Accounting Policies of Arcotech Ltd. Company

Mar 31, 2024

a) Corporate information:

Arcotech Limited (''the Company'') is a public company domiciled in India and is incorporated under the provisions
of the Companies Act applicable in India. Its shares are listed on two recognised stock exchanges in India. The
registered office of the Company is located at 181, Sector - 3, Industrial Growth Centre, Bawal-123501. Dist.
Rewari, Haryana, India. The Company is principally engaged in the business of manufacturing non-ferrous semis.

b) Basis of preparation

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards
(Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended thereafter.

The financial statements are prepared on a historical cost basis, except for the following assets and liabilities:

- certain financial assets and financial liabilities which have been measured at fair value.

All assets and liabilities have been classified as current and non-current as per the Company''s normal operating
cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products
and services and the time between the acquisition of assets for processing and their realisation in cash and cash
equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current and
noncurrent classification of assets and liabilities. Deferred tax assets and liabilities are classified as non-current
assets and liabilities.

The financial statements for the year ended March 31, 2024 were authorized and approved for issue by the
Board of Directors on May 30, 2024. .

c) Fair value measurements

The Company measures financial instruments at fair value on initial recognition and at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based on the
presumption that the transaction to sell the asset or transfer the liability takes place either:

i. In the principal market for the asset or liability or

ii. In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or
a liability is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant that
would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized
within the fair value hierarchy. This is described, as follows, based on the lowest level input that is significant to
the fair value measurement as a whole:

i. Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

ii. Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable

iii. Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as
explained above. This note summarises accounting policy for fair value. Other fair value related disclosures are
given in the relevant notes:

Disclosures for valuation methods, significant estimates and assumptions (refer note no.41)

Financial instruments (including those carried at amortised cost) (refer note no.41)

d) Property, plant and equipment

Items of Property, plant and equipment are carried at cost less accumulated depreciation and impairment losses,
if any. The cost of an item of Property, plant and equipment comprises its purchase price, including import duties
and other non refundable taxes or levies and any directly attributable cost of bringing the assets to its working
condition for its intended use and any trade discount and rebates are deducted in arriving at purchase price.
Cost of the assets also includes interest on borrowings attributable to acquisition of qualifying fixed assets up to
the date the asset is ready for its intended use incurred up to that date. It also includes the present value of the
expected cost for the decommissioning and removing of an asset and restoring the site after its use, if the
recognition criteria for a provision are met.

Expenditure incurred after the property, plant and equipment have been put into operation, such as repairs and
maintenance, are normally charged to the statements of profit and loss in the period in which the costs are
incurred. Major inspection and overhaul expenditure is capitalized if the recognition criteria are met.

The Company identifies and determines cost of each component/ part of Property, plant and equipment
separately, if the component/ part has a cost which is significant to the total cost of the Property, plant and
equipment and has useful life that is materially different from that of the remaining asset.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the
proceeds from disposal with the carrying amount of property, plant and equipment, and are recognized net
within other income/other expenses in statement of profit and loss.

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.

Cost of Items of Property, plant and equipment not ready for intended use as on the balance sheet date, is
disclosed as capital work in progress. Advances given towards acquisition of property, plant and equipment
outstanding at each balance sheet date are disclosed as Capital Advance under Other non current assets.

Subsequent expenditure relating to Property, plant and equipment is capitalised only if such expenditure results
in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

Depreciation is the systematic allocation of the depreciable amount of PPE over its useful life and is provided on
a straight-line basis over the useful lives as prescribed under Schedule II to the Act or as per technical assessment.
The residual values, useful lives and method of depreciation of property, plant and equipment is reviewed at
each financial year end and adjusted prospectively, if appropriate.

Depreciation on additions (disposals) is provided on a pro-rata basis i.e. from (up to) the date on which is asset is
ready to use /(disposed of). Freehold land is not depreciated.

e) Inventories

- Inventories of raw materials, stores & consumables are valued at cost on FIFO basis.

