Aarti Pharmalabs Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2025

3 MATERIAL ACCOUNTING POLICIES

3.1 Classification of Current versus Non-Current:

All assets and liabilities in the financial statements
have been classified as current or non-current as
per the Company''s normal operating cycle of up to
twelve months.

For the purpose of Balance Sheet, an asset is
classified as current if:

(i) It is expected to be realised, or is intended to
be sold or consumed, in the normal operating
cycle; or

(ii) It is held primarily for the purpose of trading; or

(iii) It is expected to realise the asset within twelve
months after the reporting period; or

(iv) The asset is a cash or cash equivalent unless it
is restricted from being exchanged or used to
settle a liability for at least twelve months after
the reporting period

All other assets are classified as non-current.
Similarly, a liability is classified as current if:

(i) I t is expected to be settled in the normal
operating cycle; or

(ii) It is held primarily for the purpose of trading; or

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

(iv) The Company does not have an unconditional
right to defer the settlement of the liability
for at least twelve months after the reporting
period. Terms of a liability that could result in its
settlement by the issue of equity instruments
at the option of the counterparty does not
affect this classification

All other liabilities are classified as non-current.

3.2 Property, Plant and Equipment (PPE)

PPE is recognised when it is probable that future
economic benefits associated with the item will

flow to the company and the cost of the item
can be measured reliably. The initial cost of PPE
comprises its purchase price, including import
duties and non-refundable purchase taxes, and any
directly attributable costs of bringing an asset to
working condition and location for its intended use
less accumulated depreciation and accumulated
impairment losses, if any Cost includes professional
fees related to the acquisition of PPE and for
qualifying assets, borrowing costs is capitalised in
accordance with the company''s accounting policy.

Subsequent costs are included in the asset''s
carrying amount or recognized as a separate asset,
as appropriate, only when it is probable that future
economic benefits associated with the item will
flow to the Company and the cost of the item can be
measured reliably. All other repairs and maintenance
cost are charged to the Statement of Profit and Loss
during the period in which they were incurred.

Long term lease arrangements of land are treated as
PPE, in case such arrangements result in transfer of
control and the present value of the lease payments
is likely to represent substantially all of the fair value
of the land.

An item of PPE and any significant part initially
recognised is derecognised upon disposal or when
no future economic benefits are expected with the
carrying amount of any component accounted for
as a separate asset is derecognised when replaced.
Gains or losses arising from de-recognition of a PPE
are measured as the difference between the net
disposal proceeds and the carrying amount of the
asset and are recognised in the Statement of Profit
and Loss when the asset is derecognised.

Depreciation methods, estimated useful lives and
residual value:

Depreciation is the systematic allocation of the
depreciable amount of PPE over its useful life and
is provided using straight line method, so as to
write off the cost of the assets (other than freehold
land and capital work-in-progress) less their
residual values over their useful lives specified in
Schedule II to the Companies Act, 2013, or in the
case of assets where the useful life was determined
by technical evaluation, over the useful life so
determined. Depreciation method is reviewed at

each financial year end to reflect the expected
pattern of consumption of the future economic
benefits embodied in the asset. The estimated
useful life and residual values are also reviewed
at each financial year end and the effect of any
change in the estimates of useful life/residual value
is accounted on prospective basis. Depreciation on
additions/ disposals is provided on a pro-rata basis
i.e. from/ upto the date on which asset is ready for
use/ disposed.

The Company uses different useful lives than those
prescribed in Schedule II to the Act for some of the
assets. The useful lives have been assessed based
on technical advice, taking into account the nature of
the PPE and the estimated usage of the asset on the
basis of management''s best estimation of obtaining
economic benefits from those classes of assets.
The estimated useful life is reviewed periodically,
with the effect of any changes in estimate being
accounted for on a prospective basis.

The company has used the following useful lives to
provide depreciation on the following assets:

3.3 Capital Work-in-Progress

Capital Work-in-Progress represents expenditure
incurred on capital assets that are under construction
or are pending capitalisation and includes project
expenses pending allocation. The same is carried at
cost, comprising of direct costs, related incidental
expenses and attributable borrowing costs. Project
expenses pending allocation are apportioned to the
PPE of the project proportionately on capitalisation.

3.4 Intangible assets

Intangible assets are recognised when it is probable
that the future economic benefits that are attributable
to the asset will flow to the Company and the cost of
the asset can be measured reliably. Intangible assets
re stated at original cost net of tax/duty credits
availed,if any, less accumulated amortisation and
cumulative impairment. Administrative and other
general overhead expenses that are specifically
attributable to acquisition of intangible assets are
allocated and capitalised as a part of the cost of the
intangible assets. Intangible development costs are
capitalised as and when technical and commercial
feasibility of the asset is demonstrated and future
economic benefits are probable.

The useful lives of intangible assets are assessed as
either finite or indefinite. Intangible assets with finite
lives are amortized over the useful economic life
and assessed for impairment whenever there is an
indication that the intangible asset may be impaired.
The amortization period and the amortization
method for an intangible asset with a finite useful
life are reviewed at least at the end of each reporting
period.

Gains or losses arising from de-recognition of an
intangible asset are measured as the difference
between the net disposal proceeds and the carrying
amount of the asset and are recognised in the
Statement of Profit and Loss when the asset is
derecognised.

