3. SIGNIFICANT ACCOUNTING POLICIES

3.01 Basis of Preparation

"These Financial Statements ('Financial Statements') of the Company have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the 'Ind AS') as notified by Ministry of Corporate Affairs ('MCA') under Section 133 of the Companies Act, 2013 ('the Act') read with the Companies (Indian Accounting Standards) Rules, 2015, as amended and other relevant provisions of the Act. In addition, the guidance notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) are also applied except where compliance with other statutory promulgation requires a different treatment.

The Ind AS Financial Statements comprise of the Balance Sheet as at year ended 31st March 2024, the Statement of profit and loss (including Other Comprehensive Income) for the year ended 31st March 2024, statement of cash flows for the year ended 31st March 2024 and Statement of changes in equity for the year ended on that date, and accounting policies and other explanatory information.

The Financial Statements were approved by the Company's Board of Directors and authorized for issue on 28th MAY 2024.

As required by Division II issued under Schedule III of the act, the company has presented the assets and liabilities in the Balance Sheet in the order of liquidity."

3.02 Basis of Measurement

"The Financial Statements have been prepared on going concern basis in accordance with accounting principles generally accepted in India to comply with Indian Accounting Standards (Ind AS) prescribed in Companies Act.

Certain accounting policies and disclosures of the Company require the measurement of fair values, for both financial and non-financial assets and liabilities. These statements are prepared under historical cost convention on accrual basis and also certain financial assets and financial liabilities which are measured at fair values at the end of each reporting period as mentioned in the relevant notes to accounts. The Company has an established control framework with respect to the measurement of fair values. The valuation team regularly reviews significant unobservable inputs and valuation adjustments.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. 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, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on this basis.

Fair value measurements under Ind AS are categorized as below based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety:

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

- Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the asset or liability, either directly or indirectly: and

- Level 3 inputs are unobservable inputs for the valuation of assets/liabilities.

"When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

Further information about the assumptions made in measuring fair values is included in the following notes:

Note - investment property.

Note - share-based payment; and Note - financial instruments.

The Balance Sheet and Statement of Profit and Loss are prepared and presented in the format prescribed in the Schedule III to the Companies Act, 2013 (“the Act"). The Statement of cash flows has been prepared and presented as per the requirements of Ind AS 7 “Statement of Cash flows". The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of the Financial Statements along with the other notes required to be disclosed under the notified Accounting Standards.

Amounts in the Financial statements are presented in Indian Rupees rounded off in Lacs to two decimal places as permitted by Schedule III to the Companies Act, 2013 except otherwise stated. Per share data are presented in Indian Rupees to two decimals places.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle. Based on the nature of products and the time between acquisition of assets for processing and their realization in cash and cash equivalents. The operating Cycle has been taken to be 12 months. Deferred tax assets and deferred tax liabilities are classified as non-current assets and non-current liabilities, as the case may be.

3.03 Use of Key Accounting Estimates and Judgements

The preparation of the Financial Statements in conformity with Ind AS requires the Management to make estimates, judgement and assumptions that affect the application of accounting policies and the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities. The principal accounting estimates have been described under the relevant income /expense and / or assets / liability item in the Financial Statements. The Management believes that the estimates used in the preparation of these Financial Statements are prudent and reasonable. Actual results could differ from these estimates. Continuous evaluation is done on the estimation and judgments based on historical experience and other factors, including expectations of future events that are believed to be reasonable.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only the period of the revision and future periods if the revision affects both current and future periods. Revisions to accounting estimates are recognized prospectively.

"Information about critical judgments in applying accounting policies, as well as estimates and assumptions that have the most significant effect to the carrying amounts of assets and liabilities within the next financial year, are included in the following notes:

- Measurement of defined benefit obligations - Note

- Measurement and likelihood of occurrence of provisions and contingencies - Note

- Recognition of deferred tax assets - Note

- Key assumptions used in discounted cash flow projections - Note

- Measurement of consideration and assets acquired as part of business combination - Note

- Impairment of Intangibles - Note "

