Accounting Policies of Keto Motors Ltd. Company

2. Material accounting policies

2.1. Statement of compliance

These financial statements have been
prepared in accordance with Indian
Accounting Standards (“Ind AS”) as notified
under the Companies (Indian Accounting
Standards) Rules, 2015 read with Section
133 of the Companies Act, 2013 (the “Act”)
as amended from time to time and based
on requirement of Division II of schedule III
of the Companies Act, 2013.

2.2. Basis of preparation

The financial statements have been
prepared on historical cost basis except for
certain financial instruments which are
measured at fair value at the end of each

reporting period as explained in the
accounting policies below. These financial
statements are presented in Indian Rupees
(INR), which is also the Company''s
functional currency.

All amounts have been rounded to the
nearest Lakhs.

2.3. Use of estimates and judgments

The preparation of financial statements in
conformity with Ind AS requires
management to make judgments, estimates
and assumptions, that affect the
application of accounting policies and the
reported amounts of assets, liabilities and
disclosures of contingent assets and
liabilities at the date of these financial
statements and the reported amounts of
revenues and expenses for the period
presented. Actual results may differ from
these estimates.

Estimates

Estimates and underlying assumptions are
reviewed at each balance sheet date.
Revisions to accounting estimates are
recognised in the period in which the
estimate is revised and in future periods
affected.

In particular, information about significant
areas of estimation uncertainty and critical
judgments in applying accounting policies
that have the most significant effect on the
amounts recognised in the financial
statements are included in the following
notes:

i. Note 3- Property, plant and equipment
and Intangible assets- useful life and
impairment

ii. Note 29 - Assets and obligations
relating to employee benefits

iii. Note 7- Allowance for trade and other
receivables

Judgements

The preparation of financial statements
requires management to make judgments,
estimates and assumptions in the
application of accounting policies that
affect the reported amounts of assets,
liabilities, income and expenses. Actual
results may differ from these estimates.
Continuous evaluation is done on the
estimation and judgments based on
historical experience and other factors,
including expectations of future events that
are believed to be reasonable. Revisions to
accounting estimates are recognised
prospectively.

2.4. Cost recognition

Costs and expenses are recognised when
incurred and are classified according to
their nature. Expenditure is capitalized
where appropriate, in accordance with the
policy for internally generated intangible
assets and represents employee costs,
stores and other manufacturing supplies,
and other expenses incurred for
construction and product development
undertaken by the Company.

Material and other cost of sales as
reported in the statement of profit and loss
is presented net of the impact of realised
foreign exchange relating to derivatives
hedging cost exposures.

2.5. Foreign currency

These financial statements are presented in
Indian rupees, which is the functional
currency of KML.

Transactions in foreign currencies are
recorded at the exchange rate prevailing
on the date of transaction. Foreign
currency denominated monetary assets
and liabilities are remeasured into the
functional currency at the exchange rate
prevailing on the balance sheet date.

Exchange differences arising on settlement
of transactions and translation of monetary
items are recognized in the statement of
profit and loss except to the extent,
exchange differences which are regarded
as an adjustment to interest costs on foreign
currency borrowings, are capitalized as
part of borrowing costs.

2.6. Going Concern

The Company''s financial statements have
been prepared on a going concern basis.

The Company has performed an assessment
of its financial position as at March 31,
2026 and forecasts of the Company for a
period of eighteen months from the date of
these financial statements (the ''Going
Concern Assessment Period'' and the
''Foreseeable Future'').

In developing these forecasts, the Company
has modelled a base case, which has been
further sensitised using severe but plausible
downside scenarios. It also accounts for
other end-market and operational factors
throughout the Going Concern Assessment
Period. This has been further sensitized
using more severe but plausible scenarios
considering external market commentaries
and other factors impacting the global
economy and automotive industry.
Management do not consider more extreme
scenarios than the ones assessed to be
plausible.

In evaluating the forecasts, the Company
has taken into consideration both the
sufficiency of liquidity to meet obligations
as they fall due as well as potential impact
on compliance with financial covenants
during the forecast period. These forecasts
indicate that, based on cash generated
from operations, the existing funding
facilities, the Company will have sufficient
liquidity to operate and discharge its
liabilities as they become due, without
breaching any relevant covenants and the
need for any mitigating actions.

Based on the evaluation described above,
management believes that the Company
has sufficient financial resources available
to it at the date of approval of these
financial statements and that it will be
able to continue as a ''going concern'' in the
foreseeable future and for a period up to
September 30, 2027.

2.7. Recent Accounting Pronouncements

On August 13, 2025, Ministry of
Corporate Affairs (“MCA”) notified the
amendments to the following standard:

Ind AS 1 - Presentation of Financial
Statements -

Distinction between current and non¬
current liability. These amendments
provide clearer guidance on classification
of the liabilities as current and non-current
liability by including the additional
definition and considerations for
classification of the liability. The
amendments also provide additional
disclosure requirements relating to
material breach of long-term loan
arrangement.

The amendment relates to classification of
the non-current and current bifurcation of
long-term loan arrangement due to
breach of covenants on or before the end
of reporting period. Due to this, the loan is
considered to be payable on demand and
is classified as current liability, unless the
lender agrees, by the end of the reporting
period to provide a period of grace of at
least twelve months after the reporting
period within which the entity can rectify
the breach and during which the lender
cannot demand immediate repayment.
The amendment is applicable from April 1,
2026.

The Company is currently assessing the
probable impact of amendments which
are applicable in its annual financial
statements.

Ind AS 7 - Cash flow statement -

Supplier Financing Arrangement. These
amendments include additional disclosure
requirements for supplier financing
arrangements relating to cash and non¬
cash changes (i.e. the effect of business
combinations, exchange differences or
other transactions that do not require the
use of cash or cash equivalents) and
disclosure relating to the terms and
conditions related to the arrangement
including disclosure of dissimilar terms
separately along with carrying amounts in
line items disclosed for which suppliers
have received payments from financial
institution and range of due dates. The
amendment is applicable from April 1,
2025 with exemption to comparative
period and interim periods in which entity
first applies the amendments.

