3 Significant accounting polic
3.1 Revenue recognition

Revenue from goods and services is recognized, when the Company satisfies a performance
obligation by transferring a promised good or service to its customers. The Company considers the
terms of the contract and its customary business practices to determine the transaction price.
Performance obligations are satisfied at the 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 Goods & services Tax. Transaction price
is recognised based on the price specified in the contract, net of the estimated sales incentives/
discounts. Past trends are used to estimate and provide for the discounts/right of return, using the
expected value method.

3.2 Leases

As a lessee, the Company mainly has lease arrangement for buildings. The Company assesses whether
a contract is or contains a lease at inception of the contract. The assessment involves the exercise of
judgement about whether there is an identified asset, whether the Company has the right to direct the
use of the asset and whether the Company obtains substantially all the economic benefits from use of
that asset.

The Company recognise a right-of- use asset (ROU) and a corresponding lease liability at the lease
commencement date. The lease liability is measured at the present value of the lease payments that are
not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that
rate can not be readily determined, the Company uses the incremental borrowing rate.

The ROU assets are 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 initiatives. ROU assets are amortised from the commencement date on a
straight-line basis over the shorter of the lease term and useful life of the underlying assets. ROU assets
are evaluated for recoverability whenever events or changes in circumstances indicate that their
carrying amounts may not be recoverable.

The lease liability is initially measured at amortised cost at the present value of future lease payments.
The lease payments are discounted using the interest rate implicit in the lease or if nor readily
determinable, using the incremental borrowing rate. Lease liabilities are remeasured with a
corresponding adjustments to the related ROU asset if the Company changes its assessment of whether
it will exercise an extension or a termination option.

Transaction in foreign currency are translated in functional currency using the exchange rates
prevailing at the dates of the respective transactions. Foreign currency monetary items, outstanding
at the balance sheet date are restated at year end rates. Non-monetary items are measured in terms of
historical cost in foreign currency are not translated again. The exchange differences on monetary
items arising, if any are recognised in the statement of Profit and loss in the period in which they
arise.

3.4 Taxation

Income tax expense consists of current 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 in the other
comprehensive income or directly in the equity, in which case the current and deferred taxes are
also recognised in other comprehensive income or directly in equity.

Current tax

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted
or substantively enacted at the reporting date, and any adjustment to tax payable in respect of
previous years.

Deferred tax

Deferred tax is recognized using the balance sheet approach, providing for temporary differences
between the carrying amounts of assets and liabilities for financial reporting purposes and the
amounts used for taxation purposes. Deferred tax assets and liabilities are recognised for deductible
temporary differences arising between the tax base of the assets and liabilities and their carrying
amounts, except when the deferred income tax arises from the initial recognition of an asset or
liability is a transaction that is not a business combination and affects neither accounting nor
taxable profit or loss at the time of the transaction.

Deferred tax are recognised to the extent that it is probable that taxable profit will be available,
against which the deductible temporary differences can be utilised.

Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to
apply to taxable income in the years in which the temporary differences are expected to be resolved
or settled.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same tax
authority and the relevant entity intends to settle its current tax assets and liabilities on a net basis.

Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no
longer probable that the related tax benefit will be realized.

3.5 Earnings per share

The Company presents basic and diluted earnings per share (“EPS”) data for its ordinary shares.

The basic earnings per share is computed by dividing the net profit attributable to equity
shareholders for the period by the weighted average number of equity shares outstanding during
the year.

Diluted earnings per share is computed by dividing the net profit attributable to equity shareholders
for the year relating to the dilutive potential equity shares, by the weighted average number of
equity shares considered for deriving basic earnings per share and the weighted average number of
equity shares which could have been issued on the conversion of all dilutive potential equity shares.
Potential equity shares are deemed to be dilutive only if their conversion to equity shares would
decrease the net profit per share.

3.6 Property, plant and equipment
Tangible assets and intangible assets

The initial cost of PPE comprises its purchase price, including import duties and non-refundable
purchase taxes, and any directly attributable costs of bringing an asset to working condition and
location for its intended use, including relevant borrowing costs and any expected costs of
decommissioning, less accumulated depreciation and accumulated impairment losses, if any.
Expenditure incurred after the PPE have been put into operation, such as repairs and maintenance, are
charged to the Statement of Profit and Loss in the period in which the costs are incurred.
If significant parts of an item of PPE have different useful lives, then they are accounted for as separate
items (major components) of PPE.

Material items such as spare parts, stand-by equipment and service equipment are classified as PPE
when they meet the definition of PPE as specified in Ind AS 16 - Property, Plant and Equipment.
Expenditure during construction period (including financing cost related to borrowed funds for
construction or acquisition of qualifying PPE) is included under Capital Work-in-Progress, and the
same is allocated to the respective PPE on the completion of their construction.

There is no potential for the recovery of investments paid to Pride Ventures India Pvt. Ltd
Rs.2,85,00,004/-, Simar Pride Ventures LLP Rs.1,81,26,084/- , City Makers Rs.1,00,00,000/-
aggregating to Rs. 5,66,26,088/-. Hence, the board of directors decided to write off the same in the
F.Y 2023-24.

³-⁷ Depreciation and amortisation

Depreciation is the systematic allocation of the depreciable amount of PPE over its useful life and is provided
on a straight-line basis over the useful lives as prescribed in Schedule II to the Act or as per technical assessment.

Depreciable amount for PPE is the cost of PPE less its estimated residual value. The useful life of PPE is the
period over which PPE is expected to be available for use by the Company, or the number of production or
similar units expected to be obtained from the asset by the Company

The Company has componentised its PPE and has separately assessed the life of major components. In case of
certain classes of PPE, the Company uses different useful lives than those prescribed in Schedule II to the Act.
The useful lives have been assessed based on technical advice, taking into account the nature of the PPE and
the estimated usage of the asset on the basis of management’s best estimation of obtaining economic benefits
from those classes of assets.

