Accounting Policies of DOMS Industries Ltd. Company

Mar 31, 2025

1 Company information

DOMS Industries Limited (formerly known as DOMS Industries
Private Limited) (''DOMS'' or ''the Company'') has its registered
office at J-19, G.I.D.C, Umbergaon, Gujarat 396171. The
Company was incorporated on October 24, 2006 under
erstwhile Companies Act, 1956. On April 21, 2017, the Company
changed its name from Writefine Products Private Limited to
DOMS Industries Private Limited and thereafter, the name of
the Company was changed to "DOMS Industries Limitedâ and
a fresh certificate of incorporation consequent upon change of
name was issued by the RoC on August 03, 2023. During the
year ended March 31, 2024, the Company has completed its
Initial Public Offer ("IPO") and its equity shares were listed on
the National Stock Exchange ("NSEâ) and on the BSE Limited
("BSEâ) on December 20, 2023.

The Company is primarily engaged in manufacturing, marketing,
trading and distribution of stationery products. The Company
sells its products in India and in international markets. The
Company has its manufacturing facilities located at Umbergaon,
Gujarat and Bari Brahma, Jammu & Kashmir.

2 Basis of Preparation

i) Compliance with Ind AS

The Standalone Financial Statements of the Company have
been prepared in compliance with Indian Accounting Standards
(hereinafter referred to as the ''Ind AS'') notified under Section
133 of the Companies Act, 2013 (the Act) [Companies (Indian
Accounting Standards) Rules, 2015] and other relevant
provisions of the Act.

The Standalone Financial Statements have been prepared on
accrual and going concern basis.

ii) Historical Cost Convention

The Standalone Financial Statements have been prepared
under the historical cost convention except for certain financial
instruments measured at fair value as explained in the
accounting policies. Historical cost is generally based on the
fair value of the consideration given in exchange for goods and
services at the time of their acquisition.

iii) New and amended standards adopted by the Company

The Ministry of Corporate Affairs vide notification dated
September 9, 2024 and September 28, 2024 notified the
Companies (Indian Accounting Standards) Second Amendment
Rules, 2024 and Companies (Indian Accounting Standards) Third
Amendment Rules, 2024, respectively, which amended/ notified
certain accounting standards (see below), and are effective for
annual reporting periods beginning on or after April 1, 2024:

- Insurance contracts- Ind AS 117; and

- Lease Liability in Sale and Leaseback-
Amendments to Ind AS 116

These amendments did not have any material impact on the
amounts recognised in prior periods and are not expected to
significantly affect the current or future periods.

iv) Standards issued but not yet effective

There are no standards that are notified and not yet effective
as on the date.

v) Current vs non-current classification

All assets and liabilities have been classified as current or nonÂ¬
current as per the Company''s operating cycle and other criteria
set out in the Schedule Ill (Division II) to the Act. Based on the
nature of products/services and the time between the delivery
of services and their realisation in cash and cash equivalents,
the Company has ascertained its operating cycle as 12 months
for the purpose of current or non-current classification of assets
and liabilities.

Assets:

An asset is classified as current when it satisfies any of the
following criteria:

a) It is expected to be realised in, or is intended for sale or
consumption in, the Company''s normal operating cycle;

b) It is held primarily for the purpose of being traded;

c) It is expected to be realised within 12 months after the
reporting date; or

d) It is cash or cash equivalent unless it is restricted from
being exchanged or used to settle a liability for at least 12
months after the reporting date.

Current assets include the current portion of non-current
financial assets. All other assets are classified as non-current.

Liabilities:

A liability is classified as current when it satisfies any of the
following criteria:

a) It is expected to be settled in the Company''s normal
operating cycle;

b) It is held primarily for the purpose of being traded;

c) It is due to be settled within 12 months after the
reporting date; or

d) The Company does not have an unconditional right to
defer settlement of the liability for at least 12 months
after the reporting date.

Current liabilities include current portion of non-current
financial liabilities. All other liabilities are classified
as non-current.

Deferred tax assets and liabilities are classified as non-current
assets and liabilities.

Operating cycle:

Operating cycle is the time between the acquisition of assets
for processing and their realisation in cash or cash equivalents.
Based on the nature of the products and the time between
the acquisition of assets and their realisation in cash and cash
equivalents, the Company has ascertained its operating cycle
as twelve months for the purpose of current and non-current
classification of assets and liabilities.

vi) Events occurring after reporting period

Where events occur after the balance sheet date provide
evidence of conditions that existed at the end of the reporting
period, the impact of such events is adjusted with the
Standalone Financial Statements. Otherwise, events after the
balance sheet date of material size or nature are only disclosed.

vii) Functional and presentation currency

Items included in the Standalone Financial Statements of
the Company are presented in INR which is our Company''s
functional currency. All amounts have been rounded-
off to the nearest lakhs and decimals thereof, unless
otherwise mentioned.

viii) Critical estimates and judgements

The preparation of Standalone Financial Statements requires the
use of accounting estimates which, by definition, will likely differ
from the actual results. Management also needs to exercise
judgement in applying the Company''s accounting policies.

This note provides an overview of the areas that involved a higher
degree of judgement or complexity, and of items which are more
likely to be materially adjusted due to final outcomes deviating from

estimates and assumptions made. Detailed information about each
of these estimates and judgements is included in relevant notes
together with information about the basis of calculation for each
affected line item in the Standalone Financial Statements.