Ind AS 107 - Financial Instruments
Disclosure -

Additional disclosure relating to Supplier
Financing Arrangement - The liquidity risk
disclosure will also include the disclosure
for supplier financing arrangement which
includes maturity analysis for supplier
financing arrangement and a description
of how the entity manages the liquidity risk
inherent in Supplier Financing Arrangement
(Refer note 2.15).

Ind AS 12 - Income Taxes - Pillar Two-

The amendment includes in the scope of the
Ind AS 12 the income tax paid on pillar two
model rules and disclosure for application
of the exception. Additional disclosure
relating to current income taxes related to
Pillar Two income taxes and disclosure of
known or reasonably estimable
information that helps users of financial
statements understand the entity''s
exposure to Pillar Two income taxes arising
from that legislation when Pillar two
legislation is enacted but not yet effective.
These disclosures shall be supported by

qualitative and quantitative information.
These amendments are effective from April
1, 2025, but to be disclosed in annual
financial statements.

2.8. Property, Plant & Equipment

Property, plant and equipment are stated
at cost of acquisition or construction less
accumulated depreciation and
impairment, if any.

Freehold land is measured at cost and is not
depreciated.

Cost includes purchase price, non¬
recoverable taxes and duties, labour cost
and direct overheads for self-constructed
assets and other direct costs incurred up to
the date the asset is ready for its intended
use.

Subsequent expenditure relating to
property, plant and equipment is
capitalised only when it is probable that
future economic benefits associated with
these 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.

Interest cost incurred is capitalised up to the
date the asset is ready for its intended use
for qualifying assets, based on borrowings
incurred specifically for financing the asset
or the weighted average rate of all other
borrowings, if no specific borrowings have
been incurred for the asset.

Depreciation is provided on the Straight¬
Line Method (SLM) over the estimated
useful lives of the assets considering the
nature, estimated usage, operating
conditions, history of replacement,
anticipated technological changes,
manufacturers'' warranties and
maintenance support. Considering these
factors, the Company has decided to retain
the useful life hitherto adopted for various
categories of property, plant and

equipment, which are different from those
prescribed in Schedule II of the Companies
Act, 2013.

The useful lives are reviewed at each year
end. Changes in expected useful lives are
treated as change in accounting estimates.

Depreciation is not recorded on capital
work-in-progress until construction and
installation are complete and the asset is
ready for its intended use.

An item of property, plant and equipment
is derecognized on disposal. Any gain or
loss arising from derecognition of an item
of property, plant and equipment is
included in the statement of profit and loss.

2.9. Current and 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 the
normal operating cycle, held primarily for
trading, expected to be realised within
twelve months after the reporting period,
or is cash/cash equivalent unless restricted.
All other assets are classified as non¬
current. A liability is current when it is
expected to be settled in the normal
operating cycle, held primarily for trading,
due to be settled within twelve months, or
there is no unconditional right to defer

settlement for at least twelve months. The
Company has identified twelve months as
its operating cycle for the purpose of
current/non-current classification of assets
and liabilities.

2.10.Intangible Assets and Research &
Development (Ind AS 38)

Intangible assets acquired separately are
measured on initial recognition at cost.
Following initial recognition, intangible
assets are carried at cost less accumulated
amortisation and accumulated impairment
losses. Intangible assets primarily comprise
software, technical know-how, vehicle
homologation/certification costs, and
capitalised development costs relating to
new EV platforms, battery management
systems (BMS), and motor/controller
technology.

Research costs are expensed as incurred.
Development expenditure on new vehicle
models, others are capitalised only when
the Company can demonstrate:

a. the technical feasibility of completing
the asset;

b. its intention to complete and use or sell
the asset;

c. how the asset will generate probable
future economic benefits;

d. availability of adequate technical,
financial, and other resources to
complete development; and

e. the ability to measure reliably the
expenditure attributable to the asset
during development. Capitalised
development costs are amortised on a
straight-line basis over the estimated
commercial life of the related vehicle
platform/technology, generally not
exceeding 5—7 years, commencing from
the date the asset is available for use
(i.e., start of commercial production).

Amortisation expense is recognised in the
Statement of Profit and Loss under
''Depreciation and amortisation expense''.
The amortisation period and method are
reviewed at each financial year-end.

2.11. Leases (Ind AS 116)

The Company assesses at contract
inception whether a contract is, or
contains, a lease. The Company
recognises a right-of-use (ROU) asset and
a corresponding lease liability for all
lease arrangements (including factory
land leases from MIDC/state industrial
development corporations, leased office
p r e m i s e s , a n d l e a s e d
warehouses/dealership-support
facilities) except for short-term leases
(lease term of 12 months or less) and
leases of low-value assets, for which lease
payments are recognised as an expense
on a straight-line basis over the lease
term.

The ROU asset is initially measured at cost,
comprising the initial lease liability
amount, adjusted for any lease payments
made at or before the commencement
date, lease incentives received, initial
direct costs, and an estimate of
restoration costs. The ROU asset is
subsequently depreciated on a straight¬
line basis over the shorter of the lease
term and the useful life of the underlying
asset. The lease liability is initially
measured at the present value of lease
payments discounted using the
Company''s incremental borrowing rate
and subsequently increased by interest
and reduced by lease payments made
and remeasured upon modification or
reassessment of the lease term.

2.12. Inventories (Ind AS 2)

Inventories are valued at the lower of cost
and net realisable value. Cost is
determined on a weighted average /
FIFO basis (as applicable to each

category) and comprises all costs of
purchase, costs of conversion, and other
costs incurred in bringing the inventories
to their present location and condition:

• Raw materials: valued at weighted
average cost;

• Work-in-progress and finished vehicles:
valued at material cost plus
appropriate share of labour and
manufacturing overheads based on
normal operating capacity;

• Stores, spares, and consumables:
valued at weighted average cost;

• Scrap/by-products including battery
cell rejects: valued at net realisable
value.

