Accounting Policies of Classic Leasing & Finance Ltd. Company

Mar 31, 2024

3 Significant accounting policies

All other equity investments are measured at fair value, with value changes recognised in Statement of Profit and Loss, except
lor those equity investments for which the Company has elected to present the value changes in ‘Other Comprehensive Income’.

Derecognition

I he Company derecognizes a fnancial asset when the contractual rights to the cash flows from the financial asset expire or it
transfers the financial asset anc :he transfer qualifies for derecognition under Ind AS 109.

ii. Financial liability

Initial recognition and measurement

Financial liabilities are initially recognised at fair value plus any transaction cost that are attributable to the acquisition of the
financial liabilities except financial liabilities at fab value through profit or loss which are intially measured at fair value.

Subsequent measurement

For purposes of subsequent measurement, financial liabilities are classified in following categories:

• Financial liabilities through profit or loss (FVTPL)

• Financial liabilities at amortised cost

Financial liabilities through FVTPL

A financial liability is classified as at FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such
on initial recognition. Financial liabilities at FVTPL arc measured at fair value and net gains and losses, including any interest
expense, are recognised in profit or loss.

Financial liabilities at amortised cost

Other financial liabilities are subsequently measured at amortised cost using the effective interest method, merest expense and
any gain or loss on derecogniticr are recognised in profit or loss.

Interest bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are
recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. For trade and
other payables maturing within one year from the balance sheet date, the carrying amounts approximates fair value due to the
short maturity of these instruments.

Derecognition

A financial liability (or a part of a financial liabil ty) is derecognized from the Company''s Balance Sheet when the obligation
specified in the contract is discharged or cancelled or expires.

iii. Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the
Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to
realise the asset and settle the liability simultaneously.

c) Property, Plant and Equipment

i. Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalised borrowing costs, less accumulated
depreciation and accumulated impairment losses, f any. The cost of an item of property, plant and'' equipment comprises its
purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any
directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of dismantling and
removing the item and restoring the site on which it is located. Borrowing costs directly attributable to the acquisition or
construction of those qualifying property, plant anc equipment, which necessarily take a substantial period of time to get ready
for their intended use, are capitalised.

Assets retired from active use and held for disposal are stated at the lower ol their net book value and net realisable value and
shown under ‘Other current assets’.

A fixed asset is eliminated from the financial statements on disposal or when no further benefit is expected from its use and
disposal. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profr. or less.

----------- -- ---- rULIUL.S

ii. Transition lo Ind AS ------

On transition to Ind AS. the Company has elected to continue with the carrying value of all of its properly, plant and equipment

recognised as at 1st April, 2019, measured as per the previous GAAP, and use that carry ing value as the deemed cost of such
property, plant and equipment.

iii. Subsequent expenditure

Subsequent expenditure is capital zed only when it is probable that the future economic benefits associated with the expenditure
^{Vl t ow 0} *"^e Company. Ongoing repairs and maintenance are expensed as incurred.

iv. Depreciation and amortisation

Deprcciaion and amortisation for Ihe year is recognised in the Statement of Profit and Loss.

Depreciation on Property'', Plant a«; Equipment are provided on written down value method over the useful lives of assets at the
rates and in the manner specified ir Part C of Schedule II of the Act.

Freehold land is not depreciated.

Dcprccia.ion methods, useful liver and residual values are reviewed at each financial year end and adjusted as appropriate.

d) Intangible Assets

Intangible assets with finite usefu ives that are acquired separately are carried at cost less accumulated amortisation and any
accumulated impairment losses. Amortisation is recognised on a written down value basis over their est mated useful lives. An
intangible asset is derecognised or disposal, or when no future economic benefits arc expected front use or disposal. Estimated
useful life of the Computer Softwa- is 5 years.

e) Inventories

Inventories are valued a. the lower cf cost or ne, realizable value. Cost includes purchase price, duties, transport & handing costs
and other costs directly attributable to the acquisition and bringing the inventories to their present location and condition.

- basis of determination of test remains as follows:

a) Raw material, Packing Material; Moving Weighted Average Basis.

b) Stores & spares: at standard con which approximates the cost.

c) Work-in-progress: Cost of input plus overhead upto the stage of completion.

d) Finished Goods: Cost of input ¦r.us appropriate overhead.

0 Impairment

i. Impairment of financial instruments: financial assets

r*j**^{ted ::redl, losses are reco}«^nt''^{d for al1} financial assets subsequent to initial recognition other than financials assets in
FVTPL category.

For financial assets other than trade receivables, as per Ind AS 109, the Company recognises 12 month expected credit losses for
all originated or acquired financial assets if at the reporting date the credit risk of the financial asset has not increased
. significantly since its initial recogr.: on. The expected credit losses are measured as lifetime expected credit losses if the credit
risk on financial asset increases significantly since its initial recognition. The Company''s trade receivables do not contain
significant financing component and loss allowance on trade receivables is measured at an amount cqua to life time expected
losses i.e. expected cash shortfall.

ii. Impairment of non-financial assets

Ihe Company’s non-financial assets are reviewed at each reporting date to determine whether there is any indication of
impairment For impairment testing, assets that do not generate independent cash inflows are grouped together into cash¬
generating units (CGUs). Each CCU represents the smallest Company of assets that generates cash in lows that arc largely
. independent of the cash inflows of tther assets or CGUs. If any such indication exists the recoverable amount of an asset or
CGU is estimated to determine the extent of impairment, if any. When it is not possible to estimate the recoverable amount of an
individual isset, the Company estint es the recoverable amount of the CGU to which the asset belongs.

g) Investments '' -------------

h) Employee Uenefits

i. Short-term employee benefits

The undiscotintcd amonn, of short term employ benefits expected ,o be paid id exchange for the services readeted bv
employees are recognised as an expense during the period when the employees render the services. *

ii. Defined contribution plans

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iii. Di fined benefit plans

be Company pays gratuity to the employees whoever has completed five years of service with the Commnv „♦ ,h* ,• r
resignation. fhe gnttnity is paid @ 15 days salaty for evety completed year of’service as per the Cent of Ac!