Such classes of assets and their estimated useful lives are as under:

Depreciation on additions is provided on a pro-rata basis from the month of installation or acquisition and in
case of Projects from the date of commencement of commercial production. Depreciation on
deductions/disposals is provided on a pro-rata basis up to the date of deduction/disposal.

3.8 Research and development

Expenditures on research activities undertaken with the prospect of gaining new scientific or technical
knowledge and understanding are recognized in the statement of profit and loss when incurred.

Development activities involve a plan or design for the production of new or substantially improved products
and processes. Development expenditures are capitalized only if development costs can be measured reliably;
the product or process is technically and commercially feasible; future economic benefits are probable; and
the Company intends to and has sufficient resources to complete development and to use or sell the asset.

Expenditure on research and development eligible for capitalization are carried as tangible assets under
development where such assets are not yet ready for their intended use.

The expenditures to be capitalized include the cost of materials and other costs directly attributable to
preparing the asset for its intended use. Other development expenditures are recognized as expense in the
statement of profit and loss as incurred.

Tangible assets relating to products in development are subject to impairment testing at each reporting date.

All other tangible assets are tested for impairment when there are indications that the carrying value may not
be recoverable. All impairment losses are recognized immediately in the statement of profit and loss.

The amortization period and the amortization method for tangible assets with a finite useful life are reviewed
at each reporting date.

3.9 Intangible assets

Intangible assets including software licenses of enduring nature and contractual rights acquired
separately are measured on initial recognition at cost. Following initial recognition, intangible
assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any.
Cost comprises the purchase price and any directly attributable cost of bringing the asset to its
working condition for its intended use.

Intangible assets with finite lives are amortized 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 with a finite useful life 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 with finite lives is recognised
in the statement of profit and loss unless such expenditure forms part of carrying value of another
asset.

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

3.10 Inventories

Inventories are valued as follows:

• Raw materials, fuel, stores & spare parts and packing materials:

Valued at lower of cost and net realisable value (NRV). However, these items are considered to be
realisable at cost, if the finished products, in which they will be used, are expected to be sold at or
above cost. Cost is determined on weighted average basis.

• Work-in- progress (WIP), finished goods and stock-in-trade:

Valued at lower of cost and NRV. Cost of finished goods and WIP includes cost of raw materials,
cost of conversion and other costs incurred in bringing the inventories to their present location and
condition. Cost of inventories is computed on weighted average basis.

3.11 Cash and cash
equivalents

Cash and cash equivalents in the Balance Sheet comprise cash at bank and in hand and short-term
deposits with banks that are readily convertible into cash which are subject to insignificant risk of
changes in value and are held for the purpose of meeting short-term cash commitments.

3.12 Im pairment of financial an d non financial assets

(i) Impairment of financial assets

Non-financial assets other than inventories, deferred tax asset and non-current asset classified as held
for sale are reviewed at 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 recoverable amount. The recoverable amount is higher of the asset’s or Cash¬
Generating Unit’ (CGU) fair value is less cost of disposal and its value in use. Recoverable amount is
determined for individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or group of assets.

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

(ii) Impairment of non- financial assets:

In accordance with IND-AS 109, the Company applies expected credit loss (“ECL”) model for
measurement and recognition of impairment loss on the financial assets measured at amortized cost
and debt instrument measured at FVOCI.

Loss allowances on receivable from customers are measured following the ‘simplified approach’ at an
amount equal to the life time ECL, at each reporting date. In respect of other financial assets such as
debt securities and bank balances, the loss allowance is measured at 12 month ECL only if there is no
significant deterioration in the credit risk since initial recognition of the asset or asset is determined is
have a low credit risk at the reporting date.

The Company has carried out annual review of impairment of fixed assets, based on the report of the
technical executives it is observed there is no necessity for any impairment.

3.13 Employee benefits
Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is
recognized for the amount expected to be paid if the Company has a present legal or constructive
obligation to pay this amount as a result of past service provided by the employee and the
obligation can be estimated reliably.

Defined contribution plans (like contribution to provident fund, ESI)

The Company’s contributions to defined contribution plans are charged to the income statement
as and when the services are received from the employees.

Defined benefit plan-Gratuity

The liability in respect of defined benefit plans and other post-employment benefits are calculated
using the projected unit credit method using actuarial valuation. The present value of the defined
benefit obligation is determined by discounting the estimated future cash outflows using interest
rates of high-quality corporate bonds that are denominated in the currency in which the benefits
will be paid, and that have terms to maturity approximating to the terms of the related defined
benefit obligation. In countries where there is no deep market in such bonds, the market rates on
government bonds are used. The current service cost of the defined benefit plan, recognized in the
income statement in employee benefit expense, reflects the increase in the defined benefit
obligation resulting from employee service in the current year, benefit changes, curtailments and
settlements. Past service costs are recognized immediately in income. 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. This cost is included in employee benefit expense in the income
statement. Actuarial gains and losses arising from experience adjustments and changes in actuarial
assumptions are charged or credited to equity in other comprehensive income in the period in
which they arise.

Termination benefits

Termination benefits are recognized as an expense when the Company is demonstrably
committed, without realistic possibility of withdrawal, to a formal detailed plan to either terminate
employment before the normal retirement date, or to provide termination benefits as a result of an
offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies
are recognized as an expense if the Company has made an offer encouraging voluntary
redundancy, it is probable that the offer will be accepted, and the number of acceptances can be
estimated reliably.