Aartech Solonics Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2025

1. SIGNIFICANT ACCOUNTING POLICIES1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (IND AS). The financial statements have been prepared to comply in all material respects with the Indian accounting standards notified under the Companies (Indian Accounting Standards) Rules, 2015, (as amended and as applicable from time to time) and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared on an accrual basis and under the historical cost convention on Going Concern basis.

The accounting policies adopted in the preparation of financial statements are consistent for all the periods presented. The financial statements are presented in INR which is the functional currency, and all values are rounded to the nearest lakh (''1,00,000) except when otherwise indicated. The financial statements were authorized for issue in accordance with a resolution of the Board of Directors on May 21, 2025.

1.2 CURRENT VERSUS NON-CURRENT CLASSIFICATION

All assets and liabilities have been classified as current or non-current as per the Company''s operating cycle. Based on the nature of the business and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or noncurrent classification of assets and liabilities. Deferred tax assets and liabilities are classified as non-current assets and liabilities.

1.3 PROPERTY, PLANT & EQUIPMENT

Property, plant, and equipment are stated at cost of acquisition less accumulated depreciation and impairment losses, if any. The cost includes taxes, duties, freight, and other incidental expenses related to the acquisition and installation of the respective assets. Subsequent expenditure related to an item of property, plant, and equipment is added to its book value only if it increases the future economic benefits from the existing assets beyond its previously assessed standard of performance.

Depreciation on property, plant, and equipment is provided on a straight-line basis over the useful lives of assets estimated by the management, taking into account the nature of the asset on technical evaluation of the useful life which may not necessarily be in alignment with the indicative useful lives prescribed by Schedule II to the Companies Act 2013. The following useful lives are considered:

Asset Name:	Useful Life
Land	-
Building	30 Years
Plant & Machinery	15 Years
Electrification	10 Years
Office Equipment	5 Years
Computer & Accessories	3 Years
Testing Equipment	15 Years
Furniture & Fixtures	10 Years
Vehicles	8 Years
Tools	15 Years

If significant parts of property, plant, and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant, and equipment. Items of property, plant, and equipment that have been retired from active use and are held for disposal are stated at the lower of their carrying value and estimated net realizable value and are disclosed separately in the financial statements. Any gain or loss on disposal of an item of property, plant, and equipment is recognized in the Statement of Profit and Loss. Capital work-in-progress includes the cost of property, plant, and equipment that are not ready for intended use at the balance sheet date. Advances paid towards the acquisition of property, plant, and equipment outstanding at each balance sheet date are classified as capital advances under “Other Non-Current Assets”.

1.4 INTANGIBLE ASSETS:

Intangible assets comprise software and technical know-how. Intangible assets are stated at cost of acquisition less accumulated amortization and impairment losses, if any. These intangible assets are amortized on a straight-line basis based on the basis of their useful lives which, in management''s estimate, represent the period during which economic benefits will be derived from their use. Currently the entity holds no intangible assets.

1.5 INVESTMENT PROPERTY:

Investments in land or buildings (including property under construction) which are held to earn rentals and/or for capital appreciation are classified as investment property. Investment properties are initially measured at cost including transaction costs. Subsequent to initial recognition, investment properties are stated at cost net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises the purchase price, borrowing costs if capitalization criteria are met, and directly attributable cost of bringing the investment property to its working condition for the intended use.

Depreciation on investment property is provided on a straight-line basis over the useful lives of assets estimated by the management. Such classes of investment properties and their estimated useful lives are as under:

Asset Name:	Useful Life
Land	Nil

Investment properties are derecognized either when they have been disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. On disposal of an investment property, the difference between its carrying amount and net disposal proceeds is recognized in the Statement of Profit and Loss.

1.6 REVENUE RECOGNITION:

Revenue is recognized when control of the goods or services is transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. Revenue is stated exclusive of Goods and Services Tax and net of trade and quantity discount.

Revenue from the sale of products is recognized on transfer of control of products to the customers, which is usually on dispatch or delivery of goods. When the outcome of a project contract can be estimated reliably, revenue from project contracts is recognized under the percentage-of-completion method based on the percentage of costs incurred to date compared to the total estimated contract costs. An expected loss on the project contract is recognized as an expense immediately. Contract revenue earned in excess of billing has been reflected as “Contract assets” and billing in excess of contract revenue has been reflected under “Contract liabilities” in the balance sheet.

Revenue from services represents service income other than from services which are incidental to the sale of products and projects. Revenue from services is recognized as per the terms of the contract with the customer using the proportionate completion method. Revenue from services rendered over a period of time is recognized on a straightline basis over the period of the performance obligation.

1.7 INVENTORIES:

Inventories comprise all costs of purchase, conversion, and other costs incurred in bringing the inventories to their present location and condition. Raw materials, work-in-progress, finished goods, and traded goods are carried at the lower of cost and net realizable value. Cost is determined on the basis of First in First Out Method (FIFO). The net realizable value of work-in-progress and finished goods is determined with reference to the estimated selling price less estimated cost of completion and estimated costs necessary to make the sale of related finished goods. Raw materials held for the production of finished goods are not written down below cost except in cases where material prices have declined and it is estimated that the cost of the finished product will exceed its net realizable value.

1.8 EMPLOYEES BENEFITS:(a) Short-term Employee Benefits

All employee benefits that are payable within twelve months of rendering the service are classified as short-term employee benefits. These include salaries, wages, short-term compensated absences, and the expected cost of ex-gratia payments. Such benefits are recognized in the period during which the employee provides the related service.

(b) Post-employment and Other Lont-term Benefits

Defined Contribution Plans: The Company''s superannuation scheme and employee state insurance scheme are defined contribution plans. Contributions under these schemes are recognized as expenses in the Statement of Profit and Loss during the period in which the employee renders the related service.