Critical estimates and judgements

The areas involving critical estimates and judgements are:

i) Useful lives of property, plant and equipment and
intangible assets (Refer Note 3 & 5)

ii) Definition of lease, lease term and discount rate for the
calculation of lease liability (Refer Note 4)

iii) Recognition and measurement of provisions and
contingencies (Refer Note 48(m))

iv) Recognition of deferred tax assets (Refer Note 26)

v) Estimation of current tax expense and current tax payable
(Refer Note 26)

vi) Estimation of defined benefit obligations (Refer Note 39)

vii) Estimation of impairment of investment in associate and
subsidiaries (Refer Note 6)

viii) Fair valuation of Employee Stock options (Refer Note 40)

Estimates and judgements are continually evaluated. They are
based on historical experience and other factors, including
expectations of future events that may have a financial impact
on the Company and that are believed to be reasonable under
the circumstances.

Mar 31, 2024

2(i) Material accounting policies

(a) Basis of preparation

The financial statements of the Company have been prepared in compliance with Indian Accounting Standards (hereinafter referred to as the ''Ind AS'') notified under Section 133 of the Companies Act, 2013 (the Act) read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015, Companies (Indian Accounting Standards) Amendment Rules, 2016 and other relevant provisions of the Act.

The financial statements have been prepared on accrual and going concern basis. The accounting policies are applied consistently to all the periods presented in the financial statements except where a newly issued accounting standard is initially adopted or revision to an existing accounting standard where a change in accounting policy hitherto in use.

The financial statements have been prepared under the historical cost convention except for certain financial instruments measured at fair value as explained in the accounting policies. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services at the time of their acquisition.

Authorization of financial statements

The Financial Statements of the Company were approved and authorized for issue in accordance with a resolution passed in Board of Directors meeting held on May 24, 2024.

(b) Current vs non-current classification

The Company presents assets and liabilities in the balance sheet based on current / non-current classification. An asset is treated as current when it is:

â¢ Expected to be realised or intended to be sold or consumed in normal operating cycle

â¢ Held primarily for the purpose of trading

â¢ Expected to be realised within twelve months after the reporting period, or

â¢ Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period

Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

All other assets are classified as non-current.

A liability is current when:

â¢ It is expected to be settled in normal operating cycle

â¢ It is held primarily for the purpose of trading

â¢ It is due to be settled within twelve months after the reporting period, or

â¢ There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period

The Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.

Inventories which comprise raw materials, work-in-progress, finished goods, stock-in-trade, packing material are carried at the lower of cost and net realisable value. Cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

In determining the cost, moving weighted average cost method is used. In the case of manufactured inventories and work in progress, fixed production overheads are allocated on the basis of normal capacity of production facilities.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. The net realisable value of work-in-progress is determined with reference to the selling prices of related finished products. Raw

materials and other supplies held for use in the production of finished products are not written down below cost except in cases where material prices have declined and it is estimated that the cost of the finished products will exceed their net realisable value. The comparison of cost and net realisable value is made on an item-by-item basis.

(d) Revenue recognition

i. Revenue from sale of goods

Revenue represents amounts received and receivable from third parties and related parties for goods supplied to the customers. The Company recognizes revenue from sale of goods measured upon satisfaction of performance obligation which is at a point in time when control of the goods is transferred to the customer, generally on delivery of the goods. Revenue is measured based on the transaction price, which is the consideration, adjusted for trade discounts, rebates, scheme allowances, incentives, and returns, if any. Revenue excludes taxes collected from customers on behalf of the Government. Accumulated experience is used to estimate and accrue for the discounts (using the most likely method) and returns considering the terms of the underlying schemes and agreements with the customers. Due to the short nature of credit period given to customers, there is no financing component in the contract.

A liability is recognised where payments are received from customers before transferring control of the goods being sold.

Contract assets

Contract assets are recognised for advance given towards supply of goods. On successful acceptance of goods and services, the amounts is recognised as contract assets.

Contract Liabilities

Contract liabilities include advances received towards supply of goods and services. The outstanding balances of these accounts are adjusted upon revenue recognition against the advance from customers received.

ii. Rendering of services

Income from services are recognized as and when performance obligation is met.

(e) Other Income

i. Interest income

Interest income from financial assets is recognised when it is probable that economic benefits will flow to the Company and the amount of income can be measured reliably.

ii. Royalties

Royalty income is recognized on an accrual basis in accordance with the substance of the relevant agreement.

(f) Property, plant and equipment

i. Recognition and measurement

Freehold land is carried at historical cost. All other items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. The cost of an item of property, plant and equipment shall be recognised as an asset if, and only if it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. The cost of an item of property, plant and equipment comprises:

a) its purchase price, including import duties and nonrefundable taxes (net of GST), after deducting trade discounts and rebates.

b) any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

c) borrowing costs for long-term construction projects if the recognition criteria are met.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

Advances paid towards the acquisition of property, plant and equipment outstanding at each Balance Sheet date is classified as capital advances under other non-current assets and the cost of assets not ready to use before such date are disclosed under ''Capital work-in-progress''.

ii. Subsequent expenditure

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliably. Repairs and maintenance costs are recognized in the Statement of Profit and Loss when incurred.

iii. Depreciation

Depreciation is calculated on cost of items of property, plant and equipment less their estimated residual values, if any, over their estimated useful lives using the straight line method in the manner and at the rates prescribed by Part ''C'' of Schedule II of the Act, except as stated below. Depreciation on additions/(disposals) is provided on a prorata basis i.e. from/ (upto) the date on which asset is ready for use / disposed off.

