Accounting Policies of Plaza Wires Ltd. Company

Mar 31, 2025

B. SIGNIFICANT ACCOUNTING POLICIES
1 PROPERTY, PLANT AND EQUIPMENT:

(I) RECOGNITION AND MEASUREMENT

Property, Plant and equipment are measured at cost (which includes capitalised borrowing costs)
less accumulated depreciation and accumulated impairment losses, if any.

The cost of an item of property, plant and equipment comprises:

a) its purchase price, including import duties and non-refundable purchase taxes, after deducting
trade discounts and rebates.

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

c) the initial estimate of the costs of dismantling and removing the item and restoring the site on
which it is located. If significant parts of an item of property, plant and equipment have different
useful lives, then they are accounted for as separate items (major components) of property, plant
and equipment and depreciated accordingly.

The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is
determined as the difference between the sales proceeds and the carrying amount of the asset and
is recognised in the statement of profit and loss on the date of disposal or retirement.

(ii) SUBSEQUENT EXPENDITURE

Subsequent expenditure is capitalised only if it is probable that the future economic benefits
associated with the expenditure will flow to the Company.

(iii) DEPRECIATION, ESTIMATED USEFUL LIFE AND ESTIMATED RESIDUAL VALUE

Depreciation is calculated using the Straight Line Method, pro rata to the period of use, taking into
account useful lives and residual value of the assets. The useful life of assets & the estimated
residual value taken from those prescribed under Part C of Schedule II to the Companies Act, 2013.
Depreciation is computed with reference to cost. Depreciation on additions during the year is provi¬
ded on pro rata basis with reference to month of addition/installation. Depreciation on assets disp-
osed/discarded is charged up to the date of sale excluding the month in which such assets is sold.

The assets residual value and useful life are reviewed and adjusted, if appropriate, at the end of each
reporting year. Gains and losses on disposal are determined by comparing proceeds with carrying
amounts. These are included in the statement of Profit and Loss.

2. INTANGIBLE ASSETS

Identifiable intangible assets are recognised when it is probable that future economic benefits
attributed to the asset will flow to the Company and the cost of the asset can be reliably measured.

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

(i) RECOGNITION AND MEASUREMENT

Computer software''s have finite useful lives and are measured at cost less accumulated
amortisation and any accumulated impairment losses.

(ii) SUBSEQUENT EXPENDITURE

Subsequent expenditure is capitalised only when it increases the future economic benefits emb¬
odied in the specific asset to which it relates. All other expenditure, including expenditure on inte¬
rnally generated goodwill and brands, when incurred is recognised in statement of profit or loss.

(iii) AMORTISATION

Amortisation is calculated to write off the cost of intangible assets less their estimated residual
values using the straight-line method over their estimated useful lives and is generally recognised
in statement of profit or loss. Computer software are amortised over their estimated useful life or 10
years, whichever is lower.

Amortisation methods, useful lives and residual values are reviewed at each reporting date and
adjusted, if required.

3. IMPAIRMENT OF NON FINANCIAL ASSETS

An asset is considered as impaired when at the date of Balance Sheet, there are indications of
impairment and the carrying amount of the asset, or where applicable, the cash generating unit to
which the asset belongs, exceeds its recoverable amount (i.e. the higher of the net asset selling
price and value in use).The carrying amount is reduced to the recoverable amount and the
reduction is recognized as an impairment loss in the statement of profit and loss. The impairment
loss recognized in the prior accounting period is reversed if there has been a change in the estimate
of recoverable amount. Post impairment, depreciation is provided on the revised carrying value of
the impaired asset over its remaining useful life.

IMPAIRMENT LOSSES ARE RECOGNISED IN THE STATEMENT OF PROFIT AND LOSS.

For assets excluding goodwill, 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 years. Such reversal is
recognised in the summary 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.

4. FINANCIAL ASSETS

Initial Recognition and Measurement

All financial assets are initially recognized at fair value. Transaction costs that are directly attribu¬
table to the acquisition or issue of financial assets, which are not at fair value through profit or loss,
are adjusted to the fair value on initial recognition. Financial assets are classified, at initial recog¬
nition, as financial assets measured at fair value or as financial assets measured at amortised cost.

