G G Engineering Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2025

Note 2 : Significant Accounting Policies

a. Basis of Preparation

These financial statements have been prepared in accordance with the generally accepted accounting
principles in India under the historical cost convention on accrual basis, except for certain tangible assets
which are being carried at revalued amounts. Pursuant to section 133 of the Companies Act, 2013 read
with Rule 7(1) of the Companies (Accounts) Rules, 2014, till the standards of accounting or any addendum
thereto are prescribed by Central Government in consultation and recommendation of the National
Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956
shall continue to apply. Consequently, these financial statements have been prepared to comply in all
material aspects with the accounting standards notified under Section 211(3C) of the Companies Act,
1956 [Companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the
Companies Act, 2013.

All assets and liabilities have been classified as current or non-current as per the Company''s operating
cycle and other criteria set out in the Schedule III (Division I) to the Companies Act, 2013. Based on the
nature of products and the time between the acquisition of assets for processing and their realisation
in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the
purpose of current - non-current classification of assets and liabilities.

b. Functional and Presentation currency

These standalone Ind AS financial statements are presented in Indian Rupees (INR), which is the
Company''s functional currency

c. Basis of measurement

The standalone Ind AS financial statements have been prepared on a historical cost basis, except for the
following that are measured at fair values at the end of each reporting period: - (i) certain financial assets
and liabilities and contingent consideration that is measured at fair value

d. First-time adoption

In accordance with Ind AS 101 on First-time adoption of Indian Accounting Standards, the Company''s first
Ind AS financial statements include, the opening balance sheet as at 1 April,2019; Balance sheet as at 31
March 2020 and 31 March 2021; two statements each of profit and loss, cash flow and changes in Equity
for the year ended 31 March 2020 and 31 March 2021 together with related notes.

The same accounting policies have been used for all periods presented, except where the Company has
made use of exceptions or exemptions allowed under Ind AS 101 in the presentation of the opening Ind
AS balance sheet.

The balance sheets, statements of profit and loss, statements of cash flows and statements of changes
in equity of the prior years presented have been recast in accordance with Ind AS.

e. Tangbile Assets

Plant, Property and Equipment are stated at cost, net of accumulated depreciation and accumulated
impairment losses, if any, except in case of land which is carried at revalued amount. Cost comprises of
the purchase price including import duties and non-refundable taxes, and directly attributable expenses
incurred to bring the asset to the location and condition necessary for it to be capable of being operated
in the manner intended by management23. Subsequent costs related to an item of Property, Plant and
Equipment are recognised in the carrying amount of the item if the recognition criteria are met.

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 net carrying amount and net realisable value and are shown separately in
the financial statements under the head ''Other current assets''. Any write-down in this regard is recognised
immediately in the Statement of Profit and Loss.

Depreciation is provided on a pro-rata basis on the straight-line method over the estimated useful lives
of the assets, based on technical evaluation done by management''s expert, which are higher than those
specified by Schedule II to the Companies Act, 2013, in order to reflect the actual usage of the assets. The
depreciation charge for each period is recognised in the Statement of Profit and Loss, unless it is included
in the carrying amount of any other asset. The useful life, residual value and the depreciation method
are reviewed atleast at each financial year end. If the expectations differ from previous estimates, the
changes are accounted for prospectively as a change in accounting estimate.

f. Investments

Investments that are readily realisable and are intended to be held for not more than one year from the
date on which such investments are made, are classified as current investments. All other investments
are classified as non-current investments. Current investments are valued at fair value. Non-current
investments are carried at cost. However, provision for diminution is made to recognise a decline, other
than temporary, in the value of non-current investments, such reduction being determined and made for
each investment individually.

g. Inventories

Raw materials, packing materials, stores, spares and consumables are valued at lower of cost and net
realisable value. However, these items are realisable at cost if the finished products in which they will be
used are expected to be sold at or above cost. Finished goods, stock-in-trade and work-in-progress are
valued at lower of cost and net realizable value. Cost is ascertained on weighted average method and in
case of finished products and work-in-progress; it includes appropriate production overheads and duties.

h. Ind AS 115, Revenue from contracts from Customers

Ind AS 115 supersedes Ind AS 11, Construction Contracts and Ind AS 18, Revenue. Ind AS 115 requires an
entity to report information regarding nature, amount, timing and uncertainty of revenue and cash flows
arising from a contract with customers. The principle of Ind AS 115 is that an entity should recognise
that demonstrates the transfer of promised goods and services to customer at an amount that reflects
the consideration to which the entity expects to be entitled in exchange for those goods or services. The
standard can be applied either retrospectively to each prior reporting period presented or can be applied
retrospectively with recognition of cumulative effect of contracts that are not completed contracts at the
date of initial application of the standard.

Revenue is recognised upon transfer of control of promised services or products to customers in an
amount that reflects the consideration which Company expects to receive in exchange for those services
or products.

Revenue from sale of goods is recognised when the significant risks and rewards of ownership of the
goods have been passed to the customer. Sales are net off sales returns, free quantities delivered and
trade discounts.

Interest Income:

Interest income is recognized on a time proportion basis taking into account the amount outstanding and
the rate applicable. For all debt instruments measured either at amortized cost or at fair value through
other comprehensive income, interest income is recorded using the effective interest rate (EIR).

Dividend Income:

Dividend income is accounted for when the right to receive the same is established, which is generally
when shareholders approve the dividend.

Other Income:

Other income is accounted for on accrual basis except where the receipt of income is uncertain in which
case it is accounted for on receipt basis.

i. Current Tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year
and any adjustment to the tax payable or receivable in respect of previous years. The amount of current
tax reflects the best estimate of the tax amount expected to be paid or received after considering the
uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or
substantively enacted by the reporting date. Current tax assets and current tax liabilities are offset only
if there is a legally enforceable right to set off the recognised amounts, and it is intended to realize the
asset and settle the liability on a net basis or simultaneously. Minimum Alternate Tax (''MAT'') under the
provision of Income tax Act,1961 is recognised as current tax in the statement of profit and loss. MAT
paid in accordance with the laws, which gives future economic benefits in the form of adjustment to future
income tax liability, is considered as an asset if there is a convincing evidence that the company will pay
normal tax. Accordingly, MAT is recognised as an asset in the balance sheet when it is probable that
the future economic benefit associated with it will flow to the company and included under Deferred tax
assets. Current tax assets and liabilities are offset only if, the Company:

