1C. Summary of Significant Accounting Policies:

a) Property, plant and equipment
Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes
capitalised borrowing costs, less accumulated depreciation and accumulated
impairment losses, if any.

Cost of an item of property, plant and equipment includes its purchase price, import
duties and non-refundable purchase taxes, duties or levies, after deducting trade
discounts and rebates, any other directly attributable cost of bringing the asset to its
working condition for its intended use and estimated cost of dismantling and
removing the items and restoring the site on which it is located. The present value of
the expected cost for the decommissioning of an asset after its use is included in the
cost of the respective asset if the recognition criteria for a provision are met.

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

If significant parts of an item of property, plant and equipment have different useful
lives, then they are accounted for as separate items (major components) of property,
plant and equipment.

A property, plant and equipment is eliminated from the financial statements on
disposal or when no further benefit is expected from its use and disposal. Assets
retired from active use and held for disposal are generally stated at the lower of their
net book value and net realisable value. Any gain or losses arising on disposal of
property, plant and equipment is recognized in the Statement of Profit and Loss.

Once classified as held-for-sale, property, plant and equipment are no longer
depreciated.

Gains or losses arising from de-recognition of fixed assets are measured as the
difference between the net disposal proceeds and the carrying amount of the asset and
are recognized in the Statement of Profit and Loss when the asset is derecognized.

Subsequent expenditure

Subsequent expenditure is capitalised only if it is probable that the future economic
benefits associated with the expenditure will flow to the Company and cost of the
item can be measured reliably.

Depreciation

Depreciation on property, plant and equipment is calculated on a Written Down
Value basis to allocate their cost, net of their estimated residual values, over the
estimated useful lives and is recognized in the Statement of Profit and Loss.

The management has estimated, supported by internal technical assessment made by
the management the useful life of the classes of Assets and has not followed the
scheduled II in following categories of assets.

- Assets costing less than INR 5,000 each are depreciated at the rate of 100% in the
year of purchase.

- Depreciation methods, useful lives and residual values are reviewed at each
financial year end and adjusted, if appropriate. Based on technical evaluation and
consequent advice, the management believes that its estimates of useful lives as
given above best represent the period over which management expects to use
these assets.

- Depreciation on additions (disposals) is provided on a pro-rata basis i.e. from
(upto) the date on which asset is ready for use (disposed of).

b) Leases

With effect from 1 April 2019, the Company has applied Ind AS 116 ‘Leases’ for all
long term and material lease contracts covered by the Ind AS. The Company has
adopted modified retrospective approach as stated in Ind AS 116‘Leases’ for all
applicable leases on the date of adoption.

Measurement of lease liability

At the time of initial recognition, the Company measures lease liability as present
value of all lease payments discounted using the Company’s incremental cost of
borrowing and directly attributable costs. Subsequently, the lease liability is -

i) increased by interest on lease liability

ii) reduced by lease payments made; and

iii) remeasured to reflect any reassessment or lease modifications specified in Ind
AS 116 ‘Leases’, or to reflect revised fixed lease payments.

Measurement of Right-of-use assets

At the time of initial recognition, the Company measures ‘Right-of-use assets’ as
present value of all lease payments discounted using the Company’s incremental cost
of borrowing w.r.t said lease contract. Subsequently, ‘Right-of-use assets’ is
measured using cost model i.e. at cost less any accumulated depreciation and any
accumulated impairment losses adjusted for any re-measurement of the lease liability
specified in Ind AS 116 ‘Leases’.

Depreciation on ‘Right-of-use assets’ is provided on straight line basis over the lease
period.

The exception permitted in Ind AS 116 ‘Leases’ for low value assets and short term
leases has been adopted by Company, wherever applicable. The Company recognises
the lease payments associated with these leases as an expense over the lease term.

The Company has elected not to recognise right-of-use assets and lease liabilities for
short-term leases that have a lease term of 12 months or less and leases of low-value
assets. The Company recognises the lease payments associated with these leases as an
expense over the lease term.