No depreciation is provided for leasehold land since as per the lease agreements, the leases are renewable at the option of the Company at the end of the lease period, with marginal payment of further premium.

In case of certain class of assets, the Company uses different useful life than those prescribed in Schedule II of the Companies Act, 2013. The useful life has been assessed based on technical advice, taking into account the nature of the asset, the estimated usage of the asset on the basis of the management''s best estimation of getting economic benefits from those classes of assets. The Company uses its technical expertise along with historical and industry trends for arriving at the economic life of an asset.

Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year end.

The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the Statement of Profit and Loss.

Derecognition

An item of property, plant and equipment and any significant part initially recognized is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss when the asset is derecognised.

Capital work in progress and Capital advances

Assets under construction includes the cost of property, plant and equipment that are not ready to use at the balance sheet date. Advances paid to acquire property, plant and equipment before the balance sheet date are disclosed under other non-current assets. Assets under construction are not depreciated as these assets are not yet available for use.

(g) Intangible assets and amortisation

Intangible assets comprise application software purchased / developed and trademark. These are amortised using the straight line method over a period of the software license, which in Management''s estimate represents the period during which the economic benefits will be derived from their use.

Amortization methods and useful lives are reviewed periodically including at each financial year end.

The useful lives of intangible assets are as mentioned below:

Derecognition

An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in the statement of profit and loss when the asset is derecognised.

(h) Financial instruments

Financial instruments (assets and liabilities) are recognised when the Company becomes a party to a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

i. Financial assets

Initial recognition and measurement

Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument.

A financial asset or financial liability is initially measured at fair value plus or minus, for an item not at Fair value through Profit or Loss (''FVTPL''), transaction costs that are directly attributable to its acquisition or issue.

Classification

The Company classifies financial assets as subsequently measured at amortized cost on the basis of its business model for managing the financial assets and the contractual cash flow characteristics of the financial asset.

Debt instruments

A ''debt instrument'' is measured at the amortized cost if both the following conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments

of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the Effective Interest Rate (''EIR'') method. Amortised cost is calculated by taking into account any discount or premium and fees or costs that are an integral part of the EIR.

The EIR amortisation is included in other income in the profit and loss.

Equity Instruments measured at Fair Value through Other Comprehensive Income (''FVTOCI'') or FVTPL

The classification is made on initial recognition and is irrevocable. If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the Other Comprehensive Income (OCI). There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity. Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Profit and loss statement.

Equity instruments measured at Cost

Equity instruments / Investments in subsidiaries / Associates are accounted at cost in accordance with Ind AS 27- Separate Financial Statements.

De-recognition

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognised (i.e. removed from the Company''s balance sheet) when:

- The rights to receive cash flows from the asset have expired, or

- The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Impairment of financial assets

In accordance with Ind-AS 109, the Company applies expected credit loss (''ECL'') model for recognition and measurement of impairment loss on the following financial assets and credit risk exposure:

a) Trade receivables

b) Financial assets that are debt instruments, and are measured at amortized cost e.g. deposits and bank balance

ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.

The Company follows ''simplified approach'' for recognition of impairment loss allowance on trade receivables.

The application of simplified approach does not require the Company to track changes in credit risk.

Rather, it recognises impairment loss allowance based on lifetime ECL at each reporting date, right from its initial recognition.

ECL are measured in a manner that they reflect unbiased and probability weighted amounts determined by a range of outcomes, taking into account the time value of money and other reasonable information available as a result of past events, current conditions and forecasts of future economic conditions.

For recognition of impairment loss on other financial assets and risk exposure, the Company determines whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.

ECL allowance recognised (or reversed) during the period is recognised as income/ expense in the Standalone Statement of Profit and Loss under the head ''Other expenses''.

The Company assume the credit risk on financial assets increased significantly if it is more than 3 year past due.

ii. Financial liabilities

Initial recognition and measurement

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Company''s financial liabilities include trade and other payables and loans and borrowings.

Classification

The Company classifies all financial liabilities as subsequently measured at amortised cost.

Subsequent measurement of Financial liabilities at amortised cost

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit and loss when the liabilities are derecognised.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or transaction costs that are an integral part of the EIR.

The EIR amortisation is included as finance costs in the statement of profit and loss.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.

Offsetting of financial instruments

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.