Defined Benefit Plans and Other Long-term Benefits: The Company''s gratuity, pension, medical benefit, and retirement gift schemes are defined benefit plans. Other long-term benefits include leave wages, retention bonuses, silver jubilee, and star awards. The present value of the obligation under these defined benefit plans and other long-term benefits is determined through actuarial valuation using the Projected Unit Credit Method. This method recognizes each period of service as giving rise to an additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. For funded plans, the fair value of the plan assets is subtracted from the gross obligation under the defined benefit plans to recognize the obligation on a net basis. Provident fund is considered a defined benefit plan since any additional obligations due to investment risk and interest rate risk must be met by the Company.

For defined benefit plans, remeasurements, which include actuarial gains and losses, the return on plan assets (excluding amounts included in net interest on the net defined benefit liability or asset), and any changes in the effect of asset ceiling (where applicable), are recognized in Other Comprehensive Income (OCI) and reflected in retained earnings. These remeasurements are not reclassified to profit or loss. For other long-term benefits, all remeasurements, including actuarial gains or losses, are charged to the Statement of Profit and Loss.

The Company recognizes the following items in the net defined benefit obligation as expenses in the Statement of Profit and Loss:

- service cost, including current service cost, past service cost, and gains and losses on curtailments and settlements.

- Net interest expense or income.

Provision for leave wages, pension, medical benefits, retention bonuses, silver jubilee, and star awards expected to be utilized within the next 12 months is treated as short-term employee benefits, while those expected to be utilized beyond 12 months are treated as long-term employee benefits. For presentation purposes, the allocation between short-term and long-term provisions is determined by an actuary.

1.9 LEASES:

The Company''s lease asset class consist of leases for Office building. The Company assesses whether a contract is (or contains) a lease at inception of a contract. A contract is (or contains) a lease if the contract conveys the right to control

the use of an identified asset for a period of time in exchange for consideration. to assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

1. The contract involves the use of an identified asset.

2. The Company has substantially all the economic benefits from the use of the asset through the period of the lease.

3. The Company has the right to direct the use of the asset.

Where the Company is the lessee:

At the date of commencement of the lease, the Company recognizes a Right-of-Use asset (ROU) and a corresponding lease Liability for all lease arrangements in which it is a lessee except for leases with a term of twelve months or less (short-term leases) and leases of low-value assets. For these short-term and low value asset leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

The ROU assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses, if any. ROU assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and the useful life of the underlying asset.

The Lease liability is initially measured at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or;

if not readily determinable, using the incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed lease payments (including in-substance fixed payments), less any lease incentives receivable, variable lease payments that depend on an index or a rate, and payments of penalties for terminating the lease if the lease term reflects the exercise of an option to terminate the lease. The Lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

Where the Company is the lessor:

Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset is classified as operating leases. Rental income from operating lease contracts is recognized on a straight-line basis over the lease term.

1.10 IMPAIRMENT OF NON-FINANCIAL ASSETS:

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when an annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. The recoverable amount is the higher of an asset''s or Cash Generating Unit''s (CGU) fair value less costs of disposal and its value in use. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.

1.11 FOREIGN CURRENCY TRANSACTIONS:

The Company is exposed to currency fluctuations on foreign currency transactions. Transactions in foreign currency are recorded at the exchange rate prevailing on the transaction date. Exchange differences on settled transactions are recognized in the Statement of Profit and Loss.

Translation: Monetary assets and liabilities in foreign currency at year-end are translated at the closing exchange rate, with resultant exchange differences recognized in the Statement of Profit and Loss. Nonmonetary items are stated using the exchange rate at the date of transaction or when fair value was determined.

1.12 FAIR VATUE MEASUREMENT:

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

- in the principal market for the asset or liability

- ln the absence of a principal market, in the most advantageous market for the asset or liability

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

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

Assets and liabilities measured at fair value are categorized within the fair value hierarchy;

- Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.

- Level 2: Valuation techniques with directly or indirectly observable inputs

- Level 3: Valuation techniques with unobservable inputs.

Transfers between levels in the hierarchy are reassessed at each reporting period. The Company uses various methods and assumptions, including discounted cash flow analysis and market prices, to determine fair value. All methods are approximations and may differ from actual realized values.

1.13 FINANCIAL INSTRUMENTS:

A financial instrument is any contract that results in a financial asset for one entity and a financial liability or equity instrument for another entity.

Financial Assets

Initial Recognition and Measurement: On initial recognition, financial assets are recognized at fair value, except for trade receivables which are recognized at transaction price as they do not contain a significant financing component. For financial assets recognized at fair value through profit and loss (FWPL), transaction costs are recognized in the Statement of Profit and Loss. For other financial assets, transaction costs are included in the acquisition value.

Subsequent Measurement: Financial assets are classified into the following categories for subsequent measurement:

(a) Financial assets at amortized cost: Financial assets are measured at amortized cost if held within a business model aimed at holding these assets to collect contractual cash flows, and the contractual terms give rise to cash flows that are solely payments of principal and interest. After initial measurement, these

assets are measured at amortized cost using the Effective Interest Rate (EIR) method. Amortized cost takes into account discounts, premiums, and fees that are integral to the EIR. EIR amortization is included in finance income in the Statement of Profit and Loss. Impairment losses are recognized in the Statement of Profit and Loss. This category typically includes trade and other receivables, loans, and other financial

(b) Financial assets including derivatives at fair value through profit or loss (FVTPL): These financial assets are measured at fair value through profit and loss unless they are measured at amortized cost or FWOCI upon initial recognition. Transaction costs for these assets are immediately recognized in the Statement of

(c) Financial assets at fair value through other comprehensive income (FVTOCI): Derivative instruments in this category are measured at fair value initially and at each reporting date. Changes in fair value are recognized in Other Comprehensive Income (OCI).

(d) Equity instruments: Equity investments in subsidiaries and associates are measured at cost.

Derecognition: A financial asset is derecognized primarily when;

(a) The right to receive cash flows from the asset has expired, or

(b) The Company has transferred its rights to receive cash flows from the asset or has assumed an

obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement; and either (i) the Company has transferred substantially all the risks and rewards of the asset, or (ii) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Upon derecognition of a financial asset, 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 uses the expected credit loss (ECL) model for impairment of financial assets such as deposits, trade receivables, contract assets, and other financial assets resulting from transactions within the scope of Ind AS 115. The simplified approach is used for trade receivables and contract assets, recognizing impairment based on lifetime ECLS. For other financial assets, the Company assesses whether there has been a significant increase in credit risk since initial recognition. If credit risk has not increased significantly, twelve-month ECL is used; otherwise, lifetime ECL is applied. If credit quality improves, impairment loss allowance reverts to twelve-month ECL. ECL is the difference between contractual cash flows and the cash flows expected to be received, discounted at the original EIR.

