Accounting Policies of Vibhor Steel Tubes Ltd. Company

Mar 31, 2025

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Statement of Compliance

The financial statements have been prepared in accordance with
the provisions of the Companies Act, 2013 and the Indian
Accounting Standards ("Ind AS") notified under the Companies
(Indian Accounting Standards) Rules, 2015, as amended, issued
by Ministry of Corporate Affairs under section 133 of the
Companies Act 2013 ("the Act"). In addition, the Guidance
Notes/announcements issued by the Institute of Chartered
Accountants of India (ICAI) from time to time are also applied
except where compliance with other statutory promulgations
require a different treatment. These financials statements have
been approved for issue by the Board of Directors at their meeting
held on May 28, 2025.

2.2 Basis of Preparation

These financial statements are prepared in accordance with
Indian Accounting Standards (Ind AS) under the historical cost
convention on the accrual basis except for certain financial
instruments which are measured at fair values, and the provisions
of the Companies Act, 2013 (''the Act'') (to the extent notified). The
Ind AS is prescribed under Section 133 of The Companies Act,
2013.

Accounting policies have been consistently applied except where
a newly-issued accounting standard is initially adopted or a
revision to an existing accounting standard requires a change in
the accounting policy hitherto in use.

Going Concern :

The financials satements have been prepared on a going concern
basis using historical cost convention, except for the Net defined
Benefit (asset)/ liability measured at Fair Value of Plan Assets less
Present value of defined benefit obligations."

2.3 Use of Estimates

The preparation of the financial statements is in conformity with
Ind AS requires management to make estimates, judgments and
assumptions. These estimates, judgments and assumptions
affect the application of accounting policies and the reported
amounts of assets and liabilities, revenues and expenses the
disclosures of contingent assets and liabilities at the date of the
financial statements. 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 changes in circumstances surrounding the
estimates.

The estimates and underlying assumptions are reviewed on going
concern basis.

Revisions to accounting estimates are recognized in the period in
which the estimate is revised if the revision affects only that
period. If the revision affects both current and future period, the
same is recognised accordingly.

The management believes that the estimates used in preparation
of the financial statements are prudent and reasonable.
Information about estimates and judgements made in applying
accounting accounting policies that have the most significant
effect on the amounts recognised in the financial statements are
disclosed in Note 2.5.

2.4 Siginificant Accounting Policies

i) Current V/S Non-Current Classification

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

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

• it is expected to be realised in, or is intended for sale or
consumption in, the Company''s normal operating cycle.

• it is held primarily for the purpose of being traded;

• it is expected to be realised within 12 months after the
reporting date; or

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

All other assets are classified as non-current.

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

• it is expected to be settled in the Company''s normal
operating cycle;

• it is held primarily for the purpose of being traded;

• it is due to be settled within 12 months after the reporting
date; or the Company does not have an unconditional
right to defer settlement of the liability for at least 12
months after the reporting date. Terms of a liability that
could, at the option of the counterparty, result in its
settlement by the issue of equity instruments do not
affect its classification.

The company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non¬
current assets and liabilities

The operating cycle is the time between the acquisition of
assets for processing and their realisation in cash and cash
equivalents. Based on the nature of service and the time
between rendering of services and their realization in cash
and cash equivalents, 12 months has been considered by the
company for the purpose of current / non-current
classification of assets and liabilities.

ii) Functional and Presentation Currency

Amounts in the financial statements are presented in Indian
Rupee (?) in lakhs rounded off to two decimal places as
permitted by Schedule lll to the Act.

iii) Property, Plant And Equipment (PPE):

PPE is recognised 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 intial
cost of PPE comprises its purchase cost, including import
duties and non refundable purchase taxes, directly
attributable costs of bringing an asset to working condition
and location for its intended use. Borrowing costs in case of
qualifying assets are capitalised in accordance with the

Company''s accounting policy. Freehold Land is carried at
historical costs. Other PPE is stated at original cost net of
tax/duty credits availed, if any less accumulated
depreciation and cumulative impairment, if any.