Amortisation:

I ntangible assets with finite lives are amortised
over the useful economic life and assessed for
impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation
period and the amortisation method for an intangible
asset with a finite useful life are reviewed at least at
the end of each reporting period.

Changes in the expected useful life or the expected
pattern of consumption of future economic benefits
embodied in the assets are considered to modify
the amortisation period or method, as appropriate,
and are treated as change in accounting estimates.
Amortisation expense on intangible assets with
finite lives is recognised in the statement of profit
and loss unless such expenditure forms part of
carrying value of another assets.

Intangible Assets without finite life are tested
for impairment at each Balance sheet date and
impairment provision, if any are debited to profit and
loss.

The estimated useful lives of the amortisable
intangible assets are as follows:

3.5 impairment of Non-Financial Assets:

The Company assesses at each reporting date,
whether there is an indication that a non-financial
asset may be impaired. If any indication exists, or
when annual impairment testing for such asset
is required, the Company estimates the asset''s
recoverable amount in order to determine the
extent of the impairment loss (if any). When it is
not possible to estimate the recoverable amount
of an individual asset, the Company estimates the
recoverable amount of the cash-generating unit to
which the asset belongs. Goodwill and the intangible
assets with indefinite life are tested for impairment
each year.

Impairment loss is recognised when the carrying
amount of an asset (or cash generating unit)
exceeds its recoverable amount which is higher of
asset''s (or cash generating unit''s) net selling price
or the value in use. The amount of value in use is
determined as the present value of estimated future
cash flows from the continuing use of an asset (or
cash generating unit) and from its disposal at the
end of its useful life. For this purpose, the discount
rate (pre-tax) is determined based on the weighted
average cost of capital of the company suitably
adjusted for risks specified to the estimated cash
flows of the asset (or cash generating units).

If recoverable amount of an asset (or cash generating
unit) is estimated to be less than its carrying
amount, such deficit is recognised immediately in
the Statement of Profit and Loss as impairment
loss and the carrying amount of the asset (or

cash generating unit) is reduced to its recoverable
amount.

When an impairment loss subsequently reverses,
the carrying amount of the asset (or cash generating
unit) is increased to the revised estimate of its
recoverable amount, but so that the increased
carrying amount does not exceed the carrying
amount that would have been determined had no
impairment loss is recognised for the asset (or cash
generating unit). A reversal of an impairment loss is
recognised immediately in the Statement of Profit
and Loss.

3.6 Inventories:

Inventories are valued, after providing for
obsolescence as given below:

Raw Materials, Packing Materials and Stores and
Spares:

(i) Raw Materials, Packing Materials and Stores
and Spares:

Raw materials, packing materials and stores
and spares are valued at lower of Cost or
net realizable value. However, materials and
other items held for use in the production of
inventories are not written down below cost
if the finished products in which they will be
incorporated are expected to be sold at or
above cost. Costs are determined on Weighted
Average Basis method.

(ii) Work-in-process:

Work-in-process is valued at the lower of cost
and net realizable value. The cost is computed
on Weighted Average Basis method.

(iii) Finished Goods, Semi-Finished Goods and
Traded Goods:

Finished goods, Semi-finished goods and
traded goods are valued at lower of cost and
net realisable value. The cost is computed on
Weighted Average Basis method.

Cost is determined on Weighted Average
Basis method which includes expenditure
incurred for acquiring inventories like purchase
price, import duties, taxes (net of tax credit),

cost of conversion and other costs incurred
in acquiring the inventories to their present
location and condition.

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

3.7 Cash and Cash Equivalents

Cash and cash equivalents in the balance sheet
comprise cash at banks and on hand and highly
liquid financial instruments, which are readily
convertible into known amounts of cash, that are
subject to an insignificant risk of change in value
with an original maturity of three months or less.

3.8 Employee Benefits:

(i) Short-term employee benefits:

All employee benefits payable wholly within
twelve months of rendering the services are
classified as short-term employee benefits.
Benefits such as salaries, wages short-term
compensated absences, expected cost of
bonus, etc. are recognised in the period in which
the employee renders the related services.

(ii) Post-employment benefits:

(a) Defined Contribution Plan:

The Company makes defined contribution
to Employee Provident Fund, Employee
Pension Fund, Employee Deposit Linked
Insurance, and Superannuation Schemes.
The contribution paid/payable under
these schemes is recognised during the
period in which the employee renders
the related service which are recognised
in the Statement of Profit and Loss on
accrual basis during the period in which
the employee renders the services.

(b) Defined Benefit Plan

The gratuity liability of the company is
funded through a Group Gratuity Scheme
with Life Insurance Corporation of India
(LIC) under which the annual contribution
is paid to LIC. The Company''s liability under
Payment of Gratuity Act is determined
on the basis of actuarial valuation made

at the end of each financial year using
the projected unit credit method. The
obligation is measured at the present
value of the estimated future cash flows
using a discount rate based on the market
yield on government securities where
the terms of government securities are
consistent with the estimated terms
of the defined benefit obligations at
the Balance Sheet date. The Company
recognizes the net obligation of a defined
benefit plan in its Balance Sheet as an
asset or liability. Gains and losses through
re-measurements of the net defined
benefit liability / (asset) are recognized in
other comprehensive income and are not
reclassified to profit or loss in subsequent
periods.

