2 SIGNIFICANT ACCOUNTING POLICIES:

a) BASIS OF PREPARATION OF FINANCIAL
STATEMENTS:

These financial statements have been prepared in
accordance with the Generally Accepted Accounting
Principles in India ("Indian GAAP") to comply with
Accounting Standards ("AS") specified under Section
133 of the Companies Act, 2013 read with Rule 3
of the Companies (Indian Accounting Standards)
Rules as amended from time to time. The financial
statements have been prepared under the historical
cost convention on the accrual basis except for
certain financial instruments which are measured
at fair values, the provisions of the Companies
Act, 2013 ('the Act') (to the extent notified) and
guidelines issued by the Securities and Exchange
Board of India (SEBI).

Accounting policies have been consistently applied
except where a newly-issued accounting standard
is initially adopted or a revision to an existing
accounting standard requires a change in the
accounting policy hitherto in use.

b) USE OF ESTIMATES:

The preparation of financial statements in
conformity with generally accepted accounting
principles requires management of the Company to
make estimates and assumptions that affect certain
reported balances of assets and liabilities, disclosures
relating to the contingent liabilities as at the date of
the financial statements and reported amounts of
income and expense during the year. Accordingly,
future results could differ due to changes in these
estimates and the difference between the actual
result and the estimate are recognized in the period
in which the results are known / materialize.

c) PROPERTY, PLANT AND EQUIPMENT:

(i) Tangible assets:

Property Plant and Equipment (PPE) and other
tangible assets are stated at cost of acquisition
inclusive of freight, duties, taxes and incidental
expenses relating to the acquisition, installation,
erection and commissioning less depreciation.
Internally manufactured assets are valued at
works cost. Subsequent expenditure related
to PPE is capitalized only when it is probable

(ii) Current investments are carried in the financial
statements at lower of cost and fair value
determined on an individual investment basis.

e) INVENTORIES:

(i) Inventories does not include spare parts, servicing
equipment and stand by equipment which meet
definition of PPE as per AS-10 (revised) .

(ii) Raw materials, stores, spare parts and
components are valued at cost on weighted
average basis or net realizable value whichever
is lower.

(iii) Work in progress is valued at works cost or net
realizable value whichever is lower.

(iv) Finished goods are valued at works cost or net
realizable value whichever is lower.

(v) Material cost of work in progress and finished
goods are computed on weighted average basis.

f) REVENUE RECOGNITION:

Revenue is recognized to an extent that is probable

that the economic benefits will flow to the Company

and the revenue can be reliably measured.

(i) Revenue from Contract with Customer:
Revenue from contract with customers is
recognised when the Company satisfies
performance obligation by transferring promised
goods and services to the customer. Performance
obligations maybe satisfied at a point of time or
over a period of time. Performance obligations
satisfied over a period of time are recognised as
per the terms of relevant contractual agreements/
arrangements. Performance obligations are
said to be satisfied at a point of time when
the customer obtains controls of the asset.

Revenue is measured based on transaction
price, which is the fair value of the consideration
received or receivable, stated net of discounts,
returns and value added tax. Transaction price
is recognised based on the price specified in the
contract, net of the estimated sales incentives/
discounts. Accumulated experience is used to
estimate and provide for the discounts/ right of
return, using the expected value method.

A liability is recognised for expected sale returns
and corresponding assets are recognised
for the products expected to be returned.
The Company recognises as an asset, the
incremental costs of obtaining a contract with
a customer, if the Company expects to recover
those costs. The said asset is amortised on a
systematic basis consistent with the transfer of
goods or services to the customer.

(ii) Interest income is recognized on time proportion
basis.

(iii) Dividend income is recognized, when the right to
receive the dividend is established.

(iv) Rental income is recognized on time proportion
basis.

g) EMPLOYEE BENEFITS:

(i) Short term employee benefits:

Employee benefits payable wholly within twelve
months of rendering the service are classified as
short term. Benefits such as salaries, bonus, leave
travel allowance etc. are recognized in the period in
which the employee renders the related service.