ECL impairment loss allowance (or reversal) is recognized in the Statement of Profit and Loss under ''Other expenses.'' Financial Liabilities

Initial Recognition and Measurement: Financial liabilities are classified at initial recognition as financial liabilities at fair value through profit or loss (FWPL), payables, or derivatives designated as hedging instruments. They are recognized at fair value, with transaction costs recognized in the Statement of Profit and Loss for FVTPL liabilities, and included in the acquisition or issue value for other financial liabilities.

Subsequent Measurement: Financial liabilities, including derivatives, designated at FVTPL are measured at fair value. Other financial liabilities, such as deposits, are measured at amortized cost using the EIR method. For trade and other payables maturing within one year, the carrying amount approximates fair value.

Derecognition: A financial liability is derecognized when the obligation is discharged, cancelled, or expired. An exchange or modification of terms with the same lender that results in substantially different terms is treated as derecognition of the original liability and recognition of a new one. The difference in carrying amounts is recognized in the Statement of Profit and Loss.

Offsetting of Financial Instruments: Financial assets and liabilities are offset and the net amount reported in the balance sheet if there is a legally enforceable right to offset and an intention to settle on a net basis or to realize the assets and settle the liabilities simultaneously.

1.14 TAXES ON INCOME:

Income-tax expense includes both current tax and deferred tax.

- Current Tax: This is calculated based on the taxable profit for the year in accordance with the relevant provisions of the Income Tax Act, 1961. It is recognized in the Statement of Profit and Loss unless it relates to items recognized in

Other Comprehensive Income (OCI) or directly in equity. ln such cases, current tax is also recognized in OCI or equity. Advance taxes and provisions for current income taxes are presented in the balance sheet after offsetting advance tax paid and income tax provisions arising in the same tax.

-Deferred Tax: Deferred Tax reflects the Tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. It is recognized using the balance sheet method at the Tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred Tax assets are recognized to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences can be utilized. These assets are reviewed at each balance sheet date and written down when it is no longer probable that sufficient taxable profits will be available. Deferred T ax related to items recognized outside profit or loss is also recognized outside profit or loss, either in OCI or directly in equity.

1.15 PROVISIONS AND CONTINGENCIES:

Provisions are recognized when the company has a present obligation (legal or constructive) as a result of past events, and it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate can be made of the amount. Provisions are discounted to their present value when the effect of time value of money is material.

Contingent Liabilities are disclosed when there is a possible obligation that arises from past events, the existence of which will be confirmed by the occurrence or non-occurrence of future events not wholly within the control of the company, or a present obligation that arises from past events where it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured.

Contingent Assets are not recognized in the financial statements.

1.16 EARNINGS PER SHARE:

Basic earnings per share is calculated by dividing the net profit attributable to equity shareholders by the weighted average number of equities shares outstanding during the year.

Diluted earnings per share adjusts the net profit and the weighted average number of shares for the effects of all dilutive potential equity shares.

1.17 CASH & CASH EQUIVALENTS:

Cash and cash equivalents comprise cash, cheques in hand, cash at bank, and short-term deposits with maturities of three months or less. Deposits with maturities over three months are classified as "Other bank balances."

1.18 GOVERNMENT GRANTS AND SUBSIDIES:

Government grants and subsidies are recognized when there is reasonable assurance that the company will comply with the conditions attached and that the grant or subsidy will be received. Revenue-related grants are recognized in the Statement of Profit and Loss on a systematic basis over the periods necessary to match them with the related costs they are intended to compensate. Asset-related grants are deducted from the carrying amount of the asset.

1.19 NON-CURRENT ASSETS HELD FOR SALE ANO DISCONTINUED OPERATIONS:

Non-current assets or disposal groups are classified as "held for sale" if:

- A decision has been made to sell,

- They are available for immediate sale in their present condition,

- They are being actively marketed,

- Sale is expected within 12 months of the balance sheet date.

Such assets are measured at the lower of their carrying amount and fair value less costs to sell and are not depreciated or amortized.

A discontinued operation is a component that has been disposed of or is classified as held for sale and represents a separate major line of business or geographical area of operations. The results of discontinued operations are presented separately in the Statement of Profit and Loss.

1.20 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS:

The preparation of financial statements in accordance with indAS requires management to make estimates and assumptions that affect reported amounts of revenue, expenses, assets, and liabilities. Actual results may differ from these estimates. Any revisions to accounting estimates are recognized prospectively.

KEY ASSUMPTIONS AND ESTIMATING UNCERTAINTY:

These assumptions and estimates have a significant risk of causing material adjustments to the carrying amounts of assets and liabilities within the next financial year. The Company bases its assumptions and estimates on parameters available when the financial statements were prepared. Circumstances may change due to market changes or other developments beyond the Company''s control, and such changes are reflected in the assumptions when they occur.

a. TAXES:

Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based on the likely timing and level of future taxable profits together with future tax planning strategies.

b. PROVISIONS:

Significant estimates are involved in determining provisions related to liquidated damages, onerous contracts, warranty costs, asset retirement obligations, and legal and regulatory proceedings, Provisions for onerous sales contracts are made when total contract costs exceed expected contract revenue. The provision for warranty, liquidated damages, and onerous contracts is based on the best estimate required to settle the present obligation at the end of the reporting period. Legal proceedings often involve complex issues and substantial uncertainties, requiring considerable judgement in determining the probability of a present obligation and estimating the obligation amount reliably. Internal and external counsel are generally involved in this determination process. Estimates are revised periodically.

c. PROPERTY, PLANT, AND EQUIPMENT AND INTANGIBLE ASSETS:

Depreciation charges are based on estimates of an asset''s expected useful life and residual value. These estimates are determined by management when the asset is acquired and reviewed periodically, including at each financial year-end. They are based on historical experience with similar assets and anticipated future events, such as changes in technology.

d. EMPLOYEE BENEFITS:

The Company''s obligation for employee benefits is determined based on actuarial valuations, which involve 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. These liabilities are highly sensitive to changes in these assumptions, and all assumptions are reviewed at each reporting date. The discount rate is based on government bond interest rates, and mortality rates are based on publicly available tables for India. Future salary increases and gratuity increases are based on expected future inflation rates.

e. IMPAIRMENT OF NON-FINANCIAL ASSETS:

The Company assesses at each balance sheet date whether there is any indication that an asset or group of assets (cashgenerating unit) may be impaired. If any indication exists, the Company estimates the recoverable amount, which is the greater of the asset''s net selling price and its value in use. Estimated future cash flows are discounted to present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount is less than the carrying amount, an impairment loss is recognized in the Statement of Profit and Loss. If an impairment loss no longer exists, the recoverable amount is reassessed and the asset

is reflected at the recoverable amount, subject to a maximum of depreciable historical cost had no impairment been recognized.

f. IMPAIRMENT OF FINANCIAL ASSETS:

The Company assesses impairment on financial assets based on the Expected Credit Loss (ECL) model. The provision matrix is based on historically observed default rates over the expected life of the financial assets and is adjusted for forward-looking estimates. At each reporting date, the historical default rates are updated and changes in forwardlooking estimates are analyzed.

---

Mar 31, 2024

1. SIGNIFICANT ACCOUNTING POLICIES1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The financial statements of the company have been prepared in accordance with Indian Accounting Standards (lND AS). The financial statements have been prepared to comply in all material respects with the Indian accounting standards notified under the Companies (Indian Accounting Standards) Rules, 2015, (as amended and as applicable from time to time) and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared on an accrual basis and under the historical cost convention on Going Concern basis.

The accounting policies adopted in the preparation of financial statements are consistent for all the periods presented. The financial statements are presented in INR which is the functional currency, and all values are rounded to the nearest lakh (^ 1,00,000) except when otherwise indicated. The financial statements were authorised for issue in accordance with a resolution of the Board of Directors on May 30, 2024.

1.2 CURRENT VERSUS NON-CURRENT CLASSIFICATION

All assets and liabilities have been classified as current or non-current as per the Company''s operating cycle. Based on the nature of the business and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities. Deferred tax assets and liabilities are classified as non-current assets and liabilities.

1.3 PROPERTY, PLANT & EQUIPMENT

property, plant, and equipment are stated at cost of acquisition less accumulated depreciation and impairment losses, if any. The cost includes taxes, duties, freight, and other incidental expenses related to the acquisition and installation of the respective assets. Subsequent expenditure related to an item of property, plant, and equipment is added to its book value only if it increases the future economic benefits from the existing assets beyond its previously assessed standard of performance.

Depreciation on property, plant, and equipment is provided on a straight-line basis over the useful lives of assets estimated by the management, taking into account the nature of the asset on technical evaluation of the useful life which may not necessarily be in alignment with the indicative useful lives prescribed by Schedule II to the Companies Act 2013. The following useful lives are considered:

Asset Name:	Useful Life
Land	-
Building	30 Years
Plant & Machinery	15 Years
Electrification	10 Years
Office Equipment	5 Years
Computer & Accessories	3 Years
Testing Equipment	15 Years
Furniture & Fixtures	10 Years
Vehicles	8 Years
Tools	15 Years

If significant parts of property, plant, and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant, and equipment. Items of property, plant, and equipment that have been retired from active use and are held for disposal are stated at the lower of their carrying value and estimated net realizable value and are disclosed separately in the financial statements. Any gain or loss on disposal of an item of property, plant, and equipment is recognized in the Statement of Profit and Loss. Capital work-in-progress includes the cost of property, plant, and equipment that are not ready for intended use at the balance sheet date. Advances paid towards the acquisition of property, plant, and equipment outstanding at each balance sheet date are classified as capital advances under "Other Non-Current Assets".

1.4 INTANGIBLE ASSETS:

Intangible assets comprise software and technical know-how. Intangible assets are stated at cost of acquisition less accumulated amortization and impairment losses, if any. These intangible assets are amortized on a straight-line basis based on the basis of their useful lives which, in management''s estimate, represent the period during which economic benefits will be derived from their use. Currently the entity holds no intangible assets.

1.5 INVESTMENT PROPERTY:

Investments in land or buildings (including property under construction) which are held to earn rentals and/or for capital appreciation are classified as investment property. Investment properties are initially measured at cost including transaction costs. Subsequent to initial recognition, investment properties are stated at cost net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises the purchase price, borrowing costs if capitalization criteria are met, and directly attributable cost of bringing the investment property to its working condition for the intended use.

Depreciation on investment property is provided on a straight-line basis over the useful lives of assets estimated by the management. Such classes of investment properties and their estimated useful lives are as under:

Asset Name: Useful Life

Land Nil

Investment properties are derecognized either when they have been disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. On disposal of an investment property, the difference between its carrying amount and net disposal proceeds is recognized in the Statement of Profit and Loss.

1.6 REVENUE RECOGNITION:

Revenue is recognized when control of the goods or services is transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. Revenue is stated exclusive of Goods and Services Tax and net of trade and quantity discount.

Revenue from the sale of products is recognized on transfer of control of products to the customers, which is usually on dispatch or delivery of goods. When the outcome of a project contract can be estimated reliably, revenue from project contracts is recognized under the percentage-of-completion method based on the percentage of costs incurred to date compared to the total estimated contract costs. An expected loss on the project contract is recognized as an expense immediately. Contract revenue earned in excess of billing has been

reflected as -Contract assets" and billing in excess of contract revenue has been reflected under "Contract liabilities” in the balance sheet.

Revenue from services represents Service income other than from services which are incidental to the sale of products and projects. Revenue from services is recognized as per the terms of the contract with the customer using the proportionate completion method. Revenue from services rendered over a period of time is recognized on a straight-line basis over the period of the performance obligation.

