2.01 BASIS OF PREPARATION AND PRESENTATION OFRESTATED FINANCIAL STATEMENTi) Compliance with Ind AS

The Financial Statements have been prepared in
accordance with Indian Accounting Standards
(Ind AS) as prescribed under Section 133 of
the Companies Act, 2013 read with Companies
(Indian Accounting Standards) Rules, 2015 and
Companies (Indian Accounting Standards)
(Amendment) Rules, 2016 and relevant
provisions of the Companies Act, 2013.

ii) The Financial Statements of the Company
comprise of the Balance Sheet as at 31 March
2026, 31 March 2025 and 31 March 2024,
Statement of Profit and Loss, Statement of Cash
Flow and Statement of Changes in Equity for
the year ended 31 March 2026, 31 March 2025
and 31 March 2024, the Summary statement
of Material Accounting Policies and Notes to
Financial Information (collectively, the ''Financial
Statements'' or ''Statements'').

iii) The Financial Statements have been compiled
from:

(a) Financial Statements of the Company
as at and for the year ended 31 March
2026, 31 March 2025 and 31 March 2024
prepared in accordance with the Indian
Accounting Standards (''Ind AS'') notified
under Section 133 of the Companies Act,
2013 read with the Companies (Indian
Accounting Standards) Rules, 2015 as
amended, to the extent applicable, and
the presentation requirements of the
Companies Act, 2013 which have been
approved by the Board of Directors at
their meeting held on 29^th May 2026.

The financial statement for the year ended
31 March 2026 is the first set of Financial

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

All other assets are classified as non-current.

A liability is current when:

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

• It is held primarily for the purpose of trading.

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

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

All other liabilities are classified as non-current.

Deferred tax assets and deferred tax liabilities are
classified as non- current assets and liabilities.

The operating cycle is the time between the acquisition
of assets for processing and their realization in cash
and cash equivalents. The Company has identified
twelve months as its operating cycle.

2.03 REVENUE RECOGNITION

Revenue is recognised in accordance with Ind AS 115,
"Revenue from Contracts with Customers" Revenue is
recognised to the extent it is probable that economic
benefits will flow to the Company and the revenue
can be reliably measured. Revenue is measured at
the transaction price of the consideration received or
receivable, net of Goods and Services tax and other
taxes collected on behalf of third parties.

(a) Rendering of services

The Company derives its revenue primarily
from post-production services, including
visual effects (VFX) and 2D-to-3D conversion

services, provided under fixed-price and time-
and-material contracts.

Revenue from fixed-price contracts is
recognised over time, as the Company''s
performance does not create an asset with
an alternative use and the Company has an
enforceable right to payment for performance
completed to date. The stage of completion is
measured using an input method, based on
efforts (labour hours/days) incurred to date
as a proportion of the total estimated efforts
required to complete the contract. Estimates of
total efforts are reviewed at each reporting date,
and any change is accounted for as a change in
accounting estimate.

Revenue from time-and-material contracts is
recognised over time as the related services are
performed, based on the amount the Company
has a right to invoice for services performed to
date.

Where a contract includes variable consideration
(such as volume-linked pricing or delivery-
based penalties/credits), it is included in the
transaction price only to the extent it is highly
probable that a significant reversal of revenue
will not subsequently occur.

Revenue relating to services performed but not
billed to the customer as at the reporting date
is recognised as unbilled revenue (a contract
asset) and is transferred to trade receivables
once the right to consideration becomes
unconditional.

Contract balances

• Unbilled revenue (contract asset):
An unbilled revenue is the right to
consideration in exchange for services
transferred to the customer. Unbilled
revenues are recognised when there is

excess of revenue earned over billings
on contracts. Unbilled revenues are
classified as such (only act of invoicing
is pending) when there is unconditional
right to receive cash, and only passage of
time is required, as per contractual terms.

• Trade receivables: A receivable represents
the Company''s right to an amount of
consideration that is unconditional (i.e.,
only the passage of time is required
before payment of the consideration is
due or payments are already due but yet
to be realized).

• Contract liabilities (advances from

customers): recognised when

consideration is received, or is
unconditionally due, before the related
services are performed, and released to
revenue as the services are performed.

Costs relating to contracts

Costs incurred to fulfil a contract, that relate
directly to an identified contract and are
expected to be recovered, are recognised as an
asset (work-in-progress) and amortised in line
with the pattern of revenue recognition for the
related contract.

(b) Other income

Interest Income from a financial asset is
recognised based on Effective Interest Rate
(EIR). Interest Income is included under the
head "Other income" in the statement of profit
and loss.

2.04 FOREIGN CUBRENCY

(i) Functional and presentation currency Items
included in the financial statements are
measured using the currency of the primary
economic environment in which the entity

operates (''the functional currency''). The
Company''s financial statements are presented in
lndian rupee (lNR) which is also the Company''s
functional and presentation currency,

(ii) Transactions and balances Foreign currency
transactions are translated into functional
currency using the exchange rate prevailing at
the date of the transactions. Foreign exchange
gains and losses resulting from the settlement
of such transactidn and from the translation of
monetary assets and liabilities denominated in
foreign currencies at the year-end exchange
rate are generally recognized in the statement
of profit and loss, Non-monetary items that are
measured in terms of historical cost in a foreign
currency are translated using the exchange
rates at the dates of the initial transactions.
Non-monetary items measured at fair value
in a foreign currency are translated using the
exchange rates at the date when the fair value
is determined, Exchange differences Exchange
differences arising on settlement or translation
of monetary items are recognized . as income or
expense in the year in_which they arise with the
exception of exchange differences on gain or
loss arising on translation of nonmonetary items
measured at fair value which is treated in line
with the recognition of the gain or loss on the
change in fair value of the item (i.e,, translation
differences on items whose fair value gain or
loss is recognized in.OCl or profit or loss are also
recognized in OCI or profit or loss, respectively)

.05 PROPERTY, PLANT AND EQUIPMENT1. Recognition and measurement

Items of property, plant and equipment are
measured at cost, which includes capitalised
borrowing costs, less accumulated depreciation
and accumulated impairment losses, if any. Cost
of an item of property, plant and equipment
comprises its purchase price, including import

duties and non-refundable purchase taxes, after
deducting trade discounts and rebates, any
directly attributable cost of bringing the item to
its working condition for its intended use and
estimated costs of dismantling and removing
the item and restoring the site on which it is
located.