The Company has applied the practical expedient to grandfather the definition of a
lease on transition. This means that it has applied Ind AS 116 to all the contracts
entered into before 1 April 2019 and identified as leases in accordance with Ind AS
17.

The Company as a lessor :

Leases for which the Company is a lessor is classified as a finance or operating lease.
Whenever the terms of the lease transfer substantially all the risks and rewards of
ownership to the lessee, the contract is classified as a finance lease. All other leases
are classified as operating leases. When the Company is an intermediate lessor, it
accounts for its interests in the head lease and the sublease separately. The sublease is
classified as a finance or operating lease by reference to the right-of-use asset arising
from the head lease. For operating leases, rental income is recognized on a straight
line basis over the term of the relevant lease.

c) Investment properties

Investment property is the property either to earn rental income or for capital
appreciation or for both but not for sale in ordinary course of business, use in
production or supply of goods or services or for administrative purpose. Investment
properties are measured initially at cost, including transaction costs.

Investment properties are derecognized either upon disposal or when they are
permanently withdrawn from use and no future economic benefit is expected from
their disposal. The difference between the net disposal proceeds and the carrying
amount of the asset is recognized in profit or loss in the period in which the property
is derecognized.

d) Assets held for sale

Non-current assets, or disposal groups comprising assets and liabilities, are
classified as held for sale if it is highly probable that they will be recovered primarily
through sale rather than through continuing use.

Such assets are generally measured at the lower of their carrying amount and fair
value less costs to sell.

Once classified as held for sale, intangible assets, property, plant and equipment and
investment properties are no longer amortised or depreciated.

Non-current assets classified as held-for-sale are presented separately from the other
assets in the balance sheet.

e) Impairment

Impairment of non-financial assets

The Company assesses, at each reporting date, whether there is an indication that an
asset may be impaired. If any indication exists, or when annual impairment testing for
an asset is required, the Company estimates the asset’s recoverable amount.

For impairment testing, assets that do not generate independent cash inflows are
grouped together into cash-generating units (CGUs). Each CGU represents the
smallest Group of assets that generates cash inflows that are largely independent of
the cash inflows of other assets or CGUs.

An asset’s recoverable amount is the higher of an individual asset’s or cash¬
generating unit’s (CGU) fair value less costs of disposal and its value in use.
Recoverable amount is determined for an individual asset, unless the asset does not
generate cash inflows that are largely independent of those from other assets or group
of assets. When the carrying amount of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and is written down to its recoverable
amount.

In assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset. In determining fair value
less costs of disposal, recent market transactions are taken into account. If no such
transactions can be identified, an appropriate valuation model is used. These
calculations are corroborated by valuation multiples, quoted share prices for publicly
traded companies or other available fair value indicators.

After impairment, depreciation is provided on the revised carrying amount of the asset
over its remaining useful life.

The Company bases its impairment calculation on detailed budgets and forecast
calculations, which are prepared separately for each of the Company’s CGUs to which
the individual assets are allocated. These budgets and forecast calculations generally
cover a period of five years. For longer periods, a long-term growth rate is calculated
and applied to project future cash flows after the fifth year. Toestimate cash flow
projections beyond periods covered by the most recent budgets/forecasts, the
Company extrapolates cash flow projections in the budget using a steady or declining
growth rate for subsequent years, unless an increasing rate can be justified. In any
case, this growth rate does not exceed the long-term average growth rate for the
products, industries, or country or countries in which the entity operates, or for the
market in which the asset is used.

The Company’s corporate assets do not generate independent cash inflows. To
determine impairment of a corporate asset, recoverable amount is determined for the
CGUs to which the corporate asset belongs.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds
its estimated recoverable amount. Impairment losses, if any, are recognized in the
Standalone Statement of Profit and Loss. Impairment losses of continuing operations,
including impairment on inventories, are recognized in the Standalone Statement of
Profit and Loss, except for properties previously revalued with the revaluation surplus
taken to OCI. For such properties, the impairment is recognized in OCI up to the
amount of any previous revaluation surplus.