If significant parts of an item of PPE have different useful
lives, then they are accounted for as a separate items (major
component) of PPE. Likewise, expenditure towards major
inspections and overhauls are identified as separate
component and depreciated over the expected period till the
next overhaul expenditure.

Under the previous GAAP, property, plant and equipment
were carried at historical cost less depreciation and
impairment losses, if any. On transition to Ind AS, the
company has availed the optional exemption under Ind AS
101 and accordingly it has used the carrying value as at the
date of transitions as the deemed cost of the property, plant
& equipment under Ind AS.

Subsequent costs are included in the asset''s carrying
amount or recognised 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.

PPE not ready for the intended use on the date of the Balance
Sheet are disclosed as "capital work-in-progress".
Advances given towards acquisition or construction of PPE
are disclosed separately as "Capital Advances". At the point
when an asset is capable of operating in the manner as
intended by the management, the cost of construction is
transferred to the appropriate category of PPE. Cost
associated with commissioning of an asset are capitalzed
until the period of commissioning has been completed and
asset is ready for its intended use.

Depreciation is recognised using written down value method
so as to write off the cost of the assets (other than freehold
land and capital work-in-progress) less their residual values
over their useful lives specified in Schedule II to the
Companies Act, 2013, or in the case of assets where the
useful life was determined by technical evaluation, over the
useful life so determined.

Depreciation commences when the assets are ready for the
intended use. Depreciation on additions to deductions from,
owned assets is calculated pro rata to the period of use.

PPE is de recognised upon disposal or when no future
economic benefits are expected from its use or disposal. Any
gain or loss arising on de recognition is recognised in the
Statement of Profit and Loss in the same period.

The estimated useful lives, residual values and depreciation
method are reviewed at each financial year end and the
effect of any change is accounted for on prospective basis.

The carrying amount of the all property, plant and equipment
are derecognized on its disposal or when no future
economic benefits are expected from its use or disposal and
the gain or loss on de-recognition is recognized in the
statement of profit & loss.

iv) Financial Instruments-Initial Recognition, Subsequent
Measurement And Impairment

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.

Financial Assets

(a) Initial recognition and measurement:

All financial assets are recognised initially at fair value
and, in the case of financial assets not recorded at fair

value through profit or loss, transaction costs that are
attributable to the acquisition of the financial asset, are
added to or deducted from the fair value on initial
recognition.

(b) Subsequent measurement

For purposes of subsequent measurement financial
assets are classified in two broad categories:

• Financial assets at fair value

• Financial assets at amortised cost

(c) Classification:

The company classifies financial assets as
subsequently measured at amortised cost, fair value
through other comprehensive income or fair value
through profit or loss on the basis of its business model
for managing the financial assets and the contractual
cash flows characteristics of the financial asset.

(d) Financial assets measured at amortised cost:

Financial assets are measured at amortised cost when
asset is held within a business model, whose objective
is to hold assets for collecting contractual cash flows
and contractual terms of the asset give rise on specified
dates to cash flows that are solely for payments of
principal and interest. Such financial assets are
subsequently measured at amortised cost using the
effective interest rate (EIR) method. The losses arising
from impairment are recognised in the Statement of
profit and loss. This category generally applies to trade
and other receivables.

(e) Financial assets measured at fair value through other
comprehensive income (FVTOCI):

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.

(f) Financial assets measured at fair value through profit or
loss (FVTPL):

Financial assets under this category are measured
initially as well as at each reporting date at fair value
with all changes recognised in profit or loss.

(g) Investment in Equity Instruments:

Equity instruments which are held for trading are
classified as at FVTPL. All other equity instruments are
classified as FVTOCI. Fair value changes on the
instrument, excluding dividends, are recognized in the
other comprehensive income. There is no recycling of
the amounts from other comprehensive income to profit
or loss.

