Accounting Policies of Vardhman Special Steels Ltd. Company

Mar 31, 2025

2. Material Accounting Policies

This note provides a list of the material accounting
policies adopted in the preparation of these
standalone financial statements. These policies have
been consistently applied to all the years presented,
unless otherwise stated.

a) Basis of preparation

i) Statement of Compliance

These standalone financial statements have been
prepared in accordance with Indian Accounting
Standards ("Ind AS") as per the Companies (Indian
Accounting Standards) Rules, 2015 notified under
section 133 of Companies Act, 2013, "the Act" and
other relevant provisions of the Act as amended from
time to time.

ii) ii) Effective 01 April 2015, the Company had
transitioned to Ind AS while the financial statements
were being prepared in accordance with the
Companies (Accounting Standards) Rules, 2006
(previous GAAP) till 31 March 2017 and the transition
was carried out in accordance with Ind AS 101 "First
time adoption of Indian Accounting Standards". While
carrying out transition, in addition to the mandatory
exemptions, the Company had elected certain
exemptions which are listed as below:

- The Company had opted to continue with the
carrying value for all of its property, plant and
equipment, intangible assets and investment
property as recognized in the standalone
financial statements prepared under previous
GAAP and use the same as deemed cost in
the standalone financial statement as at the
transition date.

- The Company had opted to carry the assessment
whether a contract or arrangement contains a
lease on the basis of facts and circumstances
existing at the date of transition, except where
the effect is not expected to be material. In
accordance with Ind AS 17, this assessment
should be carried out at the inception of the
contract or arrangement.

The standalone financial statements of the Company
for the year ended 31 March 2025 were approved by
the Company''s Board of Directors on 22 April 2025.

iii) Functional and presentation currency

The functional currency of the Company is the Indian
rupee. These standalone financial statements are
presented in Indian rupees. All amounts have been
rounded-off to the nearest lakhs, up to two places of
decimal, unless otherwise indicated.

iv) Basis of measurement

The standalone financial statements have been
prepared on the historical cost basis except for the
following items:

v) Measurement of fair values

A number of Company''s accounting policies and
disclosures require the measurement of fair values,
for both financial and non-financial assets and
liabilities.

The Company has established policies and
procedures with respect to the measurement of fair
values. This includes the top management division
which is responsible for overseeing all significant fair
value measurements, including Level 3 fair values. The
top management division regularly reviews significant
unobservable inputs and valuation adjustments.
If third party information, is used to measure fair
values, then the top management division assesses
the evidence obtained from the third parties to
support the conclusion that these valuations meet
the requirement of Ind AS, including the level in the

fair value hierarchy in which the valuations should be
classified.

Significant valuation issues are reported to the
Company''s board of directors.

Fair values are categorised into different levels in a
fair value hierarchy based on the inputs used in the
valuation techniques as follows:

- Level 1: Quoted prices (unadjusted) in active
markets for identical assets and liabilities.

- Level 2: Inputs other than quoted prices
included in Level 1 that are observable for the
asset or liability, either directly or indirectly.

- Level 3: Inputs for the asset or liability that are not
based on observable market data (unobservable
inputs).

When measuring the fair value of an asset or liability,
the Company uses observable market data as far as
possible. If the inputs used to measure the fair value
of an asset or liability fall into different levels of the
fair value hierarchy, then the fair value measurement
is categorised in its entirely in the same level of the
fair value hierarchy as the lowest level input that is
significant to the entire measurement.

The Company recognises transfers between levels of
the fair value hierarchy at the end of the reporting
period during which the changes have occurred.

Further information about the assumptions made
in measuring fair values used in preparing these
standalone financial statements is included in note
46- Financial instruments.

vi) Current versus non-current classification

The Company presents assets and liabilities in the
Statement of Assets and Liabilities based on current/
non-current classification.

An asset is treated as current when it is:

- Expected to be realised or intended to be sold or
consumed in normal operating cycle.

- Held primarily for the purpose of trading.

- Expected to be realised within twelve months
after the reporting period, or

- 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.

The Company classifies all other liabilities as non¬
current.

Deferred tax assets and liabilities are classified as non¬
current assets and liabilities.

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

vii) Use of estimates and judgements

The preparation of these standalone financial
statements in conformity with Generally Accepted
Accounting Principles (GAAP) requires management
to make judgments, estimates and assumptions that
impact the application of accounting policies and the
reported amounts of assets, liabilities, income and
expenses and the disclosure of contingent liabilities
on the date of the standalone financial statements.
Actual results could differ from those estimates.
Estimates and underlying assumptions are reviewed
on an ongoing basis. Any revision to accounting
estimates is recognised prospectively in current and
future periods.

Financial reporting results rely on the estimate of the
effect of certain matters that are inherently uncertain.
Future events rarely develop exactly as forecast and
the best estimates require adjustments, as actual
results may differ from these estimates under different
assumptions or conditions. Estimates and Judgments
are continually evaluated and are based on historical
experience and other factors, including expectation
of future events that are believed to be reasonable
under the circumstances. The Management believes
that the estimates used in preparation of these

standalone financial statements are prudent and
reasonable. Existing circumstances and assumptions
about future developments, however, may change
due to market changes or circumstances arising that
are beyond the control of the Company.

Judgements

Information about judgments made in applying accounting
policies that have the most significant effects on
the amounts recognized in the standalone financial
statements is included in the following notes:

- Note 2(o)(i) and 29 - revenue recognition:
whether revenue is recognized over time or at a
point in time; determining the transaction price,
estimating the expected value of right to return

- Note 2(g) and 20 - lease term: whether the
Company is reasonably certain to exercise
extension options

Assumptions and estimation uncertainties

In particular, information about significant areas
of estimation uncertainty and critical judgments in
applying accounting policies that have the most
significant effects on the amounts recognised in the
standalone financial statements is included in the
following notes:

- Note 2(a)(v) - Fair value measurement

- Note 2(d) and 3 - Assessment of useful life of
Property, plant and equipment

- Note 2(e) and 5 - Assessment of useful life of
Intangible assets

- Note 2(h) and 20 - leases classification and
assessment of discount rate in relation to lease
accounting as per Ind AS 116

- Note 2(i) - Valuation of inventories

- Note 2(p) - Accounting for Government grant

- Note 2(l), 2(m) and 40 - Recognition and
measurement of provisions and contingencies,
key assumptions about the likelihood and
magnitude of an outflow of resources

- Note 2(r), 9, 23 and 38 - Recognition of tax
expense including deferred tax

- Note 2(j) - Impairment of financial assets

- Note 2(j) - Impairment test of non-financial
assets: key assumptions underlying recoverable
amounts and

- Note 2(k) and 43 - Measurement of defined
benefit obligations: key actuarial assumptions;
Share based Payments

- Note 2(o)(i) and 29 - Revenue recognition:
estimate of expected returns

) Foreign currency transactions

Initial recognition

Transactions in foreign currencies are translated
into the functional currency of the Company at the
exchange rates at the dates of the transactions.

Measurement at the reporting date

Monetary assets and liabilities denominated in foreign
currencies are translated into the functional currency
at the exchange rate at the reporting date. Non¬
monetary assets and liabilities that are measured at
fair value in a foreign currency are translated into the
functional currency at the exchange rate when the
fair value was determined. Non-monetary assets and
liabilities that are measured based on historical cost in
a foreign currency are translated at the exchange rate
at the date of the transaction. Exchange differences
on restatement/settlement of all monetary items are
recognised in profit or loss.

) 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.

Financial assets

Recognition and initial measurement

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

A financial asset (unless it is a trade receivable without
a significant financing component which is initially
measured at transaction price) or financial liability
is recognized initially at fair value plus or minus,
for an item not at FVTPL, transaction costs that are
directly attributable to its acquisition or issue. A trade

receivable without a significant financing component
is initially measured at the transaction price.

Classification and subsequent measurement

On initial recognition, a financial asset is classified as

- measured at:

- amortised cost;

- fair value through other comprehensive income
(FVOCI) - debt investment;

- fair value through other comprehensive income
(FVOCI) - equity investment, or

- fair value through profit and loss (FVTPL)

Financial assets are not reclassified subsequent to
their initial recognition, except if and in the period the
Company changes its business model for managing
financial assets.

A financial asset is measured at amortised cost if it
meets both of the following conditions and is not
designated as at FVTPL:

- the asset is held within a business model whose
objective is to hold assets to collect contractual
cash flows; and

- the contractual terms of the financial asset give
rise on specified dates to cash flows that are
solely payments of principal and interest on the
principal amount outstanding.

A debt instrument is measured at FVOCI if it
meets both of the following conditions and is
not designated as at FVTPL:

- the asset is held within a business model
whose objective is achieved by both collecting
contractual cash flows and selling financial
assets; and

- the contractual terms of the financial asset give
rise on specified dates to cash flows that are
solely payments of principal and interest on the
principal amount outstanding.

On initial recognition of an equity investment that is
not held for trading, the Company may irrevocably

elect to present subsequent changes in the
investment''s fair value in OCI (designated as FVOCI

- equity investment). This election is made on an
investment-by-investment basis.

All financial assets not classified as measured at
amortised cost or FVOCI as described above are
measured at FVTPL. This includes all derivative
financial assets. On initial recognition, the Company
may irrevocably designate a financial asset that
otherwise meets the requirements to be measured
at amortised cost or at FVOCI as at FVTPL if doing
so eliminates or significantly reduces an accounting
mismatch that would otherwise arise.

Financial assets: Business model assessment

The Company makes an assessment of the objective
of the business model in which a financial asset is held
at a portfolio level because this best reflects the way
the business is managed and information is provided
to management. The information considered
includes:

- The stated policies and objectives for the
portfolio and the operation of those policies in
practice. These include whether management''s
strategy focuses on earning contractual interest
income, maintaining a particular interest rate
profile, matching the duration of the financial
assets to the duration of any related liabilities or
expected cash outflows or realizing cash flows
through the sale of the assets;

- How the performance of the portfolio is
evaluated and reported to the Company''s
management;

- The risks that affect the performance of the
business model (and the financial assets held
within that business model) and how those risks
are managed;

- How managers of the business are compensated
- e.g. whether compensation is based on the fair
value of the assets managed or the contractual
cash flows collected; and

- The frequency, volume and timing of sales of
financial assets in prior periods, the reasons for
such sales and expectations about future sales
activity.

Transfers of financial assets to third parties in
transactions that do not qualify for derecognition are
not considered sales for this purpose, consistent with
the Company''s continuing recognition of the assets.

Financial assets that are held for trading or are
managed and whose performance is evaluated on a
fair value basis are measured at FVTPL.

Financial assets: Assessment whether contractual
cash flows are solely payments of principal and
interest

For the purposes of this assessment, ''principal'' is
defined as the fair value of the financial asset on initial
recognition. ''Interest'' is defined as consideration
for the time value of money and for the credit risk
associated with the principal amount outstanding
during a particular period of time and for other
basic lending risks and costs (e.g. liquidity risk and
administrative costs), as well as a profit margin.

In assessing whether the contractual cash flows
are solely payments of principal and interest, the
Company considers the contractual terms of the
instrument. This includes assessing whether the
financial asset contains a contractual term that could
change the timing or amount of contractual cash
flows such that it would not meet this condition. In
making this assessment, the Company considers:

- contingent events that would change the
amount or timing of cash flows;

- terms that may adjust the contractual coupon
rate, including variable interest rate features;

- prepayment and extension features; and

- terms that limit the Company''s claim to cash
flows from specified assets (e.g. non-recourse
features).

Financial liabilities: Classification, subsequent
measurement and gains and losses

Financial liabilities are classified as measured at
amortised cost or FVTPL. A financial liability is classified

as at FVTPL 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 FVTPL 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.

Derecognition

Financial assets

The Company derecognises a financial asset when
the contractual rights to the cash flows from the
financial asset expire, or it transfers the rights to
receive the contractual cash flows in a transaction
in which substantially all of the risks and rewards of
ownership of the financial asset are transferred or
in which the company neither transfers nor retains
substantially all of the risks and rewards of ownership
and does not retain control of the financial asset.

If the Company enters into transactions whereby it
transfers assets recognised on its balance sheet, but
retains either all or substantially all of the risks and
rewards of the transferred assets, the transferred
assets are not derecognised.

Financial liabilities

The Company derecognises a financial liability when
its contractual obligations are discharged or cancelled
or expire.

The Company also derecognises a financial liability
when its terms are modified and the cash flows under
the modified terms are substantially different. In this
case, a new financial liability based on the modified
terms is recognised at fair value. The difference
between the carrying amount of the financial liability
extinguished and the new financial liability with
modified terms is recognised in profit or loss.

Offsetting

Financial assets and financial liabilities are offset and
the net amount presented in the balance sheet when,
and only when, the Company currently has a legally
enforceable right to set off the amounts and it intends
either to settle them on a net basis or to realise the
asset and settle the liability simultaneously.

Derivative financial instruments

The Company holds derivative financial instruments
to hedge its foreign currency risk exposures. Such
derivative financial instruments are initially recognised
at fair value on the date on which a derivative contact
is entered into and are subsequently re-measured
at fair value, and changes therein are generally
recognized in profit or loss. Derivatives are carried as
financial assets when the fair value is positive and as
financial liability when the fair value is negative

d) Property, plant and equipment (''PPE'')

Recognition and measurement

Property, plant and equipment are measured at cost
of acquisition or construction less accumulated
depreciation and/or accumulated impairment, if any.

The 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 cost directly attributable to bringing the
asset to the location and the working condition
for its intended use and

• the initial estimate of the costs of dismantling
and removing the item and restoring the site on
which it is located, the obligation for which an
entity incurs either when the item is acquired or
as a consequence of having used the item dur¬
ing a particular period for purposes other than
to produce inventories during that period.

• financing cost related to borrowed funds at¬
tributable to the construction or acquisition of
qualifying assets upto the date of the assets are
ready for use.

The cost of an item of property, plant and equipment
shall be recognized as an asset if, and only if it is
probable that future economic benefits associated
with the item will flow to the Company and the cost
of the item can be measured reliably.

Freehold land is carried at historical cost less any
accumulated impairment losses.

Advances paid towards the acquisition of property,
plant and equipment outstanding at each balance
sheet date is classified as capital advances under
other non-current assets and the cost of assets not
put to use before such date are disclosed under
''Capital work-in-progress''.

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.

The cost and related accumulated depreciation are
eliminated from the standalone financial statements
upon sale or retirement of the asset and the resultant
gains or losses are recognized in the statement of
profit and loss. Assets to be disposed off are reported
at the lower of the carrying value or the fair value less
cost to sell.

