B) Material Accounting Policies

(i) Statement of compliance with Ind AS

The financial statements have been prepared
in accordance with Indian Accounting
Standard (Ind AS) as notified under Section
133 of the Companies Act, 2013 read with the
Companies (Indian Accounting Standard)
Rules, 2015 as amended from time to time
and other relevant provisions of the Act.

(ii) Basis of Preparation and Presentation

These financial statements are prepared in
accordance with Indian Accounting Standards
(Ind AS) under the historical cost convention
on accrual basis except for certain financial
instruments which are measured at fair
values. All assets and liabilities have been
classified as current or non-current based on
normal operating cycle of business activities
of the Company, which is 12 months.

(iii) Use of estimates

The preparation of the financial statements
requires Management to make judgements,
estimates and assumptions that affect the

reported amounts of revenues, expenses,
assets and liabilities and accompanying
disclosures, and the disclosure of contingent
liabilities. Uncertainty about these
assumptions and estimates could result in
outcomes that require a material adjustment
to the carrying amount of assets or liabilities
affected in future periods.

The said estimates are based on the facts
and events, that existed as at the reporting
date, or that occurred after that date but
provide additional evidence about conditions
existing as at the reporting date.

(iv) Property, Plant and Equipment

Property, plant and equipment are stated at
historical cost less accumulated depreciation
and impairment losses, if any. Freehold land
is not depreciated. The cost of an item of
property, plant and equipment comprises its
cost of purchase and any attributable cost of
bringing the asset to its working condition for
its intended use.

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

(v) Capital work in progress

Property, plant and equipment under
construction as well as Coding and Marking
machines held exclusively for Rental prior to
dispatch to Customer’s location are disclosed
as capital work in progress.

(vi) Intangible Assets

Intangible assets with finite useful lives
that are acquired separately are carried
at cost less accumulated amortisation and
accumulated impairment losses. Amortisation
is recognised on a straight line basis over
their estimated useful lives. The estimated
useful life and amortisation method are
reviewed at the end of each reporting period,
with the effect of any changes in estimate
being accounted for on a prospective basis.
Intangible assets with indefinite useful lives
that are acquired separately are carried at
cost less accumulated impairment losses.

Estimated useful lives of the Intangible
assets are as follows:

Computer Software 6 Years

Technical Know How 6 Years

There are no intangible assets having
indefinite useful life.

An intangible asset is derecognised upon
disposal or when no future economic benefits
are expected to arise. Gains or losses arising
from derecognition of an intangible asset,
measured as the difference between the net
disposal proceeds and the carrying amount
of the asset, are recognised in profit or loss
when the asset is derecognised.

(vii) Leases

As a Lessee

At inception of a contract, the Company
assesses whether a contract is, or contain
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 period
of time in exchange for consideration. To
assess whether a contract conveys the right
to control the use of an identified asset, the
Company assesses whether:

• The contract involves the use of an identified
asset this may be specified explicitly or
implicitly and should be physically distinct or
represent substantially all of the capacity of
a physically distinct asset.

• The Company has the right to substantially
all of the economic benefits from the use of
the asset throughout the period of use; and

• The Company has the right to direct the use
of the asset. The Company has this right
when it has the decision making rights that
are most relevant to changing how and for
what purposes the asset is used.

At the date of commencement of lease, the
Company recognises a Right-of-use asset
(“ROU”) and a corresponding liability for all
lease arrangements in which it is a lessee,
except for leases with the term of twelve
months or less (short term leases) and low
value leases. For short term and low value
leases, the Company recognises the lease
payment as an operating expense on straight
line basis over the term of lease.

Right-of-use assets are depreciated from the
commencement date on a straight-line basis
over the period of the lease term and useful
life of the underlying asset.

The lease liability is initially measured at
amortised cost at the present value of the
future lease payments. The lease payments
are discounted using the interest rate implicit
in the lease or, if that rate cannot be readily
determined, the Company’s incremental
borrowing rate.