(h) Derecognition of Financial assets:

A financial asset is primarily derecognised when the
rights to receive cash flows from the asset have expired
or the company has transferred its rights to receive
cash flows from the asset, if an entity transfers a
financial asset in a transfer that qualifies for
derecognition in its entirety and retains the right to
service the financial asset for a fee, it shall recognise
either a servicing asset or a servicing liability for that
servicing contract. If the fee to be received is not
expected to compensate the entity adequately for

performing the servicing, a servicing liability for the
servicing obligation shall be recognised at its fair value.
If the fee to be received is expected to be more than
adequate compensation for the servicing, a servicing
asset shall be recognised for the servicing right at an
amount determined on the basis of an allocation of the
carrying amount of the larger financial asset.

(i) 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 financial assets
that are debt instruments and trade receivables. 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.

Financial Liabilities

(a) Initial recognition and measurement:

All financial liabilities are recognised initially at fair
value and, in the case of loans, borrowings and
payables, net of directly attributable transaction
costs. Financial liabilities include trade and other
payables, loans and borrowings including bank
overdrafts and derivative financial instruments.

(b) Classification & Subsequent measurement:

If a financial instrument that was previously
recognised as a financial asset is measured at fair
value through profit or loss and its fair value
decreases below zero, it is a financial liability
measured in accordance with IND AS. Financial
liabilities are classified as held for trading, if they
are incurred for the purpose of repurchasing in the
near term.

The company classifies all financial liabilities as
subsequently measured at amortised cost, except
for financial liabilities at fair value through profit or
loss. Such liabilities, including derivatives that are
liabilities, shall be subsequently measured at fair
value.

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. After initial recognition Gain and
Liabilities held for Trading are recognised in
statement of profit and Loss Account.

Financial liabilities at fair value through profit or
loss :

Financial liabilities at fair value through profit or
loss include financial liabilities held for trading or
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.

Gains or losses on liabilities held for trading are
recognised in the consolidated statement of profit
and loss.

Financial liabilities designated upon initial
recognition at fair value through profit or loss are
designated as such at the initial date of
recognition, and 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 recognised in OCI. These gains/
losses are not subsequently transferred to P&L.
However, the group may transfer the cumulative
gain or loss within equity. All other changes in fair
value of such liability are recognised in the
consolidated statement of profit and loss."

(d) Derecognition of Financial Liabilities:

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

Offsetting financial instruments:

Financial assets and liabilities are offset and the
net amount reported in the balance sheet when
there is a legally enforceable right to offset the
recognised amounts and there is an intention to
settle on a net basis to realise the asset and settle
the liability simultaneously.

Subsequent recoveries of amounts previously
written off are credited to Other Income.

v) 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.

For the purpose of the statement of cash flows, cash and
cash equivalents consist of cash and short-term deposits, as
defined above, net of outstanding bank overdrafts as they
are considered an integral part of the company''s cash
management. Cash Flow Statement has been prepared
using Indirect Method.

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Mar 31, 2024

1. COMPANY OVERVIEW

Vibhor Steel Tubes Private Limited was incorporated on April 16, 2003 with Registrar of Companies (ROC), Delhi under the provisions of Companies Act 1956. Thereafter, the name of our Company was changed from ''Vibhor Steel Tubes Private Limited'' to ''Vibhor Steel Tubes Limited'' upon conversion of the Company from Private to Public Company pursuant to a special resolution passed by the shareholders of our Company on June 14, 2023 and a fresh certificate of incorporation consequent to change of name from Vibhor Steel Tubes Private limited to Vibhor Steel Tubes Limited was issued by ROC on 07 July 2023 The Company''s Corporate Identity Number is U27109HR2003PLC035091. The company is engaged in the business of manufacturing of ERW Pipes & Tubes, Galvanized Pipes & Tubes and Crash Barriers.

The Registered office of company is situated at Plot No. 2, Industrial Development Colony, Delhi Road Hisar Haryana 125005 India.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Statement of compliance

The financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 and the Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended, issued by Ministry of Corporate Affairs under section 133 of the Companies Act 2013 ("the Act"). In addition, the Guidance Notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) from time to time are also applied except where compliance with other statutory promulgations require a different treatment. These financials statements have been approved for issue by the Board of Directors at their meeting held on May 28, 2024.

