Accounting Policies of Mamata Machinery Ltd. Company

Mar 31, 2025

ⁿThe Company bought back 2,37,860 equity shares for an aggregate amount of '' 26,16,46,000 being 8% of the
total paid up equity share capital at '' 1,100 per equity share. The equity shares bought back were extinguished
on June 10, 2023.

*The Board of Directors in their meeting held on May 31, 2024 approved resolution for issue of Bonus equity
shares in the ratio of 1:8, 8 (Eight) new equity share of '' 10/- each for every 1 (One) existing fully paid-up shares
of '' 10/- each to existing shareholders of the company which was subsequently approved by Members of
Company in the Extraordinary General Meeting held on May 31, 2024.

b) For the period of five years immediately preceding the balance sheet date March 31, 2025

- Aggregate number and class of shares alloted as fully paid up pursuant to contract(s) without payment
being received in cash: Nil

- Aggregate number and class of shares allotted as fully paid up by way of bonus shares: 2,18,73,600 Equity
Shares of '' 10 each

- Aggregate number and class of shares bought back: 2,37,860 Equity Shares of '' 10 each

Nature and purpose of each reserve:

i) Capital Reserve: During amalgamation/merger/acquisition, the excess of net assets taken, over the
consideration paid, if any, is treated as capital reserve.

ii) Securities Premium Reserve: The amount received in excess of face value of the equity shares is recognised
in Securities Premium Reserve. In case of equity-settled share based payment transactions, the difference
between fair value on grant date and nominal value of share is accounted as securities premium reserve.
This reserve is utilised in accordance with the provisions of the Companies Act 2013.

iii) General Reserve: The reserve arises on transfer portion of the net profit pursuant to the earlier provisions
of Companies Act 1956. Mandatory transfer to general reserve is not required under the Companies Act
2013.

Note on Borrowings

i) Car loan from HDFC Bank Ltd (Hyundai EV-
IONIQ 5)

Secured car loan of '' 4.56 Million sanctioned on 28^th
November, 2023 at fixed rate of interest of 8.82%
p.a. The Loan is repayable in 48 monthly instalments
commencing from the month following the month of
purchase of said vehicle/car. The car loan is taken in
the name of Mamata Machinery Limited and secured
against hypothecation of car.

ii) Car loan from HDFC Bank Ltd (XUV-700)

Secured car loan of '' 2.59 Million sanctioned on
08^th August, 2022 at fixed rate of interest of 7.89%
p.a. The Loan is repayable in monthly instalments
commencing from the month following the month of
purchase of said vehicle/car. The car loan is taken in
the name of Mamata Machinery Limited and secured
against hypothecation of car.

iii) Car loan from HDFC Bank Ltd (Toyota)

Secured car loan of '' 9.13 Million sanctioned on 11^th
November, 2020 at fixed rate of interest of 7.51%
p.a. The Loan is repayable in monthly instalments
commencing from the month following the month of
purchase of said vehicle/car. The car loan is taken in
the name of Mamata Machinery Limited and secured
against hypothecation of car.

iv) Car loan from HDFC Bank Ltd (BMW -740I)

Secured car loan of '' 14.06 Million sanctioned on
23^rd December, 2019 at fixed rate of interest of 8.40%
p.a. The Loan is repayable in monthly instalments
commencing from the month following the month of
purchase of said vehicle/car. The car loan is taken in
the name of Mamata Machinery Limited and secured
against hypothecation of car.

vii) There are no defaults in respect of any loans
during the current year and previous financials years
reported.

Note on Borrowings

i) Working Capital loan from State Bank of India (GECL- 39538929534)

Guranteed Emergency Credit Line loan limit of '' 24.25 Million sanctioned on 01 July, 2020 at fixed rate of
interest of 7.40% p.a. The Loan is repayable in monthly instalments commencing from the month following the
month of loan taken. The GECL loan is taken in the name of Mamata Machinery Limited. This loan is given for
payment of salaries/wages to the employees during COVID situation.The Loan is repayable in 4 years monthly
instalments commencing after 12 months from the date of disbursement. The Loan is repaid during the year.

ii) State Bank of India CC A/c

Cash credit facility of '' 129 Million (Include SBI SME EPC Cash credit limit of '' 100 Million) is secured by all
current assets (including stock, raw material, goods, book debts and vehicles and all other movable assets of the
borrower),present and future wherever lying, stored and kept and whether in possession of the Borrower or of
the bank of any third party whether in india or elsewhere. The Cash Credit facility is taken in the name of Mamata
Machinery Limited.The Loan is repayable on demand. The facility is closed during the year.

iii) HDFC FDOD A/c - 492320000455

Cash credit limit of '' 95.00 Million is secured by fixed deposits. The Cash Credit facility is taken in the name of
Mamata Machinery Limited.The Loan is repayable on demand. The facility is closed during the year.