(iii) Long term employee benefits:

Compensated absences which are not
expected to occur within twelve months after
the end of the period in which the employee
renders the related services are recognised
as a liability. The cost of providing benefits
is actuarially determined using the projected
unit credit method, actuarial valuations being
carried out at each Balance Sheet date.

(iv) Performance Stock Option Plan:

The Company recognizes compensation
expense relating to share-based payments
based on estimated fair-values of the awards
on the grant date. The estimated fair value of
awards is recognized as an expense in the
Statement of Profit and Loss on a straight-line
basis over the requisite service period for each
separately vesting portion of the award as if
the award was in-substance, multiple awards
with a corresponding increase to share options
outstanding accounts.

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Mar 31, 2024

3 MATERIAL ACCOUNTING POLICIES

3.1 Classification of Current versus NonCurrent:

All assets and liabilities In the financial statements have been classified as current or non-current as per the Company''s normal operating cycle of up to twelve months.

For the purpose of Balance Sheet, an asset is classified as current if:

(i) It is expected to be realised, or is intended to be sold or consumed, in the normal operating cycle; or

(II) It Is held primarily for the purpose of trading; or

(III) It Is expected to realise the asset within twelve months after the reporting period; or

(Iv) The asset Is a cash or cash equivalent unless It Is restricted from being exchanged or used to settle a liability for at least twelve months after the reportIng perIod

All other assets are classified as non-current.

Similarly, a liability Is classified as current If:

(I) It Is expected to be settled In the normal operating cycle; or

(II) It Is held primarily for the purpose of trading; or

(III) I t Is due to be settled within twelve months after the reporting period; or

(Iv) The Company does not have an unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could result In Its settlement by the Issue of equity Instruments at the option of the counterparty does not affect this classification

All other liabilities are classified as non-current.

3.2 Property, Plant and Equipment (PPE)

PPE Is recognised when It Is probable that future economic benefits associated with the Item will flow to the company and the cost of the Item can be measured reliably. The Initial cost of PPE comprises Its purchase price, Including Import duties and non-refundable purchase taxes, and any directly attributable costs of bringing an asset to working condition and location for Its Intended use less accumulated depreciation and accumulated Impairment losses, If any Cost Includes professional fees related to the acquisition of PPE and for qualifying assets, borrowing costs Is capitalised In accordance with the company''s accounting policy.

Subsequent costs are Included In the asset''s carrying amount or recognized as a separate asset, as appropriate, only when It Is probable that

future economic benefits associated with the Item will flow to the Company and the cost of the Item can be measured reliably. All other repairs and maintenance cost are charged to the Statement of Profit and Loss during the period In which they were incurred.

Long term lease arrangements of land are treated as PPE, In case such arrangements result In transfer of control and the present value of the lease payments Is likely to represent substantially all of the fair value of the land.

An Item of PPE and any significant part Initially recognised Is derecognised upon disposal or when no future economic benefits are expected with the carrying amount of any component accounted for as a separate asset Is derecognised when replaced. Gains or losses arising from de-recognition of a PPE are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised In the Statement of Profit and Loss when the asset Is derecognised.

Depreciation methods, estimated useful lives and residual value:

Depreciation Is the systematic allocation of the depreciable amount of PPE over Its useful life and Is provided using straight line method, so as to write off the cost of the assets (other than freehold land and capital work-in-progress) less their residual values over their useful lives specified In Schedule II to the Companies Act, 2013, or In the case of assets where the useful life was determined by technical evaluation, over the useful life so determined. Depreciation method Is reviewed at each financial year end to reflect the expected pattern of consumption of the future economic benefits embodied In the asset. The estimated useful life and residual values are also reviewed at each financial year end and the effect of any change In the estimates of useful life/residual value Is accounted on prospective basis. Depreciation on additions/ disposals Is provided on a pro-rata basis I.e. from/ upto the date on which asset Is ready for use/ disposed.

The Company uses different useful lives than those prescribed In Schedule II to the Act for some of the assets. The useful lives have been assessed based

on technical advice, taking into account the nature of the PPE and the estimated usage of the asset on the basis of management''s best estimation of obtaining economic benefits from those classes of assets. The estimated useful life is reviewed periodically, with the effect of any changes in estimate being accounted for on a prospective basis.

The company has used the following useful lives to provide depreciation on the following assets:

3.3 Capital Work-in-Progress

Capital Work-in-Progress represents expenditure incurred on capital assets that are under construction or are pending capitalisation and includes project expenses pending allocation. The same is carried at cost, comprising of direct costs, related incidental expenses and attributable borrowing costs. Project expenses pending allocation are apportioned to the PPE of the project proportionately on capitalisation.

3.4 Intangible assets

Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to the Company and the cost of the asset can be measured reliably. Intangible assets re stated at original cost net of tax/duty credits availed,if any, less accumulated amortisation and cumulative impairment. Administrative and other general overhead expenses that are specifically attributable to acquisition of intangible assets are allocated and capitalised as a part of the cost of the

intangible assets. Intangible development costs are capitalised as and when technical and commercial feasibility of the asset is demonstrated and future economic benefits are probable.

The useful lives of intangible assets are assessed as either finite or indefinite. Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period.

Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.

Amortisation:

I ntangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the assets are considered to modify the amortisation period or method, as appropriate, and are treated as change in accounting estimates. Amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss unless such expenditure forms part of carrying value of another assets.