3.04 Recent Accounting Developments

A. Application of newly amended Standards

On March 31, 2023, the Ministry of Corporate Affairs (MCA) notified Companies (Indian Accounting Standards) Amendment Rules, 2023 to further amend the Companies (Indian Accounting Standards) Rules, 2015 by making amendments to Ind AS 101 - First-time Adoption of Indian Accounting Standards, Ind AS 102 - Share-based Payment, Ind AS 103 - Business Combinations, Ind AS 107 - Financial Instruments:

Disclosures, Ind AS 109 - Financial Instruments, Ind AS 115 - Revenue from Contracts with Customers, Ind AS 1 - Presentation of Financial Statements, Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors, Ind AS 12 - Income Taxes and Ind AS 34 - Interim Financial Reporting; effective from 1 April 2023. Key amendments are as follows: -

1. Amendments to Ind AS 1 - Presentation of Financial Statements:

A. The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their 'significant' accounting policies with a requirement to disclose their 'material' accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.

B. The amendments have had an impact on the Group's disclosures of accounting policies, but not on the measurement, recognition, or presentation of any items in the Group's financial statements.

2. Amendments to Ind AS 12 - Income Taxes:

The amendments narrow the scope of the initial recognition exception under Ind AS 12, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences such as leases.

The Group previously recognized for deferred tax on leases on a net basis. As a result of these amendments, the Group has recognized a separate deferred tax asset in relation to its lease liabilities and a deferred tax liability in relation to its right-of-use assets. Since, these balances qualify for offset as per the requirements of paragraph 74 of Ind AS 12, there is no impact in the balance sheet. There was also no impact on the opening retained earnings as at 1 April 2022.

Amendments to Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors: The amendments clarify the distinction between changes in accounting estimates, changes in accounting policies and the correction of errors. It has also been clarified how entities use measurement techniques and inputs to develop accounting estimates. The amendments had no impact on the Group's consolidated financial statements."

B. Standards notified but not yet effective.

There are no amendments issued after the reporting date which are not yet effective up to the reporting date. The Company has not adopted any amendments that have been notified earlier but are not yet effective."

3.05 Property, Plant and Equipment

- The Company has elected to continue with carrying value of all its property, plant, and equipment as recognized in the Financial Statements as at date of transition to Ind AS and use the same as its deemed cost as at the date of transition.

- Property, plant, and equipment are stated at their cost of acquisition less accumulated depreciation and impairment (if any). The cost comprises the purchase price, borrowing cost and attributable cost of bringing the asset to its working condition for its intended use.

- The land used for the office buildings is stated at cost.

- Gains or losses arising on retirement or disposal of property, plant and equipment are recognized in the statement of Profit and Loss.

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

- Property, plant, and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as “Capital work-in-progress.""

3.06 Depreciation and Useful Life

- Depreciation on Property, Plant and Equipment is provided on Written Down Value and computed on the basis of the useful life prescribed in Schedule II to the Companies Act, 2013 (Act) from the date the asset is ready to put to use.

- Depreciation on office building and investment properties is provided on Written Down value Method and computed on the basis of the useful life prescribed in Schedule II to the Act from the date the asset is ready to put to use.

- The residual value of 5% of Original Cost/Deemed Cost is considered for the Purpose of Calculating Depreciation rates. The residual values, useful lives and method of depreciation are reviewed at the end of each financial year.

- Depreciation is provided on a pro-rata basis in the year in which the assets are put to use.

- The Company has used rates to provide depreciation which coincide with the rates indicated in schedule II of the Companies Act 2013 on its fixed assets.

3.07 Capital Work in Progress and Intangible Assets under Development

- Property, Plant and Equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as “Capital Work-in-Progress."

- Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date are classified as capital advances under other non-current assets."

3.08 Intangible Assets

- Intangible assets (Software) are stated at their cost of acquisition less amortization. The cost comprises of purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. These are amortized on Straight Line Method (SLM) over the useful life not exceeding 5 years from the date; the assets are available for use.

a. Impairment of Non-Financial Assets

"Assessment for impairment is done at each Balance Sheet date as to whether there is any indication that a non-financial asset may be impaired. Indefinite life intangibles are subject to a review for impairment annually or more frequently if events or circumstances indicate that it is necessary. For the purpose of assessing impairment, the smallest identifiable group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets is considered as a cash generating unit. Goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Company's cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

