Corporate Information

NAKODA GROUP OF INDUSTRIES LIMITED ("the Company") (CIN No. L15510MH2013PLC249458) is a Public Limited Company, domiciled and incorporated in India, under the provisions of Companies Act, 2013. The Registered office of the Company is situated at 239, Bagadgonj, Nagpur, (M.H.) - 440008. The Company's share are listed on "Bombay Stock Exchange" [BSE] and "NationalStock

The Company is primarily engaged in the business of manufacturing, selling, distribution and trading of Tutty Fruity, Cotton Bales and Other Agriculture Commodities.

The Rnard nf Directors approved the financial statements for the year ended March 31, 2023 olid julliui iied fui ii-i-ut: uli May 10, 2023.

1. SIGNIFICANT ACCOUNTING POLICIES AND KEY ACCOUNTING ESTIMATES AND JUDGEMENTS

SIGNIFICANT ACCOUNTING POLICIES

1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS

These financial statements are the separate financial statements of the Company (also called as "financial statements") prepared in accordance with Indian Accounting Standard ("Ind AS") as notified under section 133 of the Companies Act, 2013 ("the Act") read together with the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standard) Rule, 2016, as amended, time to time. The preparation and presentation of the financial statements is based on the Indian Accounting Standards (Ind AS) Division - II of the Schedule - III of the Companies Act, 2013.

These financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting except for certain financial assets and financial liabilities that are measured at fair values at the end of each reporting period, as stated in the accounting policies set out below.

The statement of cash flows have been prepared under indirect method, whereby the profit and loss is adjusted for the effect of transactions of a non-cash nature, any deferrals and accruals or future operating cash receipts or payments and items of income and expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated. The Company considers all highly liquid instruments that are readily convertible to know amounts of cash and are subject to an insignificant risk of changes in value to be cash equivalents.

These accounting policies have been applied consistently over all the period presented in these financial statements.

The Company's financial statements are prepared and presented in I'ⁿ

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Lakhs, which is also the functional currency for the Company. All gfigglints ha^Ooeen

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rounded off to the nearest (^) in Lakhs up to two decimals, except when otherwise specified.

1.2 CURRENT AND NON - CURRENT CLASSIFICATION

The Company presents the assets and liabilities in the balance sheet based on current / non-current classification. An assets or a liabilities are classified as current when it satisfies any of the following criteria:

i) The assets / liabilities are expected to be realized / settled in the Company's normal operating cycle;

ii) The assets are intended for sales or consumption;

iii) The assets / liabilities are held primarily for the purpose trading;

iv) The assets / liabilities are expected to be realized / settled within twelve months after the end of reporting date;

v) The asset is cash or cash equivalents unless it is restricted from being exchanged or used to settle a liabilities for at least twelve months after the reporting period.

vi) In the case of the liabilities, the Company does not have an unconditional right to defer the settlement of the liabilities for at least twelve months after the reporting date.

All other assets and liabilities are classified as non-current.

For the purpose of current / non-current classification of assets and liabilities, the Company has ascertained its operating cycle as twelve months. This is based on the nature of services and the time between the acquisition of the assets or inventories for processing and their realization in cash and cash equivalents.

1.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Property, Plants and Equipments

Measurement at Recognition

An item of property, plants and equipments that qualifies as an assets is measured on the initial recognition at cost. Following the initial recognition, item of property, plants and equipments are carried at its cost less accumulated depreciation and accumulated

impairment losses, if any.

The Company identifies and determines cost of each part of an item of property, plants and equipments separately, If the part has a cost which is significant to the total cost of that item of property, plants and equipments and has useful life that is materially different from

that of the remaining items.

The cost of an item of property, plants and equipments comprises of its purchase price including import duties and other non-refundable purchase taxes or levies, directly attributable cost of bringing the assets to its present location and working condition for its intended use and the initial estimate of decommissioning, restoration and similar liabilities, if any. Any trade discount and rebates are deducted in arriving at the purchaseyarice of such property, plants and equipments.

Cost includes the cost of replacing a part of the plants and equipme|^)|J:he re^pition criteria are met. Expenses directly attributable to new manufacturir^Mm^^wg its

construction period are capitalized, if the recognition criteria are met. Expenditure related to plans, designs and drawings of buildings or plant and machineries are capitalized under the relevant heads of property, plants and equipments, if the recognition criteria are met.

When the significant parts of property, plants and equipments are required to be replaced at periodical intervals, the Company recognizes such part as individual assets with specific useful lives and depreciates them accordingly.

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 flows to the Company and the cost of the item can be measured reliably. The carrying amount of any components accounted for as a separate asset is de-recognized when replaced.

All the costs, including administrative, financing and general overhead expenses, as are specifically attributable to construction of a specific projects or to the acquisition of a property, plants and equipments or bringing it to its present location and working condition, is include as a part of the cost of construction of the project or as a part of the cost of property, plants and equipments, till the commencement of its commercial production. Any adjustments arising from exchange rate variations attributable to the property, plants and equipments are capitalized as aforementioned.