1.7 INVENTORIES:

Inventories comprise all costs of purchase, conversion, and other costs incurred in bringing the inventories to their present location and condition. Raw materials, work-in-progress, finished goods, and traded goods are carried at the lower of cost and net realizable value. Cost is determined on the basis of First in First Out Method (FIFO). The net realizable value of work-in-progress and finished goods is determined with reference to the estimated selling price less estimated cost of completion and estimated costs necessary to make the sale of related finished goods. Raw materials held for the production of finished goods are not written down below cost except in cases where material prices have declined and it is estimated that the cost of the finished product will exceed its net realizable value.

1.8 EMPLOYEES BENEFITS:(al Short-term Employee Benefits

All employee benefits that are payable within twelve months of rendering the service are classified as shortterm employee benefits. These include salaries, wages, short-term compensated absences, and the expected cost of ex-gratia payments. Such benefits are recognized in the period during which the employee provides the related service.

(bl Post-employment and Other Lont-term Benefits

Defined Contribution Plans: The Company''s superannuation scheme and employee state insurance scheme are defined contribution plans. Contributions under these schemes are recognized as expenses in the Statement of Profit and Loss during the period in which the employee renders the related service.

Defined Benefit Plans and Other Long-term Benefits: The Company''s gratuity, pension, medical benefit, and retirement gift schemes are defined benefit plans. Other long-term benefits include leave wages, retention bonuses, silver jubilee, and star awards. The present value of the obligation under these defined benefit plans and other long-term benefits is determined through actuarial valuation using the Projected Unit Credit Method. This method recognizes each period of service as giving rise to an additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. For funded plans, the fair value of the plan assets is subtracted from the gross obligation under the defined benefit plans to recognize the obligation on a net basis. Provident fund is considered a defined benefit plan since any additional obligations due to investment risk and interest rate risk must be met by the Company.

For defined benefit plans, remeasurements, which include actuarial gains and losses, the return on plan assets (excluding amounts included in net interest on the net defined benefit liability or asset), and any changes in the effect of asset ceiling (where applicable), are recognized in Other Comprehensive Income (OCl) and reflected in retained earnings. These remeasurements are not reclassified to profit or loss. For other long-term benefits, all remeasurements, including actuarial gains or losses, are charged to the Statement of Profit and Loss.

The Company recognizes the following items in the net defined benefit obligation as expenses in the Statement of Profit and Loss:

- service cost, including current service cost, past service cost, and gains and losses on curtailments and settlements.

- Net interest expense or income.

Provision for leave wages, pension, medical benefits, retention bonuses, silver jubilee, and star awards expected to be utilized within the next 12 months is treated as short-term employee benefits, while those expected to be utilized beyond 12 months are treated as long-term employee benefits. For presentation purposes, the allocation between short-term and long-term provisions is determined by an actuary.

1.9 LEASES:

The Company''s lease asset class consist of leases for Office building. The Company assesses whether a contract is (or contains) a lease at inception of a contract. A contract is (or contains) a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. to assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

1. The contract involves the use of an identified asset.

2. The Company has substantially all the economic benefits from the use of the asset through the period of the lease.

3. The Company has the right to direct the use of the asset.

Where the Company is the lessee:

At the date of commencement of the lease, the Company recognizes a Right-of-Use asset (ROU) and a corresponding lease Liability for all lease arrangements in which it is a lessee except for leases with a term of twelve months or less (short-term leases) and leases of low-value assets. For these short-term and low value asset leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

The ROU assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses, if any. ROU assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and the useful life of the underlying asset.

The Lease liability is initially measured at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or;

if not readily determinable, using the incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed lease payments (including in-substance fixed payments), less any lease incentives receivable, variable lease payments that depend on an index or a rate, and payments of penalties for terminating the lease if the lease term reflects the exercise of an option to terminate the lease. The Lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

Where the Company is the lessor:

Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset is classified as operating leases. Rental income from operating lease contracts is recognized on a straight-line basis over the lease term.

1.10 IMPAIRMENT OF NON-FINANCIAL ASSETS:

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when an annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. The recoverable amount is the higher of an asset''s or Cash Generating Unit''s (CGU) fair value less costs of disposal and its value in use. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to in assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. ln determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.

1.11 FOREIGN CURRENCY TRANSACTIONS:

The Company is exposed to currency fluctuations on foreign currency transactions. Transactions in foreign currency are recorded at the exchange rate prevailing on the transaction date. Exchange differences on settled transactions are recognized in the Statement of Profit and Loss.

Translation: Monetary assets and liabilities in foreign currency at year-end are translated at the closing exchange rate, with resultant exchange differences recognized in the Statement of Profit and Loss. Nonmonetary items are stated using the exchange rate at the date of transaction or when fair value was determined.

1.12 FAIR VATUE MEASUREMENT:

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

- in the principal market for the asset or liability

- ln the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible to the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. The fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

Assets and liabilities measured at fair value are categorized within the fair value hierarchy;

- Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities.

- Level 2: Valuation techniques with directly or indirectly observable inputs

- Level 3: Valuation techniques with unobservable inputs.

Transfers between levels in the hierarchy are reassessed at each reporting period. The Company uses various methods and assumptions, including discounted cash flow analysis and market prices, to determine fair value. All methods are approximations and may differ from actual realized values.

1.13 FINANCIAL INSTRUMENTS:

A financial instrument is any contract that results in a financial asset for one entity and a financial liability or equity instrument for another entity.

Financial Assets

Initial Recognition and Measurement: On initial recognition, financial assets are recognized at fair value, except for trade receivables which are recognized at transaction price as they do not contain a significant financing component. For financial assets recognized at fair value through profit and loss (FWPL), transaction costs are recognized in the Statement of Profit and Loss. For other financial assets, transaction costs are included in the acquisition value.

