Pajson Agro India Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

1. Summary of significant accounting policies and other explanatory information

1.1 Background

PAJSON AGRO INDIA LIMITED (formerly known as PAJSON AGRO INDIA PRIVATE LIMITED) (the "Company") was incorporated in India on 17 November 2021 and having its registered office at Office no. 510, 5th Floor, Pearl Omaxe Tower, Netaji Subhash Place, Pitampura, Shakur Pur I Block, North West Delhi, Delhi, India, 110034. Subsequently, Company was converted into Public Limited Company vide special resolution passed by our shareholders at the Extra Ordinary General Meeting held on December 24, 2024 and the name of the company was changed to PAJSON AGRO INDIA LIMITED pursuant to issuance of Fresh Certificate of Incorporation dated 8th February 2025 by Registrar of Companies, Delhi. The Corporate Identification Number of our company U01100DL2021PLC386740

The company is in the business of manufacturing and trading of Cashew Kernels and other dry fruit commodities having cashew manufacturing unit at Vishakhapatnam, Andhra Pradesh.

1.2 Basis of preparation of financial statements

The financial statements are prepared under historical cost convention on an accrual basis, in accordance with the generally accepted accounting principles in India and including the Accounting Standards specified under Section 133 of the Companies Act, 2013 (the ''Act'') read with the Companies (Accounts) Rules, 2021 (as amended), pronouncements of the Institute of Chartered Accountants of India and other accounting principles generally accepted in India, to the extent applicable. The Company has followed presentation and disclosures requirements are as per Schedule III (amended) notified under the Act.

These financial statements are presented in Indian Rupees (H), which is also the Company''s functional currency. All amounts have been rounded-off to the nearest lakhs and two decimals thereof, unless otherwise indicated. Transactions and balances with values below the rounding off norm adopted by the Company have been reflected as "0" in the relevant notes in these financial statements.

1.3 Use of estimates

The preparation of the financial statements in conformity with generally accepted accounting principles (GAAP)

requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and such differences are recognised in the period in which such results are known / materialise. Any revision to accounting estimates is recognised prospectively in current and future periods. Examples of such estimates include provisions for doubtful debts, income taxes, and the useful lives of Property, Plant and Equipment and intangible assets.

1.4 Current-non-current classification

All assets and liabilities are classified into current and noncurrent.

Assets

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

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

(b) it is held primarily for the purpose of being traded;

(c) it is expected to be realised within 12 months after the reporting date; or

(d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

Current assets include the current portion of non-current financial assets. All other assets are classified as noncurrent.

Liabilities

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

(a) it is expected to be settled in the Company''s normal operating cycle;

(b) it is held primarily for the purpose of being traded;

(c) it is due to be settled within 12 months after the reporting date; or

(d) the Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability that could, at the option of the counterparty, result

in its settlement by the issue of equity instruments do not affect its classification.

Current liabilities include current portion of non-current financial liabilities. All other liabilities are classified as noncurrent.

Operating cycle

The 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 being a period of 12 months for the purpose of classification of assets and liabilities as current and non-current.

1.5 Property, plant and equipment and depreciation

Property, plant and equipment are stated at cost less accumulated depreciation and / or accumulated impairment loss, if any. The cost of property, plant and equipment includes non-refundable taxes and duties, freight and other incidental expenses related to the acquisition and installation of the respective items of property, plant and equipment.

Subsequent expenditures related to an item of property, plant and equipment are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing property, plant and equipment, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the year during which such expenses are incurred.

Depreciation on tangible assets is provided on the straight-line method. Depreciation is provided over the useful lives of assets estimated by the management which are equal to the useful lives prescribed under Schedule II to the Companies Act, 2013.

Useful Life of Property, Plant and Equipments

The useful lives are reviewed by the management periodically and revised, if appropriate. In case of a revision, the unamortised depreciable amount is charged over the revised remaining useful life.

Depreciation on additions to property, plant and equipment is provided on pro-rata basis from the date the assets are ready for use. Depreciation on sale / deletion from property, plant and equipment is provided up to the date of sale / deletion.