If significant parts of an item of property, plant
and equipment have different useful lives, then
they are accounted for as separate items (major
components) of property, plant and equipment.
Any gain or loss on disposal of an item of
property, plant and equipment is recognised in
profit or loss.

2. Subsequent Expenditure

Subsequent expenditure is capitalised only if it
is probable that the future economic benefits
associated with the expenditure will flow to the
Company.

3. Depreciation

Depreciation is calculated on cost of items
of property, plant and equipment less their
estimated residual values over their estimated
useful lives using the written down value
method and is generally recognised in the
statement of profit and loss. Assets acquired
under finance leases are depreciated over the
shorter of the lease term and their useful lives
unless it is reasonably certain that the Company
will obtain ownership by the end of the lease
term. Freehold land is not depreciated.

Depreciation on property, plant and equipment
is provided over the useful life of assets as
assessed by the management are in line with
useful lives prescribed in Schedule II to the
Companies Act 2013, as follows -

Depreciation method, useful lives and residual
values are reviewed at each financial yearend
and adjusted if appropriate.

Depreciation on additions (disposals) is provided on
a pro-rata basis i.e. from (up to) the date on which
asset is ready for use (disposed off).

2.06 INTANGIBLE ASSETS

Intangible assets are recognized when it is probable
that the future economic benefits that are attributable
to the asset will flow to the enterprise and the cost
of the asset can be measured reliably. Intangible
assets acquired separately are measured on initial
recognition at cost. Following initial recognition,
intangible assets are carried at cost less accumulated
amortization and accumulated impairment losses,
if any. Internally generated intangibles, excluding
capitalized development cost, are not capitalized and
the related expenditure is reflected in statement of
Profit and Loss in the period in which the expenditure
is incurred. Cost comprises the purchase price and
any attributable cost of ringing the asset to its working
condition for its intended use.

The useful lives of intangible assets are assessed as
either finite or indefinite. Intangible assets with finite
lives are amortized over their useful economic lives
and assessed for impairment whenever there is an
indication that the intangible asset may be impaired.
The amortization period and the amortization method
for an intangible asset with a finite useful life is
reviewed at least at the end of each reporting period.
Changes in the expected useful life or the expected
pattern of consumption of future economic benefits
embodied in the asset is accounted for by changing

the amortization period or method, as appropriate,
and are treated as changes in accounting estimates.
The amortization expense on intangible assets with
finite lives is recognized in the statement of profit
and loss in the expense category consistent with the
function of the intangible assets.

Intangible assets with indefinite useful lives are not
amortized but are tested for impairment annually,
either individually or at the cash-generating unit level.
The assessment of indefinite life is reviewed annually
to determine whether the indefinite life continues to
be supportable. If not, the change in useful life from
indefinite to finite is made on a prospective basis.

Gains or losses arising from the disposal of the
intangible assets are measured as the difference
between the net disposal proceeds and the carrying
amount of the asset and are recognized in the
statement of profit and loss when the assets are
disposed off.

Intangible assets with finite useful life are amortized
on a written down value basis over the estimated
useful economic life of 5 years, which represents the
period over which the Company expects to derive
economic benefits from the use of the assets.

2.07 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) Recognition and initial measurement

Trade receivables are initially recognised when
they are originated. All other financial asset
and financial liabilities are initially recognised
when the Company becomes a party to the
contractual provisions of the instrument.

A financial asset or financial liability is initially
measured at fair value plus, for an item not at
fair value through profit and loss (FVTPL),

Financial liabilities: Classification, subsequent
measurement and gains and losses

Financial liabilities are classified as measured at
amortised cost or FVPL. A financial liability is
classified as at FVPL if it is classified as held for
trading, or it is a derivative or it is designated
as such on initial recognition. Financial
liabilities at FVPL are measured at fair value
and net gains and losses, including any interest
expense, are recognised in profit or loss. Other
financial liabilities are subsequently measured
at amortised cost using the effective interest
method. Interest expense and foreign exchange
gains and losses are recognised in profit or
loss. Any gain or loss on derecognition is also
recognised in profit or loss.

Financial liabilities held for trading include
derivative liabilities that are not accounted for
as hedging instrument. Financial liabilities that
meets the definition of held for trading are
recognised at fair value through profit or loss.

ii) Impairment

In accordance with Ind AS 109, the Company
applies the expected credit losses (ECL) model
for measurement and recognition of impairment
loss on the following financial asset and credit
risk exposure

a. Financial assets measured at amortized
cost;

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

The Company follows a "simplified approach"

for recognition of impairment loss allowance on:

(i) Trade receivables or contract revenue
receivables;

Under the simplified approach, the
Company does not track changes in credit
risk. Rather, it recognizes impairment
loss allowance based on lifetime ECLs
at each reporting date, right from its
initial recognition. The Company uses a
provision matrix to determine impairment
loss allowance on the portfolio of trade
receivables. The provision matrix is based
on its historically observed default rates
over the expected life of trade receivable
and is adjusted for forward-looking
estimates. At every reporting date, the
historically observed default rates are
updated and changes in the forward¬
looking estimates are analysed.

For recognition of impairment loss on
other financial assets and risk exposure,
the Company determines whether there
has been a significant increase in the credit
risk since initial recognition. If credit risk
has not increased significantly, 12-month
ECL is used to provide for impairment
loss. However, if credit risk has increased
significantly, lifetime ECL is used. If, in
subsequent periods, the credit quality
of the instrument improves such that
there is no longer a significant increase
in credit risk since initial recognition,
then the Company reverts to recognizing
impairment loss allowance based on 12-
months ECL.

Lifetime ECL are the expected credit
losses resulting from all possible default
events over the expected life of a financial
instrument. The 12-month ECL is a portion
of the lifetime ECL that results from default
events that are possible within 12 months
after the reporting date.