(i) Employee benefits

i. Short-term employee benefits are expensed as the related service is provided. A liability is recognised on an undiscounted basis for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

ii. Compensated absences are recognised when the employees render service that increase their entitlement to future compensated absences. As per the policy of the Company, employees are entitled to encash leave subject to a maximum of 30 days. Compensated absences which are payable wholly within twelve months of rendering the service and are classified as short-term employee benefits.

iii. A defined contribution plan is a post-employment benefit plan where the Compay''s legal or constructive obligation is limited to the amount that it contributes to a separate legal entity. The Company makes specified monthly contributions towards Government administered provident fund scheme. Obligations for contributions to defined contribution plan are expensed as an employee benefits expense in the statement of profit and loss in period in which the related service is provided by the employee. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

iv. Defined benefit plans:- The Company''s net obligation in respect of defined benefit plans is calculated separately by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets. The calculation of defined benefit obligations

is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.

v. Termination benefits : termination benefits are expensed at earlier of when the Company can no longer withdraw the offer of those benefits and when the Company recognises costs of a restructuring. If benefits are not expected to be settled wholly within 12 months of the reporting date, then they are discounted.

(j) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than biological assets, investment property, inventories, contract assets and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset''s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or Cash Generating Unit (''CGU''). Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an individual asset or CGU is the greater of its value in use and its fair value less costs of disposal. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognised in statement of profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not subsequently reversed. In respect of other assets for which impairment loss has been recognised in prior periods, the Company reviews at each reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a reversal is made only to the extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

(k) Foreign currency transactions

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in profit or loss. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item.

(l) Borrowing cost

Borrowing costs are interest and other costs (including exchange differences relating to foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of funds. Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a substantial period of time to get ready for their intended use are capitalised as part of the cost of that asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.

Commencement of capitalisation

Capitalisation of borrowing cost as part of the cost of a qualifying asset shall begin on the commencement date. The commencement date for capitalisation is the date when the entity first meets all of the following conditions:

a. it incurs expenditures for the asset;

b. it incurs borrowing costs; and

c. it undertakes activities that are necessary to prepare the asset for its intended use or sale.

(m) Leases

Company as lessee

The Company assesses whether a contract is or contains a lease, at inception of the contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Company recognises the lease payments as an operating expense in the Statement of profit and loss

Lease liabilities

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate.

The lease liability is presented as a separate line in the financial statement. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

Lease payments included in the measurement of the lease liability comprise:

â¢ Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;

â¢ Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;

â¢ The amount expected to be payable by the lessee under residual value guarantees;

â¢ The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and

â¢ Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

â¢ The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

â¢ The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).

â¢ A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification. The effective date of the modification is the date when both the parties agree

to the lease modification and is accounted for in that point in time. The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day any initial direct costs, less any lease incentives received . They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated on a straight-line basis over shorter of the lease term and the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

The right-of-use assets are presented as a separate line in the statement of financial position.

The Company applies Ind AS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in the ''Property, Plant and Equipment'' policy.

Variable rents that do not depend on an index or rate are not included in the measurement the lease liability and the right of- use asset. The related payments are recognised as an expense in the period in which the event or condition that triggers those payments occurs and are included in the line âOther expenses" in profit or loss.

As a practical expedient, Ind AS 116 permits a lessee not to separate lease and non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has used this practical expedient and has recognised single ROU for entire lease and non lease components.

(n) Cash and cash equivalents

Cash and cash equivalents includes cash-in-hand and demand deposit with banks with original maturity of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Mar 31, 2023

Company information

DOMS Industries Private Limited ('DIPL' or 'the Company') has its registered office at J-19, G.I.D.C, Umbergaon, Gujarat 396171. The Company was incorporated on 24 October 2006 under erstwhile Companies Act, 1956. With effect from 21 April 2017, the company changed its nameÂ from Writefine Products Private Limited to DOMS Industries Private Limited.

The Company is primarily engaged in manufacturing, marketing, trading and distribution ot school stationery and art materials under the brand names "DOMS" and "C3". The Company has market presence in India and internationally The Company has its manufacturing facilities locatedÂ at Umbergaon, Gujarat and Bari Brahma, Jammu & Kashmir.

Authorization of financial statements

The Financial Statements of the Company were approved and authorized for issue in accordance with a resolution passed in Board of Directors meeting held on 10 July 2023.

2(i) Significant accounting policies

(a) Â Â Â Basis of preparation

The financial statements of the Company have been prepared in compliance with Indian Accounting Standards (hereinafter referred to as the âInd ASâ) notified under Section 133 of the Companies Act, 2013 (the Act) read with Rule 3 of the Companies (Indian Accounting Standards) Rules,Â 2015, Companies (Indian Accounting Standards) Amendment Rules, 2016 and other relevant provisions of the Act.

The financial statements have been prepared on accrual and going concern basis. The accounting policies are applied consistently to all the periods presented in the financial statements except where a newly issued accounting standard is initially adopted or revision to an existingÂ accounting standard where a change in accounting policy hitherto in use.

(b) Â Â Â Current vs non-current classification

The Company presents assets and liabilities in the balance sheet based on current / non-current classification An asset is treated as current when it is:

Expected to be realised or intended to be sold or consumed in normal operating cycle Held primarily for the purpose of trading

Expected to be realised within twelve months after the reporting period, or

Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting

period

Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

All other assets are classified as non-current.

A liability is current when:

It is expected to be settled in normal operating cycle It is held primarily for the purpose of trading

It is due to be settled within twelve months after the reporting period, or

There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period The Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents The Company has identified twelve months as its operating cycle

Inventories which comprise raw materials, woik-in-progress, finished goods, stock-in-trade, packing material are carried at the lower of cost and net realisable value. Cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories toÂ their present location and condition

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated cosis necessary to make the sale. The net realisable value of work-in-progress is determined with reference to the selling prices of related finishedÂ products. Raw materials and other supplies held for use in the production of finished products are not written down below cost except in casesÂ where material prices have declined and it is estimated that the cost of the finished products will exceed their net realisable value TheÂ V comparison of cost and net realisable value is made on an item-by-item basis.