- Inventories of work in process are valued at lower of cost and net realizable value.

- Inventories of finished goods are valued at cost or market value whichever is lower.

- Saleable dust and scrap are valued at estimated realizable value.

Cost of inventories also include all other costs incurred in bringing the inventories to their present location and
condition. Net realisable value is estimated selling price in the ordinary course of business, less the estimated cost
of completion and the estimated cost necessary to make the sale.

f) Foreign currencies

Foreign currency transactions are recorded at exchange rates prevailing on the date of the transaction. Foreign
currency denominated monetary assets and liabilities are restated into the functional currency using exchange
rates prevailing on the balance sheet date.

Gains and losses arising on settlement and restatement of foreign currency denominated monetary assets and
liabilities are included in the statement of profit and loss.

The Company''s financial statements are presented in INR. The Company determines the functional currency as INR
on the basis of primary economic environment in which the entity operates.

g) Revenue recognition

Effective April 1,2018, the Company has applied Ind AS 115 which establishes a comprehensive framework
for determining whether, how much and when revenue is to be recognised. The company applied five step model
under Ind As-115 for revenue recognition. Revenue is recognised upon transfer of control products & service to
customer in an amount that reflects the consideration which company expects to receive in exchange for those
products & services.

Dividend income from investments is recognised when the right to receive the payment is established.

h) Retirement and other employee benefits

Gratuity and Leave encashment, which are defined benefit plan, are accrued based on an independent actuarial
valuation, which is done based on project unit credit method as at the balance sheet date. The Company
recognizes the net obligation of a defined benefit plan in its balance sheet as an asset or liability. Gains and
losses through re-measurements of the net defined benefit liability/(asset) are recognized in other comprehensive
income. In accordance with Ind AS, re-measurement gains and losses on defined benefit plans recognized in OCI
are not to be subsequently reclassified to statement of profit and loss. As required under Ind AS compliant
Schedule III, the Company transfers it immediately to retained earnings.

The eligible employees of the Company receive benefits from a provident fund, which is defined contribution
retirement plan. Both the eligible employee and the Company make monthly contributions to the provident fund
plan equal to a specified percentage of the covered employee''s salary.

i) Income tax

Income tax expense comprises current tax and deferred tax during the year. Current and deferred tax are
recognised in the statement of profit and loss, except when they relate to items that are recognised in other
comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in
other comprehensive income or directly in equity, respectively.

Current income tax for the current and prior periods are measured at the amount expected to be recovered from
or paid to the taxation authorities based on the taxable income for that period. The tax rates and tax laws used
to compute the amount are those that are enacted or substantively enacted by the balance sheet date.

Deferred income taxes are recognised for the future tax consequences attributable to temporary differences
between the financial statement carrying amounts of existing assets and liabilities and their tax bases in the
financial statements. The effect on deferred tax assets and liabilities of a change in the tax rates is recognised
using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be
available against which the temporary differences can be utilized. 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 tax assets and deferred tax liabilities relate to the same taxable entity and the same taxation
authority.

Minimum alternate tax (''MAT'') credit is recognized as a deferred tax asset only when and to the extent there is
convincing evidence that the Company will pay normal income tax during the specified period. Such asset is
reviewed at each Balance Sheet date and the carrying amount of MAT credit asset is written down to the extent
there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the
specified period.

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Mar 31, 2015

(a) Basis of Accounting

Financial Statements are prepared under historical cost convention on accrual basis except those disclosed in notes on accounts in conformity with accounting principles generally accepted in India and comply with the provision of Companies Act, 2013 and Accounting Standards issued by the Institute of Chartered Accountants of India.

(b) Revenue Recognition

Sales are recognized on dispatch of materials to customers.

(c) Employee Benefits

i) Defined Contribution Plan:

Contribution to Provident Fund, which is defined contribution retirement plan, is charged to the Statement of Profit & Loss in the period in which the contributions are incurred.

ii) Defined Benefit Plan:

Retirement benefits in the form of Gratuity and leave encashment are determined on actuarial valuation using projected unit credit method at the balance sheet date and are charged to Statement of Profit & Loss.