ECL is the difference between all
contractual cash flows that are due to
the Company in accordance with the
contract and all the cash flows that the
entity expects to receive (i.e., all cash
shortfalls), discounted at the original EIR.
When estimating the cash flows, an entity
is required to consider:

(a) All contractual terms of the financial
instrument (including prepayment,
extension, call and similar options)
over the expected life of the financial
instrument. However, in rare cases
when the expected life of the financial
instrument cannot be estimated
reliably, then the entity is required to
use the remaining contractual term of
the financial instrument.

(b) Cash flows from the sale of collateral
held or other credit enhancements
that are integral to the contractual
terms.

ECL impairment loss allowance
(or reversal) recognized during the
period is recognized as income/
expense in the statement of profit
and loss. This amount is reflected
under the head ''other income'' in the
statement of profit and loss.

iv) Trade Receivables

Trade receivables are amounts due from

customers for goods sold or services performed
in the ordinary course of business. They are
generally due for settlement within one year
and therefore are all classified as current.
Where the settlement is due after one year, they
are classified as non-current. Trade receivables
are recognized initially at the amount of
consideration that is unconditional unless they
contain significant financing components, when
they are recognized at fair value. The Company
holds the trade receivables with the objective to
collect the contractual cash flows and therefore
measures them subsequently at amortized cost
using the effective interest method.

v) Contract Assets

A contract asset is the entity''s right to
consideration in exchange for goods or services
that the entity has transferred to the customer. A
contract asset becomes a receivable when the
entity''s right to consideration is unconditional,
which is the case when only the passage of time
is required before payment of the consideration
is due. The impairment of contract assets is
measured, presented and disclosed on the
same basis as trade receivables.

vi) Financial liabilitiesa. Initial recognition and measurement

Financial liabilities are classified at initial
recognition as financial liabilities at fair
value through profit or loss, loans and
borrowings, and payables, net of directly
attributable transaction costs. The
Company financial liabilities include loans
and borrowings including bank overdraft,
trade payables, trade deposits, retention
money, liabilities towards services and
other payables

b. Subsequent measurement

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

Financial liabilities at fair value through
profit or loss

Financial liabilities at fair value through profit
or loss include financial liabilities held for
trading and financial liabilities designated
upon initial recognition as at fair value
through profit or loss. Financial liabilities
are classified as held for trading if they are
incurred for the purpose of repurchasing in
the near term. This category also includes
derivative financial instruments entered into
by the Company that are not designated as
hedging instruments in a hedge relationship
as defined by Ind AS 109. The separated
embedded derivate are also classified as
held for trading unless they are designated
as effective hedging instruments.

Gains or losses on liabilities held for trading
are recognized in the statement of profit
and loss.

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

has not designated any financial liability as
at fair value through profit and loss.

vii) Trade Payable

These amounts represent liabilities for goods
and services provided to the Company prior to
the end of the financial year which are unpaid.
Trade and other payables are presented as
current liabilities unless payment is not due
within 12 months after the reporting period.
They are recognized initially at fair value and
subsequently measured at amortized cost using
Effective interest rate method.

viii) Contract Liabilities

A contract liability is the obligation to transfer
goods or services to a customer for which
the Company has received consideration (or
an amount of consideration is due) from the
customer. If a customer pays consideration
before the Company transfers goods or services
to the customer, contract liability is recognized
when the payment is made or the payment is
due (whichever is earlier). Contract liabilities
are recognized as revenue when the Company
performs under the contract.

ix) Impairment of assets

As at the end of each accounting year, the
carrying amounts of PPE, investment property,
intangible assets and investments in associate
are reviewed to determine whether there is any
indication that those assets have suffered an
impairment loss. If such indication exists, the
PPE, investment property, intangible assets
and investments in associate are tested for
impairment so as to determine the impairment
loss, if any.

An impairment is recognized to the extent that
the carrying amount of receivable or asset

relating to contracts with customers (a) the
remaining amount of consideration that the
Company expects to receive in exchange for the
goods or services to which such asset relates;
less (b) the costs that relate directly to providing
those goods or services and that have not been
recognized as expenses.

Impairment loss is recognized when the carrying
amount of an asset exceeds its recoverable
amount. Recoverable amount is determined:

(i) In the case of an individual asset, at the
higher of fair value less costs to sell and the
value-in-use; and

(ii) In the case of a cash generating unit (the
smallest identifiable Company of assets
that generates independent cash flows), at
the higher of the cash generating unit''s fair
values less costs to sell and the value-in¬
use.

x) Loans and borrowings

Borrowings are initially recognized at fair value,
net of transaction cost incurred. After initial
recognition, interest bearing borrowings are
subsequently measured at amortized cost using
the Effective interest rate method. Gains and
losses are recognized in profit or loss when the
liabilities are derecognized as well as through
the Effective interest rate amortization process.
Amortized cost is calculated by taking into
account any discount or premium on acquisition
and fees or costs that are an integral part of the
Effective interest rate. The Effective interest rate
amortization is included as finance costs in the
statement of profit and loss.

Borrowing is classified as current liabilities
unless the Company has an unconditional right
to defer settlement of the liability for at least 12
months after the reporting period.

xi) Reclassification of financial assets/ financial
liabilities

The Company determines classification
of financial assets and liabilities on initial
recognition. After initial recognition, no
reclassification is made for financial assets
which are equity instruments and financial
liabilities. For financial assets which are debt
instruments, a reclassification is made only
if there is a change in the business model
for managing those assets. Changes to the
business model are expected to be infrequent.

The Company''s senior management determines
change in the business model as a result
of external or internal changes which are
significant to the Company''s operations. Such
changes are evident to external parties. A
change in the business model occurs when the
Company either begins or ceases to perform an
activity that is significant to its operations. If the
Company reclassifies financial assets, it applies
the reclassification prospectively from the
reclassification date which is the first day of the
immediately next reporting period following the
change in business model. The Company does
not restate any previously recognized gains,
losses (including impairment gains or losses) or
interest.