Upon adoption of the Ind AS 116 Leases,
Lease liability and ROU asset have been
separately presented in the Balance Sheet.
A Portion of the annual operating lease
costs, which was previously fully recognised
as a rental / lease expense, is recorded as
interest expense. In addition, the portion of
the lease payments, which represents the
reduction of the lease liability is recognised in
the cash flow statement as an outflow from
financing activities, which was previously fully
recognised as an outflow from operating
activities.

As a lessor

At the inception of a lease, the lease
arrangement is classified as either a finance
lease or an operating lease, based on
contractual terms and substance of the
lease arrangement. Whenever the terms of
the lease transfer substantially all the risks
and rewards of ownership to the lessee,
the contract is classified as a finance lease.
All other leases are classified as operating
leases.

Lease income from operating leases where
the Company is a lessor is recognised in
income on a straight-line basis over the lease
term unless the receipts are structured in
accordance with lease agreement. Adoption
of the new standard had no impact upon
leases for which the Company is a lessor.

(viii) Depreciation and Amortisation

Property, plant and equipment

Depreciation is calculated using the straight¬
line method to allocate their cost, net of their
residual values, over their estimated useful
lives.

The useful lives have been taken as specified
by Schedule II to the Companies Act, 2013
except for coding and marking machines
where useful lives have been determined as
seven years based on technical evaluation
done by the Management and for Plant &
Machineries for masks useful lives have been
determined and duly certified by Chartered
Engineer as three years.

Pro-rata depreciation is charged on property,
plant and equipment from/up to the date on
which such assets are ready to put to use/are
deleted or discarded.

Intangible Assets

Intangible assets are amortised over their
respective individual estimated useful life on
straight line basis commencing from the date
such asset is acquired for use in the Company.

Computer Software and Technical Know
How are classified as intangible assets and
amortised on straight line basis over a period
of 6 years.

Pro-rata amortisation is charged on
intangible assets from/up to the date on
which such assets are acquired for use/are
deleted or discarded.

(ix) Impairment of Assets

A tangible or intangible asset is treated as
impaired when the carrying amount of the
asset exceeds its estimated recoverable value.
Carrying amounts of tangible or intangible
assets are reviewed at each balance sheet
date to determine Indications of impairment,
if any, of those assets. If any such Indication
exists, the recoverable amount of the asset
is estimated and an impairment loss equal
to the excess of the carrying amount over
its recoverable value is recognised as an
impairment loss and the same is charged to
profit and loss account. The impairment loss,
if any, recognised in prior accounting period
is reversed if there is a change in estimate of
recoverable amount.

(x) Financial Instruments

Financial assets and financial liabilities are
recognised when the Company becomes
a party to the contractual provision of the
instrument. All the financial assets and
financial liabilities are initially measured
at fair value, except for trade receivables
which are initially measured at transaction
price. Transaction costs that are directly

attributable to the acquisition or issue of
financial assets and financial liabilities (other
than financial assets and financial liabilities
at fair value through profit or loss) are
added to or deducted from the fair value of
the financial assets or financial liabilities, as
appropriate, on initial recognition.

(xi) Financial Assets
Initial recognition

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

• Financial assets are initially recognised
at fair value plus transaction costs for all
financial assets not carried at fair value
through profit or loss.

• Financial assets carried at fair value
through profit or loss are initially
recognised at fair value, and transaction
costs are expensed in the Statement of
Profit and Loss.

Subsequent measurement

All recognised financial assets are
subsequently measured either at amortised
cost or fair value [either through other
comprehensive income (FVTOCI) or through
profit or loss (FVTPL)] depending on the
classification of the financial assets as
follows:

(a) Financial Asset measured at Amortised
Cost: The Company’s financial assets
primarily consists of cash and cash
equivalents, trade receivables, loans to
employees, security deposits and other
eligible current and non-current assets
which are classified as financial assets
carried at amortised cost.

(b) Financial Asset measured at Fair Value
through Other Comprehensive Income

(FVTOCI): On initial recognition, the
Company has made irrevocable election
in respect of purchases/acquisition
on an instrument-by-instrument basis
to present the subsequent changes
in fair value in other comprehensive
income pertaining to investments in
equity instruments. This election is not
permitted if the equity investment is held
for trading. These elected investments
are initially measured at fair value plus

transaction costs. Subsequently, they are
measured at fair value with gains and
losses arising from changes in fair value
recognised in other comprehensive
income and accumulated in the ‘Reserve
for equity instruments through other
comprehensive income’. The cumulative
gain or loss is not reclassified to profit
or loss on disposal of the investments as
the same has been recognised in other
comprehensive income.