SUBSEQUENT MEASUREMENT

Financial Assets Measured at Amortised Cost (AC)

A Financial Asset is measured at Amortised Cost if it is held within a business model whose objec¬
tive 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 represent solely payments of principal
and interest on the principal amount outstanding.

FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
(FVTOCI)

A Financial Asset is measured at FVTOCI if it is held within a business model whose objective is achi¬
eved 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 represents solely
payments of principal and interest on the principal amount outstanding.

FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS (FVTPL)

A Financial Asset which is not classified in any of the above categories are measured at FVTPL.
Financial assets are reclassified subsequent to their recognition, if the Company changes its
business model for managing those financial assets. Changes in business model are made and
applied prospectively from the reclassification date which is the first day of immediately next
reporting period following the changes in business model in accordance with principles laid down
under Ind AS 109 - Financial Instruments.

DERECOGNITION OF FINANCIAL ASSETS

The Company derecognises a financial asset when the contractual rights to cash flows from the
asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a
transaction in which substantially all the risks and rewards of ownership of the financial asset are
transferred.

IMPAIRMENT OF FINANCIAL ASSETS

In accordance with Ind-AS 109, the Company applies Expected Credit Loss (ECL) model for measu¬
rement and recognition of impairment loss on the following financial asset & credit risk exposure:

a) Financial assets that are debt instruments and are measured at amortised cost e.g., loans, debt
securities, deposits, and bank balance.

b) Trade receivables

The Company follows ‘simplified approach’ for recognition of impairment loss allowance on:

- Trade receivables which do not contain a significant financing component.

The application of simplified approach does not require the Company to track changes in credit
risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date,
right from its initial recognition.

- For recognition of impairment loss on other financial assets and risk exposure, the Company
determines that whether there has been a significant increase in the credit risk since initial
recognition. Expected Credit Loss Model is used to provide for impairment loss.

5. FINANCIAL LIABILITIES
CLASSIFICATION

The Company classifies its financial liabilities in the following measurement categories:

- those to be measured subsequently at fair value through profit and loss-[FVTPL]; and

- those measured at amortised cost. [AC]

INITIAL RECOGNITION AND MEASUREMENT

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through
profit or loss or at amortised cost.

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

The Company’s financial liabilities include trade and other payables, lease liabilities, loans and
borrowings including bank overdrafts

SUBSEQUENT MEASUREMENT

The measurement of financial liabilities depends on their classification, as described below:

FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS [FVTPL]

Financial liabilities at fair value through profit or loss [FVTPL] include financial liabilities designated
upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as
held for trading if they are incurred for the purpose of repurchasing in the near term. This category
also includes derivative financial instruments entered into by the Company that are not designated
as hedging instruments in hedge relationships as defined by Ind-AS 109. Separated embedded
derivatives are also classified as held for trading unless they are designated as effective hedging
instruments.

Gains or losses on liabilities held for trading are recognised in the profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are
designated at the initial date of recognition, only if the criteria in Ind-AS 109 are satisfied. For
liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are
recognized in OCI. These gains/loss are not subsequently transferred to statement of profit or loss.
However, the Company may transfer the cumulative gain or loss within equity. All other changes in
fair value of such liability are recognised in the statement of profit or loss.

FINANCIAL LIABILITIES AT AMORTISED COST (LOANS AND BORROWINGS)

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

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

DERECOGNITION

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

6. CASH AND CASH EQUIVALENT

Cash and cash equivalent including other bank balances in the summary statement of assets and
liabilities comprise cash at banks and on hand and short-term deposits with an original maturity of
three months or less, which are subject to an insignificant risk of changes in value.

For the purpose of the summary statement of cash flows, cash and cash equivalents including
other bank balances consist of cash and short-term deposits, as defined above as they are
considered an integral part of the Company’s cash management.

7. INVENTORIES

Raw Materials are valued at cost.

Stores and Spares are valued at cost.

Work-in-Progress are valued at cost

Finished stocks are valued at cost or net realisable value whichever is lower.

The valuation of inventories includes taxes, duties of non refundable nature and direct expenses
and other direct cost attributable to the cost of inventory, net of excise duty/Goods and Service Tax/
countervailing duty / education cess and value added tax.