2.08 TAXES

Income tax expense comprises current tax expense
and the net change in the deferred tax asset or
liability during the year. Current and deferred tax are
recognized in the Statement of Profit and Loss, except
when they relate to items that are recognized in Other
Comprehensive Income or directly in equity, in which
case, the current and deferred tax are also recognized
in Other Comprehensive Income or directly in equity,
respectively.

Current tax:

Current tax expenses are accounted in the same
period to which the revenue and expenses relate.
Provision for current income tax is made for the tax
liability payable on taxable income after considering
tax allowances, deductions and exemptions
determined in accordance with the applicable tax
rates and the prevailing tax laws.

The Company''s management periodically evaluates
positions taken in the tax returns with respect to
situations in which applicable tax regulations are
subject to interpretation and establishes provisions
where appropriate.

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

Deferred tax:

Deferred income tax is recognized using the balance
sheet approach. Deferred tax assets and liabilities
are recognized for deductible and taxable temporary
differences arising between the tax base of assets
and liabilities and their carrying amount in financial
statements.

Deferred income tax assets are recognized to the
extent that it is probable that taxable profit will be
available against which the deductible temporary
differences and the carry forward of unused tax
credits and unused tax losses can be 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 liabilities and
assets are measured at the tax rates that are expected
to apply in the period in which the liability is settled or
the asset realized, based on tax rates (and tax laws)
that have been enacted or substantially enacted by
the end of the reporting period.

Deferred tax assets and liabilities are offset when
there is a legally enforceable right to set off current
tax assets against current tax liabilities and when they
relate to income taxes levied by the same taxation
authority and the Company intends to settle its
current tax assets and liabilities on a net basis.

2.09 EMPLOYEE BENEFITS(i) Short-term obligations

All employee benefits falling due wholly within
twelve months of rendering the service are
classified as short-term employee benefits.
Short-term employee benefit obligations are
measured on an undiscounted basis and are
expensed as the related service is provided. A
liability is recognized for the amount expected
to be paid, if the Company has a present legal
or constructive obligation to pay this amount
because of past service provided by the
employee, and the amount of obligation can be
estimated reliably.

(ii) Defined Contribution Plan

The Company''s Employees Provident Fund
Organization (EPFO), Pension Fund and
Employees State Insurance (ESI) are defined
contribution plans. Obligations for contributions
to defined contribution plans are recognized
as an employee benefit expense in profit or
loss in the periods during which the related
services are rendered by employees. Prepaid
contribution is recognized as an assets to the
extent that a cash refund or reduction in future
payments is available.

(iii) Defined Benefit Plan

Retirement benefit in the form of Gratuity is
considered as defined benefit plan. The liability
recognized in the balance sheet in respect
of gratuity is the present value of the defined
benefit obligation at the balance sheet date,
together with adjustments for unrecognized
actuarial gains or losses and past service costs.
The defined benefit obligation is determined by
actuarial valuation as on the balance sheet date,
using the projected unit credit method.

Remeasurements, comprising of actuarial
gains and losses, the effect of the asset ceiling,
excluding amounts included in net interest on the
net defined benefit liability (excluding amounts
included in net interest on the net defined
benefit liability), are recognized immediately in
the balance sheet with a corresponding debit or
credit to retained earnings through OCI in the
period in which they occur. Remeasurements are
not reclassified to profit or loss in subsequent
periods.

Past service costs are recognized in profit or
loss on the earlier of:

(i) The date of the plan amendment or
curtailment, and

(ii) The date that the Company recognizes
related restructuring costs.

Net interest is calculated by applying the
discount rate to the net defined benefit liability.

The Company recognizes the following changes
in the net defined benefit obligation as an
expense in the statement of profit and loss:

(i) Service costs comprising current service
costs, past-service costs, gains and
losses on curtailments and nonroutine
settlements; and

(iii) Net interest expense or income

2.10 LEASES

Leases are accounted for using the principles
of recognition, measurement, presentation and
disclosures as set out in IndAS 116-"Leases"

Company as a lessee

On inception of a contract, the Company assesses
whether it contains a lease. A contract contains a
lease when it conveys the right to control the use of
an identified asset for a period of time in exchange
for consideration. The right to use the asset and the
obligation under the lease to make payments are
recognized in the Company''s financial statements as
a right-of-use asset and a lease liability.

Lease contracts may contain both lease and non¬
lease components. The company allocates payments
in the contract to the lease and non-lease components
based on their relative stand-alone prices and applies
the lease accounting model only to lease component

Right to use Assets

The right-of-use asset recognized at lease
commencement includes the amount of lease
liabilities on initial measurement, initial direct costs
incurred, and lease payments made at or before
the commencement date less any lease incentives
received. Right-of-use assets are depreciated to a
residual value over the rights-of-use assets estimated
useful life or the lease term, whichever is lower.
Right-of-use assets are also adjusted for any re¬
measurement of lease liabilities and are subject to
impairment testing. Residual value is reassessed at
each reporting date.

Lease liability

The lease liability is initially measured at the present
value of the lease payments to be made over the lease
term. The lease payments include fixed payments
(including ''in-substance fixed'' payments) and variable
lease payments that depend on an index or a rate, less

any lease incentives receivable. ''In-substance fixed''
payments are payments that may, in form, contain
variability but that, in substance, are unavoidable. In
calculating the present value of lease payments, the
Company uses its incremental borrowing rate at the
lease commencement date if the interest rate implicit
in the lease is not readily determinable.

The lease term includes periods subject to extension
options which the Company is reasonably certain to
exercise and excludes the effect of early termination
options where the Company is not reasonably
certain that it will exercise the option. Minimum lease
payments include the cost of a purchase option if the
Company is reasonably certain it will purchase the
underlying asset after the lease term.

After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of
interest on lease liability and reduced for lease
payments made. In addition, the carrying amount of
lease liabilities is re-measured if there is a modification
e.g. a change in the lease term, a change in the ''in¬
substance fixed'' lease payments or as a result of a
rent review or change in the relevant index or rate.

