Pitti Engineering Ltd. कंपली की लेखा नीति

Mar 31, 2025

1.2. MATERIAL ACCOUNTING POLICIES

1.2.1 BASIS OF PREPARATION AND PRESENTATION

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

Company''s standalone financial statements are presented
in Indian Rupees (?) which is also its functional currency,
and all values are rounded to the nearest lakhs ('' 00000)
except when otherwise indicated.

The Shareholders have the power to amend the
Standalone Financial Statements after the issue.

1.2.2 PREPARATION OF STANDALONE FINANCIAL
STATEMENTS

(a) Basis of Accounting

The standalone financial statements of the
Company have been prepared in accordance with
Indian Accounting Standards (Ind AS) notified under
the Companies (Indian Accounting Standards) Rules,
2015 read with Section 133 of Companies Act, 2013
as amended from time to time.

The standalone financial statements have been
prepared on an accrual basis and in accordance with
the historical cost basis except for certain financial
instruments measured at fair value at the end of
each reporting period as explained in the accounting
policies below.

Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly
transaction between market participants at the

measurement date regardless of whether that price
is directly observable or estimated using another
valuation technique. In estimating the fair value

of an asset or a liability the Company takes into
account the characteristics of the asset or liability if
market participants would take those characteristics
into account when pricing the asset or liability at the
measurement date. Fair value for measurement and
/ or disclosure purposes in these standalone financial
statements is determined on such basis except for
measurements that have some similarities to fair
value but are not fair value such as net realisable
value in Ind AS 2.

(b) Significant accounting judgments estimates and
assumptions

The preparation of the Company''s standalone
financial statements in conformity with Ind AS
requires the management to make judgments
estimates and assumptions that affect the
reported amounts of revenues expenses assets and
liabilities and the accompanying disclosures and the
disclosure of contingent liabilities. Uncertainty about
these assumptions and estimates could result in
outcomes that require a material adjustment to the
carrying amount of assets or liabilities affected in
future periods.

The management believes that the estimates used
in preparation of standalone financial statements
are prudent and reasonable.

Estimates and underlying assumptions are reviewed
at each reporting date. Revisions to accounting
estimates are recognised in the period in which the
estimate is revised and future period is effected.

(c) Current/ Non-Current Classification

The Company presents assets and liabilities in
the balance sheet based on current/ non-current
classification. An asset is treated as current when
it is

(i) Expected to be realised or intended to be sold
or consumed in normal operating cycle

(ii) Held primarily for the purpose of trading

(iii) Expected to be realised within twelve months
after the reporting period or

(iv) 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

(i) It is expected to be settled in normal operating
cycle

(ii) It is held primarily for the purpose of trading

(iii) It is due to be settled within twelve months
after the reporting period or

(iv) 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.

1.2.3A. PROPERTY PLANT AND EQUIPMENT

Freehold land is measured at cost and not
depreciated. All other items of property plant and
equipment (includes Tools and Dies) are stated at
cost less accumulated depreciation and impairment
loss if any.

Cost includes cost of acquisition installation or
construction other direct expenses incurred to bring
the assets to its working condition and finance costs
incurred up to the date the asset is ready for its
intended use and excludes GST eligible for credit /
setoff.

Such cost includes the cost of replacing part of
the plant and equipment costs of dismantling and
removing the item and restoring the site on which
it is located and borrowing costs for long-term
construction projects if the recognition criteria are
met. When significant parts of plant and equipment
are required to be replaced at intervals the same
were depreciated separately based on their specific
useful lives.

All other repair and maintenance costs are recognised
in the statement of profit or loss as incurred.

The Company records a provision for dismantling
cost towards Plant and Machinery wherever
applicable. Dismantling costs are provided at the
present value of future expenditure using the
current pre-tax rate expected to be incurred to fulfil
dismantling obligation and are recognised as part of
the cost of the underlined asset. Any change in the

present value of expenditure other than unwinding of
discount on the provision is reflected as adjustment
to the provision and the corresponding asset. The
change in the provision due to the unwinding of
discount is recognised in the statement of profit and
loss.

Capital work-in-progress in respect of assets which
are not ready for their intended use are carried at
cost comprising of direct costs related incidental
expenses and attributable interest.

All identifiable Revenue expenses including interest
incurred in respect of various projects / expansion
net of income earned during the project development
stage prior to its intended use are considered as pre
- operative expenses and disclosed under Capital
Work-in-Progress.

Depreciation is not recorded on capital work-in¬
progress until construction and installation is
complete and the asset is ready for its intended use.

Advances paid towards the acquisition of fixed
assets outstanding at each balance sheet date are
disclosed as “Capital Advances" under other non¬
current assets.

Property plant and equipment are eliminated from
standalone financial statements either on disposal
or when retired from active use. Losses arising in
the case of the retirement of property plant and
equipment and gains or losses arising from disposal
of property plant and equipment are recognised
in the statement of profit and loss in the year of
occurrence.

Depreciable amount for assets is the cost of an
asset or other amount substituted for cost less
its estimated residual value. Property Plant and
Equipment is provided on straight-line method over
the useful life of the assets as specified in Schedule
II to the Companies Act, 2013. Building constructed
on leasehold land is depreciated based on the useful
life specified in Schedule II to the Companies Act,
2013 where the lease period of the land is beyond
the life of the building. Any Capital Expenditure
costing '' 5,000 or less are treated as a Revenue
Expenditure and recognised in the statement of
profit and loss in the year in which it is incurred.

B. INTANGIBLE ASSETS

Intangible assets are recognised when it is
probable that the future economic benefits that are
attributable to the assets will flow to the Company
and the cost of the assets can be measured reliably.

Intangible assets are stated at cost or acquisition
less accumulated amortisation and impairment loss
if any.

Intangible assets including software is amortised
over their estimated useful life on straight line basis
from the date they are available for intended use
subject to impairment test.

The estimated useful life and the amortisation period
of the intangible assets are reviewed at the end of
each financial year and the amortisation period is
revised to reflect the changed pattern if any.

Development expenditures on an individual product/
project are recognised as an intangible asset when
the Company can demonstrate the technical
feasibility of completing the intangible asset so that
the asset will be available for use or sale its intention
to complete and use or sell the asset its ability to use
or sell the asset how the asset will generate future
economic benefits the availability of resources to
complete the asset and the availability to measure
reliably the expenditure during development.

Product development cost is amortised on a
straight-line basis over a period of 60 months.

Subsequent cost

Subsequent costs incurred for replacement of a
major component of an asset are included in the
asset''s carrying cost or recognised as a separate
asset as appropriate. The carrying values of the
replaced components are recognised to statement
of Profit and Loss when replaced.

De-recognition

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

Gains or losses arising from de-recognition of an
intangible assets are measured as the difference
between the net disposal proceeds and the carrying
amount of the asset and are recognised in the
statement of profit and loss when the asset is
derecognised.

1.2.4 IMPAIRMENT OF NON-FINANCIAL ASSETS

An asset is treated as impaired when the carrying cost of
asset exceeds its recoverable value. An impairment loss is
charged to the Statement of Profit and Loss in the year in
which an asset is identified as impaired. The impairment
loss recognised in prior accounting period is reversed if
there has been a change in the estimate of recoverable
amount.

Assessment of impairment is done at each Balance
Sheet date as to whether there is any indication that
an asset (tangible and intangible) may be impaired. For
assessing impairment, the smallest identifiable group of
assets that generates cash inflows from continuing use
that are largely independent of the cash inflows from
other assets or groups of assets is considered as a cash
generating unit. If any such indication exists an estimate
of the recoverable amount of the individual asset/cash
generating unit is made.

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 amortisation or depreciation) had no
impairment loss been recognised for the asset in prior
years.

1.2.5 REVENUE RECOGNITION

Revenue from contracts with customers is recognised
when control of the goods or services is transferred to the
customer at an amount that reflects the consideration
entitled in exchange for those goods or services.

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

Revenue from rendering services is recognised over time
by measuring progress towards complete satisfaction of
performance obligations in the reporting period. While in
case of Job work services, the same is recognised after
the completion of service.

Revenue towards satisfaction of a performance obligation
is measured at the amount of transaction price (net of
variable consideration) allocated to that performance
obligation. The transaction price of goods sold, and services
rendered is net of variable consideration on account of

various discounts offered by the Company as part of the
contract. Variable considerations are determined based
on the most likely amount. Consideration is due upon
satisfaction of performance obligations and a receivable
is recognised when it becomes unconditional.

Payment terms agreed with a customer are as per
business practice and there is no financing component
involved in the transaction price.

(a) Interest income

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

(b) Dividend income

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

(c) Other income

Revenue in respect of other incomes is recognised
when a reasonable certainty as to its realisation
exists.

Income from export incentives under Foreign Trade
Policy relating to Rod Tep, duty drawback premium
on sale of import licenses and lease license fee are
recognised as income when the right to receive
credit as per the terms of the Scheme is established
in respect of the exports made and where there is
no significant uncertainty regarding the ultimate
collection of the relevant export proceeds.

1.2.6INVESTMENTS

The Company has accounted for its investment in
subsidiaries at cost less impairment loss (if any).

All other equity investments are measured at fair value,
with value changes recognised in the Statement of Profit
and Loss, except for those equity investments for which
the Company has elected to present the change in ''Other
Comprehensive Income''.

Investments are classified into current and non-current
investments. Investments that are readily realisable
and intended to be held for not more than a year

from the date of acquisition are classified as current
investments. All other investments are classified as non¬
current investments. However, that part of long term
investments which are expected to be realised within
twelve months from Balance Sheet date is also presented
under “Current Investment" under “Current portion of long
term investments" in consonance with the current / non¬
current classification of Schedule III of the Act.

1.2.7 INVENTORIES

(a) Inventories include raw material, work in progress,
finished goods, scrap and stores, spares and
consumables. Work in progress & finished goods are
carried at the weighted average cost or net realisable
value whichever is lower.

(b) Raw materials including materials in transit, stores
& spares, consumables and additives are valued at
lower of cost or net realisable value. However, these
items are realisable at cost if the finished products
in which they will be used, are expected to be sold
at or above cost. The cost is computed on weighted
average basis and the same is charged off to revenue
on its issue.

(c) The cost of inventories is computed to include all
cost of purchases cost of conversion standard
overheads and other related cost incurred in bringing
the inventories to their present condition.

(d) Net realisable value is the estimated selling price in
the ordinary course of business less the estimated
cost of completion and the estimated costs
necessary to make the sale.

1.2.8CASH AND CASH EQUIVALENTS

Cash and cash equivalents in the balance sheet comprise
cash at Banks and on hand and short-term deposits with
an original maturity of three months or less, which are
subject to an insignificant risk of changes in value.

For the statement of cash flows, cash and cash
equivalents consist of cash and short-term deposits, as
defined above.

1.2.9FOREIGN CURRENCY TRANSACTIONS AND BALANCES

Items included in the standalone financial statements are
measured using the currency of the primary economic
environment in which the Company operates (functional
currency). The standalone financial statements are
presented in Indian Rupee (?) which is the Company''s
functional and presentation currency.

Foreign exchange differences arising on foreign currency
borrowings is disclosed under finance cost other than

on ''Borrowing costs'' in accordance with Ind AS 23 which
is directly attributable to the acquisition construction or
production of a qualifying asset forming part of the cost
of the asset.