I ntangible Assets without finite life are tested for impairment at each Balance sheet date and impairment provision, if any are debited to profit and loss.

The estimated useful lives of the amortisable intangible assets are as follows:

3.5 Impairment of Non-Financial Assets:

The Company assesses at each reporting date, whether there is an indication that a non-financial asset may be impaired. if any indication exists, or when annual impairment testing for such asset is required, the Company estimates the asset''s recoverable amount in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Goodwill and the intangible assets with indefinite life are tested for impairment each year.

impairment loss is recognised when the carrying amount of an asset (or cash generating unit) exceeds its recoverable amount which is higher of asset''s (or cash generating unit''s) net selling price or the value in use. The amount of value in use is determined as the present value of estimated future cash flows from the continuing use of an asset (or cash generating unit) and from its disposal at the end of its useful life. For this purpose, the discount rate (pre-tax) is determined based on the weighted average cost of capital of the company suitably adjusted for risks specified to the estimated cash flows of the asset (or cash generating units).

If recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, such deficit is recognised immediately in the Statement of Profit and Loss as impairment loss and the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount.

When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss is recognised for the asset (or cash generating unit). A reversal of an impairment loss is recognised immediately in the Statement of Profit and Loss.

3.7 Inventories:

inventories are valued, after providing for obsolescence as given below:

Raw Materials, Packing Materials and Stores and Spares:

(i) Raw Materials, Packing Materials and Stores and Spares:

Raw materials, packing materials and stores and spares are valued at lower of Cost or net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Costs are determined on Weighted Average Basis method.

(ii) Work-in-process:

Work-in-process is valued at the lower of cost and net realizable value. The cost is computed on Weighted Average Basis method.

(iii) Finished Goods, Semi-Finished Goods and Traded Goods:

Finished goods, Semi-finished goods and traded goods are valued at lower of cost and net realisable value. The cost is computed on Weighted Average Basis method.

Cost is determined on First in First out basis which includes expenditure incurred for acquiring inventories like purchase price, import duties, taxes (net of tax credit), cost of conversion and other costs incurred in acquiring the inventories to their present location and condition.

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

3.8 Cash and Cash Equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and highly liquid financial instruments, which are readily convertible into known amounts of cash, that are subject to an insignificant risk of change in value with an original maturity of three months or less.

3.9 Employee Benefits:

(i) Short-term employee benefits:

All employee benefits payable wholly within twelve months of rendering the services are classified as short-term employee benefits. Benefits such as salaries, wages short-term compensated absences, expected cost of bonus, etc. are recognised in the period in which the employee renders the related services.

(ii) Post-employment benefits:

(a) Defined Contribution Plan:

The Company makes defined contribution to Employee Provident Fund, Employee Pension Fund, Employee Deposit Linked Insurance, and Superannuation Schemes. The contribution paid/payable under these schemes is recognised during the period in which the employee renders the related service which are recognised in the Statement of Profit and Loss on accrual basis during the period in which the employee renders the services.

(b) Defined Benefit Plan

The gratuity liability of the company is funded through a Group Gratuity Scheme with Life Insurance Corporation of India (LIC) under which the annual contribution is paid to LIC. The Company''s liability under Payment of Gratuity Act is determined on the basis of actuarial valuation made at the end of each financial year using the projected unit credit method. The obligation is measured at the present value of the estimated future cash flows using a discount rate based on the market yield on government securities where the terms of government securities are consistent with the estimated terms of the defined benefit obligations at the Balance Sheet date. The Company recognizes the net obligation of a defined benefit plan in its Balance Sheet as an asset or liability. Gains and losses through re-measurements of the net defined benefit liability / (asset) are recognized in other comprehensive income and are not reclassified to profit or loss in subsequent periods.

(iii) Long term employee benefits:

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee

renders the related services are recognised as a liability. The cost of providing benefits is actuarially determined using the projected unit credit method, actuarial valuations being carried out at each Balance Sheet date.

(iv) Share Based Payment:

The grant date fair value of options granted to employees is recognized as an employee expense, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the options. The expense is recorded for each separately vesting portion of the award as if the award was, in substance, multiple awards. The increase in Other Equity recognized in connection with share based payment transaction is presented as a separate component in equity under "Employee Stock Options Outstanding Reserve". The amount recognized as an expense is adjusted to reflect the actual number of stock options that vest.

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Mar 31, 2023

CORPORATE INFORMATION

AARTI PHARMALABS LIMITED ("the Company") is a Public Limited Company incorporated under the provisions of the Companies Act, 2013. During FY 2021-22, Company has changed its name from Aarti Organics limited to Aarti Pharmalabs limited and same is approved at ROC. Necessary changes has been incorporate in all places including MOA & AOA.The equity shares of the Company are listed on Bombay Stock Exchange Ltd (BSE) and NationalStock Exchange of India Ltd (NSE). During FY 2021-22 Company has changed its Registered Office to Plot No. 22/C/1 & 22/C/2, 1^st Phase, G.I.D.C. Vapi, District Valsad Gujarat - 396195 and same is approved at ROC. The Company is engaged in manufacturer of Active Pharmaceutical Ingredients (API), pharmaceutical intermediates, New Chemical Entities (NCE), and xanthine derivatives situated in India.

