Nandani Creation Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2025

2. SIGNIFICANT ACCOUNTING POLICIES:

This note provides a list of the significant accounting policies adopted in the preparation of the standalone financial
statements. These policies have been consistently applied to all the years presented, unless otherwise stated.

a. SEGMENT REPORTING

Operating Segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker.

The Board of Directors assesses the financial performance and position of the Company and makes strategic
decisions and has been identified as chief operating decision maker (CODM).

b. REVENUE RECOGNITION

Revenue is recognized upon transfer of control of promised products to customers in an amount that reflects the
consideration expected to be received in exchange for those products or services. Revenue is measured at the fair
value of the consideration received or receivable. Amount disclosed as revenue are exclusive of goods and service
tax, net of returns, trade allowances and rebates.

Revenue is recognized when the Goods/ Services are delivered to customers.

c. INCOME TAX

The income tax expense or credit for the period is the tax payable on the current period''s taxable income based on
the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary

differences.

Tax expense comprises current and deferred tax. Current and deferred tax is recognised in profit or loss except to
the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the
tax is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end
of the reporting period. Management periodically evaluates positions taken in tax returns with respect to situations
in which applicable tax regulation is subject to interpretation and considers whether it is probable that a taxation
authority will accept an uncertain tax treatment. The Company measures its tax balances either based on the most
likely amount or the expected value, depending on which method provides a better prediction of the resolution of
the uncertainty.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the standalone financial statements. Deferred income
tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction that at the time
of the transaction affects neither accounting profit nor taxable profit (tax loss). Deferred income tax is determined
using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and
are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is
settled.

Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax
liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net
basis, or to realise the asset and settle the liability simultaneously.

d. LEASES

As a Lessee

Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is
available for use by the Group. Contracts may contain both lease and non-lease components. The Group allocates the
consideration in the contract to the lease and non-lease components based on their relative stand- alone prices.
However, for leases of real estate for which the Group is a lessee, it has elected not to separate lease and non-lease
components and instead accounts for these as a single lease component.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include net
present value of the following lease payments:

• Fixed payments (including in substance fixed payments), less any lease incentives receivable

• Variable lease payments that are based on an index or a rate, initially measured using the index or rate as at the
commencement date

• Amounts expected to be payable by the Group under residual value guarantees

• The exercise price of a purchase option if the Group is reasonably certain to exercise that option, and

• Payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the
liability. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily
determined, which is generally the case for lease in the Group, the lessee''s incremental borrowing rate is used, being
the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar
value to the right-of-use asset in similar economic environment with similar terms, security and conditions.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over
the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each
period.

Right-of-use assets are measured at cost comprising the following:

• The amount of the initial measurement of lease liability

• Any lease payments made at or before the commencement date less any lease incentives received

• Any initial direct costs, and

• Restoration costs.

Right-of-use assets are generally depreciated over the shorter of the asset''s useful life and the lease term on a
straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is
depreciated over the underlying asset''s useful life.

Payments associated with short-term leases of equipment and all leases of low value assets are recognised on a
straight-line basis as an expense in profit or loss. Short term leases are leases with a lease term of twelve months or
less.

e. IMPAIRMENT OF ASSETS

Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised 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 costs of disposal
and value in use. For the purposes of assessing impairment, assets are compared at the lowest levels for which there
are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or group
of assets (cash-generating units). Non-financial assets that suffered an impairment are reviewed for possible
reversal of the impairment at the end of each reporting period.

f. CASH AND CASH EQUIVALENTS

For the purpose of presentation in the cash flow statement, Cash and Cash Equivalents includes cash on hand,
deposits held at call with financial institutions, other short-term, other highly liquid investments with original
maturities of three months or less that are readily convertible to known amounts of cash and which are subject to
an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in
current liabilities in the balance sheet.

