Indo-MIM Ltd. நிறுவனத்தின் கணக்கியல் கொள்கைகள்

Note No. 31- Material Accounting Policies:

This note provides a list of the material accounting policy information adopted in the preparation of
this standalone financial statement. These policies have consistently applied to all the years presented
unless otherwise stated.

1. Basis of Preparation

The standalone financial statements are prepared and presented in accordance with Generally
Accepted Accounting Principles in India (GAAP) comprises the mandatory Indian Accounting Standards
(Ind AS) [as notified under section 133 of the Companies Act, 2013 read with Rule 3 of the Companies
(Indian Accounting Standards) Rules, 2015], as amended from time to time, to the extent applicable,
the provisions of the Companies Act, 2013.

2. Use of estimates and judgments

The preparation of the standalone financial statements in conformity with Ind AS requires that the
company''s management to make judgements, estimates and assumptions that affect the application of
accounting policies and reported amounts of assets and liabilities, disclosure of contingent liability and
contingent assets as at the date of standalone financial statements and the reported amounts of
revenue and expenses during the reporting period. Estimates and underlying assumptions are reviewed
on a ongoing basis. Although such estimates are made on a reasonable and prudent basis taking into
account of all available information, actual results could differ from these estimates and such
differences are recognised in the period in which the results are ascertained and in any future periods
affected.

Accounting estimates and judgements are used in various line items in the standalone financial
statements such as:

(i) Business model measurement

(ii) Effective interest rate

(iii) Impairment of assets

(iv) Provision for tax expense

(v) Residual Value and useful life of Property, Plant and Equipment and other intangible assets.

(vi) Derivate financial instruments

(vii) Determinafion of lease term

Esfimates and judgements are confinually evaluated. They are based on historical experience and other
factors, including expectafions of future events that may have a financial impact on the Company and
that are believed to be reasonable under the circumstances.

3. Basis of Measurement

The standalone financial statements have been prepared on a historical cost basis except for certain
financial instruments that are measured at fair value at the end of each reporfing period:

• Derivafive financial instruments, if any

• Financial assets and liabilifies that are qualified to be measured at fair value

• The defined benefit asset / liability is recognised as the present value of defined benefit obligafion
less fair value of plan assets.

These standalone financial statements have been prepared on a going concern basis.

4. Functional and Presentation Currency

The standalone financial statements are presented in Indian Rupee (INR) which is the funcfional and
the presentation currency of the Company and all the values are rounded to the nearest millions, except
when otherwise indicated.

5. Current/ non-current classification

All assets and liabilifies are classified into current and non-current as per the Company''s normal
operafing cycle and other criteria set out in the Schedule III to the Companies Act, 2013.

Assets

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

i) it is expected to be realised in the Company''s normal operafing cycle;

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

iii) it is expected to be realised within 12 months after the reporfing date; or

iv) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability
for at least 12 months after the reporfing date.

Current assets include the current porfion 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:

i) it is expected to be settled in the Company''s normal operating cycle;

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

iii) it is due to be settled within 12 months after the reporting date; or

iv) The Company does not have an unconditional right to defer settlement of the liability for at least 12
months after the reporting date.

Current liabilities include current portion of non-current financial liabilities. All other liabilities are
classified as non-current.

Operating cycle is the time between the acquisition of assets for processing and their realisation in cash
or cash equivalents.

6. Property, Plant and Equipment (PPE) and Capital Work in-Progress
Initial Recognition and Measurement:

Property, plant, and equipment is initially measured at cost and subsequently at cost less accumulated
depreciation and cumulative impairment losses, if any. Cost for this purpose includes all attributable
costs for bringing the asset to its location and condition. The present value of the expected cost for the
decommissioning of an asset after its use is included in the cost of the respective asset if the recognition
criteria for provision is met.

Subsequent expenditure related to property, plant and equipment is capitalized only when it is
probable that the future economic benefit associated with these flow to the company and the cost of
item can be measured reliably. Other repairs and maintenance costs are exposed off as and when
incurred.