Variable lease payments that do not depend on an
index or a rate are recognized as an expense in the
period over which the event or condition that triggers
the payment occurs. In respect of variable leases
which guarantee a minimum amount of rent over the
lease term, the guaranteed amount is considered to
be an ''in-substance fixed'' lease payment and included
in the initial calculation of the lease liability. Payments
which are ''in-substance fixed'' are charged against the
lease liability

The Company has opted not to apply the lease
accounting model to intangible assets, leases of low-
value assets or leases which have a term of less than
12 months. Costs associated with these leases are
recognized as an expense on a straight-line basis over
the lease term.

2.11 EARNINGS PER SHARE

Basic earnings per share are calculated by dividing
the net profit or loss for the year attributable to
equity shareholders by the weighted average number
of equities shares outstanding during the year.
The weighted average number of equities shares
outstanding during the year is adjusted for events
such as bonus issue, bonus element in a rights issue,
share split, and reverse share split (consolidation of
shares) that have changed the number of equities
shares outstanding, without a corresponding change
in resources

For the purpose of calculating diluted earnings per
share, the net profit or loss for the year attributable
to equity shareholders and the weighted average
number of shares outstanding during the year are
adjusted for the effect of all potentially dilutive equity
shares.

2.12 BORROWING COSTS

Borrowing cost includes interest and other costs
incurred in connection with the borrowing of funds
and charged to Statement of Profit & Loss on the basis
of effective interest rate (EIR) method. Borrowing
cost also includes exchange differences to the extent
regarded as an adjustment to the borrowing cost.

Borrowing costs directly attributable to the
acquisition, construction or production of an asset
that necessarily takes a substantial period of time to
get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. Capitalization
of Borrowing Cost is suspended and charged to the
statement of profit and loss during extended periods
when active development activity on the qualifying
asset is interrupted. All other borrowing costs are
recognized as expense in the year in which they occur.

2.13 CASH AND CASH EQUIVALENTS

For the purpose of presentation in the statement of
cash flows, cash and cash equivalents includes cash

on hand, deposit held at call with financial institutions,
other short - term, highly liquid investments with
original maturities of three months or less that are
readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes
in value, and bank overdrafts. Bank overdrafts are
shown within borrowings in current liabilities in the
balance sheet.

II Significant Accounting Policies

1 Basis of preparation:

The Financial Statements have been prepared in accordance with Indian Generally Accepted Accounting
Principles (IGAAP) under historical cost convention on the accrual basis. IGAAP comprises mandatory accounting
standards prescribed by the Companies (Accounting Standards) Rules, 2021.

2 Revenue recognition:

a) Sale of Service

The company derives its revenues primarily from Sale of Visual effects (VFX) Service contracts.

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and
the revenue can be reliably measured in accordance with AS-9, Revenue Recognition. Sales are recognized
on accrual basis, and only after transfer of services to the customer.

Revenue from services provided under fixed price contracts, where the outcome can be estimated reliably, is
recognized following the proportionate completion method, where revenue is recognized in proportion to the
progress of the contract activity. The progress of the contract activity is usually determined as a proportion of
efforts incurred up to the balance sheet date, which bears to the total hours / days estimated for the contract.

Revenue on time-and-material contracts are recognized as the related services are performed and the revenues
from the end of the last billing to the balance sheet date are recognized as unbilled revenues.

b) Other Income

Revenue arising from the use by others of enterprise resources yielding interest, royalties and dividends
should only be recognised when no significant uncertainty as to measurability or collectability exists. These
revenues are recognised on the following bases:

(i) Interest : on a time proportion basis taking into account the amount outstanding and the rate
applicable.

(ii) Royalties : on an accrual basis in accordance with the terms of the relevant agreement.

(iii) Dividends from : when the owner’s right to receive payment is established by investments in shares.

3 Property Plant and Equipment including Intangible assets:

Property Plant and Equipment’s are stated at cost, less accumulated depreciation. Cost includes cost of acquisition
including material cost, freight, installation cost, duties and taxes, and other incidental expenses, incurred up to
the installation stage, related to such acquisition. Property Plant and Equipment’s purchased in India in foreign
currency are recorded in Rupees, converted at the exchange rate prevailed on the date of purchase. Intangible
assets that are acquired by the Company are measured initially at cost. After initial recognition, an intangible
asset is carried at its cost less any accumulated amortisation and any accumulated impairment loss.

4 Depreciation & Amortisation:

The Company has applied the estimated useful lives as specified in Schedule II of the Companies Act 2013 and
calculated the depreciation as per the Written Down Value (WDV) method. Depreciation on new assets acquired
during the year is provided at the rates applicable from the date of acquisition to the end of the financial year. In
respect of the assets sold during the year, depreciation is provided from the beginning of the year till the date of
its disposal.

Intangible assets are amortised on a straight-line basis over the estimated useful life as specified in Schedule
II of the Companies Act 2013. The amortisation expense on intangible assets with finite lives is recognised in
the statement of profit and loss. In respect of the assets sold during the year, amortisation is provided from the
beginning of the year till the date of its disposal.

5 Impairment of assets:

The Management periodically assesses using, external and internal sources, whether there is an indication that
an asset may be impaired. An impairment loss is recognised wherever the carrying value of an asset exceeds
its recoverable amount. The recoverable amount is higher of the asset’s net selling price and value in use, which
means the present value of future cash flows expected to arise from the continuing use of the asset and its
eventual disposal. Reversal of impairment loss is recognised immediately as income in the profit and loss account.

6 Use of estimates:

The preparation of the financial statements in conformity with Generally Accepted Accounting Principles requires
the Management to make estimates and assumptions that affect the reported balances of assets and liabilities
and disclosures relating to contingent assets and liabilities as at the date of the financial statements and the
reported amounts of income and expenses during the year. Examples of such estimates include provisions for
doubtful debts, income taxes, post - sales customer support and the useful lives of Property Plant and Equipment’s
and intangible assets.

7 Foreign currency transactions:

Domestic Operation:

I . Initial recognition :

A foreign currency transaction should be recorded, on initial recognition in the reporting currency, by applying
to the foreign currency amount the exchange rate between the reporting currency and the foreign currency
at the date of the transaction.

II . Measurement :

Foreign currency monetary items should be reported using the closing rate.