Explanatory Note on the Composite Scheme of Arrangement''

The Scheme of Arrangement for the demerger of Pharma Business Undertaking from Aarti Industries Limited ("the Company" or "the demerged company") into its wholly owned subsidiary Aarti Pharmalabs Limited ("the resulting company"), ("the Scheme") was approved by Honourable National Company Law Tribunal (NCLT), Ahmedabad Bench on 21 September, 2022 (and became effective upon filing of the same with ROC, Gujarat on 17 October, 2022).

Accordingly, all the assets and liabilities pertaining to the Pharma Business Undertaking, including supporting manufacturing units, employees, cash and cash equivalents and investments (including investments in subsidiaries and joint ventures), as defined in the Scheme, stand transferred and vested into the resulting company from its Appointed Date i.e. from 1 July, 2021.

Details of Assets & Liabilities of Aarti Industries limited Demerged Pharma Undertaking Transferred to Company pursuant to scheme as at Appointed date is as below:

Particular	Amount ('' in Crores)
Property, Plant and Equipment	789.69
Investments	32.71
Trade Receivable	256.89
Inventories	336.23
Other Current & Non-Current Assets (Incl. Cash & Cash Equivalents)	721.56
Total Assets	2,137.08
Trade Payables	(170.47)

Particular	Amount ('' in Crores)
Other Current & Non-Current	(71.00)
Liabilities
Borrowings	(725.68)
Total Liability	(967.15)
Excess of Assets over Liabilities	1,169.94

SIGNIFICANT ACCOUNTING POLICIES

(A) BASIS OF PREPARATION AND PRESENTATION:

The Standalone Financial Statements have been prepared in accordance with the accounting principles generally accepted in India including Indian Accounting Standards (Ind AS) prescribed under the Section 133 of the Companies Act, 2013, Companies (Indian Accounting Standards) Rules, 2015 as amended and relevant provisions of the Companies Act, 2013 including presentation and disclosure requirements of Division II of Schedule III of the Act as amended from time to time.

Accordingly, the Company has prepared these Financial Statements which comprise the Balance Sheet as at 31 March, 2023, the Statement of Profit and Loss for the year ended 31 March 2023, the Statement of Cash Flows for the year ended 31 March 2023 and the Statement of Changes in Equity for the year ended as on that date, and accounting policies and other explanatory information (together hereinafter referred to as ‘Financial Statements'').

In addition, the financial statements are presented in INR which is also the Company''s functional currency and all values are rounded to the nearest lakhs except when otherwise indicated.

(B) BASIS OF MEASUREMENT:

The financial statements of the company are prepared in accordance with Indian Accounting Standards (Ind AS), under the historical cost convention on the accrual basis as per the provisions of the Companies Act, 2013 ("the Act"), except for:

• Financial instruments - measured at fair value;

• Plan assets under defined benefit plans - measured at fair value

• In addition, the carrying values of recognised assets and liabilities, designated as hedged items in fair value hedges that would otherwise be carried at cost, are adjusted to record changes in the fair values

attributable to the risks that are being hedged in effective hedge relationships.

(C) SIGNIFICANT ACCOUNTING ESTIMATES, JUDGEMENTS ASSUMPTIONS:

The preparation of the financial statements in conformity with Ind AS requires the management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Actual results could differ from those estimates according to the nature of the assumption and other circumstances. This note provides an overview of the areas where there is a higher degree of judgment or complexity. Detailed information about each of these estimates and judgments is included in relevant notes together with information about the basis of calculation.

The following are areas involving critical estimates and judgments:

Judgements:

• Leases

• Evaluation of recoverability of deferred tax assets, and estimation of income tax payable and income tax expense in relation to an uncertain tax position

• Provisions and Contingencies

Estimates:

• Impairment

• Accounting for Defined benefit plans

• Useful lives of property, plant and equipment and intangible assets

• Fair Valuation of Financial instruments

• Valuation of inventories

(D) CURRENT AND NON-CURRENT CLASSIFICATION:

The Company presents assets and liabilities in the Balance sheet based on current/non-current classification, an asset is treated as current when it is:

i) Expected to be realized or intended to be sold or consumed in normal operating cycle, or

ii) Held primarily for the purpose of trading, or

iii) Expected to be realized within twelve months after the reporting period, or

iv) Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period

A liability is treated as current when it is:

(i) Expected to be settled in normal operating cycle, or

(ii) Held primarily for the purpose of trading, or

(iii) Due to be settled within twelve months after the reporting period, or

(iv) There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period

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

The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. The Company has identified twelve months as its operating cycle.

(E) PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS AND DEPRECIATION/AMORTIZATION:

1. Property, Plant and Equipment (PPE)

PPEs held for use in the production, supply or administrative purposes, are stated in the balance sheet at cost less applicable accumulated depreciation/amortisation and accumulated impairment losses (if any).

The cost of PPE comprises its purchase price (including the costs of materials / components) net of any trade discounts and rebates,any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, including relevant borrowing costs for qualifying assets including exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs and such other incidental costs that may be associated with acquisition or creation of the asset ready for its intended use.

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

PPE which are not ready for intended use as on the date of Balance Sheet are disclosed as "Capital work-in-progress". Capital Work-in-Progress represents expenditure incurred on capital assets that are under construction/erection or are pending to be commercialized and put to use. The same is carried at cost which is determined in the same manner as for any PPE.