OTHER BANK BALANCES

Other bank balances consist of term deposits with banks, which have original maturities of more than three months.
Such assets are recognised and measured at amortized cost (including directly attributable transaction cost) using
the effective interest method, less impairment losses, if any.

g. TRADE RECEIVABLES

Trade receivables are amounts due from customers for goods/services sold in ordinary course of business. Trade
receivables are recognised initially at the amount of consideration that is unconditional. The Group holds the trade
receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at
amortized cost using effective interest method, less loss allowance.

h. INVENTORIES

Inventories are measured at the lower of cost and net realizable value.

Raw materials, stock-in-trade and stores and spares:

The cost of inventories is calculated on weighted average basis, and includes expenditure incurred in acquiring the
inventories and other costs incurred in bringing them to their present location and condition. Raw materials,
components and other supplies held for use in the production of finished products are not written down below cost
except in cases where material prices have declined and it is estimated that the cost of the finished products will
exceed their net realizable value.

Work-in-progress and finished goods:

Cost includes raw material costs and an appropriate share of fixed production overheads based on normal operating
capacity. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated
costs of completion and selling expenses. The net realizable value of work-in-progress is determined with reference
to the selling prices of related finished products.

i. INVESTMENTS AND OTHER FINANCIAL ASSETS

(i) Classification

The Group classifies its financial assets in the following measurement categories:

- those to be measured subsequently at fair value (either through other comprehensive income, or through profit
or loss), and

- those measured at amortised cost.

The classification depends on the entity''s business model for managing the financial assets and the contractual terms
of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in the statement of profit and loss or other
comprehensive income. For investments in equity instruments, this will depend on whether the Group has made an
irrevocable election at the time of initial recognition to account for the equity investment at fair value through other
comprehensive income (FVOCI).

The Group reclassifies debt investments when and only when its business model for managing those assets changes.

(ii) Recognition

Regular way purchases and sales of financial assets are recognised on trade date, on which the Group commits to
purchase or sale the financial asset.

(iii) Measurement

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not
at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial
asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

(iv) Debt Instruments

Subsequent measurement of debt instruments depends on the Group''s business model for managing the asset and
the cash flow characteristics of the asset. There are three measurement categories into which the Group classifies
its debt instruments:

- Amortised Cost: Assets that are held for collection of contractual cash flows where those cash flows represent
solely payments of principal and interest are measured at amortised cost.

Interest income from these financial assets is included in other income using the effective interest rate method. Any
gain or loss arising on derecognition is recognised directly in profit or loss and presented in other income or other
expenses. Impairment losses are presented as separate line item in the statement of profit and loss.

- Fair Value Through Other Comprehensive Income (FVOCI): Assets that are held for collection of contractual
cash flows and for selling the financial assets, where the assets'' cash flows represent solely payments of principal
and interest, are measured at fair value through other comprehensive income (FVOCI). Movements in the
carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest
revenue and foreign exchange gains and losses which are recognised in the statement of profit and loss. When
the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from
equity to the statement of profit and loss and recognised in other income. Interest income from these financial
assets is included in other income using the effective interest rate method. Foreign exchange gain and losses are
presented in other income and impairment expenses are presented as separate line item in statement of profit
and loss.

- Fair Value Through Profit or Loss: Assets that do not meet the criteria for amortised cost or FVOCI are
measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured
at fair value through profit or loss and is not part of a hedging relationship is recognised and presented net in
the statement of profit and loss within other income or other expenses in the period in which it arises. Interest
income from these financial assets is included in other income.

(v) Investments in Mutual Funds and Equity Instruments

Investment in mutual funds and equity instruments are classified as fair value through profit or loss as they are not
held within a business model whose objective is to hold assets in order to collect contractual cash flows and the
contractual terms of such assets do not give rise on specified dates to cash flows that are solely payments of principal

and interest on the principal amount outstanding. Where the Group''s management has elected to present fair value
gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of
fair value gains and losses to the statement of profit and loss. The Group makes such election on an instrument-by¬
instrument basis. The classification is made on initial recognition and is irrevocable. Dividends from such
investments are recognised in profit or loss as other income when the Group''s right to receive payments is
established.