Borrowing costs relating to the acquisition/construction of property, plants and equipments which takes the substantial period of time to get ready for its intended use are also included in the cost of property, plants and equipments/cost of constructions to the extent they relate to the period till such property, plants and equipments are ready to be put to use.

Any subsequent expenditure related to an item of property, plants and equipments is added to its book value only and only if it increases the future economic benefits from the existing assets beyond its previously assessed standard of performance.

Any items such as spare parts, stand by equipment and servicing equipments that meet the definitions criteria of the property, plants and equipments are capitalized at cost and depreciated over the useful life of the respective property, plants and equipments. Cost is in the nature of repairs and maintenances are recognized in the statement of profit and loss as

and when incurred.

Capital Work-in-Progress and Capital Advances

Cost of property, plants and equipments not ready for intended use, as on the balance sheet date, is shown as a "Capital Work-in-Progress". The capital work-in-progress is stated at cost. Any expenditure in relation to survey and investigation of the properties is carried as capital work-in-progress. Such expenditure is either capitalized as cost of the projects on completion of construction project or the same is expensed in the period in which it is

decided to abandon such projects.

Any advances given towards acquisition of property, plants and equiprrje^^^^s^Lnding at each balance sheet date are disclosed as "Other Non - Current Assets".

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Depreciation on each part of property, plants and equipments are provided to the extent of the depreciable amount of the assets on the basis of "Straight Line Method (SLM)" on the useful lives of the tangible property, plants and equipments as estimated by the Company's management and is charged to the statement of profit and loss, as per the requirement of Schedule - II to the Companies Act, 2013. The estimated useful lives of the property, plants and equipments has been assessed based on the technical advice which is considered in the nature of the property, plants and equipments, the usage of the property, plants and equipments, expected physical wear and tear of the such property, plants and equipments, the operating conditions, anticipated technological changes, manufacturer warranties and maintenance support of the property, plants and equipments etc.

When the parts of an item of the property, plants and equipments have different useful lives, they are accounted for as a separate items (major components) and are depreciated over their useful lives or over the remaining useful lives of the principal property, plants and equipments, whichever is less.

The useful lives of the items of property, plants and equipments as estimated by the Company's management is mentioned below:

The Company based on technical assessment made by the technical experts and the Company's management estimate, depreciate certain items of property, plants and equipments over the estimated useful lives which are different from the useful lives as prescribed under Schedule - II of the Companies Act, 2013. The Company's management believes that the useful lives as given above is best to represent the period over which Company's management expects to use these property, plants and equipments.

Freehold land is not depreciated. Leasehold land and their improvement cost are amortized over the period of the lease, if any.

The useful lives, residual value of each part of an item of property, plants and equipments and the method of depreciation are reviewed at the end of each reporting peciof these expectations differ from the previous estimates, such change is ac^<5^iSey^^as a change in accounting estimate and adjusted prospectively, if appropriate.^;^

The carrying amount of an item of property, plants and equipments and other intangible assets are recognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from derecognition of the property, plants and equipments is measured as the difference between the net disposal proceeds and the carrying amount of the assets and is recognized in the statement of profit and loss, as and when the assets are de-recognized.

b) Intangible Assets

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Measurement at Recognition

Intangible assets acquired separately measured on the initial recognition at cost. Intangible assets arising on the acquisition of business are measured at fair value as at the date of acquisition. Internally generated intangible assets including research costs are not capitalized and the related expenditure is recognized in the statement of profit and loss in the period in which the expenditure is incurred. Following the initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment loss, if any.

Amortization

Intangible assets with the finite lives are amortized on a ".Straight Line Basis" over the estimated useful economics lives of such intangible assets. The amortization expenses on intangible assets with the finite lives are recognized in the statement of profit and loss.

The amortization period and the amortization method for an intangible assets with the finite useful lives are reviewed at the end of each financial year, If any, of these expectations differ from the previous estimates, such changes are accounted for as a change in an accounting estimate and adjusted prospectively, if appropriate.

Derecognition

The carrying amount of an intangible assets are recognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the de-recognition of an intangible assets is measured as the difference between the net disposal proceeds and the carrying amount of the intangible assets and is recognized in the statement of profit and loss, as and when such assets are de-recognized.

c) Impairment

Assets that have an indefinite useful life, for example goodwill, are not subject to amortization and are tested for impairment annually and whenever there^rarf^i^dication that the assets may be impaired. f/J/

Assets that are subject to depreciation and amortization and assets representing investments in subsidiary and associate companies are reviewed for impairment, whenever events or changes in circumstances indicate that carrying amount may not be recoverable. Such circumstances include, though are not limited to, significant or sustained decline in revenues or earnings and material adverse changes in the economic environments.