Subsequent expenditure

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

Depreciation

Depreciation is calculated on cost of items of
PPE (excluding freehold land) less their estimated
residual values over their estimated useful lives using
the straight-line method and is recognised in the
Statement of Profit and Loss. Freehold land is not
depreciated.

Depreciation on items of property, plant and
equipment is provided as per the rates corresponding
to the useful life specific in Schedule II of the
Companies Act, 2013 read with notification dated
29 August 2014 of Ministry of Corporate Affairs as
follows:

Significant components of assets and their useful
life and depreciation charge is based on an internal
technical evaluation. These estimated lives are based
on technical assessment made by technical expert
and management estimates. Management believes
that these estimated useful lives are realistic and
reflect fair approximation of the period over which
the assets are likely to be used.

Depreciation method, useful lives and residual values
are reviewed at each financial year-end and adjusted
if appropriate. Depreciation on additions (disposal) is
provided on a pro-rata basis i.e. from (upto) the date
on which asset is ready for use (disposed of).

Derecognition

A property, plant and equipment are derecognised
on disposal or when no future economic benefits
are expected from its use and disposal. Losses arising
from retirement and gains or losses arising from
disposal of a tangible 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.

Other Intangible Assets

Acquired Intangible

Intangible assets that are acquired by the Company
are measured initially at cost. Cost of an item of
Intangible asset 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. After

initial recognition, an intangible asset is carried at
its cost less any accumulated amortisation and any
accumulated impairment loss.

Subsequent expenditure

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

Amortisation

Amortisation is calculated to write off the cost of
intangible assets less their estimated residual values
over their estimated useful lives using the straight¬
line method, and is included in depreciation and
amortisation expense in Statement of Profit and Loss.
The estimated useful life of Computer software is 5
years.

Amortisation method, useful life and residual values
are reviewed at the end of each financial year and
adjusted if appropriate.

Derecognition

Intangible assets are derecognised on disposal or
when no future economic benefits are expected
from its use and disposal.

f) Non-current assets held for sale

Non-current assets classified as held for sale are
generally measured at the lower of their carrying
amount and fair value less cost to sell, if it is highly
probable that they will be recovered primarily through
sale rather than through continuing use. Losses on
initial classification as held for sale and subsequent
gains and losses on re-measurement are recognised
in the Statement of Profit and Loss.

Once classified as held-for sale, property, plant and
equipment, and intangible assets are no longer
amortised or depreciated.

g) Borrowing costs

Borrowing costs are interest and other costs (including
exchange differences arising from foreign currency
borrowings to the extent that they are regarded as
an adjustment to interest costs) incurred by the
Company in connection with the borrowing of funds.
Borrowing costs directly attributable to acquisition

or construction of an asset which necessarily take
a substantial period of time to get ready for their
intended use are capitalized as a part of cost of the
asset. Other borrowing costs are recognised as an
expense in the period in which they are incurred.

h) Leases
As lessee

The Company''s lease asset classes primarily consist of
leases for buildings. The Company, at the inception of
a contract, assesses whether the contract is a lease or
not. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified
asset for a time in exchange for a consideration.
Accordingly, there was no adjustment in the opening
balance of retained earnings as on 1 April 2019.

The Company elected to use the following practical
expedients on initial application:

- Applied a single discount rate to a portfolio of
leases of similar assets in similar economic
environment with a similar end date.

- Applied the exemption not to recognize right-of-
use assets and liabilities for leases with less than
12 months of lease term on the date of initial
application.

- Excluded the initial direct costs from the
measurement of the right-of-use asset at the
date of initial application.

- Applied the practical expedient to grandfather
the assessment of which transactions are
leases. Accordingly, Ind AS 116 is applied only
to contracts that were previously identified as
leases under Ind AS 17.

The Company recognises a right-of-use asset and a
lease liability at the lease commencement date. The
right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability
adjusted for any lease payments made at or before
the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle
and remove the underlying asset or to restore the
underlying asset or the site on which it is located, less
any lease incentives received.

The right-of-use assets is subsequently measured at
cost less any accumulated depreciation, accumulated
impairment losses, if any and adjusted for any
remeasurement of the lease liability. The right-of-use
assets is depreciated using the straight-line method
from the commencement date over the shorter of
lease term or useful life of right-of-use asset. The
estimated useful lives of right-of-use assets are
determined on the same basis as those of property,
plant and equipment. Right-of-use assets are tested
for impairment whenever there is any indication
that their carrying amounts may not be recoverable.
Impairment loss, if any, is recognised in the statement
of profit and loss.

The lease liability is initially measured at the present
value of the lease payments that are not paid at
the commencement date, discounted using the
Company''s incremental borrowing rate. The lease
liability is subsequently remeasured by increasing
the carrying amount to reflect interest on the lease
liability, reducing the carrying amount to reflect
the lease payments made and remeasuring the
carrying amount to reflect any reassessment or
lease modifications or to reflect revised in-substance
fixed lease payments. The company recognises the
amount of the re-measurement of lease liability due
to modification as an adjustment to the right-of-use
asset and statement of profit and loss depending
upon the nature of modification. Where the carrying
amount of the right-of-use asset is reduced to zero
and there is a further reduction in the measurement
of the lease liability, the Company recognises
any remaining amount of the re-measurement in
statement of profit and loss.

Lease payments included in the measurement of the
lease liability comprise the following:

- fixed payments, including in-substance fixed
payments;

- variable lease payments that depend on an index
or a rate, initially measured using the index or
rate as at the commencement date;

- amounts expected to be payable under a
residual value guarantee; and

- the exercise price under a purchase option that
the company is reasonably certain to exercise,
lease payments in an optional renewal period if
the company is reasonably certain to exercise
an extension option, and penalties for early
termination of a lease unless the company is
reasonably certain not to terminate early.

The lease liability is measured at amortised cost using
the effective interest method. It is remeasured when
there is a change in future lease payments arising
from a change in an index or rate, if there is a change
in the company''s estimate of the amount expected
to be payable under a residual value guarantee, if
the company changes its assessment of whether it
will exercise a purchase, extension or termination
option or if there is a revised in-substance fixed lease
payment.

When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying
amount of the right-of-use asset, or is recorded in
profit or loss if the carrying amount of the right-of-
use asset has been reduced to zero. The company
presents right-of-use assets that do not meet the
definition of investment property in ''property, plant
and equipment'' and lease liabilities in ''financial
liabilities'' in the statement of financial position.

The Company has elected not to recognise right-of-
use assets and lease liabilities for short-term leases
that have a lease term of 12 months or less and leases
for which the underlying asset is of low value. The
Company recognises the lease payments associated
with these leases as an expense in the Statement of
Profit or Loss over the lease term.

Inventories

Inventories are measured at the lower of cost and net
realizable value. The methods of determining cost of
various categories of inventories are as follows:

The cost of inventories includes expenditure incurred
in acquiring the inventories, production or conversion
costs and other costs incurred in bringing them to
their present location and condition.

Net realisable value is the estimated selling price in the
ordinary course of business, less the estimated costs
necessary to make the sale. The net realisable value
of work-in-progress is determined with reference to
the selling prices of related finished products.

Raw materials, components and other supplies held
for use in the production of finished products are
not written down below cost except in cases where
material prices have declined and it is estimated that
the cost of the finished products will exceed their net
realisable value.

The comparison of cost and net realisable value is
made on an item-by-item basis.

j) Impairment

Impairment of financial asset

The Company recognises loss allowances for
expected credit loss on financial assets measured at
amortised cost. At each reporting date, the Company
assesses whether financial assets carried at amortised
cost are credit-impaired. A financial asset is ''credit-
impaired'' when one or more events that have
detrimental impact on the estimated future cash
flows of the financial assets have occurred.

Evidence that a financial asset is credit - impaired
includes the following observable data:

- significant financial difficulty of the debtor,
borrower or issuer;

- a breach of contract such as a default or being
past due for 90 days or more;

- the restructuring of a loan or advance by the
Company on terms that the Company would
not consider otherwise;

- it is probable that the borrower will enter
bankruptcy or other financial reorganisation; or

- the disappearance of an active market for a
security because of financial difficulties.

The Company measures loss allowances at an
amount equal to lifetime expected credit losses,
except for the following, which are measured as 12

month expected credit losses:

- Bank balances for which credit risk (i.e. the
risk of default occurring over the expected
life of financial instrument) has not increased
significantly since initial recognition.

Loss allowances for trade receivables are always
measured at an amount equal lifetime expected
credit losses. Lifetime expected credit losses are the
expected credit losses that result from all possible
default events over the expected life of a financial
instrument.

12-month expected credit losses are the expected
credit losses that result from default events that are
possible within 12 months after the reporting date (or
a shorter period if the expected life of the instrument
is less than 12 months)

In all cases, the maximum period considered when
estimating expected credit losses is the maximum
contractual period over which the Company is
exposed to credit risk.

When determining whether the credit risk of a
financial asset has increased significantly since initial
recognition and when estimating expected credit
losses, the Company considers reasonable and
supportable information that is relevant and available
without undue cost or effort. This includes both
quantitative and qualitative information and analysis,
based on the Company''s historical experience and
informed credit assessment and including forward¬
looking information.

The Company assumes that the credit risk on a
financial asset has increased significantly if it is more
than 30 days past due.

The Company considers a financial asset to be in
default when:

• the debtor is unlikely to pay its credit obligations
to the Company in full, without recourse by the
Company to actions such as realising security (if
any is held); or

• the financial asset is more than 90 days past due.

Measurement of expected credit losses

Expected credit losses are a probability-weighted
estimate of credit losses. Credit losses are measured
as the present value of all cash shortfalls (i.e. the
difference between the cash flows due to the
Company in accordance with the contract and the
cash flows that the Company expects to receive).

Expected credit losses are discounted at the effective
interest rate of the financial asset.

Presentation of allowance for expected credit losses
in the balance sheet

Loss allowance for financial assets measured at
amortised cost are deducted from the gross carrying
amount of the assets.

Write-off

The gross carrying amount of a financial asset is
written off (either partially or in full) to the extent
that there is no realistic prospect of recovery. This is
generally the case when the Company determines
that the debtor does not have assets or sources of
income that could generate sufficient cash flows to
repay the amounts subject to the write- off. However,
financial assets that are written off could still be
subject to enforcement activities in order to comply
with Company''s procedures for the recovery of
amount due.

Impairment of non-financial assets

The Company''s non-financial assets, other than
inventories and deferred tax assets, are reviewed at
each reporting date to determine whether there is any
indication of impairment. If any such indication exists,
then the asset''s recoverable amount is estimated.
For impairment testing, assets that do not generate
independent cash inflows are grouped together into
cash-generating units (CGUs). Each CGU represents
the smallest Group of assets that generates cash
inflows that are largely independent of the cash
inflows of other assets or CGUs.

The recoverable amount of a CGU (or an individual
asset) is the higher of its value in use and its fair value
less costs to sell. Value in use is based on the estimated
future cash flows, 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 CGU (or the asset).

The Company''s corporate assets do not generate
independent cash inflows. To determine impairment
of a corporate asset, recoverable amount is
determined for the CGUs to which the corporate
asset belongs.

An impairment loss is recognised if the carrying
amount of an asset or CGU exceeds its estimated
recoverable amount. Impairment losses, if any, are
recognised in the Statement of Profit and Loss.

In regard to assets for which impairment loss has been
recognised in prior period, the Company reviews at
each reporting date whether there is any indication
that the loss has decreased or no longer exists. An
impairment loss is reversed if there has been a change
in the estimates used to determine the recoverable
amount. Such a reversal is made only to the extent
that the asset''s carrying amount does not exceed the
carrying amount that would have been determined,
net of depreciation or amortisation, if no impairment
loss had been recognised.

k) Employee benefits

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 recognised for the amount expected to be paid e.g.,
salaries and wages and bonus etc., if the Company
has a present legal or constructive obligation to pay
this amount as a result of past service provided by
the employee, and the amount of obligation can be
estimated reliably.

Share-based payment transactions

Equity-settled share-based payments to employees
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 on a straight-line basis over
the vesting period, based on the Company''s estimate
of equity instruments that will eventually vest, with a
corresponding increase in equity.

When the terms of an equity-settled award are
modified, the minimum expense recognised by the
Company is the grant date fair value of the unmodified
award, provided the vesting conditions (other than
a market condition) specified on grant date of the
award are met.

Further, additional expense, if any, is measured and
recognised as at the date of modification, in case
such modification increases the total fair value of the
share-based payment plan, or is otherwise beneficial
to the employee.

Defined benefit plans

A defined benefit plan is a post-employment benefit
plan other than a defined contribution plan. Gratuity
is a defined benefit plan. The administration of the
gratuity scheme has been entrusted to the VSSL
gratuity fund trust. The Company''s net obligation
in respect of gratuity is calculated separately
by estimating the amount of future benefit that
employees have earned in the current and prior
periods, discounting that amount and deducting the
fair value of any plan assets.

The calculation of defined benefit obligation is
performed annually by a qualified actuary using the
projected unit credit method. Re-measurements of
the net defined benefit liability i.e. Gratuity, which
comprise actuarial gains and losses are recognised in
Other Comprehensive Income (OCI). The Company
determines the net interest expense (income) on the
net defined benefit liability for the period by applying
the discount rate used to measure the defined benefit
obligation at the beginning of the annual period to the
then- net defined benefit liability, taking into account
any changes in the net defined benefit liability during
the period as a result of contributions and benefit
payments. Net interest expense and other expenses
related to defined benefit plans are recognised in the
Statement of Profit and Loss.

When the benefits of a plan are changed or when
a plan is curtailed, the resulting change in benefit
that relates to past service (''past service cost'' or ''past
service gain'') or the gain or loss on curtailment is
recognised immediately in the Statement of Profit
and Loss. The Company recognises gains and losses
on the settlement of a defined benefit plan when the
settlement occurs.

When the calculation results in a potential asset for
the Company, the recognised asset is limited to
the present value of economic benefits available
in the form of any future refunds from the plan or
reductions in future contribution to the plan. To
calculate the present value of economic benefits,
consideration is given to any applicable minimum
funding requirement.

"Remeasurements of the net defined benefit liability,
which comprise actuarial gains and losses, the return
on plan assets (excluding interest) and the effect
of the asset ceiling (if any, excluding interest), are
recognized immediately in OCI."