42. Operating Segment

In accordance with Ind AS 108 “Operating Segments”, segment information has been given in the consolidated
Ind AS financial statements, and therefore, no separate disclosure on segment information is given in these
Financial Statements.

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date.

Level 2 inputs are inputs other than quoted prices included within Level 1, that are observable for the asset or
liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for the asset or liability.

All financial assets and liabilities are categorised under a Amortised Cost, hence there are no fair value
adjustments and therefore hierarchy table not applicable.

45. Financial Risk Management

The Company has exposure to the following risks arising from financial instruments:

- Credit risk;

- Liquidity risk; and

- Market risk.

i) Credit Risk

Credit Risk is the risk that the counter party will not meet its obligation under a financial instrument or customer
contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily
trade receivables) including deposits with banks and other financial assets.

Trade Receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer,
demographics of the customers, default risk of the country in which the customer operates. Credit risk is
managed through credit approvals, establishing credit limits and continously monitoring the creditworthiness
of the customer to which the Company grants credit terms in the normal course of business.

Cash and Cash Equivalents

Credit risk from balances with banks is managed by the Company''s Finance department team in accordance
with the Company''s policy. The limits are set to minimize the concentration of risks and therefore mitigate
financial loss through counter party''s potential failure to make payments. Credit limits of all authorities are
reviewed by the management on regular basis. All balances with banks is subject to low credit risk due to good
credit ratings assigned to the Company.

The Company''s maximum exposure to credit risk for the Cash & Cash Equivalents components of the balance
sheet at March 31,2025 and March 31, 2024 is the carrying amounts as illustrated in the Balance Sheet.

Other Financial Assets

Other Financial Assets are neither past over due nor impaired.

ii) Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become
due. The Company employees prudent liquidity risk management practices which inter alia means maintaining
sufficient cash and the availability of funding through an adequate amount of committed credit facilities. Given
the nature of the underlying businesses, the corporate finance maintains flexibility in funding by maintaining
availability under committed credit lines and this way liquidity risk is mitigated by the availability of funds to cover
future commitments. Cash flow forecasts are prepared and the utilized borrowing facilities are monitored on a
daily basis and there is adequate focus on good management practices whereby the collections are managed
efficiently. The Company while borrowing funds for large capital project, negotiates the repayment schedule
in such a manner that these match with the generation of cash on such investment. Longer term cash flow
forecasts are updated from time to time and reviewed by the Senior management of the Company.

Interest rate risk and Exposure to interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates
relates primarily to the Company''s long-term and short term debt obligations with floating interest rates.

Presently the borrowings of the company are subject to a floating interest regime at MCLR specified in the
respective financing agreements, which is subject to variation in rate of interest in the market. Considering
the present market scenario the Company''s policy is to maximise the borrowings at MCLR based variable
interest rate.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion
of loans and borrowings affected. With all other variables held constant, the Company''s profit before tax is
affected through the impact on floating rate borrowings, as follows:

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently
observable market environment.

Foreign Currency Risk Management

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign
exchange rates relates primarily to the Company''s operating activities (when revenue, expense or capital
expenditure is denominated in foreign currency). Foreign currency exchange rate exposure is partly balanced
by purchasing of goods from the respective countries. The Company evaluates exchange rate exposure arising
from foreign currency transactions and follows established risk management policies.

Contract liabilities are on account of the upfront revenue received from customer (advance from customer) for
which performance obligation has not yet been completed.

The performance obligation is satisfied when control of the goods or services are transferred to the customers
based on the contractual terms. Payment terms with customers vary depending upon the contractual terms of
each contract.

47. Government Grant

The Company is entitled to government assistance on its Export incentives on fulfilment of the conditions stated
in the respective schemes. Duty credit allowed under the Remission of Duties and Taxes on Exported Products
(RoDTEP) scheme and Duty Drawback scheme are subject to realization of sale proceeds within the period
prescribed by RBI. These are of revenue in nature and the same is accounted as stated in accounting policy on
Government Grant.