(d) Â Â Â Revenue recognition

i. Â Â Â Revenue from sale of goods

Revenue represents amounts received and receivable from third parties and related parties for goods supplied to the customers. The Company recognizes revenue from sale of goods measured upon satisfaction of performance obligation which is at a point in time when control of the goodsÂ is transferred to the customer, generally on delivery of the goods. Revenue is measured based on the transaction price, which is the consideiation,Â adjusted for trade discounts, rebates, scheme allowances, incentives, and returns, if any. Revenue excludes taxes collected from customers onÂ behalf of the Government, Accumulated experience is used to estimate and accrue for the discounts (using the most likely method) and returnsÂ considering the terms of the underlying schemes and agreements with the customers. Due to the short nature of credit period given to customers,Â there is no financing component in the contract.

A liability is recognised where payments are received from customers before transferring control of the goods being sold.

Contract assets

Contract assets are recognised for advance given towards supply of goods. On successful acceptance of goods and services, the amounts is recognised as contract assets.

Contract Liabilities

ii. Â Â Â Rendering of services

Income from services are recognized as and wheperformance obligation is met.

iii. Â Â Â Interest income

Interest income from financial assets is recognised when it is probable that economic benefits will flow to the Company and the amount of income can be measured reliably Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rateÂ applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial assets to that assetâs netÂ carrying amount on initial recognition.

iv. Â Â Â Export incentives

Export benefits are recognised as and when there is significant certainty as to realisation and when they are quantifiable with a high degree of accuracy

v. Â Â Â Royalties

Royalty income is recognized on an accrual basis in accordance with the substance of the relevant agreement.

(e) Â Â Â Property* plunt and equipment

i. Â Â Â Recognition and measurement

Freehold land Is carried at historical cost. All ulliei items of property, plant and equipment urc measured at cost less accumulated depreciation and any accumulated impairment losses. The cost of an item of property, plant and equipment shall be recognised as an asset it, and only if it isÂ probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliabl> AnyÂ gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. The cost of an item of property, plant andÂ equipment comprises:

a) Â Â Â its purchase price, including import duties and non-refundable taxes (net of Cenvat, VAT and GST), after deducting trade discounts andÂ rebates.

b) Â Â Â any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the mannerÂ intended by management.

c) Â Â Â borrowing costs for long-term construction projects if the recognition criteria are met.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment

ii. Â Â Â Subsequent expenditure

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to tne Company and the cost of the item can be measured reliably. Repairs and maintenance costs are recognized in the Statement of Profit and LossÂ pwhen incurred.

Hi. Depreciation

Depreciation is calculated on cost of items of property, plant and equipment less their estimated residual values, if any, over their estimated useful lives using the straight line method in the manner and at the rates prescribed by Part âCâ of Schedule II of the Act, except as stated below.Â Depreciation on additions/(disposals) is provided on a pro-rata basis i.e. from/ (upto) the date on which asset is ready for use / disposed off.

The estimated useful lives of assets are as follows	Â	Â
Particulars	Estimated useful lives	Useful lives as per ScheduleÂ IIÂ of Companies Act, 2013
Buildings	25 years	30 years
Roads	10 years	10 years
Plant & Equipment	8.7 years	15 years
Electrical installation	2.5 years	10 years
Furniture & Fittings	5 years	10 years
Vehicles	4 years	8 years
Office equipments	8.3 years	5 years
ComDuters (includina servers and accessories)	5 years	3-6 years

In case of certain class of assets, the Company uses different useful life than those prescribed in Schedule II of the Companies Act, 2013. The useful life has been assessed based on technical advice, taking into account the nature of the asset, the estimated usage of the asset on the basis ofÂ the managementâs best estimation of getting economic benefits from those classes of assets. The Company uses its technical expertise along withÂ historical and industry trends for arriving at the economic life of an asset.

Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year end.

Derecognition

An item of property, plant and equipment and any significant part initially recognized is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the netÂ disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss when the asset is derecognised.

Capital work in progress and Capital advances

Assets under construction includes the cost of property, plant and equipment that are not ready to use at the balance sheet date. Advances paid to acquire property, plant and equipment before the balance sheet date are disclosed under other non-current assets. Assets under construction are notÂ depieciatol as these assets arc not yet available for uso.

(f) Intangible assets and amortisation

Intangible assets comprise application software purchased / developed and trademark. These are amortised using the straight line method over a period of the software license, which in Managementâs estimate represents the period during which the economic benefits will be derived fromÂ their use.

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. Amortization methods and useful lives are reviewed periodically including at each financial year end.

The useful lives of intangible assets are as mentioned below:__

Particulars	Estimated useful lives
Trademark	10 years
Software	3 years

Derecognition

An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, areÂ Recognised in the statement of profit and loss when the asset is derecognised.

(g) Financial instruments

i. Financial assets

Initial recognition and measurement

Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Group becomes a party to the contractual provisions of the instrument.

A financial asset or financial liability is initially measured at fair value plus or minus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue.