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. The net realizable value of
work-in-progress is determined with reference to the selling prices of related finished products.
Raw materials and other supplies held for use in production of finished products are not written
down below cost except in cases where material prices have declined and it is estimated that the
cost of the finished products will exceed their net realizable value.

8. EARNINGS PER SHARE

(I) BASIC EARNINGS PER SHARE

Basic earnings per shares is calculated by dividing Profit/(Loss) attributable to equity holders
(adjusted for amounts directly charged to Reserves) before/after Exceptional Items (net of tax) by
Weighted average number of Equity shares, (excluding treasury shares).

(ii) DILUTED EARNINGS PER SHARE

Diluted earnings per shares is calculated by dividing Profit/(Loss) attributable to equity holders
(adjusted for amounts directly charged to Reserves) before/after Exceptional Items (net of tax) by
Weighted average number of Equity shares (excluding treasury shares) considered for basic
earning per shares adjusted for the effects of dilutive potential Equity shares.

9. FOREIGN CURRENCY

FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currencies are translated into the functional currency of the Company at the
exchange rate prevailing at the date of the transactions. Monetary assets (other then investments
in companies registered outside India) and liabilities denominated in foreign currencies are
translated into the functional currency at the exchange rate at the reporting date.

Difference on account of changes in foreign currency are generally charged to the statement of
profit & loss.

10. REVENUE RECOGNITION
(I) SALE OF GOODS

Revenue from sale of goods is recognised when control or substantial risks and rewards of owner¬
ship are transferred to the buyer under the terms of the contract, generally on delivery of goods.

Revenue is measured at the amount of consideration which the Company expects to be entitled to
in exchange for transferring distinct services to a customer as specified in the contract, excluding
amounts collected on behalf of third parties (for example taxes and duties collected on behalf of the
government). Consideration is generally due upon satisfaction of performance obligations and
receivable is recognized when it becomes unconditional.

Revenue is measured based on the transaction price, which is the consideration, adjusted for
discounts, incentive schemes and claims, if any, as specified in the contract with the customer.
Revenue also excludes taxes collected from customers.

(ii) CONTRACT BALANCES
TRADE RECEIVABLES

A receivable represents the Company’s right to an amount of consideration that is unconditional.
CONTRACT LIABILITIES

A contract liability is the obligation to transfer goods or services to a customer for which the
Company has received consideration (or an amount of consideration is due) from the customer. If a
customer pays consideration before the Company transfers goods or services to the customer, a
contract liability is recognised when the payment is made. Contract liabilities are recognised as
revenue when the Company performs under the contract.

(iii) OTHER INCOME

Other income is comprised primarily of interest income. Interest income is recognized using the
effective interest method and where no significant uncertainty as to measure or collectability
exists.

11. EMPLOYEE BENEFITS

(I) DURING EMPLOYMENT BENEFITS

(A) SHORT TERM EMPLOYEE BENEFITS

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

(ii) POST EMPLOYMENT BENEFITS

(A) DEFINED CONTRIBUTION PLANS

A defined contribution plan is a post employment benefit plan under which a Company pays fixed
contribution into a separate entity and will have no legal or constructive obligation to pay further
amounts.

(B) DEFINED BENEFIT PLANS

The Company pays gratuity to the employees who have has completed five years of service with the
company at the time when employee leaves the Company. The gratuity liability amount is
unfunded and formed exclusively for gratuity payment to the employees.

The liability in respect of gratuity and other post-employment benefits is calculated using the
Projected Unit Credit Method and spread over the periods during which the benefit is expected to
be derived from employees'' services. Re-measurement of defined benefit plans in respect of post
employment are charged to Other Comprehensive Income.

Compensated Absences : Accumulated compensated absences, which are expected to be availed
or encashed within 12 months from the end of the year are treated as short term employee benefits.
The obligation towards the same is measured at the expected cost of accumulating compensated
absences as the additional amount expected to be paid as a result of the unused entitlement as at
the year end.

(C) TERMINATION BENEFITS

Termination benefits are payable when employment is terminated by the Company before the
normal retirement date or when an employee accepts voluntary redundancy in exchange for these
benefits. In case of an offer made to encourage voluntary redundancy, the termination benefits are
measured based on the number of employees expected to accept the offer.

