1. General Information

Kross Limited is a public limited company registered in Jharkhand. India under the provisions of the erstwhile Companies Act. 1956 The Company is engaged m manufacturing of critical components for commercial vehicles and Tractors The Compam sepciahses in manufacturing of trailer axles and other components for automotive industry (CIN U29I00JHIW1PLCOO44O5 & ISIN INE006601022 )

Registered Office M-4, Phase-VT. Camhana. Adityapur Industrial Area. Jamshepdur. Gamharia, Serai kela-kharsawan. Seraikella Kharsawan. Jharkhand. India. 812108 In the F.GM held on October 26. 2023 the members approved by passing the special resolution for proposal to raise an amount upto INR 250 Crores by way of fresh issue in an initial public offering (the "IPO") of its equity share and consequently listing the Equity Shares on certain stock exchanges in India The IPO may comprise a fresh issuance of Equity Shares b\ the Company and an offer for sale of Equity Shares by certain promoters of the Company The Company had filed DRHP with the SEBI dated November 30, 2023 and SEBI had issued final observations on March 22. 2024

2 Basis uf Preparation

2.1 Statement orCompliance

The financial statements comply with all material aspect of Indian Accounting Standards (Ind AS) notified undei section 133 of the Companies Act. 2013 (the Act) [Companies (Indian Accounting standards) Rule. 2015] and other relevant piovisions ot the Act

2.2 Functional anil presentation currency

These financial statements are presented in Indian Rupees (Rs ). which is also the Company s functional currency All amounts have been rounded-off to the nearest Millions upto

two decimal, unless otherwise stated

2.3 Basis of measurement

These Historical Audited Financial Statements have been prepared on the historical cost basis except certain financial assets and liabilities which are measured at fair values

2.4 (Jte of eslinri ales and critical accounting judgements

In the preparation of the financial statements, the Company makes judgements, estimates and assumptions about the carrying value of assets and liabilities that arc not readily apparent from other sources The estimates and associated assumptions are based on historical experience and other factois that arc considered to be relevant Actual results may differ from these estimates Estimates and underlying assumptions are reviewed on an ongoing basis Revisions to accounting estimates are recognised in the period in which the estimate is revised and future periods affected

Key source of estimation of uncertainty at the date of the financial statements, which may cause materia! adjustment to the carrying amounts of assets and liabilities within the next financial vear are provided below

(a) Property, plant and equipment and intangible assets - useful lives

Property, plant and equipment repicsents a significant proportion of the asset base of the Company The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life The useful lives and residual values of the Company’s assets are determined by the Management at the tune the asset is acquired and reviewed periodically, including at the end of each reporting period The lives are based on historical experience with similar assets

(b) Assets and obligations relating to employee l>enefils

The cost of the defined benefit gratuity jjlan and the present value of the gratuity obligation ate determined using actuarial valuations An actuarial valuation inv olves making various assumptions that may differ from actual developments in the future These include the determination of the discount rate: future salary increases and mortality rates Due to the complexities involved m the valuation and its long-term nature, a defined benefit obligation is highly sensitise to changes in these assumptions All assumptions are reviewed at each repotting date

(c) Lease classification, termination and renewal option of leases

Ind AS 116. Leases requires lessees to determine the lease term as the iron-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain The Company makes an assessment on the expected lease teim on a leasc-bv-lease basis and thereby assesses whether it is reasonably certain that the Company will continue the lease beyond non-can cell able period and whether anv options to extend or terminate the contract will be exercised In evaluating the lease term, the Company considers factors such as any significant leasehold improvements undertaken over the tease term, costs relating to the terminating the lease and the importance of the underlying asset to Companv's operations taking m to account the location of the underlying asset and the availability of suitable alternatives The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances After considering current and future economic conditions, the Company has concluded that no material changes are required to lease period relating to the existing lease contracts

2.5 Measurement uf fair values

A number ot the Company's accounting policies and disclosures require the measurement of fan values, tor both financial and non-tinancial assets and liabilities

The Company has an established control framework with respect to the measurement of fair values The Company regularly reviews significant unobservable inputs and valuation adjustments If third party information is used to measure fair values, then the Company assesses the evidence obtained from the third parties io suppoii the conclusion that these valuations meet the requirements of Ind AS. including the level in the lair value hierarchy in which the valuations should be classified