(vi) Investments in Bonds

Investment in bonds are financial assets with fixed or determinable payments that are quoted in an active market.
These are classified as financial assets measured at fair value through other comprehensive income (FVTOCI)
as they fulfill the following conditions:

• Such assets are held within a business model whose objective is achieved both by collecting contractual cash
flows and by selling financial assets.

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

• The Group recognises these assets on the date when they are originated and are initially measured at fair value
plus any directly attributable transaction costs.

Changes in the fair value of such financial assets are recognised in Other Comprehensive Income (OCI). However,
interest income, impairment losses (and reversals), are recognised in the statement of profit and loss. On
derecognition, the cumulative gain or loss previously recognised in OCI is reclassified from equity to the statement
of profit and loss.

(vii) Impairment of Financial Assets

The Group assesses on a forward-looking basis the expected credit losses associated with its assets carried at
amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has
been a significant increase in credit risk.

For trade receivables only, the Group applies the simplified approach permitted by Ind AS 109 Financial
Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

(viii) Derecognition of Financial Assets

A financial asset is derecognized only when

- The Group has transferred the rights to receive cash flows from the financial asset or

- retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation
to pay the cash flows to one or more recipients.

Where the Group has transferred an asset, the Group evaluates whether it has transferred substantially all risks and
rewards of ownership of the financial asset. In such cases, the financial asset is derecognised. Where the Group has
not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not
derecognised.

Where the Group has neither transferred a financial asset nor retains substantially all risks and rewards of
ownership of the financial asset, the financial asset is derecognised if the Group has not retained control of the
financial asset. Where the Group retains control of the financial asset, the asset is continued to be recognised to the
extent of continuing involvement in the financial asset.

(ix) Income Recognition Interest Income

Interest income from financial assets at fair value through the profit or loss is disclosed as interest income within
other income. Interest income on financial assets at amortised cost and financial assets at FVOCI is calculated using
effective interest method is recognised in the statement of profit and loss as part of other income. Interest income is
calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for financial
assets that subsequently become credit impaired.

Dividends

Dividends are recognised in profit or loss only when the right to receive payment is established, it is probable that
the economic benefits associated with the dividend will flow to the Group, and the amount of the dividend can be
measured reliably.

j. Investment in Subsidiary

A subsidiary is an entity controlled by the Company. Control exists when the Company has power over the entity, is
exposed, or has rights to variable returns from its involvement with the entity and has the ability to affect those
returns by using its power over the entity. Power is demonstrated through existing rights that give the ability to
direct relevant activities, those which significantly affect the entity''s returns.

Investments in subsidiaries are carried at cost. The cost comprises price paid to acquire investment and directly
attributable cost.

k. OFFSETTING FINANCIAL INSTRUMENTS

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally
enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the
asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events
and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of
the Group or the counterparty.

l. PROPERTY, PLANT AND EQUIPMENT

All items of property, plant and equipment are stated at historical cost less depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the items. Cost comprises the purchase price, borrowing
costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for
its intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

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 Group and the cost of the
item can be measured reliably. The carrying amount of any component accounted for as a separate asset is
derecognized when replaced. All other repairs and maintenance are charged to Statement of profit and loss during
the reporting period in which they are incurred.

The useful lives have been determined based on technical evaluation done by the 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 residual values are not more than 5% of the original cost of the asset.

The assets'' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting
period.

An asset''s carrying amount is written down immediately to its recoverable amount if the asset''s carrying amount is
greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in
Statement of profit and loss within other income or other expenses.

m. INTANGIBLE ASSETS

Intangible assets that are acquired by the Group are measured initially at cost. All intangible assets are with finite
useful lives and are measured at cost less accumulated amortisation and impairment, if any.

Amortisation and Useful Lives

Intangible assets are amortised over the useful life and assessed for impairment whenever there is an indication
that the intangible asset may be impaired. The amortisation period and the amortisation method are reviewed at
the end of each reporting period.

Intangible assets comprise software having an estimated useful life of 10years.

n. TRADE AND OTHER PAYABLES

These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year
which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within
twelve months after the reporting period. They are recognised initially at their fair value and subsequently measured
at amortised cost using the effective interest method.

o. BORROWINGS

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees
paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn down. Borrowings are classified as current liabilities unless
the Group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting
period.

p. BORROWING COST

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a
qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its
intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for
their intended use or sale.