1. has a legally enforceable right to set off the recognised amounts; and

2. intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

j. Deferred Tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes.
Deferred tax is also recognised in respect of carried forward tax losses and tax credits. Deferred tax is not
recognised for:

• temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not
a business combination and that affects neither accounting nor taxable profit or loss at the time of the
transaction;

• temporary differences related to investments in subsidiaries, associates and joint arrangements to the
extent that the Company can control the timing of the reversal of the temporary differences and it is
probable that they will not reverse in the foreseeable future; and

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

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be
available against which they can be used. The existence of unused tax losses is strong evidence
that future taxable profit may not be available. Therefore, in case of a history of recent losses, the
Company recognises a deferred tax asset only to the extent that it has sufficient taxable temporary
differences or there is convincing other evidence that sufficient taxable profit will be available against
which such deferred tax asset can be realised. Deferred tax assets - unrecognized or recognised,
are reviewed at each reporting date and are recognised/ reduced to the extent that it is probable/
no longer probable respectively that the related tax benefit will be realised. Deferred tax is measured
at the tax rates that are expected to apply to the period when the asset is realised or the liability is
settled, based on the laws that have been enacted or substantively enacted by the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in
which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets
and liabilities. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset
current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the
same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets
on a net basis or their tax assets and liabilities will be realised simultaneously.

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Mar 31, 2024

Note 1 : Corporate Information

GG Engineering Limited ("the Company") is a company limited by shares having its registered office at Office No. 203,2nd Floor, Shivam Chambers Coop Soc Ltd. S.V Road,Goregaon West, Near Sahara Apartment Mumbai - 400 104. From Ghaziabad, Uttar Pradesh, the company is trading into Iron and Steel Metals.

Note 2 : Significant Accounting Policies

a. Basis of Preparation

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis, except for certain tangible assets which are being carried at revalued amounts. Pursuant to section 133 of the Companies Act, 2013 read with Rule 7(1) of the Companies (Accounts) Rules, 2014, till the standards of accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) of the Companies Act, 1956 [Companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act, 2013.

All assets and liabilities have been classified as current or non-current as per the Company''s operating cycle and other criteria set out in the Schedule III (Division I) to the Companies Act,2013. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current - non-current classification of assets and liabilities.

b. Functional and Presentation currency

These standalone Ind AS financial statements are presented in Indian Rupees (INR), which is the Company''s functional currency

c. Basis of measurement

The standalone Ind AS financial statements have been prepared on a historical cost basis, except for the following that are measured at fair values at the end of each reporting period: - (i) certain financial assets and liabilities and contingent consideration that is measured at fair value

d. First-time adoption

In accordance with Ind AS 101 on First-time adoption of Indian Accounting Standards, the Company''s first Ind AS financial statements include, the opening balance sheet as at 1 April,2019; Balance sheet as at 31 March 2020 and 31 March 2021; two statements each of profit and loss, cash flow and changes in Equity for the year ended 31 March 2020 and 31 March 2021 together with related notes.

The same accounting policies have been used for all periods presented, except where the Company has made use of exceptions or exemptions allowed under Ind AS 101 in the presentation of the opening Ind AS balance sheet.

The balance sheets, statements of profit and loss, statements of cash flows and statements of changes in equity of the prior years presented have been recast in accordance with Ind AS.

e. Tangbile Assets

Plant, Property and Equipment are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any, except in case of land which is carried at revalued amount. Cost comprises of the purchase price including import duties and non-refundable taxes, and directly attributable expenses incurred to bring the asset to the location and condition necessary for it to be capable of being operated in the manner intended by management23. Subsequent costs related to an item of Property, Plant and Equipment are recognised in the carrying amount of the item if the recognition criteria are met.

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 net carrying amount and net realisable value and are shown separately in the financial statements under the head ''Other current assets''. Any write-down in this regard is recognised immediately in the Statement of Profit and Loss.

Depreciation is provided on a pro-rata basis on the straight-line method over the estimated useful lives of the assets, based on technical evaluation done by management''s expert, which are higher than those specified by Schedule II to the Companies Act, 2013, in order to reflect the actual usage of the assets. The depreciation charge for each period is recognised in the Statement of Profit and Loss, unless it is included in the carrying amount of any other asset. The useful life, residual value and the depreciation method are reviewed atleast at each financial year end. If the expectations differ from previous estimates, the changes are accounted for prospectively as a change in accounting estimate.

The estimates of useful lives of tangible assets are as follows :

Assets	Useful Life
Factory Building	60 years
Plant & Machinery	15 years
Vehicle	8 years
Office Equipments	5 years
Furniture	10 years
Computer	3 years
Motor Car & Truck	10 years

f. Investments

Investments that are readily realisable and are intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as non-current investments. Current investments are valued at fair value. Non-current investments are carried at cost. However, provision for diminution is made to recognise a decline, other than temporary, in the value of non-current investments, such reduction being determined and made for each investment individually.

g. Inventories

Raw materials, packing materials, stores, spares and consumables are valued at lower of cost and net realisable value. However, these items are realisable at cost if the finished products in which they will be used are expected to be sold at or above cost. Finished goods, stock-in-trade and work-in-progress are valued at lower of cost and net realizable value. Cost is ascertained on weighted average method and in case of finished products and work-in-progress; it includes appropriate production overheads and duties.

h. Ind AS 115, Revenue from contracts from Customers

Ind AS 115 supersedes Ind AS 11, Construction Contracts and Ind AS 18, Revenue. Ind AS 115 requires an entity to report information regarding nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with customers. The principle of Ind AS 115 is that an entity should recognise that demonstrates the transfer of promised goods and services to customer at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard can be applied either retrospectively to each prior reporting period presented or can be applied retrospectively with recognition of cumulative effect of contracts that are not completed contracts at the date of initial application of the standard.

i. Current Tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date. Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realize the asset and settle the liability on a net basis or simultaneously. Minimum Alternate Tax (''MAT'') under the provision of Income tax Act,1961 is recognised as current tax in the statement of profit and loss. MAT paid in accordance with the laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is a convincing evidence that the company will pay normal tax. Accordingly, MAT is recognised as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the company and included under Deferred tax assets. Current tax assets and liabilities are offset only if, the Company:

1. has a legally enforceable right to set off the recognised amounts; and

2. intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

j. Deferred Tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognised in respect of carried forward tax losses and tax credits. Deferred tax is not recognised for:

• temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss at the time of the transaction;

• temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company can control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

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

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which they can be used. The existence of unused tax losses is strong

evidence that future taxable profit may not be available. Therefore, in case of a history of recent losses, the Company recognises a deferred tax asset only to the extent that it has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable profit will be available against which such deferred tax asset can be realised. Deferred tax assets -unrecognized or recognised, are reviewed at each reporting date and are recognised/ reduced to the extent that it is probable/ no longer probable respectively that the related tax benefit will be realised. Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously

k. Provisons and Contingent Liabilities

Provisions : Provisions for legal claims, service warranties are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses. Provisions are measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.Contingent Liabilities : Contingent liabilities are disclosed when there is a possible obligation arising from past events, 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 or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

l. Earnings per share

(i) Basic earnings per share: - Basic earnings per share is calculated by dividing:

• the profit attributable to owners of the Company

• by the weighted average number of equity shares outstanding during the fiscal year

(ii) Diluted earnings per share: -

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:

• the after-income tax effect of interest and other financing costs associated with dilutive potential equity shares, and

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

m. Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The management assesses the financial performance and position of the Company and makes strategic decisions. The chief operating decision maker, consists of the Managing Director and Chairman of the Company.

n. Cash and Cash Equivalents

The Company''s statement of cash flows is prepared using the Indirect method, whereby profit for the period is adjusted for the effect of transaction of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payment and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

Cash and cash equivalents comprise cash and bank balances and short-term fixed bank deposits that are subject to an insignificant risk of changes in value. These also include bank overdrafts and cash credit facility that form an integral part of the Company''s cash management.

o. Current and Non Current Classification

The Schedule III to the Act requires assets and liabilities to be classified as either current or noncurrent. The Company presents assets and liabilities in the balance sheet based on current/non-current classification.

Assets

An asset is classified as current when it satisfies any of the following criteria:

(i) it is expected to be realised in, or is intended for sale or consumption in, the Company''s normal operating cycle;

(ii) it is expected to be realised within twelve months from the reporting date;

(iii) it is held primarily for the purposes of being traded; or

(iv) it is 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 date. All other assets are classified as non

current

Liabilties

A liability is classified as current when it satisfies any of the following criteria:

• it is expected to be settled in the Company''s normal operating cycle;

• it is due to be settled within twelve months from the reporting date;

• it is held primarily for the purposes of being traded; or

• the Company does not have an unconditional right to defer settlement of the liability for atleast twelve months from the reporting date.

All other liabilities are classified as non-current.

p. Operating Cycle

Operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents. Based on the nature of operations and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for current - non-current classification of assets and liabilities.

r. CSR Policy

Reference to the cited provisions of section 135 of the Companies Act, 2013, CSR activities are not applicable on the company.

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Mar 31, 2023

Note 2 : Significant Accounting Policies

The significant accounting policies applied by the Company in the preparation of its financial statements
are listed below. Such accounting policies have been applied consistently to all the periods presented in
these financial statements.

2.1 Basis of preparation of Financial Statements

a) Statement of compliance with Ind AS:

These financial statements are prepared in accordance with the Indian Accounting Standards
(hereinafter referred to as the ‘Ind AS'') notified under the Companies (Indian Accounting
Standards) Rules, 2015 (as amended from time to time) and presentation requirements of
Division II of Schedule III to the Companies Act, 2013 (Ind AS compliant schedule III), as are
applicable.

b) Basis of measurement

These financial statements are prepared under the historical cost convention except for the
following material items that have been measured at fair value as required by relevant Ind AS :

- certain financial assets (including derivative financial instruments) that are measured at
fair value;

- share based payments;

- defined benefit plans - plan assets measured at fair value;

- certain property, plant and equipment measured at fair value (viz leasehold land and
freehold land) which has been considered as deemed cost.

The fair values of financial instruments measured at amortised cost are required to be
disclosed in the said financial Historical cost is generally based on the fair value of the
consideration given in exchange for assets.

Fair value measurement :

Fair value is the price that would be received on sale of an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date (that is, an exit
price). It is a market-based measurement, not an entity- specific measurement. 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, or

- In 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 best
economic interest.

A 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.

The Company uses valuation techniques that are appropriate in the circumstances and for
which sufficient data is available to measure fair value, maximizing the use of relevant
observable inputs and minimising the use of unobservable inputs.

Where required/appropriate, external valuers are involved.

All financial assets and liabilities for which fair value is measured or disclosed in the financial
statements are categorised within the fair value hierarchy established by Ind AS 113, that
categorises into three levels, the inputs to valuation techniques used to measure fair value.
These are based on the degree to which the inputs to the fair value measurements
are observable and the significance of the inputs to the fair value measurement in its entirety:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities
that the entity can access at the measurement date.

Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable
for the asset or liability, either directly(i.e. as prices) or indirectly(i.e. derived from prices).

Level 3 inputs are unobservable inputs for the asset or liability.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active
markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to
unobservable inputs (Level 3 inputs).

For financial assets and liabilities maturing within one year from the Balance Sheet date and
which are not carried at fair value, the carrying amount approximates fair value due to the
short maturity of these instruments.

The Company recognises transfers between levels of fair value hierarchy at the end of
reporting period during which change has occurred.

c) Current 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:

- Expected to be realised or intended to be sold or consumed in normal operating cycle

- Held primarily for the purpose of trading

- Expected to be realised within twelve months after the reporting period, or

- Cash or cash equivalent unless 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.

A liability is current when:

- It is expected to be settled in normal operating cycle

- It is held primarily for the purpose of trading

- It is due to be settled within twelve months after the reporting period, or

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

The Company classifies all other liabilities as non-current.

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
realisation in cash and cash equivalents. Based on the nature of products / services and time
between acquisition of assets for processing / rendering of services and their realization in
cash and cash equivalents, operating cycle is less than 12 months. However, for the purpose
of current/non-current classification of assets & liabilities period of 12 months has been
considered as normal operating cycle.

d) Functional and presentation currency

Items included in the financial statements of the Company are measured using the
currency of the primary economic environment in which the Company operates (i.e. the
“functional currency”). The financial statements are presented in Indian Rupee, the national
currency of India, which is the functional currency of the Company.

e) Rounding of amounts :

All amounts disclosed in the financial statements and notes are in Indian Rupees as permitted
by Schedule III to the Companies Act, 2013, unless otherwise stated.