Net realisable value is the estimated selling
price in the ordinary course of business, less
estimated costs of completion and
estimated costs necessary to make the sale.
Given the volatility in prices of critical
minerals (lithium carbonate, cobalt, nickel)
and the risk of technological obsolescence
in battery chemistry and vehicle electronics,
the Company makes a specific provision for
non-moving, slow-moving, and obsolete
inventory, including allowance for
vehicles/components affected by model
changeovers or battery chemistry
transitions.

2.13.Revenue Recognition (Ind AS 115)

Revenue from contracts with customers is
recognised when control of the promised
goods or services is transferred to the
customer, at an amount that reflects the
consideration the Company expects to be
entitled to in exchange for those goods or
services, net of returns, trade discounts,
volume rebates, and goods and services
tax (GST).

a. Sale of Vehicles

Revenue from the sale of electric
vehicles is recognised at a point in time

when control transfers to the
dealer/customer, which is generally on
delivery/dispatch from the factory or
dealer handover, depending on the
terms of the dealer/customer contract
and when the significant risks and
rewards of ownership have been
transferred, the Company retains
neither continuing managerial
involvement nor effective control, and
collectability of consideration is
probable.

b. Sale of Services

Revenue from Service is recognised
based on the specific terms of the
contract/ pro rata basis and is
recognised to the extent it is probable
that the economic benefits will flow to
the company, revenue can be reliably
measured and when no significant
uncertainty exists regarding the
collectability of the same. The company
collects Goods and Service Tax on
behalf of the government and
therefore no economic benefit flowing
to the company. Hence it is excluded
from revenue.

c. Other Revenue

Income from interest/other incomesare
being accounted for on time proportion
basis taking into account the amount
outstanding and the applicable rate of
interest.

2.14.Government Grants and Incentives (Ind
AS 20)

Government grants, including incentives
received or receivable under the
Production Linked Incentive (PLI) Scheme
for Advanced Chemistry Cell (ACC) / Auto
and Auto Component sector, the Faster
Adoption and Manufacturing of Electric
Vehicles (FAME-II / successor schemes),
State EV manufacturing/investment
subsidies, and capital/interest subsidies
under State Industrial Policies, are
recognised when there is reasonable
assurance that the Company will comply
with the conditions attached to the grant
and the grant will be received.

• Grants related to depreciable assets
(capital subsidies linked to investment in
plant and machinery) are treated as
deferred income and recognised in the
Statement of Profit and Loss on a
systematic basis over the useful life of
the related asset, or presented as a
deduction from the carrying amount of
the asset, consistently applied;

• Grants related to revenue (e.g.,
production-linked incentives computed
with reference to incremental sales of
eligible EVs/components, and demand
incentives under FAME passed through
to the Company) are recognised in the
Statement of Profit and Loss on a
systematic basis over the periods in
which the Company recognises the
related costs/sales as expenses, and
are presented as ''Other Income'' or
netted against the related expense, as
appropriate, with the policy consistently
applied and disclosed;

• Where a grant becomes receivable as
compensation for expenses already
incurred, it is recognised in profit or loss
in the period in which it becomes
receivable.

Government grants are not recognised
until there is reasonable assurance that the
Company will comply with the conditions
attached to them (such as minimum
domestic value addition, investment
thresholds, and localisation/indigenisation
targets under PLI-Auto and PLI-ACC
schemes) and the grants will be received.

2.15. Financial Instruments (Ind AS 109)

Financial assets and financial liabilities are
recognised when the Company becomes a

party to the contractual provisions of the
instrument. Financial assets are classified,
at initial recognition, as subsequently
measured at amortised cost, fair value
through other comprehensive income
(FVOCI), or fair value through profit or loss
(FVTPL), based on the Company''s business
model for managing the financial assets
and the contractual cash flow
characteristics of the financial asset.

• Trade receivables, security deposits,
and loans to employees are classified
and measured at amortised cost using
the effective interest rate (EIR) method,
less impairment;

• Investments in mutual funds / liquid
instruments held for treasury
management are measured at FVTPL;

• Investments in equity instruments of
other entities (other than
subsidiaries/associates/joint ventures)
are, in certain cases, irrevocably
designated at FVOCI;

• Derivative financial instruments,
including forward contracts and
commodity hedges used to manage
exposure to lithium/cobalt/nickel price
risk and foreign currency risk on
imported battery cells, are measured
at FVTPL unless designated as effective
hedging instruments, in which case
hedge accounting under Ind AS 109 is
applied.

2.16.Impairment of Financial Assets -
Expected Credit Loss (ECL)

The Company applies the Ind AS 109
expected credit loss model for recognising
impairment loss on financial assets
measured at amortised cost. For trade
receivables (including dealer receivables)
and contract assets, the Company applies
the simplified approach, recognising
lifetime expected credit losses from initial
recognition, using a provision matrix based

on historical default rates adjusted for
forward-looking estimates, dealer-
network credit risk concentration, and
macroeconomic factors relevant to the EV
financing ecosystem (including used-EV
residual value and battery degradation
risk affecting dealer floor-plan financing).
For other financial assets, the Company
assesses whether there has been a
significant increase in credit risk since
initial recognition; if not, 12-month ECL is
recognised, otherwise lifetime ECL is
recognised.

