Atam Valves Ltd. நிறுவனத்தின் கணக்கியல் கொள்கைகள்

Mar 31, 2025

Note 1 Corporate Information

Atam Valves Limited (hereinafter referred to as “the Company”) is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956 and has its registered office at 1051, Industrial Area, Jalandhar, Punjab. The Company is listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE). The Company is engaged in the business of manufacturing of Valves and fittings, steam traps and strainers.

The financial statements were approved and authorized for issue by the Company''s Board of Directors in the meeting held on May 26, 2025.

Note 2 Statement of Compliance with Ind AS and Basis of preparation and measurement

I Statement of Compliance

The financial statements have been prepared in accordance with Indian Accounting Standards (hereinafter referred to as “Ind AS”) notified under Section 133 of the Companies Act, 2013 (the Act) read with Rule 3 of the Companies(Indian Accounting Standards) Rules, 2015 as amended from time to time and other relevant provisions of the Act.

II Basis of Preparation and Measurement

(i.) The financial statements have been prepared on historical cost convention on accrual basis except for certain financial instruments (including derivative instruments) which are measured at fair value at the end of each reporting period as required under Ind AS.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. 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, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/ or disclosure purposes in the financial statements is determined on such a basis, except for measurements that have some similarities to fair value but are not fair value, such as net realisable value in Ind AS 2.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability.

(ii.) 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.

(iii.) The functional and presentation currency of the Company is Indian rupees (?) and all values are rounded to the nearest lakhs and two decimals thereof, unless otherwise stated.

Note 3 Material Accounting Policy Information, Significant Accounting Estimates, Judgements and Assumptions and Applicability of New and Revised Ind AS

I Material Accounting Policy Information

A. Revenue Recognition (i.) Sale of goods

Revenue from sale of goods is recognised as and when the company satisfies performance obligation by transfer of control of goods.

Generally control is transferred upon shipment of goods to the customer or when the goods is made available to the customer, provided transfer of title to the customer occurs and the company has not retained any significant risk of ownership or future obligations with respect to the goods shipped.

Revenue is measured at the amount of consideration which the company expects to be entitled in exchange for transferring promised goods to a customer as specified in the contract, after deduction of any trade discounts, volume rebates

and any taxes or duties collected on behalf of the Government such as goods and services tax, etc. Consideration is generally due upon satisfaction of performance obligation and receivable is recognized when it becomes unconditional and only passage of time is required before the payment is due. No element of financing is deemed present as the sales are made with the short term credit period generally consistent with market practices.

If the Company receives consideration before transfer of goods to the customer, such amount is presented as a contract liability. The company does not adjust such liability for the effects of significant financing component if it is expected that the promised goods will be transferred to the customer within a period of one year. Contract liabilities are recognised as revenue when the Company satisfies performance obligation as per the contract.

(ii.) Interest Income

Interest Income from financial assets is recognized when it is probable that economic benefits will flow to the company and amount of income can be measured reliably. Interest income is accrued on time basis, by reference to principal outstanding and at effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of financial asset to that asset''s net carrying amount on initial recognition.

(iii.) Insurance and other claims

Insurance and other claims are recognized when no significant uncertainty exists with regard to the amount to be realized and the ultimate collection thereof.

(iv.) Other Income

Other income is recognized when no significant uncertainty exists with regard to the amount to be realized and the ultimate collection thereof.

B. 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. The amount of short term employee benefits are recognized as an expense on an undiscounted basis in the statement of profit and loss of the year in which the related service is rendered.

(ii.) Post-Employment benefit plans

(a.) Defined Contribution Plan:

Provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme as an expense, when an employee renders the related service.

(b.) Defined Benefit Plan:

Gratuity

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees of the Company. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the tenure of employment with the Company.

Liability with regard to the defined benefit plan is determined by actuarial valuation, performed by an independent actuary, at each balance sheet date using the projected unit credit method.

The Company recognizes the obligation of the defined benefit plan in its balance sheet as a liability. Remeasurements comprising of actuarial gains and losses, and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability) are recognised in Other Comprehensive Income which are not reclassified to profit or loss in subsequent periods. All other expenses related to defined benefit plan are recognised in employee benefits expense in the Statement of profit and loss.

C. Property, plant and equipment

Property, plant and equipment are stated at cost or deemed cost applied on transition to Ind AS, less accumulated depreciation and impairment loss, if any. The cost directly attributable to acquisition are capitalised until the property plant and equipment are ready for use as intended by the management.

The cost of an item of Property, plant and equipment comprises of: (i) Purchase price including import duties and nonrefundable purchase taxes after deducting trade discounts and rebates. (ii) Any expenditure directly attributable for bringing an asset to the location and the working condition for its intended use and (iii) The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation for which an entity incurs either when the item is acquired or as a consequence of having used the item during a particular period for purposes other than to produce inventories during that period.

Subsequent expenditures relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the cost of the item can be measured reliably. Repairs and maintenance costs are recognized in net profit in the statement of profit and loss when incurred.

Property, Plant and Equipment which are significant to the total cost of that item of Property, Plant and Equipment and having different useful life are accounted separately.

Property, plant and equipment which are not ready for intended use at each balance sheet date are disclosed as “Capital work-in-progress” and advances paid towards the acquisition of Property, plant and equipment outstanding at each balance sheet date are classified as Capital advances under “Other non-current assets”.

On transition to Ind AS, the Company has elected to continue with the carrying value of its property, plant and equipment recognised as at April 1, 2021 (transition date) measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.

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. The cost/deemed cost and the related accumulated depreciation are eliminated from the financial statements upon disposal or retirement of the asset and any gain or loss arising thereon is determined as the difference between sale proceeds and the carrying amount of the asset and is recognised in the statement of profit and loss.

D. Intangible Assets

Intangible assets are stated at cost or deemed cost applied on transition to Ind AS, less accumulated amortization and impairment, if any. The cost of intangible asset comprises of its purchase price, net of recoverable taxes and any directly attributable cost of preparing the asset for its intended use.

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in statement of profit and loss as and when incurred.

On transition to Ind AS, the Company has elected to continue with the carrying value of its intangible assets recognised as at April 1,2021 (transition date) measured as per the previous GAAP and use that carrying value as deemed cost of intangible assets.

An intangible asset is derecognised upon disposal or retirement of the asset. The cost/deemed cost and the related accumulated amortization are eliminated from the financial statements upon disposal or retirement of the asset and resultant gains or losses are recognized in the statement of Profit and Loss when the asset is derecognized.

E. Depreciation and amortization

Depreciation is provided on Property, plant and equipment on written down value method on the basis of useful lives of such assets specified in Schedule II to the Act.

Depreciation method, useful lives and residual values are reviewed periodically, including at each financial year end with the effect of any changes in estimate accounted for on a prospective basis.

Amortization

Intangible assets are amortized on straight line method over the estimated useful life. The amortization method, useful life and residual value are reviewed at each financial year end. The estimated useful life is based on number of factors including effect of obsolescence and other economic factors and is as under:

Assets description	Useful Life
Computer Software / Website	5 Years

F. Inventories

Inventories are valued at cost or net realizable value, whichever is lower except production waste/scrap which is valued at net realizable value. The raw materials and other supplies held for use in the production are valued at net realisable value only if the finished products in which they are to be incorporated are expected to be sold below cost.