Estimation of fair value: Method of Estimation

In the absence of valuation reports of Registered Valuer as defined under rule 2 of Companies (Registered
Valuer and valuation) Rules, 2017, the Company has used the government registration rates for the purpose of
determining the fair value of Land and Buildings.

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Mar 31, 2024

1. Corporate Information:

Mamata Machinery Limited (Mamata or the "Parent Company") is a public limited Company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. The Registered office of the Company is located at survey No. 423/P, Sarkhej-Bavla Road, N.H.8A, Moraiya, Sanand, Ahmedabad, Gujarat-382213, India.

The Company was converted from a Private Limited Company to Public Limited company vide Special resolution passed in the Extra-Ordinary General Meeting of the company dated June 05, 2024 and consequently, the name of the Company was changed to "Mamata Machinery Limited" and a fresh certificate of incorporation, dated June 21, 2024 was issued to the Company by the Registrar of Companies, Central Processing Centre having Corporate Identification Number U29259GJ1979PLC003363.

The Mamata Machinery has its operations in the State of Gujarat and is principally engaged in the business of (i) Bag Packing Machinery (ii) Packing Machinery (iii) Plastic Extrusion Machinery, (iv) Part of Machinery

2. Statement of Compliance

These Ind AS Financial Statements ("Financial Statements") have been prepared in accordance with Indian Accounting Standards ("Ind AS") as per the provisions of Companies (India Accounting Standards) Rules, 2015 notified under section 133 of the Companies Act 2013, (" the Act") and other relevant provisions of the Act.

The Financial Statements are presented in Indian Rupees ("INR") and all values are rounded to the nearest Million (Rs. 000,000) upto one decimal, except when otherwise indicated. Due to rounding off, the numbers presented throughout the document may not add up precisely to the totals and percentages may not precisely reflect the absolute figures. Previous year figures have been regrouped / re-casted / re-classified, wherever necessary.

3. Basis of Preparation of Financial Statements

The Financial Statements have been prepared under historical cost convention on accrual basis, unless otherwise stated. These Financial Statements of the Company are presented as per Schedule III (Division II) of the Companies Act, 2013.

For the purpose of Ind AS Financial Statements for the year ended March 31, 2024 of the Company, the transition date is considered as April 01, 2022 for the purpose of preparation of Statutory Ind AS Financial Statements as required under the Act.

Current and non-current classification

The Company presents assets and liabilities in the balance sheet based on current and noncurrent classification.

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 o p e r a t i

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

(c) it is expected to be realised within 12 months after the balance sheet date; or

(d) it is cash or a cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the balance sheet 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 balance sheet date, or

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

Current liabilities include current portion of noncurrent 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

The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. The Company has identified twelve months as its operating cycle for the purpose of current and non-current classification of assets and liabilities.

4. Material Accounting Policies: -

4.1 Critical Accounting estimates, assumptions and judgements.

The preparation of the Financial Statements in conformity with Ind AS requires management to make

estimates, judgements and assumptions. These estimates, judgements and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of Financial Statements and reported amounts of revenues and expenses during the period. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of the circumstances surrounding the estimates. Changes in estimates are reflected in the financial statement in the period in which changes are made and if material, their effects are disclosed in the notes to the Financial Statements. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and future periods are affected.

4.1.1 Judgernenls^

Information abou^ judgements made in applying accounting policies that hav^the most

material effects on the amounts recognised in the financial statements is included in the following notes:

Revenue recognition:

Revenue is measured based on the consideration specified in a contract with a customer. The Company recognises revenue when it transfers control over a good or service to a customer based on lead time assessment for transfer of goods from one location to other location subject to inco terms^

4.1.2 Accounting Estimates and Assumptions

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying values of assets and liabilities within the next financial year are discussed below.

a) Employee Benefit Obligations

Employee benefit obligations are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments. These include the estimation of the appropriate discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, the employee benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

b) Provisions and contingencies

From time to time, the Company is subject to legal proceedings, the ultimate outcome of each being subject to uncertainties inherent in litigation. A provision for litigation is made when it is considered probable that a payment will be made and the amount can be reasonably estimated. Significant judgment is required when evaluating the provision including, the probability of an unfavourable outcome and the ability to make a reasonable estimate of the amount of potential loss. Litigation provisions are reviewed at each accounting period and revisions made for the changes in facts and circumstances. Contingent liabilities are disclosed in the notes forming part of the Financial Statements. Contingent assets are not disclosed in the Financial Statements unless an inflow of economic benefits is probable.