Subsequent Measurement: Financial assets are classified into the following categories for subsequent measurement:

(a) Financial assets at amortized cost: Financial assets are measured at amortized cost if held within a business model aimed at holding these assets to collect contractual cash flows, and the contractual terms give rise to cash flows that are solely payments of principal and interest. After initial measurement, these assets are measured at amortized cost using the Effective Interest Rate (EIR) method. Amortized cost takes into account discounts, premiums, and fees that are integral to the EIR. EIR amortization is included in finance income in the Statement of Profit and Loss. Impairment losses are recognized in the Statement of Profit and Loss. This category typically includes trade and other receivables, loans, and other financial

(b) Financial assets including derivatives at fair value through profit or loss (FVTPL): These financial assets are measured at fair value through profit and loss unless they are measured at amortized cost or FWOCI upon initial recognition. Transaction costs for these assets are immediately recognized in the Statement of

(c) Financial assets at fair value through other comprehensive income (FVTOCI): Derivative instruments in this category are measured at fair value initially and at each reporting date. Changes in fair value are recognized in Other Comprehensive Income (OCI).

(d) Equity instruments: Equity investments in subsidiaries and associates are measured at cost. Derecognition: A financial asset is derecognized primarily when;

(a) The right to receive cash flows from the asset has expired, or

(b) The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement; and either (i) the Company has transferred substantially all the risks and rewards of the asset, or (ii) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Upon derecognition of a financial asset, 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 uses the expected credit loss (ECL) model for impairment of financial assets such as deposits, trade receivables, contract assets, and other financial assets resulting from transactions within the scope of Ind AS 115. The simplified approach is used for trade receivables and contract assets, recognizing impairment based on lifetime ECLS. For other financial assets, the Company assesses whether there has been a significant increase in credit risk since initial recognition. If credit risk has not increased significantly, twelve-month ECL is used; otherwise, lifetime ECL is applied. If credit quality improves, impairment loss allowance reverts to twelve-month ECL. ECL is the difference between contractual cash flows and the cash flows expected to be received, discounted at the original EIR.

ECL impairment loss allowance (or reversal) is recognized in the Statement of Profit and Loss under ''Other expenses.''

Financial Liabilities

Initial Recognition and Measurement: Financial liabilities are classified at initial recognition as financial liabilities at fair value through profit or loss (FWPL), payables, or derivatives designated as hedging instruments. They are recognized at fair value, with transaction costs recognized in the Statement of Profit and Loss for FVTPL liabilities, and included in the acquisition or issue value for other financial liabilities.

Subsequent Measurement: Financial liabilities, including derivatives, designated at FVTPL are measured at fair value. Other financial liabilities, such as deposits, are measured at amortized cost using the EIR method. For trade and other payables maturing within one year, the carrying amount approximates fair value. Derecognition: A financial liability is derecognized when the obligation is discharged, cancelled, or expired. An exchange or modification of terms with the same lender that results in substantially different terms is treated as derecognition of the original liability and recognition of a new one. The difference in carrying amounts is recognized in the Statement of Profit and Loss.

Offsetting of Financial Instruments: Financial assets and liabilities are offset and the net amount reported in the balance sheet if there is a legally enforceable right to offset and an intention to settle on a net basis or to realize the assets and settle the liabilities simultaneously.

1.14 TAXES ON INCOME:

Income-tax expense includes both current tax and deferred tax.

- Current Tax: This is calculated based on the taxable profit for the year in accordance with the relevant provisions of the Income Tax Act, 1961. It is recognized in the Statement of Profit and Loss unless it relates to items recognized in Other Comprehensive Income (OCI) or directly in equity. ln such cases, current tax is also recognized in OCI or equity. Advance taxes and provisions for current income taxes are presented in the balance sheet after offsetting advance tax paid and income tax provisions arising in the same tax.

-Deferred Tax: Deferred Tax reflects the Tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. It is recognized using the balance sheet method at the Tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred Tax assets are recognized to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences can be utilized. These assets are reviewed at each balance sheet date and written down when it is no longer probable that sufficient taxable profits will be available. Deferred Tax related to items recognized outside profit or loss is also recognized outside profit or loss, either in OCI or directly in equity.

1.15 PROVISIONS AND CONTINGENCIES:

Provisions are recognized when the company has a present obligation (legal or constructive) as a result of past events, and it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate can be made of the amount. Provisions are discounted to their present value when the effect of time value of money is material.

Contingent Liabilities are disclosed when there is a possible obligation that arises from past events, the existence of which will be confirmed by the occurrence or non-occurrence of future events not wholly within the control of the company, or a present obligation that arises from past events where it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured Contingent Assets are not recognized in the financial statements.

1.16 EARNINGS PER SHARE:

Basic earnings per share is calculated by dividing the net profit attributable to equity shareholders by the weighted average number of equities shares outstanding during the year.

Diluted earnings per share adjusts the net profit and the weighted average number of shares for the effects of all dilutive potential equity shares.

1.17 CASH & CASH EQUIVALENTS:

Cash and cash equivalents comprise cash, cheques in hand, cash at bank, and short-term deposits with maturities of three months or less. Deposits with maturities over three months are classified as "Other bank balances."

1.18 GOVERNMENT GRANTS AND SUBSIDIES:

Government grants and subsidies are recognized when there is reasonable assurance that the company will comply with the conditions attached and that the grant or subsidy will be received. Revenue-related grants are recognized in the Statement of Profit and Loss on a systematic basis over the periods necessary to match them with the related costs they are intended to compensate. Asset-related grants are deducted from the carrying amount of the asset.

1.19 NON-CURRENT ASSETS HELD FOR SALE ANO DISCONTINUED OPERATIONS:

Non-current assets or disposal groups are classified as "held for sale" if:

- A decision has been made to sell,

- They are available for immediate sale in their present condition,

- They are being actively marketed,

- Sale is expected within 12 months of the balance sheet date.

Such assets are measured at the lower of their carrying amount and fair value less costs to sell and are not depreciated or amortized.

A discontinued operation is a component that has been disposed of or is classified as held for sale and represents a separate major line of business or geographical area of operations. The results of discontinued operations are presented separately in the Statement of Profit and Loss.