Defined contribution plans

A defined contribution plan is a post-employment
benefit plan under which an entity pays specified
contributions to a separate entity and will have
no legal or constructive obligation to pay further
amounts. The Company makes specified monthly
contributions towards employee provident fund
and employee state insurance scheme (''ESI'') to
Government administered scheme which is a defined
contribution plan. The Company''s contribution is
recognised as an expense in the Statement of Profit
and loss during the period in which the employee
renders the related service.

Compensated absences

The Company''s net obligation in respect of long¬
term employee benefits other than post-employment
benefits is the amount of future benefit that employees
have earned in return for their service in the current
and prior periods; that benefit is discounted to
determine its present value. Such obligation such as
those related to compensate absences is measured
on the basis of an annual independent actuarial
valuation using the projected unit cost credit method.
Remeasurements gains or losses are recognised in
profit or loss in the period in which they arise. The
obligations are presented as current liabilities in the
balance sheet if the Company does not have an
unconditional right to defer the settlement for at least
twelve months after the reporting date.

---

Mar 31, 2024

2. Material Accounting Policies

This note provides a list of the material accounting policies adopted in the preparation of these financial statements. These policies have been consistently applied to all the years presented, unless otherwise stated.

a) Basis of preparation

i) Statement of Compliance

These financial statements have been prepared in accordance with Indian Accounting Standards ("Ind AS") as per the Companies (Indian Accounting Standards) Rules, 2015 notified under section 133 of Companies Act, 2013, "the Act" and other relevant provisions of the Act as amended from time to time.

ii) Effective 01 April 2015, the Company had transitioned to Ind AS while the financial statements were being prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (previous GAAP) till 31 March 2017 and the transition was carried out in accordance with Ind AS 101 "First time adoption of Indian Accounting Standards". While carrying out transition, in addition to the mandatory exemptions, the Company had elected certain exemptions which are listed as below:

- The Company had opted to continue with the carrying value for all of its property, plant and equipment, intangible assets and investment property as recognized in the financial statements prepared under previous GAAP and use the same as deemed cost in the financial statement as at the transition date.

- The Company had opted to carry the assessment whether a contract or arrangement contains a lease on the basis of facts and circumstances existing at the date of transition, except where

the effect is not expected to be material. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement.

The financial statements of the Company for the year ended 31 March 2024 were approved by the Company''s Board of Directors on 1 May 2024.

iii) Functional and presentation currency

The functional currency of the Company is the Indian rupee. These financial statements are presented in Indian rupees. All amounts have been rounded-off to the nearest lakhs, up to two places of decimal, unless otherwise indicated.

iv) Basis of measurement

The financial statements have been prepared on the historical cost basis except for the following items:

v) Measurement of fair values

A number of Company''s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

The Company has established policies and procedures with respect to the measurement of fair values. This includes the top management division which is responsible for overseeing all significant fair value measurements, including Level 3 fair values. The top management division regularly reviews significant unobservable inputs and valuation adjustments. If third party information, is used to measure fair values, then the top management division assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirement of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified.

Significant valuation issues are reported to the Company''s board of directors.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

- Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities.

- Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

- Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

When measuring the fair value of an asset or liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirely in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the changes have occurred.

Further information about the assumptions made in measuring fair values used in preparing these financial statements is included in note 46- Financial instruments.

vi) Current versus non-current classification

The Company presents assets and liabilities in the Statement of Assets and Liabilities based on current/ non-current classification.

An asset is treated as current when it is:

- Expected to be realised or intended to be sold or consumed in normal operating cycle.

- Held primarily for the purpose of trading.

- Expected to be realised within twelve months after the reporting period, or

- 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.

The Company classifies all other liabilities as noncurrent.

Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.

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

vii) Use of estimates and judgements

The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make judgments, estimates and assumptions that impact the application of accounting policies and the reported amounts of assets, liabilities, income and expenses and the disclosure of contingent liabilities on the date of the financial statements. Actual results could differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognised prospectively in current and future periods.

Financial reporting results rely on the estimate of the effect of certain matters that are inherently uncertain. Future events rarely develop exactly as forecast and the best estimates require adjustments, as actual results may differ from these estimates under different assumptions or conditions. Estimates and Judgments are continually evaluated and are based on historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances. The Management believes that the estimates used in preparation of these financial statements are prudent and reasonable. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company.

Judgements

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the financial statements is included in the following notes:

- Note 2(o)(i) and 29 - revenue recognition: whether revenue is recognized over time or at a point in time; determining the transaction price, estimating the expected value of right to return

- Note 2(h) and 20 - lease term: whether the Company is reasonably certain to exercise extension options

Assumptions and estimation uncertainties

In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effects on the amounts recognised in the financial statements is included in the following notes:

- Note 2(a)(v) - Fair value measurement

- Note 2(d) and 3 - Assessment of useful life of Property, plant and equipment

- Note 2(e) and 5 - Assessment of useful life of Intangible assets

- Note 2(h) and 20 - leases classification and assessment of discount rate in relation to lease accounting as per Ind AS 116

- Note 2(i) - Valuation of inventories

- Note 2(q) - Accounting for Government grant

- Note 2(l), 2(m) and 40 - Recognition and measurement of provisions and contingencies, key assumptions about the likelihood and magnitude of an outflow of resources

- Note 2(r), 8, 23 and 38 - Recognition of tax expense including deferred tax

- Note 2(j) - Impairment of financial assets

- Note 2(j) - Impairment test of non-financial assets: key assumptions underlying recoverable amounts and

- Note 2(k) and 43 - Measurement of defined benefit obligations: key actuarial assumptions; Share based Payments

- Note 2(o)(i) and 29 - Revenue recognition: estimate of expected returns

b) Foreign currency transactions Initial recognition

Transactions in foreign currencies are translated into the functional currency of the Company at the exchange rates at the dates of the transactions.

Measurement at the reporting date

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Nonmonetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Exchange differences on restatement/settlement of all monetary items are recognised in profit or loss.

c) 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.

Financial assets

Recognition and initial measurement

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

A financial asset (unless it is a trade receivable without a significant financing component which is initially measured at transaction price) or financial liability is recognized initially at fair value plus or minus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

Classification and subsequent measurement

On initial recognition, a financial asset is classified as

- measured at:

- amortised cost;

- fair value through other comprehensive income (FVOCI) - debt investment;

- fair value through other comprehensive income (FVOCI) - equity investment, or

- fair value through profit and loss (FVTPL)

Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

- the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and

- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt instrument is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

- the asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment''s fair value in OCI (designated as FVOCI - equity investment). This election is made on an investment-by-investment basis.

All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial assets: Business model assessment

The Company makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

- The stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management''s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets;

- How the performance of the portfolio is evaluated and reported to the Company''s management;

- The risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;

- How managers of the business are compensated - e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and

- The frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Company''s continuing recognition of the assets.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

Financial assets: Assessment whether contractual cash flows are solely payments of principal and interest.

For the purposes of this assessment, ''principal'' is defined as the fair value of the financial asset on initial recognition. ''Interest'' is defined as consideration for the time value of money and for the credit risk

associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Company considers:

- contingent events that would change the amount or timing of cash flows;

- terms that may adjust the contractual coupon rate, including variable interest rate features;

- prepayment and extension features; and

- terms that limit the Company''s claim to cash flows from specified assets (e.g. non-recourse features).

Financial liabilities: Classification, subsequent measurement and gains and losses

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL 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 FVTPL 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.

Derecognition

Financial assets

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.

If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.

Financial liabilities

The Company derecognises a financial liability when its contractual obligations are discharged or cancelled or expire.

The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in profit or loss.

Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

Derivative financial instruments

The Company holds derivative financial instruments to hedge its foreign currency risk exposures. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contact is entered into and are subsequently re-measured at fair value, and changes therein are generally recognized in profit or loss. Derivatives are carried as financial assets when the fair value is positive and as financial liability when the fair value is negative

d) Property, plant and equipment (''PPE'')

Recognition and measurement

Property, plant and equipment are measured at cost of acquisition or construction less accumulated depreciation and/or accumulated impairment, if any.

The 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 cost directly attributable to bringing the asset to the location and the working condition for its intended use and

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

• financing cost related to borrowed funds attributable to the construction or acquisition of qualifying assets upto the date of the assets are ready for use.

The cost of an item of property, plant and equipment shall be recognized as an asset if, and only if it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.

Freehold land is carried at historical cost less any accumulated impairment losses.

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances under other non-current assets and the cost of assets not put to use before such date are disclosed under ''Capital work-in-progress''.

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.

The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the statement of profit and loss. Assets to be disposed off are reported at the lower of the carrying value or the fair value less cost to sell.

Subsequent expenditure

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

Depreciation

Depreciation is calculated on cost of items of PPE (excluding freehold land) less their estimated residual values over their estimated useful lives using the straight-line method and is recognised in the Statement of Profit and Loss. Freehold land is not depreciated.

Depreciation on items of property, plant and equipment is provided as per the rates corresponding to the useful life specific in Schedule II of the

Companies Act, 2013 read with notification dated 29 August 2014 of Ministry of Corporate Affairs as follows:

Significant components of assets and their useful life and depreciation charge is based on an internal technical evaluation. These estimated lives are based on technical assessment made by technical expert and management estimates. Management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.

Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate. Depreciation on additions (disposal) is provided on a pro-rata basis i.e. from (upto) the date on which asset is ready for use (disposed of).

Derecognition

A property, plant and equipment are derecognised on disposal or when no future economic benefits are expected from its use and disposal. Losses arising from retirement and gains or losses arising from disposal of a tangible 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.

Other Intangible Assets

Acquired Intangible

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

Subsequent expenditure

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

Amortisation

Amortisation is calculated to write off the cost of intangible assets less their estimated residual values over their estimated useful lives using the straightline method, and is included in depreciation and amortisation expense in Statement of Profit and Loss. The estimated useful life of Computer software is 5 years.

Amortisation method, useful life and residual values are reviewed at the end of each financial year and adjusted if appropriate.

Derecognition

Intangible assets are derecognised on disposal or when no future economic benefits are expected from its use and disposal.

f) Non-current assets held for sale

Non-current assets classified as held for sale are generally measured at the lower of their carrying amount and fair value less cost to sell, if it is highly probable that they will be recovered primarily through sale rather than through continuing use. Losses on initial classification as held for sale and subsequent gains and losses on re-measurement are recognised in the Statement of Profit and Loss.

Once classified as held-for sale, property, plant and equipment, and intangible assets are no longer amortised or depreciated.

g) Borrowing costs

Borrowing costs are interest and other costs (including exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred by the Company in connection with the borrowing of funds.

impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the Company''s incremental borrowing rate. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments. The company recognises the amount of the re-measurement of lease liability due to modification as an adjustment to the right-of-use asset and statement of profit and loss depending upon the nature of modification. Where the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognises any remaining amount of the re-measurement in statement of profit and loss.

Lease payments included in the measurement of the lease liability comprise the following:

- fixed payments, including in-substance fixed payments;

- variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

- amounts expected to be payable under a residual value guarantee; and

- the exercise price under a purchase option that the company is reasonably certain to exercise, lease payments in an optional renewal period if the company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the company is reasonably certain not to terminate early.

Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a substantial period of time to get ready for their intended use are capitalized as a part of cost of the asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.

h) Leases As lessee

The Company''s lease asset classes primarily consist of leases for buildings. The Company, at the inception of a contract, assesses whether the contract is a lease or not. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a time in exchange for a consideration. Accordingly, there was no adjustment in the opening balance of retained earnings as on 1 April 2019.

The Company elected to use the following practical expedients on initial application:

- Applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date.

- Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term on the date of initial application.

- Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application.

- Applied the practical expedient to grandfather the assessment of which transactions are leases. Accordingly, Ind AS 116 is applied only to contracts that were previously identified as leases under Ind AS 17.

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the company''s estimate of the amount expected to be payable under a residual value guarantee, if the company changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero. The company presents right-of-use assets that do not meet the definition of investment property in ''property, plant and equipment'' and lease liabilities in ''financial liabilities'' in the statement of financial position.

The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases for which the underlying asset is of low value. The Company recognises the lease payments associated with these leases as an expense in the Statement of Profit or Loss over the lease term.

i) Inventories

Inventories are measured at the lower of cost and net realizable value. The methods of determining cost of various categories of inventories are as follows:

The cost of inventories includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their present location and condition.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs necessary to make the sale. The net realisable value of work-in-progress is determined with reference to the selling prices of related finished products.

Raw materials, components and other supplies held for use in the production of finished products are not written down below cost except in cases where material prices have declined and it is estimated that the cost of the finished products will exceed their net realisable value.

The comparison of cost and net realisable value is made on an item-by-item basis.

j) Impairment

Impairment of financial asset

The Company recognises loss allowances for expected credit loss on financial assets measured at amortised cost. At each reporting date, the Company assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is ''credit-impaired'' when one or more events that have detrimental impact on the estimated future cash flows of the financial assets have occurred.

Evidence that a financial asset is credit - impaired includes the following observable data:

- significant financial difficulty of the debtor, borrower or issuer;

- a breach of contract such as a default or being past due for 90 days or more;

- the restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise;

- it is probable that the borrower will enter bankruptcy or other financial reorganisation; or

- the disappearance of an active market for a security because of financial difficulties.

The Company measures loss allowances at an amount equal to lifetime expected credit losses, except for the following, which are measured as 12 month expected credit losses:

- Bank balances for which credit risk (i.e. the risk of default occurring over the expected life of financial instrument) has not increased significantly since initial recognition.

Loss allowances for trade receivables are always measured at an amount equal lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument.

12-month expected credit losses are the expected credit losses that result from default events that are possible within 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months)

In all cases, the maximum period considered when estimating expected credit losses is the maximum contractual period over which the Company is exposed to credit risk.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company''s historical experience and informed credit assessment and including forwardlooking information.

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

The Company considers a financial asset to be in default when:

• the debtor is unlikely to pay its credit obligations to the Company in full, without recourse by the Company to actions such as realising security (if any is held); or

• the financial asset is more than 90 days past due.

Measurement of expected credit losses

Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive).

Expected credit losses are discounted at the effective interest rate of the financial asset.

Presentation of allowance for expected credit losses in the balance sheet

Loss allowance for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

Write-off

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write- off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with Company''s procedures for the recovery of amount due.

Impairment of non-financial assets

The Company''s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset''s recoverable amount is estimated. For impairment testing, assets that do not generate independent cash inflows are grouped together into cash-generating units (CGUs). Each CGU represents the smallest Group of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs.

The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, 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 CGU (or the asset).

The Company''s corporate assets do not generate independent cash inflows. To determine impairment of a corporate asset, recoverable amount is determined for the CGUs to which the corporate asset belongs.