Non-monetary items which are carried in terms of historical cost denominated in a foreign currency should
be reported using the exchange rate at the date of the transaction.

Non-monetary items which are carried at fair value or other similar valuation denominated in a foreign
currency should be reported using the exchange rates that existed when the values were determined.

III . Treatment of Foreign exchange :

Exchange differences arising on settlement/restatement of foreign currency monetary assets and liabilities of
the Company are recognised as income or expenses in the Statement of Profit and Loss.

8 Employee Benefits:

A. Short - term employee benefits:

All employee benefits payable wholly within twelve months of rendering the service are classified as
short-term employee benefits. Benefits such as salaries, wages etc. and the expected cost of ex-gratia are
recognised in the period in which the employee renders the related service. A liability is recognised for the
amount expected to be paid when there is a present legal or constructive obligation to pay this amount as a
result of past service provided by the employee and the obligation can be estimated reliably.

Compensated absences

Compensated absences which are expected to occur within twelve months after the end of the period in
which the employee renders the related services are recognised as undiscounted liability at the balance
sheet date. Compensated absences which are not expected to occur within twelve months after the end of
the period in which the employee renders the related services are recognised as an liability at the present
value of the defined benefit obligation at the balance sheet date.

B. Post-Employment benefits:

Defined benefit plan:

Gratuity liability is a defined benefit obligation and is unfunded. The Company accounts for liability for future
gratuity benefits based on the actuarial valuation using Projected Unit Credit Method carried out as at the
end of each financial year.

Defined contribution Plan:

Contributions to defined contribution plans are recognised as expense when employees have rendered
services entitling them to such benefits.The Company provides benefits such as provident fund contribution
to its employees which are treated as defined contribution plans.

9 Taxes on Income:

Income Tax expense is accounted for in accordance with AS-22 “Accounting for Taxes on Income” for both Current
Tax and Deferred Tax stated below:

A. Current Tax:

Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961.

B. Deferred Tax:

Deferred tax is recognised, subject to the consideration of prudence, as the tax effect of timing difference
between accounting income and the corresponding tax bases used in the computation of taxable income for
the current accounting year using the tax rates and tax laws that have been enacted or substantially enacted
by the balance sheet date.

Deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty,
except arising from unabsorbed depreciation and carried forward losses, that sufficient future taxable income
will be available against which such deferred tax assets can be realised.Deferred tax assets are recognised
for all deductible temporary differences to the extent that it is probable that taxable profits will be available
against which those deductible temporary differences can be utilised.

Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable
that taxable profits will be available against which those deductible temporary differences can be utilised.
Such deferred tax assets and liabilities are not recognised if the temporarydifference arises from the initial
recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither
the taxable profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at the end of each reporting year and reduced to
the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of
the asset to be recovered. Unrecognised deferred tax assets are re-assessed at each reporting date and are
recognised 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 if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the
same taxation authority.

I Company Overview

Basilic Fly Studio Private limited (the "Company”) is a Private limited company domiciled in India and was incorporated on 28th January 2016 vide Registration No.U92100TN2016PTC103861 under the provisions of the Companies Act, 2013. The registered office of the Company is situated at Tower A, KRC Commerzone, Mount Poonamallee Road, Porur, Chennai,Tamil Nadu 600116 India with operating units across the Country. Subsequently, company was converted into Public Limited Company vide special resolution passed by our shareholders at the Extra Ordinary General Meeting held on 29.12.2022 and the name of the company was changed to Basilic Fly Studio Limited (''the Company”) pursuant to issuance of Fresh Certificate of Incorporation dated 19.05.2023 Registrar of Companies, Chennai with Corporate Identification Number U92100TN2016PLC103861. The Company has by way of Initial Public Offer (IPO) and listed on Emerge Platform of National Stock Exchange of India Limited on 11th September, 2023 with Corporate Identification Number L92100TN2016PLC103861.

The Company is engaged in the business of post production activities of providing high-end visual effects and 2D to 3D conversion to the Media and Entertainment industry.

II Significant Accounting Policies1 Basis of preparation:

The Financial Statements have been prepared in accordance with Indian Generally Accepted Accounting Principles (IGAAP) under historical cost convention on the accrual basis. IGAAP comprises mandatory accounting standards prescribed by the Companies (Accounting Standards) Rules, 2021.

2 Revenue recognition:Sale of Service

The company derives its revenues primarily from Sale of Visual effects (VFX) Service contracts.

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured in accordance with AS-9, Revenue Recognition. Sales are recognized on accrual basis, and only after transfer of services to the customer.

Revenue from services provided under fixed price contracts, where the outcome can be estimated reliably, is recognized following the proportionate completion method, where revenue is recognized in proportion to the progress of the contract activity. The progress of the contract activity is usually determined as a proportion of efforts incurred up to the balance sheet date, which bears to the total hours / days estimated for the contract.

Revenue on time-and-material contracts are recognized as the related services are performed and the revenues from the end of the last billing to the balance sheet date are recognized as unbilled revenues.

b) Other Income

Revenue arising from the use by others of enterprise resources yielding interest, royalties and dividends should only be recognised when no significant uncertainty as to measurability or collectability exists. These revenues are recognised on the following bases:

(i) Interest : on a time proportion basis taking into account the amount outstanding and the rate applicable.

(ii) Royalties : on an accrual basis in accordance with the terms of the relevant agreement.

(iii) Dividends from : when the owner''s right to receive payment is established by investments in shares.

3 Property Plant and Equipment including Intangible assets:

Property Plant and Equipment''s are stated at cost, less accumulated depreciation. Cost includes cost of acquisition including material cost, freight, installation cost, duties and taxes, and other incidental expenses, incurred up to the installation stage, related to such acquisition. Property Plant and Equipment''s purchased in India in foreign currency are recorded in Rupees, converted at the exchange rate prevailed on the date of purchase. Intangible assets that are acquired by the Company are measured initially at cost. After initial recognition, an intangible asset is carried at its cost less any accumulated amortisation and any accumulated impairment loss.