Net gain or loss on foreign currency translations on trade
receivables and trade payables is classified under other
income or other expenses.

(a) Initial Recognition

Foreign currency transactions are translated into the
functional currency using the exchange rates at the
date of the transaction. Exchange differences arising
on foreign currency transactions settled during the
year are recognised in the Statement of Profit and
Loss.

(b) Measurement of foreign currency items at the
Balance Sheet date

Monetary assets and liabilities denominated in
foreign currencies as at the balance sheet date
not covered by forward exchange contracts are
translated at year end rates. The resultant exchange
differences are recognised in the Statement of Profit
and Loss. Non-Monetary assets are recorded at the
rates prevailing on the date of the transaction.

1.2.10.EMPLOYEE BENEFITS

Short-term employee benefits

All employee benefits payable wholly within twelve
months after the end of the annual reporting period in
which the employees render the related services, are
classified as short-term employee benefits. Benefits such
as salaries, wages, short-term compensated absences,
performance incentives etc., and the expected cost of
bonus, ex-gratia are recognised during the period in which
the employee renders related service.

Post-employment benefits
Defined Contribution Plan

Payments to defined contribution retirement benefit
plans are recognised as an expense when employees have
rendered the service entitling them to the contributions.

Contribution as per Employee''s Provident Funds and
Miscellaneous Provisions Act, 1952 towards Provident
Fund and Family Pension Fund are provided for and
payments in respect thereof are made to the relevant
authorities on actual basis.

Short term employee benefits are recognised on an
undiscounted basis whereas long term employee benefits
are recognised on a discounted basis.

Defined Benefit Plan

The cost of providing benefits under the defined benefit
plan is determined using the projected unit credit method
with the actuarial valuations being carried out at the end
of each annual reporting period.

Gratuity: In accordance with applicable Indian Laws the
Company provides gratuity, a defined benefit retirement
plan (the Gratuity Plan) covering eligible employees. The
gratuity plan provides a lump sum payment to vested
employees at retirement or termination of employment
an amount based on the respective employees last drawn
salary and the years of employment with the Company.
Liability regarding Gratuity Plan is accrued based on
actuarial valuation at the Balance Sheet date.

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

Leave Encashment: In accordance with applicable Indian
Laws the Company provides Encashment of Leave a
defined benefit plan (Leave Encashment Plan) covering
all employees. Liability with regard to Leave Encashment
Plan is accrued based on actuarial valuation at the Balance
Sheet date.

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

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

(ii) The date that the Company recognises related
restructuring costs

Net interest is calculated by applying the discount rate
to the net defined benefit liability or asset. The Company
recognises the following changes in the net defined
benefit obligation as an expense in the statement of profit
and loss

(i) Service costs comprising current service costs past-
service costs gains and losses on curtailments and
non-routine Settlements; and

(ii) Net interest expense or income
Termination Benefits

When the employee early retirement/termination/
resignation/withdrawal the normal retirement benefit will
be paid based on the service up to the date of exit.

Employee Share based payments

The Company operates equity settled share-based
plan for the employees (Referred to as Employee Stock
Option Plan (ESOP)). ESOP granted to the employees are
measured at fair value of the stock options at the grant
date. Such fair value 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
shares that will eventually vest, with a corresponding
increase in equity (Share option outstanding A/c). At the
end of each reporting period, the Company revises its
estimate of the number of equity shares expected to vest.
The impact of the revision of the original estimates, if any,
is recognised in the Statement of Profit and Loss such
that cumulative expense reflects the revision estimate,
with a corresponding adjustment to the Share option
outstanding reserve.

The Company grants stock options to the employees of
its subsidiaries. The cost of such options, as determined
based on the fair value on the grant date, is accounted
for as an employee benefit expense in the books of the
Company. Since the Company does not recover this cost
from its subsidiaries, the corresponding amount is treated
as a deemed investment in the respective subsidiaries.

Treasury Shares

The Company has established the Pitti Engineering
Limited Employee Welfare Trust for administering its
Employee Stock Option Scheme and provided a loan to
the Trust for acquiring the Company''s shares from the
secondary market, of which shares were purchased during
the year. As the Trust is considered an extension of the
Company, all transactions between the Company and the
Trust including the loan and the investment in shares have
been eliminated in the standalone financial statements,
and the shares held by the Trust have been treated as
treasury shares. These shares are recognised at cost and
is disclosed separately as reduction from Other Equity
as Treasury Shares. No gain or loss is recognised in the
Statement of Profit and Loss on purchase, sale, issuance,
or cancellation of Treasury Shares.

1.2.11.BUSINESS COMBINATION

Business combinations involving entities or businesses
under common control are accounted for using the pooling
of interest method. Under pooling of interest method,
the assets and liabilities of the combining entities or
businesses are reflected at their carrying amounts after
adjusting necessary to harmonies the accounting policies.
The financial information in the financial statements
in respect of prior periods is restated as if the business

combination had occurred from the beginning of the
preceding period in the financial statements, irrespective
of the actual date of the combination. The identity of the
reserves is preserved in the same form in which they
appear in the financial statements of the transferor and
the difference, if any, between the amount recorded as
share capital issued plus any additional consideration in
the form of cash or other assets and the amount of share
capital of the transferor is transferred to capital reserve.

1.2.12BORROWING COSTS

Borrowing costs which are directly attributable to the
acquisition/construction or production of a qualifying
asset which are the assets that necessarily takes
substantial period to get ready for intended use or sale
till the time such assets are ready for intended use are
capitalised as part of the costs of such assets. Other
Borrowing costs are recognised as expenses in the year in
which they are incurred.

Borrowing cost includes interest amortisation of ancillary
costs incurred in connection with the arrangement of
borrowings and exchange differences arising from foreign
currency borrowings to the extent they are regarded as an
adjustment to the interest cost if any.

1.2.13LEASES

The Company as a lessee

As per Ind AS-116 the Company has recognised lease
liabilities and corresponding equivalent right-of-use
assets. The Company''s lease asset primarily consist of
leases for Land, Buildings, Plant & Machinery and Vehicles.
The Company assesses whether a contract contains a
lease at inception of a contract. A contract is or contains
a lease if the contract conveys the right to control the use
of an identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the
right to control the use of an identified asset the Company
assesses whether

(i) The contract involves the use of an identified asset.

(ii) The Company has substantially all the economic
benefits from use of the asset through the period of
the lease and

(iii) The Company has the right to direct the use of the
asset

At the date of commencement of the lease the
Company recognises a Right-of-Use (ROU) asset and a
corresponding lease liability for all lease arrangements in
which it is a lessee except for leases with a term of 12
months or less (short-term leases) and low value leases.

For these short-term and low-value leases the Company
recognises the lease payments as an operating expense.

Certain lease arrangements include the options to extend
or terminate the lease before the end of the lease term.
ROU assets and lease liabilities includes these options
when it is reasonably certain that they will be exercised.

The lease liability is initially measured at amortised cost
at the present value of the future lease payments. The
lease payments are discounted using the interest rate
implicit in the lease or if not readily determinable using
the incremental borrowing rates in the country of domicile
of these leases.

ROU assets are depreciated from the commencement
date on a straight-line basis over the shorter of the lease
term and useful life of the underlying asset. ROU assets 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.

Lease liability and ROU assets have been separately
presented in the Balance Sheet and lease payments have
been classified as financing cash flows.

1.2.14 EARNINGS PER SHARE

The basic Earnings Per Share (''EPS'') is computed by
dividing the net profit after tax for the period attributable
to equity shareholders (after deducting preference
dividends and attributable taxes) by the weighted average
number of equity shares outstanding during the year,
adjusted with treasury shares.

For calculating Diluted earnings Per Share the net profit
after tax for the period attributable to equity shareholders
and the weighted average number of shares outstanding
during the year are adjusted for the effects of all dilutive
potential equity shares. The dilutive potential equity
shares are deemed to be converted as of the beginning
of the year unless they have been issued at a later date.
After considering the number of options as per Scheme,
The effect is antidilution, hence there is no change in
diluted earning per share.

Potential equity shares are deemed to be dilutive only if
their conversion to equity shares decrease the net profit
per share from continuing ordinary operations. Potential

dilutive equity shares are deemed to be converted as at
the beginning of the period unless they have been issued
at a later date. The dilutive potential equity shares are
adjusted for the proceeds receivable had the shares been
actually issued at fair value (i.e. average market value of
the outstanding shares). Dilutive potential equity shares
are determined independently for each period presented.
The number of equity shares and potentially dilutive
equity shares are adjusted for share splits / reverse share
splits and bonus shares as appropriate.

1.2.15SEGMENT REPORTING

Operating segments are reported in a manner consistent
with the internal reporting provided to the Chief Operating
Decision Maker. The Founder & Chairman and Managing
Director & Chief Executive Officer have been identified as
the Chief Operating Decision Maker. Refer note 25.6 for
the segment information presented in the Consolidated
Financial Statements.

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Mar 31, 2024

NOTE 1: MATERIAL ACCOUNTING POLICIES INFORMATION

1.1. CORPORATE INFORMATION

Pitti Engineering Limited ("the Company”) is a public company incorporated in India. The registered office of the Company is located at 4th floor, Padmaja Landmark, Somajiguda, Hyderabad - 500082 Telangana India. Its shares are listed on Bombay Stock Exchange Ltd and National Stock Exchange of India Ltd.

The Company is engaged in the manufacturing of engineering products of iron and steel including electrical steel laminations stator & rotor core assemblies sub-assemblies pole assemblies die-cast rotors press tools and high precision machining of various metal components.

1.2. BASIS OF PREPARATION AND PRESENTATION

The standalone financial statements of the Company have been prepared in accordance with Indian Accounting standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules 2015 as amended from time to time.

Company’s standalone financial statements are presented in Indian Rupees (H) which is also its functional currency and all values are rounded to the nearest lakh (H 00000) except when otherwise indicated.

The Shareholders have the power to amend the Standalone Financial Statements after the issue.

1.3. PREPARATION OF STANDALONE FINANCIAL STATEMENTS

(a) Basis of Accounting

The standalone financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules 2015 read with Section 133 of Companies Act, 2013 as amended from time to time.

The standalone financial statements have been prepared on an accrual basis and in accordance with the historical cost basis except for certain financial instruments measured at fair value at the end of each reporting period as explained in the accounting policies below.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into

account when pricing the asset or liability at the measurement date. Fair value for measurement and / or disclosure purposes in these standalone financial statements is determined on such basis except for measurements that have some similarities to fair value but are not fair value such as net realizable value in Ind AS 2.

(b) Significant accounting judgments estimates and assumptions

The preparation of the Company’s standalone financial statements in conformity with Ind AS requires the management to make judgments estimates and assumptions that affect the reported amounts of revenues expenses assets and liabilities and the accompanying disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

The management believes that the estimates used in preparation of standalone financial statements are prudent and reasonable.

Estimates and underlying assumptions are reviewed at each reporting date. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future period is effected.