2.17.Impairment of Non-Financial Assets
(Ind AS 36)

The Company assesses at each reporting
date whether there is an indication that an
asset (including property, plant and
equipment, capitalised development
costs, and intangible assets) may be
impaired. If any indication exists, the
recoverable amount (higher of fair value
less costs of disposal and value in use) is
estimated. Given the rapid pace of
battery technology change and vehicle
platform evolution in the EV industry, the
Company specifically evaluates
indicators such as technological
obsolescence of a vehicle platform or
battery chemistry, regulatory changes
(emission norms, safety standards), and
significant underperformance of a cash¬
generating unit (CGU) relative to
budgeted performance. An impairment
loss is recognised in the Statement of Profit
and Loss when the carrying amount
exceeds the recoverable amount.
Goodwill (if any, arising on business
combinations) is tested for impairment
annually, irrespective of whether
indicators of impairment exist.

2.18. Borrowing Costs (Ind AS 23)

Borrowing costs directly attributable to the
acquisition, construction, or production of
a qualifying asset (an asset that

necessarily takes a substantial period of
time to get ready for its intended use, such
as the Company''s battery Giga-factory,
new assembly lines, and EV platform
tooling under construction) are capitalised
as part of the cost of the asset until such
time as the asset is substantially ready for
its intended use. All other borrowing costs
are expensed in the period in which they
are incurred. Income earned on temporary
investment of specific borrowings pending
their expenditure on qualifying assets is
deducted from the borrowing costs eligible
for capitalisation.

2.19. Employee Benefits (Ind AS 19)

Short-term employee benefits, including
salaries, wages, and performance
incentives expected to be paid within
twelve months, are recognised as an
expense in the period in which the related
services are rendered.

• Defined contribution plans (Provident
Fund, Employees'' State Insurance,
National Pension Scheme contributions)
are recognised as an expense as
incurred;

• Defined benefit plans (Gratuity,
payable in accordance with the
Payment of Gratuity Act, 1972) are
accounted for based on actuarial
valuation using the Projected Unit Credit
Method, carried out by an independent
actuary at each reporting date. Re¬
measurement gains/losses on the net
defined benefit liability are recognised
in Other Comprehensive Income (OCI)
and not reclassified to profit or loss in
subsequent periods;

• The Company treats accumulated leave,
as a long-term employee benefit for
measurement purposes. Such long-term
compensated absences are provided
for based on an actuarial valuation
using the projected unit credit method at
the period-end.

2.20. Income Taxes (Ind AS 12)

Income tax expense comprises current tax
and deferred tax. Current tax is the
expected tax payable on the taxable
income for the year, using tax rates enacted
or substantively enacted at the reporting
date, including consideration of the
concessional corporate tax regime under
Section 115BAA of the Income-tax Act,
1961, if opted for. Deferred tax is
recognised on temporary differences
between the carrying amounts of assets
and liabilities for financial reporting
purposes and their corresponding tax
bases, using the balance sheet liability
method. Deferred tax assets are
recognised to the extent it is probable that
future taxable profit will be available
against which the deductible temporary
differences, unused tax losses (including
those arising from accelerated
depreciation claimed on EV manufacturing
assets), and unused tax credits can be
utilised. Deferred tax assets and liabilities
are measured using tax rates expected to
apply in the period in which the asset is
realised or the liability is settled.

2.1 Basis of preparation of Standalone Financial Statements and
Compliance with Indian Accounting Standards (Ind AS)

The standalone financial statements of the Company have been prepared in
accordance with Indian Accounting Standards (“Ind AS”) notified under the
Companies (Indian Accounting Standards) Rules, 2015 (as amended from
time to time) and presentation requirements of Division II of Schedule III to
the Companies Act, 2013, (Ind AS compliant Schedule III), as applicable to
the Standalone Financial Statements.

Accordingly, the Company has prepared these Standalone Financial
Statements which comprise the Balance Sheet as at 31st March, 2025, the
Statement of Profit and Loss for the year ended 31st March 2025, the
Statement of Cash Flows for the year ended 31st March 2025 and the
Statement of Changes in Equity for the year ended as on that date, and
accounting policies and other explanatory information (together hereinafter
referred to as ‘Standalone Financial Statements’ or ‘financial statements’).

The separate financial statements have been prepared in accordance with
Indian Accounting Standards (Ind AS) under historical cost convention on
accrual basis except the assets and liabilities which have been measured at
Fair Values.

• Financial instruments - measured at fair value;

• Assets held for sale - measured at fair value less cost of sale;

• Plan assets under defined benefit plans - measured at fair
value

• Employee share-based payments - measured at fair value

• Biological assets - measured at fair value

• In addition, the carrying values of recognized assets and
liabilities, designated as hedged items in fair value hedges that
would otherwise be carried at cost, are adjusted to record
changes in the fair values attributable to the risks that are being
hedged in effective hedge relationship.

2.2 Current and Non-Current Classification:

The Company presents assets and liabilities in the balance sheet based on
current / non-current classification.

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

• Expected to be realised, or is intended to be sold or consumed, the
Company’s normal operating cycle.

• held primarily for the purpose of trading;

• It is expected to be realised within twelve months after the reporting
date; or

• It is cash or cash equivalent unless restricted from being exchanged
or used to settle a liability for at least twelve months after the
reporting period.

All other assets are classified as non-current.

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

• It is expected to be settled in the Company’s normal operating cycle;

• It is held primarily for the purpose of being trading;

• It is due to be settled within 12 months after the reporting date; or
the Company does not have an unconditional right to defer
settlement of the liability for at least 12 months after the reporting
date.

• 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 liabilities are classified as non-current.

2.3 Use of estimates and judgment

The preparation of financial statements requires estimates and assumptions
to be made that affect the reported amount of assets and liabilities on the
date of the financial statements and the reported amount of revenues and
expenses during the reporting period. Difference between the results and
estimates are recognized in the period in which the results are known /
materialized.

2.4 Effects of changes in Foreign exchange rates (Ind AS 21)

The financial statements are presented in Indian rupees, which is the
functional currency of the Company.

Transactions and balances

Transactions in foreign currencies are initially recorded by the Company in
INR at spot rates at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are
translated at INR spot rates of exchange at the reporting date. Exchange
differences arising on settlement or translation of monetary items are
recognised in the statement of profit and loss.