The Company assesses at each reporting date, whether there is an indication that assets may be impaired, if any indication exists based on internal or external factors, or when annual impairment testing for assets is required, the Company estimates the asset's recoverable amount. Where the carrying amount of the assets or its cash generating unit (CGU) exceeds its recoverable amount, the assets are considered impairpd and is written down to its recoverable amount. The recoverable amount is the greater of the fair value less cost to sell and value-in-use.

In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax rate that reflects current market rates and the risk specific to the assets. For the assets that does not generate largely independent cash inflows, the recoverable amount is determined for the CGU to which the assets belongs. Fair value less cost to sell is the best estimate of the amount obtainable from the sale of an assets in an arm's length transactions between knowledgeable, willing parties, less cost of disposal. After the impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful lives.

Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exists or has decreased. However, the increase in the carrying amount of assets due to the reversal of an impairment loss is recognized to the extent it does exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognized for

the assets in the prior years.

Impairment losses, if any, are recognized in the statement of profit and loss and included in depreciation and amortization expense. Impairment losses are reversed in the statement of profit and loss only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, if no impairment loss had previously been recognized.

d) Revenue Recognition

Revenue from Contracts with Customers

Revenue from contracts with customers is recognized on transfer of control of promised goods or services to a customer at an amount that reflects the consideration to which the Company is expected to be entitled to in exchange for those goods or services.

Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable consideration) allocated to that perfg^^^^^^ligation. The transaction price of goods sold and services rendered is net of vari^l^consife^ion on account of various discounts and schemes offered by the Company a|

This variable consideration is estimated based on the expected value of outflow. Revenue (net of variable consideration) is recognized only to the extent that it is highly probable that the amount will not be subject to significant reversal when uncertainty relating to its recognition is resolved.

Sale of Products

Revenue from sales of goods is recognized, when control on the goods have been transferred to the customers. The performance obligation in the case of sale of goods is satisfied at a point in time i.e. when the material is shipped to the customers or delivery to the customers as may be specified in the contracts with them.

Sales (Gross) excludes Goods and Service Tax (GST) and is net of discounts and incentives to the customers.

Sale of Services

Revenue from sales of service is recognized over time by measuring the progress towards satisfaction of performance obligation for the service rendered. The revenue is recognized based on the agreements/arrangements with the customers as the service is performed and based on the satisfaction of performance obligation. Advances from customers is recognized under "iOther Current Liabilities" and released to revenue on satisfaction of performance obligation.

Export Incentives

Export incentive revenues are recognized when the right to receive the credit is established and there is no significant uncertainty regarding the ultimate collection.

Interest

Revenue from Interest income is recognized using the effective interest method. Effective interest rate (EIR) is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instruments or a shorter period, where appropriate, to the gross carrying amount of the financial assets or to the amortized cost of financial liabilities.

e) Government Grants and Subsidies

The Company is entitled to receive any subsidy from the Government authorities or any other authorities in respect of manufacturing or other facilities are dealt as follows:

i) Grants in the nature of subsidies which are non-refundable and are recognized as income, when there is reasonable assurance that the Company will comply with all the necessary conditions attached to them. Income from grants is recognized on a systematic basis over the periods in which the related costs that are intended to be compensated by such grants are recognized.

ii) The Company has received refundable government loans at below^p^^^gte of interest which are accounted in accordance with the recognition a^^^rieaS^ettjent

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principle of Ind AS - 109, " Financial Instruments". The benefit of below-market rate of interest is measured as the difference between the initial carrying value of loan determined in accordance with Ind AS -109 and the proceeds received. It is recognized as income when there is a reasonable assurance that the Company will comply with all necessary conditions attached to the loans. Income from such benefit is recognized on a systematic basis over the period of the loan during which the Company recognizes interest expense corresponding to such loans.

iii) Income from subsidies is presented on gross basis under the Revenue from Operations,

f) Inventories

Inventories of thr rnw material, work in progress, finishod goods, packing material, stores and spares, components, consumables and stock-in-trade are carried at lower of cost and net realizable value. However, raw material and other items held for use in production of inventories are not written-down below cost, if the finished goods in which they will be incorporated are expected to be sold at or above costs. The comparison of costs and net realizable value is made on an item-by-item basis. In determining the cost of raw materials, work-in-progress, finished goods, packing materials, stores and spares, components and stock-in-trade, "Weighted Average" method is used.

a) Raw Material. Packing Material and Stores. Spares and Consumables: Cost of inventory comprises all costs of purchase, duties / taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventory to their present location and condition.

b) Finished Goods and Work-in-Progress: Cost included the cost of direct materials and packing material and the labor cost and an appropriate proportion of fixed and variable overhead based on the normal operating capacity of the Company, but excluding the borrowing costs but include the other costs incurred in bringing the inventories to their present location and condition. Fixed production overheads are allocated based of normal capacity of production facilities.

c) Stock-in-Trade: Cost included the purchase price, duties / taxes (other than those subsequently recoverable from tax authorities) and other direct or indirect costs incurred in bringing the inventories to their present location and conditions.