(d) Fixed Assets

(i) Fixed assets are stated at cost of acquisition inclusive of freight, duties and incidental expenses, etc.

(ii) Depreciation on fixed assets has been charged on Straight Line Method based on life assigned to each asset in accordance with Schedule II of the Companies Act, 2013.

(iii) Pursuant to enactment of Companies Act, 2013 the company has applied the estimated useful life of assets as specified in Schedule II of the Act, as a result depreciation during the year is lower by Rs. 97,83,274/-

(e) Investments

Investments, if any, are stated at cost.

(f) Inventories

(i) Inventories of Raw Materials, Stores & Consumable are valued at cost.

(ii) Inventories of Work in Process are valued at lower of cost and net realizable value.

(iii) Inventories of Finished Goods are valued at cost or market value whichever is lower.

(iv) Salable dust and scrap are valued at estimated realizable value.

(g) Foreign currency translation

Initial recognition

Foreign currency transactions are recorded 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.

Conversion

Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date.

Exchange differences

The company accounts for exchange differences arising on translation/settlement of foreign currency monetary items as below:

(i) Transactions reported in foreign currencies are recorded at the exchange rate prevailing on the date of transaction or that approximates the actual rate at the date of transaction.

(ii) Monetary items denominated in foreign currencies at the year end are restated at year end rates.

(iii) Any income or expenditure on account of foreign exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss.

(h) Contingent Liabilities

Contingent liabilities are not provided for in the books of accounts and are disclosed by way of note to the accounts.

(i) Taxes on Income

Current tax is determined as the amount of tax payable in respect of taxable Income for the period. Deferred Tax is recognized subject to considering prudence on timing differences being the differences between taxable Income and Accounting Income that originate in one period and are capable of reversal in one or more subsequent period. MAT under the provisions of Income Tax Act, 1961 is recognized as current tax in the statement of profit and loss. The credit available under the act in respect of MAT paid is recognized as an asset only when and to the extent convincing evidence that the Company will pay normal income tax during the period for which the MAT credit can be carried forward for set off against the normal tax liability. MAT credit recognized as an asset is reviewed at each balance sheet date and written down to the extent the aforesaid convincing evidence no longer exists.

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Mar 31, 2014

(a) Basis of Accounting

Financial Statements are prepared under historical cost convention on accrual basis except those disclosed in notes on accounts.

(b) Revenue Recognition

Sales are recognized on dispatch of materials to customers.

(c) Employee Benefits

i) Defined Contribution Plan:

Contribution to Provident Fund, which is defined contribution retirement plan, is charged to the Statement of Profit & Loss in the period in which the contributions are incurred.

ii) Defined Benefit Plan:

Retirement benefits in the form of Gratuity and leave encashment are determined on actuarial valuation using projected unit credit method at the balance sheet date and are charged to Statement of Profit & Loss.

(d) Fixed Assets

(i) Fixed assets are stated at cost of acquisition inclusive of freight, duties and incidental expenses, etc. (ii) Depreciation on fixed assets has been charged on Straight Line Method at the rates and in the manner, prescribed under Schedule XIV of the Companies Act, 1956.

(e) Investments

Investments, if any, are stated at cost.

(f) Inventories

(i) Inventories of Raw Materials, Stores & Consumable are valued at cost. (ii) Inventories of Work in Process are valued at lower of cost and net realizable value. (iii) Inventories of Finished Goods are valued at cost or market value whichever is lower. (iv) Salable dust and scrap are valued at estimated realizable value.

(g) Foreign currency translation

Initial recognition

Foreign currency transactions are recorded 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.

Conversion

Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date.

Exchange differences

The company accounts for exchange differences arising on translation/settlement of foreign currency monetary items as below:

(i) Transactions reported in foreign currencies are recorded at the exchange rate prevailing on the date of transaction or that approximates the actual rate at the date of transaction.