2.2 Use of estimates

The preparation of financial statements in conformity with the recognition and measurement
principles of the Ind AS requires management to make judgements, estimates and assumptions
that affect the application of the accounting policies and the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities on the date of the financial statements,
and the reported amounts of revenues, expenses and the results of operations during the reporting
period. Actual results could differ from those estimates. The estimates and underlying assumptions
are reviewed on an "ongoing basis". Such estimates & assumptions are based on management
evaluation of relevant facts & circumstances as on date of financial statements. Revisions to
accounting estimates are recognised in the period in which the estimate is revised if the revision
affects only that period; they are recognised in the period of the revision and future periods if the
revision affects both current and future periods.

2.3 Revenue recognition
Sale of goods

Revenue from contract with customers is recognised when the Company satisfies performance
obligation by transferring promised goods and services to the customer. Performance obligations
are satisfied at the point of time when the customer obtains controls of the asset.

Revenue is measured based on transaction price, which is the fair value of the consideration
received or receivable, stated net of discounts, returns and goods and services tax. Transaction
price is recognised based on the price specified in the contract, net of the estimated sales
incentives/discounts. Accumulated experience is used to estimate and provide for the discounts/
right of return, using the expected value method.

Revenue (other than sale)

Revenue (other than sale) is recognised to the extent that it is probable that the economic benefits
will flow to the Company and the revenue can be reliably measured.

Insurance Claims

Insurance claims are accounted for on the basis of claims admitted and to the extent that there is no
uncertainty in receiving the claims.

Export benefits / incentives constituting Duty Draw back, incentives under FPS / FMS / MEIS /
RoDTEP and duty free advance license scheme are accounted for on accrual basis where there is
reasonable assurance that the Company will comply with the conditions attached to them and the
export benefits will be received.

Interest Income

Interest income is recognized on a time proportion basis taking into account the amount
outstanding and the applicable effective interest rate (EIR). EIR is the rate that exactly discounts
the estimated future cash payments or receipts over the expected life of a financial liability or a
financial asset to their gross carrying amount.

Dividend

Dividend income is recognized when the Company''s right to receive dividend is established by the
reporting date, which is generally when shareholders approve the dividend.

2.4 Property, plant and equipment (PPE)

Property, plant and equipment is stated at acquisition cost net of accumulated depreciation and
accumulated impairment losses, if any. Subsequent costs are included in the asset''s carrying
amount or recognised as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Company and the cost of the item can be
measured reliably. All other repairs and maintenance are charged to the Statement of Profit and
Loss during the period in which they are incurred.

Cost of an item of property, plant and equipment comprises -

(i) its purchase price, including import duties and non -refundable purchase taxes (net of duty/
tax credit availed), after deducting trade discounts and rebates.

(ii) any costs directly attributable to bringing the asset to the location and condition necessary for
it to be capable of operating in the manner intended by management.

(iii) borrowing cost directly attributable to the qualifying asset in accordance with accounting
policy on borrowing cost.

(iv) the costs of dismantling, removing the item and restoring the site on which it is located.

PPE in the course of construction for production, supply or administrative purposes are carried at
cost, less any recognised impairment loss. Cost includes direct costs, related pre-operational
expenses and for qualifying assets applicable borrowing costs to be capitalised in accordance with
the Company''s accounting policy. Administrative, general overheads and other indirect
expenditure (including borrowing costs) incurred during the project period which are not directly
related to the project nor are incidental thereto, are expensed.

Property, plant and equipment which are not ready for intended use as on the date of Balance
Sheet are disclosed as “Capital work-in-progress”. They are classified to the appropriate
categories of property, plant and equipment when completed and ready for intended use.
Depreciation of these assets, on the same basis as other items of PPE, commences when the
assets are ready for their intended use.

Capital work-in-progress are carried at cost, comprising direct cost, related incidental expenses
and attributable borrowing cost, less impairment losses if any.

An item of property, plant and equipment is derecognized upon disposal or when no future
economic benefits are expected to arise from the continued use of asset. Any gain or loss arising on
the disposal or retirement of an item of property, plant and equipment is determined as the
difference between the sales proceeds and the carrying amount of the asset and is recognised in
the Statement of Profit and Loss.

The Company identifies and determines cost of each component/part of the plant and equipment
separately, if the component/part has a cost which is significant to the total cost of the plant and
equipment and has useful life that is materially different from that of the remaining plant and
equipment.

Machinery spares which meets the criteria of PPE is capitalized and depreciated over the useful life
of the respective asset

On transition to IndAS :

Under the Previous GAAP, all property, plant and equipment were carried at in the Balance Sheet
on basis of historical cost. In accordance with provisions of Ind AS 101 First time adoption of Indian
Accounting Standards, the Company, for certain properties, has elected to adopt fair value and
recognized as of April 1, 2016 as the deemed cost as of the transition date. The resulting
adjustments have been directly recognized in retained earnings. The balance assets have been
recomputed as per the requirements of Ind AS retrospectively as applicable.

Depreciation:

Depreciation on Property, Plant & Equipment (other than freehold land and capital work in
progress) is provided on the straight line method, based on their respective estimate of useful lives,
as given below. Estimated useful lives of assets are determined based on internal assessment
estimated by the management of the Company and supported by technical advice wherever so
required. The management believes that useful lives currently used, which is as prescribed under
Schedule II to the Companies Act, 2013, fairly reflect its estimate of the useful lives and residual
values of Property, Plant & Equipment ( considered at 5% of the original cost), though these lives in
certain cases are different from lives prescribed under Schedule
*Based on internal technical evaluation and external advise received, the management believes
that the useful lives as considered for arriving at the depreciation rates, best represent the period
over which management expect to use these assets. Hence, the useful lives for these assets is
different from the useful lives as prescribed under Part C of Schedule II of the Companies Act,
2013.

Assets individually costing Rs. 5000 or less are fully depreciated in the year of acquisition.

Depreciation of an asset begins when it is available for use, i.e., when it is in the location and
condition necessary for it to be capable of operating in the manner intended by management.
Depreciation of an asset ceases at the earlier of the date that the asset is retired from active use
and is held for disposal and the date that the asset is derecognised.

Depreciation methods, useful lives and residual values are reviewed periodically including at the
end of each financial year. Any changes in depreciation method, useful lives and residual values
are treated as a change in accounting estimate and applied/adjusted prospectively, if appropriate.