The cost item of property, plant and equipment which is not ready for their intended use as at each
reporting date is disclosed as capital work-in-progress.

An item of property, plant and equipment and any significant part initially recognised is derecognised
upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or
loss arising on derecognition of the asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is included in the statement of profit and loss when the
asset is derecognised.

Capital work-in-progress includes cost of fixed assets that are not available for use. Advances paid
towards the acquisifion of property, plant and equipment outstanding at each Balance Sheet Date is
classified as capital advances under other non-current assets.

7. Intangible Assets and Intangible Asset under Development

Intangible assets acquired separately are measured on inifial recognifion at the cost. Following inifial
recognifion, intangible assets are carried at cost less any accumulated amorfizafion and cumulafive
impairment losses, if any.

The cost of software (which is not an integral part of the related hardware) acquired for internal use
and resulfing in significant future economic benefits, is recognised as an Intangible Asset in the books
of accounts when the same is ready for use.

Intangible Assets that are not ready for its intended use as at the reporfing date are classified as
"Intangible Assets under Development''''.

Gain or loss arising from derecognifion of an intangible asset are measured as the difference between
the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of
profit and loss when the asset is derecognised.

8. Depreciation and Amortization

Depreciation is calculated on a straight-line basis over the esfimated useful lives of the assets.
Depreciation on tangible assets is provided as per the provisions of Schedule II of the Companies Act,
2013.

Where cost of a part of the asset is significant to total cost of the asset and esfi''mated useful life of that
part is different from the esfi''mated useful life of the remaining asset, esfi''mated useful life of that
significant part is determined separately and the significant part is depreciated on straight-line basis
over its esfi''mated useful life.

The residual values, useful life and method of depreciafion of an item of property, plant and equipment
are reviewed at each financial year end and adjusted prospecfively, if appropriate.

Depreciafion on item of Property, plant & equipment added/disposed off during the year is provided
on pro-rata basis with respect to date of acquisifion/disposal.

Extra Shift depreciafion for Plant & Machinery is calculated as per Schedule II of the Companies Act,
2013 as below:

• Double Shift - 50% of the Depreciafion claimed as per Single Shift and

• Triple Shift - 100% of the Depreciafion claimed as per Single Shift.

Intangible assets are amorfised over the esfi''mated useful on a straight-line basis, from the date that
they are available for use. The residual values, useful life and amorfisafion methods, are reviewed at
each financial year end and adjusted prospecfively, if appropriate.

9. Asset held for sale

An non-current asset is classified as held for sale if its carrying amount will be recovered principally
through a sale transacfion rather than through confinuing use. The asset held for sale is measured at
the lower of its carrying amount and fair value less costs to sell.

10. Borrowing costs

Borrowing costs directly attributable to the acquisifion, construcfion or producfion of an asset that
necessarily takes a substanfial period of fime to get ready for its intended use or sale are capitalised as
part of the cost of the asset. General borrowing costs are capitalised to qualifying assets by applying a
capitalisafion rate to the expenditure on that asset.

The capitalisation rate is the weighted average of the borrowing costs applicable to general borrowings
outstanding, other than specific borrowings. All other borrowing costs are expensed in the period in
which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection
with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded
as an adjustment to the borrowing costs.

11. Investment in subsidiaries

The Company recognizes its investments in subsidiary and associate companies at cost less
accumulated impairment loss, if any. Cost represents amount paid for acquisition of the said
investments.

On disposal of an investment, the difference between the net disposal proceeds and the carrying
amount is charged or credited to the Statement of Profit and Loss.

12. Impairment of Non-Financial Assets

The Company assesses, at each reporting date, whether there is an indication that an asset may be
impaired. If any indication exists, or when annual impairment testing for an asset is required, the
Company estimates the asset''s recoverable amount.