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.

Other borrowing costs are expensed in the period in which they are incurred.

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Mar 31, 2024

B. SIGNIFICANT ACCOUNTING POLICIES: -

1. Compliance with Indian Accounting Standards: -

The standalone financial statements are prepared in accordance with the IND AS as prescribed under section 133 of The Companies Act, 2013 read with Rule 3 of Companies (Indian Accounting Standard) Rules 2015 and other relevant provision of this Act.

The financial statements have been prepared on accrual and going concern basis. The accounting policies are applied consistently to all the periods presented in the financial statements. All the assets and liabilities have been classified as current and non-current as per the Company''s normal operating cycle and other criteria as set out in Division II of Schedule III to the Companies Act, 2013.

The standalone financial statements have been prepared on a Historical cost basis except for certain financial assets and liabilities that are measured at fair values.

2. Use of estimates and iudgements:-

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosure and the disclosure of contingent liabilities. Uncertainty about these estimates and assumptions could result in outcomes that requires material adjustments to the carrying amount of the assets and liabilities in future period/s.

These estimates and assumptions are based on the facts and events, that existed as at the date of Statement of Financial Position, or that occurred after that date but provide additional evidence about conditions existing as at the Statement of Financial Position date.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying values of assets and liabilities within the next financial year are discussed below.

I. Useful lives of Property, Plant and Equipment

The Property, Plant and Equipment are depreciated, on written down value basis in the case of other assets, over their respective useful lives. Management estimates the useful lives of these assets as detailed in Point 10. Changes in the expected level of usage, technological developments, level of wear and tear could impact the economic useful lives and the residual values of these assets, therefore, future depreciation charges could be revised and could have an impact on the profit/loss in future years.

II. Retirement benefit obligation

The cost of retirement benefits and present value of the retirement benefit obligations in respect of Gratuity is determined

using actuarial valuations. An actuarial valuation involves making various assumptions which may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and its long-term nature, these retirement benefit obligations are sensitive to changes in these assumptions.

All assumptions are reviewed at each reporting date. In determining the appropriate discount rate, management considers the interest rates of Government Bonds with a tenure similar to the expected working lifetime of the employees. The mortality rate is based on publicly available mortality table for the specific countries.

III. Fair value measurement of financial instrument

When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

3. Functional and presentation currency: -

The financial statements are prepared in Indian Rupees (''Rs.''), which is the Company''s functional and presentation currency. All financial information presented in Indian Rupees has been rounded to the lakhs with nearest two decimal places, unless stated otherwise.

4. Current versus non-current classification: -

The Company presents assets and liabilities in the balance sheet based on current / non-current classification.

An asset is classified as current when it is: -

• expected to be realized, or intended to be sold or consumed in normal operating cycle,

• held primarily for the purpose of trading,

• expected to be realized within 12 months after the reporting period; or

• cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

All other assets are classified as non-current.

A liability is classified as current when it is:

• expected to be settled in the normal operating cycle,

• held primarily for the purpose of trading,

• due to be settled within 12 months after the reporting date; or

• there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting date.

All other liabilities are classified as non-current.

Operating Cycle:

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

5. Revenue Recognition: -

Revenue has been recognized as per IND AS 18- Revenue Recognition issued by Central Government of India under the supervision and control of Accounting Standards Board (ASB) of Institute of Chartered Accountants of India. Revenue from sale of goods is recognized when significant risk and rewards of ownership of the goods have been passed to the buyer and it is reasonable to expect ultimate collection. Sale of goods is recognized net of GST and other taxes as the same is recovered from customers and passed on to the government

6. Taxes on Income: -

Tax expense for the year comprises of Current Tax and Deferred Tax. a) Current Tax