An item of property, plant and equipment is derecognized from the financial statements on disposal or when no further benefit is expected from its use and disposal.

Gains or losses arising from derecognition of property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit and loss when the asset is derecognised.

Capital work in-progress represents expenditure incurred in respect of assets which are yet to be brought to it working condition for its intended use and are carried at cost. Cost includes related acquisition expenses, construction or development cost, borrowing costs capitalised and other direct expenditure.

.6 Intangible assets and amortisation

Intangible assets are carried at cost less accumulated amortisation and / or accumulated impairment loss, if any. Intangible assets are recognised when the asset is identifiable, is within the control of the Company, it is probable that the future economic benefits that are attributable to the asset will flow to the Company and cost of the asset can be reliably measured.

Intangible assets are amortised on a straight-line basis over the estimated useful life as specified in Schedule II of the Companies Act 2013. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss.

Computer software is amortised over six years and other intangibles (including goodwill) are amortised over a period of five years. The estimated useful life of intangible assets is reviewed by management at each Balance Sheet date.

Amortisation is provided on a pro-rata basis i.e. from the date on which asset is ready for use.

An intangible asset is derecognised on disposal or when no future economic benefits are expected from its use and disposal. Losses arising from retirement and gains or losses arising from disposal of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit and loss.

1.7 Investments

Investments that are readily realisable and intended to be held for not more than a year from the date of acquisition are classified as current investments. All other investments are classified as long-term investments. However, that part of long-term investments which is expected to be realised within 12 months after the reporting date is presented under current assets as "current portion of long-term investments".

Long-term investments (including current portion thereof) are carried at cost less any other-than-temporary diminution in value, determined separately for each category of investments.

Current investments are carried at the lower of cost and fair value. The comparison of cost and fair value is done separately in respect of each category of investments.

Any reductions in the carrying amount and any reversals of such reductions are charged or credited to the Statement of Profit and Loss.

1.8 Revenue recognition

Revenue is measured Based On consideration received or receivable and represents amounts receivable for goods provided in the normal course of business, net of discounts and other sales-related taxes. Revenue is recognised once the performance obligation has been met. This is deemed to be when the goods have been collected by, or delivered to, the customer in accordance with the agreed delivery terms.

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured in accordance with AS-9, Revenue Recognition as prescribed by ICAI. Sales are recognized on accrual basis, and only after transfer of goods to the customer.

Interest Income: Interest Income is recognized on accrual basis after taking into account the amount outstanding and the rate applicable.

Other Income: Other items of income and expenditure are recognized on accrual basis and as a going concern basis, and the accounting policies are consistent with the generally accepted accounting policies.

Insurance and other claims are accounted for on acceptance / actual receipt basis.

1.9 Inventories

Raw material, stores and spares and packing materials are valued at lower of cost and net realizable value. Cost includes purchase price, other costs incurred in bringing the inventories to their present location and condition, and includes non-refundable taxes. The cost is determined on the basis of First in First Out method. Cost of conversion are allocated on finished goods on the relative sales value of each product at the completion of production. Materials and other items held for use in the production of inventories are not written down below cost if the finished goods in which they will be incorporated are expected to be sold at or above cost. Obsolete, slow moving and defective inventories are identified at the time of physical verification and wherever necessary a provision is made.

Cost of work-in-progress includes appropriate proportion of overhead.

Finished goods are valued at lower of cost and net realisable value. Cost of inventories of finished goods includes cost of raw materials, direct and indirect overheads which are incurred to bring the inventories to their present location and condition.

By-products are valued at net realisable value.

Stock in trade are valued at lower of cost and net realisable value. Cost of stock-in-trade includes cost of purchase and other cost incurred in bringing the inventories to the present location and condition.

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

1.10 Impairment of Assets

The carrying amounts of property, plant and equipment including intangible assets are reviewed at each Balance Sheet date to determine whether there is any indication of impairment. If any such indication exists, the assets''

recoverable amount is estimated, as the higher of the net selling price and the value in use, which means the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. If at the Balance Sheet date, there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciable historical cost. Reversal of impairment loss is recognized immediately as income in the profit and loss account.