Measurement of Fair Value:

a) Fair value hierarchy:

The fair value of freehold and leasehold land has been determined by external, independent
property valuers, having appropriate recognised professional qualifications and experience in
the category of the property being valued. The fair value measurement has been categorised
as level 2 fair value based on the inputs to the valuations technique used.

b) Valuation technique:

Value of the property has been arrived at using market approach using market corroborated
inputs. Adjustments have been made for factors specific to the assets valued including
location and condition of the assets, the extent to which input relate to items that are
comparable to the assets and the volume or the level of activity in the markets within which the
inputs are observed.

2.5 Intangible assets

Identifiable intangible assets are recognised when the Company controls the asset, it is probable
that future economic benefits attributed to the asset will flow to the Company and the cost of the
asset can be reliably measured.

At initial recognition, the separately acquired intangible assets with finite useful lives are
recognised at cost of acquisition. Following initial recognition, the intangible assets are carried at
cost less any accumulated amortisation and accumulated impairment losses, if any.

Intangible assets not ready for the intended use on the date of the balance sheet are disclosed as
‘intangible assets under development".

Intangible assets are derecognised (eliminated from the balance sheet) on disposal or when no
future economic benefits are expected from its use and subsequent disposal.

Gains or losses arising from the retirement or disposal of an intangible asset are determined as the
difference between the net disposal proceeds and the carrying amount of the asset are recognised
as income or expense in the statement of profit

Deemed cost on transition to IndAS:

Under the Previous GAAP, all Intangible assets were carried at in the Balance Sheet on basis of
historical cost. The Company has elected to continue with the carrying value of all of its intangible
assets recognised as of April 1,2016 (the transition date) measured as per the previous GAAP and
use such carrying value as its deemed cost as of the transition date.

Amortisation:

Intangible assets are amortised on a straight line basis over the estimated useful lives of respective
assets from the date when the asset are available for use, on pro-rata basis.

The amortisation period and the amortisation method for finite-life intangible assets is reviewed at
each financial year end. Changes in the expected useful life or the expected pattern of
consumption of future economic benefits embodied in the asset are considered to modify the
amortisation period or method, as appropriate, and are treated as changes in accounting estimates
and adjusted prospectively.

2.6 Financial Instruments
Financial Assets:

Initial recognition and measurement:

Financial assets are recognised when the Company becomes a party to the contractual provisions
of the instrument.

On initial recognition, a financial asset is recognised at fair value, except for trade receivables
which are initially measured at transaction price. In case of financial assets which are recognised at
fair value through profit and loss (FVTPL), its transaction costs are recognised in the statement of
profit and loss. In other cases, the transaction costs are added to or deducted from the fair value of
the financial assets.

Financial assets are subsequently classified and 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 are solely payments of principal and interest on the principal
amount outstanding)

- fair value through profit and loss (FVTPL)

- fair value through other comprehensive income (FVOCI).

Equity Instruments:

Investment in subsidiaries are measured at cost less impairment losses, if any.

All investments in equity instruments in scope of Ind AS 109 classified under financial assets are
initially measured at fair

If the equity investment is not held for trading, the Company may, on initial recognition, irrevocably
elect to measure the same either at FVOCI or FVTPL. The Company makes such election on an
instrument-by-instrument basis. Equity Instruments which are held for trading are classified as
measured at FVTPL.

Fair value changes on an equity instrument is recognised as other income in the Statement of Profit
and Loss unless the Company has elected to measure such instrument at FVOCI. Fair value
changes excluding dividends, on an equity instrument measured at FVOCI are recognized in OCI.
Amounts recognised in OCI are not subsequently reclassified to the Statement of Profit and Loss.
Dividend income on the investments in equity instruments are recognised as ‘other income'' in the
Statement of Profit and Loss.

The Company does not have any equity investments designated at FVOCI.

Derivative financial instruments:

The Company uses derivative financial instruments, such as forward currency contracts to mitigate
its foreign currency risks and interest rate risks. Such derivative financial instruments are recorded
at fair value. Derivatives are carried as financial assets when the fair value is positive and as
financial liabilities when the fair value is negative.

The purchase contracts that meet the definition of a derivative under Ind AS 109 are recognised in
the statement of profit and loss.

Any gains or losses arising from changes in the fair value of derivatives are taken directly to
statement of profit or loss.

Derecognition:

The Company derecognises a financial asset when the contractual rights to the cash flows from
the financial asset expire, or it transfers the contractual rights to receive the cash flows from the
asset.

Impairment of Financial Asset:

In accordance with IndAS 109, the Company applies the expected credit loss (”ECL”) model for
measurement and recognition of impairment loss on financial assets and credit risk exposures.
The Company follows ‘simplified approach'' for recognition of impairment loss allowance on trade
receivables or contract revenue receivables. Simplified approach does not require the Company to
track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECL
at each reporting date, right from its initial recognition. This involves use of provision matrix
constructed on the basis of historical credit loss experience and adjusted for forward looking
information. The expected credit loss allowance is based on the ageing of the receivables that are
due and the rates used in the provision matrix.

For recognition of impairment loss on other financial assets and risk exposure, the Company
determines that whether there has been a significant increase in the credit risk since initial
recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for
impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a
subsequent period, credit quality of the instrument improves such that there is no longer a
significant increase in credit risk since initial recognition, then the entity reverts to recognising
impairment loss allowance based on 12-month ECL.

ECL is the difference between all contractual cash flows that are due to the Company in
accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash
shortfalls), discounted at the original EIR. Lifetime ECL are the expected credit losses resulting
from all possible default events over the expected life of a financial instrument. The 12-month ECL
is a portion of the lifetime ECL which results from default events that are possible within 12 months
after the reporting date.

The Company measures the expected credit loss associated with its assets based on historical
trend, industry practices and the business environment in which the entity operates or any other
appropriate basis. The impairment methodology applied depends on whether there has been a
significant increase in credit risk.

ECL impairment loss allowance (or reversal) recognised during the period is recognised as
income/ expense in the Statement of Profit and Loss.

Financial Liabilities and equity instruments:

Classification as debt or equity

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.

Equity instruments

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 the Company are recognised at the
proceeds received, net of direct issue costs.

Financial liabilities

Initial recognition and measurement:

Financial liabilities are recognised when the Company becomes a party to the contractual
provisions of the instrument.