Current income tax, assets and liabilities are measured at the amount expected to be paid to or recovered from the taxation

authorities in accordance with the tax regime inserted by the Taxation Laws (Amendment) Act, 2019 in the Income Tax Act, 1961 and the Income Computation and Disclosure Standards (ICDS) enacted in India by using tax rates and the tax laws that are enacted at the reporting date.

b) Deferred Tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax assets and liabilities are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable 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. 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. Unrecognized 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 realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

For detailed breakup of current year deferred tax refer to sub note 7. (Notes to the accounts)

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Mar 31, 2023

B. SIGNIFICANT ACCOUNTING POLICIES: -

1. Compliance with Indian Accounting Standards: -

The standalone financial statements are prepared in accordance with the IND AS as prescribed under section 133 of The Companies Act, 2013 read with Rule 3 of Companies (Indian Accounting Standard) Rules 2015 and other relevant provision of this Act.

The financial statements have been prepared on accrual and going concern basis. The accounting policies are applied consistently to all the periods presented in the financial statements. All the assets and liabilities have been classified as current and non-current as per the Company''s normal operating cycle and other criteria as set out in Division II of Schedule III to the Companies Act, 2013.

The standalone financial statements have been prepared on a Historical cost basis except for certain financial assets and liabilities that are measured at fair values.

I. Useful lives of Property, Plant and Equipment

The Property, Plant and Equipment are depreciated, on written down value basis in the case of other assets, over their respective useful lives. Management estimates the useful lives of these assets as detailed in Point 10. Changes in the expected level of usage, technological developments, level of wear and tear could impact the economic useful lives and the residual values of these assets, therefore, future depreciation charges could be revised and could have an impact on the profit/loss in future years.

II. Retirement benefit obligation

The cost of retirement benefits and present value of the retirement benefit obligations in respect of Gratuity is determined using actuarial valuations. An actuarial valuation involves making various assumptions which may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and its long-term nature, these retirement benefit obligations are sensitive to changes in these assumptions.

All assumptions are reviewed at each reporting date. In determining the appropriate discount rate, management considers the interest rates of Government Bonds with a tenure similar to the expected working lifetime of the employees. The mortality rate is based on publicly available mortality table for the specific countries.

III. Fair value measurement of financial instrument

When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

3. Functional and presentation currency: -

The financial statements are prepared in Indian Rupees (''Rs.''), which is the Company''s functional and presentation currency. All financial information presented in Indian Rupees has been rounded to the lakhs with nearest two decimal places, unless stated otherwise.

4. Current versus non-current classification: -

The Company presents assets and liabilities in the balance sheet based on current / non-current classification.

An asset is classified as current when it is: -

• expected to be realized, or intended to be sold or consumed in normal operating cycle,

• held primarily for the purpose of trading,

• expected to be realized within 12 months after the reporting period; or

• cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

All other assets are classified as non-current.

A liability is classified as current when it is:

• expected to be settled in the normal operating cycle,

• held primarily for the purpose of trading,

• due to be settled within 12 months after the reporting date; or

• There is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting date.

All other liabilities are classified as non-current.

Operating Cycle:

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

5. Revenue Recognition: -

Revenue has been recognized as per IND AS 18- Revenue Recognition issued by Central Government of India under the supervision and control of Accounting Standards Board (ASB) of Institute of Chartered Accountants of India. Revenue from sale of goods is recognized when significant risk and rewards of ownership of the goods have been passed to the buyer and it is reasonable to expect ultimate collection. Sale of goods is recognized net of GST and other taxes as the same is recovered from customers and passed on to the government

6. Taxes on Income: -

Tax expense for the year comprises of Current Tax and Deferred Tax.

a) Current Tax

Current income tax, assets and liabilities are measured at the amount expected to be paid to or recovered from the taxation authorities in accordance with the tax regime inserted by the Taxation Laws (Amendment) Act, 2019 in the Income Tax Act, 1961 and the Income Computation and Disclosure Standards (ICDS) enacted in India by using tax rates and the tax laws that are enacted at the reporting date.

b) Deferred Tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax assets and liabilities are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable 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. 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. Unrecognized 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 realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

For detailed breakup of current year deferred tax refer to sub note 7. (Notes to the accounts)