In regard to assets for which impairment loss has been recognized in prior period, the
Company reviews at each reporting date whether there is any indication that the loss
has decreased or no longer exists. An impairment loss is reversed if there has been a
change in the estimates used to determine the recoverable amount. Such a reversal is
made only to the extent that the asset’s carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation or amortization, if no
impairment loss had been recognized.

An assessment is made at each reporting date to determine whether there is an
indication that previously recognized impairment losses no longer exist or have
decreased. If such indication exists, the Company estimates the asset’s or CGU’s
recoverable amount. A previously recognized impairment loss is reversed only if there
has been a change in the assumptions used to determine the asset’s recoverable
amount since the last impairment loss was recognized. The reversal is limited so that
the carrying amount of the asset does not exceed its recoverable amount, nor exceed
the carrying amount that would have been determined, net of depreciation, had no
impairment loss been recognized for the asset in prior years. Such reversal is
recognized in the Statement of Profit and Loss unless the asset is carried at a revalued
amount, in which case, the reversal is treated as a revaluation increase.

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 financial assets
measured at amortised cost.

Loss allowance for trade receivables with no significant financing component is
measured at an amount equal to lifetime expected credit losses. For all other financial
assets, ECL are measured at an amount equal to the 12-month ECL, unless there has
been a significant increase in credit risk from initial recognition in which case those
are measured at lifetime ECL.

Loss allowances for financial assets measured at amortised cost are deducted from
gross carrying amount of the assets.

(f) Inventories

Inventories which include raw materials, components, stores and spares, work in
progress, finished goods and lose tools are valued at the lower of cost and net
realizable value. However, raw materials, components and other items held for use in
the production of inventories are not written down below cost if the finished products
in which they will be incorporated are expected to be sold at or above cost or in cases
where material prices have declined and it is estimated that the cost of the finished
products will exceed their net realisable value.

Costs incurred in bringing each product to its present location and condition are
accounted for as follows:

- Raw materials and components: Cost includes cost of purchase and other costs
incurred in bringing the inventories to their present location and condition.
Cost of raw material, components, stores and spares is determined on weighted
average basis.

- Finished goods and work in progress: Cost includes cost of direct materials
and labour and a proportion of manufacturing overheads based on the normal
operating capacity. Cost is determined on weighted average basis.

Net realizable value is the estimated selling price in the ordinary course of business,
less estimated costs of completion and the estimated costs necessary to make the sale.
The net realizable value of work-in-progress is determined with reference to the
selling prices of related finished products.

The comparison of cost and net realizable value is made on an item-by-item basis.

Stores and spares, that do not qualify to be recognised as property, plant and
equipment, consists of engineering spares (such as machinery spare parts) and
consumables or consumed as indirect materials in the manufacturing process.

(g) Financial instruments

A financial instrument is defined as any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another entity. Trade
receivables and payables, loan receivables, investments in securities and subsidiaries,
debt securities and other borrowings, preferential and equity capital etc. are some
examples of financial instruments.

All financial instruments are at amortised cost, unless otherwise specified.

All the financial instruments are recognised on the date when the Group becomes
party to the contractual provisions of the financial instruments. For tradable
securities, the Group recognises the financial instruments on settlement date.

(i) Financial assets

Financial assets include cash, or an equity instrument of another entity, or a
contractual right to receive cash or another financial asset from another entity. Few
examples of financial assets are loan receivables, investment in equity and debt
instruments, trade receivables and cash and cash equivalents.

Recognition and initial measurement

Trade receivables are initially recognised when they are originated. All other
financial assets and financial liabilities are initially recognised when the Company
becomes a party to the contractual provisions of the instrument.

A financial asset or financial liability is initially measured at fair value and, for an
item not at fair value through profit and loss (FVTPL), transaction costs that are
directly attributable to its acquisition or issue.

Classification and subsequent measurement

Financial assets On initial recognition, a financial asset is classified as measured at

• amortised cost;

• fair value through other comprehensive income (“FVTOCI”) - debt investment;

• FVTOCI - equity investment; or

• FVTPL

Financial assets are not reclassified subsequent to their initial recognition, except if
and in the period the Company changes its business model for managing financial
assets.

Amortised cost

A financial asset is measured at amortised cost if it meets both of the following
conditions and is not designated as at FVTPL:

• the asset is held within a business model whose objective is to hold assets to
collect contractual cash flows; and

• the contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount
outstanding.

After initial measurement, such financial assets are subsequently measured at
amortised cost using the effective interest rate (EIR) method. 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 realisation is included in Other
Income in the statement of profit or loss. The losses arising from impairment are
recognised in the statement of profit or loss.

FVTOCI - debt investment

A debt investment is measured at FVTOCI if it meets both of the following
conditions and is not designated as at FVTPL:

• the asset 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.

Debt instruments included within the FVTOCI category are measured initially as well
as at each reporting date at fair value. Fair value movements are recognised in the
other comprehensive income (OCI). However, the Company recognises interest
income, impairment losses & reversals and foreign exchange gain or loss in the
statement of profit or loss. On de-recognition of the asset, cumulative gain or loss
previously recognised in OCI is reclassified from the equity to statement of profit or
loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest
income using the EIR method.

Equity investment

On initial recognition of an equity investment that is not held for trading, the
Company may irrevocably elect to present subsequent changes in the investment’s fair
value in OCI (designated as FVTOCI - equity investment). This election is made on
an investment by- investment basis.

If the Company decides to classify an equity instrument as at FVTOCI, then all fair
value changes on the instrument, including foreign exchange gain or loss and
excluding dividends, are recognised in the OCI. There is no recycling of the amounts
from OCI to profit or loss, even on sale of investment. However, the Company may
transfer the cumulative gain or loss within equity. Equity instruments included within
the FVTPL category are measured at fair value with all changes recognised in the
statement of profit or loss.

FVTPL

All financial assets not classified as measured at amortised cost as described above are
measured at FVTPL. This includes all derivative financial assets. On initial
recognition, the Company may irrevocably designate a financial asset that otherwise
meets the requirements to be measured at amortised cost or at FVTOCI as at FVTPL
if doing so eliminates or significantly reduces an accounting mismatch that would
otherwise arise.

De-recognition of Financial assets

The Company de-recognises a financial asset (or, where applicable, a part of a
financial asset) when:

• The right to receive cash flows from the asset has expired; or

• The Company has transferred its right to receive cash flows from the asset or has
assumed an obligation to pay the received cash flows in full without material
delay to a third party under an assignment arrangement and the Company has
transferred substantially all the risks and rewards of the asset. Once the asset is
de-recognised, the Company does not have any continuing involvement in the
same.

On de-recognition of a financial asset in its entirety, the difference between:

• the carrying amount (measured at the date of de-recognition) and

• the consideration received (including any new asset obtained less any new
liability assumed) is recognised in profit or loss.

Financial assets subsequently measured at amortised cost are generally held for
collection of contractual cash flow.

Impairment of Financial assets

The company assesses impairment based on expected credit losses (ECL)
model at an amount equal to:

• 12 months expected credit losses, or

• Lifetime expected credit losses

• Depending upon whether there has been a significant increase in credit
risk since initial recognition

• However, for trade receivables, the company does not track the changes
in credit risk. Rather, it recognizes impairment loss allowance based on
lifetime ECLs at each reporting date, right from its initial recognition.

(ii) Financial liabilities

Initial measurement and Subsequent measurement

Financial liabilities are classified as measured at amortised cost or FVTPL. A
financial liability is classified as at FVTPL if it is classified as held- for- trading, or it
is a derivative or it is designated as such on initial recognition. Financial liabilities at
FVTPL are measured at fair value and net gains and losses, including any interest
expense, are recognised in statement of profit or loss. Other financial liabilities are
subsequently measured at amortised cost using the effective interest method. Interest
expense and foreign exchange gains and losses are recognised in statement of profit or
loss. Any gain or loss on derecognition is also recognised in statement of profit or
loss.

Financial liabilities de-recognition

A financial liability is de-recognised 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 de-recognition of the original liability and the recognition of a new
liability. The difference in the respective carrying amounts is recognised in the
statement of profit or loss.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in
the balance sheet if there is a currently enforceable legal right to offset the recognised
amounts and there is an intention to settle on a net basis, to realise the assets and
settle the liabilities simultaneously

(h) 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, which are
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 at bank, cash on hand and cheques on hand as they are considered an integral
part of the Company’s cash management.

(i) Revenue from contracts with customers

Revenue is recognized to the extent that it is probable that the economic benefits will
flow to the Company and the revenue can be reliably measured, regardless of when
the payment is being made.

However, Goods and Services Tax (GST) is not received by the Company on its own
account. Rather, it is tax collected on value added to the commodity by the seller on
behalf of the government. Accordingly, it is excluded from revenue.

The specific recognition criteria described below must also be met before revenue is
recognized.

Sale of goods

The Company recognized revenue when (or as) a performance obligation was
satisfied, i.e. when ‘control’ of the goods underlying the particular performance
obligation were transferred to the customer.

Further, revenue from sale of goods is recognized based on a 5-Step Methodology
which is as follows:

Step 1: Identify the contract(s) with a customer

Step 2: Identify the performance obligation in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation

Revenue is measured based on the transaction price, which is the consideration.
Revenue also excludes taxes collected from customers.

Contract assets are recognised when there is excess of revenue earned over billings
on contracts. Contract assets are classified as unbilled receivables (only act of
invoicing is pending) when there is an unconditional right to receive cash, and only
passage of time is required, as per contractual terms.

Unearned or deferred revenue is recognised when there is billings in excess of
revenues.

Contracts are subject to modification to account for changes in contract
specifications and requirements. The Company reviews modifications to contract in
conjunction with the original contract, basis which the transaction price could be
allocated to a new performance obligation, or transaction price of an existing
obligation could undergo a change. In the event transaction price is revised for
existing obligation, a cumulative adjustment is accounted for.

Use of significant judgements in revenue recognition

a) The Company’s contracts with customers could include promises to transfer
products to a customer. The Company assesses the products promised in a
contract and identifies distinct performance obligations in the contract.
Identification of distinct performance obligation involves judgement to
determine the deliverables and the ability of the customer to benefit
independently from such deliverables.

b) Judgement is also required to determine the transaction price for the contract.
The transaction price could be either a fixed a

c) mount of customer consideration or variable consideration with elements
such as volume discounts, service level credits, performance bonuses, price
concessions and incentives. The transaction price is also adjusted for the
effects of the time value of money if the contract includes a significant
financing component. Any consideration payable to the customer is adjusted
to the transaction price, unless it is a payment for a distinct product or service
from the customer. The estimated amount of variable consideration is
adjusted in the transaction price only to the extent that it is highly probable
that a significant reversal in the amount of cumulative revenue recognised
will not occur and is reassessed at the end of each reporting period. The
Company allocates the elements of variable considerations to all the
performance obligations of the contract unless there is observable evidence
that they pertain to one or more distinct performance obligations.

d) The Company uses judgement to determine an appropriate standalone selling
price for a performance obligation. The Company allocates the transaction
price to each performance obligation on the basis of the relative standalone
selling price of each distinct product or service promised in the contract.

e) The Company exercises judgement in determining whether the performance
obligation is satisfied at a point in time or over a period of time. The
Company considers indicators such as how customer consumes benefits as
services are rendered or who controls the asset as it is being created or
existence of enforceable right to payment for performance to date and
alternate use of such product or service, transfer of significant risks and
rewards to the customer, acceptance of delivery by the customer, etc.

Rendering of services

Job work / other services are recognized upon full completion of the job work / other
services and no significant uncertainty exists regarding the collection of the
consideration.

