1.3 MATERIAL ACCOUNTING POLICIES

A. Key Accounting Estimates, Assumptions and
Management Judgments:

In preparing the financial statements, management
has made judgments, estimates and assumptions
that affect the application of accounting policies and
the reported amounts of assets, liabilities, income
and expenses. Actual results may differ from these
estimates. Any revision to such estimates is recognized
in the period in which the same is determined.

Estimates and assumptions are reviewed on an ongoing
basis. Any change in these estimates and assumptions
will generally be reflected in the financial statements
in current period or prospectively, unless they are
required to be treated retrospectively under relevant
accounting standard.

B. Current and Non-Current classification:

All assets and liabilities are classified as current or
non-current as per the Company's normal operating
cycle, and other criteria set out in Schedule III of the
Companies Act, 2013. Based on the nature of products
and the time lag between the acquisition of assets
for processing and their realisation in cash and cash

equivalents, 12 months period has been considered by
the Company as its normal operating cycle.

An asset is treated 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 twelve months
after the reporting period; or

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

All other assets are classified as non-current.

A liability is treated as current when it is:

• It is expected to be settled in normal
operating cycle;

• It is held primarily for the purpose of trading;

• It is due to be settled within twelve months after
the reporting period; or

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

All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non¬
current assets and liabilities.

. Property, Plant and Equipment

On transition to Ind AS, the Company has elected
to continue with the gross carrying value of all of
its property plant and equipment recognized as at
December 27, 2021.

The Company has provided depreciation based on
the estimated useful life of respective years and as
the change in estimated useful life is considered as
change in estimate, accordingly there is no impact of
this roll back.

Recognition and measurement

Property, plant and equipment are recorded at
cost of acquisition/construction less accumulated
depreciation and impairment losses, if any. The cost
of property, plant and equipment comprises its
purchase price net of any trade discounts and rebates,
any import duties and other taxes (other than those
subsequently recoverable from the tax authorities), any
directly attributable expenditure on making the asset
ready for its intended use, other incidental expenses.
If significant parts of an item of property, plant and
equipment have different useful lives, then they are

accounted for, as separate items (major components) of
property, plant and equipment.

Borrowing costs directly attributable to acquisition of
property, plant and equipment which take substantial
period of time to get ready for its intended use are also
included to the extent they relate to the period till such
assets are ready to be put to use. Advances paid towards
the acquisition of property, plant and equipment
outstanding at each balance sheet date is classified as
capital advances under other non-current assets.

Spare parts are treated as capital assets when they
meet the definition of property, plant and equipment.
Otherwise, such items are classified as inventory.

If significant parts of an item of property, plant and
equipment have different useful lives, then they are
accounted for, as separate items (major components)
of property, plant and equipment. Any gains or losses
on their disposal, determined by comparing sales
proceeds with carrying amount, are recognised in the
Statement of Profit or Loss.

Subsequent Expenditure

Subsequent expenditure on major maintenance or
repairs includes the cost of the replacement of parts
of assets and overhaul costs. Where an asset or part
of an asset is replaced and it is probable that future
economic benefits associated with the item will be
available to the Company, the expenditure is capitalized
and the carrying amount of the item replaced is
derecognized. Similarly, overhaul cost associated with
major maintenance are capitalized and depreciated
over their useful lives where it is probable that future
economic benefits will be available and any remaining
carrying amount of the cost of previous overhauls are
derecognized. All other costs are expensed as incurred.

Depreciation

The Company was a partnership firm till December 28,
2021 and followed the written down value method of
depreciation as per provisions of Income-tax Act, 1961.
However, on conversion , the Company has elected to
follow the straight line method (SLM) of depreciation
as per the useful life prescribed in Schedule II of the
Companies Act, 2013.

Under this method, the estimated useful lives,
as specified in Schedule II of the Companies Act,
2013 are as follows

Depreciation on property, plant and equipment is
provided based on the useful life and in the manner
prescribed in Schedule II to the Companies Act,
2013 except in respect of the following categories of

The residual values, useful lives and methods of
depreciation of property, plant and equipment
are reviewed at each reporting date and adjusted
prospectively, if appropriate

De-Recognition

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

The residual values, useful lives and methods of
depreciation of PPE are reviewed at each financial
year end and changes if any are accounted in line with
revisions to accounting estimates.

). Intangible Assets:

Recognition and Measurement

Intangible assets are recognized only if it is probable
that the future economic benefits that are attributable
to the assets will flow to the enterprise and the cost of
the assets can be measured reliably. Intangible Assets
are stated at cost of acquisition less accumulated
amortization and accumulated impairment, if any.

Amortisation

Intangible Assets are amortized over the estimated
economic life of 3 years to 10 years.

De- recognition of Intangible Assets

Intangible asset is de-recognized on disposal or when
no future economic benefits are expected from its use
or disposal. Gains or losses arising from de-recognition
of an intangible asset, measured as the difference
between the net disposal proceeds and the carrying
amount of the asset, are recognized in the Statement of
Profit and Loss when the asset is de-recognized.

E. Impairment of Non-financial asset:

Non-financial assets other than inventories and
deferred tax assets are reviewed at each Balance Sheet
date to determine whether there is any indication
of impairment. If any such indication exists, or when
annual impairment testing for an asset is required, the
Company estimates the asset's recoverable amount.
The recoverable amount is higher of the Assets or
Cash-Generating Units (CGU's) (i) fair value less costs of
disposal and (ii) its value in use. In assessing value in use,
the estimated future cash flows are discounted to their
present value using an appropriate discounting rate.
Recoverable amount is determined for an individual
asset, unless the asset does not generate cash inflows
that are largely independent of those from other assets
or group of assets. In such cases, the Recoverable
amount is determined for the Cash Generating Unit
(CGU) to which the assets belong.

When the carrying amount of an asset or CGU exceeds
its recoverable amount, the asset is considered impaired
and is written down to its recoverable amount.

Reversal of Impairment of assets

Non-financial assets other than goodwill that suffered
impairment are reviewed for possible reversal of the
impairment at the end of each reporting period.

ECL impairment loss allowance (or reversal) recognized
during the period is recognized as income/ expense
in the Statement of Profit and Loss under the head
'Other expenses'.

F. Impairment of financial asset:

The Company recognises loss allowances for expected
credit losses on financial assets measured at amortised
cost. At each reporting date, the Company assesses
whether financial assets carried at amortised cost
credit-impaired. A financial asset is 'credit-impaired'
when one or more events that have a detrimental
impact on the estimated future cash flows of the
financial asset have occurred.

Evidence that a financial asset is credit-impaired
includes the following observable data:

• Significant financial difficulty of the borrower or
issuer;

• A breach of contract such as a default or being
significantly past due;

• The restructuring of a loan or advance by the
Company on terms that the Company would not
consider otherwise; or

• It is probable that the borrower will enter
bankruptcy or other financial reorganization.

Loss allowances for trade receivables are always
measured at an amount equal to lifetime expected
credit losses. The Company follows 'simplified
approach' for recognition of impairment loss allowance
on trade receivables or contract revenue receivables.
Under the simplified approach, the Company is
not required to track changes in credit risk. Rather,
it recognises impairment loss allowance based on
lifetime Expected credit losses ('ECL") together with
appropriate Management's estimate of credit loss
at each reporting date, from its initial recognition.
The Company uses a provision matrix to determine
impairment loss allowance on the group of trade
receivables. The provision matrix is based on its
historically observed default rates over the expected
life of the trade receivable and is adjusted for forward
looking estimates. At every reporting date, the historical
observed default rates are updated and changes in the
forward-looking estimates are analysed.

Measurement of expected credit losses

Expected credit losses are a probability-weighted
estimate of credit losses. Credit losses are measured as
the present value of all cash shortfall (i.e. the difference
between the cash flows due to the Company in
accordance with the contract and the cash flows that
the Company expects to receive).

Presentation of allowance for expected credit
losses in the balance sheet

Loss allowances for financial assets measured at
amortised cost are deducted from the gross carrying
amount of the assets.

Write off

The gross carrying amount of a financial asset is written
off (either partially or in full) to the extent that there is
no realistic prospect of recovery. This is generally the
case when the Company determines that the debtor
does not have assets or sources of income that could
generate sufficient cash flows to repay the amounts
subject to the write-off. However, financial assets that
are written off could still be subject to enforcement
activities in order to comply with the Company's
procedures for recovery of amounts due.

G. Investment properties

Investment properties are properties held to earn
rentals and/or for capital appreciation. Investment
properties are measured initially at cost, including
transaction costs. Subsequent to initial recognition,

investment properties are measured in accordance with
Ind AS 16 requirements for cost model. Free hold Land
and Properties under construction are not depreciated.

Depreciation

Based on technical evaluation, the Management
believes a period of 26 years as representing the
best estimate of the period over which investment
properties (which are quite similar) are expected
to be used. Accordingly, the Company depreciates
investment properties over this period on a straight¬
line basis. This is different from the indicative useful life
of relevant type of assets mentioned in Schedule II to
the Companies Act 2013.

Any gain or loss on disposal of an investment property
is recognised in statement of profit and loss.

An investment property is derecognized upon disposal
or when the investment property is permanently
withdrawn from use and no future economic benefits
are expected from the disposal. Any gain or loss arising
on derecognition of the property(calculated as the
difference between the net disposal proceeds and
the carrying amount of the asset) is included in the
statement of profit or loss in the period in which the
property is derecognized.

H. Inventories:

Inventories are stated at the lower of cost and net
realisable value. Cost is ascertained on a weighted
average basis. Costs comprise direct materials and,
where applicable, direct labour costs and those
overheads that have been incurred in bringing the
inventories to their present location and condition. Net
realisable value is the price at which the inventories
can be realised in the normal course of business
after allowing for the cost of conversion from their
existing state to a finished condition and for the cost
of marketing, selling and distribution. The comparison
of cost and net realizable value is made on and
item by item basis.

The net realizable value of work-in-progress is
determined with reference to the net realizable
value of related finished goods. Materials and other
supplies held for

use in production of inventories 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. Fixed
production overheads are allocated on the basis of
normal capacity of production facilities.

Provisions are made to cover slow-moving and
obsolete items based on historical experience of
utilisation on a product category basis, which involves
individual businesses considering their product lines
and market conditions.

I. Leases

A contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for a
period of time in exchange for consideration.

As a lessee

(A) Lease Liability

At the commencement date, the Company
measures the lease liability at the present value of
the lease payments that are not paid at that date.
The lease payments shall be discounted using
incremental borrowing rate.

(B) Right-of-use assets

Initially recognised at cost, which comprises
the initial amount of the lease liability adjusted
for any lease payments made at or prior to the
commencement date of the lease plus any initial
direct costs less any lease incentives.

Subsequent measurement

(A) Lease Liability

Company measure the lease liability by (a)
increasing the carrying amount to reflect interest
on the lease liability; (b) reducing the carrying
amount to reflect the lease payments made; and
(c) remeasuring the carrying amount to reflect any
reassessment or lease modifications.

(B) Right-of-use assets

Subsequently measured at cost less accumulated
depreciation and impairment losses. Right-of-use
assets are depreciated from the commencement
date on a straight line basis over the shorter of the
lease term and useful life of the under lying asset.

Impairment

Right of use assets are evaluated for recoverability
whenever events or Changes in circumstances indicate
that their carrying amounts may not be recoverable.
For the purpose of impairment testing, the recoverable
amount (i.e. the higher of the fair value less cost to sell
and the value-in-use) is determined on an individual
asset basis unless the asset does not generate cash
flows that are largely independent of those from
other assets. In such cases, the Recoverable amount
is determined for the Cash Generating Unit (CGU) to
which the asset belongs.

Short term lease:

Short term lease is that, at the commencement date,
has a lease term of 12 months or less. A lease that
contains a purchase option is not a short-term lease.
If the company elected to apply short term lease, the
lessee shall recognise the lease payments associated
with those leases as an expense on either a straight¬
line basis over the lease term or another systematic
basis. The lessee shall apply another systematic basis if
that basis is more representative of the pattern of the
lessee's benefit.

J. Fair Value measurement

Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly
transaction between market participants at the
measurement date. The fair value measurement is
based on the presumption that the transaction to sell
the asset or transfer the liability takes place either:

In the principal market for the asset or liability, or

In the absence of a principal market, in the most
advantageous market which can be accessed by the
Company for the asset or liability.

The fair value of an asset or a liability is measured using
the assumptions that market participants would use
when pricing the asset or liability, assuming that market
participants act in their economic best interest.

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

All assets and liabilities for which fair value is measured
or disclosed in the Financial Information are categorised
within the fair value hierarchy, described as follows,
based on the lowest level input that is significant to the
fair value measurement as a whole:

Level 1 Quoted (unadjusted) market prices in active
markets for identical assets or liabilities

Level 2 Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
directly or indirectly observable

Level 3 Valuation techniques for which the lowest level
input that is significant to the fair value measurement
is unobservable

For assets and liabilities that are recognised in the
Financial Information on a recurring basis, the Company
determines whether transfers have occurred between
levels in the hierarchy by re-assessing categorisation
(based on the lowest level input that is significant to the

fair value measurement as a whole) at the end of each
reporting period.

K. Financial instruments:

Financial instruments are recognized when the
Company becomes a party to the contractual provisions
of the instrument.

i) Financial Assets:

Initial recognition and measurement

All financial assets are recognized initially at
fair value plus, in the case of financial assets
not recorded at fair value through profit or loss,
transaction costs that are attributable to the
acquisition of the financial asset. However, trade
receivables that do not contain a significant
financing component are measured at transaction
price. Purchases or sales of financial assets that
require delivery of assets within a time frame
established by regulation or convention in the
market place (regular way trades) are recognised
on the trade date i.e, the date that the Company
commits to purchase or sell the asset.

Subsequent measurement

For the purpose of subsequent measurement,
financial assets are classified in three categories:

a) Amortized Cost:

A financial asset is subsequently measured at
amortized cost if it is held within a business
model with the objective of collecting the
contractual cash flows and the contractual
terms of the financial asset give rise on
specified dates to cash flows that are solely
payments of principal and interest on the
principal outstanding.

Financial assets at amortized cost includes
loans receivable, trade and other receivable
and other financial assets that are held
with the object of collecting contractual
cash flows. After initial measurement at fair
value, the financial assets are measured at
amortized cost using the effective interest
rate (EIR) method less impairment.

b) Fair Value through Other Comprehensive
Income:

A financial asset is subsequently measured
at fair value through other comprehensive
income if it is held within the business
model whose objective is achieved by both
collecting contractual cash flows and selling
financial assets and the contractual terms
of the financial asset give rise on specified

dates to cash flows that are solely payments
of principal and interest on the principal
amount outstanding.

Movements in the carrying amount are
taken through other comprehensive income,
except for recognition of impairment gains or
losses, interest revenue and foreign exchange
gains and losses which are recognized in the
Statement of Profit and Loss.

c) Fair Value through Profit or Loss:

Financial assets, which are not classified in
any of the above categories, are subsequently
faired valued through profit or loss.

d) De-recognition

The Company derecognizes a financial asset
when the contractual rights to the cash flows
from the asset expire or when it transfers
the financial asset and substantially all the
risks and rewards of ownership of the asset
to another party.

e) Impairment

The Company recognizes loss allowance
using the expected credit loss (ECL) model
for the financial assets, which are not fair
valued through profit or loss/OCI. Loss
allowance for trade receivables with no
significant financing component is measured
at an amount equal to lifetime ECL. Trade
receivables are of short duration, normally
less than twelve months and hence the loss
allowance measured as lifetime ECL does not
differ from that measured as twelve months
ECL. For all other financial assets, expected
credit losses are measured at an amount
equal to the twelve months ECL, unless there
has been a significant increase in credit risk
from initial recognition in which case those
are measured at lifetime ECL.

ii) Financial Liabilities:

Initial recognition and measurement

The financial liabilities are classified at initial
recognition as at fair value through profit or loss
or as those measured at amortized cost. The
Company's financial liabilities include trade and
other payables, loans and borrowings including
bank overdrafts and financial guarantee contracts.

Subsequent measurement

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

Financial Liabilities at Fair Value through Profit
or Loss (FVTPL)

Financial liabilities at fair value through profit or
loss include financial liabilities held for trading
and financial liabilities designated upon initial
recognition as at fair value through profit or loss.

Financial liabilities designated upon initial
recognition at fair value through profit or loss are
designated at the initial date of recognition, and
only if the criteria in Ind-AS 109 are satisfied. For
liabilities designated as FVTPL, fair value gains/
losses attributable to changes in own credit risk
are recognized in OCI. These gains/ losses are not
subsequently transferred to profit or loss. However,
the company may transfer the cumulative gain or
loss within equity. All other changes in fair value
of such liability are recognised in the Statement of
Profit or Loss.

Financial Liabilities at amortised cost

Financial liabilities classified and measured at
amortised cost such as loans and borrowings are
initially recognized at fair value, net of transaction
cost incurred. After initial recognition, financial
liabilities are subsequently measured at amortised
cost using the Effective interest rate (EIR) method.
Gains and losses are recognised in profit or loss
when the liabilities are derecognised as well as
through the EIR amortisation process.

Amortised cost is calculated by taking into
account any discount or premium on acquisition
and fees or costs that are an integral part of the
EIR. The EIR amortisation is included as finance
costs in the Statement of Profit and Loss.

Derecognition

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

Offsetting of financial instruments

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

liabilities 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
company, or the counterparty.

M. Loans and borrowings

Borrowings are initially recognised at fair value, net of
transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any differences between
the proceeds (net of transaction costs) and the
redemption amount is recognised in Profit or loss
over the period of the borrowing 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 facilities will be drawn down. In this case, the fee is
deferred until the drawdown occurs.

The borrowings are removed from the Balance
sheet when the obligation specified in the contract
is discharged, cancelled or expired. The difference
between the carrying amount of the financial liability
that has been extinguished or transferred to another
party and the consideration paid including any noncash
asset transferred or liabilities assumed, is recognised in
profit or loss as other gains/(losses).

Borrowings are classified as current liabilities unless the
Company has an unconditional right to defer settlement
of the liability of at least 12 months after the reporting
period. Where there is a breach of a material provision
of a long-term loan arrangement on or before the end
of the reporting period with the effect that the liability
becomes payable on demand on the reporting date,
the entity does not classify the liability as current, if the
lender agreed, after the reporting period and before
the approval of the financial statement for issue, not to
demand payment as a consequence of the breach.

N. Cash and Cash equivalents:

Cash and cash equivalents comprise cash at bank
and in 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.

Cash Flow Statement:

Cash flow are reported using indirect method, whereby
net profit before tax is adjusted for the effects of
transactions of a non-cash nature, any deferrals of
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 finance activities of the
Company are segregated.

O. Revenue Recognition:

Revenue from contracts with customers 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 expects to be
entitled in exchange for those goods or services.

Revenue from the sale of goods is recognized at the
point in time when control of the asset is transferred to
the customer, generally on the delivery of the goods.

On the basis of the contractual terms with customers
for projects, Revenue from project is recognised at
a point in time or over time, based on satisfaction of
performance obligation/s upon transfer of control of
promised products or services to customers.

Revenue is recognisable to the extent of the amount
that reflects the consideration (i.e. the transaction
price) to which the Company is expected to be entitled
in exchange for those goods or services excluding
any amount received on behalf of third party (such as
indirect taxes). The transaction price is determined on
the basis of agreement or letter of allotment entered
into with the customer.

The Company satisfies the performance obligation
and recognises revenue over time, if one of the
criteria prescribed under Ind AS 115 - "Revenue from
Contracts with Customers" is satisfied. If a performance
obligation is not satisfied over time,then revenue is
recognised at a point in time at which the performance
obligation is satisfied.

The Company recognises revenue for performance
obligation satisfied over time only if it can reasonably
measure its progress towards complete satisfaction of
the performance obligation. The Company would not
be able to reasonably measure its progress towards
complete satisfaction of a performance obligation if
it lacks reliable information that would be required
to apply an appropriate method of measuring
progress. In those circumstances, the Company
recognises revenue only to the extent of cost incurred
until it can reasonably measure outcome of the
performance obligation.

The Company considers whether there are other
promises in the contract that are separate performance
obligations to which a portion of the transaction price
needs to be allocated. In determining the transaction
price, the Company considers the effects of variable
consideration, the existence of significant financing
component and consideration payable to the customer
like return and trade discounts.

This includes bonus, incentives, discounts etc. It is
estimated at contract inception and constrained until
it is highly probable that a significant revenue reversal
in the amount of cumulative revenue recognized will
not occur when the associated uncertainty with the
variable consideration is subsequently resolved. It is
reassessed at end of each reporting period.

These are accounted for when additions, deletions or
changes are approved either to the contract scope or
contract price. The accounting for modifications of
contracts involves assessing whether the goods or
services added to the existing contract are distinct
and whether the pricing is at the standalone selling
price. Goods or services added that are not distinct are
accounted for on a cumulative catch up basis, while
those that are distinct are accounted for prospectively,
either as a separate contract, if additional goods or
services are priced at the standalone selling price, or as
a termination of existing contract and creation of a new
contract if not priced at the standalone selling price.

P. Other Income:

Interest Income

Interest income from a financial asset is recognized
when it is probable that the economic benefits will
flow to the Company and the amount of income can be
measured reliably. Interest income is accrued on time
basis and is included in other income in the Statement
of Profit and Loss.

Rental income

Rental income arising from operating leases or on
investment properties is accounted for on a straight-line
basis over the lease terms and is included in other non¬
operating income in the Statement of Profit and Loss.

Other Income

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

Q. Employee Benefits:

Short term employee benefits

The undiscounted amount of short-term employee
benefits expected to be paid in exchange for the
services rendered by employees is recognised during
the period when the employee renders the services.
These benefits include compensated absences such as
paid annual leave, and performance incentives.

Long term employee benefits

Compensated absences which are not expected
to occur within twelve months after the end of the
period in which the employee renders the related
services are recognised as a liability at the present

value of the defined benefit obligation determined
actuarially by using Projected Unit Credit Method at the
balance sheet date.

Post - employment benefits

The Compa ny (employer) and the employees contribute
a specified percentage of eligible employees' salary
to the established provident fund. The Company
is generally liable for annual contributions and any
shortfall in the fund assets based on government
specified minimum rates of return, and recognises such
provident fund liability, considering fund as the defined
benefit plan, based on an independent actuarial
valuation carried out at every statutory year end using
the Projected Unit Credit Method.

Provision for gratuity for the staff is made on the basis
of actuarial valuation and is charged to the Statement
of Profit and Loss.

Contribution to defined contribution retirement benefit
schemes are recognised as expense in the Statement
of Profit and Loss, when employees have rendered
services entitling them to contributions.

For defined benefit schemes, 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 full in Other Comprehensive Income,
for the period in which they occur. Past service cost is
recognised immediately to the extent that the benefits
are already vested, and is otherwise amortised on a
straight line basis over the average period until the
benefits become vested.

The retirement benefit obligation recognised in
the balance sheet represents the present value of
the defined benefit obligation and is adjusted both
for unrecognised past service cost, and for the fair
value of plan assets. Any asset resulting from this
calculation is limited to the present value of available
refunds and reductions in future contributions to the
scheme, if lower.

Other long - term employment benefits

Liability towards other long term employee benefits if
any is determined based on actual liability.

The current service cost of other long terms employee
benefits, recognized in the Statement of Profit and
Loss as part of employee benefit expense, reflects the
increase in the obligation resulting from employee
service in the current year, benefit changes, curtailments
and settlements. Past service costs are recognized
immediately in the Statement of Profit and Loss. The
interest cost is calculated by applying the discount rate
to the balance of the obligation. This cost is included

in employee benefit expense in the Statement of Profit
and Loss. Re-measurements are recognized in the
Statement of Profit and Loss.

R. Borrowing Costs:

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.

Borrowing Costs directly attributable to acquisition or
construction of qualifying fixed assets are capitalized as
part of cost of such assets. A qualifying asset is one that
necessarily takes substantial period of time to get ready
for its intended use.

All other borrowing costs are charged to the Statement
of Profit and Loss account in the year in which
they are incurred.

S. Income taxes:

The tax expense comprises of current income tax
and deferred tax.

Current Income Tax

Income tax expense comprises of current tax and
deferred tax. Income tax expense is recognized in the
Statement of Profit and Loss except to the extent that
it relates to items recognized directly in equity/OCI, in
which case it is recognized in Other Comprehensive
Income. Tax on income for the current period is
determined on the basis of taxable income and tax
credits computed in accordance with the provisions
of the Income Tax Act, 1961 using the tax rates and tax
laws that have been enacted or substantively enacted
on the reporting date. The Company offsets current tax
assets and current tax liabilities, where it has a legally
enforceable right to set off the recognized amounts
and where it intends either to settle on a net basis, or to
realize the asset and settle the liability simultaneously.

Deferred Tax

Deferred income tax assets and liabilities are recognized
for all temporary differences arising between the
tax bases of assets and liabilities and their carrying
amounts in the financial statements. 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 assets is realized or the
deferred income tax liability is settled.

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