4 Depreciation & Amortisation:

The Company has applied the estimated useful lives as specified in Schedule II of the Companies Act 2013 and calculated the depreciation as per the Written Down Value (WDV) method. Depreciation on new assets acquired during the year is provided at the rates applicable from the date of acquisition to the end of the financial year. In respect of the assets sold during the year, depreciation is provided from the beginning of the year till the date of its disposal.

Intangible assets are amortised on a straight-line basis over the estimated useful life as specified in Schedule II of the Companies Act 2013. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss. In respect of the assets sold during the year, amortisation is provided from the beginning of the year till the date of its disposal.

5 Impairment of assets:

The Management periodically assesses using, external and internal sources, whether there is an indication that an asset may be impaired. An impairment loss is recognised wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is higher of the asset''s net selling price and value in use, which means the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. Reversal of impairment loss is recognised immediately as income in the profit and loss account.

6 Use of estimates:

The preparation of the financial statements in conformity with Generally Accepted Accounting Principles requires the Management to make estimates and assumptions that affect the reported balances of assets and liabilities and

disclosures relating to contingent assets and liabilities as at the date of the financial statements and the reported amounts of income and expenses during the year. Examples of such estimates include provisions for doubtful debts, income taxes, post - sales customer support and the useful lives of Property Plant and Equipment''s and intangible assets.

7 Foreign currency transactions:

Domestic Operation:

I . Initial recognition :

A foreign currency transaction should be recorded, on initial recognition in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

II . Measurement :

Foreign currency monetary items should be reported using the closing rate.

Non-monetary items which are carried in terms of historical cost denominated in a foreign currency should be reported using the exchange rate at the date of the transaction.

Non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency should be reported using the exchange rates that existed when the values were determined.

III . Treatment of Foreign exchange :

Exchange differences arising on settlement/restatement of foreign currency monetary assets and liabilities of the Company are recognised as income or expenses in the Statement of Profit and Loss.

8 Employee Benefits:A. Short - term employee benefits:

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages etc. and the expected cost of ex-gratia are recognised in the period in which the employee renders the related service. A liability is recognised for the amount expected to be paid when there is a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Compensated absences

Compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related services are recognised as undiscounted liability at the balance sheet date. Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognised as an liability at the present value of the defined benefit obligation at the balance sheet date.

B. Post-Employment benefits:Defined benefit plan:

Gratuity liability is a defined benefit obligation and is unfunded. The Company accounts for liability for future gratuity benefits based on the actuarial valuation using Projected Unit Credit Method carried out as at the end of each financial year.

Defined contribution Plan:

Contributions to defined contribution plans are recognised as expense when employees have rendered services entitling them to such benefits.The Company provides benefits such as provident fund contribution to its employees which are treated as defined contribution plans.

9 Taxes on Income:

Income Tax expense is accounted for in accordance with AS-22 "Accounting for Taxes on Income” for both Current Tax and Deferred Tax stated below:

A. Current Tax:

Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961.

B. Deferred Tax:

Deferred tax is recognised, subject to the consideration of prudence, as the tax effect of timing difference between accounting income and the corresponding tax bases used in the computation of taxable income for the current accounting year using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date.

Deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty, except arising from unabsorbed depreciation and carried forward losses, that sufficient future taxable income will be available against which such deferred tax assets can be realised.Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised.

Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporarydifference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at the end of each reporting year and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised 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 if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

10 Provisions and Contingent Liabilities:

A provision is recognised if, as a result of past event, the Company has a present legal obligation that can be estimated reliably and it is probable that an outflow of economic benefit will be required to settle the obligation. Provisions are determined by the best estimate of outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is also made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is possible obligation or present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

11 Earnings Per Share:

Basic Earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the net profit after tax by the weighted average number of shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The diluted potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value which is the average market value of the outstanding shares. Dilutive potential equity shares are deemed converted as at the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

12 Cash and Cash Equivalents:

Cash and cash equivalents comprise cash on hand and Cheque in hand, balance with bank, demand deposits with banks and other short term highly liquid investments that are readily convertible to known amounts of cash & which are subject to an insignificant risk of changes in value where it has a short maturity of three months or less from the date of acquisition.

13 Cash Flow Statement:

Cash flows are reported using indirect method, whereby net profit/loss before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

The Company''s cash and cash equivalents consist of cash on hand and in banks and demand deposits with banks, which can be withdrawn at any time, without prior notice or penalty on the principal. For the purposes of the statement of cash flows, cash and cash equivalents include cash on hand, in banks and demand deposits with banks, net of outstanding bank overdrafts that are repayable on demand and are considered part of the Company''s cash management system. In the balance sheet, bank overdrafts are presented under borrowings within current liabilities.

14 Investments:

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

I Company Overview

Basilic Fly Studio Private limited (the "Company") is 3 Private limited company dom,tiled In India and was Incorporated on 28th January 201b vrde Reparation No.U92100TN2016PTC103861 under the provisions of the Companies Act. 2013. The registered office of the Company is situated at Tower A, KRC Commerzone, Mount Poonamallee Road Porur Chennai Tamil Nadu 600116 India with operating units across the Country Subsequently, company was converted into Public limited Company vide special resolution passed by our shareholders at the Extra Ordinary General Meeting held on 29.12.2022 and the name of the company was changed to Basilic Fly Studio Limited (''the Company'' or the “issuer") pursuant to issuance of Fresh Certificate of Incorporation dated 19.05.2023 Registrar of Companies. Chennai with Corporate Identification Number U92100TN2016PLC103861

The Company is engaged in the business of post production activities of providing high-end visual effects and 2D to 30 conversion to the Media and Entertainment industry.

II Significant Accounting Policies

1 Basis of preparation:

The Financial Statements have been prepared in accordance with Indian Generally Accepted Accounting Principles (IGAAP) under historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards prescribed by the Companies (Accounting Standards) Rules, 2021.

2 Revenue recognition:

The company derives its revenues primarily from Sale of Visual effects (VFX) Service contracts.

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured in accordance with AS-9, Revenue Recognition. Sales are recognized on accrual basis, and only after transfer of services to the customer.