Net Realisable Value is the estimated selling price in ordinary course of business less estimated cost necessary to make the sales.

G. Borrowing Costs

Borrowing costs directly attributable to the acquisition or construction of qualifying assets i.e. the assets that necessarily

takes a substantial period oftime to get ready for its intended use are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that the Company incurs in connection with the borrowing of funds.

H. Earnings per Share

Basic earnings per share are computed by dividing the profit for the period attributable to the equity shareholders of the company by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the profit for the period attributable to the equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares, if any.

I. Income Taxes

Income tax expense comprises current tax and deferred tax.

Current tax is the tax payable/receivable on the taxable profit/loss for the year using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period and any adjustment to taxes in respect of previous years. Interest expenses and penalties, if any, related to income tax are included in finance cost and other expenses respectively. Interest Income, if any, related to income tax is included in other income.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle the asset and the liability on a net basis.

Deferred tax is recognised in respect of temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose at the reporting date using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date

A deferred tax asset is recognized to the extent, it is probable that future taxable profit will be available against where the deductible temporary differences and 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 utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized 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 deferred tax liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority.

Income tax expense is recognised in statement of Profit and Loss except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, as the case may be.

J. Government Grants

Government grants are not recognized until there is reasonable assurance that all attached conditions will be complied with and the grant will be received.

When the grants relates to an expense item, it is recognised in the Statement of profit and loss by way of reduction from the related cost, which the grants are intended to compensate, except where the related expense is not directly identifiable. In such cases, the grant is presented in the ''Other Income''.

Government grants that becomes receivable as compensation for expenses or losses already incurred or for the purpose of giving financial support to the Company with no related costs is recognised in the Statement of profit or loss of the period in which it becomes receivable under ''Other operating income''/''Other income'' based on the nature of grant.

Government grants relating to the purchase of property, plant and equipment are deducted from its gross value and are recognised in profit or loss on a systematic over the expected useful lives of the related assets by way of reduced depreciation.

K. Foreign Currency translations

Transactions in foreign currency are initially recorded in the functional currency i.e. Indian Rupees using the exchange rate prevailing at the date of transactions.

Monetary items denominated in foreign currency are reported using the exchange rate prevailing at the end of reporting period. The exchange difference arising on the settlement or reporting of monetary items at rates different from rates at which these were initially recorded / reported in previous financial statements, are recognised in the statement of profit and loss in the period in which it arise.

Non-monetary items denominated in foreign currency and measured at historical cost are recorded at the exchange rate prevalent at the date of transaction, Non-monetary items that are measured in term of historical cost in foreign currency are not reinstated.

L. Leases

Company as a lessee

The Company''s lease asset classes primarily consist of leases for land and buildings. The Company assesses whether a contract contains a lease, at inception of a contract. 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: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.

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

The right-of-use assets are initially recognized 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. They are 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 underlying asset. Right of use assets is 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.

The lease liability is initially measured at amortized 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 not readily determinable, using the lessee''s incremental borrowing rate. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it will exercise an extension or a termination option.

Lease liabilities and Right of Use assets have been separately presented in the financial statements. Lease Payments and interest thereon have been classified as cash flows from financing activities in the Statement of Cash flows.

M. Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

(i.) Initial Recognition and measurement

The company recognises the financial assets and financial liabilities when it becomes party to the contractual provision of the instruments. All financial assets and liabilities are recognised at fair value on initial recognition except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition of financial assets and or issue of financial liabilities that are not recognized at fair value through profit or loss, are added to or reduced from the fair value of the financial assets or financial liabilities, as appropriate. Transaction cost directly attributable to the acquisition of financial assets and financial liabilities recognized at fair value through Profit or Loss are recognised immediately in the Statement of Profit and Loss.

Transaction cost directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit and loss are recognised immediately in the statement of profit and loss.

(ii.) Subsequent measurement

For the purposes of subsequent measurement, financial instruments are classified as follows:

Non-derivative financial instruments

(a.) Financial assets carried at amortised cost

A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect 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 amount outstanding.

Interest income for such instruments is recognised in profit or loss using the effective interest rate (EIR) method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s gross carrying amount.

The carrying amounts of financial assets that are subsequently measured at amortised cost are determined based on the effective interest method less any impairment losses.

(b.) Financial assets at fair value through other comprehensive income

A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a 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.

Interest income for such instruments is recognised in profit or loss using the effective interest rate (EIR) method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s gross carrying amount.

Fair value movements are recognised in the other comprehensive income (OCI) until the financial asset is derecognised. On de-recognition, cumulative gain or loss previously recognised in OCI is reclassified from the equity to the profit or loss.

(c.) Financial assets at fair value through profit or loss

A financial asset is subsequently measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through other comprehensive income. Such financial assets are measured at fair value with all changes in fair value recognised in the statement of profit and loss.

Dividend and interest income from such instruments is recognized in the statement of profit and loss, when the right to receive the payment is established.

Fair value changes on such assets are recognised in the statement of profit and loss.

(d.) Financial liabilities

Financial liabilities are classified as at fair value through profit or loss when the financial liability is either contingent consideration recognised by the Company as an acquirer in a business combination to which Ind AS 103 applies or is held for trading or it is designated as at FVTPL.

All other financial liabilities are subsequently measured at amortized cost using the effective interest method unless at initial recognition, they are classified as measured at fair value through profit and loss.

Financial liabilities carried at fair value through profit or loss, are measured at fair value with all changes in fair value recognised in the statement of profit and loss.

Interest expense for the financial liabilities subsequently measured at amortized cost is recognised in profit or loss using the effective interest rate (EIR) method.

(e.) Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received. Incremental costs directly attributable to the issuance of equity instruments and buy back of equity instruments are recognized as a deduction from equity, net of any tax effects.

(iii.) De-recognition of financial instrument

(a.) A financial asset (or, a part of a financial asset) is primarily derecognized when the contractual right to the cash flows from the financial asset expires, or the company transfers its right to receive cash flow from the financial assets and substantially all the risks and rewards of ownership of the asset to another party.

On de-recognition of a financial asset, the difference between the asset''s carrying amount and the sum of the consideration received/receivable is recognised in the profit or loss.

(b.) A financial liability (or a part of financial liability) is derecognized when obligation specified in the contract is discharged or cancelled or expires.

On de-recognition of a financial liability, the difference between the carrying amount of the financial liability

de-recognised and the consideration paid/payable is recognised in profit or loss.

(iv) Offsetting 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 them on a net basis or to realise the assets and settle the liabilities simultaneously.

(v) Impairment of Financial Assets

Financial assets that are carried at amortised cost and fair value through other comprehensive income (FVOCI) are assessed for possible impairments basis expected credit losses taking into account the past history of recovery, risk of default of the counterparty, existing market conditions etc. The impairment methodology applied depends on whether there has been a significant increase in credit risk since initial recognition.

Expected Credit Losses are measured through a loss allowance at an amount equal to:

• The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or

• Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of financial instruments).

For trade receivables or any contractual right to receive cash or another financial asset that result from transaction that are within the scope of Ind AS 115 and Ind AS 116, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.