Non-monetary items that are measured in terms of historical cost in a
foreign currency are translated using the exchange rates at the dates of the
initial transactions. Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the date when the fair
value is determined. 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 (i.e., translation
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).

opted the period of 1^st day of April to 31^st day of March, each year as its
financial year for the purpose of preparation of financial statements
under the provisions of Section 2(41).

2.5 Fair Value Measurement: Ind AS-103

The Company measures financial instruments, such as, derivatives at fair
value at each balance sheet date. Fair value is the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair
value measurement is based on the presumption that the transaction to sell
the asset or transfer the liability takes place either:

? In the principal market for the asset or liability, or

? In the absence of a principal market, in the most advantageous
market for the asset or liability

The principal or the most advantageous market must be accessible by the
Company.

The fair value of an asset or a liability is measured using the assumptions
that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a
market participant’s ability to generate economic benefits by using the asset
in its highest and best use or by selling it to another market participant that
would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure the fair
value, maximising the use of relevant observable inputs and minimising the
use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the
financial statements are categorized within the fair value hierarchy,
described as follows, based on the lowest level input that is significant to the
fair value measurement as a whole:

> Level 1 — Quoted (unadjusted) market prices in active markets for
identical assets or liabilities

> Level 2 — Valuation techniques for which the lowest level input

that is significant to the fair value

measurement is directly or indirectly observable

> Level 3 — Valuation techniques for which the lowest level input
that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognised in the financial statements on
a recurring basis, the Company determines whether transfers have occurred
between levels in the hierarchy by re-assessing categorisation (based on the
lowest level input that is significant to the fair value measurement as a
whole) at the end of each reporting period.

The Company determines the policies and procedures for both recurring fair
value measurement, such as derivative instruments and unquoted financial
assets measured at fair value, and for non-recurring measurement, such as
assets held for distribution in discontinued operations.

External valuers are involved for valuation of certain unquoted financial
assets. Involvement of external valuers is decided upon annually by the
Board after discussion with and approval by the Company’s Audit
Committee. Selection criteria include market knowledge, reputation,
independence and whether professional standards are maintained. The
Management decides, after discussions with the Company’s external
valuers, which valuation techniques and inputs to use for each case.

For the purpose of fair value disclosures, the Company has determined
classes of assets and liabilities on the basis of the nature, characteristics
and risks of the asset or liability and the level of the fair value hierarchy as
explained above.

Revenue is recognized to the extent that it is probable that the economic
benefits will flow to the Company and the revenue can be reliably measured.
The following specific recognition criteria must also be met before revenue is
recognized:

a) Sales Revenue is recognized on dispatch to customers as per the
terms of the order. Gross sales are net of returns and applicable
trade discounts and excluding GST billed to the customers.

b) Subsidy from Government is recognized when such subsidy has
been earned by the company and it is reasonably certain that the
ultimate collection will be made.

c) Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable interest rate.
Interest income is included under the head “other income” in the
statement of profit and loss.

d) All other incomes are recognized based on the communications held
with the parties and based on the certainty of the incomes.

e) Revenue from contract with customers:

Revenue from contracts with customer is recognised when control of
the goods or services are transferred to the customer at an amount
that reflects the consideration to which the Company expects to be
entitled in exchange for those goods or services. The company has
concluded that it is the principal in its revenue arrangements because
it typically controls the goods or services before transferring them to
the customers.

Ind AS 115 establishes a five-step model to account for revenue
arising from contracts with customers and requires that revenue be
recognised at an amount that reflects the consideration to which an
entity expects to be entitled in exchange for transferring goods or
services to a customer.

Ind AS 115 requires entities to exercise Judgement, taking into
consideration all of the relevant facts and circumstances when
applying each step of the model to contracts with their customers.

The standard also specifies the accounting for the incremental costs
of obtaining a contract and the cost directly related to fulfilling a
contract. In addition, the standard requires extensive disclosures.

The Goods and service Tax (GST) is not received by the Company on
its own account. It is a tax collected on value added to the
commodity by the seller on behalf of the government. Accordingly, it
has been excluded from revenue.

The specific recognition criteria described below must also be met
before revenue is recognised.

f) Revenue from Sale of goods:

Revenue from sale of goods is recognised when all the significant
risks and rewards of ownership of the goods have been passed to the
buyer, usually on delivery of the goods. Revenue from the sale of
goods is measured at the fair value of the consideration received or
receivable, net of returns and allowances.

g) Interest income:

For all financial instrument measured at amortised cost, interest
income is recorded using effective interest rate (EIR), which is the rate
that exactly discounts the estimated future cash payments or receipts
through the expected life of the financial instrument or a shorter
period, where appropriate, to the net carrying amount of the financial
asset. Interest income is included under the head “other income” in
the statement of profit and loss.

h) Dividend Income:

Revenue is recognised when the Company’s right to receive the
payment is established, which is generally when shareholders
approve the dividend.

i) Other Operating Income:

The Company presents incentives received related to refund of
indirect taxes as other operating income in the statement of profit
and loss. Interest on the contract assets/ financial assets arising
from the Company’s principal or ancillary revenue generating
activities are classified as ‘Other operating revenue ’ in Statement of
Profit and Loss.

j) Other Income:

Other Income is accounted for on accrual basis except, where the
receipt of income is uncertain.

2.7 Taxes (Ind AS 12)

Current income tax

Current income tax assets and liabilities are measured at the amount
expected to be recovered from or paid to the taxation authorities. The tax
rates and tax laws used to compute the amount are those that are
enacted or substantively enacted, at the reporting date in India.

Current income tax relating to items recognised outside profit or loss is
recognised outside profit or loss (either in OCI or in equity). Current tax
items are recognised in correlation to the underlying transaction either in
OCI or directly in equity. Management periodically evaluates positions
taken in the tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provision where
appropriate.