(c) Current/ Non-Current Classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is:

(i) Expected to be realized or intended to be sold or consumed in normal operating cycle

(ii) Held primarily for the purpose of trading

(iii) Expected to be realized within twelve months after the reporting period or

(iv) 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:

(i) It is expected to be settled in normal operating cycle

(ii) It is held primarily for the purpose of trading

(iii) It is due to be settled within twelve months after the reporting period or

The useful life of each tool has been estimated in number of strokes; hence Depreciation has also been done on the number of strokes made by each tool during the year. However if any tool wears out or gets obsolete before expiry of the estimated life the remaining value of the tool is depreciated during that year.

B. INTANGABLE ASSETS:

Intangible assets are recognized when it is probable that the future economic benefits that are attributable to the assets will flow to the Company and the cost of the assets can be measured reliably.

Intangible assets are stated at cost or acquisition less accumulated amortization and impairment loss if any.

Intangible assets including software is amortized over their estimated useful life on straight line basis from the date they are available for intended use subject to impairment test.

The estimated useful life and the amortization period of the intangible assets are reviewed at the end of each financial year and the amortization period is revised to reflect the changed pattern if any.

Development expenditures on an individual product/ project are recognized as an intangible asset when the Company can demonstrate the technical feasibility of completing the intangible asset so that the asset will be available for use or sale its intention to complete and use or sell the asset its ability to use or sell the asset how the asset will generate future economic benefits the availability of resources to complete the asset and the availability to measure reliably the expenditure during development.

Product development cost are amortized on a straight-line basis over a period of 60 months.

Subsequent cost

Subsequent costs incurred for replacement of a major component of an asset are included in the asset’s carrying cost or recognized as a separate

(iv) 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.

1.4. A. PROPERTY PLANT AND EQUIPMENT

Freehold land is measured at cost and not depreciated. All other items of property plant and equipment (includes Tools and Dies) are stated at cost less accumulated depreciation and impairment loss if any.

Cost includes cost of acquisition installation or construction other direct expenses incurred to bring the assets to its working condition and finance costs incurred up to the date the asset is ready for its intended use and excludes GST eligible for credit / setoff.

Such cost includes the cost of replacing part of the plant and equipment costs of dismantling and removing the item and restoring the site on which it is located and borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of plant and equipment are required to be replaced at intervals the same were depreciated separately based on their specific useful lives.

All other repair and maintenance costs are recognized in the statement of profit or loss as incurred.

The Company records a provision for dismantling cost towards Plant and Machinery wherever applicable. Dismantling costs are provided at the present value of future expenditure using the current pre-tax rate expected to be incurred to fulfil dismantling obligation and are recognized as part of the cost of the underlined asset. Any change in the present value of expenditure other than unwinding of discount on the provision is reflected as adjustment to the provision and the corresponding asset. The change in the provision

due to the unwinding of discount is recognized in the statement of profit and loss.

Capital work-in-progress in respect of assets which are not ready for their intended use are carried at cost comprising of direct costs related incidental expenses and attributable interest.

All identifiable Revenue expenses including interest incurred in respect of various projects / expansion net of income earned during the project development stage prior to its intended use are considered as pre - operative expenses and disclosed under Capital Work-in-Progress.

Depreciation is not recorded on capital work-inprogress until construction and installation is complete and the asset is ready for its intended use.

Advances paid towards the acquisition of fixed assets outstanding at each balance sheet date are disclosed as "Capital Advances” under other non-current assets.

Property plant and equipment are eliminated from standalone financial statements either on disposal or when retired from active use. Losses arising in the case of the retirement of property plant and equipment and gains or losses arising from disposal of property plant and equipment are recognized in the statement of profit and loss in the year of occurrence.

''Depreciable amount for assets is the cost of an asset or other amount substituted for cost less its estimated residual value. Property Plant and Equipment is provided on straight-line method over the useful life of the assets as specified in Schedule II to the Companies Act 2013. Building constructed on leasehold land is depreciated based on the useful life specified in Schedule II to the Companies Act 2013 where the lease period of the land is beyond the life of the building. Any Capital Expenditure costing H5000 or less are treated as a Revenue Expenditure and recognized in the statement of profit and loss in the year in which it is incurred.

asset as appropriate. The carrying values of the replaced components are recognized to statement of Profit and Loss when replaced.

De-recognition

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

Gains or losses arising from de-recognition of an intangible assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

C. INVESTMENT PROPERTY

Properties that are held for long-term rental yields and/ or for capital appreciation are classified as investment properties. Investment properties are stated at cost of acquisition or construction less accumulated depreciation and impairment if any. Depreciation is recognised using the straight-line method so as to amortise the cost of investment properties over their useful lives as specified in Schedule II of the Companies Act 2013. Transfers to or from investment properties are made at the carrying amount when and only when there is a change in use. An item of investment property is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of asset. Any gain or loss arising on the disposal or retirement of an item of investment property is determined as the difference between the sales proceeds and the carrying amount of the property and is recognised in the Statement of Profit and Loss.

1.5. IMPAIRMENT OF NON-FINANCIAL ASSETS:

An asset is treated as impaired when the carrying cost

of asset exceeds its recoverable value. An impairment

loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

Assessment for impairment is done at each Balance Sheet date as to whether there is any indication that an asset (tangible and intangible) may be impaired. For the purpose of assessing impairment the smallest identifiable group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets is considered as a cash generating unit. If any such indication exists an estimate of the recoverable amount of the individual asset/cash generating unit is made.

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.

1.6. REVENUE RECOGNITION

Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration entitled in exchange for those goods or services.

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

Revenue from rendering of services is recognised over the time by measuring the progress towards complete satisfaction of performance obligations at the reporting period. While in case of Job work services, the same is recognised after the completion of service.

Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price of goods sold and services rendered is net of variable consideration on account of various discounts offered by the company as part of the contract. Variable consideration are determined based on the most likely amount. Consideration is due upon satisfaction of performance obligations and a receivable is recognised when it becomes unconditional.

Payment terms agreed with a customer are as per business practice and there is no financing component involved in the transaction price.

(a) Interest income

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

(b) Dividend income

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

(c) Other income

Revenue in respect of other income is

recognized when a reasonable certainty as to its realization exists.

income from export incentives under Foreign Trade Policy relating to RodTep, duty drawback premium on sale of import licenses and lease license fee are recognized as income when the right to receive credit as per the terms of the scheme is established in respect of the exports made and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.

1.7. INVESTMENTS

The company has accounted for its investment in subsidiary at cost less impairment loss (if any).

All other equity investments are measured at fair value, with value changes recognized in Statement of Profit and Loss, except for those equity investments for which the company has elected to present the change in ''Other Comprehensive Income’.

Investments are classified into current and non-current investments. Investments that are readily realizable and intended to be held for not more than a year from the date of acquisition are classified as current investments. All other investments are classified as non-current investments. However that part of long term investments which are expected to be realized within twelve months from Balance Sheet date is also presented under "Current Investment” under "Current portion of long term investments” in consonance with the current / noncurrent classification of Schedule III of the Act.

1.8. INVENTORIES

(a) Inventories include raw material, work in progress, finished goods, scrap and stores, spares and consumables. Work in progress & finished goods are

carried at the weighted average cost or net realizable value whichever is lower.

(b) Raw materials including materials in transit, stores & spares, consumables and additives are valued at lower of cost or net realizable value. However, these items are considered to be realisable at cost if the finished products in which they will be used, are expected to be sold at or above cost. The cost is computed on weighted average basis and the same is charged off to revenue on its issue..

(c) The cost of inventories is computed to include all cost of purchases cost of conversion standard overheads and other related cost incurred in bringing the inventories to their present condition.

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

1.9. CASH AND CASH EQUIVALENTS:

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above.

1.10. FOREIGN CURRENCY TRANSACTIONS AND BALANCES

Items included in the standalone financial statements are measured using the currency of the primary economic environment in which the Company operates (''functional currency’). The standalone financial statements are presented in Indian Rupee (INR) which is the Company’s functional and presentation currency.

Foreign exchange differences arising on foreign currency borrowings is disclosed under finance cost other than on ''Borrowing costs’ in accordance with Ind AS 23 which is directly attributable to the acquisition construction or production of a qualifying asset forming part of the cost of the asset.

Net gain or loss on foreign currency translations on trade receivables and trade payables is classified under other income or other expenses as the case may be.

(a) Initial Recognition

Foreign currency transactions are translated into the functional currency using the exchange rates at the date of the transaction. Exchange differences arising on foreign currency transactions settled during the year are recognized in the Statement of Profit and Loss.

(b) Measurement of foreign currency items at the Balance Sheet date

Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date not covered by forward exchange contracts are translated at year end rates. The resultant exchange differences are recognized in the Statement of Profit and Loss. Non-Monetary assets are recorded at the rates prevailing on the date of the transaction.

1.11. EMPLOYEE BENEFITS

Short-term employee benefits:

All employee benefits payable wholly within twelve months after the end of the annual reporting period in which the employees render the related services, are classified as short term employee benefits. Benefits such as salaries, wages, short-term compensated absences, performance incentives etc., and the expected cost of bonus, ex-gratia are recognised during the period in which the employee renders related service.

Post-employment benefits:

Defined Contribution Plan

Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered the service entitling them to the contributions.

Contribution as per Employee’s Provident Funds and Miscellaneous Provisions Act 1952 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

Short term employee benefits are recognised on an undiscounted basis whereas Long term employee benefits are recognised on a discounted basis.

Defined Benefit Plan

The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method with the actuarial valuations being carried out at the end of each annual reporting period.

Gratuity: In accordance with applicable Indian Laws the Company provides gratuity a defined benefit retirement plan (the Gratuity Plan) covering eligible employees. The gratuity plan provides a lump sum payment to vested employees at retirement or termination of employment an amount based on the respective employee’s last drawn salary and the years of employment with the Company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date.

Remeasurements comprising of actuarial gains and losses the effect of the asset ceiling excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts

included in net interest on the net defined benefit liability) are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through Other Comprehensive Income (OCI) in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.

Leave Encashment: In accordance with applicable Indian Laws the Company provides Encashment of Leave a defined benefit plan (Leave Encashment Plan) covering all employees. Liability with regard to Leave Encashment Plan is accrued based on actuarial valuation at the Balance Sheet date.

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

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

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

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company recognizes the following changes in the net defined benefit obligation as an expense in the statement of profit and loss:

(i) Service costs comprising current service costs past-service costs gains and losses on curtailments and non-routine Settlements; and

(ii) Net interest expense or income Termination Benefits

When the employee early retirement/termination/ resignation/withdrawal the normal retirement benefit will be paid based on the service up to the date of exit.

1.12. BORROWING COSTS

Borrowing costs which are directly attributable to the acquisition/construction or production of a qualifying asset which are the assets that necessarily takes substantial period of time to get ready for intended use or sale till the time such assets are ready for intended use are capitalized as part of the costs of such assets. Other Borrowing costs are recognized as expenses in the year in which they are incurred.

Borrowing cost includes interest amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost if any.

1.13. LEASES

The Company as a lessee

As per Ind AS-116 the Company has recognized lease liabilities and corresponding equivalent right-of-use

assets. The Company’s lease asset primarily consist of leases for Land Buildings, Plant & Machinery and Vehicles. The Company assesses whether a contract contains a lease at inception of a contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset the Company assesses whether:

(i) The contract involves the use of an identified asset.