(c) Financial assets at fair value through
profit or loss (FVTPL): Investments in
equity instruments are classified as at
FVTPL, unless the Company irrevocably
elects on initial recognition to present
subsequent changes in fair value in other
comprehensive income for investments
in equity instruments which are not held
for trading.

(d) Financial assets at Cost: Contribution
to Venture fund in form of purchase of
units with lock in period of more than
12 months is classified as Non-current
Investment.

Derecognition of financial assets

A financial asset is derecognised when the
contractual right to receive cash flows from
the asset has expired; the Company has
transferred the financial asset along with all
the risks and rewards or has assumed an
obligation to pay the received cash flows
in full to a third party under a pass-through
arrangement.

On derecognition of a financial asset in
its entirety, the difference between the
carrying amounts measured at the date of
derecognition and the consideration received
is recognised in profit or loss.

Impairment of financial assets

The Company applies the expected credit
loss model for recognising impairment loss
on financial assets measured at amortised
cost, trade receivables and other contractual
rights to receive cash or other financial asset.

Expected Credit Loss (ECL) is the difference
between all contractual cash flows that are
due in accordance with the contract and the
cash flows expected to receive (i.e., all cash
shortfalls).

(xii) Financial Liabilities

Financial liabilities of the Company are
contractual obligation to deliver cash or
another financial asset to another entity. The
Company’s financial liabilities include long¬
term and short-term borrowings, trade and
other payables and other eligible current and
non-current liabilities.

Classification Measurement and De¬
recognition

All recognised financial liabilities are
subsequently measured at amortised
cost. The Company de-recognise financial
liabilities when, and only when, the Company’s
obligations are discharged, cancelled, or
have expired. Gain and losses are recognised
in profit or loss when the liabilities are
derecognised.

(xiii) Offsetting of financial instruments

Financial Assets and Financial Liabilities
are offset and the net amount is reported
in the balance sheet only 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 realize the assets
and settle the liabilities simultaneously.

(xiv) Valuation of Inventories

Inventories are valued at lower of cost and
net realisable value after providing for non
moving material, obsolescence wherever
necessary. The cost of inventories have been
computed to include all cost of purchases,
cost of conversion and other related costs
incurred in bringing the inventories to their
present location and condition. 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.

Inventories are carried in the balance sheet
as follows:

(xv) Translation of Foreign Currency
Transactions

The Company’s financial statements are
presented in Indian Rupees (?) which is
Company’s functional and presentation
currency. Transactions denominated in
foreign currency are recognised at the rates
of exchange prevailing at the date of the
transactions. At the end of each reporting
period, monetary items denominated in
foreign currencies are retranslated at the
rates prevailing at year end date. Exchange
differences on monetary items are recognised
in profit or loss in the period in which they
arise. Income and Expenses of foreign branch
have been translated at the average rate for
the year.

(xvi) Revenue Recognition

The Company derives revenues primarily
from sale of manufactured goods, traded
goods, and related services.

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

The Company does not expect to have any
contracts where the period between the
transfer of the promised goods or services to
the customer and payment by the customer
exceeds one year. As a consequence, it does
not adjust any of the transaction prices for
the time value of money.

Revenue from sales of manufactured goods,
traded goods and related services are
recognised when significant risks and rewards
of ownership of the goods are transferred to
the customer, recovery of the consideration
is probable, the amount of revenue can be

measured reliably, and all performance
obligation related to contract is satisfied.
Sales are disclosed net of returns and claims.

Other operating revenue include duty
drawback & Export Incentives which are
recognised when the right to receive is
established.

Other Income includes Interest Income,
Dividend Income, Gain on Foreign Exchange
Fluctuations etc. Interest Income accrued
on a time basis by reference to the principal
outstanding and the effective interest rate.
Dividend Income accounted in the period
in which the right to receive the same is
established.

(xvii) Government Grants

Grants and subsidies from the Government
are recognised when there is reasonable
assurance that the grant/ subsidy will be
received, and all the prescribed conditions
will be complied with.

Grant or subsidy relating to an expense item
is recognised as income in the statement
of profit or loss over the periods necessary
to match them on a systematic basis to the
costs which is intended to compensate.

Grant or subsidy relating to an asset are
included in non-current liabilities as deferred
income and are credited to statement of
profit or loss on a straight-line basis over
the expected lives of the related assets and
presented within other income.

(xviii) Borrowing Costs

Borrowing costs directly attributable to the
acquisition, construction or production of
qualifying assets are capitalised as part of
the cost of such assets. A qualifying asset
is one that necessarily takes a substantial
period of time to get ready for their intended
use. All other borrowing costs are recognised
as expense in the period in which they are
incurred.

(xix) Dividends

Final dividend on shares is recorded as
a liability on the date of approval by the
shareholders at the annual general meeting
and interim dividend are recorded as a
liability on the date of declaration by the
Company’s Board of Directors.

(xx) Earnings per share

Basic earnings per share is calculated by
dividing the net profit or loss after tax for the
period attributable to the equity shareholders
by the weighted average number of Equity
Shares outstanding during the year adjusted
for bonus elements in equity shares issued
during the year

For the purpose of calculating diluted earnings
per share, the net profit or loss after tax 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.

(xxi) Employee Benefits

Short-term Employee Benefits:

Employee benefits such as salaries, wages,
short term compensated absences, expected
cost of bonus, ex-gratia and performance-
linked rewards falling due wholly within
twelve months of rendering the service are
classified as short term employee benefits
and are expensed in the period in which the
employee renders the related service.

Long-term Employee Benefits:

Defined Contribution Plans:

Contributions to the employee’s provident
fund, Employee’s Pension Scheme and
Employee’s State Insurance are recognised
as defined contribution plan and charged
as expenses during the period in which the
employees perform the services.

Defined Benefit Plans:

Retirement benefits in the form of Gratuity
is considered as defined benefit plan and
determined on actuarial valuation using the
Projected Unit Credit Method at the balance
sheet date.

Interest Cost, Current Service Cost and Past
Service Cost are recognised in profit and loss
account immediately. Re-measurement gain
and losses arising due to change in actuarial
assumptions and estimates are recognised
directly in Other Comprehensive Income. Such
re-measurements are not reclassified to the
Statement of Profit and Loss in subsequent
periods.

based on tax rates (and tax laws) that have
been enacted or substantively enacted at the
reporting date.

Minimum Alternate Tax (MAT) credit:

Minimum Alternate Tax (MAT) credit is
recognised as an asset only when and to
the extent there is convincing evidence that
the Company will pay income tax under the
normal provisions during the specified period,
resulting in utilisation of MAT credit.

In the year in which the MAT credit becomes
eligible to be recognised as an asset in
accordance with the recommendations
contained in the Guidance Note issued by the
Institute of Chartered Accountants of India,
the said asset is created by way of a credit to
the statement of Profit & Loss and shown as
MAT Credit Entitlement.

Consistent with the stated accounting policy,
the Company has recognised deferred tax
asset, being the Excess of tax on book profit
paid over the Normal income tax for the
past several years standing at '49.57 Crores
allowed forward as a MAT credit, which can
be utilised against the normal income tax
liability in future years.

Based on the evaluation of the factors
mentioned as per Ind-AS 12 “Income Taxes”,
the Company has determined that there is
virtual certainty that sufficient future taxable
profits will be available against which the
MAT credit Entitlement of '49.57 Crores can
be utilised.

Therefore, the Company has recognised a
deferred tax asset of ' 49.57 Crores in the
financial Statements for the year ended 31
March 2025.

(xxiv) Segment Reporting

The Company is engaged predominantly
into manufacturing of Coding & Marking
Machines and consumables thereof. The
Company has only One Reportable business
segment identified by Management namely

Coding & Marking Machines and consumable
thereof.