2. Intangible Assets

Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to the Company and the cost of the asset can be measured reliably. Intangible assets are stated at original cost net of tax/duty credits availed,if any, less accumulated amortisation and cumulative impairment. Administrative and other general overhead expenses that are specifically attributable to acquisition of intangible assets are allocated and capitalised as a part of the cost of the intangible assets. Intangible development costs are capitalised as and when technical and commercial feasibility of the asset is demonstrated and future economic benefits are probable.

The useful lives of intangible assets are assessed as either finite or indefinite. Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period.

Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised

in the Statement of Profit and Loss when the asset is derecognised.

3. Depreciation/Amortization

Pursuant to the notification of Schedule II of the Companies Act, 2013, the management has reassessed and changed based on technical estimates, wherever necessary, the useful lives to compute depreciation, to confirm to the requirements of the Companies Act, 2013. The useful life for various class of assets is as follows:

Assets Class	Useful Life
Leasehold Land	Over the remaining of Lease
Building	Over a period of 19-31 years
Residential Quarters Over a period of 30 years
Plant & Equipments	Over its useful as technically assessed, i.e over a period of 9 - 19 years, based on the type of processes and equipments installed.
Computers	Over a period of 2.5 years
Office Equipment	Over a period of 5 years
Furniture & Fixtures	Over a period of 10 years
Vehicles	Over a period of 7 years
Intangible assets (including Product / Process Development)	Over a period of 5-7 years, except for those where the finite periods are provided for

4. Impairment

The Company assesses at each reporting that the carrying amounts of its property, plant and equipment, intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount.

Impairment loss, if any, is provided to the extent, the carrying amount of assets exceeds their recoverable amount. Recoverable amount is higher of net selling price of an asset or its value in use. Value in use is the present value of estimated future

cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.

(F) RESEARCH AND DEVELOPMENT:

Research costs are expensed as incurred. Development expenditures on an individual project are recognised as an intangible asset when the Company can demonstrate:

• development costs can be measured reliably;

• the product or process is technically and commercially feasible;

• future economic benefits are probable; and

• the company intends to, and has sufficient resources to complete development and to use or sell the asset.

Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortization and accumulated impairment losses. Amortisation of the asset begins when development is complete and the asset is available for use. It is amortised over the period of expected future benefit. Amortisation expense is recognised in the statement of profit and loss unless such expenditure forms part of carrying value of another asset. During the period of development, the asset is tested for impairment annually.

(G) INTANGIBLE ASSETS UNDER DEVELOPMENT:

Expenditure incurred on acquisition/development of intangible assets which are not ready for their intended use at balance sheet date are disclosed under intangible assets under development.

(H) VALUATION OF INVENTORIES:

Inventories have been valued on the following basis:

Raw Materials, Packing Material, Stores - At cost on weighted Average basis Or net realisable value whichever is lower. Cost and Spares and Traded goods includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition.

Work-in-Process - At cost plus appropriate allocation of overheads or net realisable value whichever is lower.

Finished Goods - At cost plus appropriate allocation of overheads or net realizable value, whichever is lower.

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

Provisions are made for obsolete and non-moving inventories. Unserviceable and scrap items, when determined, are valued at estimated net realisable value.

(I) REVENUE RECOGNITION:

Ind AS 115 applies, with limited exceptions, to all revenue arising from contracts with its customers. Ind AS 115 establishes a five-step model to account for revenue arising from contracts with customers and requires that revenue be recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.

Ind AS 115 requires entities to exercise judgment, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers. It also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract.

(i) Sale of goods:

Revenue from sale of goods is recognised when control of the products being sold is transferred to our customer and when there are no longer any unfulfilled obligations. Income from services rendered is recognised based on agreements/ arrangements with the customers as the service is performed and there are no unfulfilled obligations.

The Company recognizes net revenue from goods sold and services rendered at Transaction Price which is the amount of consideration the Company expects to be entitled to in exchange for transferring promised goods or services to a customer, excluding the amounts collected on behalf of a third party. The Transaction price is net of discounts, sales incentives, rebates granted, returns, sales taxes, GST and duties and any other recoverable taxes.

Generally, In case of domestic sales, performance obligations are satisfied when the goods are

dispatched or delivery is handed over to transporter, revenue from export of goods is recognized at the time of Bill of lading or airway bill or any other similar document evidencing delivery thereof.

(ii) Interest Income:

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

(iii) Dividend income:

Revenue is recognized when the Company''s right to receive the dividend is established, which is generally when shareholders approve the dividend.

(iv) Export benefits:

Export incentives are recognized as income when the right to receive credit as per the terms of the scheme is established in respect of the exports made and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.

(v) Government grants:

Government grants are recognised when there is reasonable assurance that the Company will comply with the conditions attached to them, application for the govenement grant is made and it is probable that the government grants will be received.

(J) FINANCIAL INSTRUMENTS

Recognition and initial measurement

Financial assets and financial liabilities are recognised when an entity becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. However, Trade receivables that do not contain a significant financing component are measured at transaction price. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit and loss are recognised immediately in the Statement of Profit and Loss. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through Statement of Profit and Loss (FVTPL)) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.