1.20 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS:

The preparation of financial statements in accordance with indAS requires management to make estimates and assumptions that affect reported amounts of revenue, expenses, assets, and liabilities. Actual results may differ from these estimates. Any revisions to accounting estimates are recognized prospectively.

KEY ASSUMPTIONS AND ESTIMATING UNCERTAINTY:

These assumptions and estimates have a significant risk of causing material adjustments to the carrying amounts of assets and liabilities within the next financial year. The Company bases its assumptions and estimates on parameters available when the financial statements were prepared. Circumstances may change due to market changes or other developments beyond the Company''s control, and such changes are reflected in the assumptions when they occur.

a. TAXES:

Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based on the likely timing and level of future taxable profits together with future tax planning strategies.

b. PROVISIONS:

Significant estimates are involved in determining provisions related to liquidated damages, onerous contracts, warranty costs, asset retirement obligations, and legal and regulatory proceedings, Provisions for onerous sales contracts are made when total contract costs exceed expected contract revenue. The provision for warranty, liquidated damages, and onerous contracts is based on the best estimate required

to settle the present obligation at the end of the reporting period. Legal proceedings often involve complex issues and substantial uncertainties, requiring considerable judgement in determining the probability of a present obligation and estimating the obligation amount reliably. Internal and external counsel are generally involved in this determination process. Estimates are revised periodically.

c. PROPERTY, PLANT, AND EQUIPMENT AND INTANGIBLE ASSETS:

Depreciation charges are based on estimates of an asset''s expected useful life and residual value. These estimates are determined by management when the asset is acquired and reviewed periodically, including at each financial year-end. They are based on historical experience with similar assets and anticipated future events, such as changes in technology.

d. EMPLOYEE BENEFITS:

The Company''s obligation for employee benefits is determined based on actuarial valuations, which involve 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. These liabilities are highly sensitive to changes in these assumptions, and all assumptions are reviewed at each reporting date. The discount rate is based on government bond interest rates, and mortality rates are based on publicly available tables for India. Future salary increases and gratuity increases are based on expected future inflation rates.

e. IMPAIRMENT OF NON-FINANCIAL ASSETS:

The Company assesses at each balance sheet date whether there is any indication that an asset or group of assets (cash-generating unit) may be impaired. If any indication exists, the Company estimates the recoverable amount, which is the greater of the asset''s net selling price and its value in use. Estimated future cash flows are discounted to present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount is less than the carrying amount, an impairment loss is recognized in the Statement of Profit and Loss. If an impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount, subject to a maximum of depreciable historical cost had no impairment been recognized.

f. IMPAIRMENT OF FINANCIAL ASSETS:

The Company assesses impairment on financial assets based on the Expected Credit Loss (ECL) model. The provision matrix is based on historically observed default rates over the expected life of the financial assets and is adjusted for forward-looking estimates. At each reporting date, the historical default rates are updated and changes in forward-looking estimates are analyzed.

---

Mar 31, 2023

1. SIGNIFICANT ACCOUNTING POLICIES

1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The financial statements have been prepared to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended and as applicable from time to time) and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared on an accrual basis and under the historical cost convention on Going Concern basis.

The accounting policies and estimates adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below (if any).

1.2 PRESENTATION AND DISCLOSURE OF FINANCIAL STATEMENTS:

The Schedule III notified under the Companies Act, 2013, has become applicable to the Company, for preparation and presentation of its financial statements. The adoption of Schedule III does not impact recognition and measurement principles followed for preparation of these financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

The previous year''s figures have been reworked, regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.

1.3 USE OF ESTIMATES:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known /materialized.

1.4 REVENUE RECOGNITION:

Revenue on sale of goods is recognized when property in the goods is transferred to the buyer for a price, or when all significant risks and rewards of ownership have been transferred to the buyer and no effective control is retained by the Company in respect of the goods transferred, to a degree usually associated with ownership, and no significant uncertainty exists regarding the amount of consideration that will be derived from the sale of goods.

Revenue on transactions of rendering services is recognized under the completed service contract method. Contract is regarded as completed when no significant uncertainty exists regarding the amount of consideration that will be derived from rendering the services.

1.5 INVENTORIES:

i. Finished goods and work in progress are valued at lower of historical cost or net realizable value. Cost of inventories comprises of cost of purchase, cost of conversion and other costs incurred in bringing them to their respective present location and condition. By products are valued at net realizable value. Cost of finished goods and by- products includes excise duty. Cost is determined on a weighted average basis.

ii. Stores, Spares and Raw Materials are valued at lower of historical cost or net realizable value. However, materials & other items held for use in the production of inventories are not written below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a weighted average basis.

iii. Historical cost is determined on the basis of weighted average method.

iv. Obsolete stocks are identified once every year on the basis of technical evaluation and are charged off to revenue.

v. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

1.6 INVESTMENTS

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value. Long-term investments are carried at cost individually. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments in case of long-term investments.

1.7 PROPERTY, PLANT & EQUIPMENTS:

Property, Plant and Equipment are stated at historical cost less accumulated depreciation and impairment loss if any. While arriving at the historical cost, all costs, including net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets, and including financing costs till commencement of commercial production or the date the asset is put to use or bringing the asset to its working condition for intended use, are capitalized.

Capital Expenditure on purchase and development of identifiable non-monetary assets without physical substance is recognized as Intangible Assets in accordance with principles given under AS-26 - Intangible Assets issued by the Institute of Chartered Accountants of India. These are grouped and separately shown under the schedule of Fixed Assets. These are amortized over their respective expected useful lives. Intangible assets are stated at cost less accumulated amortization and impairment loss, if any.

1.9 EXPENSES INCURRED DURING CONSTRUCTION PERIOD:

The progress / milestone-based payments made under the contracts for projects and assets under construction or development and other capital advances are considered as advances on capital account until the same are allocated to fixed assets, capital work-in-progress, and expenditure during construction and other relevant accounts, as applicable. Expenditure incidental to the construction of

projects or assets under construction or development that take substantial period of time to get ready for their intended use is accumulated as expenditure during construction, pending allocation to fixed assets and other relevant accounts, as applicable.