2.2 Basis of preparation

For all periods up to March 31, 2023, the company prepared its financial statements in accordance with Indian GAAP, including accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014. The financial statements for the year ended March 31, 2023 are the first financials the company has prepared in accordance with Ind-AS for IPO purposes.

The company maintains accounts on accrual basis. The company has consistently applied the accounting policies used in the preparation of its opening IND-AS Balance Sheet at April 1, 2021 throughout all periods presented in the prospectus filed for IPO, as

if these policies had always been in effect and are covered by IND AS 101 "First-time adoption of Indian Accounting Standards". The transition was carried out from accounting principles generally accepted in India ("Indian GAAP") which is considered as the previous GAAP, as defined in IND AS 101.

Going Concern :

The financials satements have been prepared on a going concern basis using historical cost convention, except for the Net defined Benefit (asset)/ liability measured at Fair Value of Plan Assets less Present value of defined benefit obligations.

2.3 Use of estimates

The preparation of the financial statements is in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, revenues and expenses the disclosures of contingent assets and liabilities at the date of the financial statements. 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 changes in circumstances surrounding the estimates.

The estimates and underlying assumptions are reviewed on going concern basis.

Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period. If the revision affects both current and future period, the same is recognised accordingly.

The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Information about estimates and judgements made in applying accounting accounting policies that have the most significant effect on the amounts recognised in the financial statements are disclosed in Note 2.5.

2.4 Siginificant accounting policies

(i) Current v/s non-current classification

The company presents assets and liabilities in the balance sheet based on current/ noncurrent classification. An asset is classified as current when it is:

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

• Held primarily for the purpose of trading

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

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

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in normal operating cycle

• It is held primarily for the purpose of trading

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

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

The company classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. Based on the nature of service and the time between rendering of services and their realization in cash and cash equivalents, 12 months has been considered by the company for the purpose of current / non-current classification of assets and liabilities.

ii) Functional and presentation currency

Amounts in the financial statements are presented in Indian Rupee (?) in lakhs rounded off to two decimal places as permitted by Schedule lll to the Act.

iii) Property, plant and equipment (PPE):

PPE is recognised 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 intial cost of PPE comprises its purchase cost, including import duties and non refundable purchase taxes, directly attributable costs of bringing an asset to working condition and location for its intended use. Borrowing costs in case of qualifying assets are capitalised in accordance with the Company''s accounting policy. Freehold Land is carried at historical costs. Other PPE is stated at original cost net of tax/duty credits availed, if any less accumulated depreciation and cumulative impairment, if any.

If significant parts of an item of PPE have different useful lives, then they are accounted for as a separate items (major component) of PPE. Likewise, expenditure towards major inspections and overhauls are identified as separate

component and depreciated over the expected period till the next overhaul expenditure.

Under the previous GAAP, property, plant and equipment were carried at historical cost less depreciation and impairment losses, if any. On transition to Ind AS, the company has availed the optional exemption under Ind AS 101 and accordingly it has used the carrying value as at the date of transitions as the deemed cost of the property, plant & equipment under Ind AS.

Subsequent costs are included in the asset''s carrying amount or recognised 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.

PPE not ready for the intended use on the date of the Balance Sheet are disclosed as "capital work-in-progress". At the point when an asset is capable of operating in the manner as intended by the management, the cost of construction is transferred to the appropriate category of PPE. Cost associated with commissioning of an asset are capitalzed until the period of commissioning has been completed and asset is ready for its intended use.

Depreciation is recognised using written down value method so as to write off the cost of the assets (other than freehold land and capital work-in-progress) less their residual values over their useful lives specified in Schedule II to the Companies Act, 2013, or in the case of assets where the useful life was determined by technical evaluation, over the useful life so determined.

Depreciation commences when the assets are ready for the intended use. Depreciation on additions to deductions from, owned assets is calculated pro rata to the period of use.