(ii) The Company has substantially all the economic benefits from use of the asset through the period of the lease and

(iii) The Company has the right to direct the use of the asset.

At the date of commencement of the lease the Company recognizes a Right-of-Use (ROU) asset and a corresponding lease liability for all lease arrangements in which it is a lessee except for leases with a term of 12 months or less (short-term leases) and low value leases. For these short-term and low-value leases the Company recognizes the lease payments as an operating expense.

Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or if not readily determinable using the incremental borrowing rates in the country of domicile of these leases.

ROU assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. ROU assets 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.

Lease liability and ROU assets have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.

1.14. EARNINGS PER SHARE

The basic earnings per share (''EPS’) is computed by dividing the net profit after tax for the period attributable to

equity shareholders (after deducting preference dividends and attributable taxes) by weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share the net profit after tax for the period attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. The dilutive potential equity shares are deemed to be converted as of the beginning of the year unless they have been issued at a later date.

Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares as appropriate.

1.15. SEGMENT REPORTING

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker. The Founder & Chairman and Managing Director & Chief Executive Officer have been identified as the Chief Operating Decision Maker. Refer note 25.12 for the segment information presented.

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Mar 31, 2023

NOTE 1: SIGNIFICANT ACCOUNTING POLICIES

1.1. CORPORATE INFORMATION

Pitti Engineering Limited ("the Company") is a public company incorporated in India. The registered office of the Company is located at 4th floor, Padmaja Landmark, Somajiguda, Hyderabad - 500082 Telangana India. Its shares are listed on Bombay Stock Exchange Ltd and National Stock Exchange of India Ltd.

The Company is engaged in the manufacturing of engineering products of iron and steel including electrical steel laminations stator & rotor core assemblies subassemblies pole assemblies die-cast rotors press tools and high precision machining of various metal components.

1.2. BASIS OF PREPARATION AND PRESENTATION

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

Company''s financial statements are presented in Indian Rupees (H) which is also its functional currency and all values are rounded to the nearest lakh (H 00000) except when otherwise indicated.

The shareholders have the power to amend the Financial Statements after the issue.

1.3. PREPARATION OF FINANCIAL STATEMENTS

(a) Basis of Accounting

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules 2015 read with Section 133 of Companies Act, 2013 as amended from time to time.

The Financial statements have been prepared on an accrual basis and in accordance with the on historical cost basis except for certain financial instruments measured at fair value at the end of each reporting period as explained in the accounting policies below.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of

an asset or a liability the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and / or disclosure purposes in these financial statements is determined on such basis except for measurements that have some similarities to fair value but are not fair value such as net realizable value in Ind AS 2.

(b) Significant accounting judgments estimates and assumptions

The preparation of the Company''s financial statements in conformity with Ind AS requires the management to make judgments estimates and assumptions that affect the reported amounts of revenues expenses assets and liabilities and the accompanying disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

The management believes that the estimates used in preparation of financial statements are prudent and reasonable.

Estimates and underlying assumptions are reviewed at each reporting date. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future period is effected.

(c) Current/ Non-Current Classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is:

(i) Expected to be realized or intended to be sold or consumed in normal operating cycle

(ii) Held primarily for the purpose of trading

(iii) Expected to be realized within twelve months after the reporting period or

(iv) 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:

(i) It is expected to be settled in normal operating cycle

Depreciation on tangible fixed assets has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act 2013 except in respect of the assets where the useful life estimated by Management is different from the Act details are given below.

Category of asset	Estimated useful lives as assessed	Useful lives as per
	by the Management	Schedule II to the Act
Factory Building	5-30 years	30 years
Leasehold Building	8-30 years	30 years
Furniture and Fixtures	2-10 years	10 years

Category of asset	Estimated useful lives as assessed by the Management	Useful lives as per Schedule II to the Act
Patterns Match Plates	5-10 years	15 years
Plant & Machinery	2-20 years	15 years
Electricals	2-15 years	10 years
Office Equipment	3-15 years	5 years
Lab & Test Equipment	2-10 years	10 years
Other Miscellaneous Equipment	2-25 years	15 years
Vehicles-Motor Cycle	10 years	10 years
Vehicles-Motor Cars	2-8 years	8 years
Computers - Servers	6 years	6 years
Computers - Desktops	3-6 years	3 years

(ii) It is held primarily for the purpose of trading

(iii) It is due to be settled within twelve months after the reporting period or

(iv) 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.

1.4. PROPERTY PLANT AND EQUIPMENT

Freehold land is measured at cost and not depreciated. All other items of property plant and equipment (includes Tools and Dies) are stated at cost less accumulated depreciation and impairment loss if any.

Cost includes cost of acquisition installation or construction other direct expenses incurred to bring the assets to its working condition and finance costs incurred up to the date the asset is ready for its intended use and excludes GST eligible for credit / setoff.

Such cost includes the cost of replacing part of the plant and equipment costs of dismantling and removing the item and restoring the site on which it is located and borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of plant and equipment are required to be replaced at intervals the same were depreciated separately based on their specific useful lives.

All other repair and maintenance costs are recognized in the statement of profit or loss as incurred.

The Company records a provision for dismantling cost towards Plant and Machinery wherever applicable. Dismantling costs are provided at the present value of future expenditure using the current pre-tax rate expected to be incurred to fulfil dismantling obligation and are recognized as part of the cost of the underlined asset. Any change in the present value of expenditure other than unwinding of discount on the provision is reflected as adjustment to the

provision and the corresponding asset. The change in the provision due to the unwinding of discount is recognized in the statement of profit and loss.

Capital work-in-progress in respect of assets which are not ready for their intended use are carried at cost comprising of direct costs related incidental expenses and attributable interest.

All identifiable Revenue expenses including interest incurred in respect of various projects / expansion net of income earned during the project development stage prior to its intended use are considered as pre - operative expenses and disclosed under Capital Work-in-Progress.

Depreciation is not recorded on capital work-in-progress until construction and installation is complete and the asset is ready for its intended use.

Advances paid towards the acquisition of fixed assets outstanding at each balance sheet date are disclosed as "Capital Advances” under other non-current assets.

Property plant and equipment are eliminated from financial statements either on disposal or when retired from active use. Losses arising in the case of the retirement of property plant and equipment and gains or losses arising from disposal of property plant and equipment are recognized in the statement of profit and loss in the year of occurrence.

''Depreciable amount for assets is the cost of an asset or other amount substituted for cost less its estimated residual value. Property Plant and Equipment is provided on straight-line method over the useful life of the assets as specified in Schedule II to the Companies Act 2013. Building constructed on leasehold land is depreciated based on the useful life specified in Schedule II to the Companies Act 2013 where the lease period of the land is beyond the life of the building. Any Capital Expenditure costing 5000 or less are treated as a Revenue Expenditure and recognized in the statement of profit and loss in the year in which it is incurred.

The useful life of each tool has been estimated in number of strokes; hence Depreciation has also been done on the number of strokes made by each tool during the year. However if any tool wears out or gets obsolete before expiry of the estimated life the remaining value of the tool is depreciated during that year.

Intangible assets are recognized when it is probable that the future economic benefits that are attributable to the assets will flow to the Company and the cost of the assets can be measured reliably.

Intangible assets are stated at cost or acquisition less accumulated amortization and impairment loss if any.

Intangible assets including software is amortized over their estimated useful life on straight line basis from the date they are available for intended use subject to impairment test.

The estimated useful life and the amortization period of the intangible assets are reviewed at the end of each financial year and the amortization period is revised to reflect the changed pattern if any.

Development expenditures on an individual product/ project are recognized as an intangible asset when the Company can demonstrate the technical feasibility of completing the intangible asset so that the asset will be available for use or sale its intention to complete and use or sell the asset its ability to use or sell the asset how the asset will generate future economic benefits the availability of resources to complete the asset and the availability to measure reliably the expenditure during development.

Product development cost are amortized on a straightline basis over a period of 60 months.

Subsequent cost

Subsequent costs incurred for replacement of a major component of an asset are included in the asset''s carrying cost or recognized as a separate asset as appropriate. The carrying values of the replaced components are recognized to statement of Profit and Loss when replaced.

De-recognition

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

Gains or losses arising from de-recognition of an intangible assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

INVESTMENT PROPERTY

Properties that are held for long-term rental yields and/ or for capital appreciation are classified as investment properties. Investment properties are stated at cost of acquisition or construction less accumulated depreciation and impairment if any. Depreciation is recognised using the straight-line method so as to amortise the cost of investment properties over their useful lives as specified in Schedule II of the Companies Act 2013. Transfers to or from investment properties are made at the carrying amount when and only when there is a change in use. An item of investment property is derecognised upon disposal or when no future economic benefits are expected to arise

from the continued use of asset. Any gain or loss arising on the disposal or retirement of an item of investment property is determined as the difference between the sales proceeds and the carrying amount of the property and is recognised in the Statement of Profit and Loss.

1.5. REVENUE RECOGNITION

Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration entitled in exchange for those goods or services.

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

Revenue from rendering of services is recognised over the time by measuring the progress towards complete satisfaction of performance obligations at the reporting period.

Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price of goods sold and services rendered is net of variable consideration on account of various discounts offered by the company as part of the contract. Consideration is due upon satisfaction of performance obligations and a receivable is recognised when it becomes unconditional.

(a) Interest income

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

(b) Dividend income

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

(c) Other income

Revenue in respect of other income is recognized when a reasonable certainty as to its realization exists.

Income from export incentives under Foreign Trade Policy relating to RodTep, duty drawback premium on sale of import licenses and lease license fee are recognized as income when the right to receive credit as per the terms of the scheme is established in respect of the exports made and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.

1.6. INVESTMENTS

The company has accounted for its investment in subsidiary at cost less impairment loss (if any).

All other equity investments are measured at fair value, with value changes recognized in Statement of Profit and Loss, except for those equity investments for which the company has elected to present the change in ''Other Comprehensive Income''.

Investments are classified into current and non-current investments. Investments that are readily realizable and intended to be held for not more than a year from the date of acquisition are classified as current investments. All other investments are classified as non-current investments. However that part of long term investments which are expected to be realized within twelve months from Balance Sheet date is also presented under "Current Investment” under "Current portion of long term investments” in consonance with the current / noncurrent classification of Schedule III of the Act.

1.7. INVENTORIES

(a) Inventories include raw material work in progress finished goods scrap and stores spares and consumables and is carried at the weighted average cost or net realizable value whichever is lower.

(b) The cost of inventories is computed to include all cost of purchases cost of conversion standard overheads and other related cost incurred in bringing the inventories to their present condition.

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

1.8. FOREIGN CURRENCY TRANSACTIONS AND BALANCES

Items included in the financial statements are measured using the currency of the primary economic environment in which the Company operates (''functional currency''). The financial statements are presented in Indian Rupee (H) which is the Company''s functional and presentation currency.

Foreign exchange differences arising on foreign currency borrowings is disclosed under finance cost other than on ''Borrowing costs'' in accordance with Ind AS 23 which is directly attributable to the acquisition construction or production of a qualifying asset forming part of the cost of the asset.

Net gain or loss on foreign currency translations on trade receivables and trade payables is classified under other income or other expenses as the case may be.

(a) Initial Recognition

Foreign currency transactions are translated into the functional currency using the exchange rates at the date of the transaction. Exchange differences arising on foreign currency transactions settled during the year are recognized in the Statement of Profit and Loss.