c) Deferred income tax assets and liabilities

Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits. The amount of total deferred tax assets could change if management estimates of projected future taxable income or if tax regulations undergo a change. Similarly, the identification of temporary differences pertaining to subsidiary that are expected to reverse in the foreseeable future and the determination of the related deferred income tax liabilities, require the Management to make material judgments, estimates and assumptions.

d) Useful lives of property, plant and equipment (‘PPE’) and intangible assets

Management reviews the estimated useful lives and residual value of PPE and Intansible^at^the .end of each reporting period. Factors such as changes in the

expected level of usage, technological developments, units-of-production and product life-cycle, could significantly impact the economic useful lives and the residual values of these assets. Consequently, the future depreciation and amortisation charge could be revised and may have an impact on the profit of the future years.

4.2 The Company has consistently applied the following material accounting policies to all periods presented in these Financial Statements.

a) Revenue recognition:

Revenue is recognised upon transfer of control of promised goods to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those goods. To * 4recognize revenues, the Company applies the following five step approach:

- identify the contract with a customer,

- identify the performance obligations in the contract,

- determine the transaction price,

- allocate the transaction price to the performance obligations in the contract, and

- recognise revenues when a performance obligation is satisfied.

Sale of goods

The Company manufactures and sells packing machines. Sales are recognised when control o.f the products has transferred, being when the products are delivered to the customers. Delivery occurs when the products have been shipped to the specific location, the risks-of obsolescence and loss have been transferred to the customer.

The timing of transfers of control varies depending on the terms of sale. For domestic sale of goods to the customers, such transfer occurs when the products are delivered to dealers. For FOB export terms of sale, it will be considered as sale when delivered to a carrier at the port of the seller. For CIF terms of sale, it will be considered as sales when it will be received by buyer.

Revenue is measured based on the transaction price, which is the consideration, adjusted for trade discount, cash discount, rebates, scheme allowances, incentives and returns, if any, as specified in the contracts with the customers. Revenue excludes taxes collected from customers on behalf of the government. Accruals for discounts/incentives and returns are estimated (using the most likely method) based on accumulated experience and underlying schemes and agreements with customers.

The Company gives warranties on certain products undertaking to repair or replace the item that failed to perform satisfactorily during the warranty period. Provision for warranties is made for probable future claims on sales effected and are estimated based on previous claim experience and are accounted for under Ind AS 37 Provisions, Contingent Liabilities and Contingent Assets.

Sale of services

Revenue from sale of services is recognized when the activity is performed as per service contract. In arrangements for sale of goods, the Company provides after-sales service to the end customers which entitles them to avail free of cost maintenance services for a specified period and after that a paid service. When two or more revenue-generating activities or deliverables are provided under a single arrangement, each deliverable that is considered to be a separate unit of account is accounted for separately.

Other operating revenue -

i) Export incentive entitlements are recognised as income when the right to receive credit as per the terms of the scheme is established in respect of the exports made, and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds. These are presented as other operating income in the Statement of Profit and Loss.

ii) Dividend and interest income:

Dividend income is recognised when the Company''s right to receive the payment is established, which is generally when shareholders approve the dividend.

Interest income from a financial asset is recognised when it is probable that the 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 rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.

b) Tax Expense:

The tax expense comprises of income tax and deferred tax. Tax is recognized in Statement of Profit and Loss, except to the extent that it relates to items recognized in the comprehensive income or in equity.

i. Current Income taxes: Current income tax for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities based on the taxable income for the period. The tax rates and tax laws used to compute the current tax amounts are those that are enacted or substantively enacted as at the reporting date and applicable for the period. While determining the tax provisions, the Company assesses whether each uncertain tax position is to be considered separately or together with one or more uncertain tax positions depending the nature and circumstances of each uncertain tax position. The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and liability simultaneously.

ii. Deferred taxes: Deferred income tax is recognized using the balance sheet approach. Deferred income tax assets and liabilities are recognized for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount in Financial Statements, except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profits or loss at the time of the transaction.

Deferred income tax assets are recognized to the extent 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.

Deferred income tax liabilities are recognized for all taxable temporary differences except in respect of taxable temporary differences that is expected to reverse within the tax holiday period.