PPE is de recognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de recognition is recognised in the Statement of Profit and Loss in the same period.

The estimated useful lives, residual values and depreciation method are reviewed at each financial year end and the effect of any change is accounted for on prospective basis.

The carrying amount of the all property, plant and equipment are derecognized on its disposal or when no future economic benefits are expected from its use or disposal and the gain or loss on de-recognition is recognized in the statement of profit & loss.

iv) Financial instruments-initial recognition, subsequent measurement and impairment

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.

Financial assets

(a) Initial recognition and measurement:

All financial assets are recognised initially at fair value and, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset, are added to or deducted from the fair value on initial recognition.

(b) Subsequent measurement

For purposes of subsequent measurement financial assets are classified in two broad categories:

• Financial assets at fair value

• Financial assets at amortised cost

(c) Classification:

The company classifies financial assets as subsequently measured at amortised cost, fair value through other comprehensive income or fair value through profit or loss on the basis of its business model for managing the financial assets and the contractual cash flows characteristics of the financial asset.

(d) Financial assets measured at amortised cost:

Financial assets are measured at amortised cost when asset is held within a business model, whose objective is to hold assets for collecting contractual cash flows and contractual terms of the asset give rise on specified dates to cash flows that are solely for payments of principal and interest. Such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. The losses arising from impairment are recognised in the Statement of profit and loss. This category generally applies to trade and other receivables.

(e) Financial assets measured at fair value through other comprehensive income (FVTOCI):

Financial assets under this category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income.

(f) Financial assets measured at fair value through profit or loss (FVTPL):

Financial assets under this category are measured initially as well as at each reporting date at fair value with all changes recognised in profit or loss.

(g) Investment in Equity Instruments:

Equity instruments which are held for trading are classified as at FVTPL. All other equity instruments are classified as FVTOCI. Fair value changes on the instrument, excluding dividends, are recognized in the other comprehensive income. There is no recycling of the amounts from other comprehensive income to profit or loss.

(h) Derecognition of Financial assets:

A financial asset is primarily derecognised when the rights to receive cash flows from the asset have expired or the company has transferred its rights to receive cash flows from the asset, if an entity transfers a financial asset in a transfer that qualifies for derecognition in its entirety and retains the right to service the financial asset for a fee, it shall recognise either a servicing asset or a servicing liability for that servicing contract. If the fee to be received is not expected to compensate the entity adequately for performing the servicing, a servicing liability for the servicing obligation shall be recognised at its fair value. If the fee to be received is expected to be more than adequate compensation for the servicing, a servicing asset shall be recognised for the servicing right at an amount determined on the basis of an allocation of the carrying amount of the larger financial asset.

(i) 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 financial assets that are debt instruments and trade receivables. 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.

Financial Liabilities

(a) Initial recognition and measurement:

All financial liabilities are recognised initially at fair value and, in the case of loans, borrowings and payables, net of directly attributable transaction costs. Financial liabilities include trade and other payables, loans and borrowings including bank overdrafts and derivative financial instruments.

(b) Classification &

Subsequent measurement:

If a financial instrument that was previously recognised as a financial asset is measured at fair value through profit or loss and its fair value decreases below zero, it is a financial liability measured in accordance with IND AS. Financial liabilities are classified as held for trading, if they are incurred for the purpose of repurchasing in the near term.

The company classifies all financial liabilities as subsequently measured at amortised cost, except for financial liabilities at fair value through profit or loss. Such liabilities, including derivatives that are liabilities, shall be subsequently measured at fair value.

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. After initial recognition Gain and Liabilities held for Trading are recognised in statement of profit and Loss Account.

Financial liabilities at fair value through profit or loss :

Financial liabilities at fair value through profit or loss include financial liabilities held for trading or 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.

Gains or losses on liabilities held for trading are recognised in the consolidated statement of profit and loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and 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 recognised in OCI. These gains/ losses are not subsequently transferred to P&L. However, the group may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the consolidated statement of profit and loss.