An asset''s recoverable amount is the higher of an asset''s or Cash Generating Unit''s (CGU) fair value less
costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless
the asset does not generate cash inflows that are largely independent of those from other assets or
groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the
asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset in determining fair value less costs of disposal.

Reversal of impairment provision is made when there is an increase in the estimated service potential
of an asset or Cash Generating Unit (CGU), either from use or sale, on reassessment after the date when
impairment loss for that asset was last recognised.

13. Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and demand
deposits with an original maturity of three months or less and highly liquid investments that are readily

convertible into known amounts of cash and which are subject to an insignificant risk of changes in
value.

Bank overdrafts, if any, are classified as borrowings under current liabilities in the balance sheet.

14. Inventories

All the inventories of the company other than disposable scrap are valued at lower of cost and net
realisable value. Disposable scrap is valued at estimated net realisable value.

Cost of inventories includes cost of purchase, costs of conversion and other costs incurred in bringing
the inventories to their present location and condition. The cost of materials is ascertained by using
weighted average method and inventories of stores, spare parts, fuel and loose tools is ascertained by
using FIFO method.

Work in progress and finished goods are valued at lower of cost and net realisable value. The cost of
work-in progress and finished goods includes materials, Direct labour and appropriate manufacturing
overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated
costs of completion and estimated costs necessary to make the sale.

15. Revenue recognition

A. Revenue from Contract with Customers

Revenue is recognised when (or as) the company satisfies a performance obligation by transferring a
promised goods or services (i.e., an Asset) to a Customer,

Revenue from sale of goods:

Revenue from the sale of goods is recognised at the point in time when the customer obtains control
of the asset. The indicators for transfer of control include the following:

• the company has transferred physical possession of the asset.

• the customer has legal title to the asset

• the customer has accepted the asset

• when the company has a present right to payment for the asset

• the customer has the significant risks and rewards of ownership of the asset. The transfer of
significant risks and rewards ownership is assessed based on the Inco- terms of the contracts.

Ex-Works contract - In case of Ex-works contract, revenue is recognised when the specified goods are
unconditionally appropriated to the contract.

FOR Contracts - In the case of FOR contracts, revenue is recognised when the goods are handed over
to the carrier for transmission to the buyer and in the case of FOR desh''nah''on contracts, revenue is
recognised when the physical possession is transferred.

The normal credit terms is 7 to 120 days upon delivery.

Tooling income - Revenue from tooling income is recognised when the performance obligah''on is
satisfied and usually coincides with the point in time when the control of the tool is transferred, which
is generally on receipt of the customers approval as per the terms of the contract.

Measurement:

Revenue is recognised at the amount of the transaction price that is allocated to the performance
obligation.

The transaction price is the amount of consideration to which the Company expects to be entitled in
exchange for transferring promised goods or services to a customer, excluding amount collected on
behalf of third parties.

B. Other income

i) Interest income is recognised using the effective interest rate method.

ii) Dividend income is recognised when the company''s right to receive the payment is established,
which is generally when shareholders approve the dividend.

iii) Rental income arising from operating leases is accounted for on a straight-line basis over the lease
term unless increase in rentals are in line with expected inflation or otherwise justified.

iv) Income from export incentives is accounted for on the export of goods if the entitlements can be
estimated with reasonable assurance and conditions precedent to claim are fulfilled and

v) Other income not specifically stated above is recognised on accrual basis.

16. Foreign currency transactions

Transactions in foreign currencies are initially recorded by the Company at their respective currency
exchange rates at the date the transaction qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated to the functional
currency by using the closing exchange rate at the reporting date. Differences arising on settlement or
translation of monetary items are recognised in 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 rate at the dates of the inih''al transach''ons.

17. Employee benefits

Short term employee benefits:

(i) All employee benefits payable wholly within twelve months of rendering the related services are
classified as short-term employee benefits and they mainly include:

(a) Wages & salaries.

(b) Short-term compensated absences.

(c) Profit-sharing, incenfives and bonuses and

(d) Non-monetary benefits such as subsidised transport, canteen facilifies, are valued on undiscounted
basis and recognised during the period in which the related services are rendered.