The stock of waste or scrap is valued at net realizable value.

"Net Realizable Value" is the estimated selling price of inventories in the ordinary course of business, less estimated costs of completion and estimated cost necessary to make the sales of the products.

The Company considers factors like estimated shelf life, product discontinuances and aging of inventory in determining the provision for slow moving, obsolete a n a I e a b I e

inventory and adjust the inventory provision to reflects the reco)^^Bl^\?^l\of the

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g) Financial Instruments

A financial instruments are in any contract that gives rise to a financial assets of one entities and a financial liabilities or equity instruments of another entities.

Financial Assets

Initial Recognition and Measurements

The Company recognizes a financial assets in its balance sheet, when it becomes party to the contractual provisions of the instruments. All the financial assets are recognized initially at fair value, plus in the case of financial assets not recorded at fair value through profit or loss (FVTPL), transaction costs that are attributable to the acquisition of the financial assets.

Where the fair value of a financial assets at initial recognition is different from its transaction price, the difference between the fair value and the transaction price is recognized as a gain or loss in the statement of profit and loss at initial recognition, if the fair value is determined through a quoted market price in an active market for an identical assets (i.e. level 1 input) or through a valuation technique that uses data from observable markets (i.e. level 2 input).

In case the fair value is not determined using a level 1 or level 2 input as mentioned above, the difference between the fair value and transaction price is deferred appropriately and recognized as a gain or loss in the statement of profit and loss only to the extent that such gain or loss arises due to a change in factor that market participants take into account when pricing the financial assets.

However, trade receivables that do not contain a significant financing component are measured at transaction price.

Subsequent Measurements

For subsequent measurements, the Company classifies a financial assets in accordance with the below criteria:

i) The Company's business model for managing the financial assets and

ii) The contractual cash flows characteristics of the financial assets.

Based on the above criteria, the Company classifies its financial assets into the following categories:

i) Financial assets measured at amortized costs

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

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

Financial Assets measured at Amortized Costs

A financial assets are measured at the amortized costs if both the folioare met: Yr\\

a) The Company's business model objective for managing the financial assets is to hold financial assets in order to collect contractual cash flows, and

b) The contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

This category applies to cash and bank balances, trade receivables, loans and other financial assets of the Company. Such financial assets are subsequently measured at amortized cost using the effective interest method.

Under the effective interest method, the future cash receipts are exactly discounted to the initial recognition value using the effective interest rate. The cumulative amortization using the effective interest method of the difference between the initial recognition amounts and the maturity amount is added to the initial recognition value (net of principal repayments, if any) of the financial assets over the relevant period of the financial assets to arrive at the amortized costs at each reporting date. The corresponding effect of the amortization, under effective interest method is recognized as interest income over the relevant period of the financial assets. The same is included under "Other Income" in the statement of profit and

loss.

The amortized costs of a financial assets are also adjusted for loss allowance, if any.

Financial Assets measured at FVTOCI

A financial assets are measured at FVTOCI if both of the following conditions are met:

a) The Company's business model objective for managing the financial assets is achieved both by collecting contractual cash flows and selling the financial assets, and

b) The contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

This category applies to certain investments in debt instruments. Such financial assets are subsequently measured at fair value at each reporting date. Fair value changes are recognized in the Other Comprehensive Income (OCI). However, the Company recognizes interest income and impairment losses and its reversals in the statement of profit and loss.

On de-recognition of such financial assets, cumulative gain or loss previously recognized in OCI is reclassified from equity to statement of profit and loss.

Further, the Company, through an irrevocable election at initial recognition, has measured certain investments in equity instruments at FVTOCI. The Company has made such election on an instrument-by-instrument basis. These equity instruments are neither held for trading nor are contingent consideration recognized under a business combination. Pursuant to such irrevocable election, subsequent changes in the fair value of such equity instruments are recognized in other comprehensive income. However, the Company recognizes dividend income from such instruments in the statement of profit and loss, when the right_to_receive such payment is established, it is probable that the economic benefits

Company and the amount can be measured reliably. ffyf

On de-recognition of such financial assets, cumulative gain or loss previously recognized in OCI is not reclassified from the equity to statement of profit and loss. However, the Company may transfer such cumulative gain or loss into retained earnings within equity.

Financial Assets measured at FVTPL

A financial assets are measured at FVTPL unless it is measured at amortized costs or at FVTOCI as explained above. This is a residual category applied to all other investments of the Company excluding investments in subsidiary and associate companies. Such financial assets are subsequently measured at fair value at each reporting date. Fair value changes are recognized in the statement of profit and loss.