(c) Derecognition of Financial Liabilities:

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

Offsetting financial instruments:

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis to realise the asset and settle the liability simultaneously.

Subsequent recoveries of amounts previously written off are credited to Other Income.

v) Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and shortterm 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.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and

short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the company''s cash management. Cash Flow Statement has been prepared using Indirect Method.

vi) Provisions, contingent liabilities and contingent assets

(a) 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 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. If the effect of the time value of money is material, the amount of a provision shall be the present value of expense expected to be required to settle the obligation. Provisions are therefore discounted, when effect is material, The discount rate shall be pre-tax rate that reflects current market assessment of time value of money and risk specific to the liability. Unwinding of the discount is recognised in the Statement of Profit and Loss as a finance cost. Provisions are reviewed at each balance sheet date and are adjusted to reflect the current best estimate.

(b) Contingencies

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 nonoccurrence 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. Information on contingent liability is disclosed in the Notes to the Financial Statements.

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity, Contingent assets are not recognised, but are disclosed in the notes. However, when the realisation of income is virtually certain, then the related asset is no longer a contingent asset, but it is recognised as an asset.

vii) Share capital and securities premium Ordinary shares are classified as Equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.

Par value of the equity share is recorded as share capital and the amount received in excess of the par value is classified as securities premium.

viii) Revenues

(a) Sale of products/goods

Revenue from sale of product/goods is recognized at the point in time when control of asset is transferred to the customer, generally on the delivery of the product/ goods and there is no uncertainty in receiving the same and there is reasonable assurance that the Company will comply with the conditions attached to them.

The Company considers whether there are other promises in the contracts that are separate performance obligations to which a portion of the transaction price needs to be allocated. ln determining the transaction price for the sale of products/ goods, the Company considers the effects of variable consideration, the existence of significant financing components, noncash consideration, and consideration payable to the customer (if any).

Variable consideration: lf the consideration in a contract includes a variable amount, the Company estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the associated uncertainty with the variable consideration is subsequently resolved. Some contracts for the sale of Products/Goods provide customers with a right of return and volume rebates. The rights of return and volume rebates give rise to variable consideration.

Contract Balances: If an entity performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, the entity shall present the contract as a contract asset, excluding any amounts presented as a receivable. A contract asset is an entity''s right to consideration in exchange for goods

or services that the entity has transferred to a customer. Similarly, an entity shall recognize contract liability when there is an entity''s obligation to transfer goods or services to a customer for which the entity has received consideration (or an amount of consideration is due) from the customer.

Trade credit: ln case of exceptional trade credit agreed with the customers which contain a significant financing component, the transaction price for such trade receivables are discounted, using the rate that would be reflected in a separate financing transaction between the Company and its customers at transaction inception, to take into consideration the significant financing component.

The Company identifies contract assets when the right to consideration in exchange for goods or services transferred to a customer is conditioned on something other than the passage of time and identifies contract liabilities when there is an obligation to transfer goods or services to a customer for which the Company has received consideration.

(b) Sale of services

Revenue from rendering of services is recognised over time as the customer receives the benefit of the Company''s performance and the Company has an enforceable right to payment for services transferred.

(c) Other Income

A. Interest income is recognised on a time proportion basis.

B. Other items of income accounted as and when the right to receive such income arises and it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably.

ix) Taxation

(a) Current tax

Current tax is expected tax payable on the taxable income for the year, using the tax rate enacted at the reporting date, and any adjustment to the tax payable in respect of the earlier periods.

Current tax assets and liabilities are offset where the company has legal enforceable right to offset and intends either to settle on

net basis, or to realize the assets and settle the liability simultaneously.

(b) Deferred tax

Deferred tax is recognized for all taxable temporary differences and is calculated based on the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

Deferred tax is measured at the tax rates that are expected to be applied when the asset is realized or the liability is settled, based on the laws that have been enacted or substantively enacted at the reporting date.