For other assets, the company uses 12 months ECL to provide for impairment loss where no significant increase in credit risk is. If there is significant increase in credit risk full lifetime ECL is used.

(vi.) Write off

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering the financial asset in its entirety or a portion thereof.

N. Impairment of Non-financial assets

Property, plant and equipment, other intangible assets and other non-financial assets are tested for impairment 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.

If such assets are considered to be impaired, the impairment to be recognized in the statement of profit and loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. The recoverable amount is the higher of an asset''s fair value less costs of disposal and value in use.

The assets that suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period. When an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, however that the increased carrying amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognised for the asset in prior years. The reversal of an impairment loss is recognised in the statement of profit and loss.

Impairment is reviewed periodically including at the end of each financial year.

O. Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

A contingent liability is not recognised in the financial statements, however, is disclosed, unless the possibility of an outflow of resources embodying economic benefits is remote. If it becomes probable that an outflow of future economic benefits will be required for an item dealt with as a contingent liability, a provision is recognised in the financial statements of the period (except in the extremely rare circumstances where no reliable estimate can be made).

A contingent asset is not recognised in the financial statements, however, is disclosed, where an inflow of economic benefits is probable. When the realisation of income is virtually certain, then the asset is no longer a contingent asset, and is recognised as an asset.

Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date.

P. Dividends

Final dividends on equity shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Board of Directors of the Company.

Q. Cash and cash equivalents

The Cash and cash equivalent in the balance sheet comprise cash at banks, cash in hand, demand deposits and short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value

R. Statement of Cash flows

The statement of cash flows is prepared in accordance with the Indian Accounting Standard (Ind AS) - 7 “Statement of Cash flows” using the indirect method for operating activities whereby profit for the period is adjusted for the effects of transaction of a non-cash nature, and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the company are segregated.

II Current - Non-Current Classification

All assets and liabilities have been classified as current and non-current on the basis of the following criteria:

Assets

An asset is classified as current when it satisfies any of the following criteria:

(a.) it is expected to be realised in, or is intended for sale or consumption in, the company''s normal operating cycle;

(b.) it is held primarily for the purpose of being traded;

(c.) it is expected to be realised within twelve months after the reporting date; or

(d.) it is cash or cash equivalent unless it is restricted from being exchanged or use to settle a liability for at least twelve months after the reporting date.

Current assets include the current portion of non-current financial assets.

All other assets are classified as non-current.

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

(a.) it is expected to be settled in the company''s normal operating cycle;

(b.) it is held primarily for the purpose of being traded;

(c.) it is due to be settled within twelve months after the reporting date; or

(d.) there is no unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counterpart, result in its settlement by the issue of equity instruments do not affect its classification.

Current liabilities include current portion of non-current financial liabilities.

All other liabilities are classified as non-current.

Operating cycle

Operating cycle is the time between the acquisition of assets for processing/servicing and their realisation in cash or cash equivalents. Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current or non-current classification of assets and liabilities.

III Significant Accounting Estimates, Judgements and Assumptions

The preparation of financial statements in conformity with Indian Accounting Standards (Ind AS) require management to make judgements, estimates and assumptions in the application of accounting policies that affect the reported amount of income, expenses, assets and liabilities and disclosure of contingent liabilities.

The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis and the effect of revision to accounting estimates is recognized prospectively from the period in which the estimate is revised.

Critical accounting estimates, Judgements and assumptions (i.) Income taxes

Significant judgement is required in determination of provision for current tax and deferred tax e.g. determination of taxability of certain incomes and deductibility of certain expenses etc. The carrying amount of income tax assets/ liabilities is reviewed at each reporting date. The factors used in estimates may differ from actual outcome which could lead to signification adjustment to the amounts reported in financial statements

(ii.) Defined Benefit Plans

The cost of the defined benefit plan and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future, salary increases, mortality rates etc. Due to the complexities involved in the valuation and its long-term nature, the obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

(iii.) Inventories

Management has estimated the net realizable values of inventories, taking into account the most reliable evidence available at each reporting date. The future realization of these inventories may be affected by market driven changes.

(iv) Fair value measurement

Some of the company''s assets and liabilities are measured at fair value for financial reporting process. In estimating the fair value of an asset or liability, the company uses market-observable data to the extent is available.

(v) Provisions / Contingencies

Significant judgement is required for estimating the possible outflow of resources, if any, in respect of contingencies/ claims/litigations against the Company which involves judgements around estimating the ultimate outcome of such past events and measurement of the obligation amount etc. The Company assesses such claims and monitors the legal environment on an ongoing basis, with the assistance of external legal counsel, wherever necessary.

(vi.) Useful lives of property plant and equipment and Intangible assets

The estimated useful lives of property plant and equipment and intangible assets are based on a number of factors including the effects of obsolescence, internal assessment of user experience and other economic factors (such as the known technological advancements, commercial obsolescence of the asset etc.). The useful life of property plant and equipment and intangible assets is reviewed on an ongoing basis.

(vii.) Recoverable amount of property, plant and equipment

The recoverable amount of property plant and equipment is based on estimates and assumptions regarding the expected market outlook and expected future cash flows. Any changes in these assumptions may have a material impact on the measurement of the recoverable amount and could result in impairment.

IV Applicability of New and Revised Ind AS

Ministry of Corporate Affairs (“MCA”) notifies new accounting standards or amendments to the existing accounting standards from time to time. There is no such notification which would be applicable w.e.f. April 1, 2024.

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Mar 31, 2024

Note 1 Corporate Information

Atam Valves Limited (hereinafter referred to as "the Company") is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956 and has its registered office at 1051, Industrial Area, Jalandhar, Punjab. The Company is listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE). The Company is engaged in the business of manufacturing of Valves and fittings, steam traps and strainers.

The financial statements were approved and authorized for issue by the Company''s Board of Directors in the meeting held on April 15, 2024.

Note 2 Statement of Compliance with Ind AS and Basis of preparation and measurement

I. Statement of Compliance

The financial statements have been prepared in accordance with Indian Accounting Standards (hereinafter referred to as "Ind AS") notified under Section 133 of the Companies Act, 2013 (the Act) read with Rule 3 of the Companies(Indian Accounting Standards) Rules, 2015 as amended from time to time and other relevant provisions of the Act.

II. Basis of Preparation and Measurement

(i) The financial statements have been prepared on historical cost convention on accrual basis except for certain financial instruments (including derivative instruments) which are measured at fair value at the end of each reporting period as required under Ind AS.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

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, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/ or disclosure purposes in the financial statements is determined on such a basis, except for measurements that have some

similarities to fair value but are not fair value, such as net realisable value in Ind AS 2.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability.

(ii) 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.

(iii) The functional and presentation currency of the Company is Indian rupees (C) and all values are rounded to the nearest lakhs and two decimals thereof, unless otherwise stated.

Note 3 Material Accounting Policy Information, Significant Accounting Estimates, Judgements and Assumptions and Applicability of New and Revised Ind AS

I. Material Accounting Policy Information

A. Revenue Recognition

(i) Sale of goods

Revenue from sale of goods is recognised as and when the company satisfies performance obligation by transfer of control of goods.