Classification

Debt instruments

A âdebt instrumentâ is measured at the amortized cost if both the following conditions are met:

a) Â Â Â The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

b) Â Â Â Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on theÂ principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the EIR method. Amortised cost is calculated by taking into account any discount or premium and fees or costs that are an integral part of the EIR The EIR amortisation is included in otherÂ income in the profit and loss.

Equity Instruments measured at FVTOCI or FVTPL

All equity investments in scope of Ind-AS 109 are measured at Fair Value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either as at FVTOCI or FVTPL. The Company makes suchÂ election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable. If the Company decides toÂ classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OtherÂ Comprehensive Income (OCI) There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the Company mayÂ transfer the cumulative gain or loss within equity. Equity instruments included within the FVTPL category are measured at fair value with allÂ changes recognized in the Profit and loss statement.

Equity instruments measured at Cost

Equity instruments / Investments in subsidiaries / Associates are accounted at cost in accordance with Ind AS 27 - Separate Financial Statements.Â De-i ecognition

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognised (i.e. removed from the Companyâs balance sheet) when:

- Â Â Â The rights to receive cash flows from the asset have expired, or

- Â Â Â The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in fullÂ without material delay to a third party; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) theÂ Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Impairment of financial assets

In accordance with Ind-AS 109, the Company applies expected credit loss (âECLâ) model for recognition and measurement of impairment loss on the following financial assets and credit risk exposure:

a) Â Â Â Trade receivables

b) Â Â Â Financial assets that are debt instruments, and are measured at amortized cost e.g. deposits and bank balance

ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. Lifetime ECL are the expected credit losses resulting from allÂ possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results fromÂ default events that are possible within 12 months after the reporting date.

The Company follows âsimplified approachâ for recognition of impairment loss allowance on trade receivables. The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECL atÂ each reporting date, right from its initial recognition.

ECL are measured in a manner that they reflect unbiased and probability weighted amounts determined by a range of outcomes, takrng into account the time value of money and other reasonable information available as a result of past events, current conditions and forecasts of futureÂ economic conditions.

For recognition of impairment loss on other financial assets and risk exposure, the Company determines whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairmentÂ loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improvesÂ such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment lossÂ allowance based on 12-month ECL.

recognised (or reversed) during the period is recognised as income/ expense in the Standalone Statement of Profit and Loss underÂ _/^%'^jne-heaj{^Qthew?tpenses'

ffÂ ^/L^|,^ngalV^Wnc the credit risk on financial assets increased significantly if it is more than 3 year past due.

ii. Financial liabilities

Initial recognition and measurement

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable The Companyâs financial liabilities include trade and other payables and loans and borrowings.

Classification

The Company classifies all financial liabilities as subsequently measured at amortised costÂ Subsequent measurement of Financial liabilities at amortised cost

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or transaction costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantiallyÂ modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. TheÂ difference in the respective carrying amounts is recognised in the statement of profit and loss.

Offsetting of financial instruments

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legallyÂ enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default,Â insolvency or bankruptcy of the Company or the counterparty.

(h) Employee benefits

i.Â Â Â Â Short-term employee benefits are expensed as the related service is provided. A liability is recognised on an undiscounted basis for the amountÂ expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by theÂ employee and the obligation can be estimated reliably.

ii.Â Â Â Â Compensated absences are recognised when the employees render service that increase their entitlement to future compensated absences. As perÂ the policy of the Company, employees are entitled to encash leave subject to a maximum of 30 days. Compensated absences have been providedÂ for based on outstanding leave balance and employee's basic pay. Compensated absences are payable wholly within twelve months of renderingÂ the service and are classified as short-term employee benefits.

iii.Â Â Â Â A defined contribution plan is a post-employment benefit plan where the Compay's legal or constructive obligation is limited to the amount that itÂ contributes to a separate legal entity. The Company makes specified monthly contributions towards Government administered provident fundÂ scheme. Obligations for contributions to defined contribution plan are expensed as an employee benefits expense in the statement of profit andÂ loss in period in which the related service is provided by the employee. Prepaid contributions are recognised as an asset to the extent that a cashÂ refund or a reduction in future payments is available.

iv.Â Â Â Â Defined benefit plans:- The Companyâs net obligation in respect of defined benefit plans is calculated separately by estimating the amount ofÂ future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any planÂ assets. The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. WhenÂ the calculation results in a potential asset for the Company, the recognised asset is limited to the present value of economic benefits available inÂ the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits,Â consideration is given to any applicable minimum funding requirements. Remeasurements, comprising of actuarial gains and losses, the effect ofÂ the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amountsÂ included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet with a corresponding debit or credit toÂ the retained earnings through OC1 in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periodsÂ When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or lossÂ on curtailment is recognised immediately in profit or loss. The Company recognises gains and losses on the settlement of a defined benefit planÂ when the settlement occurs.