1.10 DEPRECIATION & AMORTISATION:

Depreciation on fixed assets is provided as per straight line method. Depreciation is computed as per Part "C" of Schedule II of The Companies Act 2013. Depreciation on additions / deductions to fixed assets made during the year is provided on a pro-rata basis from / up to the date of such additions / deductions, as the case may be. Intangible assets are amortized over the best estimate of their useful lives; subject to a rebuttable presumption that such useful lives will not exceed ten years.

1.11 IMPAIRMENT OF ASSETS:

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss.

If at the balance sheet date, there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount but limited to the carrying amount that would have been determined (net of depreciation/amortization) had no impairment loss been recognized in prior accounting periods.

1.12 FOREIGN CURRENCY TRANSACTIONS

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction. Monetary items denominated in foreign currencies at the year-end are restated at year end rates. In case of items which are covered by forward exchange contracts, the difference between the year-end rate and rate on the date of the contract is recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contract. Non-monetary foreign currency items are carried at cost. Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Profit and Loss account except in case of long-term liabilities, where they relate to acquisition of fixed assets/ in which case they are adjusted to the carrying cost of such assets.

1.13 RESEARCH AND DEVELOPMENT:

The Company maintains an in-house Research & Development Facility which has been recognized by the Department of Scientific & Industrial Research, Ministry of Science & Technology, and Government of India during the current financial year. The Company accounts for the Revenue Expenditure on research and development facility including salaries, consumables and power & fuel separately and the same is disclosed separately under respective heads of expenditure in the Statement of Profit and Loss. Capital expenditure to the research & development facility is shown as addition to fixed assets and disclosed separately.

1.14 EMPLOYEES BENEFITS:

Expenses and liabilities in respect of employee benefits are recorded as under.

i. Provident Fund & ESI

The Company makes contribution to statutory provident fund and Employee State Insurance in accordance with Employees Provident Fund and Miscellaneous Provisions Act, 1952 and Employee State Insurance Act, 1948 which is a defined contribution plan and contribution paid or payable is recognized as an expense in the period in which services are rendered by the employee.

ii. Gratuity

Gratuity is a post-employment benefit. The Company has formed a gratuity trust with Life Insurance Corporation of India during the year ending March 31, 2013. The annual provision is determined by the Life Insurance Corporation and the same is paid by the Company to be used as Gratuity Fund. Before April 1, 2012, the Company did not make any provisions in the books of accounts for future liability on account of gratuity payable in the event of retirement of any of its employees or directors. The amount of gratuity due and payable was recorded as an expense in the year in which the liability to pay the same arises.

iii. Leave Encashment

Leave encashment is a post-employment benefit. The Company has taken a Leave encashment policy with Life Insurance Corporation of India during the year ending March 31, 2023. The annual provision is determined by the Life Insurance Corporation and the same is paid by the Company. Before April 01, 2022, the company did not make any provisions in the books of accounts for future liability on account of leave encashment payable in the event of retirement of any of its employees or directors. The amount of leave encashment due and payable was recorded as an expense in the year in which the liability to pay the same arises.

iv. Short-term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

v. Post-employment and other long term employee benefits are recognized as an expense in the Profit and Loss account in the year in which the employee has retired/ resigned and the amount has become payable.

Tax expense comprises of current and deferred. Provision for Current Tax is made in accordance with the provisions of Income Tax, 1961. In accordance with Accounting Standard AS-22 ''Accounting for Taxes on Income'' as notified by Companies Accounting Standard Rules, 2006, Deferred Tax Liability/ Asset arising from timing differences between book and income tax profits is accounted for at the current rate of tax to the extent these differences are expected to crystallize in later years. However, deferred Tax Assets are recognized only if there is a reasonable/ virtual certainty of realization thereof. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date.

1.15 LEASE:

Leases, where the lessor effectively retains substantially all the risks and benefits of the ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.

In case of finance leases, the lower of the fair value of the assets and present value of the minimum lease rentals is capitalized as fixed assets with corresponding amount shown as lease liability. The principal

component in the lease rental is adjusted against the lease liability and the interest component is charged to Profit and Loss account.

1.16 TAXES ON INCOME:

Tax expense comprises of current and deferred. Provision for Current Tax is made in accordance with the provisions of Income Tax Act, 1961.

In accordance with Accounting Standard AS-22 ''Accounting for Taxes on Income'' as notified by Companies Accounting Standard Rules, 2006, Deferred Tax Liability/ Asset arising from timing differences between book and income tax profits is accounted for at the current rate of tax to the extent these differences are expected to crystallize in later years. However, deferred Tax Assets are recognized only if there is a reasonable/ virtual certainty of realization thereof.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date.

1.17 GOVERNMENT GRANTS AND SUBSIDIES:

Grants and subsidies from the government are recognized when there is reasonable assurance that the grant/subsidy will be received and all attaching conditions will be complied with.

When the grant or subsidy relates to an expense item, it is recognized as income over the periods necessary to match them on a systematic basis to the costs, which it is intended to compensate. Where the grant or subsidy relates to an asset, its value is deducted from the gross value of the asset concerned in arriving at the carrying amount of the related asset.

1.18 BORROWING COST

Borrowing costs directly attributable 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 capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

1.19 PROVISIONS AND CONTINGENCIES:

A provision is recognized when there is a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation. Provisions are not discounted and are determined based on best estimate required to settle the obligation at each balance sheet date. Provisions are reviewed at each balance sheet date and are adjusted to effect the current best estimation.

A contingent liability is recognized for:

A present obligation that arises from past events but is not recognized as a provision because either the possibility that an outflow of resources embodying economic benefits will be required to settle the obligation is remote or a reliable estimate of the amount of the obligation cannot be made.

A possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company.

Contingent assets are neither accounted for nor disclosed in the financial statements.

1.20 EARNINGS PER SHARE:

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue, bonus element in a rights issue to existing shareholders, share split, and reverse share split (consolidation of shares).

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

Current investments are carried at lower of cost and quoted/fair value, computed category wise. Long Term Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary. Any loss or gain on sale / redemption of investments is recognized in the profit and loss account.