Revenue from services provided under fixed price contracts, where the outcome can be estimated reliably, is recognized following the proportionate completion method, where revenue is recognized in proportion to the progress of the contract activity. The progress of the contract activity is usually determined as a proportion of efforts incurred up to the balance sheet date, which bears to the total hours / days estimated for the contract.

Revenue on time-and-material contracts are recognized as the related services are performed and the revenues from the end of the last billing to the balance sheet date are recognized as unbilled revenues.

Interest Income: Revenue is recognized on the time proportion basis after taking into account the amount outstanding and the rate applicable Dividend Income: Dividend Income is recognised when the owners right to receive payment is established.

Other Income : Other items of income and expenditure are recognized on accrual basis and as a going concern basis, and the accounting policies are consistent with the generally accepted accounting policies.

3 Property Plant and Equipment including Intangible assets:

Property Plant and Equipments are stated at cost, less accumulated depreciation. Cost includes cost of acquisition including material cost, freight, installation cost, duties and taxes, and other incidental expenses, incurred up to the installation stage, related to such acquisition. Property Plant and Equipments purchased in India in foreign currency are recorded in Rupees, converted at the exchange rate prevailed on the date of purchase.

Intangible assets that are acquired by the Company are measured initially at cost. After initial recognition, an intangible asset is carried at its cost less any accumulated amortisation and any accumulated impairment loss.

4 Depreciation & Amortisation:

The Company has applied the estimated useful lives as specified in Schedule II of the Companies Act 2013 and calculated the depreciation as per the Writen Down Value (WDV> method. Depreciation on new assets acquired during the year is provided at the rates applicable from the date of acquisition to the end of the financial year. In respect of the assets sold during the year, depreciation is provided from the beginning of the year till the date of its disposal

Intangible assets are amortised on a straight-line basis over the estimated useful life as specified in Schedule II of the Companies Act 2013. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss. In respect of the assets sold during the year, amortisation is provided from the beginning of the year till the date of its disposal

Useful life of Property, Plant and Equipments

Category Useful life

Computer & Accessories 3-6 years

Furniture & Fittings 10 years

Office Equipments 5 years

Plant & Machinery 15 years

Printers & Scanners 13 years

Vehicles 8 years

5 Impairment of assets:

The Management periodically assesses using, external and internal sou-ces, whether there is an indication that an asset may be impaired. An impairment loss is recognised wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is h''gher of the asset’s net selling price and value in use, which means the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal Reversal of impairment loss is recognised immediately as income in the profit and loss account.

6 Use of estimates:

The preparation of the financial statements in conformity with Generally Accepted Accounting Principles requires the Management to make estimates and assumptions Wfcuhe reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and the reported amount of income and expenses during the year Examples of such estimates include provisions for doubtful debts, income taxes, post - sales customer support and the useful hues of Property Plant and Equipments and intangible assets.

7 Foreign currency transactions:

Domestic Operation:

I. Initial recognition :

A foreign currency transactions are recorded, on initial recognition in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

II. Measurement:

Foreign currency monetary items are reported using the closing rate.

Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction Non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined

III. Treatment of Foreign exchange :

Exchange differences arising on settlement/restatement of foreign currency monetary assets and liabilities of the Company are recognised as income or expenses in the Statement of Profit and Loss

8 Employee Benefits:

A. Short - term employee benefits:

Leave encashment:

The leave encashment liability upon retirement would not arise as the accumulated leave is reimbursed every year and accounted at actual.

B. Post-Employment benefits:

Defined benefit plan:

Gratuity liability is a defined benefit obligation and is unfunded. The Company accounts for liability for future gratuity benefits based on the actuarial valuation using Projected Unit Credit Method carried out as at the eno of each financial year

Defined contribution Plan:

Provident Fund: Eligible employees receive benefit from provident fund covered under thn Provident Fund Act Both the employee and the company make monthly contributions. The employer contribution is charged off to Profit & Loss Account as an expense.

9 Taxes on Income:

Income Tax expense is accounted for in accordance with AS-22 ''Accounting for Taxes on Income" for both Current Tax and Deferred Tax stated below.

A. Current Tax:

Provision for current tax Is marie in accordance with the provisions of the income Tax Act, 1961.

B. Deferred Tax:

Deferred tax t: recognised, subject to the consideration of prudence, as the tax effect of timing difference between the taxable income and accounting income computed for the current accounting year using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date.

Deterred tax assets are recognised and carried forward to the extent that there is a reasonable certainty, except arising from unabsorbed depreciation and carried forward losses, that sufficient future taxable income will be available against which such deferred tax assets can be realised

10 Provisions and Contingent Liabilities:

A provision is recognised if. as a result of past event, the Company h3s a present legal obligation that can be estimated reliably and It is probable that an outflow of economic benefit will be required to settle the obligation Provisions are determined by the best estimate of outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a con''ingent liability is also made when there is a possible obligation or a present obligation that mav, but probably w''ll not, require an outflow of resources. Where there is possible obligation or present obligation in respect of which the likelihood of outflow of resources is remote, no provision o’ disclosure is made

11 Earnings Per Share:

Basic Earnings per share is computed by dividing the net protit after lax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividfrg the net prof'':: after tax by the weighted average number of shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all d’lutive potential eouity shares. The diluted potential equity shares are adjusted for tue proceeds receivable had the shares been actually issued at fair value which is the average market value cf the outstanding shires Dilutive potential equity shares a»e deemed converted as at the beginning of the period, unless issued ai a later date. Dilutive potential equity shares are determined independently for each period presented.

12 Operating Lease

Lease where the Lessor effectively ieta*ns substantially all the risks a no benefits of ownership of the leased term, are classified as operating lease. Operating lease payments are recognized as an expense in the Profit and Loss Account on a straight line basis. ___ _ _

13 Cash and Cash Equivalents:

Cash and cash equivalents comprise cash and cash deposits with banks. The Company cons,decs all highly liquid investments with a original maturity at a date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents

14 Cash Flow Statement:

Cash Hows are reported using indirect method, whereby net profit/loss before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of .ncome or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

15 Investments:

investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investment;. All other investments are classified as long-term investments.