Derecognition

A financial assets (or, where applicable, a part of a financial assets or part of a group of similar financial assets) is derecognized (i.e. removed from the Company's balance sheet) when any of the following occurs:

i) The contractual rights to cash flows from the financial assets expires;

ii) The Company transfers its contractual rights to receive cash flows of the financial assets and has substantially transferred all the risks and rewards of ownership of the financial

assets;

iii) The Company retains the contractual rights to receive cash flows but assumes a contractual obligation to pay the cash flows without material delay to one or more recipients under a "pass-through" arrangement (thereby substantially transferring all the risks and rewards of ownership of the financial assets);

iv) The Company neither transfers nor retains substantially all risk and rewards of ownership and does not retain control over the financial assets.

In cases, where the Company has neither transferred nor retained substantially all of the risks and rewards of the financial assets, but retains control of the financial assets, the Company continues to recognize such financial assets to the extent of its continuing involvement in the financial assets. In that case, the Company also recognizes an associated liabilities. The financial assets and the associated liabilities are measured on a basis that reflects the rights and obligations that the Company has retained.

On de-recognition of a financial assets, (except as mentioned in above for financial assets measured at FVTOCI), the difference between the carrying amount and the consideration received is recognized in the statement of profit and loss.

Impairment of Financial Assets

The Company applies expected credit losses (ECL) model for measurements and recognition of loss allowance on the following:

i) Trade receivables /vT

ii) Financial assets measured at amortized costs (other than trade receivable^)

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iii) Financials assets measured at fair value through other comprehensive income (FVTOCI)

In case of trade receivables, the Company follows a simplified approach wherein an amount equal to lifetime ECL is measured and recognized as loss allowance.

In case of other assets (listed as ii and iii above), the Company determines, if there has been a significant increase in credit risk of the financial assets since the initial recognition. If the credit risk of such assets has not increased significantly, an amount equal to twelve months ECL is measured and recognized as loss allowance. However, if credit risk has increased significantly, an amount equal to lifetime ECL is measured and recognized as loss allowance.

Subsequently, if the credit quality of the financial assets improves such that there is no longer a significant increase in credit risk since initial recognition, the Company reverts to recognizing impairment loss allowance based on twelve months ECL.

ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expected to receive (i e , all cash shortfalls), discounted at the original effective interest rate.

Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial assets. Twelve months ECL is a portion of the lifetime ECL which results from default events that are possible within twelve months from the reporting date.

ECL are measured in a manner that they reflect unbiased and probability weighted amounts determined by a range of outcomes, taking into account the time value of money and other reasonable information available as a result of past events, current conditions and forecasts of future economic conditions.

As a practical expedient, the Company uses a provision matrix to measure lifetime ECL on its portfolio of trade receivables. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates. At each reporting date, the historically observed default rates and changes in the forward-looking estimates are updated.

ECL impairment loss allowance (or reversal) recognized during the reporting period are recognized as income / expense in the statement of profit and loss under the head "Other Expenses".

Financial Liabilities

initial Recognition and Measurements

The Company recognizes a financial liabilities in its balance sheet when it becomes party to the contractual provisions of the instruments. All financial liabilities are recognized initially at fair value, in the case of financial liabilities not recorded at fair value through profit or loss (FVTPL), transaction costs that are attributable to the acquisition of the financial

liabilities.

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Where the fair value of a financial liabilities at initial recognition is diff#£fa from W| transaction price, the difference between the fair value and the trans^|p^^fe^s|f

recognized as a gain or loss in the statement of profit and loss at initial recognition, if the fair value is determined through a quoted market price in an active market for an identical assets (i.e. level 1 input) or through a valuation technique that uses data from observable markets (i.e. level 2 input).

In case the fair value is not determined using a level 1 or level 2 input as mentioned above, the difference between the fair value and transaction price is deferred appropriately and recognized as a gain or loss in the statement of profit and loss, only to the extent that such gain or loss arises, due to a change in factor that market participants take into account when pricing the financial liabilities.

Subsequent Measurements

All financial liabilities of the Company are subsequently measured at amortized costs using the effective interest method.

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Under the effective interest method, the future cash payments are exactly discounted to the initial recognition value using the effective interest rate. The cumulative amortization using the effective interest method of the difference between the initial recognition amount and the maturity amount is added to the initial recognition value (net of principal repayments, if any) of the financial liabilities over the relevant period of the financial liabilities to arrive at the amortized costs at each reporting date. The corresponding effects of the amortization, under effective interest method is recognized as interest expense over the relevant period of the financial liabilities. The same is included under finance costs in the statement of profit and loss.

Derecognition

A financial liabilities are de-recognized when the obligation under the liabilities are discharged or cancelled or expires. When an existing financial liabilities are replaced by another from the same lender on substantially different terms, or the terms of an existing liabilities are substantially modified, such an exchange or modification are treated as the de-recognition of the original liabilities and the recognition of a new liabilities. The difference between the carrying amount of the financial liabilities de-recognized and the consideration paid is recognized in the statement of profit and loss.