If any indication of impairment exists, an estimate of the recoverable amount of the individual asset/cash generating unit is made. Asset/cash generating unit whose carrying value exceeds their recoverable amount are written down to the recoverable amount by recognizing the impairment loss as an expense in the Statement of Profit and Loss. The impairment loss is allocated first to reduce the carrying amount of any goodwill (if any) allocated to the cash generating unit and then to the other assets of the unit, pro rata based on the carrying amount of each asset in the unit. The recoverable amount is higher of an assets or cash generating unit's fair value less costs of disposal and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset or cash generating unit and from its disposal at the end of its useful life. Assessment is also done at each Balance Sheet date as to whether there is any indication that an impairment loss recognized for an asset in prior accounting periods may no longer exist or may have decreased, basis the assessment a reversal of an impairment loss for an asset other than goodwill is recognized in the Statement of Profit and Loss account."

b. Investment Properties

- Investment properties are properties held to earn rentals or for capital appreciation, or both. Investment properties are measured initially at their cost of acquisition less accumulated depreciation and impairment, if any. The cost comprises of purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use.

- 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. All other repair and maintenance costs are recognized in the Statement of Profit or Loss as incurred.

- An investment property is derecognized on disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on de-recognition of property is recognized in the statement of Profit and Loss in the same period.

- Investment properties are subsequently measured at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation on investment properties is provided on the Written Down Value method, computed on the basis of useful lives prescribed in Schedule II to the Act: The residual value, useful life and method of depreciation are reviewed at the end of the financial year.

3.11 Inventories

Inventories are valued at cost or net realizable value, whichever is lower. The cost in respect of the various items of inventory is computed as under:

- In the case of raw materials which are not ordinarily interchangeable at Standard Cost on Specific Identification of cost basis, in case of raw materials which are ordinarily interchangeable at FIFO method of cost i.e., Cost plus direct expenses. The cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition.

- In the case of stores and spares at Standard Cost on a weighted average cost basis i.e., Cost plus direct expenses. The cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition.

- In the case of work in progress at raw material cost plus conversion costs depending upon the stage of completion.

- In the case of finished goods at raw material cost plus conversion costs, packing cost, non-recoverable indirect taxes (if applicable) and other overheads incurred to bring the goods to their present location and condition.

- In the case of by-products at estimated realizable value Net realizable value is the estimated selling price in ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

3.12 Assets Held for Sale

Non-current assets or disposal groups comprising of assets and liabilities are classified as 'held for sale' when all of the following criteria's are met:

(i) decision has been made to sell.

(ii) The assets are available for immediate sale in their present condition.

(iii) the assets are being actively marketed and

(iv) Sales have been agreed or are expected to be concluded within 12 months of the Balance Sheet date.

Subsequently, such non-current assets and disposal groups classified as held for sale are measured at the lower of it carrying value and fair value less costs of disposal. Non-current assets held for sale are not depreciated or amortized."

3.13 Investments in Subsidiaries & Joint Ventures

Investments in subsidiaries and joint ventures are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries and joint venture, the difference between net disposal

proceeds and the carrying amounts are recognized in the Statement of Profit and Loss.

3.14 Revenue Recognition

Revenue is recognized based on the nature of activity when consideration can be reasonably measured and recovered with reasonable certainty. The Company applies revenue recognition criteria to each nature of revenue transaction as set out below:

a) Revenue from Contracts with Customers:

Pursuant to the application of Ind AS 115 - 'Revenue from Contracts with Customers' effective from 1 April 2018, the Company has applied following accounting policy for revenue recognition:

Revenue is measured at the fair value of the consideration received /receivable, taking into account contractually defined terms of payment, and excluding taxes or duties collected on behalf of the government and is net of rebates and discounts. The Company assesses its revenue arrangements against specific criteria to determine if it is acting as principal or agent. The Company has concluded that it is acting as a principal in all of its revenue arrangements.

Revenue is recognized in the income statement to the extent that it is probable that the economic benefits will flow to the Company and the revenue and costs, if applicable, can be measured reliably.

The Company has applied five step models as per Ind AS 115 'Revenue from contracts with customers' to recognize revenue in the Financial Statements. The Company satisfies a performance obligation and recognizes revenue over time, if one of the following criteria is met:

- The customer simultaneously receives and consumes the benefits provided by the Company's performance as the Company perform: or

- The Company's performance creates or enhances an asset that the customer controls as the asset is created or enhanced: or

- The Company's performance does not create an asset with an alternative use to the Company and the entity has an enforceable right to payments for performance completed to date.