Interest income

For all debt instruments measured at amortised cost, interest income is
recorded using the effective interest rate (EIR). EIR is the rate that exactly
discounts the estimated future cash payments or receipts over the expected life
of the financial instrument or a shorter period, where appropriate, to the gross
carrying amount of the financial asset or to the amortised cost of a financial
liability. When calculating the effective interest rate, the Company estimates
the expected cash flows by considering all the contractual terms of the
financial instrument (for example, prepayment, extension, similar options) but
does not consider the expected credit losses. Interest income is included in
finance income in the statement of profit and loss.

Government grants

The Company is entitled for export incentives which are recognised as income when
the right to receive credit as per the terms of the scheme is established in respect of
the exports made, and where there is no significant uncertainty regarding the ultimate
collection of the relevant exportproceeds. These are presented as other operating
revenue in the Statement of Profit and Loss.

Dividend income

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

Impairment of trade receivables

The allowance for expected credit losses for trade receivables and contract assets are
calculated at individual level when there is an indication of impairment.

j) Borrowing costs

Borrowing costs are interest and other costs (including exchange differences relating
to foreign currency borrowings to the extent that they are regarded as an adjustment
to interest costs) incurred in connection with the borrowing of funds.

Borrowing costs directly attributable to acquisition or construction of an asset which
necessarily take a substantial period of time to get ready for their intended use are
realisation as part of the cost of that asset. Other borrowing costs are recognised as an
expense in the period in which they are incurred.

(k) Recognition of interest expense

Interest expense is recognized using effective interest method.

The ‘effective interest rate’ is the rate that exactly discounts estimated future cash
payments through the expected life of the financial instrument to:

- the amortized cost of the financial liability.

In calculating interest expense, the effective interest rate is applied to the amortized
cost of the liability.

(l) Employee benefits

a) Short-term employee benefits

All employee benefits payable wholly within twelve months of receiving employee
services are classified as short-term employee benefits. These benefits include salaries
and wages, bonus and ex-gratia. Short-term employee benefit obligations are
measured on an undiscounted basis and are expensed as the related service is
provided. A liability is recognized for the amount expected to be paid, if the Company
has a present legal or constructive obligation to pay the amount as a result of past
service provided by the employee, and the amount of obligation can be estimated
reliably.

Compensated Absences

The Company provides for the encashment of leave with pay based on policy of the
Company in this regard. The employees are entitled to accumulate such leave subject
to certain limits, for the future encashment. The Company records an obligation for
Leave Encashment in the period in which the employee renders the services that
increases this entitlement. The Company measures the expected cost of compensated
leave as the additional amount that the Company expects to pay as a result of the
unused entitlement that has accumulated at the Balance Sheet date.

b) Post-Employment Benefits
Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity
pays fixed contributions into a separate entity and will have no legal or constructive
obligation to pay further amounts. The Company makes specified monthly
contributions to the Regional Provident Fund Commissioner towards provident fund,
superannuation fund scheme and employee state insurance scheme (‘ESI’).
Obligations for contributions to defined contribution plans are recognized as an
employee benefit expense in the Statement of Profit and Loss in the periods during
which the related services are rendered by employees.

Defined benefit plan (Gratuity)

The liability in respect of defined benefit plans is calculated using the projected unit
credit method with actuarial valuations being carried out at the end of each annual
reporting period. The Company recognises the net obligation of a defined benefit plan
as a liability in its balance sheet. Gains or losses through re-measurement of the net
defined benefit liability are recognised in other comprehensive income and are not
reclassified to profit and loss in the subsequent periods. The effects of any plan
amendments are recognised in the statement of profit and loss.

(m) Income taxes

Tax expense recognized in statement of profit or loss consists of current and deferred
tax except to the extent that it relates to items recognised in OCI or directly in equity,
in which case it is recognised in OCI or directly in equity respectively.

Current Tax

Current tax comprises the expected tax payable or receivable on the taxable income
or loss for the year and any adjustment to the tax payable or receivable in respect of
previous years. The amount of current tax reflects the best estimate of the tax amount
expected to be paid or received after considering the uncertainty, if any, related to
income taxes.

Current income tax assets and liabilities are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to
compute the amount are those that are enacted or substantively enacted, at the
reporting date.