Offsetting of Financial Assets and Financial Liabilities

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 recognized amounts and there is an intention to settle on a net basis or to realize the assets and settle the liabilities simultaneously.

h) Derivative Financial Instruments and Hedge Accounting

The Company enters into derivative financial contracts in the nature of forward currency contracts with external parties to hedge its foreign currency risks reIign currency denominated financial liabilities measured at amortized cos|^^KeCofi^)|i|iy formally establishes a hedge relationship between such forward ci^r^nV^fQ^o^t|i^ts ("Hedging Instruments") and recognized financial liabilities ("Hedged IteifiV') throylJy/a

formal documentation at the inception of the hedge relationship in line with the Company s Risk Management objective and strategy.

The hedge relationship so designated is accounted for in accordance with the accounting principles prescribed for a fair value hedge under Ind AS -109, "Financial Instruments".

Recognition and Measurement of Fair Value Hedge

Hedging instruments is initially recognized at fair value on the date on which a derivative contract is entered into and is subsequently measured at fair value at each reporting date. Gain or loss arising from changes in the fair value of hedging instruments is recognized in the statement ot profit and loss. Hedging instruments Is recognized as a riiMiiddl assets in the balance sheet, if its fair value as at reporting date is positive as compared to carrying value and as a financial liabilities, if its fair value as at reporting date is negative as

compared to carrying value.

Hedged items (recognized financial liabilities) is initially recognized at fair value on the date of entering into contractual obligation and is subsequently measured at amortized costs. The hedging gain or loss on the hedged items is adjusted to the carrying value of the hedged item as per the effective interest method and the corresponding effects is recognized in the statement of profit and loss.

Derecognition

On derecognition of the hedged items, the unamortized fair value of the hedging instrument adjusted to the hedged items, is recognized in the statement of profit and loss.

i) Fair Value

The Company measures financial instruments at fair value in accordance with the accounting policies mentioned above. Fair value is the price that would be received to sell an assets or paid to transfer a liabilities in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the assets or transfer the liabilities takes place

either:

* In the principal market for the assets or liabilities, or

* In the absence of a principal market, in the most advantageous market for the assets or liabilities.

All the assets and liabilities for which fair value is measured or disclosed in the financial statements ore categorized within the fair value hierarchy that categorizes into thrpp IpvpIs, described as follows, the inputs to valuation techniques used to measure value. The fair value hierarchy gives the highest priority to a quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3

i"^puts).

Level 1 - Quoted (unadjusted) market prices in active markets for idenTO<^,assets liabilities; |^(

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly;

Level 3 - Inputs that are unobservable for the assets or liabilities.

For assets and liabilities that are recognized in the financial statements at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization at the end of each reporting period and discloses the same.

j) Foreign Currency Transactions

a) initial Recognition

Transactions in the foreign currencies entered into by the Company are accounted in the ruiicliuiidl ujiieticy (i.e. Indian Rupee \), by applying the exchange rates prevailing on the date of the transaction i.e. spot exchange rate. Any exchange difference arising on foreign exchange transactions settled during the reporting period are recognized in the statement of profit and loss except to the extent that they are regarded as an adjustment to the finance costs on foreign currency borrowings that are directly attributable to the acquisition or constructions of the qualifying assets, are capitalized to the qualifying assets.

b) Conversion of Foreign Currency Items at Reporting Date

Foreign currency monetary items of the Company are restated at the end of the reporting date by using the closing exchange rate as prescribed by the Reserve Bank of India. Nonmonetary Items are recorded at the exchange rate prevailing on the date of the transactions i.e. measured at historical costs. Non-monetary items that are measured at fair value in a foreign currency, are translated using the exchange rates at the date when the fair value is measured i.e. using the exchange rate at the date of transactions.

k) Taxes on Income

Tax expense comprises current tax and deferred income tax. Tax expenses is the aggregate amount included in the determination of profit or loss for the reporting period current tax and deferred income tax. Tax expenses are recognized in the statement of profit and loss, except to the extent that it relates to the items recognized in the other comprehensive income or in the equity. In that case, tax is also recognized in other comprehensive income or equity.

Current income tax is the amount of income tax payable in respect of taxable profit for the reporting period. Taxable profit differs from " Before Tax" as reported under the statement of profit and loss because of item of expenses or income that are taxable or deductible in other years and items that are never taxable or deductible under Income Tax

Act, 1961.

Current tax assets and liabilities are measured by using the tax rates that h^^sa^ted by the end of the reporting period for the amounts expected to be recoverejO^&irr&^^ifl to the income tax authorities. Current tax also includes any adjustment am<$j^Jj£ tax (W^fjble / receivable in respect of previous reporting period.

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit under Income Tax Act, 1961 and their carrying amounts. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the reporting date.

Deferred tax liabilities are generally recognized for all taxable temporary differences. However, in case of temporary difference that arises from initial recognition of assets or liabilities in a transaction that affect neither the taxable profits nor the accounting profits, deferred tax liabilities are not recognized. Also, for temporary differences, if any, that may arise from initial recognition of goodwill, deferred tax liabilities are not recognized.