Revenue is recognized either at a point of time or over a period of time based on various conditions included in the contracts with customers.

b) Sale of goods:

Revenue from sales of goods is recognized as and when the Company satisfies performance obligations by transferring control of the promised goods to its customers.

c) Rendering of services

Revenue from a contract to provide services is recognized by reference to the stage of completion of the contract.

d) Dividend and interest income

- Dividend income from investments is recognized when the shareholder's right to receive payment has been established (provided that it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably).

- Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.

e) Other Income

Other income is accounted for in accordance with IND AS 115 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."

3.15 Government Grants

Capital Grants

- In the case of depreciable assets, the cost of the assets is shown at gross value and grant / contribution thereon is treated as Capital Grants.

- Government grants shall be recognized in Profit or Loss on a systematic basis over the periods of the useful life of the related asset.

Revenue Grants

-Government grants are recognized where there is reasonable assurance that the grant will be received, and all attached conditions will be compiled with. Government grants are recognized in profit or loss on a systematic basis over the periods in which the entire recognizes as expenses the related costs for which the grants are intended to compensate.

3.16 Employee Benefits

- Employee benefits include salaries, wages, provident fund, gratuity, leave encashment towards un-availed leave, compensated absences. Short-term employee benefits are recognized at their undiscounted amount in the accounting period in which they are incurred.

- Employees benefit under defined Contribution Plan comprises Employee Provident Fund under the provisions of Employees' Provident Fund and Miscellaneous Provisions Act, 1952, for which the Company contributes to the plan under the provisions of the said Act.

- Gratuity is a post-employment benefit and is in the nature of a defined benefit plan. The liability recognized in the balance sheet in respect of gratuity is the present value of the defined benefit/obligation at the balance sheet date, together with adjustments for unrecognized actuarial gains or losses and past service costs. The defined benefit/obligation is calculated at or near the balance sheet date by an independent actuary using the projected unit credit method. This is based on standard rates of inflation, salary growth rate and mortality. Discount factors are determined close to each year-end by reference to market yields on government bonds that have terms to maturity approximating the terms of the related liability. Service costs on the Company's defined benefit plan are included in employee benefits expense. Actuarial gains/losses resulting from re-measurements of the liability are included in other comprehensive income.

- Liability in respect of leave encashment i.e., compensated absences becoming due or expected to be availed within one year from the balance sheet date is recognized on the basis of discounted value of estimated amount required to be paid or estimated value of benefit expected to be availed by the employees. Liability in respect of compensated absences becoming due or expected to be availed more than one year after the balance sheet date is estimated on the basis of an actuarial valuation performed by an independent actuary using the projected unit credit method. Actuarial gains and losses arising from past experience and changes in actuarial assumptions are charged to the Statement of Profit and Loss in the year in which such gains or losses are determined."

3.17 Borrowing Cost

Borrowing costs that are attributable to the acquisition and/or construction of qualifying assets are capitalized as part of the cost of such assets during the period of time that is necessary to complete and prepare the assets for its intended use or sale. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Statement of Profit and Loss.

3.18 Earnings Per Share

- Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted-average number of equities shares outstanding during the period. The weighted-average number of equities shares outstanding during the period is adjusted for events including A bonus issue.

- for the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted-average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

3.19 Accounting for Taxes on Income

- Tax expense for the year comprises of current tax, earlier year tax and deferred tax. It is recognized in the Statement of Profit and Loss except to the extent it relates to an item which is recognized directly in equity or in other comprehensive income.

- Current tax is the expected tax payable/receivable on the taxable income/ loss for the year using applicable tax rates at the Balance Sheet date, and any adjustment to taxes in respect of previous years.

- Deferred tax is recognized in respect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax assets are recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realized.

- Minimum Alternate Tax credit is recognized as deferred tax asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such an asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer convincing evidence to the effect that the Company will pay normal income tax during the specified period.

- Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

- Transactions or events which are recognized outside profit or loss, either in other comprehensive income or in equity, are recorded along with the tax as applicable.

- Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognized amounts and there is an intention to settle the asset and the liability on a net basis. Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities; and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority."