Notes to Accounts of Rosmerta Digital Services Ltd.

Mar 31, 2024

I. Provisions, contingent liabilities & contingent assets

General

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a
past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate
can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of
the consideration required to settle the present obligation at the end of the reporting period, taking into
account the risks and uncertainties surrounding the obligation.

Long-term provisions are detennined by discounting the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value of money. Short tenn provisions are carried at their
redemption value and are not offset against receivables from reimbursements.

Contingent liabilities

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

Contingent Assets

A contingent asset is not recognized unless it becomes virtually certain that an inflow of economic benefits
will arise. When an inflow of economic benefits is probable, contingent assets are disclosed in the Ind AS
financial statements.

J. Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits
with an original maturity of three months or less, that are readily convertible to a known amount of cash and
subject to an insignificant risk of changes in value.

K. Segment reporting

The Company has engaged in the business of providing "Digitally Enabled Service and automotive
components/accessories" and has only reportable segment in accordance with IND AS-108 ''Operating
Segment''. The infonnation relating to this operating segment is reviewed regularly by the Board of
Directors to make decisions about resources to be allocated and to assess its perfonnance. The accounting
principles used in the preparation of the financial statements are consistently applied to record revenue and
expenditure in the segment, and are as set out in the material accounting policies.

L. Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss [excluding other comprehensive
income] for the period attributable to equity shareholders by the weighted average number of equity shares
outstanding during the period. Earnings considered in ascertaining the Company’s earnings per share are the
net profit after tax for the year. The weighted average numbers of equity shares outstanding during the
period are adjusted for events of bonus issue and sub-division of shares.

For the purpose of calculating diluted earnings per share, the net profit or loss [excluding other
comprehensive income] for the year attributable to equity share holders and the weighted average number
of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

M. Property, plant and equipment (PPE)

Property, Plant and Equipment are stated at cost, net of accumulated depreciation and accumulated
impairment losses, if any. Cost comprises the purchase price, including import duties and non- refundable
purchase taxes, and any directly attributable cost of bringing the asset to its working condition for its
intended use. Such cost includes the cost of replacing part of the plant and equipment and borrowing costs
for long-tenn construction projects if the recognition criteria are met.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Company and the cost of the item can be measured reliably. The carrying amount of any component
accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are
charged to Statement of Profit and Loss during the year in which they are incurred.

PPE not ready for the intended use on the date of the Balance Sheet are disclosed as "capital work-in¬
progress”.

Depreciation methods, estimated useful lives and residual value:

Depreciation is calculated on pro rata basis on straight line method based on estimated useful life of assets
given below:

N. Retirement and other employee benefits

i. Short term employee benefits

Employee benefits such as salaries, wages, short-term compensated absences, bonus, ex-gratia and
performance-linked rewards falling due wholly within twelve months of rendering the service are classified
as short-term employee benefits and are expensed in the period in which the employee renders the service

ii. Post-employment benefits
a) Provident Fund

The Company’s state governed provident fund scheme, employee state insurance scheme and employee
pension scheme are defined contribution plans. The contribution paid/payable under the schemes is
recognized during the period in which the employee renders the service. The Company has no obligation,
other than the contribution payable to the provident fund. If the contribution payable to the scheme for
service received before the balance sheet date exceeds the contribution already paid, the deficit payable to
the scheme is recognized as a liability after deducting the contribution already paid. If the contribution
already paid exceeds the contribution due for services received before the balance sheet date, then excess is
recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future
payment or a cash refund. ^ -

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b) Defined benefits plan
Gratuity

The Company provides for gratuity, a defined benefit plan (the ''Gratuity Plan") covering eligible employees
in accordance with the Payment of Gratuity Act, 1972.Gratuity liability is a defined benefit obligation and is
provided on the basis of its actuarial valuation based on the projected unit credit method made at each
Balance Sheet date.

Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts
included in net inteiest on the net defined benefit liability and the return on plan assets (excluding amounts
included in net interest on the net defined benefit liability), are recognized immediately in the balance sheet
with a corresponding debit or credit to retained earnings through OCI in the period in which they occur.
Remeasurements are not reclassified to profit or loss in subsequent periods.

Short-term and other long-term employee benefits

The Company records all short term obligation for such compensated absences as well as performance
bonus on the basis of amount paid in the period during which the services are rendered by the employees,
all such expenses are recognize in the period in which they actually arise.

O. Assumptions and estimation uncertainties

Assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment
recognized in the Ind AS financial statements are as under:

— Recognition of deferred tax assets: availability of future taxable profit against which temporary
differences shall be deductible,

P. Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are
measured at the best estimate of the expenditure required to settle the present obligation at the Balance
Sheet date.

If the effect of the time value of money is material, provisions are discounted to reflect its present value
using a current pre-tax rate that reflects the current market assessment of the time value of money and the
risks specific to the obligation. When discounting is used, the increase in the provision due to the passage of
time is recognised as a finance cost

Q. Lease Liabilities

The Company s lease asset classes primarily consist of leases for Land & Buildings,. The Company assesses
whether a contract is or contains a lease, at the inception of a contract. A contract is, or contains, a lease if
the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right to control the use of an identified asset, the
Company assesses whether:

(i) the contract involves the use of an identified asset

(ii) the Company has substantially all of the economic benefits from use of the asset through the period of
the lease and

(iii) the Company has the right to direct the use of the asset.

The right-of-use asset is a lessee''s right to use an asset over the life of a lease. At the date of commencement
of the lease, the Company recognises a right-of-use asset and a corresponding lease liability for all lease
arrangements in which it is a lessee, except for short-term leases and leases of low value assets. For these,
the Company recognises the lease payments as an operating expense.

The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any
initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated
depreciation and impainnent losses, if any. Right-of-use assets are depreciated from the commencement
date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset.

The lease liability is initially measured at the present value of the future lease payments. The lease
payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the
incremental borrowing rates. The lease liability is subsequently remeasured by increasing the carrying
amount to reflect interest on the lease liability and reducing the carrying amount to reflect the lease
payments made.

A lease liability is remeasured upon the occurrence of certain events such as a change in the lease tenn or a
change in an index or rate used to determine lease payments. The remeasurement normally also adjusts the
leased assets.

Lease Liability has been separately presented in the Balance Sheet and lease payments have been classified
as financing cash flows.

R. Inventories

Inventories are valued at the lower of cost and net realisable value. Cost is computed on a weighted average
cost basis. Cost of raw materials includes cost of purchase and other costs incurred in bringing the
inventories to their present location and condition. The aforesaid items are valued at net realisable value if
the traded goods in which they are to be incorporated are expected to be sold at a loss.

S. Recent accounting pronouncements and changes in accounting standards

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31,
2024, MCA has not notified any new standards or amendments to the existing standards applicable to the
Group.