(b) Measurement of foreign currency items at the Balance Sheet date

Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date not covered by forward exchange contracts are translated at year end rates. The resultant exchange differences are recognized in the Statement of Profit and Loss. NonMonetary assets are recorded at the rates prevailing on the date of the transaction.

1.9. EMPLOYEE BENEFITS

Defined Contribution Plan

Contribution as per Employee''s Provident Funds and Miscellaneous Provisions Act 1952 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

Short term employee benefits are recognised on an undiscounted basis whereas Long term employee benefits are recognised on a discounted basis.

Defined Benefit Plan

Gratuity: In accordance with applicable Indian Laws the Company provides gratuity a defined benefit retirement plan (the Gratuity Plan) covering eligible employees. The gratuity plan provides a lump sum payment to vested employees at retirement or termination of employment an amount based on the respective employee''s last drawn salary and the years of employment with the Company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date.

Leave Encashment: In accordance with applicable Indian Laws the Company provides Encashment of Leave a defined benefit plan (Leave Encashment Plan) covering all employees. Liability with regard to Leave Encashment Plan is accrued based on actuarial valuation at the Balance Sheet date.

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 recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through Other Comprehensive Income (OCI) in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.

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

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

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

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company recognizes the following changes in the net defined benefit obligation as an expense in the statement of profit and loss:

(i) Service costs comprising current service costs past-service costs gains and losses on curtailments and non-routine Settlements; and

(ii) Net interest expense or income

Termination Benefits

When the employee early retirement/termination/ resignation/withdrawal the normal retirement benefit will be paid based on the service up to the date of exit.

1.10. BORROWING COSTS

Borrowing cost includes interest amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost if any.

Borrowing costs which are directly attributable to the acquisition/construction or production of a qualifying asset till the time such assets are ready for intended use

are capitalized as part of the costs of such assets. Other Borrowing costs are recognized as expenses in the year in which they are incurred.

1.11. LEASES

The Company as a lessee

As per Ind AS-116 the Company has recognized lease liabilities and corresponding equivalent right-of-use assets. The Company''s lease asset primarily consist of leases for Land Buildings Plant & Machinery and Vehicles. The Company assesses whether a contract contains a lease at inception of a contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset the Company assesses whether:

(i) The contract involves the use of an identified asset.

(ii) The Company has substantially all the economic benefits from use of the asset through the period of the lease and

(iii) The Company has the right to direct the use of the asset.

At the date of commencement of the lease the Company recognizes a Right-of-Use (ROU) asset and a corresponding lease liability for all lease arrangements in which it is a lessee except for leases with a term of 12 months or less (short-term leases) and low value leases. For these short-term and low-value leases the Company recognizes the lease payments as an operating expense.

Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or if not readily determinable using the incremental borrowing rates in the country of domicile of these leases.

ROU assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. ROU assets 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.

Lease liability and ROU assets have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.

1.12. IMPAIRMENT

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

Assessment for impairment is done at each Balance Sheet date as to whether there is any indication that an asset (tangible and intangible) may be impaired. For the purpose of assessing impairment the smallest identifiable group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets is considered as a cash generating unit. If any such indication exists an estimate of the recoverable amount of the individual asset/cash generating unit is made.

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.

1.13. EARNINGS PER SHARE

The basic earnings per share (''EPS'') is computed by dividing the net profit after tax for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share the net profit after tax for the period attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. The dilutive potential equity

shares are deemed to be converted as of the beginning of the year unless they have been issued at a later date.

Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares as appropriate.

1.14. SEGMENT REPORTING

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker. The Chairman and Managing Director and Vice Chairman and Managing Director have been identified as the Chief Operating Decision Maker. Refer note 25.11 for the segment information presented.

1.15. PROVISIONS AND CONTINGENCIES

The Company creates a provision when there exists a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may but probably will not require an outflow of resources.

When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources is remote no provision or disclosure is made.

The expenses relating to a provision is presented in the Statement of Profit & Loss net of any reimbursement.

1.16. TAXATION

Current Income Tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where the Company operates and generates taxable income.

Current income tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognized in correlation to the underlying transaction either in Other Comprehensive Income (OCI) or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

The Company has adopted and effected the reduced corporate tax rate permitted under section 115BAA of the Income Tax Act 1961 as per the Taxation Laws (Amendment) Ordinance 2019. The tax calculations for the year ended 31st March 2022 have been made accordingly.

Deferred Tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Financial Statements and the corresponding tax bases used in the computation of taxable profit.

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

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of Deferred tax liabilities and assets are reviewed at the end of each reporting period.

1.17. 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

Initial Recognition and Measurement

All financial assets are recognized initially at fair value in the case of financial assets not recorded at fair value through profit or loss transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date i.e. the date that the Company commits to purchase or sell the asset.

However, Trade receivables that do not contain a significant financing component are measured at transaction price.

Subsequent Measurement

For purposes of subsequent measurement financial assets are classified in four categories:

(i) Debt instruments at amortized cost

(ii) Debt instruments at fair value through other comprehensive income (FVTOCI)

(iii) Debt instruments derivatives and equity instruments at fair value through profit or loss (FVTPL)

(iv) Equity instruments measured at fair value through other comprehensive income (FVTOCI)

Debt Instruments at Amortized Cost

A ''debt instrument'' is measured at the amortized cost if both the following conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows

and

b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

This category is the most relevant to the Company. After initial measurement such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method.

Equity Investments

All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognized by an acquirer in a business combination to which Ind AS 103 applies are classified as at FVTPL. For all other equity instruments the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument by- instrument basis. The classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as at FVTOCI then all fair value changes on the instrument excluding dividends are recognized in the OCI. There is no recycling of the amounts from OCI to P&L even on sale of investment. However the Company may transfer the cumulative gain or loss within equity.

Derecognition

A financial asset (or where applicable a part of a financial asset or part of a group of similar financial assets) is primarily derecognized when:

(i) The rights to receive cash flows from the asset have expired or

(ii) The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''pass-through'' arrangement and either

(a) The Company has transferred substantially all the risks and rewards of the asset or

(b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.

Impairment of Financial Assets

In accordance with Ind AS 109 the Company uses expected credit loss model for evaluating impairment of financial assets other than those measured at sale value through profit and loss. Expected credit losses are measured through a loss allowance at an amount equal to :

- The twelve months expected credit losses (expected credit losses that result from those default events on the financial instrument but are possible within twelve months after the reporting date.) : or

- Full life time expected credit losses (expected credit losses that result from those default events over the life of the financial instrument).

For trade receivables the Company applies simplified approach which requires expected lifetime losses to be recognized from initial recognition of the receivables at every reporting date the existing trade receivables are reviewed and accordingly required credit loss is recognized in books.

For other assets (other than trade receivables) the Company uses twelve months expected credit loss to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full life time expected credit loss is used.

Financial Liabilities

Initial Recognition and Measurement

Financial liabilities are classified at initial recognition as financial liabilities at fair value through profit or loss loans and borrowings payables or as derivatives designated as hedging instruments in an effective hedge as appropriate.

All financial liabilities are recognized initially at fair value and in the case of loans and borrowings and payables net of directly attributable transaction costs.

The Company''s financial liabilities include trade and other payables loans and borrowings including bank overdrafts financial guarantee contracts and derivative financial instruments.

Subsequent Measurement

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

Loans and Borrowings

This is the category most relevant to the Company. After initial recognition interest-bearing loans and borrowings are subsequently measured at amortized cost using the Effective Interest Rate (EIR) method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.

Derecognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms or the terms of an existing liability are substantially modified such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.

Derivative Financial Instrument and Hedge Accounting

The company uses derivative financial instruments such as forward exchange contracts and interest rate risk exposures to hedge its risk associated with foreign currency fluctuations and changes in interest rates.

Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and / or disclosure purposes in these financial statements is determined on such basis except for measurements that have some similarities to fair value but are not fair value such as net realizable value in Ind AS 2.

Levels of Risk in Fair Value Measurement:

Level 1 - The fair value of financial instruments quoted in active markets is based on their quoted closing price at the balance sheet date.

Level 2 - The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques using observable market data. Such valuation techniques include discounted cash flows, standard valuation models based on market parameters for interest rates, yield curves or foreign exchange rates, dealer quotes for similar instruments and use of comparable arm''s length transactions.

Level 3 - The fair value of financial instruments that are measured on the basis of entity specific valuations using inputs that are not based on observable market data (unobservable inputs)

1.18. EXCEPTIONAL ITEM

Exceptional items are disclosed separately in the financial statements where it is necessary to do so to provide further understanding of the financial performance of the Company. These are material items of income or expense that have to be shown separately due to their nature or incidence.

1.19 GOVERNMENT GRANT

Government grants including any non-monetary grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be compiled with. Government grants are recognized in the statement of profit and loss on a systematic basis over the periods in which the related costs, which the grants are intended to compensate, are recognised as expenses. Government grants related to property, plant and equipment are presented at fair value and grants are recognised as deferred income.

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Mar 31, 2018

NOTE 1: SIGNIFICANT ACCOUNTING POLICIES

1.1. Corporate Information

Pitti Engineering Limited (Formerly Pitti Laminations Limited) (“the Company”) is a public Company domiciled in India and incorporated under the Companies Act, 1956. Its shares are listed on BSE Ltd and National Stock Exchange of India Ltd. The company is engaged in the manufacturing of Electrical Steel Laminations, Motor Cores, Sub-Assemblies, Die-Cast Rotors, Press Tools and machining of metal components.

1.2. Statement of Compliance

The financial statements of the Company have been prepared in accordance with Indian Accounting standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies Accounting Standard (Amendment Rules 2016).

The financial statements are the company’s first Ind AS and covered by Ind AS 101 ‘first time adoption of Indian Accounting Standards for the financial year 2017-18. For all periods up to and including the year ended 1st April 2016, the Company prepared its financial statements in accordance with the accounting standards notified under the section 133 of the Companies Act 2013, read together with the Companies (Accounts) Rules, 2014 (Indian GAAP).

An explanation of how the transition to Ind AS has affected the company’s equity and its net profit is provided in Note 2.22.

1.3. Preparation of Financial Statements

(a) Basis of Accounting

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

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

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and / or disclosure purposes in these financial statements is determined on such basis, except for measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS 2.

(b) Significant accounting judgments, estimates and assumptions

The preparation of the Company’s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities.

Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

The management believes that the estimates used in preparation of financial statements are prudent and reasonable.

(c) Current/ Non-Current Classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is:

(i) Expected to be realized or intended to be sold or consumed in normal operating cycle

(ii) Held primarily for the purpose of trading

(iii) Expected to be realized within twelve months after the reporting period, or

(iv) 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:

(i) It is expected to be settled in normal operating cycle

(ii) It is held primarily for the purpose of trading

(iii) I t is due to be settled within twelve months after the reporting period, or

(iv) 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.

1.4. Property, Plant and Equipment

Freehold land is carried at historical costs. All other items of property, plant and equipment (includes Tools and Dies) are stated at cost less accumulated depreciation and impairment loss, if any.