Fail values are categorised into different levels m a lair value hierarchy based on the inputs used in the valuation techniques as follows

- Level I quoted puces I unadjusted ) in active markets for identical assets or liabilities

- Level 2 inputs other than quoted prices included in Level I that are observable for the asset or liability, cither directly ti e. as prices) or indirectly (i e . derived from prices)

- Level 3 inputs for the asset or liability that are not based on observable market data (unobservable inputs)

When measuimg the fair value of an asset or a liability, the Company uses observable market data as fai as possible If the inputs used to measure the fair value of an asset or a liability fall into different levels of the lair value hierarchy, then the fair value measurement is categorised m its entirety m the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement The Company recognises transfer between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

3 Material accounting pulicies:

Pursuant to the Companies I Indian Accounting Siandaidst Amendment Rules 202t effectiveO I -04-2023 the company is required to disclose material accounting policv Informauon’ in lieu of the carhci requirement of disclosing significant accounting policies All accounting policies followed by the company are m accordance with the Indian Accounting Standards | Ind AS) notified u s 133 of the Companies Act. 2013 read with the Companies I Indian Accounting Standards) Rules

2015 and conform to Schedule III to the Companies Act. 2013 as applicable Specific disclosure of material accounting policy information where Ind AS pennits options is made hereunder The companv has assessed the materiality of the accounting policy information, which involves exercising judgement and considering both quantitative and qualitative factors by taking into account not only the size and nature of the item or condition but also the characteristics of the transactions, events or conditions that could make the inform amm more likelv to imnaci the decisions of the users of the financial statements

3.1 Current versus non-rurrcul classification

The Company presents assets and liabilities in the balance sheet based on current non-current classification An asset is classified current when it is

(a) Expected to be realised or intended to be sold or consumed in the normal operating cycle (bl Held primarily for the purpose of trading

Icl Expected to be realised within twelve months after the leportmg period, or

(d) Cash or cash equivalent unless restricted from bemg exchanged or used to settle a liability for at least twelve months after the reporting period All othei assets are classified as non-current

A liability is classiticd current when

la) If is expected to be settled in the normal operating cycle.

(bt It is held primarily for the purpose of trading.

(c) It is due to be settled within twelve months after the reporting period, or

(d) 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 othei liabilities as non-current

Deferred tax assets and liabilities are always classified as non-cut rent assets and liabilities

3.2 Financial instruments

(a) Recognition and initial measurement

Trade receivables and debt securities issued arc imtiallv recognised when they are originated All other financial assets and financial liabilities arc initially recognised when the Company becomes a party to the contractual provisions of the msliument

A financial asset or financial liability is initially measured at fan value plus, for an item not at fan value through profit and loss I FVTPLk transaction costs that are directly attributable to its acquisition ™ issue

(bl Classification and subsequent measurement

Financial assets

On initial recognition a financial asset is classified as measured at

- amortised cost.

- Fan value through profit or loss tFYTPLl or Fair value through other comprehensive income I'FVOCTl

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

A financial asset is measured at amortised cost if U 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 cm specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding

A financial asset is measured at fair value through other comprehensive income I’FVOCD if it meets both of the following conditions and is not designated as at F\TPL

- the asset is held within a business model whose objective is to hold assets to collect contractual cash flows and cash flows from sales, and

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

All financial assets not classified as measured at amoitised cost as described above are measured at F\TPI This includes all derivative financial assets On initial recognition, the Company mav irrevocably designate a financial asset that otherwise meets the requuemenis to be measured at amortised cost as at FVTPL if doing so eliminates or sigmflcanilv reduces an accounting mismatch ihat would otherwise arise

Equity instruments are always classified fair value through profit and loss, except m cases where the Company has elected an irrevocable option of designating the same as fair value through other comprehensne income |FVOCI)

Financial assets: Subsequent measurement and sains and losses Financial assets at FVTPL :

These assets are subsequently measured at fan value \'et gains and losses, including any uueresi or dividend income, are recognised in profit or loss Financial assets at amortised cost:

These assets are subsequently measured at amortised cost using the effective interest method The amortised cost is reduced by impairment losses Interest income, foreign exchange gams and losses and impairment are recognised in profit or loss Any gain or lass on derecognition is recognised in profit nr loss Financial assets at FYOCI :

These assets are subsequently measured at fair value through other comprehensive income i e subsequent changes in fair value of the instrument is recognised in other comprehensive income Any dividend received on such instruments are recognised in .Statement of Profit and Loss Financial liabilities: C lassiliiatimi. subsequent measurement and gains and losses

Financial liabilities arc classified and measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if u is classified as hdd-for-tradmg, 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 gams and losses, including any interest expense, are recognised in profit ot loss Other financial liabilities are subsequently measured at amortised cost using the effective interest method Interest expense and foreign exchange gams and losses are recognised in profit or loss Any gain or loss on derecognition is also recognised in profit or loss

(cl Derecognition Financial

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it uansfers the rights to receive rhe contractual cash flows m a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain contml of the financial asset

If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but irtams eithei all or substantially all of the risks and rewards of the transferred assets, the transferred assets arc not derecognised Financial liabilities

The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire

The Company also derecognises a financial liability when its terms arc modified and the cash flows under the modified terms are substantially different In this case, a new financial liability based on the modified terms is recognised at fan value The difference between the carrying amount of the financial liability extinguished and the new- financial liability with modified terms is recognised in profit or loss

(d) Impairment of financial assets

Loss allowance for expected credit losses is recognised for financial assets measured at amortised cost and fair value through othei comprehensive income The Company recognises life time expected credit losses for all uade receivables thai do not constitute a financing transaction

For financial assets (apart from irade receivables that do not constitute of financing transaction! whose credit risk has not significantly increased since initial recognition, loss allowance equal to (write months expected credit losses is recognised Loss allowance equal U» ihe lifetime expected credit losses is recognised if the credit risk of the financial asset has significantly increased since muial recognition

(e) Offsetting

Financial assets and financial liabilities are offset and the net amount presented m the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously

3.3 Revenue from contract with customers

Revenue from contracts with customers is recognised when control of the goods'services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods/services Such revenue is recognised upon the Company's performance of us contractual obligations and on satisfying all the following conditions

111 Panics to the contract have approved the contract and undeuaken to perfurm their respective obligations.

12 > Such contract has specified the respective rights and obligations of the parties m connection with the transfer of goods or rendering of services thereinafter the "Transfer").

(31 Such contract contains specific payment terms tn relation to the Transfer

(4) Such conn act has a commercial nature, namely, it will change the risk, time distribution or amount of the Company ’s future cash flow,

(5) The Company is likely to recover the consideration it is emitted to for the Transfer to customers

Revenue is recognised when no significant uncertainty exists regarding the collection of the considciation The amount recognised as revenue is exclusive of all indirect taxes and net of returns and discounts

la! Sale nf goads

For contracts with customers for sale of goods, revenue is recognised net of discount and rebates, at a point in time when control of the asset is transferred to the customer, which is when the goods are delivered to the customers as per the terms of the contracts Delivery happens when the goods have been shipped nr delivered to the specific location, as the case may be. the risk of loss has been transferred, and either the customer has accepted the goods in accordance with the contracts or the Company has objective evidence that all criteria related for acceptance has been satisfied

No dement oT significant financing is deemed present as the sales are generally made with a cicdii teim which is consistent writh the market practice A leceivahle is recognised when ihe woods are delivered and this is the point m lime that the consideration is unconditional because onk the passage of time is rcouired before the payment is due

(b) Sale of Services

Revenue from service contmcts are recognised in the accounting penod in which the services are rendered Where the contracts include multiple performance obligations, the transaction price is allocated to each performance obligation based on the standalone selling price and revenue is recognised over time as and when the customer receives the benefit of the Company 's performance based on the actual service provided to as proportion of the total services to be provided In case, the service contracts include one performance obligation revenue is lecogmsed based on the actual service provided to the end of the reporting period as proportion of the total services to be provided This is determined based on the actual expenditure incurred to the total estimated cost

(c) Dividend and interest income

Dividend income is recognised when the company's right to receive payment has been established and that the economic benefits will flow to the Company and amount of income can be measured reliable