Deferred tax

Deferred tax is provided using the liability method on temporary
differences between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary
differences.

Deferred tax assets are recognised for all deductible temporary
differences, the carry forward of unused tax credits and any unused tax
losses. Deferred tax assets are recognised to the extent that it is probable
that taxable profit will be available against which the deductible
temporary differences, and the carry forward of unused tax credits and
unused tax losses can be utilized.

The carrying amount of deferred tax assets is reviewed at each reporting
date and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the
deferred tax asset to be utilised. Unrecognised deferred tax assets are re¬
assessed at each reporting date and are recognised to the extent that it
has become probable that future taxable profits will allow the deferred
tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply in the period/year when the asset is realised or the
liability is settled, based on tax rates and tax laws that have been
enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is
recognised outside profit or loss (either in OCI or in equity).

Deferred tax items are recognised in correlation to the underlying
transaction either in OCI or directly in equity.

The Company offsets deferred tax assets and deferred tax liabilities if
and only if it has a legally enforceable right to set off current tax assets
and current tax liabilities and the deferred tax assets and deferred tax
liabilities relate to income taxes levied by the same taxation authority on
either the same taxable entity which intends either to settle current tax
liabilities and assets on a net basis, or to realise the assets and settle the
liabilities simultaneously, in each future period in which significant
amounts of deferred tax liabilities or assets are expected to be settled or
recovered.

2.8 Property, Plant & Equipment (Ind AS 16)

Property, plant and equipment and capital work in progress are stated at
cost, net of tax / duty credit availed, less accumulated depreciation and
accumulated impairment losses, if any. Such cost includes the cost of
replacing part of the plant and equipment and borrowing costs for long-term
construction projects if the recognition criteria are met. When significant
parts of plant and equipment are required to be replaced at intervals, the
Company depreciates them separately based on their specific useful lives. All
other repair and maintenance costs are recognised in the statement of profit
and loss as incurred.

Cost includes expenditures that are directly attributable to the acquisition of
the asset. The cost of self-constructed assets includes the cost of materials
and other costs directly attributable to bringing the asset to a working
condition for its intended use. Borrowing costs that are directly attributable
to the construction or production of a qualifying asset are capitalized as part
of the cost of that asset.

Subsequent expenditure related to an item of property, plant and equipment
is added to its book value only if it increases the future benefits from the
existing asset beyond its previously assessed standard of performance or
extends its estimated useful life.

Capital Work in Progress (CWIP) includes Civil Works in Progress, Plant &
Equipment under erection and Pre-Operative Expenditure pending allocation
on the assets to be acquired/commissioned, capitalized. It also includes
payments made to towards technical know-how fee and for other General
Administrative Expenses incurred for bringing the asset into existence.

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

Gains and losses upon disposal of an item of property, plant and equipment
are determined by comparing the proceeds from disposal with the carrying
amount of property, plant and equipment and are recognized net within
“other (income)/expense, net” in the statement of profit and loss.

Depreciation is calculated on a straight-line basis using the rates arrived at
based on the useful lives estimated by the management, which is equal to the
life prescribed under the Schedule II to the Companies Act, 2013.

The lives of the assets including Right to Use Assets are as follows:

The management believes that these estimated useful lives are realistic and
reflect fair approximation of the period over which the assets are likely to be
used.

An item of property, plant and equipment and any significant part initially
recognised is derecognised upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss arising on de¬
recognition 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.

The residual values, useful lives and methods of depreciation of property,
plant and equipment are reviewed at each financial period/year end and
adjusted prospectively, if appropriate.

2.9 Intangible Assets (Ind AS 38)

Costs relating to computer software, which is acquired, are capitalized and
amortised on a straight-line basis over their estimated useful lives of three
years.

Gains or losses arising from de-recognition of an intangible asset are
measured as the difference between the net disposal proceeds and the
carrying amount of the assets and are recognised in the statement of profit
and loss when the asset is derecognised.

2.10 Borrowing Costs (Ind AS 23)

Borrowing costs directly attributable to the acquisition, construction or
production of an asset that necessarily takes a substantial period of time to
get ready for its intended use or sale are capitalised as part of the cost of the
asset. All other borrowing costs are expensed in the period in which they
occur. Borrowing costs consist of interest and other costs that an entity
incurs in connection with the borrowing of funds. Borrowing cost also
includes exchange differences to the extent regarded as an adjustment to the
borrowing costs.

2.11 Leases (Ind AS 116)

The Company assesses at contract inception whether a contract is, or
contains, a lease. That is, if the contract conveys the right to control the use
of an identified asset for a period of time in exchange for consideration.

Company as a lessee

The Company applies a single recognition and measurement approach for all
leases, except for short-term leases and leases of low-value assets. The
Company recognises lease liabilities to make lease payments and right-of-use
assets representing the right to use the underlying assets.

Right-of-use assets

The Company recognises right-of-use assets at the commencement date of the
lease (i.e., the date the underlying asset is available for use). Right-of-use
assets are measured at cost, less any accumulated depreciation and
impairment losses, and adjusted for any re-measurement of lease liabilities.
The cost of right-of-use assets includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease payments made at or
before the commencement date less any lease incentives received. Right-of-
use assets are depreciated on a straight-line basis over the shorter of the
lease term and the estimated useful lives of the assets.

Lease Liabilities

At the commencement date of the lease, the Company recognises lease
liabilities measured at the present value of lease payments to be made over
the lease term. The lease payments include fixed payments. In calculating
the present value of lease payments, the Company uses its incremental
borrowing rate at the lease commencement date because the interest rate
implicit in the lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a modification, a change

in the lease term, a change in the lease payments or a change in the
assessment of an option to purchase the underlying asset.

Short-term leases and leases of low-value assets

The Company applies the short-term lease recognition exemption to its short¬
term leases of those leases that have a lease term of 12 months or less from
the commencement date and do not contain a purchase option.