Cost includes cost of acquisition, installation or construction, other direct expenses incurred to bring the assets to its working condition and finance costs incurred up to the date the asset is ready for its intended use and excludes CENVAT / Value Added Tax / GST eligible for credit / setoff.

Such cost includes the cost of replacing part of the plant and equipment, costs of dismantling and removing the item and restoring the site on which it is located and borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of plant and equipment are required to be replaced at intervals, the same were depreciated separately based on their specific useful lives. Likewise, when a major inspection is preformed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in the statement of profit or loss as incurred.

Dismantling cost is estimated at 5% of the original cost of the assets and to that extent the provision is created and shown under noncurrent liability.

Capital work-in-progress in respect of assets which are not ready for their intended use are carried at cost, comprising of direct costs, related incidental expenses and attributable interest.

All identifiable Revenue expenses including interest incurred in respect of various projects / expansion, net of income earned during the project development stage prior to its intended use, are considered as pre - operative expenses and disclosed under Capital Work-in-Progress.

Advances paid towards the acquisition of fixed assets outstanding at each balance sheet date are disclosed as “Capital Advances” under other noncurrent assets.

Property, plant and equipment are eliminated from financial statements, either on disposal or when retired from active use. Losses arising in the case of the retirement of property, plant and equipment and gains or losses arising from disposal of property, plant and equipment are recognized in the statement of profit and loss in the year of occurrence.

Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value. Property, Plant and Equipment is provided on straight-line method, over the useful life of the assets, as specified in Schedule II to the Companies Act, 2013. Building constructed on leasehold land is depreciated based on the useful life specified in Schedule II to the Companies Act, 2013, where the lease period of the land is beyond the life of the building. Any Capital Expenditure costing Rs. 5,000 or less are treated as a Revenue Expenditure and recognized in the statement of profit and loss in the year in which it is incurred.

Depreciation on tangible fixed assets has been provided on the straight-line method, except tools which are depreciated as per number of strokes, as per the useful life prescribed in Schedule II to the Companies Act, 2013.

Intangible assets are recognized when it is probable that the future economic benefits that are attributable to the assets will flow to the Group and the cost of the assets can be measured reliably.

Intangible assets are stated at cost or acquisition less accumulated amortization and impairment loss, if any.

Intangible assets including software is amortized over their estimated useful life on straight line basis from the date they are available for intended use, subject to impairment test.

The estimated useful life of the intangible assets and the amortization period are reviewed at the end of each financial year and the amortization period is revised to reflect the changed pattern, if any.

Subsequent cost

Subsequent costs incurred for replacement of a major component of an asset are included in the asset’s carrying cost or recognized as a separate asset, as appropriate. The carrying value of the replaced component are recognized to statement of Profit and Loss when replaced.

De-recognition

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

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

1.5. Revenue / Expenditure Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. The company has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks.

(a) Interest income

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

(b) Dividend income

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

(C) Other income

Revenue in respect of other income is recognized when a reasonable certainty as to its realization exists.

Income from export incentives such as duty drawback and premium on sale of import licenses, and lease license fee are recognized on accrual basis.

1.6. Investments

Investments are classified into current and non-current investments. Investments that are readily realizable and intended to be held for not more than a year from the date of acquisition are classified as current investments. All other investments are classified as non-current investments. However, that part of long term investments which are expected to be realized within twelve months from Balance Sheet date is also presented under “Current Investment” under “Current portion of long term investments” in consonance with the current / noncurrent classification of Schedule III of the Act.

Equity investments are stated at fair value.

1.7. Inventories

(a) Inventories include Raw Material, work in progress, finished goods, scrap and stores, spares and consumables are carried at the lower of cost and net realizable value.

(b) The following basis of valuation is applied for valuation of Inventories.

(c) The cost of inventories have been computed to include all cost of purchases, cost of conversion, standard overheads and other related cost incurred in bringing the inventories to their present condition.

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

1.8. Foreign Currency Transactions and Balances

(a) Initial Recognition

Foreign currency transactions are recorded using the exchange rates prevailing on the date’s respective transactions. Exchange differences arising on foreign currency transactions settled during the year are recognized in the Statement of Profit and Loss.

(b) Measurement of foreign currency items at the Balance Sheet date

Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date, not covered by forward exchange contracts, are translated at year end rates. The resultant exchange differences are recognized in the Statement of Profit and Loss. Non-Monetary assets are recorded at the rates prevailing on the date of the transaction.

(c) Forward Contracts

The Company enters into forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments.

The Company does not enter into any derivative instruments for trading or speculative purposes.

The premium or discount arising at the inception of forward exchange contract is amortized and recognized as an expense/income over the life of the contract. Exchange differences on such contracts are recognized in the Statement of Profit and Loss in the period in which the exchange rates change. Any Profit or Loss arising on cancellation or renewal of such forward exchange contract is also recognized as income or expense for the period.

1.9. Employee Benefits

Defined Contribution Plan:

Contribution as per Employee’s Provident Funds and Miscellaneous Provisions Act, 1952 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

Defined Benefit Plan:

Gratuity: In accordance with applicable Indian Laws, the company provides gratuity, a defined benefit retirement plan (the Gratuity Plan) covering all employees. The gratuity plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee’s last drawn salary and the years of employment with the company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date.

Leave Encashment: In accordance with applicable Indian Laws, the company provides Encashment of Leave, a defined benefit plan (Leave Encashment Plan) covering all employees. Liability with regard to Leave Encashment Plan is accrued based on actuarial valuation at the Balance Sheet date.

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 recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.

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

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

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

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company recognizes the following changes in the net defined benefit obligation as an expense in the statement of profit and loss:

(i) Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine Settlements; and

(ii) Net interest expense or income

1.10. Borrowing Costs

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost, if any.

Borrowing costs, which are directly attributable to the acquisition/ construction of fixed assets, till the time such assets are ready for intended use, are capitalized as part of the costs of such assets. Other Borrowing costs are recognized as expenses in the year in which they are incurred.

1.11. LEASES

Assets acquired by way of finance lease are capitalized at the lower of the fair value and the present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between finance charge and reduction of the lease liability based on the implicit rate of return. Finance charges are recognized as finance costs in the Statement of Profit and Loss. Lease rentals paid in respect of operating leases are recognized as an expense in the statement of Profit and Loss.

1.12. Impairment

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

Assessment for impairment is done at each Balance Sheet date as to whether there is any indication that an asset (tangible and intangible) may be impaired. For the purpose of assessing impairment, the smallest identifiable group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets is considered as a cash generating unit. If any such indication exists, an estimate of the recoverable amount of the individual asset/cash generating unit is made.

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.

1.13. Earnings Per Share

The basic earnings per share (‘EPS’) is computed by dividing the net profit after tax for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit after tax for the period attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. The dilutive potential equity shares are deemed to be converted as of the beginning of the year, unless they have been issued at a later date.

Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

1.14. SEGMENT REPORTING

Segments are identified having regard to the dominant source and nature of risks and returns and internal organization and management structure. The Company has considered only one business segments as the primary segments for disclosure. Geographical segment is recognized as Secondary Segment.

1.15. Provisions And

Contingencies

The Company creates a provision when there exists a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources.

When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources is remote, no provision or disclosure is made.

The expenses relating to a provision is presented in the Statement of Profit & Loss net of any reimbursement.

1.16. Taxation Current Income Tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the company operates and generates taxable income.

Current income tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognized in correlation to the underlying transaction either in Other Comprehensive Income (OCI) or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred Tax

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

Deferred tax liabilities are recognized for all taxable temporary differences, except:

(i) When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss

(ii) In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future

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

(i) When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss

(ii) In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

1.17. 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 Initial Recognition and Measurement

All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date, i.e., the date that the company commits to purchase or sell the asset.

Subsequent Measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

(i) Debt instruments at amortized cost

(ii) Debt instruments at fair value through other comprehensive income (FVTOCI)

(iii) Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)

(iv) Equity instruments measured at fair value through other comprehensive income (FVTOCI)

Debt Instruments at Amortized Cost

A ‘debt instrument’ is measured at the amortized cost if both the following conditions are met:

a) The asset is held within a business model, whose objective is to hold assets for collecting contractual cash flows, And

b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

This category is the most relevant to the company. After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method.

Equity Investments

All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognized by an acquirer in a business combination to which Ind AS 103 applies are classified as at FVTPL. For all other equity instruments, the company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The company makes such election on an instrument byinstrument basis. The classification is made on initial recognition and is irrevocable.

I f the company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the company may transfer the cumulative gain or loss within equity.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized when:

(i) The rights to receive cash flows from the asset have expired, or

(ii) The company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘passthrough’ arrangement; and either (a) The company has transferred substantially all the risks and rewards of the asset, or (b) the company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Financial Liabilities Initial Recognition and Measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The company’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.

Subsequent Measurement

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

Loans and Borrowings

This is the category most relevant to the company. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.

Derecognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.

Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and / or disclosure purposes in these financial statements is determined on such basis, except for measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS 2.

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Mar 31, 2016

Note-1.1 : Basis of Preparation of Financial Statements

(a) Basis of Accounting

The financial statements of Pitti Laminations Limited (PLL) or Company have been prepared and presented under the historical cost convention, on the accrual basis of accounting in accordance with the accounting principles generally accepted in India (‘Indian GAAP’) and comply with the Accounting standards prescribed in the Companies (Accounting Standards) Rules, 2006 which continue to apply under Section 133 of the Companies Act, 2013 (‘the Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014.

(b) Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires judgments, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

(c) Current/ Non Current Classification

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

Note-1.2 : Tangible and Intangible Assets

Fixed Assets are stated at cost, less accumulated depreciation. All expenditure of capital nature is capitalized. Such expenditure comprises of purchase price, import duties, levies (other than refundable) and any directly attributable cost of bringing the assets to their working condition for intended use.

Pursuant to the requirements under Schedule II to the Companies Act, 2013, the Company has identified and determined the cost of each component of an asset separately when the component has a cost which is significant to the total cost of the asset and has useful life that is materially different from that of the remaining asset.

Capital Work in Progress & Capital Advances

Cost of Assets not ready for intended use, as on the balance sheet date, is shown as capital work in progress. Advances given towards acquisition of fixed assets outstanding at each balance sheet date are disclosed as Long Term Loans & Advances.

Note-1.3 : Depreciation

Depreciation on fixed assets is provided using straight line method based on the useful lives as prescribed under Schedule II to the Companies Act, 2013 and is charged to the Statement of Profit and Loss. Depreciation for assets purchased / sold during a period is proportionately charged.

Significant components of assets identified separately pursuant to the requirements under Schedule II of the Companies Act, 2013 are depreciated separately over their useful life.

All assets costing individually Rs.5, 000 and below are depreciated fully in the year of purchase.

Note-1.4 : Revenue / Expenditure Recognition

Revenue from sale of goods is recognized on transfer of all significant risks and rewards of ownership to the buyer. The amount recognized as sale is exclusive of sales tax/VAT and is net of returns & discounts. Sales are stated gross of excise duty as well as net of excise duty (on goods manufactured and outsourced), excise duty being the amount included in the amount of gross turnover.

Interest income is recognized on the time proportion basis.

Expenditure is accounted for on accrual basis and provision is made for all known losses and obligations.