12. INCOME TAXES

Income tax expense comprises current and deferred tax. Tax is recognised in statement of profit
and loss, except to the extent that it relates to items recognised in the other comprehensive income
or in equity. In which case, the tax is also recognised in the other comprehensive income or in
equity.

(I) CURRENT TAX

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid
to the taxation authorities, based on tax rates and laws that are enacted or subsequently enacted at
the Balance sheet date.

Current tax assets and liabilities are offset only if, the Company:

a) has a legally enforceable right to set off the recognised amounts; and

b) intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current tax provision is computed for income calculated after considering allowances and
exemptions under the provisions of the applicable Income Tax Laws. Current tax assets and current
tax liabilities are off set, and presented as net.

(ii) DEFERRED TAX

Deferred tax is recognised on temporary differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding tax bases used in the computation of
taxable profit.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the
year in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have
enacted or substantively enacted by the end of the reporting year. The carrying amount of Deferred
tax liabilities & assets are reviewed at the end of each reporting year. Deferred tax is recognised to
the extent that it is probable that future taxable profit will be available against which they can be
used.

The measurement of deferred tax reflects the tax consequences that would follow from the
manner in which the Company expects, at the reporting date, to recover or settle the carrying
amount of its assets and liabilities.

Deferred tax assets and liabilities are offset only if:

a) the Company has a legally enforceable right to set off current tax assets against current tax
liabilities; and

b) The Deferred Tax Assets and the deferred tax liabilities relate to income taxes levied by the same
taxation authority on the same taxable Company.

Minimum alternate tax (MAT) paid in a year is charged to the Statement of Profit and Loss as current
tax. The company recognizes MAT credit available as an asset only to the extent that there is
convincing evidence that the company will pay normal income tax during the specified period i.e.
the period for which MAT credit is allowed to be carried forward.

In the year in which the company recognizes MAT credit as an asset in accordance with the GN on
accounting for Credit Available in respect of Minimum Alternate Tax under the Income Tax Act, 1961,
the said asset is created by way of credit to the Statement of Profit and Loss and shown as ""MAT
Credit Entitlement."" The company reviews the ""MAT credit entitlement"" asset at each reporting
date and writes down the asset to the extent the company does not have convincing evidence that
it will pay normal tax during the specified period.

13. BORROWING COSTS

General and specific Borrowing costs that are directly attributable to the acquisition, construction
or production of a qualifying asset that necessarily takes a substantial period of time to get ready for
its intended use are capitalised as part of the cost of that asset till the date it is ready for its intended
use or sale. Other borrowing costs are recognised as an expense in the year in which they are
incurred.

(i) AS A LESSEE

The company recognises a Right-of-use asset and a lease liability at the lease commencement
date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the
lease liability adjusted for any lease payments made at or before the commencement date, plus any
initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset
or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The Right-of-use asset is subsequently depreciated using the straight-line method from the
commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of
the lease term. The estimated useful lives of right-of-use assets are determined on the same basis
as those of property and equipment. Right of- use assets are depreciated on a straight-line basis
over the shorter of the lease term. In addition, the Right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain re-measurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at
the commencement date, discounted using the interest rate implicit in the lease or, if that rate
cannot be readily determined, company’s incremental borrowing rate. Generally, the company
uses its incremental borrowing rate as the discount rate.

The lease liability is measured at amortised cost using the effective interest method. It is
remeasured when there is a change in future lease payments arising from a change in an index or
rate, if there is a change in the company’s estimate of the amount expected to be payable under a
residual value guarantee, or if company changes its assessment of whether it will exercise a
purchase, extension or termination option.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the
carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of
the right-of-use asset has been reduced to zero.

SHORT-TERM LEASES AND LEASES OF LOW-VALUE ASSETS

The company has elected not to recognise right-of-use assets and lease liabilities for short-term
leases that have a lease term of 12 months. The company recognises the lease payments associated
with these leases as an expense on a straight-line basis over the lease term unless the receipts are
structured to increase in line with expected general inflation to compensate for the expected
inflationary cost increases.