Interest income from a financial asset is recognised when it is probable rhat 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 the assets net carrying amount on initial recognition

3.4 Government grants

Government grants are recognised where there is reasonable assurance thai the grant will be received and all attached conditions will he complied with When the gram relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate are expensed When the gram relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset

3.5 Income Taxes Current tax

Current tax assets and liabilities are measured at the amount expected to be recover ed from or paid to Ihe taxation authorities The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the icportmg date

Current lax relating to items recognised directly tn equity is recognised in equity and not m the statement of profit or loss Management penodicallv ev aluates positions taken in the tax returns with respect to situations m which applicable (ax regulations are subject to interpretation and establishes provisions where appropriate

Deferred tat

Deferred tax is provided using the liability method on temporary differences between Ihe tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date Deferred tax liabilities are recognised foi all taxable temporary differences

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses Deferred tax assets are recognised to the extent that it is probable that taxable prolu will be av ailable against winch the deductible lempotary differences, and ihe carry forward of unused lax credits and unused tax losses can be utilised

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longei probable lhat sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable pi of ns will allow the deterred tax asset to be recovered

Deferred tax assets and liabilities are measured at the tax rates thai are expected to apply m the year when the asset is realised or the liability is settled, based on tax rates land tax laws) that have been enacted or substanuvdv enacted at the reporting date

Deferred lax relating to items recognised outside profit ot loss is recognised outside profit or loss Deferred tax items are recognised m correlation to the underlying transaction either m OCT or directly in equity

The Company offsets deferred tax assets and deferred tax liabilities if and only if it lias a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied bv the same taxation authority

3.6 Foreign currencies

Items included in the financial statements are measured using the currency of the primary economic environment in which the enntv operates I 'the functional currency'l The Company's financial statements are presented in Indian Kupees. which is the Company s functional and presentation currency Transactions and halances

Transactions in foreign currencies arc initially recorded by the Company in its functional currency spot rates at the dale the transaction first qualifies for recognition

Monetary assets and liabilities denominated m loreign currencies are translated at the functional currency sjwvt rates of exchange at the reporting date Differences arising on settlement or translation of monetary items are recognised in profit or loss unless they relates to the qualifying cash flow hedges

N'on-moneiary items that are measured in terms of historical cost in a foreign currency arc translated using the exchange rates at the dates of the initial transactions

In determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which the Company initially recognises the non-monetary asset or non*monetary liability' arising from the advance consideration If there are multiple payments or receipts in advance the Company determines the transaction dale for each payment or receipt ol advance consideration

3.7 Hruprrh, plant and equipment

Propem plant and equipment is staled at cost, net i>t accumulated depreciation and accumulated impairment losses, if any Construction in progress is staled at cost, net of accumulated impairment losses, ifanv

Cost of Propel tv, plant and equipment includes the costs directly attributable to the acquisition or constructions ol assets, or replacing pans of the plant and equipment and borrowing costs foi qualifying assets if the recognition criteria are met When significant parts of plant and equipment are requued to be replaced at intervals the Company depreciates them separately based on then specific useful lives

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 them will flow to the Company and the cost of the item can measured reliably All other repair and maintenance costs arc recognised in profit or loss as incurred Advance given for acquisition construction of Property’. Plant and Equipment and Intangible assets are presented as "Capilal Advance" under Other Non Curr ent Assets The assets in the process ol construction or acquisition but not ready for management’s intended use are included under Capital Work in progress

Depreciation is provided on Straight line method in the manner and on the basis of useful lives prescribed in Schedule 11 ro the Companies Act 20H Depreciation on addition deduction is calculated nro-rata from to the month of addition deduction

An item of propem, plant and equipment and any significant pail initially recognised is derecognised upon disposal |i e. at the date the recipient obtains control I or when no future economic benefits are expected from us use or disposal Anv gain or loss arising on detecogmtion of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset I is included in the statement of profit or loss when the asset is derecognised

The residual values, useful lives and methods of depreciation of propem¹. plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate The estimated useful lives of' the assets considered by the Company is stated hereunder