(ii) Monetary items denominated in foreign currencies at the year end are restated at year end rates.

(iii) Any income or expenditure on account of foreign exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss.

(h) Contingent Liabilities

Contingent liabilities are not provided for in the books of accounts and are disclosed by way of note to the accounts.

(i) Taxes on Income

Current tax is determined as the amount of tax payable in respect of taxable Income for the period. Deferred Tax is recognized subject to considering prudence on timing differences being the differences between taxable Income and Accounting Income that originate in one period and are capable of reversal in one or more subsequent period. Deferred Tax Asset for the current year has been created taking into account the unabsorbed depreciation and carry forward of losses of earlier years.

MAT under the provisions of Income Tax Act, 1961 is recognized as current tax in the statement of profit and loss. The credit available under the act in respect of MAT paid is recognized as an asset only when and to the extent convincing evidence that the Company will pay normal income tax during the period for which the MAT credit can be carried forward for set off against the normal tax liability. MAT credit recognized as an asset is reviewed at each balance sheet date and written down to the extent the aforesaid convincing evidence no longer exists.

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Mar 31, 2013

(a) Basis of Accounting

Financial Statements are prepared under historical cost convention on accrual basis except those disclosed in notes on accounts.

(b) Revenue Recognition

Sales are recognized on dispatch of materials to customers.

(c) Employee Benefits

i) Defined Contribution Plan:

Contribution to Provident Fund, which is defined contribution retirement plan, is charged to the Statement of Profit & Loss in the period in which the contributions are incurred.

ii) Defined Benefit Plan:

Retirement benefits in the form of Gratuity and leave encashment are determined on actuarial valuation using projected unit credit method at the balance sheet date and are charged to Statement of Profit & Loss.

(d) Fixed Assets

(i) Fixed assets are stated at cost of acquisition inclusive of freight, duties and incidental expenses, etc. (ii) Depreciation on fixed assets has been charged on Straight Line Method at the rates and in the manner, prescribed under Schedule XIV of the Companies Act, 1956.

(e) Investments

Investments, if any, are stated at cost.

(f) Inventories

(i) Inventories of Raw Materials, Stores & Consumable are valued at cost. (ii) Inventories of Work in Process are valued at lower of cost and net realizable value. (iii) Inventories of Finished Goods are valued at cost or market value whichever is lower. (iv) Salable dust and scrap are valued at estimated realizable value.

(g) Foreign currency translation

Initial recognition

Foreign currency transactions are recorded 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. Conversion

Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date.

Exchange differences

The company accounts for exchange differences arising on translation/settlement of foreign currency monetary items as below:

(i) Transactions reported in foreign currencies are recorded at the exchange rate prevailing on the date of transaction or that approximates the actual rate at the date of transaction. (ii) Monetary items denominated in foreign currencies at the year end are restated at year end rates. (iii) Any income or expenditure on account of foreign exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss.

(h) Contingent Liabilities

Contingent liabilities are not provided for in the books of accounts and are disclosed by way of note to the accounts.

(i) Taxes on Income

Current tax is determined as the amount of tax payable in respect of taxable Income for the period. Deferred Tax is recognized subject to considering prudence on timing differences being the differences between taxable Income and Accounting Income that originate in one period and are capable of reversal in one or more subsequent period. Deferred Tax Asset for the current year has been created taking into account the unabsorbed depreciation and carry forward of losses of earlier years.

MAT under the provisions of Income Tax Act, 1961 is recognized as current tax in the statement of profit and loss. The credit available under the act in respect of MAT paid is recognized as an asset only when and to the extent convincing evidence that the Company will pay normal income tax during the period for which the MAT credit can be carried forward for set off against the normal tax liability. MAT credit recognized as an asset is reviewed at each balance sheet date and written down to the extent the aforesaid convincing evidence no longer exists.

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Mar 31, 2012

(a) Basis of Accounting

Financial Statements are prepared under historical cost convention on accrual basis except those disclosed in notes on accounts.