1.11 Employee benefits

Short-term employee benefits

Employee benefits payable wholly within twelve months of rendering the service are classified as short- term employee benefits and are recognised in the period in which the employee renders the related services.

Post-employment benefits

Defined benefit plans

The Company''s gratuity is a defined benefit plan. The Company''s net obligation in respect of a defined benefit plan is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. Any unrecognized past service costs and the fair value of any plan assets are deducted. The calculation of the Company''s obligation is performed annually by a qualified actuary using the projected unit credit method.

The Company recognizes all actuarial gains and losses arising from defined benefit plans immediately in the Statement of Profit and Loss. All expenses related to defined benefit plans are recognized in employee benefits expense in the Statement of Profit and Loss. When the benefits of a plan are improved, the portion of the increased benefit related to past service by employees is recognized in Statement of Profit and Loss on a straight line basis over the average period until the benefits become vested. The Company recognizes gains and losses on the curtailment or settlement of a defined benefit plan when curtailment or settlement occurs.

Defined contribution plans

The Company makes specified monthly contributions

towards employees'' provident fund, employees'' state insurance and superannuation fund schemes, which are defined contribution plans. The Company''s contribution is recognized as an expense in the Statement of Profit and Loss during the period in which employee renders the related service.

Other long-term benefits

Compensated absences

The employees can carry forward a portion of the unutilised accrued compensated absences and utilise it in future service periods or receive cash compensation on termination of employment. Since the compensated absences do not fall due wholly within twelve months after the end of the period in which the employees render the related service and are also not expected to be utilized wholly within twelve months after the end of such period, the benefit is classified as long-term employee benefits.

Liability with respect to compensated absences is determined based on an actuarial valuation done by an independent actuary at the year end.

1.12 Foreign currency transactions and translations

I. Initial Recognition:

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

II. Measurement:

Foreign currency monetary items are reported using the closing rate.

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.

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.

III. Treatment of Foreign Exchange:

Exchange differences arising on settlement/ restatement of foreign currency monetary assets and liabilities of the Company are recognized as income or expenses in the Statement of Profit and Loss.

1.13 Borrowing Cost

Borrowing cost includes interest and amortisation of ancillary costs incurred in connection with the arrangement of borrowings.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale capitalised as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

1.14 Taxation

Income-tax expense comprises current tax (i.e. amount of tax for the period determined in accordance with the income-tax law) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the period). The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantially enacted by the Balance Sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in future; however, where there is unabsorbed depreciation or carry forward of losses, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax assets are reviewed as at each Balance Sheet date and written down or written-up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realised.

1.15 Earnings per share (EPS)

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

1.16 Provisions, contingent liabilities and contingent assets

A provision is created when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent assets are neither recognised nor disclosed in the financial statements. However, contingent assets are assessed continually and if it is virtually certain that an inflow of economic benefits will arise, the asset and related income are recognised in the period in which the change occurs.

1.17 Contingencies

Provision in respect of loss contingencies relating to claims, litigation, assessment, fines, penalties, etc. are recognised when it is probable that a liability has been incurred, and the amount can be estimated reliably.

1.18 Cash and cash equivalents

Cash and cash equivalents comprise cash and cash deposits with banks. The Company considers all highly liquid investments with an original maturity at a date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

1.19 Cash Flow Statement

Cash flows are reported using indirect method, whereby net profit/loss before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments 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.

1.1. Background

PAJSON AGRO INDIA LIMITED (formerly known as PAJSON AGRO INDIA PRIVATE LIMITED) (the
"Company") was incorporated in India on 17 November 2021 and having its registered office at
Office no. 510, 5^th Floor, Pearl Omaxe Tower, Netaji Subhash Place, Pitampura, Shakur Pur I
Block, North West Delhi, Delhi, India, 110034. Subsequently, Company was converted into Public
Limited Company vide special resolution passed by our shareholders at the Extra Ordinary
General Meeting held on December 24, 2024 and the name of the company was changed to
PAJSON AGRO INDIA LIMITED pursuant to issuance of Fresh Certificate of Incorporation dated
8th February 2025 by Registrar of Companies, Delhi. The Corporate Identification Number of
our company U01100DL2021PLC386740

The company is in the business of manufacturing and trading of Cashew Kernels and other dry
fruit commodities having cashew manufacturing unit at Vishakhapatnam, Andhra Pradesh.

