Prostarm Info Systems Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2025

3. Material accounting policies

The Company has applied following accounting
policies to all periods presented in the
Standalone Financial Statement.

a) Property, Plant and Equipment [PPE]

(i) Definition

Property, plant and equipment are tangible
items that:

(a) are held for use in the production
or supply of goods or services, for
rental to others, or for administrative
purposes; and

(b) are expected to be used during more
than one period.

(ii) Recognition & initial measurement

Property, plant and equipment are
measured at cost less accumulated
depreciation and impairment losses, if any.

The initial cost of property, plant and
equipment comprises its purchase price,
including import duties and non-refundable
purchase taxes, attributable borrowing cost
and any other directly attributable costs of
bringing an asset to working condition and
location for its intended use. It also includes
the present value of the expected cost for
the decommissioning and removing of an
asset and restoring the site after its use, if the
recognition criteria for a provision are met.

(iii) Subsequent measurement
(depreciation and useful lives)

Assets in the course of development
or construction and freehold land are
not depreciated.

Other property, plant and equipment are
stated at cost less accumulated depreciation
and any provision for impairment.
Depreciation commences when the assets
are ready for their intended use.

Expenditure incurred after the property,
plant and equipment have been put into
operation, such as repairs and maintenance,
are normally charged to the statements of
profit and loss in the period in which the costs
are incurred. Major inspection and overhaul
expenditure is capitalized if the recognition
criteria are met When significant parts of plant
and equipment are required to be replaced
at intervals, the Company depreciates them
separately based on their specific useful
lives. Likewise, when a major inspection
is performed, its cost is recognised in the

carrying amount of the plant and equipment
as a replacement if the recognition criteria are
satisfied. All other repair and maintenance
costs are recognised in the statement of profit
and loss as incurred.

Depreciation is calculated on the
depreciable amount, which is the cost of an
asset less its residual value. Depreciation
is provided at rates calculated to write off
the cost, less estimated residual value, of
each asset on a written down value basis
over its expected useful life of the assets as
prescribed under Part C of Schedule II to the
Companies Act, 2013.

Depreciation on PPE sold, discarded or
demolished during the period, if any, is being
provided pro-rata up to the date on which
such PPE are sold, discarded or demolished.

Leasehold land & building and improvements
are amortized on the basis of duration and
other terms of lease.

When parts of an item of Property, Plant and
Equipment have different useful life, they
are accounted for as separate items (Major
components) and are depreciated over the
useful life respectively.

Right-of-use Assets (Land & Building
under operating Lease) is amortised on
a straight-line basis over the period of
respective lease term.

The residual values, useful lives and
methods of depreciation of PPE are
reviewed at the end of each financial
year considering the physical condition
of the PPE and benchmarking analysis or
whenever there are indicators for review of
residual value and useful life.

Items such as spare parts, stand-by
equipment and servicing equipment are
recognised in accordance with this Ind AS
when they meet the definition of property,
plant and equipment. Otherwise, such items
are classified as inventory. It is estimated
that spares having a value of more than
'' 2 lacs are assumed to qualify for the
definition of property plant equipment. Life
of the spares has been considered to be
18 months. Residual value of 5% has been
considered for all the spares capitalised.
The residual value of such spares is
transferred to the Statement of Profit and
Loss as and when they are consumed.

(iv) De-recognition

PPE are derecognised either when they
have been disposed of or when they are

permanently withdrawn from use and no
future economic benefit is expected from
their disposal. The difference between the net
disposal proceeds and the carrying amount
of the asset is recognised in the Statement of
Profit and Loss in the period of de-recognition.

b) Capital Work-in-Progress

Assets in the course of construction are
capitalized in capital work in progress
account. At the point when an asset is
capable of operating in the manner intended
by management, the cost of construction
is transferred to the appropriate category
of property, plant and equipment. Costs
associated with the commissioning of an asset
are capitalised when the asset is available
for use but incapable of operating at normal
levels until the period of commissioning has
been completed.

c) Intangible Assets

(i) Recognition and initial measurement

Intangible assets acquired are measured
on initial recognition at cost. Following initial
recognition, intangible assets are carried at
cost less any accumulated amortisation
and accumulated impairment losses.

(ii) Subsequent measurement &
amortization

The useful lives of intangible assets are
assessed as either finite or indefinite. The
Company currently does not have any
intangible assets with indefinite useful
life. Intangible assets are amortised over
the useful economic life and assessed for
impairment whenever there is an indication
that the intangible asset may be impaired.
The amortisation period and the amortisation
method for an intangible asset are reviewed
at least at the end of each reporting period.
Changes in the expected useful life or the
expected pattern of consumption of future
economic benefits embodied in the asset
are considered to modify the amortisation
period or method, as appropriate, and are
treated as changes in accounting estimates.
The amortisation expense on intangible
assets is recognised in the statement of profit
and loss unless such expenditure forms part
of carrying value of another asset.

(iii) De-recognition

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

recognised in the statement of profit and loss
when the asset is derecognised.

d) Investment Properties

(i) Recognition and initial measurement

Investment properties are properties held
to earn rentals or for capital appreciation, or
both. Investment properties are measured
initially at cost, including transaction
costs. The cost comprises purchase price,
borrowing cost if capitalisation criteria
are met and directly attributable cost of
bringing the asset to its working condition
for the intended use.

(ii) Subsequent measurement &
amortization

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.

Though the Company measures investment
property using cost based measurement,
the fair value of investment property is
disclosed in the notes. Fair values are
determined based on an annual evaluation
performed by an accredited external
independent valuer who holds a recognised
and relevant professional qualification
and has experience in the category of the
investment property being valued.

Investment properties are stated at cost
less accumulated depreciation and
accumulated impairment loss, if any,
subsequently. Depreciation is provided from
the date the assets are put to use, on written
down value method as per the useful life
of the assets as prescribed under Part C of
Schedule II of the Companies Act, 2013.

Depreciation on Investment Properties sold,
discarded or demolished during the period,
if any, is being provided pro-rata up to the
date on which such Investment Properties
are sold, discarded or demolished.

Leasehold land & Building and
improvements are amortised on the basis
of duration and other terms of lease.

The residual values, useful lives and methods
of depreciation of Investment Properties are
reviewed at the end of each financial year/
period considering the physical condition of
the Investment Properties and benchmarking
analysis or whenever there are indicators for
review of residual value and useful life.

(iii) De-recognition

Investment properties are derecognised
either when they have been disposed of
or when they are permanently withdrawn
from use and no future economic benefit is
expected from their disposal. The difference
between the net disposal proceeds and the
carrying amount of the asset is recognised in
the Statement of Profit and Loss in the period
of de-recognition.

e) Revenue Recognition

(i) Revenue from contract with customer is
recognised, when control of the goods or
services are transferred to the customer, at
an amount that reflects the consideration to
which the Company is expected to be entitled
in exchange for those goods or services.

(ii) Company generally follows mercantile
system of accounting and recognizes
significant items of incomes on accrual basis.
The revenues have been duly recognized
in accordance with the provisions of Indian
Accounting Standard - 115. However, some
of expenditures are accounted for on the
receipt of bill or invoice of the same which are
not material.

(iii) Revenue is measured at the fair value of
the consideration received or receivable,
net of discounts, volume rebates, outgoing
service tax, Goods & Service Tax (GST) and
other applicable indirect taxes.

(iv) Service tax / Goods & Service Tax (GST)
is not received by the Company on its
own account. Rather, it is tax collected on
value added to the services by the service
provider on behalf of the Government.
Accordingly, it is excluded from revenue.

(v) Revenue is recognized to the extent that it
is possible that the economic benefits will
flow to the company and the revenue can
be reliably measured with reliable certainty
of realizing the consideration.

(vi) Unbilled income represents the value
of services rendered but not yet been
invoiced on the reporting date due to
contractual terms.

f) Interest Income

Interest income is accrued on a time basis, by
reference to the principal outstanding and at
the effective interest rate applicable, which
is the rate that exactly discounts estimated
future cash receipts through the expected life of
the financial asset to that asset''s net carrying
amount on initial recognition.

Interest is accounted on accrual basis on
overdue receivables.

g) Dividend Income

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

h) Leases

On March 30, 2019, ministry of corporate affairs
has notified Ind AS 116, Leases. Ind AS 116 will
replace the existing leases standard, Ind AS 17,
Leases, and related interpretations. The standard
sets out the principles for the recognition,
measurement, presentation and disclosure
of leases for both parties to a contract i.e., the
lessee and lessor. Ind AS 116 introduces a single
lessee accounting model and requires a lessee
to recognize assets and liabilities for all leases
with a term of more than 12 months, unless
the underlying asset is of low value. Currently,
operating lease expenses are charged to the
Statement of Profit and Loss. The standard also
contains enhanced disclosure requirements for
lessees. Ind AS 116 substantially carries forward
the lessor accounting requirements in Ind AS 17.

On completion of evaluation of the effect
of adoption of Ind AS 116, the Company is
using the ''Modified Retrospective Approach''
for transitioning to Ind AS 116 and took the
cumulative adjustment to retained earnings on
the date of initial application (April 1, 2019). The
Company as elected certain available practical
expedients on transition.

The Company has adopted Ind AS 116 ''Leases''
effective April 1, 2019 and applied the Standard
to its leases, pursuant to which it has reclassified
its leased asset as Right-of-Use Assets.

The determination of whether an arrangement is
(or contains) a lease is based on the substance
of the arrangement at the inception of the
lease. The arrangement is, or contains, a lease
if fulfilment of the arrangement is dependent
on the use of a specific asset or assets and the
arrangement conveys a right to use the asset or
assets, even if that right is not explicitly specified
in an arrangement.

A lease is classified at the inception date as a
finance lease or an operating lease. A lease that
transfers substantially all the risks and rewards
incidental to ownership to the Company is
classified as a finance lease.

(i) Company as a lessee

The Company''s lease asset classes primarily
consist of leases for land and building. The
Company, at the inception of a contract,
assesses whether the contract is a lease

or not a lease. A contract is, or contains, a
lease if the contract conveys the right to
control the use of an identified asset for a
time in exchange for a consideration. This
policy has been applied to contract existing
and entered into on or after April 1, 2019.The
Company has elected not to recognise
Right-of-use Assets and lease liabilities for
short-term leases that have a lease term of
12 months or less and leases of low-value
assets. The Company recognises the lease
payments associated with these leases as
an expense over the lease term.

The Company recognises a Right-of-use
Asset and a lease liability at the lease
commencement date. The Right-of-use
asset is initially measured at cost, which
comprises the initial amount of the lease
liability adjusted for any lease payments
made at or before the commencement
date, plus any initial costs incurred.
The Right-of-use Asset is subsequently
depreciated using the straight-line method
from the commencement date to the
end of the lease term. The lease liability is
initially measured at the present value of
the lease payments that are not paid at the
commencement date, discounted using
the Company''s incremental borrowing
rate. Subsequently, lease liabilities are
measured on amortised cost basis. In the
comparative period, lease payments under
operating leases are recognised as an
expense in the Statement of Profit and Loss
over the lease term.

The weighted average incremental
borrowing rate applied to lease liabilities as
at April 1, 2019 is 8.00% p.a.

(ii) Company as a lessor

Assets given under operating leases are
included in investment properties. Lease
income is recognised in the Statement of
Profit and Loss on straight line basis over the
lease term, unless there is another systematic
basis which is more representative of the
time pattern of the lease.

Initial direct costs incurred in negotiating
and arranging an operating lease are
added to the carrying amount of the leased
asset and recognised over the lease term
on the same basis as rental income.

Lease deposits received are financial
instruments (financial liability) and need
to be measured at fair value on initial
recognition. The difference between
the fair value and the nominal value of

deposits is considered as rent in advance
and recognised over the lease term on a
straight-line basis. Unwinding of discount is
treated as interest expense (finance cost)
for deposits received and is accrued as per
the EIR method.

i) Cash & Cash Equivalents

Cash and cash equivalent in the balance sheet
comprise cash at banks and on hand and
short-term deposits with an original maturity
of three months or less, which are subject to an
insignificant risk of changes in value.

For the purpose of the statement of cash flows,
cash and cash equivalents consist of cash at
banks, cash in hand and short-term deposits,
as defined above.

j) Taxation

(i) Current income tax

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.

Current income tax relating to items
recognised outside profit or loss is
recognised outside profit or loss (either
in other comprehensive income or in
equity). Current tax items are recognised
in correlation to the underlying transaction
either in OCI or directly in equity.
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.

(ii) 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 liabilities are recognised for all
taxable temporary differences, except when
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. 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 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 tax rates that are expected
to apply in the year/period 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 (either in other comprehensive
income or in equity). 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.

(iii) Sales Tax/ GST / VAT

Sales/ value added taxes paid on
acquisition of assets or on incurring
expenses are recognised net of the amount
of sales/ value added taxes paid, except:

• When the tax incurred on a purchase
of assets or services is not recoverable
from the taxation authority, in which
case, the tax paid is recognised as
part of the cost of acquisition of the
asset or as part of the expense item,
as applicable.

• When receivables and payables are
stated with the amount of tax included,
the net amount of tax recoverable from,
or payable to, the taxation authority

is included as part of receivables or
payables in the balance sheet.

k) Inventories

Finished Goods-

Finished goods are valued at lower of cost or net
realisable value. Cost includes direct materials

and labour and a portion of manufacturing
overhead based on normal operating capacity.
Net realisable value is the estimated selling
price in the ordinary course of business, less
estimated costs of completion and estimated
costs necessary to make the sale. Finished
Goods are measured at First In First Out basis.

Raw Materials, WIP and Stores & Spares-

Raw materials, components, stores and spares
and work-in progress are valued at lower or cost
and net realizable value. However, materials
and other items held for use in the production
of inventories are not written down below cost
if the finished products in which they will be
incorporated are expected to be sold at or
above cost. Cost of raw materials, components,
stores and spares is determined on FIFO basis.
Cost of Work in Progress is measured at First In
First Out Basis.

Capital spares that qualifies the criteria of
property, plant and equipment are recognised
as PPE. Accordingly, the company has capitalized
spares having useful life of more than 12 months
and corresponding depreciation is charged
on them.

Stock-in-Trade

Inventories being stock-in-trade are valued at
the lower of cost and net realisable value.

Cost of these inventories are determined on First
In First Out basis.

l) Employee Benefits

(i) Short-term employee benefits

Employee benefits payable wholly within
twelve months of receiving employee
services are classified as short-term
employee benefits. These benefits include
salaries and wages, performance incentives
and compensated absences which are
expected to occur in next twelve months.
The undiscounted amount of short-term
employee benefits to be paid in exchange
for employee services is recognised as an
expense as the related service is rendered
by employees.

(ii) Post-employment benefits -

(a) Defined benefit plans - Gratuity

The Company has a defined benefit
plan (the "Gratuity Plan"). The Gratuity
Plan provides a lump sum payment to
employees who have completed five

years or more of service at retirement,
disability or termination of employment,
being an amount based on the
respective employee''s last drawn salary
and number of years of employment
with Company. Presently the Company''s
gratuity plan is unfunded.

The present value of the defined
benefit obligation is determined by
discounting the estimated future cash
outflows by reference to market yields
at the end of the reporting period on
government bonds that have terms
approximating to the terms of the
related obligation. The net interest cost
is calculated by applying the discount
rate to the net balance of the defined
benefit obligation and the fair value of
plan assets if any. This cost is included
in employee benefit expense in the
statement of profit and loss.

The liability or asset recognised in the
balance sheet in respect of gratuity
plan is the present value of the defined
benefit obligation at the end of the
reporting period less the fair value of
plan assets if any. The defined benefit
obligation is calculated annually by
actuaries using the projected unit
credit method.

Re-measurement gains and losses
arising from experience adjustments
and changes in actuarial assumptions
are recognised in the period in which they
occur, directly in other comprehensive
income and are never reclassified to
profit or loss. Changes in the present
value of the defined benefit obligation
resulting from plan amendments
or curtailments are recognised
immediately in the statement of profit
and loss as past service cost.

(b) Defined Contribution Plans - Provident
Fund and Employee State Insurance

Provident Fund, Pension Fund &
Employee State Insurance (ESI) are
defined contribution schemes as
per applicable rules/statute and
contribution made to the Provident
Fund Trust, Regional Provident Fund
Commissioner and Employee State
Insurance Fund respectively are
charged to the Statement of Profit
and Loss.

(iii) Employee Share based payments

Share Based Payments Equity-settled
share-based payments to employees of
the Group are measured at the fair value
of the equity instruments at the grant
date. Details regarding the determination
of the fair value of equity-settled share-
based payments transactions are set out in
Note 60.

The fair value determined at the grant
date of the equity-settled share-based
payments is expensed on a straight¬
line basis over the vesting period, based
on the Company''s estimate of equity
instruments that will eventually vest, with
a corresponding increase in equity. At the
end of each reporting period, the Company
revises its estimate of the number of equity
instruments expected to vest. The impact
of the revision of the original estimates,
if any, is recognised in Statement of
Profit and Loss such that the cumulative
expenses reflect the revised estimate, with
a corresponding adjustment to the Share
Based Payments Reserve.

The dilutive effect of outstanding options is
reflected as additional share dilution in the
computation of diluted earnings per share.

In case of Group equity-settled share-
based payment transactions, where
the Company grants stock options to
the employees of its subsidiary, the
Company has accounted cost of share-
based payment as recoverable from the
subsidiary under intragroup repayment
arrangement with a corresponding credit
in the equity.

m) Earning Per Share

i) Company presents basic and diluted
earnings per share ("EPS") data for its
equity shares. Basic EPS is calculated by
dividing the profit and loss attributable to
equity shareholders of the Company by the
weighted average number of equity shares
outstanding during the period.

ii) Diluted EPS is determined by adjusting
the profit and loss attributable to equity
shareholders and the weighted average
number of equity shares outstanding for the
effects of all dilutive potential equity shares.

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Mar 31, 2024

3. MATERIAL ACCOUNTING POLICIES

The Company has applied following accounting policies to all periods presented in the Standalone
Financial Statement.

a) Property, Plant and Equipment [PPE]

(i) Definition

Property, plant and equipment are tangible items that:

(A) are held for use in the production or supply of goods or services, for rental to others, or for
administrative purposes; and

(B) are expected to be used during more than one period.

(ii) Recognition & Initial Measurement

Property, plant and equipment are measured at cost less accumulated depreciation and
impairment losses, if any.

The initial cost of property, plant and equipment comprises its purchase price, including import
duties and non-refundable purchase taxes, attributable borrowing cost and any other directly
attributable costs of bringing an asset to working condition and location for its intended use. It
also includes the present value of the expected cost for the decommissioning and removing of an
asset and restoring the site after its use, if the recognition criteria for a provision are met.

(iii) Subsequent Measurement (depreciation and useful lives)

Assets in the course of development or construction and freehold land are not depreciated.

Other property, plant and equipment are stated at cost less accumulated depreciation and any
provision for impairment. Depreciation commences when the assets are ready for their intended

use.

Expenditure incurred after the property, plant and equipment have been put into operation, such
as repairs and maintenance, are normally charged to the statements of profit and loss in the period
in which the costs are incurred. Major inspection and overhaul expenditure is capitalized if the
recognition criteria are met When significant parts of plant and equipment are required to be
replaced at intervals, the Company depreciates them separately based on their specific useful
lives. Likewise, when a major inspection is performed, its cost is recognised in the carrying
amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All
other repair and maintenance costs are recognised in the statement of profit and loss as incurred.

Depreciation is calculated on the depreciable amount, which is the cost of an asset less its
residual value. Depreciation is provided at rates calculated to write off the cost, less estimated
residual value, of each asset on a written down value basis over its expected useful life of the
assets as prescribed under Part C of Schedule II to the Companies Act, 2013.

Depreciation on PPE sold, discarded or demolished during the year, if any, is being provided pro¬
rata up to the date on which such PPE are sold, discarded or demolished.

Leasehold land & building and improvements are amortized on the basis of duration and other
terms of lease.

When parts of an item of Property, Plant and Equipment have different useful life, they are
accounted for as separate items (Major components) and are depreciated over the useful life
respectively.

Right-of-use Assets (Land & Building under operating Lease) is amortised on a straight-line basis
over the period of respective lease term.

The residual values, useful lives and methods of depreciation of PPE are reviewed at the end of
each financial year considering the physical condition of the PPE and benchmarking analysis or
whenever there are indicators for review of residual value and useful life.

Items such as spare parts, stand-by equipment and servicing equipment are recognised in
accordance with this Ind AS when they meet the definition of property, plant and equipment.
Otherwise, such items are classified as inventory. It is estimated that spares having a value of
more than Rs. 2 lacs are assumed to qualify for the definition of property plant equipment. Life of
the spares has been considered to be 18 months. Residual value of 5% has been considered for
all the spares capitalised. The residual value of such spares is transferred to the Statement of
Profit and Loss as and when they are consumed.

(iv) De-recognition

PPE are derecognised either when they have been disposed of or when they are permanently
withdrawn from use and no future economic benefit is expected from their disposal. The
difference between the net disposal proceeds and the carrying amount of the asset is recognised
in the Statement of Profit and Loss in the period of de-recognition.

b) Capital Work-in-Progress

Assets in the course of construction are capitalized in capital work in progress account. At the point
when an asset is capable of operating in the manner intended by management, the cost of construction
is transferred to the appropriate category of property, plant and equipment. Costs associated with the
commissioning of an asset are capitalised when the asset is available for use but incapable of operating
at normal levels until the period of commissioning has been completed.

c) Intangible Assets

(i) Recognition and initial measurement

Intangible assets acquired are measured on initial recognition at cost. Following initial
recognition, intangible assets are carried at cost less any accumulated amortisation and
accumulated impairment losses.

(ii) Subsequent Measurement & Amortization

The useful lives of intangible assets are assessed as either finite or indefinite. The Company
currently does not have any intangible assets with indefinite useful life. Intangible assets are
amortised over the useful economic life and assessed for impairment whenever there is an
indication that the intangible asset may be impaired. The amortisation period and the amortisation
method for an intangible asset are reviewed at least at the end of each reporting period. Changes
in the expected useful life or the expected pattern of consumption of future economic benefits
embodied in the asset are considered to modify the amortisation period or method, as appropriate,
and are treated as changes in accounting estimates. The amortisation expense on intangible
assets is recognised in the statement of profit and loss unless such expenditure forms part of
carrying value of another asset.

(iii) De-recognition

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

d) Investment Properties

(i) Recognition and initial measurement

Investment properties are properties held to earn rentals or for capital appreciation, or both.
Investment properties are measured initially at cost, including transaction costs. The cost
comprises purchase price, borrowing cost if capitalisation criteria are met and directly attributable
cost of bringing the asset to its working condition for the intended use.

(ii) Subsequent Measurement & Amortization

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.

Though the Company measures investment property using cost based measurement, the fair value
of investment property is disclosed in the notes. Fair values are determined based on an annual
evaluation performed by an accredited external independent valuer who holds a recognised and
relevant professional qualification and has experience in the category of the investment property
being valued.

Investment properties are stated at cost less accumulated depreciation and accumulated
impairment loss, if any, subsequently. Depreciation is provided from the date the assets are put
to use, on written down value method as per the useful life of the assets as prescribed under Part
C of Schedule II of the Companies Act, 2013

Depreciation on Investment Properties sold, discarded or demolished during the year, if any, is
being provided pro-rata up to the date on which such Investment Properties are sold, discarded or
demolished.

Leasehold land & Building and improvements are amortised on the basis of duration and other
terms of lease.

The residual values, useful iives and methods of depreciation of Investment Properties are
reviewed at the end of each financial year considering the physical condition of the Investment
Properties and benchmarking analysis or whenever there are indicators for review of residual
value and useful life.

Investment properties are derecognised either when they have been disposed of or when they are
permanently withdrawn from use and no future economic benefit is expected from their disposal.
The difference between the net disposal proceeds and the carrying amount of the asset is
recognised in the Statement of Profit and Loss in the period of de-recognition.

e) Revenue Recognition

(i) Revenue from contract with customer is recognised, when control of the goods or services are
transferred to the customer, at an amount that reflects the consideration to which the Company
is expected to be entitled in exchange for those goods or services.

(ii) Company generally follows mercantile system of accounting and recognizes significant items of
incomes on accrual basis. The revenues have been duly recognized in accordance with the
provisions of Indian Accounting Standard - 115. However, some of expenditures are accounted
for on the receipt of bill or invoice of the same which are not material.

(iii) Revenue is measured at the fair value of the consideration received or receivable, net of discounts,
volume rebates, outgoing service tax, Goods & Service Tax (GST) and other applicable indirect
taxes.

(iv) Service tax / Goods & Service Tax (GST) is not received by the Company on its own account.
Rather, it is tax collected on value added to the services by the service provider on behalf of the
Government. Accordingly, it is excluded from revenue.

(v) Revenue is recognized to the extent that it is possible that the economic benefits will flow to the
company and the revenue can be reliably measured with reliable certainty of realizing the
consideration.

(vi) Unbilled income represents the value of services rendered but not yet been invoiced on the
reporting date due to contractual terms.

f) Interest Income

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective
interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through
the expected life of the financial asset to that asset''s net carrying amount on initial recognition.

Interest is accounted on accrual basis on overdue receivables.

g) Dividend Income

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

h) Leases

On March 30,2019, ministry of corporate affairs has notified Ind AS 116, Leases. Ind AS 116 will replace
the existing leases standard, Ind AS 17, Leases, and related interpretations. The standard sets out the
principles for the recognition, measurement, presentation and disclosure of leases for both parties to a

contract i.e., the lessee and lessor. Ind AS 116 introduces a single lessee accounting model and requires
a lessee to recognize assets and liabilities for all leases with a term of more than 12 months, unless the
underlying asset is of low value. Currently, operating lease expenses are charged to the Statement of
Profit and Loss. The standard also contains enhanced disclosure requirements for lessees. Ind AS 116
substantially carries forward the lessor accounting requirements in Ind AS 17.

On completion of evaluation of the effect of adoption of Ind AS 116, the Company is using the ''Modified
Retrospective Approach’ for transitioning to Ind AS 116 and took the cumulative adjustment to retained
earnings on the date of initial application (April 1, 2019). The Company as elected certain available
practical expedients on transition.

The Company has adopted Ind AS 116 ''Leases’ effective April 1, 2019 and applied the Standard to its
leases, pursuant to which it has reclassified its leased asset as Right-of-Use Assets.

The determination of whether an arrangement is (or contains) a lease is based on the substance of the
arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the
arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right
to use the asset or assets, even if that right is not explicitly specified in an arrangement.

A lease is classified at the inception date as a finance lease or an operating iease. A lease that transfers
substantially all the risks and rewards incidental to ownership to the Company is classified as a finance
lease.

(i) Company as a lessee

The Company’s lease asset classes primarily consist of leases for land and building. The Company,
at the inception of a contract, assesses whether the contract is a lease or not a lease. A contract
is, or contains, a lease if the contract conveys the right to control the use of an identified asset for
a time in exchange for a consideration. This policy has been applied to contract existing and entered
into on or after April 1,2019.The Company has elected not to recognise Right-of-use Assets and
lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-
value assets. The Company recognises the lease payments associated with these leases as an
expense over the lease term.

The Company recognises a Right-of-use Asset and a lease liability at the lease commencement
date. The Right-of-use asset is initially measured at cost, which comprises the initial amount of the
lease liability adjusted for any lease payments made at or before the commencement date, plus any
initial costs incurred. The Right-of-use Asset is subsequently depreciated using the straight-iine
method from the commencement date to the end of the lease term. The lease liability is initially
measured at the present value of the lease payments that are not paid at the commencement date,
discounted using the Company’s incremental borrowing rate. Subsequently, lease liabilities are
measured on amortised cost basis. In the comparative period, lease payments under operating
leases are recognised as an expense in the Statement of Profit and Loss over the iease term.

The weighted average incremental borrowing rate applied to lease liabilities as at April 1,2019 is
8% p.a.

Assets given under operating leases are included in investment properties. Lease income is
recognised in the Statement of Profit and Loss on straight line basis over the lease term, unless
there is another systematic basis which is more representative of the time pattern of the lease.

Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying
amount of the leased asset and recognised over the lease term on the same basis as rental income.

Lease deposits received are financial instruments (financial liability) and need to be measured at
fair value on initial recognition. The difference between the fair value and the nominal value of
deposits is considered as rent in advance and recognised over the lease term on a straight-line
basis. Unwinding of discount is treated as interest expense (finance cost) for deposits received and
is accrued as per the EIR method.

i) Cash & Cash Equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term
deposits with an original maturity of three months or less, which are subject to an insignificant risk of
changes in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash at banks,
cash in hand and short-term deposits, as defined above.

j) Taxation

(i) Current income tax

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.

Current income tax relating to items recognised outside profit or loss is recognised outside profit
or loss (either in other comprehensive income or in equity). Current tax items are recognised in
correlation to the underlying transaction either in QCI or directly in equity. 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.

(ii) 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 liabilities are recognised for all taxable temporary differences, except when 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. 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 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 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
(either in other comprehensive income or in equity). Deferred tax items are recognised in correlation

to the underlying transaction either in OC! 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.

(iii) Sales Tax/GST/VAT

Sales/ value added taxes paid on acquisition of assets or on incurring expenses are recognised net
of the amount of sales/ value added taxes paid, except:

^D When the tax incurred on a purchase of assets or services is not recoverable from the
taxation authority, in which case, the tax paid is recognised as part of the cost of acquisition
of the asset or as part of the expense item, as applicable.

° When receivables and payables are stated with the amount of tax included, the net amount
of tax recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the balance sheet.

k) Inventories
Finished Goods-

Finished goods are valued at lower of cost or net realisable value. Cost includes direct materials and
labour and a portion of manufacturing overhead based on normal operating capacity.Net realisable value
is the estimated selling price in the ordinary course of business, less estimated costs of completion and
estimated costs necessary to make the sale. Finished Goods are measured at First In First Out basis.

Raw Materials, WIP and Stores & Spares-

Raw materials, components, stores and spares and work-in progress are valued at cost. However,
materials and other items held for use in the production of inventories are not written down below cost
if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost
of raw materials, components, stores and spares is determined on FIFO basis. Cost of Work in Progress
is measured at First In First Out Basis.

Capital spares that qualifies the criteria of property, plant and equipment are recognised as PPE.
Accordingly, the company has capitalized spares having useful life of more than 12 months and
corresponding depreciation is charged on them."

Stock-in-Trade

Inventories being stock-in-trade are valued at the lower of cost and net realisable value.

Cost of these inventories are determined on First In First Out basis.

I) Employee Benefits

(i) Short-term employee benefits

Employee benefits payable wholly within twelve months of receiving employee services are
classified as short-term employee benefits. These benefits include salaries and wages,
performance incentives and compensated absences which are expected to occur in next twelve
months. The undiscounted amount of short-term employee benefits to be paid in exchange for
employee services is recognised as an expense as the related service is rendered by employees.

(ii) Post-employment benefits -

(a) Defined benefit plans - Gratuity

The Company has a defined benefit plan (the "Gratuity Plan"). The Gratuity Plan provides a
lump sum payment to employees who have completed five years or more of service at
retirement, disability or termination of employment, being an amount based on the respective
employee’s last drawn salary and number of years of employment with Company. Presently
the Company’s gratuity plan is unfunded.

The present value of the defined benefit obligation is determined by discounting the estimated
future cash outflows by reference to market yields at the end of the reporting period on
government bonds that have terms approximating to the terms of the related obligation. The
net interest cost is calculated by applying the discount rate to the net balance of the defined
benefit obligation and the fair value of plan assets if any. This cost is included in employee
benefit expense in the statement of profit and loss.

The liability or asset recognised in the balance sheet in respect of gratuity plan is the present
value of the defined benefit obligation at the end of the reporting period less the fair value of
plan assets if any. The defined benefit obligation is calculated annually by actuaries using the
projected unit credit method.

Re-measurement gains and losses arising from experience adjustments and changes in
actuarial assumptions are recognised in the period in which they occur, directly in other
comprehensive income and are never reclassified to profit or loss. Changes in the present
value of the defined benefit obligation resulting from plan amendments or curtailments are
recognised immediately in the statement of profit and loss as past service cost.

(b) Defined Contribution Plans - Provident Fund and Employee State Insurance

Provident Fund, Pension Fund & Employee State Insurance (ESI) are defined contribution
schemes as per applicable rules/statute and contribution made to the Provident Fund Trust,
Regional Provident Fund Commissioner and Employee State Insurance Fund respectively are
charged to the Statement of Profit and Loss.

(iii) Long-term Employee Benefits:-

Long-term employee benefits Compensated absences which are not expected to occur within
twelve months after the end of the period in which the employee renders the related service are
recognised as a liability at the present value of the obligation as at the Balance Sheet date. The cost
of providing benefits is determined using the projected unit credit method, with actuarial valuations
being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in the
Statement of Profit and Loss in the period in which they occur.

m) Earning Per Share

i) Company presents basic and diluted earnings per share (''EPS'') data for its equity shares. Basic EPS
is calculated by dividing the profit and loss attributable to equity shareholders of the Company by the
weighted average number of equity shares outstanding during the period.

ii) Diluted EPS is determined by adjusting the profit and loss attributable to equity shareholders and the
weighted average number of equity shares outstanding for the effects of all dilutive potential equity
shares.