An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses, if any, are recognised in the Statement of Profit and Loss.

In regard to assets for which impairment loss has been recognised in prior period, the Company reviews at each reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a reversal is made only to the extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

k) Employee benefits

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 recognised for the amount expected to be paid e.g., salaries and wages and bonus etc., if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.

Share-based payment transactions

Equity-settled share-based payments to employees 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 on a straight-line basis over the vesting period, based on the Company''s estimate of equity instruments that will eventually vest, with a corresponding increase in equity.

When the terms of an equity-settled award are modified, the minimum expense recognised by the Company is the grant date fair value of the unmodified award, provided the vesting conditions (other than a market condition) specified on grant date of the award are met.

Further, additional expense, if any, is measured and recognised as at the date of modification, in case such modification increases the total fair value of the share-based payment plan, or is otherwise beneficial to the employee.

Post-employment benefits

Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. Gratuity

is a defined benefit plan. The administration of the gratuity scheme has been entrusted to the VSSL gratuity fund trust. The Company''s net obligation in respect of gratuity is calculated separately by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method. Re-measurements of the net defined benefit liability i.e. Gratuity, which comprise actuarial gains and losses are recognised in Other Comprehensive Income (OCI). The Company determines the net interest expense (income) on the net defined benefit liability for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then- net defined benefit liability, taking into account any changes in the net defined benefit liability during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in the Statement of Profit and Loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service (''past service cost'' or ''past service gain'') or the gain or loss on curtailment is recognised immediately in the Statement of Profit and Loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.

When the calculation results in a potential asset for the Company, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contribution to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirement.

¦Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in OCI."

Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays specified

contributions to a separate entity and will have no legal or constructive obligation to pay further amounts. The Company makes specified monthly contributions towards employee provident fund and employee state insurance scheme (''ESI'') to Government administered scheme which is a defined contribution plan. The Company''s contribution is recognised as an expense in the Statement of Profit and loss during the period in which the employee renders the related service.

Compensated absences

The Company''s net obligation in respect of longterm employee benefits other than post-employment benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. Such obligation such as those related to compensate absences is measured on the basis of an annual independent actuarial valuation using the projected unit cost credit method. Remeasurements gains or losses are recognised in profit or loss in the period in which they arise. The obligations are presented as current liabilities in the balance sheet if the Company does not have an unconditional right to defer the settlement for at least twelve months after the reporting date.

---

Mar 31, 2023

Significant Accounting Policies

This note provides a list of the significant
accounting policies adopted in the preparation
of these financial statements. These policies have
been consistently applied to all the years presented,
unless otherwise stated.

a) Basis of preparation

i) Statement of Compliance

These financial statements have been prepared
in accordance with Indian Accounting Standards
(Ind AS) as per the Companies (Indian Accounting
Standards) Rules, 2015 notified under section 133
of Companies Act, 2013, the Act and other relevant
provisions of the Act as amended from time to
time.

ii) Effective 01 April 2015, the Company had
transitioned to Ind AS while the financial
statements were being prepared in accordance
with the Companies (Accounting Standards) Rules,
2006 (previous GAAP) till 31 March 2017 and the
transition was carried out in accordance with Ind
AS 101 First time adoption of Indian Accounting
Standards. While carrying out transition, in addition
to the mandatory exemptions, the Company had
elected certain exemptions which are listed as
below:

- The Company had opted to continue with the
carrying value for all of its property, plant and
equipment, intangible assets and investment
property as recognized in the financial
statements prepared under previous GAAP

v) Measurement of fair values

A number of Company''s accounting policies and
disclosures require the measurement of fair values,
for both financial and non-financial assets and
liabilities.

The Company has established policies and
procedures with respect to the measurement of fair
values. This includes the top management division
which is responsible for overseeing all significant fair
value measurements, including Level 3 fair values.
The top management division regularly reviews
significant unobservable inputs and valuation

adjustments. If third party information, is used to
measure fair values, then the top management
division assesses the evidence obtained from
the third parties to support the conclusion that
these valuations meet the requirement of Ind AS,
including the level in the fair value hierarchy in
which the valuations should be classified.

Significant valuation issues are reported to the
Company''s board of directors.

Fair values are categorised into different levels in a
fair value hierarchy based on the inputs used in the
valuation techniques as follows:

— Level 1: Quoted prices (unadjusted) in active
markets for identical assets and liabilities.

— Level 2: Inputs other than quoted prices
included in Level 1 that are observable for the
asset or liability, either directly or indirectly.

— Level 3: Inputs for the asset or liability that
are not based on observable market data
(unobservable inputs).

When measuring the fair value of an asset or
liability, the Company uses observable market data
as far as possible. If the inputs used to measure the
fair value of an asset or liability fall into different
levels of the fair value hierarchy, then the fair
value measurement is categorised in its entirely in
the same level of the fair value hierarchy as the
lowest level input that is significant to the entire
measurement.

The Company recognises transfers between levels
of the fair value hierarchy at the end of the reporting
period during which the changes have occurred.

Further information about the assumptions made
in measuring fair values used in preparing these
financial statements is included in note 45 and 46-
Financial instruments.

vi) Current versus non-current classification

The Company presents assets and liabilities in
the Statement of Assets and Liabilities based on
current/non-current classification.

An asset is treated as current when it is:

— Expected to be realised or intended to be sold
or consumed in normal operating cycle.

- Held primarily for the purpose of trading.

- Expected to be realised within twelve months
after the reporting period, or

- 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.

The Company classifies all other liabilities as
non-current.

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

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

vii) Use of estimates and judgements

The preparation of financial statements in
conformity with Generally Accepted Accounting
Principles (GAAP) requires management to make
judgments, estimates and assumptions that
impact the application of accounting policies
and the reported amounts of assets, liabilities,
income and expenses and the disclosure of
contingent liabilities on the date of the financial
statements. Actual results could differ from those
estimates. Estimates and underlying assumptions
are reviewed on an ongoing basis. Any revision to
accounting estimates is recognised prospectively
in current and future periods.

Financial reporting results rely on the estimate of
the effect of certain matters that are inherently
uncertain. Future events rarely develop exactly as

forecast and the best estimates require adjustments,
as actual results may differ from these estimates
under different assumptions or conditions.
Estimates and Judgments are continually
evaluated and are based on historical experience
and other factors, including expectation of future
events that are believed to be reasonable under
the circumstances. The Management believes
that the estimates used in preparation of these
financial statements are prudent and reasonable.
Existing circumstances and assumptions about
future developments, however, may change due
to market changes or circumstances arising that
are beyond the control of the Company.

In particular, information about significant areas
of estimation uncertainty and critical judgments
in applying accounting policies that have the most
significant effects on the amounts recognised in
the financial statements is included in the following
notes:

- Note 2(a)(v) - Fair value measurement

- Note 2(d) and 3 - Assessment of useful life of
Property, plant and equipment

- Note 2(e) and 5 - Assessment of useful life of
Intangible assets

- Note 2(h) and 20- leases classification and
assessment of discount rate in relation to
lease accounting as per Ind AS 116

- Note 2(i) - Valuation of inventories

- Note 2(p) - Accounting for Government grant

- Note 2(l), 2(m) and 40 - Recognition
and measurement of provisions and
contingencies, key assumptions about the
likelihood and magnitude of an outflow of
resources

- Note 2(r), 8, 23,and 38 - Recognition of tax
expense including deferred tax

- Note 2(j) - Impairment of financial assets

- Note 2(j) - Impairment test of non-financial
assets: key assumptions underlying
recoverable amounts and

- Note 2(k) and 43 - Measurement of defined
benefit obligations: key actuarial assumptions;
Share based Payments

- Note 2(o) - Revenue from contract with
customers and related accruals

b) Foreign currency transactions
Initial recognition

Transactions in foreign currencies are translated
into the functional currency of the Company at the
exchange rates at the dates of the transactions.

Measurement at the reporting date

Monetary assets and liabilities denominated
in foreign currencies are translated into the
functional currency at the exchange rate at the
reporting date. Non-monetary assets and liabilities
that are measured at fair value in a foreign currency
are translated into the functional currency at the
exchange rate when the fair value was determined.
Non-monetary assets and liabilities that are
measured based on historical cost in a foreign
currency are translated at the exchange rate at the
date of the transaction. Exchange differences on
restatement/settlement of all monetary items are
recognised in profit or loss.

c) 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.

Recognition and initial measurement

Trade receivables are initially recognised when
they are originated. All other financial assets 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''), transaction
costs that are directly attributable to its acquisition
or issue.

Classification and subsequent measurement
Financial assets

On initial recognition, a financial asset is classified
as - measured at:

- amortised cost;

- fair value through other comprehensive
income (FVOCI) - debt investment;

- fair value through other comprehensive
income (FVOCI) - equity investment, or

- fair value through profit and loss (FVTPL)

Financial assets are not reclassified subsequent to
their initial recognition, except if and in the period
the Company changes its business model for
managing financial assets.

A financial asset is measured at amortised cost if it
meets both of the following conditions and is not
designated as at FVTPL:

- the asset is held within a business model
whose objective is to hold assets to collect
contractual cash flows; and

- the contractual terms of the financial asset
give rise on specified dates to cash flows that
are solely payments of principal and interest
on the principal amount outstanding.

A debt instrument is measured at FVOCI if it
meets both of the following conditions and
is not designated as at FVTPL:

- the asset is held within a business model
whose objective is achieved by both
collecting contractual cash flows and selling
financial assets; and

- the contractual terms of the financial asset
give rise on specified dates to cash flows that
are solely payments of principal and interest
on the principal amount outstanding.

On initial recognition of an equity investment
that is not held for trading, the Company may
irrevocably elect to present subsequent changes
in the investment''s fair value in OCI (designated as
FVOCI - equity investment). This election is made
on an investment-by-investment basis.

All financial assets not classified as measured at
amortised cost or FVOCI as described above are
measured at FVTPL. This includes all derivative
financial assets. On initial recognition, the
Company may irrevocably designate a financial
asset that otherwise meets the requirements to be

measured at amortised cost or at FVOCI as at FVTPL
if doing so eliminates or significantly reduces an
accounting mismatch that would otherwise arise.

Financial liabilities: Classification, subsequent
measurement and gains and losses

Financial liabilities are classified as measured at
amortised cost or FVTPL. A financial liability is
classified as at FVTPL 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
FVTPL 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.

DerecognitionFinancial assets

The Company derecognises a financial asset when
the contractual rights to the cash flows from the
financial asset expire, or it transfers the rights to
receive the contractual cash flows in a transaction
in which substantially all of the risks and rewards
of ownership of the financial asset are transferred
or in which the company neither transfers nor
retains substantially all of the risks and rewards
of ownership and does not retain control of the
financial asset.

If the Company enters into transactions whereby
it transfers assets recognised on its balance sheet,
but retains either all or substantially all of the
risks and rewards of the transferred assets, the
transferred assets are not derecognised.

Financial liabilities

The Company derecognises a financial liability
when its contractual obligations are discharged or
cancelled or expire.

The Company also derecognises a financial
liability when its terms are modified and the cash
flows under the modified terms are substantially
different. In this case, a new financial liability based
on the modified terms is recognised at fair value.
The difference between the carrying amount of
the financial liability extinguished and the new
financial liability with modified terms is recognised
in profit or loss.

Offsetting

Financial assets and financial liabilities are offset
and the net amount presented in the balance sheet
when, and only when, the Company currently has
a legally enforceable right to set off the amounts

and it intends either to settle them on a net
basis or to realise the asset and settle the liability
simultaneously.

Derivative financial instruments

The Company holds derivative financial
instruments to hedge its foreign currency risk
exposures. Such derivative financial instruments
are initially recognised at fair value on the date
on which a derivative contact is entered into
and are subsequently re-measured at fair value.
Derivatives are carried as financial assets when the
fair value is positive and as financial liability when
the fair value is negative

d) Property, plant and equipment (''PPE'')Recognition and measurement

Property, plant and equipment are measured at cost
of acquisition or construction less accumulated
depreciation and/or accumulated impairment, if
any.

The 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 cost directly attributable to bringing the asset
to the location and the working condition for its
intended use and

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

> financing cost related to borrowed funds
attributable to the construction or acquisition of
qualifying assets upto the date of the assets are
ready for use.

Advances paid towards the acquisition of property,
plant and equipment outstanding at each balance
sheet date is classified as capital advances under
other non-current assets and the cost of assets not
put to use before such date are disclosed under
''Capital work-in-progress''.

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.

The cost and related accumulated depreciation are
eliminated from the financial statements upon sale
or retirement of the asset and the resultant gains
or losses are recognized in the statement of profit
and loss. Assets to be disposed off are reported at
the lower of the carrying value or the fair value less
cost to sell.

Subsequent expenditure

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

Depreciation

Depreciation is calculated on cost of items of
PPE (excluding freehold land) less their estimated
residual values over their estimated useful lives
using the straight-line method and is recognised
in the Statement of Profit and Loss. Freehold land
is not depreciated.

Depreciation on items of property, plant
and equipment is provided as per the rates
corresponding to the useful life specific in
Schedule II of the Companies Act, 2013 read with
notification dated 29 August 2014 of Ministry of
Corporate Affairs as follows:

Significant components of assets and their
useful life and depreciation charge is based on
an internal technical evaluation. These estimated
lives are based on technical assessment made
by technical expert and management estimates.
Management believes that these estimated useful
lives are realistic and reflect fair approximation of
the period over which the assets are likely to be
used.

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

Depreciation on additions (disposal) is provided on
a pro-rata basis i.e. from (upto) the date on which
asset is ready for use (disposed of).

Derecognition

A property, plant and equipment are derecognised
on disposal or when no future economic
benefits are expected from its use and disposal.
Losses arising from retirement and gains or
losses arising from disposal of a tangible 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.

e) Other Intangible Assets
Acquired Intangible

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

Subsequent expenditure

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

Amortisation

Amortisation is calculated to write off the cost of
intangible assets over their estimated useful lives
using the straight-line method, and is included
in depreciation and amortisation expense in
Statement of Profit and Loss. The estimated useful
life of Computer software is 5 years.

Amortisation method, useful life and residual values
are reviewed at the end of each financial year and
adjusted if appropriate.

Derecognition

Intangible assets are derecognised on disposal or
when no future economic benefits are expected
from its use and disposal.

f) Non-current assets held for sale

Non-current assets classified as held for sale are
generally measured at the lower of their carrying
amount and fair value less cost to sell, if it is highly
probable that they will be recovered primarily
through sale rather than through continuing use.
Losses on initial classification as held for sale and
subsequent gains and losses on re-measurement
are recognised in the Statement of Profit and Loss.