1.2. Basis of preparation of financial statements

The financial statements are prepared under historical cost convention on an accrual basis, in
accordance with the generally accepted accounting principles in India and including the
Accounting Standards specified under Section 133 of the Companies Act, 2013 (the ''Act'') read
with the Companies (Accounts) Rules, 2021 (as amended), pronouncements of the Institute of
Chartered Accountants of India and other accounting principles generally accepted in India, to
the extent applicable. The Company has followed presentation and disclosures requirements
are as per Schedule III (amended) notified under the Act.

These financial statements are presented in Indian Rupees (Rs.), which is also the Company''s
functional currency. All amounts have been rounded-off to the nearest lakhs and two decimals
thereof, unless otherwise indicated. Transactions and balances with values below the rounding
off norm adopted by the Company have been reflected as "0" in the relevant notes in these
financial statements.

1.3. Use of estimates

The preparation of the financial statements in conformity with generally accepted accounting
principles (GAAP) requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as
of the date of the financial statements and reported amounts of revenues and expenses during
the reporting period. Actual results could differ from these estimates and such differences are
recognised in the period in which such results are known / materialise. Any revision to
accounting estimates is recognised prospectively in current and future periods. Examples of
such estimates include provisions for doubtful debts, income taxes, and the useful lives of
Property, Plant and Equipment and intangible assets.

1.4. Current-non-current classification

All assets and liabilities are classified into current and non-current.

Assets

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

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

(b) it is held primarily for the purpose of being traded;

(c) it is expected to be realised within 12 months after the reporting date; or

(d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a
liability for at least 12 months after the reporting date.

Current assets include the current portion of non-current financial assets. All other assets are
classified as non-current.

Liabilities

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

(a) it is expected to be settled in the Company''s normal operating cycle;

(b) it is held primarily for the purpose of being traded;

(c) it is due to be settled within 12 months after the reporting date; or

(d) the Company does not have an unconditional right to defer settlement of the liability for at least
12 months after the reporting date. Terms of a liability that could, at the option of the
counterparty, result in its settlement by the issue of equity instruments do not affect its
classification.

Current liabilities include current portion of non-current financial liabilities. All other liabilities
are classified as non-current.

Operating cycle

The 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 being a period of 12 months for the purpose of
classification of assets and liabilities as current and non-current.

1.5. Property, plant and equipment and depreciation

Property, plant and equipment are stated at cost less accumulated depreciation and / or
accumulated impairment loss, if any. The cost of property, plant and equipment includes non-
refundable taxes and duties, freight and other incidental expenses related to the acquisition and
installation of the respective items of property, plant and equipment.

Subsequent expenditures related to an item of property, plant and equipment are added to its
book value only if they increase the future benefits from the existing asset beyond its previously
assessed standard of performance. All other expenses on existing property, plant and
equipment, including day-to-day repair and maintenance expenditure and cost of replacing
parts, are charged to the statement of profit and loss for the year during which such expenses
are incurred.

Depreciation on tangible assets is provided on the straight-line method. Depreciation is
provided over the useful lives of assets estimated by the management which are equal to the
useful lives prescribed under Schedule II to the Companies Act, 2013.

The useful lives are reviewed by the management periodically and revised, if appropriate. In
case of a revision, the unamortised depreciable amount is charged over the revised remaining
useful life.

Depreciation on additions to property, plant and equipment is provided on pro-rata basis from
the date the assets are ready for use. Depreciation on sale / deletion from property, plant and
equipment is provided up to the date of sale / deletion.

An item of property, plant and equipment is derecognized from the financial statements on
disposal or when no further benefit is expected from its use and disposal.

Gains or losses arising from derecognition of property, plant and equipment are measured as
the difference between the net disposal proceeds and the carrying amount of the asset and are
recognised in the statement of profit and loss when the asset is derecognised.

Capital work in-progress represents expenditure incurred in respect of assets which are yet to
be brought to it working condition for its intended use and are carried at cost. Cost includes
related acquisition expenses, construction or development cost, borrowing costs capitalised and
other direct expenditure.

1.6. Intangible assets and amortisation

Intangible assets are carried at cost less accumulated amortisation and / or accumulated
impairment loss, if any. Intangible assets are recognised when the asset is identifiable, is within
the control of the Company, it is probable that the future economic benefits that are attributable
to the asset will flow to the Company and cost of the asset can be reliably measured.

Intangible assets are amortised on a straight-line basis over the estimated useful life as specified
in Schedule II of the Companies Act 2013. The amortisation expense on intangible assets with
finite lives is recognised in the statement of profit and loss.

Computer software is amortised over six years and other intangibles (including goodwill) are
amortised over a period of five years. The estimated useful life of intangible assets is reviewed
by management at each Balance Sheet date.

Amortisation is provided on a pro-rata basis i.e. from the date on which asset is ready for use.

An intangible asset is derecognised on disposal or when no future economic benefits are
expected from its use and disposal. Losses arising from retirement and gains or losses arising
from disposal of an intangible asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are recognised in the statement of profit
and loss.

1.7. Investments

Investments that are readily realisable and intended to be held for not more than a year from
the date of acquisition are classified as current investments. All other investments are classified
as long-term investments. However, that part of long-term investments which is expected to be
realised within 12 months after the reporting date is presented under current assets as "current
portion of long-term investments".

Long-term investments (including current portion thereof) are carried at cost less any other-
than-temporary diminution in value, determined separately for each category of investments.

Current investments are carried at the lower of cost and fair value. The comparison of cost and
fair value is done separately in respect of each category of investments.

Any reductions in the carrying amount and any reversals of such reductions are charged or
credited to the Statement of Profit and Loss.

l.S. Revenue recognition

Revenue is measured Based On consideration received or receivable and represents amounts
receivable for goods provided in the normal course of business, net of discounts and other sales-
related taxes. Revenue is recognised once the performance obligation has been met. This is
deemed to be when the goods have been collected by, or delivered to, the customer in
accordance with the agreed delivery terms.

Revenue is recognized to the extent that it is probable that the economic benefits will flow to
the Company and the revenue can be reliably measured in accordance with AS-9, Revenue
Recognition as prescribed by ICAI. Sales are recognized on accrual basis, and only after transfer
of goods to the customer.

Interest Income: Interest Income is recognized on accrual basis after taking into account the
amount outstanding and the rate applicable.

Other Income: Other items of income and expenditure are recognized on accrual basis and as a
going concern basis, and the accounting policies are consistent with the generally accepted
accounting policies.

Insurance and other claims are accounted for on acceptance / actual receipt basis.

1.9. Inventories

Raw material, stores and spares and packing materials are valued at lower of cost and net
realizable value. Cost includes purchase price, other costs incurred in bringing the inventories
to their present location and condition, and includes non-refundable taxes. The cost is
determined on the basis of First in First Out method. Cost of conversion are allocated on finished
goods on the relative sales value of each product at the completion of production. Materials
and other items held for use in the production of inventories are not written down below cost
if the finished goods in which they will be incorporated are expected to be sold at or above cost.
Obsolete, slow moving and defective inventories are identified at the time of physical
verification and wherever necessary a provision is made.

Cost of work-in-progress includes appropriate proportion of overhead.

Finished goods are valued at lower of cost and net realisable value. Cost of inventories of
finished goods includes cost of raw materials, direct and indirect overheads which are incurred
to bring the inventories to their present location and condition.

By-products are valued at net realisable value.

Stock in trade are valued at lower of cost and net realisable value. Cost of stock-in-trade includes
cost of purchase and other cost incurred in bringing the inventories to the present location and
condition. ,.i.

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.

1.10. Impairment of Assets

The carrying amounts of property, plant and equipment including intangible assets are reviewed
at each Balance Sheet date to determine whether there is any indication of impairment. If any
such indication exists, the assets'' recoverable amount is estimated, as the higher of the net
selling price and the value in use, which means the present value of future cash flows expected
to arise from the continuing use of the asset and its eventual disposal. An impairment loss is
recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its
recoverable amount. If at the Balance Sheet date, there is an indication that a previously
assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset
is reflected at the recoverable amount subject to a maximum of depreciable historical cost.
Reversal of impairment loss is recognized immediately as income in the profit and loss account.

1.11. Employee benefits
Short-term employee benefits

Employee benefits payable wholly within twelve months of rendering the service are classified
as short- term employee benefits and are recognised in the period in which the employee
renders the related services.

Post-employment benefits

Defined benefit plans

The Company''s gratuity is a defined benefit plan. The Company''s net obligation in respect of a
defined benefit plan is calculated by estimating the amount of future benefit that employees
have earned in return for their service in the current and prior periods; that benefit is discounted
to determine its present value. Any unrecognized past service costs and the fair value of any
plan assets are deducted. The calculation of the Company''s obligation is performed annually by
a qualified actuary using the projected unit credit method.

The Company recognizes all actuarial gains and losses arising from defined benefit plans
immediately in the Statement of Profit and Loss. All expenses related to defined benefit plans
are recognized in employee benefits expense in the Statement of Profit and Loss. When the
benefits of a plan are improved, the portion of the increased benefit related to past service by
employees is recognized in Statement of Profit and Loss on a straight line basis over the average
period until the benefits become vested. The Company recognizes gains and losses on the
curtailment or settlement of a defined benefit plan when curtailment or settlement occurs.

Defined contribution plans

The Company makes specified monthly contributions towards employees'' provident fund,
employees'' state insurance and superannuation fund schemes, which are defined contribution
plans. The Company''s contribution is recognized as an expense in the Statement of Profit and
Loss during the period in which employee renders the related service.

Other long-term benefits

Compensated absences

The employees can carry forward a portion of the unutilised accrued compensated absences
and utilise it in future service periods or receive cash compensation on termination of
employment. Since the compensated absences do not fall due wholly within twelve months
after the end of the period in which the employees render the related service and are also not
expected to be utilized wholly within twelve months after the end of such period, the benefit is
classified as long-term employee benefits.

Liability with respect to compensated absences is determined based on an actuarial valuation
done by an independent actuary at the year end.

1.12. Foreign currency transactions and translations

I. Initial Recognition:

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

II. Measurement:

Foreign currency monetary items are reported using the closing rate.

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.

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.

III. Treatment of Foreign Exchange:

Exchange differences arising on settlement/ restatement of foreign currency monetary assets
and liabilities of the Company are recognized as income or expenses in the Statement of Profit
and Loss.

1.13. Borrowing Cost

Borrowing cost includes interest and amortisation of ancillary costs incurred in connection with
the arrangement of borrowings.

Borrowing costs directly attributable to the acquisition, construction or production of an asset
that necessarily takes a substantial period of time to get ready for its intended use or sale
capitalised as part of the cost of the respective asset. All other borrowing costs are expensed in
the period they occur.

1.14. Taxation

Income-tax expense comprises current tax (i.e. amount of tax for the period determined in
accordance with the income-tax law) and deferred tax charge or credit (reflecting the tax effects
of timing differences between accounting income and taxable income for the period). The
deferred tax charge or credit and the corresponding deferred tax liabilities or assets are
recognised using the tax rates that have been enacted or substantially enacted by the Balance
Sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty
that the assets can be realised in future; however, where there is unabsorbed depreciation or
carry forward of losses, deferred tax assets are recognised only if there is a virtual certainty of
realisation of such assets. Deferred tax assets are reviewed as at each Balance Sheet date and
written down or written-up to reflect the amount that is reasonably/virtually certain (as the
case may be) to be realised.

1.15. Earnings per share (EPS)

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