Deferred tax assets are recognized only to the extent that it is probable that future taxable profits will be available against which the assets can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset and when the deferred tax balances relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but the company intends to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

(c) Current and Deferred Tax for the Year

Current and deferred tax are recognized in the statement of profit & loss, except when they relates to items that are recognized in other comprehensive income or directly in equity, in which case, the current tax and deferred tax is recognized directly in other comprehensive income or equity respectively.

x) Earning per share

Basic Earnings Per Share is computed by dividing the net profit attributable to the equity shareholders of the company to the weighted average number of Shares outstanding during the period & Diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders of the company after adjusting the effect of all dilutive potential equity shares that were outstanding during the period. The weighted average number of shares outstanding during the period

includes the weighted average number of equity shares that could have issued upon conversion of all dilutive potential.

xi) Commitments

Commitments are future liabilities for contractual expenditure, classified and disclosed as follows:

(i) estimated amount of contracts remaining to be executed on capital account and not provided for

(ii) uncalled liability on shares and other investments partly paid;

(iii) funding related commitment to subsidiary

xii) Employee benefits

The company provides for the various benefits plans to the employees. These are categorized into Defined Benefits Plans and Defined Contributions Plans. Defined contribution plans includes the amount paid by the company towards the liability for Provident fund to the employees provident fund organization and Employee State Insurance fund in respect of ESI and defined benefits plans includes the retirement benefits, such as gratuity.

a. In respect Defined Contribution Plans, contribution made to the specified fund based on the services rendered by the employees are charged to Statement of Profit & Loss in the year in which services are rendered by the employee.

b. Liability in respect of Defined Long Term benefit plan is determined at the present value of the amounts payable determined using actuarial valuation techniques performed by an independent actuarial at each balance sheet date using the projected unit credit methods. Remeasurement, comprising actuarial gain and losses, the effects of assets ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of Financial Position with a charge or credit recognized in other comprehensive income in the period in

which they occur. Past Service cost is recognized in the statement of profit & loss in the period of plan amendment.

c. Liabilities for short term employee benefits are measured at undiscounted amount of the benefits expected to be paid and charged to Statement of Profit & Loss in the year in which the related service is rendered.

xiii) Inventories

Raw materials, work in progress, stores, traded and finished goods

Inventories are valued at the lower of cost (First in First Out - FIFO basis) and the net realisable value after providing for obsolescence and other losses, where considered necessary. Cost includes cost of purchase,all charges in bringing the goods to the point of sale, including indirect levies, transit insurance and receiving charges. Finished goods include appropriate proportion of overheads and, where applicable.

Rejection and scrap

Rejection and scrap are valued at net realisable value.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

ix) Leases

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. 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.

At the date of commencement of the lease, the Company recognizes a right of use asset and a corresponding lease liability for all lease arrangements in which it is a lessee, except for the leases with a term of 12 months (short term) or less and low value leases. For these short term and low value leases, the company recognizes the lease payments as an operating expenses on a staright line basis over the term of the lease.

Right of use assets are recognised on the date of lease commencement (i.e. the date the underlying asset is available for use). Right of use assets are measeured at cost, less any accumulated depreciation, impairment losses and adjusted for any remeausurement of lease liabilities. Right of use assets are depreciated on a straight line basis over the lease term. Right of use assets are evaluated for recoverability whenever events or changes in the circumstances indicate their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and value in use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets.

The lease liability is initially measured at amortised cost at the present value of the future payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are measured with a corresponding adjustment to the related right of use asset if the company changes its assessment if whether it will excercise an extension or a termination option.

Lease liability and ROU asset have been separately presented in the balance sheet and lease paymnets have been classified as financing cash flows.

x) Foreign currency reinstatement and translation

a) Functional and presentation currency

Standalone financial statements have been presented in Indian Rupees (INR), which is the Company''s functional and presentation currency.

b) Transactions and balances

Transactions in currencies other than the entity''s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items are measured in terms of historical cost in foreign currencies and are therefore not retranslated.

xi) Derivative financial instruments:

The Company uses derivative financial instruments, such as forward contracts to hedge its foreign currency exposure. The recognizing of the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, on the nature of the item being hedged. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss.