(b) Revenue Recognition

Sales are recognized on dispatch of materials to customers.

(c) Employee Benefits

i) Defined Contribution Plan:

Contribution to Provident Fund, which is defined contribution retirement plan, is charged to the Profit & Loss account in the period in which the contributions are incurred.

ii) Defined Benefit Plan:

Retirement benefits in the form of Gratuity and leave encashment are determined on actuarial valuation using projected unit credit method at the balance sheet date and are charged to Profit & Loss account.

(d) Fixed Assets

(i) Fixed assets are stated at cost of acquisition inclusive of freight, duties and incidental expenses, etc.

(ii) Depreciation of fixed assets has been charged on Straight Line Method at the rates and in the manner, prescribed under Schedule XIV of the Companies Act, 1956.

(e) Investments

Investments, if any, are stated at cost.

(f) Inventories

(i) Inventories of Raw Materials, Stores & Consumable are valued at cost.

(ii) Inventories of Work in Process are valued at lower of cost and net realizable value.

(iii) Inventories of Finished Goods are valued at cost or market value whichever is lower.

(iv) Saleable dust and scrap are valued at estimated realizable value.

(g) Foreign currency translation

Initial recognition

Foreign currency transactions are recorded 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.

Conversion

Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Exchange differences

The company accounts for exchange differences arising on translation/settlement of foreign currency monetary items as below:

(i) Transactions reported in foreign currencies are recorded at the exchange rate prevailing on the date of transaction or that approximates the actual rate at the date of transaction.

(ii) Monetary items denominated in foreign currencies at the year end are restated at year end rates.

(iii) Any income or expenditure on account of foreign exchange difference either on settlement or on translation is recognized in the profit and loss account

(h) Contingent Liabilities

Contingent liabilities are not provided for in the books of accounts and are disclosed by way of note to the accounts.

(i) Taxes on Income

Current tax is determined as the amount of tax payable in respect of taxable Income for the period. Deferred Tax is recognized subject to considering prudence on timing differences being the differences between taxable Income and Accounting Income that originate in one period and are capable of reversal in one or more subsequent period. Deferred Tax Asset for the current year has been created taking into account the unabsorbed depreciation and carry forward of losses of earlier years.

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Mar 31, 2010

(a) Basis of Accounting

Financial Statements are prepared under historical cost convention on accrual basis except those disclosed in notes on accounts.

(b) Revenue Recognition

Domestic Sales are recognized on dispatch of materials to customers.

(c) Employee Benefits

Contribution to Provident Fund, which is defined contribution retirement plan, is charged to the Profit & Loss account in the period in which the contributions are incurred. In respect of Gratuity, liability is determined on the basis of own valuation at the Balance Sheet date and is charged to Profit & Loss account.

(d) Fixed Assets

(i) Fixed assets are stated at cost of acquisition inclusive of freight, duties and incidental expenses, etc.

(ii) Depreciation of fixed assets has been charged on Straight Line Method at the rates and in the manner, prescribed under Schedule XIV of the Companies Act, 1956.

(e) Investments

Investments, if any, are stated at cost.

(f) Inventories

(i) Inventories of Raw Materials, Stores & Consumable are valued at cost. (ii) Inventories of Work in Process are valued at lower of cost and net realizable value. (iii) Inventories of Finished Goods are valued at cost or market value whichever is lower. (iv) Salable dust and scrap are valued at estimated realizable value.

(e) Contingent Liabilities

Contingent liabilities are not provided for in the books of accounts and are disclosed by way of note to the accounts.

(f) Taxes on Income

Current tax is determined as the amount of tax payable in respect of taxable Income for the period. Deferred Tax is recognized subject to considering prudence on timing differences being the differences between taxable Income and Accounting Income that originate in one period and are capable of reversal in one or more subsequent period. Deferred Tax Asset for the current year has been created taking into account the unabsorbed depreciation and carry forward of losses of earlier years.