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through
profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments
in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and,
in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The fair value of a financial instrument at initial recognition is normally the transaction price. If the
Company determines that the fair value at initial recognition differs from the transaction price,
difference between the fair value at initial recognition and the transaction price shall be recognized
as gain or loss unless it qualifies for recognition as an asset or liability. This normally depends on
the relationship between the lender and borrower or the reason for providing the loan. Accordingly
in case of interest-free loan from promoters to the Company, the difference between the loan
amount and its fair value is treated as an equity contribution to the Company.

In accordance with Ind AS 113, the fair value of a financial liability with a demand feature is not less
than the amount payable on demand, discounted from the first date that the amount could be
required to be paid.

The Company''s financial liabilities include trade and other payables and loans and borrowings
including bank overdrafts.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at
amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the
liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and
fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs
in the statement of profit and loss, unless and to the extent capitalised as part of costs of an asset.

The effective interest method is a method of calculating the amortised cost of a financial liability and
of allocating interest expense over the relevant period. The effective interest rate is the rate that
exactly discounts estimated future cash payments (including all fees and points 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 net carrying amount on initial recognition.

Trade and other payables

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.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled
or expires. When an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the derecognition of the original liability and the recognition
of a new liability. The difference in the respective carrying amounts is recognised in the statement
of profit or loss.

Off setting of Financial Instruments

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

2.7 Impairment of Non-financial assets

The carrying amounts of non-financial assets other than inventories are assessed at each
reporting date to ascertain whether there is any indication of impairment. If any such indication
exists then the asset''s recoverable amount is estimated. An impairment loss is recognised, as an
expense in the Statement of Profit and Loss, for the amount by which the asset''s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset''s fair value less
cost to sell and value in use. Value in use is ascertained through discounting of the estimated future
cash flows using a discount rate that reflects the current market assessments of the time value of
money and the risk specific to the assets. For the purpose of assessing impairment, assets are
grouped at the lowest levels into cash generating units for which there are separately identifiable
cash flows.

Impairment losses recognised in prior years are reversed when there is an indication that the
impairment losses recognised no longer exist or have decreased. Such reversals are recognised
as an increase in carrying amounts of assets to the extent that it does not exceed the carrying
amounts that would have been determined (net of amortization or depreciation) had no impairment
loss been recognised in previous years.

2.8 Borrowing costs

Borrowing costs comprises interest expense on borrowings calculated using the effective interest
method and exchange differences arising from foreign currency borrowings to the extent that they
are regarded as an adjustment to interest costs.

The effective interest method is a method of calculating the amortised cost of a financial asset
or a financial liability and of allocating the interest income or interest expense over the relevant
period.

The effective interest rate (EIR) is the rate that exactly discounts estimated future cash payments or
receipts through the expected life of the financial instrument or, when appropriate, a shorter period
to the net carrying amount of the financial asset or financial liability. EIR calculation does not
include exchange differences.

Borrowing costs that are directly attributable to the acquisition, construction or production of a
qualifying asset, which are assets that necessarily take a substantial period of time considering
project as a whole to get ready for their intended use or sale, are included in the cost of those
assets. Such borrowing costs are capitalised as part of the cost of the asset when it is probable that
they will result in future economic benefits to the entity and the costs can be measured reliably.
Other borrowing costs are recognised as an expense in the period in which they are incurred.

The Capitalisation of borrowing costs as part of the cost of a qualifying asset commences when
expenditure for the asset is being incurred, borrowing costs are being incurred and activities that
are necessary to prepare the asset for its intended use or sale are in progress.

Capitalisation of borrowing costs is suspended or ceases when substantially all the activities
necessary to prepare the qualifying asset for its intended use or sale are interrupted or completed.

Investment income earned on the temporary investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the borrowing costs eligible for Capitalisation.

2.9 Foreign currency transactions

The financial statements are presented in Indian Rupees (INR), the functional currency of the
Company. Items included in the financial statements of the Company are recorded using the
currency of the primary economic environment in which the Company operates (the ‘functional
currency'').

Foreign currency transactions are translated into the functional currency using exchange rates at
the date of the transaction. Foreign exchange gains and losses from settlement of these

transactions, and from translation of monetary assets and liabilities at the reporting date exchange
rates are recognised in the Statement of Profit and Loss.

Non-monetary assets and liabilities denominated in a foreign currency and measured at historical
cost are translated at the exchange rate prevalent at the date of transaction.

Under Previous GAAP, the Company had opted for paragraph 46A of Accounting Standard for
''Effect of Changes in Foreign Exchange Rates'' (AS 11) which provided an alternative accounting
treatment whereby exchange differences arising on long term foreign currency monetary items
relating to depreciable capital asset can be added to or deducted from the cost of the asset and
should be depreciated over the balance life of the asset.

Ind AS 101 includes an optional exemption that allows a first-time adopter to continue the above
accounting treatment in respect of the long-term foreign currency monetary items recognised
in the financial statements for the period ending immediately before the beginning of the first
Ind AS financial reporting period as per the previous GAAP. The Company has elected to avail this
optional exemption. However, the capitalization of exchange differences is not allowed on any new
long term foreign currency monetary item recognized from the first Ind AS financial reporting
period.

2.10 Inventories

Inventories are valued at the lower of cost and net realisable value.

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

- Raw materials, stores and spares: cost includes cost of purchase (viz. the purchase price,
import duties and other taxes (other than those subsequently recoverable by the entity from
the taxing authorities), and transport, handling and other costs directly attributable to the
acquisition and is net of trade discounts, rebates and other similar items) and other costs
incurred in bringing the inventories to their present location and condition. Cost is determined
on Moving Weighted Average Method.

- Materials and other supplies 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.

- Spare parts, which do not meet the definition of property, plant and equipment are classified as
inventory.

- Finished goods and work in progress: cost includes cost of direct materials and labour and a
proportion of manufacturing overheads based on the normal operating capacity, but excluding
borrowing costs.

- Traded goods: cost includes cost of purchase and other costs incurred in bringing the
inventories To their present Location and condition. cost is determined on first in first out basis.

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.

Obsolete, slow moving and defective inventories are identified from time to time and, where
necessary, a provision is made for such inventories.