Generally control is transferred upon shipment of goods to the customer or when the goods is made available to the customer, provided transfer of title to the customer occurs and the company has not retained any significant risk of ownership or future obligations with respect to the goods shipped.

Revenue is measured at the amount of consideration which the company expects to be entitled in exchange for transferring promised goods to a customer as specified in the contract, after deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the Government such as goods and services tax, etc. Consideration is generally due upon satisfaction of performance obligation and receivable is recognized when it becomes unconditional and only passage of time is required before the payment is due. No element of financing is deemed present as the sales are made with the short term credit period generally consistent with market practices.

If the Company receives consideration before transfer of goods to the customer, such amount is presented as a contract liability. The company does not adjust such liability for the effects of significant financing component if it is expected that the promised goods will be transferred to the customer within a period of one year. Contract liabilities are recognised as revenue when the Company satisfies performance obligation as per the contract.

(ii) Interest Income

Interest Income from financial assets is recognized when it is probable that economic benefits will flow to the company and amount of income can be measured reliably. Interest income is accrued on time basis, by reference to principal outstanding and at effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of financial asset to that asset''s net carrying amount on initial recognition.

(iii) Insurance and other claims

Insurance and other claims are recognized when no significant uncertainty exists with regard to the amount to be realized and the ultimate collection thereof.

(iv) Other Income

Other income is recognized when no significant uncertainty exists with regard to the amount to be realized and the ultimate collection thereof.

B. 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. The amount of short term employee benefits are recognized as an expense on an

undiscounted basis in the statement of profit and loss of the year in which the related service is rendered.

(ii) Post-Employment benefit plans

(a) Defined Contribution Plan:

Provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme as an expense, when an employee renders the related service.

(b) Defined Benefit Plan:

Gratuity

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees of the Company. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the tenure of employment with the Company.

Liability with regard to the defined benefit plan is determined by actuarial valuation, performed by an independent actuary, at each balance sheet date using the projected unit credit method.

The Company recognizes the obligation of the defined benefit plan in its balance sheet as a liability. Re-measurements comprising of actuarial gains and losses, and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability) are recognised in Other Comprehensive Income which are not reclassified to profit or loss in subsequent periods. All other expenses related to defined benefit plan are recognised in employee benefits expense in the Statement of profit and loss.

C. Property, plant and equipment

Property, plant and equipment are stated at cost or deemed cost applied on transition to Ind AS, less accumulated depreciation and impairment loss, if any. The cost directly attributable to acquisition are capitalised until the property plant and equipment are ready for use as intended by the management.

The cost of an item of Property, plant and equipment comprises of: (i) Purchase price including import duties and non-refundable purchase taxes after deducting trade discounts and rebates. (ii) Any expenditure directly attributable for bringing an asset to the location and the

working condition for its intended use and (iii) The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation for which an entity incurs either when the item is acquired or as a consequence of having used the item during a particular period for purposes other than to produce inventories during that period.

Subsequent expenditures relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the cost of the item can be measured reliably. Repairs and maintenance costs are recognized in net profit in the statement of profit and loss when incurred.

Property, Plant and Equipment which are significant to the total cost of that item of Property, Plant and Equipment and having different useful life are accounted separately.

Property, plant and equipment which are not ready for intended use at each balance sheet date are disclosed as "Capital work-in-progress" and advances paid towards the acquisition of Property, plant and equipment outstanding at each balance sheet date are classified as Capital advances under "Other non-current assets".

On transition to Ind AS, the Company has elected to continue with the carrying value of its property, plant and equipment recognised as at April 1,2021 (transition date) measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.

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. The cost/deemed cost and the related accumulated depreciation are eliminated from the financial statements upon disposal or retirement of the asset and any gain or loss arising thereon is determined as the difference between sale proceeds and the carrying amount of the asset and is recognised in the statement of profit and loss.

D. Intangible Assets

Intangible assets are stated at cost or deemed cost applied on transition to Ind AS, less accumulated amortization and impairment, if any. The cost of intangible asset comprises of its purchase price, net of recoverable taxes and any directly attributable cost of preparing the asset for its intended use.

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in statement of profit and loss as and when incurred.

On transition to Ind AS, the Company has elected to continue with the carrying value of its intangible assets recognised as at April 1,2021 (transition date) measured as per the previous GAAP and use that carrying value as deemed cost of intangible assets.

An intangible asset is derecognised upon disposal or retirement of the asset. The cost/deemed cost and the related accumulated amortization are eliminated from the financial statements upon disposal or retirement of the asset and resultant gains or losses are recognized in the statement of Profit and Loss when the asset is derecognized.

E. Depreciation and amortization

Depreciation is provided on Property, plant and equipment on written down value method on the basis of useful lives of such assets specified in Schedule II to the Act.

Depreciation method, useful lives and residual values are reviewed periodically, including at each financial year end with the effect of any changes in estimate accounted for on a prospective basis.

Amortization

Intangible assets are amortized on straight line method over the estimated useful life. The amortization method, useful life and residual value are reviewed at each financial year end. The estimated useful life is based on number of factors including effect of obsolescence and other economic factors and is as under:

Assets description	Useful Life
Computer Software	5 Years

F. Inventories

Inventories are valued at cost or net realizable value, whichever is lower except production waste/scrap which is valued at net realizable value. The raw materials and other supplies held for use in the production are valued at net realisable value only if the finished products in which they are to be incorporated are expected to be sold below cost.

Net Realisable Value is the estimated selling price in ordinary course of business less estimated cost necessary to make the sales.

G. Borrowing Costs

Borrowing costs directly attributable to the acquisition or construction of qualifying assets i.e. the assets that necessarily takes a substantial period of time to get ready for its intended use are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that the Company incurs in connection with the borrowing of funds.

H. Earnings per Share

Basic earnings per share are computed by dividing the profit for the period attributable to the equity shareholders of the company by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the profit for the period attributable to the equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares, if any.

I. Income Taxes

Income tax expense comprises current tax and deferred tax.

Current tax is the tax payable/receivable on the taxable profit/loss for the year using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period and any adjustment to taxes in respect of previous years. Interest expenses and penalties, if any, related to income tax are included in finance cost and other expenses respectively. Interest Income, if any, related to income tax is included in other income.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle the asset and the liability on a net basis.

Deferred tax is recognised in respect of temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose at the reporting date using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date.

A deferred tax asset is recognized to the extent, it is probable that future taxable profit will be available against where the deductible temporary differences and 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 utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized 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 deferred tax liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority.

Income tax expense is recognised in statement of Profit and Loss except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, as the case may be.

J. Government Grants

Government grants are not recognized until there is reasonable assurance that all attached conditions will be complied with and the grant will be received.

When the grants relates to an expense item, it is recognised in the Statement of profit and loss by way of reduction from the related cost, which the grants are intended to compensate, except where the related expense is not directly identifiable. In such cases, the grant is presented in the ''Other Income''.

Government grants that becomes receivable as compensation for expenses or losses already incurred or for the purpose of giving financial support to the Company with no related costs is recognised in the Statement of profit or loss of the period in which it becomes receivable under ''Other operating income''/''Other income'' based on the nature of grant.