Classification and Subsequent Measurement of Financial Assets:

The Company classifies financial assets, subsequently at amortised cost, Fair Value through Other Comprehensive Income ("FVTOCI") or Fair Value through Profit or Loss ("FVTPL") on the basis of following:

• the entity''s business model for managing the financial assets and

• the contractual cash flow characteristics of the financial asset.

(a) Financial Assets measured at Amortised Cost:

A Financial Asset is measured at amortised Cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the Financial Asset give rise on specified dates to cash flows that represent solely payments of principal and interest on the principal amount outstanding.

(b) Financial Assets measured at Fair Value Through Other Comprehensive Income (FVTOCI):

A Financial Asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling Financial Assets and the contractual terms of the Financial Asset give rise on specified dates to cash flows that represent solely payments of principal and interest on the principal amount outstanding.

(c) Financial Assets measured at Fair Value Through Profit or Loss (FVTPL):

FVTPL is a residual category for financial assets. Any financial asset, which does not meet the criteria for categorization as at amortised cost or as FVTOCI, is classified as at FVTPL.

Classification and Subsequent Measurement of Financial Liabilities:

(a) Financial liabilities measured at Fair Value Through Profit or Loss (FVTPL):

Financial liabilities are classified as FVTPL when the financial liability is held for trading or is a derivative (except for effective hedge) or are designated upon initial recognition as FVTPL. Gains or Losses, including any interest expense on liabilities held for trading are recognised in the Statement of Profit and Loss.

(b) Other Financial liabilities:

Other financial liabilities (including loans and borrowings, bank overdrafts and trade and other payables) are subsequently measured at amortised cost using the effective interest method.

The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and amounts paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost on initial recognition.

Interest expense (based on the effective interest method), foreign exchange gains and losses, and any gain or loss on derecognition is recognised in the Statement of Profit and Loss.

For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

Debt and Equity Instruments:

Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by a Company are recognised at the proceeds received, net of direct issue costs.

Equity Investments

All equity investments (excluding the investments in Subsidiaries) in the scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For

all other equity instruments, the company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable. If the company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to the statement of profit and loss, even on sale of investment. However, the company may transfer the cumulative gain or loss within equity. Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit and loss.

Investments in subsidiaries:

I nvestments in subsidiaries are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries, the difference between net disposal proceeds and the carrying amounts are recognised in the statement of profit and loss.

De-recognition of Financial Instruments:

The Company derecognises a Financial Asset when the contractual rights to the cash flows from the Financial Asset expire or it transfers the Financial Asset and the transfer qualifies for de-recognition under Ind AS 109. In cases where Company has neither transferred nor retained substantially all of the risks and rewards of the financial asset, but retains control of the financial asset, the Company continues to recognize such financial asset to the extent of its continuing involvement in the financial asset. In that case, the Company also recognizes an associated liability. The financial asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

A Financial liability (or a part of a financial liability) is derecognised from the Company''s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability.

The difference between the carrying amount of the financial liability de-recognised and the consideration paid and payable is recognised in the Statement of Profit and Loss.

Impairment of Financial Assets

In accordance with Ind AS 109, the Company uses ‘Expected Credit Loss'' (ECL) model, for evaluating impairment of all Financial Assets subsequent to initial recognition other than financial assets measured at fair value through profit and loss (FVTPL). The Company uses historical default rates to determine impairment loss on the portfolio of trade receivables. At every reporting date these historical default rates are reviewed and changes in the forward-looking estimates are analysed. For other financial assets, the Company uses 12 month ECL to provide for impairment loss where there is no significant increase in credit risk since its initial recognition. If there is significant increase in credit risk since its initial recognition full lifetime ECL is used. The impairment losses and reversals are recognised in Statement of Profit and Loss.

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 expects to receive (i.e., all cash shortfalls), discounted at the original EIR.

Offsetting of Financial Instruments:

Financial assets and financial liabilities are offset and presented on net basis in the balance sheet when there is a legally enforceable right to set-off the recognised amounts and it is intended to either settle them on net basis or to realise the asset and settle the liability simultaneously.

Fair Value of Financial Instruments

In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis and available quoted market prices, where applicable. All methods of assessing fair value result in general approximation of value, and such value may never actually be realized.

Financial instruments by category are separately disclosed indicating carrying value and fair value of financial assets and liabilities. For financial assets and liabilities maturing within one year from the Balance Sheet date and which are not carried at fair value, the carrying amounts approximate fair value due to the short maturity of these instruments.

Derivative Financial Instruments:

Derivative financial instruments such as forward contracts, option contracts and cross currency swaps, to hedge its foreign currency risks are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value with changes in fair value recognised in the Statement of Profit and Loss in the period when they arise.

Cash flow hedge

At inception of designated hedging relationships, the Company documents the risk management objective and strategy for undertaking the hedge. The Company also documents the economic relationship between the hedged item and the hedging instrument, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each other.

The company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to USD. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the company''s functional currency (INR).

The risk is measured through a forecast of highly probable foreign currency cash flows. The objective of the hedges is to minimise the volatility of the INR cash flows of highly probable forecast transactions. The company risk management policy is to hedge forecasted foreign currency sales for the subsequent 12 to 36 months. As per

the risk management policy, appropriate foreign currency hedges are executed or undertaken to hedge forcasted sales.

The spot component of forward contracts is determined with reference to relevant spot market exchange rates. The differential between the contracted forward rate and the spot market exchange rate is defined as the forward points.