2.11 Employee benefits
Short-term employee benefits:

All employee benefits payable wholly within twelve months of rendering the service are classified
as short-term employee benefits. Benefits such as salaries, wages, social security contributions,
short term compensated absences (paid annual leaves) etc. are measured on an undiscounted
basis at the amounts expected to be paid when the liabilities are settled and are expensed in the
period in which the employee renders the related service.

i) Defined contribution plan

The defined contribution plan is post employment benefit plan under which the Company
contributes fixed contribution to a government administered fund and will have no obligation to
pay further contribution. The Company''s defined contribution plan comprises of Provident
Fund, Employee State Insurance Scheme and Labour Welfare Fund. The Company''s
contribution to defined contribution plans are recognized in the Statement of Profit and Loss in
the period in which employee renders the related service.

ii) Defined benefit plan

The Company''s obligation towards gratuity liability is a "defined benefit" obligation. The
present value of the defined benefit obligations is determined on the basis of actuarial
valuation using the projected unit credit method. The rate used to discount "defined benefit
obligation" is determined by reference to market yields at the Balance Sheet date on Indian
Government Bonds for the estimated term of obligations.

The amount recognised as ‘Employee benefit expenses'' in the Statement of Profit and Loss is the
cost of accruing employee benefits promised to employees over the current year and the costs of
individual events such as past/future service benefit changes and settlements (such events are
recognised immediately in the Statement of Profit and Loss).

The amount of net interest expense, calculated by applying the liability discount rate to the net
defined benefit liability or asset, is charged or credited to ‘Finance costs'' in the Statement of Profit
and Loss.

Re-measurement of net defined benefit liability/ asset pertaining to gratuity comprise of actuarial
gains/ losses (i.e. changes in the present value of the defined benefit obligation resulting from
experience adjustments and effects of changes in actuarial assumptions), the return on plan
assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest) and is
recognised immediately in the balance sheet with a charge or credit recognised in other
comprehensive income in the period in which they occur. Re-measurements are not reclassified to
profit or loss account in subsequent periods.

Other long-term employee benefit obligations:

The liabilities for earned leave that are not expected to be settled wholly within 12 months are
measured as the present value of expected future payments to be made in respect of services
provided by employees up to the end of the reporting period using the projected unit credit method.
The benefits are discounted using the market yields at the end of the reporting period that have
terms approximating to the terms of the related obligation. Remeasurements as a result of
experience adjustments and changes in actuarial assumptions are recognised in the Statement of
Profit and Loss. Accumulated leave, which is expected to be utilized within the next 12 months, is
treated as short term employee benefit.

2.12 Government Grant:

Government grants are recognised only when there is reasonable assurance that the
Company will comply with the conditions attaching to them and the grants will be received.

Government grants are recognised in profit or loss on a systematic basis over the periods in which
the Company recognises as expenses the related costs for which the grants are intended to
compensate.

a) related to or used for assets are included in the Balance Sheet as deferred income and
recognised as income in profit or loss on a systematic basis over the useful life of the assets.

b) related to an expense item is recognised in the statement of profit and loss on a systematic
basis over the periods that the related costs, for which it is intended to compensate, are
expensed and presented as deduction from the related/relevant expense.

In the unlikely event that a grant previously recognised is ultimately not received, it is treated as a
change in estimate and the amount cumulatively recognised is expensed in the Statement of Profit
and Loss.

Export benefits available under prevalent schemes are accrued in the year in which the goods are
exported and there is no uncertainty in receiving the same.

2.13 Non-current assets held for sale and discontinued operations

Non-current assets (or disposal group) are classified as "held for sale" if their carrying amount will
be recovered principally through a sale transaction rather than through continuing use. The criteria
for "held for sale" is regarded as met only when the assets is available for immediate sale in its
present condition, subject only to terms that are usual and customary for sale of such assets, its
sale is highly probable; and it will genuinely be sold, not abandoned.

Non-current assets held for sale are measured at the lower of their carrying amount and fair value
less costs to sell, except for assets such as deferred tax assets, assets arising from employee
benefits, financial assets and contractual rights under insurance contracts, which are specifically
exempt from this requirement.

If the criteria for held for sale is no longer met, the asset ceases to be classified as held for sale and
the asset shall be measured at the lower of :

(a) its carrying amount before the asset was classified as held for sale, adjusted for any
depreciation, amortisation or revaluations that would have been recognised had the asset not
been classified as held for sale, and

(b) its recoverable amount at the date of the subsequent decision not to sell.

An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal
group) to fair value less costs to sell. A gain is recognised for any subsequent increase in fair value
less costs to sell of an asset (or disposal group), but not in excess of any cumulative impairment
loss previously recognised. A gain or loss not previously recognised by the date of the sale of the
non-current asset (or disposal group) is recognised at the date of de-recognition.

Property, plant and equipment and intangible assets once classified as "held for sale" are not
depreciated or amortised.

A discontinued operation is a component of an entity that either has been disposed of, or is
classified as held for sale, and:

- represents a separate major line of business or geographical area of operations,

- is part of a single coordinated plan to dispose of a separate major line of business or
geographical area of operations.

Non-current assets classified as held for sale and the assets of a disposal group classified as held
for sale are presented separately from the other assets in the balance sheet. The liabilities of a
disposal group classified as held for sale are presented separately from other liabilities in the
balance sheet.

Discontinued operations are excluded from the results of continuing operations and are presented
as profit or loss before / after tax from discontinued operations in the statement of profit and loss.

2.14 Taxation

Tax expense comprises of current and deferred tax and includes any adjustments related to past
periods in current and/or deferred tax adjustments that may become necessary due to certain
developments or reviews during the relevant period.

Current income tax:

Tax on income for the current period is determined on the basis of taxable income (or on the basis of
book profits wherever minimum alternate tax is applicable) and tax credits computed in accordance
with the provisions of the Income Tax Act 1961, and based on the expected outcome of
assessments/appeals.

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

Current income tax relating to items recognised, either in other comprehensive income or directly in
equity, is also recognized in other comprehensive income or in equity, as appropriate and not in the
Statement of Profit and Loss. Management periodically evaluates positions taken in the tax returns
with respect to situations in which applicable tax regulations are subject to interpretation and
establishes provisions where appropriate.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set
off the recognized amounts and there is an intention to settle the asset and the liability on a net
basis.