Fair value hedge

The Company designates derivative contracts or non-derivative financial assets/ liabilities as hedging instruments to mitigate the risk of change in fair value of hedged item due to movement in interest rates, foreign exchange rates and commodity prices.

Changes in the fair value of hedging instruments and hedged items that are designated and qualify as fair value hedges are recorded in the Statement of Profit and Loss. If the hedging relationship no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for which the effective interest method is used is amortized to Statement of Profit and Loss over the period of maturity.

xii) Borrowing costs

a) Borrowing costs that are attributable to the acquisition, construction, or production of a qualifying asset are capitalized as a part of the cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. Where funds are borroweed specifically to finance a project, the amount capitalised represents the actual borrowing costs incurred. Where surplus funds are available out of money borrowed specifically to finance a project, the income generated from such short term investments is deducted from the total capitalsed borrowing cost. Where the funds used to finance a project form part of general borrowings, the amount capitalsed is caluclated using a weighted average of rates applicable to relevant general borrowings of the company during the year.

C apitalsation of borrowing costs is suspended and charged to the statement of profit and loss during the extended periods when the active development on the qualifying asset is suspended.

b) All other borrowing costs are recognized as expense in the period in which they are incurred.

c) EIR is the rate that excatly discounts the estimated future cash payments or receipts over the expected life of the financial liability or a shorter period, where appropraite, to the amortised cost of a financial liability. When calculating the effective interest rate (EIR) the company estimates the expected cash flows by considering all the contractual terms of the financial instrument.

xii) Fair value measurement

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

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

The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

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

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

2.5) Critical accounting estimates, assumptions and judgements

In the process of applying the company''s accounting policies, management has made the following estimates, assumptions and judgements, which have significant effect on the amounts recognised in the financial statement:

(i) Property, plant and equipment

On transition to Ind AS, the company has adopted optional exemption under IND AS 101 for fair valuation of property, plant and equipment. and investment properties. Management believes that the assigned fair value, useful lives and residual value are reasonable.

(ii) Income taxes

Management judgment is required for the calculation of provision for income taxes and deferred tax assets and liabilities. The company reviews at each balance sheet date the carrying amount of deferred tax assets. The factors used in estimates may differ from actual outcome which could lead to significant adjustment to

the amounts reported in the standalone financial statements.

(iii) Contingencies

Management judgement is required for estimating the possible outflow of resources, if any, in respect of contingencies/claim/ litigations against the company as it is not possible to predict the outcome of pending matters with accuracy.

(iv) Allowance for uncollectable accounts receivable and advances

Trade receivables do not carry any interest and are stated at their normal value as reduced by appropriate allowances for estimated irrecoverable amounts. Individual trade receivables are written off when management deems them not to be collectible. Impairment is made on the expected credit losses, which are the present value of the cash shortfall over the expected life of the financial assets.

2.6) Standards issued but not yet effective

On March 23, 2023, the Ministry of Corporate

Affairs (MCA) has notified Companies (Indian

Accounting Standards) Amendment Rules, 2023.

This notification has resulted into amendments in the following existing accounting standards which are applicable to Companies from April 1, 2023.

i. Ind AS 101 - First-time Adoption of Indian Accounting Standards

ii. Ind AS 102 - Share-based Payment

iii. Ind AS 103 - Business Combination

iv. Ind AS 107 - Financial Instruments Disclosures

v. Ind AS 109 - Financial Instrument

vi. Ind AS 115 - Revenue from Contracts with Customers

vii. Ind AS 1 - Presentation of Financial Statements

viii. Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors

ix. Ind AS 12 - Income Taxes

x. Ind AS 34 - Interim Financial Reporting

The Company has evaluated the amendment and the impact of the amendment is insignificant in the standalone financial statements.

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Mar 31, 2023

Data Not Good