Once classified as held-for sale, property, plant and
equipment, and intangible assets are no longer
amortised or depreciated.

g) Borrowing costs

Borrowing costs are interest and other costs
(including exchange differences arising from
foreign currency borrowings to the extent that
they are regarded as an adjustment to interest
costs) incurred by the Company in connection
with the borrowing of funds. Borrowing costs
directly attributable to acquisition or construction
of an asset which necessarily take a substantial
period of time to get ready for their intended
use are capitalized as a part of cost of the asset.
Other borrowing costs are recognised as an
expense in the period in which they are incurred.

h) Leases
As lessee

The Company''s lease asset classes primarily
consist of leases for buildings. The Company, at

the inception of a contract, assesses whether the
contract is a lease or not. A contract is, or contains,
a lease if the contract conveys the right to control
the use of an identified asset for a time in exchange
for a consideration. Accordingly, there was no
adjustment in the opening balance of retained
earnings as on 1 April 2019.

The Company elected to use the following
practical expedients on initial application:

- Applied a single discount rate to a portfolio
of leases of similar assets in similar economic
environment with a similar end date.

- Applied the exemption not to recognize
right-of-use assets and liabilities for leases with
less than 12 months of lease term on the date
of initial application.

- Excluded the initial direct costs from the
measurement of the right-of-use asset at the
date of initial application.

- Applied the practical expedient to grandfather
the assessment of which transactions are
leases. Accordingly, Ind AS 116 is applied only
to contracts that were previously identified as
leases under Ind AS 17.

The Company recognises a right-of-use asset and
a lease liability at the lease commencement date.
The right-of-use asset is initially measured at cost,
which comprises the initial amount of the lease
liability adjusted for any lease payments made at
or before the commencement date, plus any initial
direct costs incurred and an estimate of costs to
dismantle and remove the underlying asset or to
restore the underlying asset or the site on which it
is located, less any lease incentives received.

The right-of-use assets is subsequently measured
at cost less any accumulated depreciation,
accumulated impairment losses, if any and
adjusted for any remeasurement of the lease
liability. The right-of-use assets is depreciated using
the straight-line methodfrom the commencement
date over the shorter of lease term or useful life
of right-of-use asset. The estimated useful lives of
right-of-use assets are determined on the same
basis as those of property, plant and equipment.
Right-of-use assets are tested for impairment
whenever there is any indication that their carrying

amounts may not be recoverable. Impairment loss,
if any, is recognised in the statement of profit and
loss.

The lease liability is initially measured at the present
value of the lease payments that are not paid at
the commencement date, discounted using the
Company''s incremental borrowing rate. The lease
liability is subsequently remeasured by increasing
the carrying amount to reflect interest on the
lease liability, reducing the carrying amount to
reflect the lease payments made and remeasuring
the carrying amount to reflect any reassessment
or lease modifications or to reflect revised
in-substance fixed lease payments. The company
recognises the amount of the re-measurement of
lease liability due to modification as an adjustment
to the right-of-use asset and statement of profit and
loss depending upon the nature of modification.
Where the carrying amount of the right-of-use asset
is reduced to zero and there is a further reduction
in the measurement of the lease liability, the
Company recognises any remaining amount of
the re-measurement in statement of profit and loss.

Lease payments included in the measurement of
the lease liability comprise the following:

- fixed payments, including in-substance fixed
payments;

- variable lease payments that depend on an
index or a rate, initially measured using the
index or rate as at the commencement date;

- amounts expected to be payable under a
residual value guarantee; and

- the exercise price under a purchase option
that the company is reasonably certain to
exercise, lease payments in an optional
renewal period if the company is reasonably
certain to exercise an extension option, and
penalties for early termination of a lease
unless the company is reasonably certain not
to terminate early.

The lease liability is measured at amortised cost
using the effective interest method. It is remeasured
when there is a change in future lease payments
arising from a change in an index or rate, if there is
a change in the company''s estimate of the amount
expected to be payable under a residual value

guarantee, if the company changes its assessment
of whether it will exercise a purchase, extension
or termination option or if there is a revised
in-substance fixed lease payment.

When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying
amount of the right-of-use asset, or is recorded in
profit or loss if the carrying amount of the right-of-
use asset has been reduced to zero. The company
presents right-of-use assets that do not meet the
definition of investment property in ''property, plant
and equipment'' and lease liabilities in ''financial
liabilities'' in the statement of financial position.

The Company has elected not to recognise
right-of-use assets and lease liabilities for
short-term leases that have a lease term of 12
months or less and leases for which the underlying
asset is of low value. The Company recognises the
lease payments associated with these leases as an
expense in the Statement of Profit or Loss over the
lease term.

i) Inventories

Inventories are measured at the lower of cost and
net realizable value. The methods of determining
cost of various categories of inventories are as
follows:

The cost of inventories includes expenditure
incurred in acquiring the inventories, production
or conversion costs and other costs incurred
in bringing them to their present location and
condition.

Net realisable value is the estimated selling price in
the ordinary course of business, less the estimated
costs necessary to make the sale. The net realisable
value of work-in-progress is determined with
reference to the selling prices of related finished
products.

Raw materials, components and other supplies
held for use in the production of finished products
are not written down below cost except in cases
where material prices have declined and it is
estimated that the cost of the finished products
will exceed their net realisable value.

The comparison of cost and net realisable value is
made on an item-by-item basis.

j) ImpairmentImpairment of financial asset

The Company recognises loss allowances for
expected credit loss on financial assets measured
at amortised cost. At each reporting date, the
Company assesses whether financial assets carried
at amortised cost are credit-impaired. A financial
asset is ''credit-impaired'' when one or more events
that have detrimental impact on the estimated
future cash flows of the financial assets have
occurred.

Evidence that a financial asset is credit - impaired
includes the following observable data:

- significant financial difficulty of the borrower
or issuer;

- a breach of contract such as a default or
being past due for 90 days or more;

- the restructuring of a loan or advance by the
Company on terms that the Company would
not consider otherwise;

- it is probable that the borrower will enter
bankruptcy or other financial reorganisation;
or

- the disappearance of an active market for a
security because of financial difficulties.

The Company measures loss allowances at an
amount equal to lifetime expected credit losses,
except for the following, which are measured as
12 month expected credit losses:

- Bank balances for which credit risk (i.e. the risk of
default occurring over the expected life of financial
instrument) has not increased significantly since
initial recognition.

Loss allowances for trade receivables are always
measured at an amount equal lifetime expected
credit losses. Lifetime expected credit losses are the
expected credit losses that result from all possible
default events over the expected life of a financial
instrument.

12-month expected credit losses are the expected
credit losses that result from default events that
are possible within 12 months after the reporting
date (or a shorter period if the expected life of the
instrument is less than 12 months)

In all cases, the maximum period considered when
estimating expected credit losses is the maximum
contractual period over which the Company is
exposed to credit risk.

When determining whether the credit risk of a
financial asset has increased significantly since
initial recognition and when estimating expected
credit losses, the Company considers reasonable
and supportable information that is relevant and
available without undue cost or effort. This includes
both quantitative and qualitative information
and analysis, based on the Company''s historical
experience and informed credit assessment and
including forward-looking information.

Measurement of expected credit losses

Expected credit losses are a probability-weighted
estimate of credit losses. Credit losses are
measured as the present value of all cash shortfalls
(i.e. the difference between the cash flows due to
the Company in accordance with the contract
and the cash flows that the Company expects to
receive).

Presentation of allowance for expected credit
losses in the balance sheet

Loss allowance for financial assets measured
at amortised cost are deducted from the gross
carrying amount of the assets.

Write-off

The gross carrying amount of a financial asset is
written off (either partially or in full) to the extent
that there is no realistic prospect of recovery. This is
generally the case when the Company determines
that the debtor does not have assets or sources
of income that could generate sufficient cash
flows to repay the amounts subject to the write¬
off. However, financial assets that are written off
could still be subject to enforcement activities in
order to comply with Company''s procedures for
the recovery of amount due.

Impairment of non-financial assets

The Company''s non-financial assets, other than
inventories and deferred tax assets, are reviewed
at each reporting date to determine whether
there is any indication of impairment. If any such
indication exists, then the asset''s recoverable
amount is estimated. For impairment testing,
assets that do not generate independent cash
inflows are grouped together into cash-generating
units (CGUs). Each CGU represents the smallest
Group of assets that generates cash inflows that
are largely independent of the cash inflows of
other assets or CGUs.

The recoverable amount of a CGU (or an individual
asset) is the higher of its value in use and its fair
value less costs to sell. Value in use is based on the
estimated future cash flows, 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 CGU
(or the asset).

The Company''s corporate assets do not generate
independent cash inflows. To determine
impairment of a corporate asset, recoverable
amount is determined for the CGUs to which the
corporate asset belongs.

An impairment loss is recognised if the carrying
amount of an asset or CGU exceeds its estimated
recoverable amount. Impairment losses, if any, are
recognised in the Statement of Profit and Loss.

In regard to assets for which impairment loss has
been recognised in prior period, the Company
reviews at each reporting date whether there is
any indication that the loss has decreased or no

longer exists. An impairment loss is reversed if
there has been a change in the estimates used to
determine the recoverable amount. Such a reversal
is made only to the extent that the asset''s carrying
amount does not exceed the carrying amount that
would have been determined, net of depreciation
or amortisation, if no impairment loss had been
recognised.

k) Employee benefitsShort-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 recognised for the amount expected to
be paid e.g., salaries and wages and bonus etc., if
the Company has a present legal or constructive
obligation to pay this amount as a result of past
service provided by the employee, and the amount
of obligation can be estimated reliably.

Share-based payment transactions

Equity-settled share-based payments to
employees 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 on a
straight-line basis over the vesting period, based on
the Company''s estimate of equity instruments that
will eventually vest, with a corresponding increase
in equity.

Post-employment benefits
Defined benefit plans

A defined benefit plan is a post-employment
benefit plan other than a defined contribution plan.
Gratuity is a defined benefit plan. The administration
of the gratuity scheme has been entrusted to
the VSSL gratuity fund trust. The Company''s net
obligation in respect of gratuity is calculated
separately by estimating the amount of future
benefit that employees have earned in the current
and prior periods, discounting that amount and
deducting the fair value of any plan assets.

The calculation of defined benefit obligation is
performed annually by a qualified actuary using the
projected unit credit method. Re-measurements of
the net defined benefit liability i.e. Gratuity, which

;o)

comprise actuarial gains and losses are recognised
in Other Comprehensive Income (OCI).
The Company determines the net interest expense
(income) on the net defined benefit liability for
the period by applying the discount rate used
to measure the defined benefit obligation at the
beginning of the annual period to the then- net
defined benefit liability, taking into account any
changes in the net defined benefit liability during
the period as a result of contributions and benefit
payments. Net interest expense and other expenses
related to defined benefit plans are recognised in
the Statement of Profit and Loss.

When the benefits of a plan are changed or when a
plan is curtailed, the resulting change in benefit that
relates to past service (''past service cost'' or ''past
service gain'') or the gain or loss on curtailment is
recognised immediately in the Statement of Profit
and Loss. The Company recognises gains and
losses on the settlement of a defined benefit plan
when the settlement occurs.

When the calculation results in a potential asset
for the Company, the recognised asset is limited
to the present value of economic benefits available
in the form of any future refunds from the plan
or reductions in future contribution to the plan.
To calculate the present value of economic
benefits, consideration is given to any applicable
minimum funding requirement

Defined contribution plans

A defined contribution plan is a post-employment
benefit plan under which an entity pays specified
contributions to a separate entity and will have
no legal or constructive obligation to pay further
amounts. The Company makes specified monthly
contributions towards employee provident fund
and employee state insurance scheme (''ESI'')
to Government administered scheme which
is a defined contribution plan. The Company''s
contribution is recognised as an expense in the
Statement of Profit and loss during the period in
which the employee renders the related service.

Compensated absences

The Company''s net obligation in respect
of long-term employee benefits other than
post-employment benefits is the amount of future

benefit that employees have earned in return for
their service in the current and prior periods; that
benefit is discounted to determine its present
value, and the fair value of any related assets is
deducted. Such obligation such as those related
to compensate absences is measured on the
basis of an annual independent actuarial valuation
using the projected unit cost credit method.
Remeasurements gains or losses are recognised
in profit or loss in the period in which they arise.

---

Mar 31, 2018

(I) REVENUE RECOGNITION

Revenue is recognised at the fair value of the consideration received or receivable. The amount disclosed as revenue is inclusive of excise duty and net of returns, trade discounts, value added tax and amount collected on behalf of third parties. The company recognizes revenue when the amount of revenue can be measured reliably and it is probable that the economic benefits associated with the transaction will flow to the entity.

Sales of goods

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods are transferred to the buyer and the entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold.

Export Incentives

Revenue in respect of the export incentives is recognized on post export basis.

Interest Income

Interest income is recognized using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses.

Dividend Income

Dividend income is recognized when the right to receive the payment is established which is generally when shareholders approve the dividend.

Insurance and Other Claims

Revenue in respect of claims is recognized when no significant uncertainty exists with regard to the amount to be realized and the ultimate collection thereof.

(II) INVENTORY VALUATION

Inventories are valued at cost or net realizable value, whichever is lower. The cost in respect of the various items of inventory is computed as under:

In case of raw materials: at weighted average cost and other costs incurred in bringing the inventories to their present location and condition.

In case of stores and spares: at weighted average cost and other costs incurred in bringing the inventories to their present location and condition.

In case of work in progress: at raw material cost plus conversion costs depending upon the stage of completion.

In case of finished goods: at raw material cost plus conversion costs, packing cost, excise duty (if applicable) and other overheads incurred to bring the goods to their present location and condition.

(III) CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash on hand cash at bank and demand deposits with banks with an original maturity of three months or less which are subject to an insignificant risk of change in value.

(IV) PROPERTY, PLANT AND EQUIPMENT

Under the Indian GAAP Property, Plant and Equipment were carried in the balance sheet on historical cost. The Company has elected to regard those values as deemed cost under Ind AS as on transition date i.e. April 1, 2015.

Property, plant and equipment are stated at cost, less accumulated depreciation. The Cost of an item of Property, Plant and Equipment comprises:

a) Its purchase price including import duties and non-refundable purchase taxes after deducting trade discounts and rebates.

b) Any attributable expenditure directly attributable for bringing an asset to the location and the working condition for its intended use and

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

Depreciation is provided on Straight Line Method on the basis of useful lives of such assets in accordance with and in the manner specified under Schedule II of the Companies Act, 2013 except the assets costing RS.5000/- or below on which depreciation is charged @ 100% per annum on proportionate basis.