v. Â Â Â Termination benefits : termination benefits are expensed at earlier of when the Company can no longer withdraw the offer of those benefits andÂ When the Company recognises costs of a restructuring. If benefits are not expected to be settled wholly within 12 months of the reporting date,

lljien they are discounted

(i) Â Â Â Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than biological assets, investment property, inventories, contract assets and deferred tax assets) to determine whether theie is any indication of impairment. If any such indication exists, thenÂ the assetâs recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or groups ofÂ CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an individual asset or CGU is the greater of its value in use and its fair value less costs of disposal. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments ofÂ the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognised in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis. An impairment loss in respect of goodwill is notÂ subsequently reversed. In respect of other assets for which impairment loss has been recognised in prior periods, the Company reviews at eachÂ reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been aÂ change in the estimates used to determine the recoverable amount. Such a reversal is made only to the extent that the asset s carrying amount doesÂ not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

(j) Â Â Â Foreign currency transactions

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilitiesÂ denominated in foreign currencies at year end exchange rates are generally recognised in profit or loss. Non-monetary items that are measured atÂ fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences onÂ assets and liabilities carried at fair value are reported as part of the fair value gain or loss. The gain or loss arising on translation of non-monetaryÂ items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translationÂ differences on items whose fair value gain or loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively).

(k) Â Â Â Borrowing cost

Borrowing costs are interest and other costs (including exchange differences relating to foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of funds. Borrowing costs directly attributable toÂ acquisition or construction of an asser which necessarily take a substantial period of time to get ready for their intended use are capitalised as partÂ of the cost of that asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.

i. Â Â Â Commencement of capitalisation

a. Â Â Â it incurs expenditures for the asset;

b. Â Â Â it incurs borrowing costs; and

c. Â Â Â it undertakes activities that are necessary to prepare the asset for its intended use or sale.

ii. Â Â Â Cessation of capitalisation

Cessation of capitalisation shall happen when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.

j)^Jtller borrowing costs are recognised as an expense in the period in which they are incurred.

(I) Leases

Company as lessee

The Company assesses whether a contract is or contains a lease, at inception of the contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with aÂ lease term of 12 months or less) and leases of low value assets. For these leases, the Company recognises the lease payments as an operatingÂ expense in the Statement of profit and loss

Lease liabilities

The lease liability is presented as a separate line in the financial statement. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the leaseÂ payments made The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

Lease payments included in the measurement of the lease liability comprise:

â¢ Â Â Â Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;

â¢ Â Â Â Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;

â¢ Â Â Â The amount expected to be payable by the lessee under residual value guarantees;

â¢ Â Â Â The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and

â¢ Â Â Â Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

â¢ Â Â Â The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of aÂ purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

â¢ Â Â Â The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which casesÂ the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change isÂ due to a change in a floating interest rate, in which case a revised discount rate is used).

â¢ Â Â Â A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasuredÂ based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of theÂ modification. The effective date of the modification is the date when both the parties agree to the lease modification and is accounted for in thatÂ point in time The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before theÂ commencement day any initial direct costs, less any lease incentives received . They are subsequently measured at cost less accumulatedÂ depreciation and impairment losses.

Right-of-use assets

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers owneiship of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-useÂ asset is depreciated on a straight-line basis over shorter of the lease term and the useful life of the underlying asset. The depreciation starts at theÂ commencement date of the lease.

The right-of-use assets are presented as a separate line in the statement of financial position.

The Company applies Ind AS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in the âProperty, Plant and Equipmentâ policy

Variable rents that do not depend on an index or rate are not included in the measurement the lease liability' and the right of- use asset. The related payments are recognised as an expense in the period in which the event or condition that triggers those payments occurs and are included in theÂ line âOther expensesâ in profit or loss.

(m) Â Â Â Cash and cash equivalents

(n) Â Â Â Provisions, contingent liabilities and contingent assets

Provisions:Â Provisions are recognised when there is a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. ProvisionsÂ are measured at the best estimate of the expenditure required to settle the present obligation at the balance sheet date and are not discounted to itsÂ present value, unless the time value of money is material.

Contingent liabilities:Â Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company or aÂ present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliableÂ estimate of the amount cannot be made.

Contingent Assets:Â Contingent assets are not recognised in the financial assets. However, the same is considered when the realisation is certain and it is no longer considered contingent. The asset is recognised in the period in which the change from contingent asset to asset occurs.

(o) Â Â Â Functional and presentation currency

Items included in the financial statements of the Company are presented in INR which is our Companyâs functional currency

(p) Â Â Â Income tax

Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in Other comprehensive income

The Group has determined that interest and penalties related to income taxes, including uncertain tax treatments, do not meet the definition of income taxes, and therefore accounted for them under Ind AS 37 Provisions, Contingent Liabilities and Contingent Assets.

i. Current tax

Current tax comprises the expected tax payable or receivable on tire taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years It is measured using tax rates enacted or substantially enacted as at the reporting date.

Current tax assets and liabilities are offset only if:

a) Â Â Â there is a legally enforceable right to set off cun-ent tax assets against current tax liabilities and when they relate to income taxes levied byÂ the same taxation authority, and

b) Â Â Â there is intention either to settle on a net basis, or to realise the asset and settle the liability simultaneously

The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty plated to income taxes, if any.

ii, Deferred tax

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is also recognised in respect of carried forward tax losses and tax credits.Â Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a businessÂ combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss).