2.12 Inventories (Ind AS 2)

Inventories are valued at the lower of cost and net realisable value. Cost is
determined on weighted average basis Costs incurred in bringing each
product to its present location and conditions are accounted for as follows:

? Raw materials and Components: Materials and other items held for
use in the production of inventories are not written down below cost
if the finished products in which they will be incorporated are
expected to be sold at or above cost. Cost includes cost of purchase
and other costs incurred in bringing the inventories to their present
location and condition.

? Finished goods and work in progress: cost includes cost of direct
materials and labour and a proportion of manufacturing overheads
based on the normal operating capacity, but excluding borrowing
costs.

? Net realisable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and the
estimated costs necessary to make the sale.

2.13 Impairment of Non-Financial Assets (Ind AS 36)

The Company assesses, at each reporting date, whether there is an
indication that an asset may be impaired. If any indication exists, or when
annual impairment testing for an asset is required, the Company estimates
the asset’s recoverable amount. An asset’s recoverable amount is the higher
of an asset’s or cash-generating unit’s (CGU) fair value less costs of disposal
and its value in use. Recoverable amount is determined for an individual
asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets. When the
carrying amount of an asset or CGU exceeds its recoverable amount, the
asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are 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. In determining fair value less costs of disposal, recent market
transactions are taken into account. If no such transactions can be
identified, an appropriate valuation model is used. These calculations are
corroborated by valuation multiples, quoted share prices for publicly traded
companies or other available fair value indicators.

The Company bases its impairment calculation on detailed budgets and
forecast calculations, which are prepared separately for each of the
Company’s CGUs to which the individual assets are allocated.

Impairment losses, including impairment on inventories, are recognised in
the statement of profit and loss. An assessment is made at each reporting
date to determine whether there is an indication that previously recognised
impairment losses no longer exist or have decreased. If such indication
exists, the Company estimates the asset’s or CGU’s recoverable amount. A
previously recognised impairment loss is reversed only if there has been a
change in the assumptions used to determine the asset’s recoverable
amount since the last impairment loss was recognised. The reversal is
limited so that the carrying amount of the asset does not exceed its
recoverable amount, nor exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been recognised for
the asset in prior periods/ years. Such reversal is recognised in the
statement of profit and loss unless the asset is carried at a revalued
amount, in which case, the reversal is treated as a revaluation increase.

I. Basis of preparation of financial statements

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act, 2013 ('the Act') read with Rule 7 of the Companies (Accounts) Rules, 2014.

Management evaluates all recently issued or revised accounting standards on an ongoing basis. The financial statements are prepared under the historical cost convention. Recognition of income and expenses, accrual basis of accounting is followed.

ii. Use of Estimates;

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the result of operations during the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

iii. Fixed Assets and Depreciation;

Fixed Assets are stated at cost, less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Financing costs relating to acquisition of fixed assets are also included to the extent they related to the period till such assets are ready to be put to use.

Depreciation on fixed assets has been provided on straight-line method based on useful life of asset specified in Schedule II of the Companies Act, 2013 on pro-rata basis.

iv. Investments;

Long-term Investments are stated at cost. Provision for diminution is being made if necessary to recognize a decline, other than temporary in the value thereof.

v. Inventories;

Inventories are valued as follows;

i) Finished Goods : At Cost

vi. Revenue Recognition;

Sale of Goods are accounted on delivery to customers. Sales are net of returns, discounts and Sales Tax / Value Added basis.

vii. Employee Benefits;

a. Gratuity & Leave Encashment;

Provisions for Gratuity and Leave Encashment have been provided in the books of accounts as the management estimates.

b. Provident fund;

Eligible employees receive benefits from a provident fund, which is a defined contribution plan. Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employee and the company make monthly contributions to the Regional Provident Fund Commissioner equal to a specified percentage of the covered employee's salary.

c. Employee State Insurance Fund;

Eligible employees receive benefits from employee state insurance scheme, which is a gross salary of less than Rs.15,000 per month are entitled to receive benefit under employee state insurance fund scheme. The employer makes contribution to the scheme at a predetermined rate (presently 4.75%) of employee's gross salary. The Company has no further obligations under the plan beyond its monthly contributions. These contributions are made to fund administered and managed by the Government of India.

viii. Provision for current and deferred tax;

Provision for current tax is made on the basis of estimated taxable income and fringe benefits respectively for the current accounting period in accordance with the provisions of Income Tax Act, 1961. Deferred tax resulting from "timing differences" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax liability is recognized and carried forward only to the extent that there is a virtual certainty that the liability will be realized in future.

ix. Provisions, Contingent Liabilities and Contingent Assets;

Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

x. Earnings per Share

In determining earnings per share, the company considers the net profit after tax expense. The number of shares used in computing basic earnings per share is the weighted average shares outstanding during the period.

xi. Cash flow statement

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the company are segregated.

xii. Foreign Exchange Transactions:

Transactions in foreign currencies are translated at the exchange rates prevailing on dates of transactions on case of purchases of materials; sale of goods and services rendered the exchange gains/losses on settlements during the year, are treated as expenditure and transferred to profit and loss account.

I. Basis of Accounting;

The Financial Statements are prepared under the historical cost convention on an accrual basis and in accordance with applicable Accounting Standards notified by the Government of India / issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956.

ii. Use of Estimates;

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the result of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

iii. Fixed Assets and Depreciation;

Fixed Assets are stated at cost, less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Financing costs relating to acquisition of fixed assets are also included to the extent they related to the period till such assets are ready to be put to use.