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances under other non-current assets and the cost of assets not put to use before such date are disclosed under ‘Capital work-in-progress’. Subsequent expenditures relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the cost of the item can be measured reliably. Repairs and maintenance costs are recognized in net profit in the statement of profit and loss when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the statement of profit and loss. Assets to be disposed off are reported at the lower of the carrying value or the fair value less cost to sell.

Intangible Assets

Intangible assets are stated at cost less accumulated amount of amortization.

Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, from the date that they are available for use. The estimated useful life of an identifiable intangible asset is based on a number of factors including the effects of obsolescence, known technological advances and other economic factors. The amortization method and useful lives are reviewed periodically at end of each financial year.

The useful life of the computer software is taken at 5 years.

(V) LEASES

Leases under which the company assumes substantially all the risks and rewards of ownership are classified as finance leases. When acquired, such assets are capitalized at fair value or present value of the minimum lease payments at the inception of the lease, whichever is lower.

Lease under which the risks and rewards incidental to ownership are not transferred to lessee is classified as operating lease. Lease payments under operating leases are recognized as an expense in net profit in the statement of profit and loss.

(VI) IMPAIRMENT

a) Financial assets

The company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss.

Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognized as an impairment gain or loss in statement of profit or loss.

b. Non-financial assets

Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.

If such assets are considered to be impaired, the impairment to be recognized in the statement of profit and loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years..

(VII) 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.

Initial Recognition and measurement

On initial recognition, all the financial assets and liabilities are recognized at its fair value plus or minus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability except trade receivables which are recognized at transaction price.

SUBSEQUENT MEASUREMENT

Non-derivative financial instruments

(i) Financial assets carried at amortised cost

A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

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

A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

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

A financial asset which is not classified in any of the above categories is subsequently measured at fair valued through profit or loss.

(iv) Financial liabilities

The financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

Derivative financial instruments

The Company holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank.

Although the Company believes that these derivatives constitute hedges from an economic perspective, they may not qualify for hedge accounting under Ind-AS 109, Financial Instruments. Any derivative that is either not designated a hedge, or is so designated but is ineffective as per Ind-AS 109, is categorized as a financial asset or financial liability, at fair value through profit or loss.

Derivatives not designated as hedges are recognized initially at fair value and attributable transaction costs are recognized in the statement of profit and loss when incurred. Subsequent to initial recognition, these derivatives are measured at fair value through profit or loss and the resulting exchange gains or losses are included in statement of profit and loss. Assets/ liabilities in this category are presented as current assets/ current liabilities if they are either held for trading or are expected to be realized within 12 months after the balance sheet date.

Equity Share Capital

(i) Equity Shares

Equity shares issued by the company are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are recognized as a deduction from equity, net of any tax effects.

Derecognition of financial instruments

A financial asset is derecognized when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability is derecognized when the obligation specified in the contract is discharged or cancelled or expired.

Fair value measurement of financial instruments

The fair value of financial instruments is determined using the 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.

Based on the three level fair value hierarchies, the methods used to determine the fair value of financial assets and liabilities include quoted market price, discounted cash flow analysis and valuation certified by the external valuer.

In case of financial instruments where the carrying amount approximates fair value due to the short maturity of those instruments, carrying amount is considered as fair value.

(VIII) EMPLOYEES BENEFITS

Short term Employee Benefits:

Short Term Employee Benefits are recognized as an expense on an undiscounted basis in the statement of profit and loss of the year in which the related service is rendered.

Post-Employment Benefits Defined Contribution Plans:

Provident Fund

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

Superannuation

Certain employees of the Company are participants in a defined contribution plan. The Company has no further obligations to the Plan beyond its monthly contributions which are periodically contributed to a trust fund, the corpus of which is invested with the Life Insurance Corporation of India.

Defined Benefit Plans Gratuity

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

Liabilities with regard to the Gratuity Plan are determined by actuarial valuation, performed by an independent actuary, at each balance sheet date using the projected unit credit method. The company fully contributes all ascertained liabilities to the VSSL Gratuity Fund Trust (the Trust). Trustees administer contributions made to the Trusts and contributions are invested in the schemes as permitted by law of India.

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

Share-based payment arrangements

Equity-settled share-based payments to employees are measured at the fair value of the equity instruments at the grant date as per Ind-AS 102. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in note. 36.

The fair value determined at the grant date of the equity-settled share-based payments is expensed. The fair value has been calculated using the Black Scholes Option Pricing model over the vesting period. Based on the Company’s estimate of equity instruments this will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve.

Compensated absences

The Company has a policy on compensated absences which are both accumulating and non-accumulating in nature. The expected cost of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary at each balance sheet date using projected unit credit method. Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.

(IX) BORROWING COSTS

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of the asset. Other borrowing costs are recognized as an expense in the period in which they are incurred. 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.

(X) EARNING PER SHARE

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

(XI) INCOME TAXES

Income tax expense comprises current tax and deferred tax. Income tax expense is recognized in net profit in the statement of profit and loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in other comprehensive income

Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from the initial recognition of an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction. Deferred tax assets and liabilities are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

(XII) GOVERNMENT GRANTS

The government grants are recognized only when there is reasonable assurance that the conditions attached to them shall be complied with, and the grants will be received. Government grants related to assets are treated as deferred income and are recognized in the statement of profit and loss on a systematic and rational basis over the useful life of the asset. Government grants related to revenue are recognized on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs which they are intended to compensate.

(XIII) FOREIGN CURRENCY TRANSACTIONS Functional and Presentation currency

The functional currency of the company is Indian rupee. These financial statements are presented in Indian rupee (rounded off to lakhs)

Transaction and balances

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

The foreign currency monetary items are translated using the closing rate at the end of each reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency shall be translated using the exchange rate at the date of the transaction. Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements shall be recognised in profit or loss in the period in which they arise.

Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the statements of profit and loss, within finance cost. All other foreign exchange gains and losses are presented in the statement of profit and loss on net basis.

(XIV) DIVIDENDS

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

(XV) PROVISIONS AND CONTINGENT LIABILITIES/ ASSETS

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Contingent Liability is disclosed after careful evaluation of facts, uncertainties and possibility of reimbursement. Contingent liabilities are not recognised but are disclosed in notes.

Contingent Assets are not recognised in financial statements but are disclosed, since the former treatment may result in the recognition of income that may or may not be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate.

(XVI) STATEMENT OF CASH FLOWS

Cash flows are reported using the indirect method, whereby profit for the period 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.

Amendment to Ind AS 7

Effective April 1, 2017, the company adopted the amendment to Ind As 7, which require the entities to provide disclosures that enable users of financial statements to evaluate changes in liability arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balance in the Balance Sheet for the liabilities arising from financing activities, to meet the disclosure requirement. The adoption of amendment did not have any material impact on financial statement.

SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

In the process of applying the Company’s accounting policies, management has made the following estimates, assumptions and judgements which have significant effect on the amounts recognized in the financial statement:

a. CONTINGENCIES

Judgment of the Management is required for estimating the possible outflow of resources, if any, in respect of contingencies/claim/litigations against the company as it is not possible to predict the outcome of pending matters with accuracy.

b. ALLOWANCE FOR UNCOLLECTED ACCOUNTS RECEIVABLE AND ADVANCES

Trade receivables do not carry any interest and are stated at their normal value as reduced by appropriate allowances for estimated irrecoverable amounts. Individual trade receivables are written off when management deems them not collectible. Impairment is made on ECL, which are the present value of the cash shortfall over the expected life of the financial assets.

c. DEFINED BENEFIT PLANS

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

d. FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

RECENT ACCOUNTING PRONOUNCEMENTS

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration : On March 28, 2018, Ministry of Corporate Affairs (*MCA*) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency.

The amendment will come into force from April 1, 2018. The company has evaluated the effect of this on the financial statements and the impact is not material.

Ind AS 115 - Revenue from Contract with Customers: On March 28, 2018, Ministry of Corporate Affairs (*MCA*) has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires the enhanced disclosures about the nature, amount, timing and uncertainity of revenue and cash flows arising from the entity’s contracts with customers.

The standard permits two possible methods of transition:

- Retrospective approach- Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8- Accounting Policies, Changes in Accounting Estimates and Errors

- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch-up approach)

The effective date for adoption of Ind AS 115 is financial beginning on or after April 1, 2018.

The Company will adopt the standard on April 1, 2018 by using cumulative catch-up transition method and accordingly comparatives for the year ending or ended March 31, 2018 will not be retrospectively adjusted. The effect on adoption of Ind AS 115 is expected to be insignificant.

During the year ended March 31, 2018 the company has made allotment of 1,35,70,000 equity shares and 35,72,000 quity shares of RS.6,785.00 Lakhs & 5,000.80 Lakhs on May 13, 2017 and Feb 21, 2018 respectively through Right Issue and Qualified Institutional Buyer at an issue price of RS.50/equity share and RS.140/equity share. (Including premium of RS.40 / equity share and RS.130 / equity share).

---

Mar 31, 2016

Note 1. CORPORATE INFORMATION:

Vardhman Special Steels Limited is a Public Limited Company incorporated under the provisions of the Companies Act, 1956 on 14^th May, 2010. The Company is engaged in the Manufacturing of Billet, Steel bars & rods and Bright bars of various categories of special and alloy steels.

Note 2. SIGNIFICANT ACCOUNTING POLICIES:

a) Accounting Convention:

The accounts are prepared on accrual basis under the historical cost convention in accordance with the accounting standards referred to in section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules 2014 and other relevant provisions of the said Act.

b) Use of Estimates:

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amount of assets and liabilities as of the date of the financial statements and the reported amount of the revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results materialize.

c) Revenue Recognition:

i) Sales:

Revenue from sale of goods is recognized:

a) When all the significant risks and rewards of ownership are transferred to the buyer and the Company retains no effective control of the goods transferred to a degree usually associated with ownership; and

b) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods.

c) Domestic Sales (Gross) include excise duty and freight and is recognized on dispatch of goods to customers.

ii) Export Incentives:

Revenue in respect of the above benefits is recognized on post export basis.

iii) Insurance and Other Claims:

The revenue in respect of claims is recognized when no significant uncertainty exists with regard to the amount to be realized and the ultimate collection thereof.

iv) Interest:

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

d) Employee Benefits:

i) Short Term Employee Benefits:

Short term employee benefits are recognized as an expense on an undiscounted basis in the statement of profit and loss of the year in which the related services are rendered.

ii) Post Employment Benefits:

a) Defined Contribution Plans

i) Provident Fund: Contribution to Provident Fund is made in accordance with the provisions of the Provident Fund Act, 1952 and is treated as revenue expenditure.

ii) Superannuation: The liability in respect of eligible employees covered under the scheme is provided through a policy taken from Life Insurance Corporation of India by an approved trust formed for the purpose. The premium in respect of such policy is recognized as an expense in the period in which it falls due.

b) Defined Benefit Plans

i) Gratuity: Provision for gratuity, which is a defined benefit plan, is made on the basis of an actuarial valuation, as per AS-15 issued by The Institute of Chartered Accountants of India, carried out by an independent actuary at the balance sheet date, using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation is measured at the present value of estimated future cash flows. The discount rates used for determining the present value of obligation is based on the market yields on Government securities as at the Balance Sheet date, having maturity periods approximating to the terms of related obligations. Actuarial gains and losses are recognized immediately in the Profit and Loss Account.

ii) Leave Encashment: As per the Company''s policy, eligible leaves can be accumulated by the employees and carried forward to future periods to either utilize during the service or encash. Encashment can be made during the service, on early retirement, on withdrawal of scheme, at resignation by employee or upon death of employee. The Company accounts for the liability for compensated absences payable in future based on an independent actuarial valuation, as per AS-15 issued by The Institute of Chartered Accountants of India, carried out at the end of the period.

e) Fixed Assets:

i) Fixed Assets are stated at historical cost less depreciation.

ii) Cost of fixed assets comprise its purchase price and any attributable expenditure (both direct and indirect) for bringing an asset to its working condition for its intended use.

f) Intangible Assets:

Intangible assets are stated at cost less accumulated amount of amortization.

g) Depreciation:

i) Depreciation is provided on straight line method in accordance with and in the manner specified in Schedule II to the Companies Act, 2013.

ii) Depreciation on assets costing '' 5,000 or below acquired during the year is charged @ 100% on proportionate basis keeping in view materiality aspect.

h) Amortization:

i) Intangible assets are amortized on straight line method over their estimated useful life.

ii) Right to use Power Lines is amortized on straight line method over their estimated useful life.

i) Investments:

Long term Investments are carried at cost less provision for diminution, other than temporary, in the value of investment. Current investments are carried at lower of cost and fair value.

j) Inventories:

Inventories are valued at cost or net realizable value, whichever is lower. The cost in respect of various items of inventories is computed as under:

i) In case of raw materials-at weighted average cost plus direct expenses.

ii) In case of stores & spares-at weighted average cost plus direct expenses.

iii) In case of finished goods-at raw material cost plus conversion cost, packing cost, excise duty and other overheads incurred to bring the goods to their present condition and location.

k) Subsidy:

Government grants available to the Company are recognized when there is a reasonable assurance of compliance with the conditions attached to such grants and where benefits in respect thereof have been earned and it is reasonably certain that the ultimate collection will be made. Government subsidy in the nature of promoter''s contribution is credited to capital reserve. Government subsidy received for a specific asset is reduced from the cost of the said asset.

l) Cenvat Credit:

Cenvat credit of excise duty paid on inputs, capital assets and input services is recognized in accordance with the Cenvat Credit Rules, 2004.

m) Foreign Currency Conversion/Translation:

i) Foreign currency transactions are recorded on initial recognition at the rate prevailing on the date of the transaction.

ii) Foreign currency monetary items are reported using the closing rate. Exchange differences arising on the settlement of monetary items or on reporting the same at the closing rate as at the balance sheet date are recognized as income or expense in the period in which they arise.

iii) The premium or discount arising at the inception of forward exchange contracts is amortized as an expense or income over the life of the contract.

iv) The exchange difference to the extent of loss, arising on forward contracts and put and call derivative options to hedge the transactions in the nature of firm commitments and /or highly probable forecast transactions is recognized in the statement of Profit and Loss. The profit, if any, arising thereon is ignored.

v) Exchange differences on the aforesaid forward exchange contract are recognized in the statement of profit & loss in the reporting period in which the exchange rates change. Profit or loss arising on cancellation or renewal of such contracts is recognized as income or expense in the period in which such profit or loss arises.

n) Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of the asset. Other borrowing costs are recognized as expense in the period in which they are incurred.

o) Expenditure incurred during construction period:

In respect of major expansion, the indirect expenses incurred during construction period up to the date of commercial production is capitalized on various categories of fixed assets on proportionate basis.

p) Provisions and Contingencies:

i) Provision is recognized (for liabilities that can be measured by using a substantial degree of estimation) when:

a) The Company has present obligation as a result of a past event;

b) A probable outflow of resources embodying economic benefits is expected to settle the obligation; and

c) The amount of the obligation can be reliably estimated.

ii) Contingent liability is disclosed in case there is:

a) 1) possible obligation that arises from past events and existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise; or

2) a reliable estimate of the amount of the obligation cannot be made.

b) a present obligation arising from the past events but is not recognized

1) when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

2) a reliable estimate of amount of the obligation cannot be made.

q) Operating Leases:

Assets acquired on leases wherein a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals paid for such leases are recognized as an expense on systematic basis over the term of lease.

r) Earnings per share:

Basic earnings per share is computed by dividing the net profit/(loss) for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by taking into account the aggregate of the weighted average number of equity shares outstanding during the period and the weighted average number of equity shares which would be issued on conversion of all the dilutive potential equity into equity shares.

s) Accounting for Tax on Income:

The accounting treatment followed for taxes on income is to provide for Current Tax and Deferred Tax. Current Tax is the amount of income-tax determined to be payable in respect of taxable income for a period. Deferred Tax is the tax effect of all timing differences.

t) Impairment of Assets:

At each Balance Sheet date, an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of accounts.

u) Segment Information:

The Company has only one reporting segment i.e. manufacturing of Steel. The Company is mainly operating in India which is considered to be the only reportable geographical segment.