The Company offsets deferred income tax assets and liabilities, where it has a legally enforceable right to offset current tax assets against current tax liabilities, and they relate to taxes levied by the same taxation authority on either the same taxable entity, or on different taxable entities where there is an intention to settle the current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

i. Post-employment and pension plans

The Company participates in various employee benefit plans. Pensions and other post-employment benefits are classified as either defined contribution plans or defined benefit plans. Under a defined contribution plan, the Company''s only obligation is to pay a fixed amount with no obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits. The related actuarial and investment risks are borne by the employee. The expenditure for defined contribution plans is recognized as an expense during the period when the employee provides service. Under a defined benefit plan, it is the Company''s obligation to provide agreed benefits to the employees. The related actuarial and investment risks are borne by the Company. The present value of the defined benefit obligations is calculated by an independent actuary using the projected unit credit method.

Re-measurement comprising actuarial gains or losses and the return on plan assets (excluding interest) are immediately recognized in other comprehensive income, net of taxes and permanently excluded from profit or loss.

¦ Provident fund

Employees receive benefits from a provident fund, which is a defined benefit plan. The employer and employees each make periodic contributions to the plan. A portion of the contribution is made to the approved provident fund trust managed by the Company while the remainder of the contribution is made to the government administered pension fund. The contributions to the trust managed by the Company is accounted for as a defined benefit plan as the Company is liable for any shortfall in the fund assets based on the government specified minimum rates of return.

* Gratuity .

In accordance with the Payment of Gratuity Act, 1972, applicable for Indian companies, the Company provides for a lump sum payment to eligible employees, at retirement or termination of employment based on the last drawn salary and years of employment with the Company. The gratuity fund is managed by the third-party fund managers.

The Company''s obligation in respect of above plans, which are defined benefit plans, are provided for based on actuarial valuation using the projected unit credit method. The Company recognizes actuarial gains and losses in other comprehensive income, net of taxes.

ii. Termination benefits

Termination benefits are expensed when the Company can no longer withdraw the offer of those benefits.

iii. Short-term benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are recorded as expense as the related service is provided. A liability is recognized for the amount expected to be paid under short-term cash bonus or profit-sharing plans, 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.

d) Property, Plant and Equipment:

i) Recognition and measurement - Property, Plant and equipment are stated at historical cost, less accumulated depreciation, and accumulated impairment losses, if any. The historical cost comprises of the purchase price, taxes, duties, freight, borrowing cost and other incidental expenses directly attributable and related to the acquisition and installation of the concerned assets wherever applicable.

Subsequent costs are included in the asset''s carrying amount or recognized as separate asset, as appropriate, only when it is probable that future economic benefits will flow to the entity and cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.

ii) Depreciation and amortization method, estimated useful lives and residual value:

Depreciation amount for assets is the cost of an asset, or other amount substituted for cost less its estimated residual value.

Depreciation on PPE (other than free hold land and factory building) has been provided based on useful life of the assets in accordance with Schedule II of the Companies Act, 2013, on Written Down Value (WDV) method. For factory building depreciation provided on Straight Line Method. Freehold land is not depreciated.

Depreciation methods, useful lives and residual value are reviewed at each reporting date and adjusted prospectively, if appropriate.

Depreciation on additions is charged proportionately from the date the asset is ready for its intended use. Depreciation on sale / deduction from tangible assets is provided up to the date of sale / deduction or discarding date as the case maybe.

Based on technical evaluation and consequent advice, the management believes that its estimates of useful lives as given above best represent the period over which management expects to use these assets.

iii) De-Recognition:

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

e) Impairment of non-financial assets:

At each balance sheet date, the carrying amount of fixed assets is reviewed by the management to determine whether there is any indication that those assets suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (the recoverable amount is the higher of an asset''s net selling price or value in use). In assessing the value in use, the estimated future cash flows expected from the continuing use of- t-he iisets-and from their disposal are discounted to their present value using a pre-discounted rate that reflects the current market assessment of the time value of money and risks specific to the asset.

Reversal of impairment loss is recognized immediately as income in the Profit and Loss Account.

f) Other Intangible assets

Other Intangible assets that are acquired by the Company and that have finite useful lives are measured at cost less accumulated amortisation and accumulated impairment losses, if -any. Intangible assets are amortized over a period .of 5 years on straight line method. Subsequent expenditures are capitalised only when they increase the future economic benefits embodied in the specific asset to which they relate.

g) Investment Property

Property that is held for long-term rental yields or for capital appreciation or both, is classified as investment property. Investment property is measured initially at its cost, including related transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalised to the asset''s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognised. Investment properties are depreciated using the straight-line method over their estimated useful lives. Though the Company measures investment property using cost-based measurement, the fair value of investment property is disclosed in the notes. The Company has used government registration rates for the purpose of determining fair value of Land and Buildings.

h) Foreign currency transaction

Transactions in currencies other than the entity''s functional currency, (foreign currencies) are translated at exchange rates on the date of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated into the functional currency at the exchange rate on that date.

Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous period are recognised in profit or loss in the period in which they arise except for:

Exchange differences relating to the translation of the results and the net assets of the Company''s foreign operations from their functional currencies to the Company''s presentation currency (i.e. INR) are recognised directly in the other comprehensive income and accumulated in the foreign currency translation reserve. Exchange differences in the foreign currency translation reserve are reclassified to a statement of profit or loss account on the disposal of the foreign operation.

Non-monetary items that are measured in terms of historical cost in foreign currency are measured using the exchange rates at the date of initial transaction.

i) Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

i. Financial Assets:

Recognition and measurement:

Initial recognition and measurement:

Financial assets are classified, at initial recognition, are measured as amortised cost, fair value through other comprehensive income and fair value through profit and loss. The classification of financia|_jLSgets at initial recognition depends on the financial asset''s contractual cash flow characferisti^''affd .the company''s business model for managing them. -

Subsequent measurement:

¦ Financial assets carried at amortized cost: A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

¦ Financial assets at fair value through other comprehensive income: A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

¦ Financial assets at fair value through profit and loss (FVTPL): A financial asset is subsequently measured at fair value through profit and loss if it is held within a business model whose objective is achieved by selling financial assets.

Equity instruments

All equity instruments in scope of Ind AS 109 are measured at fair value. Equity instruments vvhich are held for trading are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present subsequent changes in the fair value in OCI. The Company makes such an election on an instrument-by-instrument basis. 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, including foreign exchange gain or loss and excluding dividends, are recognised in the OCI. There is no recycling of the amounts from OCI to profit or loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity on derecognition. Equity instruments included within the FVTPL category are measured at fair value with all changes recognised in the profit or loss.

Derecognition of financial instruments

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. If the Company retains substantially all the risks and rewards of a transferred financial asset, the Company continues to recognize the financial asset and recognizes a borrowing for the proceeds received. A financial liability (or a part of a financial liability) is derecognized from the Company''s balance sheet when the obligation specified in the contract is discharged or cancelled or expires. Derecognition of financial instruments The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. If the Company retains substantially all the risks and rewards of a transferred financial asset, the Company continues to recognize the financial asset and recognizes a borrowing for the proceeds received. A financial liability (or a part of a financial liability) is derecognized from the Company''s balance sheet when the obligation specified in the contract is discharged or cancelled or expires.

Impairment of financial assets

In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the Trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 115.

The Company follows ''simplified approach'' for recognition of impairment loss allowance on trade receivables or any contractual right to receive cash or another financial asset.

The application..^ simplified approach does not require the Company to track changes in credit risk. Rather;-1^recogniseS''lmpairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition. As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.

ii. Financial Liabilities and equity instruments:

Classification as debt or equity:

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments:

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.

Repurchase of the Company''s own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company''s own equity instruments.

Initial recognition and measurement:

All financial liabilities are classified at initial recognition as financial liabilities at fair value through profit or loss, loans and borrowings, and payables, net of directly attributable transaction costs. The Company''s financial liabilities include loans and borrowings including bank overdraft, trade payable, trade deposits and other payables.

Subsequent measurement:

All financial liabilities are subsequently measured at amortised cost using the effective interest method. Financial liabilities, including derivatives and embedded derivatives, which are designated for measurement at FVTPL are subsequently measured at fair value.

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 between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

j) Inventories:

Inventories are valued at the lower of cost determined on First In First out ("FIFO") basis and net realisable value. Cost includes purchase price, duties, transport & handling costs and other costs directly attributable to the acquisition and bringing the inventories to their present location and condition. The basis of determination of cost remains as follows:

a) Raw material, packing material: At cost

b) Work in progress: Cost of input plus appropriate proportionate overhead up to the stage of completion.

c) Finished goods: Cost of input plus appropriate proportionate overhead

k) Cash and cash equivalents:

Cash and cash equivalents in the^-balance sheet comprise cash at bank, cash on hand, other shortterm deposits with original maturities of three months or less which are subject to an insignificant r i s ko fc h a n£ gsj rjWa I u e.

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