Government grants relating to the purchase of property, plant and equipment are deducted from its gross value and are recognised in profit or loss on a systematic over the expected useful lives of the related assets by way of reduced depreciation.

K. Foreign Currency translations

Transactions in foreign currency are initially recorded in the functional currency i.e. Indian Rupees using the exchange rate prevailing at the date of transactions.

Monetary items denominated in foreign currency are reported using the exchange rate prevailing at the end of reporting period. The exchange difference arising on the settlement or reporting of monetary items at rates different from rates at which these were initially recorded / reported in previous financial statements, are recognised in the statement of profit and loss in the period in which it arise.

Non-monetary items denominated in foreign currency and measured at historical cost are recorded at the exchange rate prevalent at the date of transaction, Non-monetary items that are measured in term of historical cost in foreign currency are not reinstated.

L. Leases Company as a lessee

The Company''s lease asset classes primarily consist of leases for land and buildings. The Company assesses whether a contract contains a lease, at inception of a contract. 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: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.

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

The right-of-use assets are initially recognized 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. They are 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 underlying asset. Right of use assets is 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.

The lease liability is initially measured at amortized 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 not readily determinable, using the lessee''s incremental borrowing rate. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it will exercise an extension or a termination option.

Lease liabilities and Right of Use assets have been separately presented in the financial statements. Lease Payments and interest thereon have been classified as cash flows from financing activities in the Statement of Cash flows.

M. Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

(i) Initial Recognition and measurement

The company recognises the financial assets and financial liabilities when it becomes party to the contractual provision of the instruments. All financial assets and liabilities are recognised at fair value on initial recognition except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition of financial assets and or issue of financial liabilities that are not recognized at fair value through profit or loss, are added to or reduced from the fair value of the financial assets or financial liabilities, as appropriate. Transaction cost directly attributable to the acquisition of financial assets and financial liabilities recognized at fair value through Profit or Loss

are recognised immediately in the Statement of Profit and Loss.

Transaction cost directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit and loss are recognised immediately in the statement of profit and loss.

(ii) Subsequent measurement

For the purposes of subsequent measurement, financial instruments are classified as follows:

Non-derivative financial instruments

(a) Financial assets carried at amortised cost

A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect 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 amount outstanding.

Interest income for such instruments is recognised in profit or loss using the effective interest rate (EIR) method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s gross carrying amount.

The carrying amounts of financial assets that are subsequently measured at amortised cost are determined based on the effective interest method less any impairment losses.

(b) Financial assets at fair value through other comprehensive income

A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a 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.

Interest income for such instruments is recognised in profit or loss using the effective interest rate (EIR) method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s gross carrying amount.

Fair value movements are recognised in the other comprehensive income (OCI) until the financial asset is derecognised. On de-recognition, cumulative gain or loss previously recognised in OCI is reclassified from the equity to the profit or loss.

(c) Financial assets at fair value through profit or loss

A financial asset is subsequently measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through other comprehensive income. Such financial assets are measured at fair value with all changes in fair value recognised in the statement of profit and loss.

Dividend and interest income from such instruments is recognized in the statement of profit and loss, when the right to receive the payment is established.

Fair value changes on such assets are recognised in the statement of profit and loss.

(d) Financial liabilities

Financial liabilities are classified as at fair value through profit or loss when the financial liability is either contingent consideration recognised by the Company as an acquirer in a business combination to which Ind AS 103 applies or is held for trading or it is designated as at FVTPL.

All other financial liabilities are subsequently measured at amortized cost using the effective interest method unless at initial recognition, they are classified as measured at fair value through profit and loss.

Financial liabilities carried at fair value through profit or loss, are measured at fair value with all changes in fair value recognised in the statement of profit and loss.

Interest expense for the financial liabilities subsequently measured at amortized cost is recognised in profit or loss using the effective interest rate (EIR) method.

(e) Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received. Incremental costs directly attributable to the issuance of equity instruments and buy back of equity instruments are recognized as a deduction from equity, net of any tax effects.

(iii) De-recognition of financial instrument

a) A financial asset (or, a part of a financial asset) is primarily derecognized when the contractual right to the cash flows from the financial asset expires, or the company transfers its right to receive cash flow from the financial assets and substantially all the risks and rewards of ownership of the asset to another party.

On de-recognition of a financial asset, the difference between the asset''s carrying amount and the sum of the consideration received/receivable is recognised in the profit or loss.

b) A financial liability (or a part of financial liability) is derecognized when obligation specified in the contract is discharged or cancelled or expires.

On de-recognition of a financial liability, the difference between the carrying amount of the financial liability de-recognised and the consideration paid/payable is recognised in profit or loss.

(iv) Offsetting 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 them on a net basis or to realise the assets and settle the liabilities simultaneously.

(v) Impairment of Financial Assets

Financial assets that are carried at amortised cost and fair value through other comprehensive income (FVOCI) are assessed for possible impairments basis expected credit losses taking into account the past history of recovery, risk of default of the counterparty, existing market conditions etc. The impairment methodology applied depends on whether there has been a significant increase in credit risk since initial recognition.

Expected Credit Losses are measured through a loss allowance at an amount equal to:

• The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or

• Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of financial instruments).

For trade receivables or any contractual right to receive cash or another financial asset that result from transaction

that are within the scope of Ind AS 115 and Ind AS 116, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.

For other assets, the company uses 12 months ECL to provide for impairment loss where no significant increase in credit risk is. If there is significant increase in credit risk full lifetime ECL is used.

(vi) Write off

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering the financial asset in its entirety or a portion thereof.

N. Impairment of Non-financial assets

Property, plant and equipment, other intangible assets and other non-financial assets are tested for impairment 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.

If such assets are considered to be impaired, the impairment to be recognized in the statement of profit and loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. The recoverable amount is the higher of an asset''s fair value less costs of disposal and value in use.

The assets that suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period. When an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, however that the increased carrying amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognised for the asset in prior years. The reversal of an impairment loss is recognised in the statement of profit and loss.

Impairment is reviewed periodically including at the end of each financial year.

O. Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

A contingent liability is not recognised in the financial statements, however, is disclosed, unless the possibility of an outflow of resources embodying economic benefits is remote. If it becomes probable that an outflow of future economic benefits will be required for an item dealt with as a contingent liability, a provision is recognised in the financial statements of the period (except in the extremely rare circumstances where no reliable estimate can be made).

A contingent asset is not recognised in the financial statements, however, is disclosed, where an inflow of economic benefits is probable. When the realisation of income is virtually certain, then the asset is no longer a contingent asset, and is recognised as an asset.

Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date.

P. Dividends

Final dividends on equity shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Board of Directors of the Company.

Q. Cash and cash equivalents

The Cash and cash equivalent in the balance sheet comprise cash at banks, cash on hand, demand deposits and short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value

R. Statement of Cash flows

The statement of cash flows is prepared in accordance with the Indian Accounting Standard (Ind AS) - 7 "Statement of Cash flows" using the indirect method for operating activities whereby profit for the period

is adjusted for the effects of transaction of a non-cash nature, and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the company are segregated.