3.8 Leases

The Company assesses at contract inception whether a contract is. or contains, a lease That rs. if the contract conveys the right to control the use of an identified asset for a period of time m exchange for consideration The Company as a lesser

The Company applies a single recognition and measurement approach for all leases, except lor short-toim leases and leases of low-value assets The Company recognises lease liabilities to make lease payments and nght-of-u.se assets representing the right to use the underlying assets Kighi -of-use assets

The Company recognises right-of-usc assets at the commencement date of the lease (i e the date the underlying asset is available for use) Right-of-usc assets are measuied at cost, less any accumulated depreciation and impairment losses, and adjusted for anv iemeasurement of lease liabilities The cost of right-of-use assets includes the amounr of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received Right-of-use assets are depreciated on a straight-hne basis over the shorter of the lease term and the estimated useful lives of the assets

If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset [.ease liabilities

At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term The lease payments include fixed payments (including m-subslance fixed payments) less anv lease incentives receivable, variable lease payments lhat depend on an index or a rate, and amounts expected to be paid under residual value guarantees The lease payments also include payments of penalties for terminating the lease, if the lease teim reflects the Company exercising the option to terminate

Variable lease payments that do not depend on an index or a rate are iccognised as expenses (unless they are incurred to produce inventories! in the period in which the event or condition that triggers the payment occurs

In calculating ihe pieseni value ol lease payments, the Company uses ns muemenlal borrowing rate ai llie lease commencement date because (he mteresl rate miplicii in the lease is not leadity detcrminahle After the commencement dale, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments The Company's lease obligations aie Dreseuted on the face of the Balance Sheet

Short-term leases and leases of low value assets

The Company applies the short-term lease recognition exemption to its short-term leases (i e . those leases that have a lease term of 12 months or less from the commencement date! It also applies the lease of low-value assets recognition exemption to leases of assets that are considered to he low value Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term

The Company ns a lessor

Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases Renta) income arising is accounted for on a straight-line basis over the lease terms and is included in revenue in the statement of profit 01 loss due to us operating natuie Initial direct costs incurred m negotiating and arranging an operating lease are added to die carrying amount of the leased asset and recognised over the lease term on the same basis as rental income Contingent rents are recognised as revenue in the period in which they are earned

3.9 Borrowing costs

Borrowing costs directly atinbuLahlc to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset All other borrowing costs are expensed in the period in which they occur Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds

3.10 Intangible assets

Intangible assets acquired separated arc measured on initial recognition at cost Subsequent to initial recognition intangible assets are earned at cost less am accumulated amortisation and accumulated impairment losses Internally generated intangibles excluding capitalised development costs, are not capitalised and the related expenditure is reflected in piofit or loss in the period m which the expenditure is incurred

Intangible assets are amortised over the useful economic life (5 years tor computer software! and assessed for impairment whenever there is an indication that the intangible asset may be impaired The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period

An intangible asset is derecognised upon disposal b e . at the date the recipient obtains control! or when no future economic benefits arc expected from its use or disposal Any gam or loss arising upon derecognition 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 or Loss

3.11 Impairment of assets t other than financial assets)

At each balance sheet date, the Company reviews the carrying value of its property, plant and equipment and intangible assets in determine whether there is any indication that the carry ing value of those assets may not be recoverable through continuing use If any such indication exists, the recoverable amount of the asset is reviewed in order to determine die extent of impairment loss, if any Where the asset docs not generate cash Hows that are independent timn othei assets, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs

Recoverable amount is the higher of lair value less costs to sell and value in use In assessing value in use. the estimated future cash Hows are discounted to their present value using a pie-tax discount late that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted An impairment loss i$ recognised m the statement of profit and loss as and when the carrying value of an asset exceeds its recoverable amount

Where an impairment toss subsequently reverses, the carrying value of the asset tor cash generating unit) is increased to the revised estimate of us recoverable amount so that the increased carry ing value does not exceed the carrying value that would have been determined had no impairment loss been recognised for the asset (or cash generating unit) m prior years A reveisal of an impairment loss is recognised m the statement of profit and loss immediately

3.12 Provisions and contingencies

Provisions are lecogmscd when the Company has a present obligation (legal or constructive) as a result of a past event, u is probable that an outflow of resources embodying economic benefits will be required to settle the obligation anj a reliable estimate can be made of the amount of the obligation