---

Mar 31, 2015

A) Accounting Convention:

The accounts are prepared on accrual basis under the historical cost convention in accordance with the accounting standards referred to in section 133 of Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules 2014 and other relevant provisions of the said Act.

b) Revenue Recognition:

i) Sales:

Revenue from sale of goods is recognized:

a) When all the significant risks and rewards of ownership are transferred to the buyer and the company retains no effective control of the goods transferred to a degree usually associated with ownership; and

b) No significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods.

c) Domestic Sales (Gross) include excise duty and freight and is recognized on dispatch of goods to customers.

ii) Insurance and Other Claims:

The revenue in respect of claims is recognized when no significant uncertainty exists with regard to the amount to be realised and the ultimate collection thereof.

iii) Benefit under Duty Entitlement Pass Book/Duty Drawback Scheme:

Revenue in respect of the above benefits is recognized on post export basis.

c) Retirement Benefits:

i. Gratuity : Provision for gratuity, which is a defined benefit plan, is made on the basis of an actuarial valuation, as per AS-15 issued by Institute of Chartered Accountants of India, carried out by an independent actuary at the balance sheet date, using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation is measured at the present value of estimated future cash flows. The discount rates used for determining the present value of obligation is based on the market yields on Government securities as at the Balance Sheet date, having maturity periods approximating to the terms of related obligations. Actuarial gains and losses are recognised immediately in the Profit and Loss Account.

ii. Leave Encashment: As per the Company's policy, eligible leaves can be accumulated by the employees and carried forward to future periods to either utilise during the service or encash. Encashment can be made during the service, on early retirement, on withdrawal of scheme, at resignation by employee or upon death of employee. The Company accounts for the liability for compensated absences payable in future based on an independent actuarial valuation, as per AS-15 issued by Institute of Chartered Accountants of India, carried out at the end of the period.

iii. Provident Fund : Contribution to Provident Fund is made in accordance with the provisions of the Provident Fund Act, 1952 and is treated as revenue expenditure.

iv. Superannuation: The liability in respect of eligible employees covered under the scheme is provided through a policy taken from Life Insurance Corporation of India by an approved trust formed for the purpose. The premium in respect of such policy is recognized as an expense in the period in which it falls due.

d) Fixed Assets:

Fixed Assets are stated at historical cost less depreciation.

e) Intangible Assets:

Intangible assets are stated at cost less accumulated amount of amortization.

f) Depreciation:

i) Depreciation is provided on straight line method in accordance with and in the manner specified in Schedule II to the Companies Act, 2013.

ii) Depreciation on assets costing Rs. 5000 or below acquired during the year is charged @ 100% on proportionate basis keeping in view materiality aspect.

g) Amortization:

i) Intangible assets are amortized on straight line method over their estimated useful life.

ii) Right to use Power Lines is amortised on straight line method over their estimated useful life.

h) Investments:

Long term Investments are carried at cost less provision for diminution, other than temporary, in the value of investment. Current investments are carried at lower of cost and fair value.

i) Inventories:

Inventories are valued at cost or net realisable value, whichever is lower. The cost in respect of various items of inventories is computed as under:

* In case of raw materials-at weighted average cost plus direct expenses.

* In case of stores & spares-at weighted average cost plus direct expenses.

* In case of finished goods-at raw material cost plus conversion cost, packing cost, excise duty and other overheads incurred to bring the goods to their present condition and location.

j) Subsidy:

Government grants available to the company are recognised when there is a reasonable assurance of compliance with the conditions attached to such grants and where benefits in respect thereof have been earned and it is reasonably certain that the ultimate collection will be made. Government subsidy in the nature of promoter's contribution is credited to capital reserve. Government subsidy received for a specific asset is reduced from the cost of the said asset.

k) Foreign Currency Conversion/Translation:

* Foreign currency transactions are recorded on initial recognition at the rate prevailing on the date of the transaction. Where export bills are negotiated with the bank, the export sales are recorded at the rate on the date of negotiation as the said rate approximates the actual rate on the date of transaction.

* Foreign Currency monetary items are reported using the closing rate. Exchange differences arising on the settlement of monetary items or on reporting the same at the closing rate as at the balance sheet date are recognised as income or expense in the period in which they arise.

* The premium or discount arising at the inception of forward exchange contracts is amortised as an expense or income over the life of the contract.

* Exchange differences on the aforesaid forward exchange contract are recognised in the statement of profit & loss in the reporting period in which the exchange rates change. Profit or loss arising on cancellation or renewal of such contracts is recognised as income or expense in the period in which such profit or loss arises.

l) Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of the asset. Other borrowing costs are recognised as expense in the period in which they are incurred.

m) Expenditure incurred during construction period:

In respect of major expansion, the indirect expenses incurred during construction period up to the date of commercial production is capitalised on various categories of fixed assets on proportionate basis.

n) Provisions and contingencies:

A provision is recognised when the Company has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation

and reliable estimate can be made of the amount of the obligation. A contingent liability is disclosed where there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resource.

o) Operating Leases:

Assets acquired on leases wherein a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals paid for such leases are recognised as an expense on systematic basis over the term of lease.

p) Employee benefits Short Term 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, short term compensated absences and bonus, etc. are recognized in the profit and loss account in the period in which the employee renders the related service.

q) Earnings per share

Basic earnings per share is calculated by dividing the net profit/(loss) for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of equity and dilutive potential equity shares outstanding during the period, except where the results would be anti-dilutive.

r) Accounting for Tax on Income:

The accounting treatment followed for taxes on income is to provide for Current Tax and Deferred Tax. Current Tax is the amount of income-tax determined to be payable in respect of taxable income for a period. Deferred Tax is the tax effect of all timing differences.

s) Impairment of Assets

At each Balance Sheet date, an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of accounts.

t) Segment Information:

The Company has only one reporting segment i.e. manufacturing of Steel. The Company is mainly operating in India which is considered to be the only reportable geographical segment.

u) Cenvat Credit:

Cenvat credit of excise duty paid on inputs, capital assets and input services is recognised in accordance with the Cenvat Credit Rules, 2004.

---

Mar 31, 2014

A) Accounting Convention:

The accounts are prepared on accrual basis under the historical cost convention in accordance with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 and other relevant provisions of the said Act.

b) Revenue Recognition:

i) Sales:

a) Export sales are converted at negotiated rate, that approximates the actual rate prevailing on the date of the transaction. The negotiated export sale at the end of the year has been recognised at the closing conversion rate.

b) Domestic Sales (Gross) include excise duty and freight and is recognized on dispatch of goods to customers.

ii) Insurance and Other Claims:

The revenue in respect of claims is recognized when no significant uncertainty exists with regard to the amount to be realised and the ultimate collection thereof.

iii) Benefit under Duty Entitlement Pass Book/Duty Drawback Scheme:

Revenue in respect of the above benefits is recognized on post export basis.

c) Retirement Benefits:

a) Gratuity : Provision for gratuity liability to employees is made on the basis of Actuarial Valuation as per AS-15 issued by Institute of Chartered Accountants of India.

b) Leave Encashment : Provision for leave encashment is made on the basis of leaves accrued to the employees during the calendar year and has been determined on Actuarial Valuation as per AS-15 issued by Institute of Chartered Accountants of India.

c) Provident Fund: Contribution to Provident Fund is made in accordance with the provisions of the Provident Fund Act, 1952 and is treated as revenue expenditure.

d) Superannuation: The liability in respect of eligible employees covered as per Company policy is provided on accrual basis.

d) Fixed Assets:

Fixed Assets are stated at historical cost less depreciation.

e) Depreciation:

a) Depreciation on Plant & Machinery & Building is charged on Straight Line method. Depreciation on straight line method is calculated on the basis of circular No.1/86 dated 21.5.1986 issued by the Company Law Board i.e. on the basis of rates corresponding to rates (inclusive of multiple shift allowance) applicable under the Income Tax Rules at the time of acquisition/purchase of assets upto 02.04.1987. However, for the assets purchased/acquired after 02.04.1987, depreciation is provided in accordance with the rates prescribed in Schedule XIV to the Companies Act, 1956. In respect of the assets purchased/acquired on or after 16.12.1993, depreciation has been provided in accordance with Notification No. GSR 756(E) dated 16.12.1993 issued by the Department of Company Affairs.

b) On the remaining assets, Depreciation is provided on straight line method in accordance with and in the manner specified in Schedule XIV to the Companies Act, 1956, except in case of computers, on which depreciation has been provided @ 25 % on straight line basis.

c) Depreciation on assets costing Rs 0.05 lac or below acquired during the year is charged @ 100% on proportionate basis.

f) Inventories:

Inventories are valued at cost or net realisable value, whichever is lower. The cost in respect of various items of inventories is computed as under:

* In case of raw materials-at weighted average cost plus direct expenses.

* In case of stores & spares-at weighted average cost plus direct expenses.

* In case of finished goods-at raw material cost plus conversion cost, packing cost, excise duty and other overheads incurred to bring the goods to their present condition and location.

g) Foreign Currency Conversion/Translation:

* Foreign currency transactions are recorded on initial recognition at the rate prevailing on the date of the transaction. Where export bills are negotiated with the bank, the export sales are recorded at the rate on the date of negotiation as the said rate approximates the actual rate on the date of transaction

* Foreign Currency monetary items are reported using the closing rate. Exchange differences arising on the settlement of monetary items or on reporting the same at the closing rate as at the balance sheet date are recognised as income or expense in the period in which they arise.

* The premium or discount arising at the inception of forward exchange contracts is amortised as an expense or income over the life of the contract.

* Exchange differences on the aforesaid forward exchange contract are recognised in the Statement of Profit & Loss in the reporting period in which the exchange rates change. Profit or loss arising on cancellation or renewal of such contracts is recognised as income or expense in the period in which such profit or loss arises.

h) Borrowing Costs :

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of the asset. Other borrowing costs are recognised as expense in the period in which they are incurred.

i) Expenditure incurred during construction period :

In respect of major expansion, the indirect expenses incurred during construction period upto the date of commercial production is capitalised on various categories of fixed assets on proportionate basis.

j) Provisions and contingencies:

A provision is recognised when the Company has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and reliable estimate can be made of the amount of the obligation. A contingent liability is disclosed where there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resource.

k) Employee benefits:

Short term 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, short term compensated absences and bonus etc. are recognized in the Statement of Profit & Loss in the period in which the employee renders the related service.

Gratuity (Defined benefit plan):

Provision for gratuity, which is a defined benefit plan, is made on the basis of an actuarial valuation carried out by an independent actuary at the balance sheet date, using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation is measured at the present value of estimated future cash flows. The discount rates used for determining the present value of obligation is based on the market yields on Government securities as at the Balance Sheet date, having maturity periods approximating to the terms of related obligations. Actuarial gains and losses are recognised immediately in the Statement of Profit & Loss.

Leave encashment (Other long term benefits):

As per the Company''s policy, eligible leaves can be accumulated by the employees and carried forward to future periods to either utilise during the service or encash. Encashment can be made during the service, on early retirement, on withdrawal of scheme, at resignation by employee or upon death of employee. The Company accounts for the liability for compensated absences payable in future based on an independent actuarial valuation carried out at the end of the period.

l) Earnings per share:

Basic earnings per share is calculated by dividing the net profit/(loss) for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Diluted earnings per share are computed using the weighted average number of equity and dilutive potential equity shares outstanding during the period, except where the results would be anti-dilutive.

m) Accounting for Tax on Income:

The accounting treatment followed for taxes on income is to provide for Current Tax and Deferred Tax. Current Tax is the amount of income-tax determined to be payable in respect of taxable income for a period. Deferred Tax is the tax effect of all timing differences.

n) Impairment of Assets:

At each Balance Sheet date, an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of accounts.