II. Current - Non-Current Classification

All assets and liabilities have been classified as current and non-current on the basis of the following criteria:

Assets

An asset is classified as current when it satisfies any of the following criteria:

a) it is expected to be realised in, or is intended for sale or consumption in, the company''s normal operating cycle;

b) it is held primarily for the purpose of being traded;

c) it is expected to be realised within twelve months after the reporting date; or

d) it is cash or cash equivalent unless it is restricted from being exchanged or use to settle a liability for at least twelve months after the reporting date.

Current assets include the current portion of non-current financial assets.

All other assets are classified as non-current.

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

a) it is expected to be settled in the company''s normal operating cycle;

b) it is held primarily for the purpose of being traded;

c) it is due to be settled within twelve months after the reporting date; or

d) there is no unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counterpart, result in its settlement by the issue of equity instruments do not affect its classification.

Current liabilities include current portion of non-current financial liabilities.

All other liabilities are classified as non-current. Operating cycle

Operating cycle is the time between the acquisition of assets for processing/servicing and their realisation in

cash or cash equivalents. Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current or non- current classification of assets and liabilities.

III. Significant Accounting Estimates, Judgements and Assumptions

The preparation of financial statements in conformity with Indian Accounting Standards (Ind AS) require management to make judgements, estimates and assumptions in the application of accounting policies that affect the reported amount of income, expenses, assets and liabilities and disclosure of contingent liabilities.

The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis and the effect of revision to accounting estimates is recognized prospectively from the period in which the estimate is revised.

Critical accounting estimates, Judgements and assumptions

i. Income taxes

Significant judgement is required in determination of provision for current tax and deferred tax

e.g. determination of taxability of certain incomes and deductibility of certain expenses etc. The carrying amount of income tax assets/liabilities is reviewed at each reporting date. The factors used in estimates may differ from actual outcome which could lead to signification adjustment to the amounts reported in financial statements

ii. Defined Benefit Plans

The cost of the defined benefit plan and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future, salary increases, mortality rates etc. Due to the complexities involved in the valuation and its long-term nature, the obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

iii. Inventories

Management has estimated the net realizable values of inventories, taking into account the most reliable evidence available at each reporting date. The future realization of these inventories may be affected by market driven changes.

iv. Fair value measurement

Some of the company''s assets and liabilities are measured at fair value for financial reporting process. In estimating the fair value of an asset or liability, the company uses market-observable data to the extent is available.

v. Provisions / Contingencies

Significant judgement is required for estimating the possible outflow of resources, if any, in respect of contingencies/claims/litigations against the Company which involves judgements around estimating the ultimate outcome of such past events and measurement of the obligation amount etc. The Company assesses such claims and monitors the legal environment on an ongoing basis, with the assistance of external legal counsel, wherever necessary.

vi. Useful lives of property plant and equipment and Intangible assets

The estimated useful lives of property plant and equipment and intangible assets are based on a number of factors including the effects of obsolescence, internal assessment of user experience and other economic factors (such as the known technological advancements, commercial obsolescence of the asset etc.). The useful life of property plant and equipment and intangible assets is reviewed on an ongoing basis.

vii. Recoverable amount of property, plant and equipment

The recoverable amount of property plant and equipment is based on estimates and assumptions regarding the expected market outlook and expected future cash flows. Any changes in these assumptions may have a material impact on the measurement of the recoverable amount and could result in impairment.

IV. Applicability of New and Revised Ind AS

Ministry of Corporate Affairs ("MCA") notifies new accounting standards or amendments to the existing accounting standards from time to time. There is no such notification which would be applicable w.e.f. April 1,2024.

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Mar 31, 2023

I. Significant Accounting Policies

A. Revenue Recognition

(i) Sale of goods

Revenue from sale of goods is recognised as and when the
company satisfies performance obligation by transfer of
control of goods.

Generally control is transferred upon shipment of goods
to the customer or when the goods is made available to
the customer, provided transfer of title to the customer
occurs and the company has not retained any significant
risk of ownership or future obligations with respect to the
goods shipped.

Revenue is measured at the amount of consideration
which the company expects to be entitled in exchange
for transferring promised goods to a customer as specified
in the contract, after deduction of any trade discounts,
volume rebates and any taxes or duties collected on
behalf of the Government such as goods and services
tax, etc. Consideration is generally due upon satisfaction
of performance obligation and receivable is recognized
when it becomes unconditional and only passage of time
is required before the payment is due. No element of
financing is deemed present as the sales are made with
the short term credit period generally consistent with
market practices.

If the Company receives consideration before transfer
of goods to the customer, such amount is presented as
a contract liability. The company does not adjust such
liability for the effects of significant financing component
if it is expected that the promised goods will be transferred
to the customer within a period of one year. Contract
liabilities are recognised as revenue when the Company
satisfies performance obligation as per the contract.

(ii) Interest Income

Interest Income from financial assets is recognized
when it is probable that economic benefits will flow to
the company and amount of income can be measured
reliably. Interest income is accrued on time basis, by
reference to principal outstanding and at effective interest
rate applicable, which is the rate that exactly discounts
estimated future cash receipts through the expected life
of financial asset to that asset''s net carrying amount on
initial recognition.

[iii) Insurance and other claims

Insurance and other claims are recognized when no
significant uncertainty exists with regard to the amount
to be realized and the ultimate collection thereof.

[iv) Other Income

Other income is recognized when no significant
uncertainty exists with regard to the amount to be realized
and the ultimate collection thereof.

B. 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. The amount of short term employee
benefits are recognized as an expense on an undiscounted
basis in the statement of profit and loss of the year in
which the related service is rendered.

[ii) Post-Employment benefit plans

[a) Defined Contribution Plan:

Provident fund is a defined contribution scheme. The
Company has no obligation, other than the contribution
payable to the provident fund. The Company recognizes
contribution payable to the provident fund scheme as an
expense, when an employee renders the related service.

b) Defined Benefit Plan:

Gratuity

The Company provides for gratuity, a defined benefit
retirement plan covering eligible employees of the
Company. The Gratuity Plan provides a lump-sum payment
to vested employees at retirement, death, incapacitation
or termination of employment, of an amount based
on the respective employee''s salary and the tenure of
employment with the Company.

Liability with regard to the defined benefit plan is
determined by actuarial valuation, performed by an
independent actuary, at each balance sheet date using
the projected unit credit method.

The Company recognizes the obligation of the defined
benefit plan in its balance sheet as a liability. Re¬
measurements comprising of actuarial gains and losses,
and the return on plan assets (excluding amounts included
in net interest on the net defined benefit liability) are
recognised in Other Comprehensive Income which are not
reclassified to profit or loss in subsequent periods. All other
expenses related to defined benefit plan are recognised
in employee benefits expense in the Statement of profit
and loss.

C. Property, plant and equipment

Property, plant and equipment are stated at cost or
deemed cost applied on transition to Ind AS, less
accumulated depreciation and impairment loss, if any.
The cost directly attributable to acquisition are capitalised
until the property plant and equipment are ready for use
as intended by the management.

The cost of an item of Property, plant and equipment
comprises of: (i) Purchase price including import duties
and non-refundable purchase taxes after deducting
trade discounts and rebates. (ii) Any expenditure directly
attributable for bringing an asset to the location and
the working condition for its intended use and (iii) The
initial estimate of the costs of dismantling and removing
the item and restoring the site on which it is located, the
obligation for which an entity incurs either when the item
is acquired or as a consequence of having used the item
during a particular period for purposes other than to
produce inventories during that period.