Note-1.5 : Investments

Investments are classified into current and long-term investments. Investments that are readily realizable and intended to be held for not more than a year from the date of acquisition are classified as current investments. All other investments are classified as long term investments. However, that part of long term investments which are expected to be realized within twelve months from Balance Sheet date is also presented under “Current Investment” under “Current portion of long term investments” in consonance with the current / non-current classification of Schedule III of the Act.

Current investments are stated at the lower of cost and fair value. The comparison of cost and fair value is done separately in respect of each category of investments.

Long-term investments are stated at cost. A provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management. Reversal of such provision for diminution is made when there is a rise in the value of long term investment, or if the reasons for the decline no longer exist.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is recognized in the Statement of Profit and Loss.

Note-1.6 : Inventories

(a) Raw Materials, work in progress, finished goods, stores, spares and consumables are carried at the lower of cost and net realizable value.

(b) Following method is applied in determining cost of raw materials, work in progress, finished goods, stores, spares and consumables. Cost of inventory comprises all costs of purchase, duties, taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventory to their present location and condition.

(c) Cost of finished goods and work-in-process includes the cost of raw materials, an appropriate share of fixed and variable production overheads and other costs incurred in bringing the inventories to their present location and condition.

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

Note-1.7 : Foreign Currency Transactions And Balances

(a) Initial Recognition

Foreign currency transactions are recorded using the exchange rates prevailing on the date’s respective transactions. Exchange differences arising on foreign currency transactions settled during the year are recognized in the Statement of Profit and Loss.

(b) Measurement of foreign currency items at the Balance Sheet date

Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date, not covered by forward exchange contracts, are translated at year end rates. The resultant exchange differences are recognized in the Statement of Profit and Loss. Non-Monetary assets are recorded at the rates prevailing on the date of the transaction.

(c) Forward Contracts

The Company enters into forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments.

The Company does not enter into any derivative instruments for trading or speculative purposes.

The premium or discount arising at the inception of forward exchange contract is amortized and recognized as an expense/ income over the life of the contract. Exchange differences on such contracts are recognized in the Statement of Profit and Loss in the period in which the exchange rates change. Any Profit or Loss arising on cancellation or renewal of such forward exchange contract is also recognized as income or expense for the period.

Note-1.8 : Employee Benefits

Defined Contribution Plan:

Contribution as per Employee’s Provident Funds and Miscellaneous Provisions Act, 1952 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

Defined Benefit Plan:

Gratuity: In accordance with applicable Indian Laws, the company provides gratuity, a defined benefit retirement plan (the Gratuity Plan) covering all employees. The gratuity plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee’s last drawn salary and the years of employment with the company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date.

Leave Encashment: In accordance with applicable Indian Laws, the company provides Encashment of Leave, a defined benefit plan (Leave Encashment Plan) covering all employees. Liability with regard to Leave Encashment Plan is accrued based on actuarial valuation at the Balance Sheet date.

Note-1.9 : Borrowing Costs

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost, if any.

Borrowing costs, which are directly attributable to the acquisition/ construction of fixed assets, till the time such assets are ready for intended use, are capitalized as part of the costs of such assets. Other Borrowing costs are recognized as expenses in the year in which they are incurred.

Note-1.10 : Leases

Assets acquired by way of finance lease are capitalized at the lower of the fair value and the present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between finance charge and reduction of the lease liability based on the implicit rate of return. Finance charges are recognized as finance costs in the Statement of Profit and Loss. Lease rentals paid in respect of operating leases are recognized as an expense in the statement of Profit and Loss.

Note-1.11 : Impairment

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Statement in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

Note-1.12 : Earnings per Share

The basic earnings per share (‘EPS’) is computed by dividing the net profit after tax for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earning’s per share, the net profit after tax for the period attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. The dilutive potential equity shares are deemed to be converted as of the beginning of the year, unless they have been issued at a later date.

Note-1.13 : Segment Reporting

Segments are identified having regard to the dominant source and nature of risks and returns and internal organization and management structure. The Company has considered business segments as the primary segments for disclosure.

Geographical segment is recognized as Secondary Segment.

Note-1.14 : Provisions and Contingencies

The Company creates a provision when there exists a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources is remote, no provision or disclosure is made.

Note- 1.15 : Taxation

Tax expense comprises of current tax (i.e. amount of tax for the period determined in accordance with the Income Tax Act, 1961) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the period).

(a) Current Tax:

The provision for taxation is based on assessable profits of the Company as determined under the Income Tax Act, 1961.

(b) Deferred Tax :

The Company is providing and recognizing deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.

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Mar 31, 2014

Note 1.1 BASIS OF ACCOUNTING

The financial statements of Pitti Laminations Limited (PLL or Company) have been prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the basis of a going concern with revenues recognized and expenses accounted on their accrual.

Note 1.2 FIXED ASSETS

Fixed Assets are stated at historical cost. Expenditure which is of capital nature is capitalized. Such expenditure comprises of purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use. Depreciation is provided (except in the case of leasehold property which is being amortized over the period of lease) on the Straight Line Method (SLM) and at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

Note 1.3 REVENUE / EXPENDITURE RECOGNITION

Revenue is recognized when it can be reliably measured and when all significant risks and rewards/ownership are transferred to the customer.

Expenditure is accounted for on accrual basis and provision is made for all known losses and obligations.

Note 1.4 INVESTMENTS

Non-current investments are stated at cost, and provision is made when there is a decline other than temporary in the carrying value of such investments, determined separately in respect of each category of investment.

Note 1.5 INVENTORIES

Inventories are valued as under:

Sl Particulars Basis of Valuation No.

1 Raw Material Weighted average cost or net realizable value whichever is lower

2 Work In Process Weighted average cost or net realizable value whichever is lower

3 Finished Goods Weighted average cost or net realizable value whichever is lower

4 Stores & Spares Weighted average cost or net realizable value whichever is lower

5 Scrap At Realizable value

6 Press Tools & Dies Tools & Dies manufactured in the Company''s in-house Tool Room are valued at cost on a consistent basis. Consumption of Tools is calculated on the actual wear and tear of these Tools & Dies. Obsolete tools and tools which have become more than three years old are written off net of salvage value.

The cost of inventories comprises of all costs of purchases, cost of conversion and other costs incurred in bringing the inventories to their present conditions.

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

Note 1.6 RETIREMENT BENEFITS

1.6.1 Defined Contribution Plan:

Contribution as per Employee''s Provident Funds and Miscellaneous Provisions Act, 1962 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

1.6.2 Defined Benefit Plan:

a) Gratuity: In accordance with applicable Indian Laws, the company provides gratuity, a defined benefit retirement plan (the Gratuity Plan) covering all employees. The gratuity plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn salary and the years of employment with the company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date.

b) Leave Encashment: In accordance with applicable Indian Laws, the company provides Encashment of Leave, a defined benefit plan (Leave Encashment Plan) covering all employees. Liability with regard to Leave Encashment Plan is accrued based on actuarial valuation at the Balance Sheet date.

Note 1.7 BORROWING COSTS

Borrowing costs attributable to the acquisition / construction of qualifying fixed assets are capitalized for the eligible period. Other borrowing costs are expensed in the period they occur.

Note 1.8 FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions are recorded at the exchange rates prevailing on the dates when the relevant transactions took place. Exchange difference arising settled foreign currency transactions during the year and translation of assets and liabilities at the yearend are recognized in the statement of profit and loss.

Difference between the forward exchange contract rate and the exchange rate as at the date of transaction is recognized as income or expense over the life of the said contract.

Note 1.9 LEASES

Assets acquired by way of finance lease are capitalized at the lower of the fair value and the present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between finance charge and reduction of the lease liability based on the implicit rate of return. Finance charges are recognized as finance costs in the Statement of Profit and Loss. Lease rentals paid in respect of operating leases are recognized as an expense in the statement of Profit and Loss.

Note 1.10 TAXATION

1.10.1 Income Tax

The provision for taxation is based on assessable profits of the company as determined under the Income Tax Act, 1961.

1.10.2 Deferred Tax

The company is providing and recognizing deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.

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Mar 31, 2013

1.1 BASIS OF ACCOUNTING

The fi nancial statements of Pitti Laminations Limited (PLL or Company) have been prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the basis of a going concern with revenues recognised and expenses accounted on their accrual.

1.2 FIXED ASSETS

Fixed Assets are stated at cost. Expenditure which is of capital nature is capitalised. Such expenditure

1.4 INVENTORIES:

Inventories are valued as under:

comprises of purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use. Depreciation is provided (except in the case of leasehold property which is being amortised over the period of lease) on the Straight Line Method (SLM) and at the rates and in the manner specifi ed in Schedule XIV to the Companies Act, 1956.

1.3 INVESTMENTS

Long term investments are stated at cost, and provision is made when there is a decline, other than temporary in the carrying value of such investments.

1.5 RETIREMENT BENEFITS

1.5.1 Defi ned Contribution Plan:

Contribution as per Employee''s Provident Funds and Miscellaneous Provisions Act, 1962 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

1.5.2 Defi ned Benefi t Plan:

Gratuity: In accordance with applicable Indian Laws, the Company provides gratuity, a defi ned benefi t retirement plan (the Gratuity Plan) covering all employees. The gratuity plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn salary and the years of employment with the Company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date.

1.5.3 Defi ned Benefi t Plan:

Leave Encashment: In accordance with applicable Indian Laws, the Company provides Encashment of Leave, a defi ned benefi t plan (Leave Encashment Plan) covering all employees. Liability with regard to Leave Encashment Plan is accrued based on actuarial valuation at the Balance Sheet date.

1.6 BORROWING COSTS

Borrowing costs attributable to the acquisition / construction of qualifying fi xed assets are capitalised for the eligible period. Other borrowing costs are expensed in the period they occur.

1.7 FOREIGN CURRENCY TRANSACTIONS

Revenue transactions in foreign currency are recorded at the exchange rates prevailing on the dates when the relevant transactions took place. The Company recognises gains / losses on foreign exchange rate fl uctuations relating to current assets and current liabilities at the year end.

Difference between the forward exchange contract rate and the exchange rate as at the date of transaction is recognised as income or expense over the life of the said contract.

1.8 LEASES

Assets acquired by way of fi nance lease are capitalised at the lower of the fair value and the present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between

fi nance charge and reduction of the lease liability based on the implicit rate of return. Finance charges are recognised as fi nance costs in the Statement of Profi t and Loss. Lease rentals paid in respect of operating leases are recognised as an expense in the statement of Profi t and Loss.

1.9 TAXATION

1.9.1 Income Tax

The provision for taxation is based on assessable profi ts of the Company as determined under the Income Tax Act, 1961.

1.9.2 Deferred Tax

The Company is providing and recognising deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.

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Mar 31, 2012

Note 1.1 BASIS OF ACCOUNTING

The financial statements of Pitti Laminations Limited (PLL or Company) have been prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the basis of a going concern with revenues recognized and expenses accounted on their accrual.

Note 1.2 FIXED ASSETS

Fixed Assets are stated at cost. Expenditure which is of capital nature is capitalized. Such expenditure comprises of purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use. Depreciation is provided (except in the case of leasehold property which is being amortized over the period of lease) on the Straight Line Method (SLM) and at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

Note 1.3 INVESTMENTS

Long term investments are stated at cost, and provision is made when there is a decline, other than temporary in the carrying value of such investments.