Depreciation is provided on Straight Line Method as per the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 with reference to the month of acquisition / installation.

iv. Investments;

Long-term Investments are stated at cost. Provision for diminution is being made if necessary to recognize a decline, other than temporary in the value thereof.

v. Inventories;

Inventories are valued as follows; i) Finished Goods : At Cost

vi. Revenue Recognition;

Sale of Goods are accounted on delivery to customers. Sales are net of returns, discounts and Sales Tax / Value Added basis.

vii. Employee Benefits;

a. Gratuity & Leave Encashment;

Provisions for Gratuity and Leave Encashment have been provided in the books of accounts as the management estimates.

b. Provident fund;

Eligible employees receive benefits from a provident fund, which is a defined contribution plan. Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employee and the company make monthly contributions to the Regional

Provident Fund Commissioner equal to a specified percentage of the covered employee''s salary.

c. Employee State Insurance Fund;

Eligible employees receive benefits from employee state insurance scheme, which is a gross salary of less than Rs.10,000 per month are entitled to receive benefit under employee state insurance fund scheme. The employer makes contribution to the scheme at a predetermined rate (presently 4.75%) of employee''s gross salary. The Company has no further obligations under the plan beyond its monthly contributions. These contributions are made to fund administered and managed by the Government of India.

viii. Provision for current and deferred tax;

Provision for current tax is made on the basis of estimated taxable income and fringe benefits respectively for the current accounting period in accordance with the provisions of Income Tax Act, 1961. Deferred tax resulting from "timing differences" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax liability is recognized and carried forward only to the extent that there is a virtual certainty that the liability will be realized in future.

ix. Provisions, Contingent Liabilities and Contingent Assets;

Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

x. Earnings per Share

In determining earnings per share, the company considers the net profit after tax expense. The number of shares used in computing basic earnings per share is the weighted average shares outstanding during the period.

xi. Cash flow statement

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the company are segregated.

xii. Foreign Exchange Transactions:

Transactions in foreign currencies are translated at the exchange rates prevailing on dates of transactions on case of purchases of materials; sale of goods and services rendered the exchange gains/losses on settlements during the year, are treated as expenditure and transferred to profit and loss account.

1. Basis of Accounting;

The Financial Statements are prepared under the historical cost convention on an accrual basis and in accordance with applicable Accounting Standards notified by the Government of India / issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956.

2. Use of Estimates;

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the result of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

3. Fixed Assets and Depreciation;

Fixed Assets are stated at cost, less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Financing costs relating to acquisition of fixed assets are also included to the extent they related to the period till such assets are ready to be put to use.

Depreciation is provided on Straight Line Method as per the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 with reference to the month of acquisition / installation.

4. Inventories;

Inventories are valued as follows;

i) Finished Goods : At Cost

5. Revenue Recognition;

Sale of Goods are accounted on delivery to customers. Sales are net of returns, discounts and Sales Tax / Value Added basis.

6. Employee Benefits;

a. Gratuity & Leave Encashment;

Provisions for Gratuity and Leave Encashment have been provided in the books of accounts as the management estimates.

b. Provident fund;

Eligible employees receive benefits from a provident fund, which is a defined contribution plan. An aggregate contribution along with interest thereon is paid at retirement, death, incapacitation or termination of employment. Both the employee and the company make monthly contributions to the Regional Provident Fund Commissioner equal to a specified percentage of the covered employee''s salary.

c. Employee State Insurance Fund;

Eligible employees receive benefits from employee state insurance scheme, which is a gross salary of less than Rs.10,000 per month are entitled to receive benefit under employee state insurance fund scheme. The employer makes contribution to the scheme at a predetermined rate (presently 4.75%) of employee''s gross salary. The Company has no further obligations under the plan beyond its monthly contributions. These contributions are made to fund administered and managed by the Government of India. of India.

7. Provision for current and deferred tax;

Provision for current tax is made on the basis of estimated taxable income and fringe benefits respectively for the current accounting period in accordance with the provisions of Income Tax Act, 1961. Deferred tax resulting from "timing differences" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax liability is recognized and carried forward only to the extent that there is a virtual certainty that the liability will be realized in future.

8. Provisions, Contingent Liabilities and Contingent Assets;

Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

9. Earnings per Share

In determining earnings per share, the company considers the net profit after tax expense. The number of shares used in computing basic earnings per share is the weighted average shares outstanding during the period.

10. Cash flow statement

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the company are segregated.

1. Basis of Accounting;

The Financial Statements are prepared under the historical cost convention on an accrual basis and in accordance with applicable Accounting Standards notifed by the Government of India / issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956.

2. Use of Estimates;

The preparation of fnancial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the fnancial statements and the result of operations during the reporting period. Although these estimates are based upon managements best knowledge of current events and actions, actual results could differ from these estimates.

3. Fixed Assets and Depreciation;

Fixed Assets are stated at cost, less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Financing costs relating to acquisition of fxed assets are also included to the extent they related to the period till such assets are ready to be put to use.

Depreciation is provided on Straight Line Method as per the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 with reference to the month of acquisition / installation.

4. Investments;

Long-term Investments are stated at cost. Provision for diminution is being made if necessary to recognize a decline, other than temporary in the value thereof.

5. Inventories;

Inventories are valued as follows;

i) Finished Goods : At Cost

ii) Shares : At Cost

6. Revenue Recognition;

Sale of Goods are accounted on deliver to customers. Sales is net of returns, discounts and Sales Tax / Value Added basis. Dividend income is accounted for when the right to receive is established.

7. Miscellaneous Expenditure;

Amalgamation expenses are written off 1/5 ever year

8. Retirement and other employee benefits;

No provision has been made for retirement benefits, as they are not applicable to the company.

9. Provision for current and deferred tax;

Provision for current tax is made on the basis of estimated taxable income and fringe benefits respectively for the current accounting period in accordance with the provisions of Income Tax Act, 1961. Deferred tax resulting from "timing differences" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax liability is recognized and carried forward only to the extent that there is a virtual certainty that the liability will be realized in future.

10. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be an outfow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the fnancial statements.

11. Leases;

Operating lease payments are recognized as expenses in the proft and loss account as per the terms of the agreements which are representative of the time pattern of the users benefit.