(ii) Post employment benefits:

a. Defined contribution plans:

The Company has contributed to provident and
pension which are defined contribution plans.
The contributions paid/ payable under the
scheme are recognized during the year in which
employee renders the related service.

b. Defined benefit plans:

Employees' gratuity is defined benefit plan. The
present value of the obligation under such plan
is determined based on actuarial valuation using
the Projected Unit Credit Method which considers
each year of service as giving rise to an additional
unit of benefit entitlement and measures each
unit separately to build up the final obligation.
Actuarial gains and losses are recognized in
the statement of other comprehensive income
in the year they arise. Obligation is measured
at the present value of estimated future cash
flows using a discounted rate that is determined
by reference to market yields as at the balance
sheet date on Government bonds where the
currency and terms of the Government bonds
are consistent with the currency and estimated
terms that matches to the defined benefit
obligation.

c. Compensated Absences:

Accumulated compensated absences, which
are expected to be availed or encashed within
12 months from the end of the year are treated
as short term employee benefits. The obligation
towards the same is measured at the expected
cost of accumulating compensated absences as
the additional amount expected to be paid as a
result of the unused entitlement as at the year
end.

Accumulated compensated absences, which are
expected to be availed or encashed beyond 12
months from the end of the year are treated
as other long term employee benefits. The
Company's liability is actuarially determined
(using the Projected Unit Credit method) at the
end of each year. Actuarial losses/ gains are
recognized in the statement of profit and loss in
the year in which they arise.

(iii) Share Based Payments:

Share-based compensation benefits are provided
to employees via the IZMO Limited Employee
Stock Option Plan.

The fair value of options granted under
the Employees' Stock Option Scheme is
recognised as an employee benefits expense
with a corresponding increase in equity. The
total amount to be expensed is determined
by reference to the fair value of the options
granted:

- including any market performance conditions
(e.g.,the entity's share price)

- excluding the impact of any service and non¬
market performance vesting conditions (e.g.
profitability, sales growth targets and remaining
an employee of the entity over a specified time
period), and

- including the impact of any non-vesting
conditions (e.g. the requirement for employees
to save or holdings shares for a specific period of
time).

The total expense is recognised over the vesting
period, which is the period over which all of the
specified vesting conditions are to be satisfied.
At the end of each period, the entity revises
its estimates of the number of options that
are expected to vest based on the non-market
vesting and service conditions. It recognises
the impact of the revision to original estimates,
if any, in profit or loss, with a corresponding
adjustment to equity.

h) FOREIGN CURRENCY TRANSACTIONS:

(i) Foreign currency transactions are translated into
rupees at the exchange rate prevailing on the
date of the transaction / rates that approximate
the actual rates as at that date.

(ii) Monetary foreign currency assets and liabilities
outstanding as at the year-end are restated at
the exchange rates prevailing as at the close of
the financial year. All exchange differences are
accounted for in the statement of profit and loss.

(iii) Non monetary items denominated in foreign
currency, are valued at the exchange rate
prevailing on the date of transaction.

i) TAXES ON INCOME:

Current Income Tax is measured at the amount
expected to be paid to the tax authorities in
accordance with local laws of various jurisdiction
where the Company operates.

Deferred tax is provided using the Balance Sheet
approach on temporary differences between the
tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes at the
reporting date. Deferred tax assets are recognised
to the extent that it is probable that taxable profit
will be available against which the deductible
temporary differences, and the carry forward of
unused tax credits and unused tax losses can be
utilised. The tax rates and tax laws used to compute
the tax are those that are enacted or substantively
enacted at the reporting date. Current and Deferred
Tax are recognised in the Statement of Profit and
Loss except to items recognised directly in Other
Comprehensive income or equity in which case the
deferred tax is recognised in other comprehensive
income and equity respectively.

j) BORROWING COSTS:

Interest and other borrowing costs on specific
borrowings relatable to qualifying assets are
capitalized up to the date such assets are ready for
use / intended to use. Other interest and borrowing
costs are charged to the statement of profit and
loss.