Defined benefit plan

(iii) The incremental gratuity liability is determined as the difference between the present value of the
obligafion, assessed annually based on an actuarial valuafion using the Projected Unit Credit Method,
and the fair value of the plan assets maintained to fund the obligafion.

(iv) Actuarial gains and losses and the return on plan assets (excluding interest) and the effect of the
asset ceiling (if any, excluding interest), are recognised immediately in other comprehensive income
(OCI). Net interest expense (income) on the net defined liability (asset) is computed by applying the
discount rate, used to measure the net defined liability (asset), to the net defined liability (asset) at the
start of the financial year after taking into account any changes as a result of contribufion and benefit
payments during the year. Net interest expense and other expenses related to defined benefit plans
are recognised in statement of profit and loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulfing change in benefit
that relates to past service or the gain or loss on curtailment is recognised immediately in statement of
profit and loss.

Other long term-term benefits

(ii) The liability for long-term compensated absences is determined annually based on an actuarial
valuafion using the Projected Unit Credit method, and is measured at the present value of the expected
future obligafions.

Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred

(v) Defined Contribufi''on Plan

a. Provident fund, and employee''s state insurance

The company has defined contribufi''on plans for employees comprising of provident fund, and
employee''s state insurance. The contribufions paid/payable to these plans during the year are charged
to the Statement of Profit and Loss for the year when the contribufions are due. The Company''s liability
is limited to the extent of contribufions made to these funds.

b. Superannuafion plan

The Company contributes 15% of the basic pay subject to a maximum of Rs. 150,000/- p.a. in respect
of those employees who opted for it. The Superannuafion Fund is administered by trustees and
managed by Birla Sun-life Insurance Company Limited. The Company is liable to the extent of its
monthly contribufi''on and recognizes such contribufions as an expense for the year incurred on accrual
basis.

c. Nafional pension scheme

The Company contributes 10% of the basic pay in respect of those employees who opted for it. The
Company contributes the amount payable in respect of a month in the following month. The Company
is liable to the extent of its monthly contribufi''on and recognizes such contribufions as an expense for
the year incurred on accrual basis.

18. Share-based payment arrangements:

Equity-settled share based payments to employees and other providing similar services are measured
at the fair value of the equity instruments at the grant date. The fair value determined at the grant date
of the equity-settled share based payments is expensed as employee benefit expenses over the vesfing
period, based on the Company''s esfimate of equity instruments that will eventually vest, with a
corresponding increase in equity. At the end of each reporfing period, the Company revises its esfimate
of the number of equity instruments expected to vest. The impact of the revision of the original
esfimates, if any, is recognized in statement of profit and loss such that the cumulafive expenses reflects
the revised esfimate, with a corresponding adjustment to the Share based payments reserve.

The dilufive effect of outstanding opfions is reflected as addifional share dilufion in the computafion of
diluted earnings per share.

19. Taxation

Income tax comprises of current and deferred tax.

(i) Current Income Tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to
the taxation authorities in accordance with Income Tax Act, 1961. The tax rates and tax laws used to
compute the amount are those that are enacted or substantively enacted at the reporting date. Current
tax relating to items recognised directly in other comprehensive income or equity is recognised in other
comprehensive income or equity respectively and not in the statement of profit and loss.

(ii) Deferred Tax

Deferred tax is provided on temporary differences between the tax bases of assets and liabilities and
their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are
recognised for all deductible temporary differences, the carry forward of unused tax credits and any
unused tax losses to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences can be utilised. 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 utilised.

Deferred tax asset and liabilities are measured at the tax rates that are expected to apply in the year
when the asset is realised or liability is settled, based on tax rates and tax laws that have been enacted
or substantially enacted at the reporting date.

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.

Deferred tax relating to items recognised directly in other comprehensive income or equity is
recognised in other comprehensive income or equity respectively and not in the statement of profit
and loss.