Deferred tax assets are generally recognized for all deductible temporary differences, and any unused tax losses and unused tax credits, to the extent, it is probable that taxable profits will be available against which those deductible temporary difference can be utilized. In case of temporary differences that arise from initial recognition of assets or liabilities in a transaction that affect neither the taxable profits nor the accounting profits, deferred tax assets are not recognized.

The carrying amount of deferred tax assets / liabilities are reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the benefits of part or all of such deferred tax

assets to be utilized.

Deferred tax assets and liabilities are measured at the tax rates that have been enacted or substantively enacted at the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or

settled.

Uncertain Tax Positions

The Company's management periodically evaluates the positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and consider whether it is probable that a taxation authority will accept an uncertain tax treatments. The Company reflects the effect of uncertainty for each uncertain tax treatment by using one of two methods, the expected value method (the sum of the possibility - weighted amounts in range of possible outcomes) or the most likely amount (single most likely amount method in a range of possible outcomes), depending on which is expected to better predict the resolution of the uncertainty. The Company applies consistent judgements and estimates if an uncertain tax treatment affects both the current

and deferred income tax.

Presentation

Current tax and deferred tax are recognized as income or an expense in the statement of profit and loss, except when they relate to items that are other

comprehensive income, in which case, the current tax and deferred ®r^comeX#^P^ense are recognized in other comprehensive income. jt *(^® **(/#).^ujj

The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the assets and settle the liabilities simultaneously. In case of deferred tax assets and deferred tax liabilities, the same are offset, if the Company has a legally enforceable right to set off corresponding current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority on the Company.

l) Lease

A lease is classified at the inception date as finance lease or an operating lease. A lease that transfers substantially all the risk and rewards incidental to the ownership to the Company is classified as a finance lease, All other lease is classified as operating lease.

The Company as a Lessee

a) Operating Lease: Rental payable under the operating lease are charged to the statement of profit and loss on a straight-line basis over the term of the relevant lease except where another systematic basis is more representative of time pattern in which economic benefits from the leased assets are consumed.

b) Finance Lease: Finance lease are capitalized at the commencement of the lease, at the lower of the fair value of the property or the present value of the minimum lease payments. The corresponding liabilities to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance expenses and the reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liabilities. Finance expenses are charged directly against the income over the period of the lease unless they are directly attributable to the qualifying assets, in which case they are capitalized. Contingent rental is recognized as an expense in the period in which they are incurred.

A leased assets are depreciated over the useful lives of the assets, however, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the assets are depreciated over the shorter of the estimated useful lives of the

assets and the lease terms.

The Company as a Lessor:

Lease payments under operating leases are recognized as an income on a straight-line basis in the statement of profit and loss over the lease term except where the lease payments are structured to increase in line with expected general inflation. The respective leased assets are included in the balance sheet based on their nature.

m) Borrowing Costs

Borrowing cost include the interest, commitments charges on^feaaJfe^borrowings, amortization of ancillary costs incurred in connection with the arrarv^^J5&nl'’t^>orrowings and exchange differences arising from foreign currency borrowingy^.^e exteYJ^hey are

regarded as an adjustment to the finance cost. l\Q\

Borrowing costs, if any, that are directly attributable to the acquisition or constructions or production of qualifying property, plants and equipments are capitalized as a part of cost of that property, plants and equipments until such time that the assets are substantially ready for their intended use. Qualifying assets are assets which take the substantial period of time to get ready for the intended use or sale.

When the Company borrows the funds specially for the purpose of obtaining the qualifying assets, the borrowing costs incurred are capitalized with the qualifying assets. When the Company borrows fund generally and use them for obtaining a qualifying assets, the capitalization of borrowing costs are computed on weighted average cost of general costs that are outstanding during the reporting period and used for acquisition of the qualifying assets. Capitalization of the borrowing costs ceases when substantially all the activities necessary to prepare the qualifying assets for intended use are complete.

Other borrowing costs are recognized as expenses in the period in which they are incurred. Any interest income earned on temporary investment of specific borrowings pending their expenditure on qualifying assets are deducted from the borrowing costs eligible for capitalization.

n) Employee Benefits

Short-Term Employee Benefits

All the employee benefits payable wholly within twelve months of rendering the services are classified as short-term employee benefits and they are recognized in the period in which the employee renders the related services. The Company recognizes the undiscounted amount of short-term employee benefits expected to be paid in the exchange for services are rendered as a liabilities (accrued expense) after deducting any amount already paid.

Post - Employment Benefits a) Defined Contribution Plans

Defined contribution plans are employee state insurance scheme and Government administrated pension fund scheme for all the applicable employees and superannuation scheme for all the eligible employees. The Company's contribution to defined contribution plans is recognized in the statement of profit and loss in the reporting period to which they

relate.

i) Recognition and Measurement of Defined Contribution Plans

The Company recognizes contribution payable to a defined contribution plan as an expense in the statement of profit and loss when the employees render services to the Company during the reporting period. If the contributions payable for services received from employees before the reporting date exceeds the contributions already paid, the deficit payable is recognized as a liability after deducting the contribution a I . If the

contribution already paid exceeds the contribution due for services the

reporting date, the excess is recognized as an assets to the extent thaepay'^t will Iparl tn for exarrmle. a reduction in future oavments or a cash refund. \\Q1 URj-¹ Jj

b) Defined Benefits Plans

i) Gratuity

The Company operates a defined benefits plan for its employees. The Company pays the gratuity to employee whoever has completed its five year of service with the Company at the time of retirement or resignation or superannuation. The gratuity is paid @ 15 Days salary for every completed year of service as per the Payment of Gratuity Act, 1972.

The liabilities in respect of gratuity is calculated using "Project Unit Credit Method" and spread over the period during which the benefits is expected to be derive from employee services. The remeasurement of defined benefits plan in respect of post-employments are charged to the other comprehensive income (OCI).

ii) Provident Fund Scheme

Provident fund is defined contribution plan covering certain eligible employees. The Company and the eligible employees make a monthly contribution to the provident fund maintained by the regional provident fund commissioners equal to the specified percentage of the basic salary of the eligible employees as per the scheme. The contributions to the provident fund are charged to the statement of profit and loss for the period, when the contributions are due. The Company has no obligation, other than the contributions

payable to the provident fund.

iii) Leave Encashment

Accumulated leave, which is expected to be utilized within the next twelve months, is treated as short-term employee benefits for measurement purpose. The Company measures the expected cost of such absence as the additional amount that is expects to pay as a result of unused entitlement that has accumulated at the reporting date.

The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefits for measurement purpose. Such long-term compensated absences are provided for based on the actuarial valuation using the "Project Unit Credit Method" at the reporting date. Actuarial gain / losses are immediately taken to the statement of profit and loss and are not deferred.

Recognition and Measurement of Defined Contribution Plans

The cost of providing defined benefits is determined using the "Projected Unit Credit" method with actuarial valuations being carried out at each balance sheet date. The defined benefit obligations recognized in the balance sheet represent the present value of the defined benefit obligations as reduced by the fair value of plan assets, if applicable. Any defined benefit assets is recognized representing the present value of available refunds and reductions in future contributions to the plan.

All expenses represented by current service cost, past service cost, if any, and net interest on the defined benefit liabilities / (assets) are recognized in the statement loss.

Remeasurements of the net defined benefits liabilities / (assets) compri^j^-^iiua^^gains

and losses and the return on the plan assets (excluding amounts incIud$ckfn net int¥fBst on

II *Ý{NAda,.-. I n H

the net defined benefit liabilities / assets), are recognized in other comprehensive income. Such remeasurements are not reclassified to the statement of profit and loss in the subsequent periods.

Past service cost is recognized immediately to the extent that the benefits are already vested, else is amortized on a straight-line basis over the average period until the amended benefits become vested. Actuarial gain or losses in respect of the defined benefits plan are recognized in the statement of profit and loss in the year in which they arise.

The Company presents the above liabilities as current and non-current in the balance sheet as per the actuarial valuation by the independent actuary.

0) Prior Period Errors and Omission

Based on paragraph 42 to paragraph 49 of Ind AS - 8, "Accounting Policies, Changes in Accounting Estimates and Errors", where it is impracticable to do so, the Company shall correct material prior period errors retrospectively in the first set of the financial statements approved for issue after their discovery by;

1) restating the comparative amounts for the prior period presented in which the error occurred; or

ii) If the error occurred before the earliest prior period presented, restating the opening balances of the assets, liabilities and equity for the earliest prior period presented.

In accordance with the above, if an error discovered is material, the Company should correct it in line the first set of the financial statements approved for issue after its discovery restating the comparative amounts for the prior period presented, as if the error has never occurred.

During the reporting period ended March 31, 2023, the Company's Management discovered a mathematical formula error while calculating the deferred tax in accordance with the Ind AS -12, "Income Taxes". It was observed that, due to the oversight mistake in the previous financial statements, the difference between the figures of written down value of property, plants and equipments as per books of accounts and Income Tax Act, 1961, as at April 01, 2021 and March 31, 2022 was wrongly considered, as a consequences, the deferred tax has been incorrectly measured for both the period.

Due to the said errors, the deferred tax liabilities as at April 01, 2021 was understated by ? 112.62 Lakhs, correspondingly the retained earnings as at April 01, 2021 was overstated by the same amount. The error also affected the profit after tax (PAT) for the year ended March 31, 2022, which was overstated by ? 04.14 Lakhs. Deferred tax liabilities as at March 31, 2022 was understated by ? 04.14 Lakhs correspondingly, the retained earnings as at March 31, 2022 was overstated by the same amount. The correction of said error had no impact on profit before tax (PBT) for the previous year ended March 31, 20^?^©W£^{ver the} Earning Per Shares (EPS) for the previous year ended March 31, 2022 w^p^rs-t^d^ by t