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognised in OCI and accumulated in other equity under ‘effective portion of cash flow hedges''. The effective portion of changes in the fair value of the derivative that is recognised in OCI is limited to the cumulative change in fair value of the hedged item, determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in statement of profit and loss.

If a hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is terminated or is exercised, then hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in other equity remains there until, for a hedge of a transaction resulting in recognition of a non-financial item, it is included in the nonfinancial item''s cost on its initial recognition or, for other cash flow hedges, it is reclassified to profit or loss in the same period or periods as the hedged expected future cash flows affect profit or loss.

I f the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in other equity are immediately classified to statement of profit and loss.

(K) CASH AND CASH EQUIVALENTS:

For the purpose of presentation in the Balance sheet, Cash and Cash equivalents comprises cash at bank and on hand and other short-term, highly liquid investments with an original maturity (or with an option to or can be readily converted or liquidated into cash) of three months or less, which are subject to an insignificant risk of changes in value. Cash and Cash Equivalents

consist of balances with banks which are unrestricted for withdrawals and usages.

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash at bank and on hand and other short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(L) PROVISIONS:

Provisions are recognized when the Company has a present obligation (legal and constructive) as a result of a past event, for which it is probable that a Cash Outflow will be required and a reliable estimate can be made of the amount of the obligation.

(M) LEASE:

The Company has adopted Ind AS 116. It has resulted into recognition of Lease Assets Right to Use with a corresponding Lease Liability in the Balance Sheet.

The Company, as a lessee, recognises a right to use asset and a lease liability for its leasing arrangements, if the contract conveys the right to control the use of an identified asset.

The contract conveys the right to control the use of an identified asset, if it involves the use of an identified asset and the Company has substantially all of the economic benefits from use of the asset and has right to direct the use of the identified asset. The cost of the right to use asset shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs incurred. The right to use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use assets are depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset.

The Company measures the lease liability at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate.

For short-term and low value leases, the Company recognises the lease payments as an operating expense.

(N) EMPLOYEE BENEFITS :

(a) Employee benefits:

All employee benefits such as salaries, wages, short-term compensated absences, expected cost of bonus, etc. are recognised in the period in which the employee renders the related services.

(b) Post-employment benefits:

(i) Defined Contribution Plan:

The Company makes defined contributions to Employee Provident Fund, Employee Pension Fund, Employee Deposit Linked Insurance, and superannuation Schemes. The contribution paid/payable under these schemes is recognised during the period in which the employee renders the related services which are recognised in the Statement of Profit and Loss on accrual basis during the period in which the employee renders the services.

(ii) Defined Benefit Plan

The gratuity liability of the company is funded through a Group Gratuity Scheme with Life Insurance Corporation of India (LIC) under which the annual contribution is paid to LIC. The Company''s liability under Payment of Gratuity Act is determined on the basis of actuarial valuation made at the end of each financial year using the projected unit credit method. The obligation is measured at the present value of the estimated future cash flows using a discount rate based on the market yield on government securities where the terms of government securities are consistent with the estimated terms of the defined benefit obligations at the Balance Sheet date. The Company recognizes the net obligation of a defined benefit plan in its Balance Sheet as an asset or liability. Gains and losses through re-measurements of the net defined benefit liability / (asset) are recognized in other comprehensive income and are not reclassified to profit or loss in subsequent periods.

(O) FOREIGN CURRENCY TRANSACTIONS:

Items included in the Standalone Financial Statements of the Company are measured using the currency of the primary economic environment in which the Company operates (functional currency). The Standalone Financial Statements of the Company are presented in Indian currency (''), which is also the functional currency of the Company.

Foreign currency transactions are recorded on initial recognition in the functional currency, using the exchange rate as applicable in the period of such transaction. Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each reporting period are appropriately dealt in the financial statements in accordance with the applicable Indian Accounting standards.

(P) INCOME TAXES:

Income tax expense comprises of current tax expense and deferred tax expenses.

Current and deferred taxes are recognized in Statement of Profit and Loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity, respectively.

Current income tax:

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act of the respective jurisdiction. The current tax is calculated using tax rates that have been enacted or substantively enacted, at the reporting date.

Deferred tax :

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the company''s financial statements and the corresponding tax bases used in computation of taxable profit and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax liabilities are recognised for all taxable temporary differences at the reporting date between the tax base of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax assets are recognised for all taxable temporary differences to the extent that is probable that taxable profits will be available against which those deductible temporary differences can be utilised.

The carrying amount of deferred tax assets is 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 all or part of the assets are to be recovered. Unrecognized deferred tax assets are reassessed at the end of each reporting period and are recognized to the extent that it has become probable that future taxable profits will be available against which the deferred tax assets to be recovered.

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

Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set-off the recognised amounts and there is an intention to settle the asset and the liability on a net basis.

Minimum Alternate Tax (MAT) :

MAT credit is recognised as an asset only when and to the extent it is reasonably certain that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.

(Q) BORROWING COSTS:

Borrowing costs, general or specific, that are attributable to the acquisition or construction of qualifying assets is capitalized as part of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to the Statement of Profit and Loss.

(R) CONTINGENT LIABILITIES Contingent liability is:

(a) a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or

(b) a present obligation that arises from past events but is not recognised because:

(i) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

(ii) the amount of the obligation cannot be measured with sufficient reliability