The existence of unused tax losses is strong evidence that future taxable profit may not be available. Therefore in case of history of recent losses, the Group recognises a deferred tax asset only to the extent that it has sufficient taxable temporary difference or there is convincing other evidenceÂ that sufficient taxable profits will be available against which such deferred tax asset can be realised. Deferred tax assets are reviewed at eachÂ reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Unrecognised deferred taxÂ assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profits will be availableÂ against which they can be used.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date and are expected to apply when the related deferred income tax asset is realised or the deferred incomeÂ tax liability is settled.

Deferred tax assets and liabilities are offset only if the entity has a legal enforceable right to set off current tax assets / liabilities and they relate to income taxes levied by the same taxation authority on the same taxable entity.

(q) Â Â Â Earnings per share (EPS)

Basic earnings per share (EPS) is computed by dividing the profit after tax or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the profit after tax as adjustedÂ for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to dilutive potential equity shares, by theÂ weighted average number of equity shares considered for deriving the basic earnings per share and the weighted average number of equity sharesÂ which could have been issued on the conversion of all the dilutive potential equity shares. Potential equity shares are deemed to be dilutive only ifÂ their conversion to equity would decrease the net profit per share from continuing ordinary operations.

(r) Â Â Â Government Grants, subsidies and export incentives

Government grants and subsidies are accounted when there is reasonable assurance that the Company will comply with the conditions attached to them and it is reasonably certain that the ultimate collection will be made. Capital grants relating to specific fixed assets are reduced from theÂ gross value of the respective fixed assets. Revenue grants are recognised in the Statement of Profit and Loss. Export benefits available underÂ prevalent schemes are accrued in the year in which the goods are exported and there is no uncertainty in receiving the same.

(s) Â Â Â Segment Reporting

Operating segment are reported in a mmaner consistent with the internal reporting provided to the Chief operating decision maker ( CODM).Â Identification of segmentsÂ : In accordance with Ind As 108 "operating segment", the operating segment used to present segment informationÂ reviewed by CODM to allocate resources to the segments and assess their performance. An operating segment is a component of the CompanyÂ that engages in the bussiness activities from which it earns revenues and incurs expenses, including revenues and expenses that relate toÂ transactions with any of the Company's other components

(t) Â Â Â Dividend

The Company recognises a liability for any dividend declared but not distributed at the end of the reporting period, when the distribution is authorised and the distribution is no longer at the discretion of the Company on or before the end of the reporting period. As per Corporate laws inÂ India, a distribution in the nature of final dividend is authorized when it is approved by the shareholders. A corresponding amount is recognizedÂ ilirectly in equity

(u) Â Â Â Standards issued but not yet effective

Ministry of Corporate Affairs (MCA), on March 31, 2023, through the Companies (Indian Accounting Standards (Ind AS)) Amendment Rules, 2023 amended certain existing Ind ASs on miscellaneous issues with effect from 1st April 2023. Following are few key amendments relevant toÂ the Company:

i.Â Â Â Â Ind AS 1 - Presentation of Financial Statements & Ind AS 34 - Interim Financial Reporting -

Material accounting policy information (including focus on how an entity applied the requirements of Ind AS) shall be disclosed instead of significant accounting policies as part of financial statements.

ii.Â Â Â Â Ind AS 107 - Financial Instruments: Disclosures -

Information about the measurement basis for financial instruments shall be disclosed as part of material accounting policy information.

iii.Â Â Â Â Ind AS 8 - Accounting policies, changes in accounting estimate and errors-Clarification on what constitutes an accounting estimate provided.

iv. Â Â Â Ind AS 12 - Income Taxes -

This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences.

The Company does not expect the effect of this on the financial statements to be material, based on preliminary evaluation.

(v) Â Â Â Events after reporting date

Where events occur after the balance sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted with the financial statements. Otherwise, events after the balance sheet date of material size or nature are only disclosed.

(w) Â Â Â Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the requirement of Division II of Schedule III to the Companies Act, 2013, unless otherwise stated.

2(11) Key Judgments, estimates and assumptions

The preparation of the Companyâs financial statements requires management to make judgments, estimates and assumptions that afreet the reported amounts of revenue, expenses, assets, liabilities, and the accompanying disclosures along with contingent liabilities. Uncertainty aboutÂ these assumptions and estimates could result in outcomes that require material adjustments to the carrying amount of assets or liabilities affectedÂ in future periods. The Company continually evaluates these estimates and assumptions based on the most recently available information. TheÂ Management believes that the estimates used in preparation of the Financial Statements are prudent and reasonable.

Judgement

Information about critical judgements in applying accounting policies, as well as estimates and assumptions that have the most significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are included in the following notes:

Â¦ Useful lives of property, plant and equipment (including right of use assets) and intangible assets (Note 3, 4 & 5)

â¢ Â Â Â Definition of lease, lease tenn and discount rate for the calculation of lease liability (Note 37)

Assumptions and estimation uncertainities

â¢ Â Â Â Identifying performance obligations under contracts with customer (Note 46)

â¢ Â Â Â Timing of revenue recognition under contracts with customers (Note 46)

â¢ Â Â Â Measurement of Defined Benefit Obligations (Note 42)

â¢ Â Â Â Recognition and measurement of provisions and contingencies, key assumptions about the likelihood and magnitude of an outflow of resourcesÂ (Note 38)

â¢ Â Â Â Provision for Expected credit losses (Note 11)

{(Recognition of deferred tax assets (Note 36)

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