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability When discounting is used, the increase m the provision due to the passage of time is recognised as a finance cost

Disclosure for contingent liabilities is made when there is a possible obligation arising from past events, the existence of winch will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future ev ents not wholly within the control of the Company or a present obligation that arises from past ev ents where it is cither not probable that an outflow of resources embodying economic benefits will be required to settle or a reliable estimate of the amount cannot be made

3.13 Inventories

Raw materials, work-in-progress and finished products are v alued at lower of cost and net realisable value after prov iding for obsolescence and other losses, where considered necessary Cost includes purchase price, non-refundablc taxes and duties and othet directly attributable costs incurred in bringing the goods to the point of sale Work-m-progress and finished goods include appropriate proportion of overheads

Stores and spares and consumables are v alued at cost comprising nt purchase puce, non refundable taxes and duties and other direetK attributable costs attei providing for obsolescence and other losses, where considered necessary

3.14 Cash and shurl-lerni deposits

Cash anJ short-term deposits in the statement of financial position comprise cash at banks and on hand and short-term highly liquid deposits with a maturity of three months or Jess.

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

3.15 Employee benrfits Short-term employee benefits

Liabilities for short-term employee benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled The liabilities are presented as current employee related liabilities under other financial liabilities in balance sheet Post - employment benefits

The liability or asset recognised in the Balance Sheet in respect ot defined benelit plans 15 the present v alue ol the defined benefit obligation at the end of the reporting period less the fair value of plan assets The defined benel it obligation is calculated annuallv at year end hv actuaries using the protected unit credit method

The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows bv reference to market yields at the end of the reporting period on government bonds that hav e terms appioximatmg to the terms of the related obligation

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value r>f plan assets This cost is included in Employee Benefits Expense'm the Statement of Profit and Loss

Remeasurcrtient gams and losses arising from experience adjustments and changes in actuarial assumptions are recognised m the period in which they occur directly in other comprehensive income These are included m the Statement of C hanges in Equity and in the Balance Sheet

Changes m the present value of the defined benefit obligations resulting trom plan amendments 01 curtailments are recognised immediately in profit or loss as past service cost

Defined contribution plan

The Company pays provident fund contributions to publicly administered provident fund as pei local regulations The Company has no further payment obligations once the contributions have been paid The contributions are accounted for as defined contribution plans and the contributions are recognised as employee benefit expense when they are due Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available

3.16 F^rnings per share

(i) Basic earnings per share

Basic earnings peT share is calculated by dividing the profit attributable to owners of the Parent

by the weighted average number of equity shares outstanding during the financial year

(ii) Diluted earnings per share

Diluted earnmgs per share adiusts the figures used in the determination of basic earnings per share to take into account the after income lax effect of interest and other financing costs associated with dilutive potential equity shares, and

the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares

3.17 Contributed equity

Equity shares are classified as equity Incremental cost directly attributable to the issue of new shares or options are shown m equity as reduction, net of tax from the proceeds

3.18 Cash dividend

The Company recognises a liability to pay a dividend when the distribution is authorised, and the distribution is no longer at the discretion of the Company As per the corporate laws of India, a distribution is authorised when it is approved by the shareholders A corresponding amount is recognised directly in equity

3.19 Segment reporting

Operating segments aie reported in a manner consistent with the internal reporting prnvided to the chief operating decision maker fCODM¹)

The CODM is responsible for allocating lesources and assessing performance of the operating segments and has been identified as the Board of Directors of the Parent Company

3.20 New amendments issued but not effective

The Ministry of Corporate Affairs has vide notification dated March 23, 2023 notified Companies (Indian Accounting Standards) Amendment Rules. 2022 which amends certain accounting standards, and are effective April I, 2023

The Rules predominantly amend Ind AS 12. Income taxes, and Ind AS I. Presentation of financial statements The other amendments to Ind AS notified by these rules are primarily in the nature of clarifications

These amendments are not expected to have a material impact on the Company in the current or future reporting periods and on foreseeable future transactions Specifically, no changes would be necessary as a consequence of amendments made to Ind AS 12 as the group's accounting policy already complies with the now mandatory treatment