Deferred tax:

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

Deferred tax liabilities are recognised for all taxable temporary differences, except:

- When the deferred tax liability arises from the initial recognition of goodwill or an asset or
liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss

- In respect of taxable temporary differences associated with investments in subsidiaries,
associates and interests in joint arrangements, when the timing of the reversal of the
temporary differences can be controlled and it is probable that the temporary differences will
not reverse in the foreseeable future

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of
unused tax credits and any unused tax losses unabsorbed tax depreciation. Deferred tax assets
are recognised to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences, and the carry forward of unused tax credits and unused tax
losses can be utilised, except:

- When the deferred Tax asset relating to the deductible temporary difference arises from
the initial recognition of an Asset or Liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss

- In respect of deductible temporary differences associated with investments in subsidiaries,
associates and interests in joint arrangements, deferred tax assets are recognised only to the
extent that it is probable that the temporary differences will reverse in the foreseeable future
and taxable profit will be available against which the temporary differences can be utilized

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

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

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss.
Deferred tax items are recognised in correlation to the underlying transaction either in OCI or
directly in equity.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred taxes relate to the same taxable
entity and the same taxation authority.

Deferred Tax Assets include Minimum Alternative Tax (MAT) paid in accordance with the tax laws in
India, which is likely to give future economic benefits in the form of availability of set off against
future income tax liability. Accordingly, MAT is recognised as deferred tax assets in the Balance
sheet when the asset can be measured reliably and it is probable that the future economic benefit
associated with the asset will be realised.

Uncertain Tax Issue:

The company determines whether to consider each uncertain tax treatment separately or together
with one or more other uncertain tax treatments and uses the approach that better predicts the
resolution of the uncertainty.

In determining the approach that predicts the resolution of the uncertainty, the Company has
considered most likely amount method & expected value method. Company adopted most likely
amount method for resolution of the uncertainty of its tax treatment.

The company determined, based on its tax compliance that it is probable that its tax treatment will
be accepted by taxation authorities.

---

Mar 31, 2018

Note 1 Summary of Significant Accounting Policies

a. Basis of Preparation

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis, except for certain tangible assets which are being carried at revalued amounts. Pursuant to section 133 of the Companies Act, 2013 read with Rule 7(1) of the Companies (Accounts) Rules, 2014, till the standards of accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) of the Companies Act, 1956 [Companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act, 2013.

All assets and liabilities have been classified as current or non-current as per the Company’s operating cycle and other criteria set out in the Schedule III (Division I) to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current - non-current classification of assets and liabilities.

b. Tangible Assets

Tangible Assets are stated at cost, net of accumulated depre ciation and accumulated impairment losses, if any, except in case of land which is carried at revalued amount. Cost comprises of the purchase price including import duties and non-refundable taxes, and directly attributable expenses incurred to bring the asset to the location and condition necessary for it to be capable of being operated in the manner intended by management23. Subsequent costs related to an item of Property, Plant and Equipment are recognised in the carrying amount of the item if the recognition criteria are met.

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 net carrying amount and net realisable value and are shown separately in the financial statements under the head ‘Other current assets’. Any write-down in this regard is recognised immediately in the Statement of Profit and Loss.

Depreciation is provided on a pro-rata basis on the straight-line method over the estimated useful lives of the assets, based on technical evaluation done by management’s expert, which are higher than those specified by Schedule II to the Companies Act, 2013, in order to reflect the actual usage of the assets. The depreciation charge for each period is recognised in the Statement of Profit and Loss, unless it is included in the carrying amount of any other asset. The useful life, residual value and the depreciation method are reviewed atleast at each financial year end. If the expectations differ from previous estimates, the changes are accounted for prospectively as a change in accounting estimate.

The estimates of useful lives of tangible assets are as follows :

c. Investments

Investments that are readily realisable and are intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long term investments. Current investments are carried at cost or fair value, whichever is lower. Long-term investments are carried at cost. However, provision for diminution is made to recognise a decline, other than temporary, in the value of long-term investments, such reduction being determined and made for each investment individually.

d. Inventories

Inventories are stated at lower of cost and net realisable value. Cost is determined using the first-in, first-out (FIFO) method. The cost of finished goods and work in progress comprises design costs, raw materials, direct labour, other direct costs and related production overheads. 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.

e. Foreign Currency Translation Initial Recognition

On initial recognition, all foreign currency transactions are recorded by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Subsequent Recognition

As at the reporting date, non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. All non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

f. Revenue Recognition

Sale of goods: Sales are recognised when the significant risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract, which coincides with the delivery of goods and are recognised net of trade discounts, rebates, sales taxes and excise duties.

Sale of Services: In contracts involving the rendering of services, revenue is measured using the proportionate completion method when no significant uncertainty exists regarding the amount of the consideration that will be derived from rendering the service and are recognised net of service tax.

g. Other Income

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividend: Dividend income is recognized when the right to receive dividend is established.

h. Current and deferred Tax

Tax expense for the period, comprising current tax and deferred tax, are included in the determination of the net profit or loss for the period. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the taxation laws prevailing in the respective jurisdictions.

Deferred tax is recognised for all the timing differences, subject to the consideration of prudence in respect of deferred tax assets. Deferred tax assets are recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. In situations, where the Company has unabsorbed depreciation or carry forward losses under tax laws, all deferred tax assets are recognised only to the extent that there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. At each Balance Sheet date, the Company re-assesses unrecognised deferred tax assets, if any.

Current tax assets and current 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. Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off assets against liabilities representing current tax and where the deferred tax assets and the deferred tax liabilities relate to taxes on income levied by the same governing taxation laws.

Minimum Alternate Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence 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.

i. Provisions and Contingent Liabilities

Provisions: Provisions are recognised when there is a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance sheet date and are not discounted to its present value.

Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, 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 or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

j. Earning per Share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the Company’s earnings per share is the net profit for the period after deducting preference dividends and any attributable tax thereto for the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares that have changed the number of equity shares outstanding, without a corresponding change in resources. 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 is adjusted for the effects of all dilutive potential equity shares.

k. Segment Reporting

The accounting policies adopted for segment reporting are in conformity with the accounting policies adopted for the Company. Further, inter-segment revenue is accounted for based on the transaction price agreed to between segments which is primarily market based. Revenue and expenses is identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the Company as a whole and are not allocable to segments on a reasonable basis, are included under “Unallocated corporate expenses/income”.

l. Cash and Cash Equivalents

In the cash flow statement, cash and cash equivalents include cash in hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three months or less.