(ii) AS A LESSOR

Leases are classified as finance leases when substantially all of the risks and rewards of ownership
transfer from the Company to the lessee. Amounts due from lessees under finance leases are
recorded as receivables at the Company’s net investment in the leases. Finance lease income is
allocated to accounting periods so as to reflect a constant periodic rate of return on the net
investment outstanding in respect of the lease.

Lease income from operating leases where the company is a lessor is recognised in income on a
straight-line basis over the lease term unless the receipts are structured to increase in line with
expected general inflation to compensate for the expected inflationary cost increases.

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Mar 31, 2024

B. SIGNIFICANT ACCOUNTING POLICIES 1 PROPERTY, PLANT AND EQUIPMENT:

(I) RECOGNITION AND MEASUREMENT

Property, Plant and equipment are measured at cost (which includes capitalised borrowing costs) less accumulated depreciation and accumulated impairment losses, if any.

The cost of an item of property, plant and equipment comprises:

a) its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates.

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

c) the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment and depreciated accordingly.

The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the statement of profit and loss on the date of disposal or retirement

(ii) SUBSEQUENT EXPENDITURE

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

(iii) DEPRECIATION, ESTIMATED USEFUL LIFE AND ESTIMATED RESIDUAL VALUE

Depreciation is calculated using the Straight Line Method, pro rata to the period of use, taking into account useful lives and residual value of the assets. The useful life of assets & the estimated residual value taken from those prescribed under Part C of Schedule II to the Companies Act, 2013. Depreciation is computed with reference to cost. Depreciation on additions during the year is provided on pro rata basis with reference to month of addition/installation. Depreciation on assets disp-osed/discarded is charged up to the date of sale excluding the month in which such assets is sold.

The assets residual value and useful life are reviewed and adjusted, if appropriate, at the end of each reporting year. Gains and losses on disposal are determined by comparing proceeds with carrying amounts. These are included in the statement of Profit and Loss.

2. INTANGIBLE ASSETS

Identifiable intangible assets are recognised when it is probable that future economic benefits attributed to the asset will flow to the Company and the cost of the asset can be reliably measured.

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

(i) RECOGNITION AND MEASUREMENT

Computer software''s have finite useful lives and are measured at cost less accumulated amortisation and any accumulated impairment losses.

(ii) SUBSEQUENT EXPENDITURE

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, when incurred is recognised in statement of profit or loss.

(iii) AMORTISATION

Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line method over their estimated useful lives and is generally recognised in statement of profit or loss. Computer software are amortised over their estimated useful life or 10 years, whichever is lower.

Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted, if required.

3. IMPAIRMENT OF NON FINANCIAL ASSETS

An asset is considered as impaired when at the date of Balance Sheet, there are indications of impairment and the carrying amount of the asset, or where applicable, the cash generating unit to which the asset belongs, exceeds its recoverable amount (i.e. the higher of the net asset selling price and value in use).The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the statement of profit and loss. The impairment loss recognized in the prior accounting period is reversed if there has been a change in the estimate of recoverable amount. Post impairment, depreciation is provided on the revised carrying value of the impaired asset over its remaining useful life.

IMPAIRMENT LOSSES ARE RECOGNISED IN THE STATEMENT OF PROFIT AND LOSS.

For assets excluding goodwill, 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 years. Such reversal is recognised in the summary 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.

4. FINANCIAL ASSETS

Initial recognition and measurement

All financial assets are initially recognized at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets, which are not at fair value through profit or loss, are adjusted to the fair value on initial recognition. Financial assets are classified, at initial recognition, as financial assets measured at fair value or as financial assets measured at amortised cost.

SUBSEQUENT MEASUREMENT

Financial Assets measured at Amortised Cost (AC)

A Financial Asset is measured at Amortised 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 represent solely payments of principal and interest on the principal amount outstanding.

FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (FVTOCI)

A Financial Asset is measured at FVTOCI 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 represents solely payments of principal and interest on the principal amount outstanding.

FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS (FVTPL)

A Financial Asset which is not classified in any of the above categories are measured at FVTPL. Financial assets are reclassified subsequent to their recognition, if the Company changes its business model for managing those financial assets. Changes in business model are made and applied prospectively from the reclassification date which is the first day of immediately next reporting period following the changes in business model in accordance with principles laid down under Ind AS 109 - Financial Instruments.