Subsequent expenditures relating to property, plant and
equipment is capitalized only when it is probable that
future economic benefits associated with these will flow
to the Company and the cost of the item can be measured
reliably. Repairs and maintenance costs are recognized in
net profit in the statement of profit and loss when incurred.

Property, Plant and Equipment which are significant to the
total cost of that item of Property, Plant and Equipment
and having different useful life are accounted separately.

Property, plant and equipment which are not ready for
intended use at each balance sheet date are disclosed as
"Capital work-in-progress" and advances paid towards the
acquisition of Property, plant and equipment outstanding
at each balance sheet date are classified as Capital
advances under "Other non-current assets".

On transition to Ind AS, the Company has elected to
continue with the carrying value of its property, plant
and equipment recognised as at April 1, 2021 (transition
date) measured as per the previous GAAP and use that
carrying value as the deemed cost of the property, plant
and equipment.

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.
The cost/deemed cost and the related accumulated
depreciation are eliminated from the financial statements
upon disposal or retirement of the asset and any gain
or loss arising thereon is determined as the difference
between sale proceeds and the carrying amount of the
asset and is recognised in the statement of profit and loss.

D. Intangible Assets

Intangible assets are stated at cost or deemed cost applied
on transition to Ind AS, less accumulated amortization and
impairment, if any. The cost of intangible asset comprises
of its purchase price, net of recoverable taxes and any
directly attributable cost of preparing the asset for its
intended use.

Subsequent expenditure is capitalised only when it
increases the future economic benefits embodied in the
specific asset to which it relates. All other expenditure
is recognised in statement of profit and loss as and
when incurred.

On transition to Ind AS, the Company has elected to
continue with the carrying value of its intangible assets
recognised as at April 1, 2021 (transition date) measured
as per the previous GAAP and use that carrying value as
deemed cost of intangible assets.

An intangible asset is derecognised upon disposal or
retirement of the asset. The cost/deemed cost and the
related accumulated amortization are eliminated from
the financial statements upon disposal or retirement of
the asset and resultant gains or losses are recognized
in the statement of Profit and Loss when the asset
is derecognized.

E. Depreciation and amortization

Depreciation is provided on Property, plant and equipment
on written down value method on the basis of useful lives
of such assets specified in Schedule II to the Act.

Depreciation method, useful lives and residual values are
reviewed periodically, including at each financial year end
with the effect of any changes in estimate accounted for
on a prospective basis.

Amortization

Intangible assets are amortized on straight line method
over the estimated useful life. The amortization method,
useful life and residual value are reviewed at each financial
year end. The estimated useful life is based on number
of factors including effect of obsolescence and other
economic factors and is as under:

F. Inventories

Inventories are valued at cost or net realizable value,
whichever is lower except production waste/scrap which
is valued at net realizable value. The raw materials and
other supplies held for use in the production are valued
at net realisable value only if the finished products in
which they are to be incorporated are expected to be sold
below cost.

Net Realisable Value is the estimated selling price in
ordinary course of business less estimated cost necessary
to make the sales.

G. Borrowing Costs

Borrowing costs directly attributable to the acquisition
or construction of qualifying assets i.e. the assets that
necessarily takes a substantial period of time to get ready
for its intended use are capitalized as part of the cost of the
asset. All other borrowing costs are expensed in the period
in which they occur. Borrowing costs consist of interest
and other costs that the Company incurs in connection
with the borrowing of funds.

H. Earnings per Share

Basic earnings per share are computed by dividing
the profit for the period attributable to the equity
shareholders of the company by the weighted average
number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per
share, the profit for the period attributable to the equity
shareholders and the weighted average number of shares
outstanding during the period is adjusted for the effects
of all dilutive potential equity shares, if any.

I. Income Taxes

Income tax expense comprises current tax and
deferred tax.

Current tax is the tax payable/receivable on the taxable
profit/loss for the year using the tax rates and tax laws
that have been enacted or substantively enacted by the
end of the reporting period and any adjustment to taxes in
respect of previous years. Interest expenses and penalties,
if any, related to income tax are included in finance cost
and other expenses respectively. Interest Income, if any,
related to income tax is included in other income.

Current tax assets and current tax liabilities are offset when
there is a legally enforceable right to set off the recognised
amounts and there is an intention to settle the asset and
the liability on a net basis.

Deferred tax is recognised in respect of temporary
differences between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purpose
at the reporting date using tax rates and tax laws that
have been enacted or substantively enacted by the
balance sheet date and are expected to apply to taxable
income in the years in which those temporary differences
are expected to be recovered or settled. The effect of
changes in tax rates on deferred tax assets and liabilities

is recognized as income or expense in the period that
includes the enactment or the substantive enactment date

A deferred tax asset is recognized to the extent, it is
probable that future taxable profit will be available
against where the deductible temporary differences and
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 utilized. Unrecognized deferred
tax assets are re-assessed at each reporting date and are
recognized 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 deferred tax liabilities are offset
when there is a legally enforceable right to set off current
tax assets against current tax liabilities and the deferred
tax assets and the deferred tax liabilities relate to income
taxes levied by the same taxation authority.

Income tax expense is recognised in statement of Profit
and Loss except to the extent that it relates to items
recognised in other comprehensive income or directly
in equity. In this case, the tax is also recognised in other
comprehensive income or directly in equity, as the case
may be.

J. Government Grants

Government grants are not recognized until there is
reasonable assurance that all attached conditions will be
complied with and the grant will be received.

When the grants relates to an expense item, it is recognised
in the Statement of profit and loss by way of reduction
from the related cost, which the grants are intended to
compensate, except where the related expense is not
directly identifiable. In such cases, the grant is presented
in the ''Other Income''.

Government grants that becomes receivable as
compensation for expenses or losses already incurred or
for the purpose of giving financial support to the Company
with no related costs is recognised in the Statement of
profit or loss of the period in which it becomes receivable
under ''Other operating income''/''Other income'' based on
the nature of grant.

Government grants relating to the purchase of property,
plant and equipment are deducted from its gross value
and are recognised in profit or loss on a systematic over
the expected useful lives of the related assets by way of
reduced depreciation.

K. Foreign Currency translations

Transactions in foreign currency are initially recordec
in the functional currency i.e. Indian Rupees using the
exchange rate prevailing at the date of transactions.

Monetary items denominated in foreign currency are
reported using the exchange rate prevailing at the end
of reporting period. The exchange difference arising or
the settlement or reporting of monetary items at rate;
different from rates at which these were initially recorded
/ reported in previous financial statements, are recognised
in the statement of profit and loss in the period in which
it arise.

Non-monetary items denominated in foreign currency
and measured at historical cost are recorded at the
exchange rate prevalent at the date of transaction, Non
monetary items that are measured in term of historica
cost in foreign currency are not reinstated.

L. Leases
Company as a lessee

The Company''s lease asset classes primarily consist o''
leases for land and buildings. The Company assesses
whether a contract contains a lease, at inception of a
contract. A contract is, or contains, a lease if the contrac
conveys the right to control the use of an identified asse''
for a period of time in exchange for consideration. Tc
assess whether a contract conveys the right to contro
the use of an identified asset, the Company assesses
whether: (i) the contract involves the use of an identified
asset (ii) the Company has substantially all of the economic
benefits from use of the asset through the period of the
lease and (iii) the Company has the right to direct the use
of the asset.