---

Mar 31, 2013

A) Accounting Convention:

The accounts are prepared on accrual basis under the historical cost convention in accordance with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 and other relevant provisions of the said Act.

b) Revenue Recognition: i) Sales:

a) Export sales are converted at negotiated rate, that approximates the actual rate prevailing on the date of the transaction and/or at the forward contract rate, if so applicable. The negotiated export sale at the end of the year has been recognised at the closing conversion rate.

b) Domestic Sales (Gross) include excise duty and freight and is recognized on dispatch of goods to customers. ii) Insurance and Other Claims:

The revenue in respect of claims is recognized when no significant uncertainty exists with regard to the amount to be realised and the ultimate collection thereof. iii) Benefit under Duty Entitlement Pass Book/Duty Drawback Scheme:

Revenue in respect of the above benefits is recognized on post export basis.

c) Retirement Benefits:

a) Gratuity: Provision for gratuity liability to employees is made on the basis of Actuarial Valuation as per AS-15 issued by Institute of Chartered Accountants of India.

b) Leave Encashment: Provision for leave encashment is made on the basis of leaves accrued to the employees during the calender year and has been determined on Actuarial Valuation as per AS-15 issued by Institute of Chartered Accountants of India.

c) Provident Fund: Contribution to Provident Fund is made in accordance with the provisions of the Provident Fund Act, 1952 and is treated as revenue expenditure.

d) Superannuation: The liability in respect of eligible employees covered as per Company policy is provided on accrual basis.

d) Fixed Assets:

Fixed Assets are stated at historical cost less depreciation.

e) Depreciation:

a) Depreciation on Plant & Machinery & Building is charged on Straight Line method. Depreciation on straight line method is calculated on the basis of circular No.1/86 dated 21.5.1986 issued by the Company Law Board i.e. on the basis of rates corresponding to rates (inclusive of multiple shift allowance) applicable under the Income Tax Rules at the time of acquisition/purchase of assets upto 02.04.1987. However, for the assets purchased/acquired after 02.04.1987, depreciation is provided in accordance with the rates prescribed in Schedule XIV to the Companies Act, 1956. In respect of the assets purchased/acquired on or after 16.12.1993, depreciation has been provided in accordance with Notification No. GSR 756(E) dated 16.12.1993 issued by the Department of Company Affairs.

b) On the remaining assets, Depreciation is provided on straight line method in accordance with and in the manner specified in Schedule XIV to the Companies Act, 1956, except in case of computers, on which depreciation has been provided @ 25% on straight line basis.

c) Depreciation on assets costing Rs. 0.05 lac or below acquired during the year is charged @ 100% on proportionate basis.

f) Inventories:

Inventories are valued at cost or net realisable value, whichever is lower. The cost in respect of various items of inventories is computed as under:

o In case of raw materials-at weighted average cost plus direct expenses. o In case of stores & spares-at weighted average cost plus direct expenses.

o In case of finished goods-at raw material cost plus conversion cost, packing cost, excise duty and other overheads incurred to bring the goods to their present condition and location.

g) Foreign Currency Conversion/Translation:

o Foreign currency transactions are recorded on initial recognition at the rate prevailing on the date of the transaction. Where export bills are negotiated with the bank, the export sales are recorded at the rate on the date of negotiation as the said rate approximates the actual rate on the date of transaction. o Foreign Currency monetary items are reported using the closing rate. Exchange differences arising on the settlement of monetary items or on reporting the same at the closing rate as at the balance sheet date are recognised as income or expense in the period in which they arise. o The premium or discount arising at the inception of forward exchange contracts is amortised as an expense or income

over the life of the contract. o Exchange differences on the aforesaid forward exchange contracts are recognised in the Statement of Profit and Loss in the reporting period in which the exchange rates change. Profit or loss arising on cancellation or renewal of such contracts is recognised as income or expense in the period in which such profit or loss arises.

h) Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of the asset. Other borrowing costs are recognised as expense in the period in which they are incurred.

i) Expenditure incurred during construction period:

In respect of major expansion, the indirect expenses incurred during construction period upto the date of commercial production is capitalised on various categories of fixed assets on proportionate basis.

j) Provisions and contingencies:

A provision is recognised when the Company has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and reliable estimate can be made of the amount of the obligation. A contingent liability is disclosed where there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resource.

k) Employee benefits: Short term 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, short term compensated absences and bonus, etc. are recognized in the Statement of Profit and Loss in the period in which the employee renders the related service. Gratuity (Defined benefit plan) :

Provision for gratuity, which is a defined benefit plan, is made on the basis of an actuarial valuation carried out by an independent actuary at the balance sheet date, using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation is measured at the present value of estimated future cash flows. The discount rates used for determining the present value of obligation is based on the market yields on Government securities as at the Balance Sheet date, having maturity period approximating to the terms of related obligations. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss. Leave encashment (Other long term benefits) :

As per the Company''s policy, eligible leaves can be accumulated by the employees and carried forward to future period to either utilise during the service or encash. Encashment can be made during the service, on early retirement, on withdrawal of scheme, at resignation by employee or upon death of employee. The Company accounts for the liability for compensated absences payable in future based on an independent actuarial valuation carried out at the end of the period.

l) Earnings per share:

Basic earnings per share is calculated by dividing the net profit/(loss) for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of equity and dilutive potential equity shares outstanding during the period, except where the results would be anti-dilutive.

m) Accounting for Tax on Income:

The accounting treatment followed for taxes on income is to provide for Current Tax and Deferred Tax. Current Tax is the amount of income-tax determined to be payable in respect of taxable income for a period. Deferred Tax is the tax effect of all timing differences.

n) Impairment of Assets:

At each Balance Sheet date, an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of accounts.

---

Mar 31, 2012

A) Accounting Convention:

The accounts are prepared on accrual basis under the historical cost convention in accordance with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 and other relevant provisions of the said Act.

b) Revenue Recognition:

i) Sales:

a) Export sales are converted at negotiated rate, that approximates the actual rate prevailing on the date of the transaction and/or at the forward contract rate, if so applicable. The unnegotiated export sale at the end of the year/period has been recognised at the closing conversion rate.

b) Domestic Sales (Gross) include excise duty and freight and is recognised on despatch of goods to customers.

ii) Insurance and Other Claims:

The revenue in respect of claims is recognised when no significant uncertainty exists with regard to the amount to be realised and the ultimate collection thereof.

iii) Benefit under Duty Entitlement Pass Book/Duty Drawback Scheme:

Revenue in respect of the above benefits is recognised on post export basis.

c) Retirement Benefits:

i) Gratuity: Provision for gratuity liability to employees is made on the basis of actuarial valuation as per AS-15 issued by Institute of Chartered Accountants of India.

ii) Leave Encashment: Provision for leave encashment is made on the basis of leave accrued to the employees during the calender year and has been determined on actuarial valuation as per AS-15 issued by Institute of Chartered Accountants of India.

iii) Provident Fund: Contribution to Provident Fund is made in accordance with the provisions of the Provident Fund Act, 1952 and is treated as revenue expenditure.

iv) Superannuation: The liability in respect of eligible employees covered as per Company policy is provided on accrual basis.

d) Fixed Assets:

Fixed Assets are stated at historical cost less depreciation.

e) Depreciation:

i) Depreciation on Plant & Machinery and Building is charged on Straight Line method. Depreciation on straight line method is calculated on the basis of circular No.1/86 dated 21.5.1986 issued by the Company Law Board i.e. on the basis of rates corresponding to rates (inclusive of multiple shift allowance) applicable under the Income Tax Rules at the time of acquisition/purchase of assets upto 02.04.1987. However,for the assets purchased/acquired after 02.04.1987, depreciation is provided in accordance with the rates prescribed in Schedule XIV to the Companies Act, 1956. In respect of the assets purchased/acquired on or after 16.12.1993, depreciation has been provided in accordance with Notification No. GsR 756(E) dated 16.12.1993 issued by the Department of Company Affairs.

ii) On the remaining assets, Depreciation is provided on straight line method in accordance with and in the manner specified in Schedule XIV to the Companies Act, 1956, except in case of computers, on which depreciation has been provided @ 25 % on straight line basis.

iii) Depreciation on assets costing Rs. 0.05 lac or below acquired during the year is charged @ 100% on proportionate basis.

f) Inventories:

Inventories are valued at cost or net realisable value, whichever is lower. The cost in respect of various items of inventories is computed as under:

- In case of raw materials-at weighted average cost plus direct expenses.

- In case of stores and spares-at weighted average cost plus direct expenses.

- In case of finished goods-at raw material cost plus conversion cost, packing cost, excise duty and other overheads incurred to bring the goods to their present condition and location.

g) Foreign Currency Conversion/Translation:

- Foreign currency transactions are recorded on initial recognition at the rate prevailing on the date of the transaction. Where export bills are negotiated with the bank, the export sales are recorded at the rate on the date of negotiation as the said rate approximates the actual rate on the date of transaction.

- Foreign Currency monetary items are reported using the closing rate. Exchange differences arising on the settlement of monetary items or on reporting the same at the closing rate as at the balance sheet date are recognised as income or expense in the period in which they arise.

- The premium or discount arising at the inception of forward exchange contracts is amortised as an expense or income over the life of the contract.

- Exchange differences on the aforesaid forward exchange contract are recognised in the statement of Profit and Loss in the reporting period in which the exchange rates change. Profit or loss arising on cancellation or renewal of such contracts is recognised as income or expense in the period in which such profit or loss arises.

h) Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of the asset. Other borrowing costs are recognised as expense in the period in which they are incurred.

i) Expenditure incurred during construction period:

In respect of major expansion, the indirect expenses incurred during construction period upto the date of commercial production is capitalised on various categories of fixed assets on proportionate basis.

j) Provisions and contingencies

A provision is recognised when the Company has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and reliable estimate can be made of the amount of the obligation. A contingent liability is disclosed where there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resource.

k) Employee benefits Short term 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, short term compensated absences and bonus, etc. are recognized in the Statement of Profit and Loss in the period in which the employee renders the related service.

Gratuity (Defined benefit plan)

Provision for gratuity, which is a defined benefit plan, is made on the basis of an actuarial valuation carried out by an independent actuary at the balance sheet date, using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation is measured at the present value of estimated future cash flows. The discount rates used for determining the present value of obligation is based on the market yields on Government securities as at the Balance Sheet date, having maturity periods approximating to the terms of related obligations. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss.

Leave encashment (Other long term benefits)

As per the Company's policy, eligible leaves can be accumulated by the employees and carried forward to future periods to either utilise during the service or encash. Encashment can be made during the service, on early retirement, on withdrawal of scheme, at resignation by employee or upon death of employee. The Company accounts for the liability for compensated absences payable in future based on an independent actuarial valuation carried out at the end of the period.

l) Earnings per share

Basic earnings per share is calculated by dividing the net profit/(loss) for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of equity and dilutive potential equity shares outstanding during the period, except where the results would be anti-dilutive.

m) Accounting for Tax on Income :

The accounting treatment followed for taxes on income is to provide for Current Tax and Deferred Tax. Current Tax is the amount of income-tax determined to be payable in respect of taxable income for a period. Deferred Tax is the tax effect of all timing differences.

n) Impairment of Assets

At each Balance Sheet date, an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of accounts.

---

Mar 31, 2011

A) Accounting Convention:

The accounts are prepared on accrual basis under the historical cost convention in accordance with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 and other relevant provisions of the said Act.

b) Revenue Recognition:

i) Sales:

a) Export sales are converted at negotiated rate, that approximates the actual rate prevailing on the date of the transaction and/or at the forward contract rate, if so applicable. The negotiated export sale at the end of the year/period has been recognized at the closing conversion rate.

b) Domestic Sales (Gross) include excise duty and freight and is recognized on dispatch of goods to customers.

ii) Insurance and Other Claims:

The revenue in respect of claims is recognized when no significant uncertainty exists with regard to the amount to be realized and the ultimate collection thereof.

iii) Benefit under Duty Entitlement Pass Book/Duty Drawback Scheme:

Revenue in respect of the above benefits is recognized on post export basis.

c) Retirement Benefits:

a) Gratuity: Provision for gratuity liability to employees is made on the basis of actuarial valuation as per AS-15 issued by Institute of Chartered Accountants of India.

b) Leave Encashment: Provision for leave encashment is made on the basis of leave accrued to the employees during the calendar year and has been determined on actuarial valuation as per AS-15 issued by Institute of Chartered Accountants of India.

c) Provident Fund: Contribution to Provident Fund is made in accordance with the provisions of the Provident Fund Act, 1952 and is treated as revenue expenditure.

d) Superannuation: The liability in respect of eligible employees covered as per Company policy is provided on accrual basis.

d) Fixed Assets:

Fixed Assets are stated at historical cost less depreciation.

e) Depreciation:

a) Depreciation on Plant & Machinery & Building is charged on Straight Line method. Depreciation on straight line method is calculated on the basis of circular No.1/86 dated 21.5.1986 issued by the Company Law Board i.e. on the basis of rates corresponding to rates (inclusive of multiple shift allowance) applicable under the Income Tax Rules at the time of acquisition/purchase of assets up to 02.04.1987. However, for the assets purchased/acquired after 02.04.1987, depreciation is provided in accordance with the rates prescribed in Schedule XIV to the Companies Act, 1956. In respect of the assets purchased/acquired on or after 16.12.1993, depreciation has been provided in accordance with Notification No. GSR 756(E) dated 1 6.1 2.1993 issued by the Department of Company Affairs.

b) On the remaining assets, depreciation is provided on straight line method in accordance with and in the manner specified in Schedule XIV to the Companies Act, 1956, except in case of computers, on which depreciation has been provided @ 25 % on straight line basis.

c) Depreciation on assets costing Rs 0.05 lac or below acquired during the year is charged @ 100% on proportionate basis.

f) Inventories:

Inventories are valued at cost or net realizable value, whichever is lower. The cost in respect of various items of inventories is computed as under:

- In case of raw materials-at weighted average cost plus direct expenses,

- In case of stores & spares-at weighted average cost plus direct expenses.

- In case of work in process at raw material cost plus conversion costs depending upon the stage of completion.

- In case of finished goods-at raw material cost plus conversion cost, packing cost, excise duty and other overheads incurred to bring the goods to their present condition and location.

g) Foreign Currency Conversion/Translation:

- Foreign currency transactions are recorded on initial recognition at the rate prevailing on the date of the transaction. Where export bills are negotiated with the bank, the export sales are recorded at the rate on the date of negotiation as the said rate approximates the actual rate on the date of transaction, o Foreign currency monetary items are reported using the closing rate. Exchange differences arising on the settlement of monetary items or on reporting the same at the closing rate as at the balance sheet date are recognized as income or expense in the period in which they arise, o The premium or discount arising at the inception of forward exchange contracts is mortised as an expense or income over the life of the contract.

- Exchange differences on the aforesaid forward exchange contract are recognized in the statement of profit & loss in the reporting period in which the exchange rates change. Profit or loss arising on cancellation or renewal of such contracts is recognized as income or expense in the period in which such profit or loss arises.

h) Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of the asset. Other borrowing costs are recognized as expense in the period in which they are incurred.

i) Expenditure incurred during construction period:

In respect of major expansion, the indirect expenses incurred during construction period up to the date of commercial production is capitalized on various categories of fixed assets on proportionate basis,

j) Accounting for Tax on Income:

The accounting treatment followed for taxes on income is to provide for Current Tax and Deferred Tax. Current Tax is the amount of income-tax determined to be payable in respect of taxable income for a period. Deferred Tax is the tax effect of all timing differences.

k) Impairment of Assets:

At each Balance Sheet date, an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount is provided in the books of accounts.