Current income tax relating to items recognized outside profit or loss is recognized
outside profit or loss (either in other comprehensive income or in equity). Current tax
items are recognized in correlation to the underlying transaction either in OCI or
directly in equity. Management periodically evaluates positions taken in the tax
returns with respect to situations in which applicable tax regulations are subject to
interpretation and establishes provisions where appropriate.

Current tax assets and current tax liabilities are offset only if there is a legally
enforceable right to set off the recognized amounts, and it is intended to realise the
asset and settle the liability on a net basis or simultaneously.

Deferred Tax

Deferred tax is provided using the Balance sheet method on temporary differences
between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes at the reporting date.

Deferred tax is also recognised in respect of carried forward tax losses and tax credits.

Deferred tax is not recognised for:

• temporary differences on the initial recognition of assets or liabilities in a
transaction that:

- is not a business combination; and

- at the time of the transaction (i) affects neither accounting nor taxable profit or
loss and (ii) does not give rise to equal taxable and deductible temporary
differences.

• temporary differences related to investments in subsidiaries, associates and
joint arrangements to the extent that the Company is able to control the timing

• of the reversal of the temporary differences and it is probable that they will not
reverse in the foreseeable future; and

• taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax liabilities are recognized for all taxable temporary differences.

Deferred tax assets are recognised for unused tax losses, unused tax credits and
deductible temporary differences to the extent that it is probable that future taxable
profits will be available against which they can be used. Future taxable profits are
determined based on the reversal of relevant taxable temporary differences. If the
amount of taxable temporary differences is insufficient to recognize a deferred tax
asset in full, then future taxable profits, adjusted for reversals of existing temporary
differences, are considered, based on the business plans of the Company. 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 realised; such reductions are
reversed when the probability of future taxable profits improves.

Deferred tax assets and liabilities are measured at the tax rates that are expected to
apply in the year when the asset is realized or the liability is settled, based on tax rates
(and tax laws) that have been enacted or substantively enacted at the reporting date.

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

Deferred tax relating to items recognized outside profit or loss is recognized outside
profit or loss (either in other comprehensive income or in equity). Deferred tax items
are recognized in correlation to the underlying transaction either in OCI or directly in
equity.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right
exists to set off current tax assets against current tax liabilities and they relate to
income taxes levied by the same tax authority on the same taxable entity, or on
different tax entities, but they intend to settle current tax liabilities and assets on a net
basis or their tax assets and liabilities will be realized simultaneously.

(o) Foreign currency transactions

Transactions in foreign currencies are initially recorded by the Company at
functional currency spot rates at the date the transaction first qualifies for
recognition or an average rate if the average rate approximates the actual rate at the
date of the transaction. Monetary assets and liabilities denominated in foreign
currencies are translated at the functional currency spot rates of exchange at the
reporting date. Exchange differences arising on settlement or translation of monetary
items are recognized in Statement of Profit and Loss.

Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rates at the dates of the initial
transactions. Non-monetary items measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair value is determined. The
gain or loss arising on translation of non-monetary items measured at fair value is
treated in line with the recognition of the gain or loss on the change in fair value of
the item (i.e., translation differences on items whose fair value gain or loss is
recognized in OCI or the Statement of Profit and Loss are also recognized in OCI or
the Statement of Profit and Loss, respectively).

(p) Segment reporting

An operating segment is a component of the Company that engages in business
activities from which it may earn revenues and incur expenses, including revenues
and expenses that relate to transactions with any of the Company’s other components,
and for which discrete financial information is available.

The Company has single Operating Segment viz. that of Bright Bars. Accordingly,
disclosure as per Indian Accounting Standard (Ind AS 108) - “Operating Segment”
are not applicable to the Company.

All operating segments’ operating results are reviewed regularly by the Company’s
Chief Operating Decision Maker (“CODM”) to make decisions about resources to be
allocated to the segments and assess their performance. CODM believes that these are
governed by same set of risks and returns hence CODM reviews as one balance sheet
component.