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

The right-of-use assets are initially recognized 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 direc
costs less any lease incentives. They are 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 underlying
asset. Right of use assets is 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.

The lease liability is initially measured at amortized 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 not readily determinable, using
the lessee''s incremental borrowing rate. Lease liabilities
are remeasured with a corresponding adjustment to
the related right of use asset if the Company changes its
assessment if whether it will exercise an extension or a
termination option.

Lease liabilities and Right of Use assets have been
separately presented in the financial statements. Lease
Payments and interest thereon have been classified as
cash flows from financing activities in the Statement of
Cash flows.

M. Financial instruments

A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity.

(i) Initial Recognition and measurement

The company recognises the financial assets and financial
liabilities when it becomes party to the contractual
provision of the instruments. All financial assets and
liabilities are recognised at fair value on initial recognition
except for trade receivables which are initially measured
at transaction price. Transaction costs that are directly
attributable to the acquisition of financial assets and or
issue of financial liabilities that are not recognized at fair
value through profit or loss, are added to or reduced from
the fair value of the financial assets or financial liabilities,
as appropriate. Transaction cost directly attributable
to the acquisition of financial assets and financial
liabilities recognized at fair value through Profit or Loss
are recognised immediately in the Statement of Profit
and Loss.

Transaction cost directly attributable to the acquisition
of financial assets or financial liabilities at fair value
through profit and loss are recognised immediately in the
statement of profit and loss.

(ii) Subsequent measurement

For the purposes of subsequent measurement, financial
instruments are classified as follows:

Non-derivative financial instruments

(a) Financial assets carried at amortised cost

A financial asset is subsequently measured at amortised
cost if it is held within a business model whose objective
is to hold the asset in order to collect 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
amount outstanding.

Interest income for such instruments is recognised in
profit or loss using the effective interest rate (EIR) method,
which is the rate that exactly discounts estimated future
cash receipts through the expected life of the financial
asset to that asset''s gross carrying amount.

The carrying amounts of financial assets that are
subsequently measured at amortised cost are determined
based on the effective interest method less any
impairment losses.

(b) Financial assets at fair value through other
comprehensive income

A financial asset is subsequently measured at fair value
through other comprehensive income if it is held within
a 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.

Interest income for such instruments is recognised in
profit or loss using the effective interest rate (EIR) method,
which is the rate that exactly discounts estimated future
cash receipts through the expected life of the financial
asset to that asset''s gross carrying amount.

Fair value movements are recognised in the other
comprehensive income (OCI) until the financial asset is
derecognised. On de-recognition, cumulative gain or loss
previously recognised in OCI is reclassified from the equity
to the profit or loss.

(c) Financial assets at fair value through profit or loss

A financial asset is subsequently measured at fair value
through profit or loss unless it is measured at amortised
cost or at fair value through other comprehensive income.
Such financial assets are measured at fair value with all
changes in fair value recognised in the statement of profit
and loss.

Dividend and interest income from such instruments is
recognized in the statement of profit and loss, when the
right to receive the payment is established.

Fair value changes on such assets are recognised in the
statement of profit and loss.

(d) Financial liabilities

Financial liabilities are classified as at fair value through
profit or loss when the financial liability is either contingent
consideration recognised by the Company as an acquirer
in a business combination to which Ind AS 103 applies or
is held for trading or it is designated as at FVTPL.

All other financial liabilities are subsequently measured at
amortized cost using the effective interest method unless
at initial recognition, they are classified as measured at fair
value through profit and loss.

Financial liabilities carried at fair value through profit or
loss, are measured at fair value with all changes in fair
value recognised in the statement of profit and loss.

Interest expense for the financial liabilities subsequently
measured at amortized cost is recognised in profit or loss
using the effective interest rate (EIR) method.

(e) Equity Instruments

An equity instrument is any contract that evidences
a residual interest in the assets of the Company after
deducting all of its liabilities. Equity instruments are
recorded at the proceeds received. Incremental costs
directly attributable to the issuance of equity instruments
and buy back of equity instruments are recognized as a
deduction from equity, net of any tax effects.

(iii) De-recognition of financial instrument

a) A financial asset (or, a part of a financial asset) is primarily
derecognized when the contractual right to the cash flows
from the financial asset expires, or the company transfers
its right to receive cash flow from the financial assets and
substantially all the risks and rewards of ownership of the
asset to another party.

On de-recognition of a financial asset, the difference
between the asset''s carrying amount and the sum of the

consideration received/receivable is recognised in the
profit or loss.

b) A financial liability (or a part of financial liability) is
derecognized when obligation specified in the contract
is discharged or cancelled or expires.

On de-recognition of a financial liability, the difference
between the carrying amount of the financial liability
de-recognised and the consideration paid/payable is
recognised in profit or loss.

(iv) Offsetting 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
them on a net basis or to realise the assets and settle the
liabilities simultaneously.

(v) Impairment of Financial Assets

Financial assets that are carried at amortised cost and fair
value through other comprehensive income (FVOCI) are
assessed for possible impairments basis expected credit
losses taking into account the past history of recovery, risk
of default of the counterparty, existing market conditions
etc. The impairment methodology applied depends on
whether there has been a significant increase in credit risk
since initial recognition.

Expected Credit Losses are measured through a loss
allowance at an amount equal to:

• The 12-months expected credit losses (expected
credit losses that result from those default events on
the financial instrument that are possible within 12
months after the reporting date); or

• Full lifetime expected credit losses (expected credit
losses that result from all possible default events over
the life of financial instruments).

For trade receivables or any contractual right to receive
cash or another financial asset that result from transaction
that are within the scope of Ind AS 115 and Ind AS 116, the
Company measures the loss allowance at an amount equal
to lifetime expected credit losses.

For other assets, the company uses 12 months ECL to
provide for impairment loss where no significant increase
in credit risk is. If there is significant increase in credit risk
full lifetime ECL is used.

(vi) Write off

The gross carrying amount of a financial asset is written
off when the Company has no reasonable expectations

of recovering the financial asset in its entirety or a
portion thereof.

N. Impairment of Non-financial assets

Property, plant and equipment, other intangible assets
and other non-financial assets are tested for impairment
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.

If such assets are considered to be impaired, the
impairment to be recognized in the statement of profit
and loss is measured by the amount by which the carrying
value of the assets exceeds the estimated recoverable
amount of the asset. The recoverable amount is the higher
of an asset''s fair value less costs of disposal and value
in use.

The assets that suffered impairment are reviewed for
possible reversal of the impairment at the end of each
reporting period. When an impairment loss subsequently
reverses, the carrying amount of the asset is increased to
the revised estimate of its recoverable amount, however
that the increased carrying amount does not exceed the
carrying amount that would have been determined (net
of any accumulated amortization or depreciation) had no
impairment loss been recognised for the asset in prior
years. The reversal of an impairment loss is recognised in
the statement of profit and loss.

Impairment is reviewed periodically including at the end
of each financial year.