DERECOGNITION OF FINANCIAL ASSETS

The Company derecognises a financial asset when the contractual rights to cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred.

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 following financial asset & credit risk exposure:

a) Financial assets that are debt instruments and are measured at amortised cost e.g., loans, debt securities, deposits, and bank balance.

b) Trade receivables

The Company follows ‘simplified approach’ for recognition of impairment loss allowance on:

- Trade receivables which do not contain a significant financing component.

The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

- For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. Expected Credit Loss Model is used to provide for impairment loss.

5. FINANCIAL LIABILITIES CLASSIFICATION

The Company classifies its financial liabilities in the following measurement categories:

- those to be measured subsequently at fair value through profit and loss-[FVTPL]; and

- those measured at amortised cost. [AC]

INITIAL RECOGNITION AND MEASUREMENT

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss or at amortised cost.

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

The Company’s financial liabilities include trade and other payables, lease liabilities, loans and borrowings including bank overdrafts

SUBSEQUENT MEASUREMENT

The measurement of financial liabilities depends on their classification, as described below: FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS [FVTPL]

Financial liabilities at fair value through profit or loss [FVTPL] include financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind-AS 109. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognised in the profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, only if the criteria in Ind-AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/loss are not subsequently transferred to statement of profit or loss. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit or loss.

FINANCIAL LIABILITIES AT AMORTISED COST (LOANS AND BORROWINGS)

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

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

DERECOGNITION

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

6. CASH AND CASH EQUIVALENT

Cash and cash equivalent including other bank balances in the summary statement of assets and liabilities comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

For the purpose of the summary statement of cash flows, cash and cash equivalents including other bank balances consist of cash and short-term deposits, as defined above as they are considered an integral part of the Company’s cash management.

7. INVENTORIES

Raw Materials are valued at cost.

Stores and Spares are valued at cost.

Work-in-Progress are valued at cost

Finished stocks are valued at cost or net realisable value whichever is lower.

The valuation of inventories includes taxes, duties of non refundable nature and direct expenses and other direct cost attributable to the cost of inventory, net of excise duty/Goods and Service Tax/ countervailing duty / education cess and value added tax.

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. The net realizable value of work-in-progress is determined with reference to the selling prices of related finished products. Raw materials and other supplies held for use in production of finished products are not written down below cost except in cases where material prices have declined and it is estimated that the cost of the finished products will exceed their net realizable value.

8. EARNINGS PER SHARE

(I) BASIC EARNINGS PER SHARE

Basic earnings per shares is calculated by dividing Profit/(Loss) attributable to equity holders (adjusted for amounts directly charged to Reserves) before/after Exceptional Items (net of tax) by Weighted average number of Equity shares, (excluding treasury shares).

(ii) DILUTED EARNINGS PER SHARE

Diluted earnings per shares is calculated by dividing Profit/(Loss) attributable to equity holders (adjusted for amounts directly charged to Reserves) before/after Exceptional Items (net of tax) by Weighted average number of Equity shares (excluding treasury shares) considered for basic earning per shares adjusted for the effects of dilutive potential Equity shares.

9. FOREIGN CURRENCY

FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currencies are translated into the functional currency of the Company at the exchange rate prevailing at the date of the transactions. Monetary assets (other then investments in companies registered outside India) and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date.

Difference on account of changes in foreign currency are generally charged to the statement of profit & loss.

10. Revenue recognition (I) SALE OF GOODS

Revenue from sale of goods is recognised when control or substantial risks and rewards of ownership are transferred to the buyer under the terms of the contract, generally on delivery of goods.

Revenue is measured at the amount of consideration which the Company expects to be entitled to in exchange for transferring distinct services to a customer as specified in the contract, excluding amounts collected on behalf of third parties (for example taxes and duties collected on behalf of the government). Consideration is generally due upon satisfaction of performance obligations and receivable is recognized when it becomes unconditional.

Revenue is measured based on the transaction price, which is the consideration, adjusted for discounts, incentive schemes and claims, if any, as specified in the contract with the customer. Revenue also excludes taxes collected from customers.

(ii) CONTRACT BALANCES TRADE RECEIVABLES

A receivable represents the Company’s right to an amount of consideration that is unconditional. CONTRACT LIABILITIES

A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made. Contract liabilities are recognised as revenue when the Company performs under the contract.

(iii) OTHER INCOME

Other income is comprised primarily of interest income. Interest income is recognized using the effective interest method and where no significant uncertainty as to measure or collectability exists.

11. EMPLOYEE BENEFITS

(I) DURING EMPLOYMENT BENEFITS

(A) SHORT TERM EMPLOYEE BENEFITS

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

(ii) POST EMPLOYMENT BENEFITS

(A) DEFINED CONTRIBUTION PLANS

A defined contribution plan is a post employment benefit plan under which a Company pays fixed contribution into a separate entity and will have no legal or constructive obligation to pay further amounts.

(B) DEFINED BENEFIT PLANS

The Company pays gratuity to the employees who have has completed five years of service with the company at the time when employee leaves the Company. The gratuity liability amount is unfunded and formed exclusively for gratuity payment to the employees.

The liability in respect of gratuity and other post-employment benefits is calculated using the Projected Unit Credit Method and spread over the periods during which the benefit is expected to be derived from employees'' services. Re-measurement of defined benefit plans in respect of post employment are charged to Other Comprehensive Income.

Compensated Absences : Accumulated compensated absences, which are expected to be availed or encashed within 12 months from the end of the year are treated as short term employee benefits. The obligation towards the same is measured at the expected cost of accumulating compensated absences as the additional amount expected to be paid as a result of the unused entitlement as at the year end.

(C) TERMINATION BENEFITS

Termination benefits are payable when employment is terminated by the Company before the normal retirement date or when an employee accepts voluntary redundancy in exchange for these benefits. In case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the offer.

12. INCOME TAXES

Income tax expense comprises current and deferred tax. Tax is recognised in statement of profit and loss, except to the extent that it relates to items recognised in the other comprehensive income or in equity. In which case, the tax is also recognised in the other comprehensive income or in equity.

(I) CURRENT TAX

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or subsequently enacted at the Balance sheet date.

Current tax assets and liabilities are offset only if, the Company:

a) has a legally enforceable right to set off the recognised amounts; and

b) intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Current tax provision is computed for income calculated after considering allowances and exemptions under the provisions of the applicable Income Tax Laws. Current tax assets and current tax liabilities are off set, and presented as net.

(ii) DEFERRED TAX

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the year in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have enacted or substantively enacted by the end of the reporting year. The carrying amount of Deferred tax liabilities & assets are reviewed at the end of each reporting year. Deferred tax is recognised to the extent that it is probable that future taxable profit will be available against which they can be used.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset only if:

a) the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and

b) The Deferred Tax Assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable Company.

Minimum alternate tax (MAT) paid in a year is charged to the Statement of Profit and Loss as current tax. The company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the company will pay normal income tax during the specified period i.e. the period for which MAT credit is allowed to be carried forward.

In the year in which the company recognizes MAT credit as an asset in accordance with the GN on accounting for Credit Available in respect of Minimum Alternate Tax under the Income Tax Act, 1961, the said asset is created by way of credit to the Statement of Profit and Loss and shown as ""MAT Credit Entitlement."" The company reviews the ""MAT credit entitlement"" asset at each reporting date and writes down the asset to the extent the company does not have convincing evidence that it will pay normal tax during the specified period.

13. BORROWING COSTS

General and specific Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset that necessarily takes a substantial period of time to get ready for its intended use are capitalised as part of the cost of that asset till the date it is ready for its intended use or sale. Other borrowing costs are recognised as an expense in the year in which they are incurred.

(i) AS A LESSEE

The company recognises a Right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The Right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property and equipment. Right of- use assets are depreciated on a straight-line basis over the shorter of the lease term. In addition, the Right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, company’s incremental borrowing rate. Generally, the company uses its incremental borrowing rate as the discount rate.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the company’s estimate of the amount expected to be payable under a residual value guarantee, or if company changes its assessment of whether it will exercise a purchase, extension or termination option.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

SHORT-TERM LEASES AND LEASES OF LOW-VALUE ASSETS

The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months. The company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases."

(ii) AS A LESSOR

Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Company to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Company’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.

Lease income from operating leases where the company is a lessor is recognised in income on a straight-line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases.

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Mar 31, 2023

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