Note 1.4 RETIREMENT BENEFITS

Note 1.4.1 DEFINED CONTRIBUTION PLAN

Contribution as per Employee's Provident Funds and Miscellaneous Provisions Act, 1962 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

Note 1.4.2 DEFINED BENEFIT PLAN

Gratuity: In accordance with applicable Indian Laws, the company provides gratuity, a defined benefit retirement plan (the Gratuity Plan) covering all employees. The gratuity plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee's last drawn salary and the years of employment with the company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date.

Note 1.4.3 DEFINED BENEFIT PLAN

Leave Encashment: In accordance with applicable Indian Laws, the company provides Encashment of Leave, a defined benefit plan (Leave Encashment Plan) covering all employees. Liability with regard to Leave Encashment Plan is accrued based on actuarial valuation at the Balance Sheet date.

Note 1.6 BORROWING COSTS

Borrowing costs attributable to the acquisition / construction of qualifying fixed assets are capitalized for the eligible period. Other borrowing costs are expensed in the period they occur.

Note 1.7 FOREIGN CURRENCY TRANSACTIONS

Revenue transactions in foreign currency are recorded at the exchange rates prevailing on the dates when the relevant transactions took place. The company recognizes gains / losses on foreign exchange rate fluctuations relating to current assets and current liabilities at the year end.

Difference between the forward exchange contract rate and the exchange rate as at the date of transaction is recognized as income or expense over the life of the said contract.

Note 1.8 LEASES

Assets acquired by way of finance lease are capitalized at the lower of the fair value and the present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between finance charge and reduction of the lease liability based on the implicit rate of return. Finance charges are recognized as finance costs in the Statement of Profit and Loss. Lease rentals paid in respect of operating leases are recognized as an expense in the statement of Profit and Loss.

Note 1.9 TAXATION Note |1.9.1| INCOME TAX

The provision for taxation is based on assessable profits of the company as determined under the Income Tax Act, 1961.

Note 1.9.2 DEFERRED TAX

The company is providing and recognizing deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.

The company had allotted 40,50,000 equity shares of Rs.10/- each at a price of Rs. 39.15 per share (including premium of Rs.29.15 per share) to the promoters and promoters group.

The issue price is determined in accordance with the guidelines stipulated under SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009.

The shares allotted shall rank pari-passu in all respects with the existing equity shares of the company including entitlement to dividend and voting.

Notes:

a. Term loans from scheduled banks viz State Bank of India, Oriental Bank of commerce and Allahabad Bank are secured by equitable mortgage of movable and immovable properties and first charge on the present and future fixed assets of the company situated at Plant I and Plant II Nadigaon, Mahaboobnagar district. A. P. Further these are secured by a second charge on the present and future current assets of the company and collateral security provided by the Chairman and Managing Director/relative of Chairman and Managing Director. (Refer Note 2.7 (a) for terms of repayment)

b. The above loan is secured by exclusive charge on the machinery purchased to the extent funded and Personal guarantee provided by the Chairman and Managing Director & Vice Chairman and Managing Director. (Refer Note 2.7 (a) for terms of repayment)

c. Secured against lien on FDR from Agroha Co-operative Urban Bank. (Repayable in September'2013)

d. Secured against hypothecation of vehicles. (Refer Note 2.7 (b) for terms of repayment)

e. Unsecured Loans from Shri G.Vijaya Kumar (Director) (Repayable in June'2013)

f. Represents 14 years interest free sales tax deferment loan received from Government of Andhra Pradesh. Repayment commences from January ,2018 based on the deferment availed in the respective years.

g. Inter Corporate Deposit received from M/s. Sri Venkateswara Coir Products Private Limited. (Repayable in June'2013)

Note:

Working capital facilities from State Bank of India, Indian Overseas Bank, Allahabad Bank, Indusind Bank and Kotak Mahindra Bank are secured on a pari passu first charge basis against hypothecation of stocks, Tools & Dies, Spares & consumables, Book debts and all other current assets both present and future. Further these are secured by second charge on fixed assets of the company both present and future, apart from the personal guarantees of the Chairman and Managing Director, Vice Chairman and Managing Director and one of the relatives of the promoter.

Note:

Out of the said amount Rs.186.69 lacs (March 31 2011 Rs.386.97 lacs) pertain to Micro, Small and Medium Enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006. The information has been given in respect of such vendors to the extent they could be identified as Micro and Small enterprises on the basis of information available with the company on records.

Note:

a) Terms of repayment are given below:

i) Loan taken from SBI IFB is repayable in quarterly instalments of Rs.99.65 lacs each till March'2013

ii) Loan taken from Allahabad Bank is repayable in quarterly instalments of Rs.85.63 lacs each till March'2013

iii) Loan taken from Oriental Bank of Commerce is repayable in quarterly instalments of Rs.68.75 lacs each till January'2016.

iv) Loan taken from TATA Capital Ltd., is repayable in quarterly instalments of Rs.20.00 lacs each till May'2013

v) Loan taken from L & T Finance Ltd., is repayable in monthly instalments of Rs.7.46 lacs each till June'2016

b) Terms of repayment are given below:

i) Loan taken from ICICI Bank is repayable in monthly instalments of Rs.0.99 lacs each inclusive of interest till June'2013

ii) Loan taken from Kotak Bank is repayable in monthly instalments of Rs.0.40 lacs each inclusive of interest till May'2013

iii) Loan taken from Axis Bank is repayable in monthly instalments of Rs.0.36 lacs each inclusive of interest till November'2014

iv) Loan taken from Tata Capital is repayable in monthly instalments of Rs.2.81 lacs each inclusive of interest till January'2014

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Mar 31, 2011

01.1 BASIS OF ACCOUNTING

The financial statements are prepared under the historical cost convention on the basis of a going concern with revenues recognized and expenses accounted on their accrual.

01.2 FIXED ASSETS

Fixed Assets are stated at cost. Expenditure which is of capital nature is capitalized. Such expenditure comprises of purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use. Depreciation is provided ( except in the case of leasehold land which is being amortized over the period of lease) on the Straight Line Method (SLM) and at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

01.3 INVESTMENTS

Long term investments are stated at cost, and provision is made when there is a decline, other than temporary in the carrying value of such investments.

01.4 BORROWING COSTS

Borrowing costs attributable to the acquisition / construction of qualifying fixed assets are capitalized for the eligible period. Other borrowing costs are charged to Profit and Loss account.

01.5 INVENTORIES: Inventories are valued as under:

Sl. Particulars Basis of Valuation No. 1 Raw Material Weighted average cost or net realizable value which ever is lower

2 Work In Process Weighted average cost or net realizable value which ever is lower

3 Finished Goods Weighted average cost or net realizable value which ever is lower

4 Stores & Spares Weighted average cost or net realizable value which ever is lower

5 Scrap At Realizable value

6 Press Tools & Tools & Dies manufactured in the Company's in-house Tool Room are valued at cost on a consistent basis. Consumption of Tools is calculated on the actual wear and tear of these Tools & Dies. Obsolete tools and tools which have become more than three years old are written off net of salvage value.



01.6 RETIREMENT BENEFITS

01.6.1 Defined Contribution Plan:

Contribution as per Employee’s Provident Funds and Miscellaneous Provisions Act, 1962 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

01.6.2 Defined Benefit Plan:

Gratuity: In accordance with applicable Indian Laws, the company provides gratuity, a defined benefit retirement plan (Gratuity Plan) covering all employees. The gratuity plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee’s last drawn salary and the years of employment with the company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the balance sheet date.

01.6.3 Defined Benefit Plan:

Leave Encashment: In accordance with applicable Indian Laws, the company provides Encashment of Leave, a defined benefit plan (Leave Encashment Plan) covering all employees. Liability with regard to Leave Encashment Plan is accrued based on actuarial valuation at the balance sheet date..

01.7 FOREIGN CURRENCY TRANSACTIONS

Revenue transactions in foreign currency are recorded at the exchange rates prevailing on the dates when the relevant transactions took place. The company recognizes gains / losses on foreign exchange rate fluctuations relating to current assets and current liabilities at the year end.

Difference between the forward exchange contract rate and the exchange rate as at the date of transaction is recognized as income or expense over the life of the said contract.

01.8 Leases

Assets acquired by way of fi nance lease are capitalized at the lower of the fair value and the present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned betweenfi nance charge and reduction of the lease liability based on the implicit rate of return. Finance charges are charged in the Profit and Loss Account. Lease rentals paid in respect of operating leases are charged to Profit and Loss Account.

01.9 TAXATION

Current year Charge

01.9.1) Income Tax

The provision for taxation is based on assessable profits of the company as determined under the Income Tax Act, 1961.

01.9.2) Wealth Tax

Wealth Tax is provided under the Wealth Tax Act, 1957.

01.9.3) Deferred Tax

The company is providing and recognizing deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.

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Mar 31, 2010

01.1 BASIS OF ACCOUNTING

The financial statements are prepared under the historical cost convention on the basis of a going concern with revenues recognized and expenses accounted on their accrual.

01.2 FIXED ASSETS

Fixed Assets are stated at cost. Expenditure which is of capital nature is capitalized. Such expenditure comprises of purchase price, import duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use. Depreciation is provided (except in the case of leasehold land which is being amortized over the period of lease) on the Straight Line Method (SLM) and at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

01.3 INVESTMENTS

Long term investments are stated at cost, and provision is made when there is a decline, other than temporary in the carrying value of such investments.

01.4 BORROWING COSTS

Borrowing costs attributable to the acquisition/construction of qualifying fixed assets are capitalized for the eligible period. Other borrowing costs are charged to Profit and Loss account.

01.5 INVENTORIES: Inventories are valued as under: Particulars Basis of Valuation

Raw Material Weighted average cost or net realizable value which ever is lower

Work In Process Weighted average cost or net realizable value which ever is lower

Finished Goods Weighted average cost or net realizable value which ever is lower

Stores & Spares Weighted average cost or net realizable value which ever is lower

Scrap At Realizable value

Press Tools & Dies Tools & Dies manufactured in the Companys in-house Tool Room are valued at cost on a consistent basis. Consumption of Tools is calculated on the actual wear and tear of these Tools & Dies.Obsolete tools and tools which have become more than three years oldare written off net of salvage value.

01.6 RETIREMENT BENEFITS

01.6.1 Defined Contribution Plan:

Contribution as per Employees Provident Funds and Miscellaneous Provisions Act, 1962 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

01.6.2 Defined Benefit Plan:

Gratuity: In accordance with applicable Indian Laws, the company provides gratuity, a defined benefit retirement plan (Gratuity Plan) covering all employees. The gratuity plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employees last drawn salary and the years of employment with the company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the balance sheet date.

01.6.3 Defined Benefit Plan:

Leave Encashment: In accordance with applicable Indian Laws, the company provides Encashment of Leave, a defined benefit plan (Leave Encashment Plan) covering all employees. Liability with regard to Leave Encashment Plan is accrued based on actuarial valuation at the balance sheet date..

01.7 FOREIGN CURRENCY TRANSACTIONS

Revenue transactions in foreign currency are recorded at the exchange rates prevailing on the dates when the relevant transactions took place. The company recognizes gains / losses on foreign exchange rate fluctuations relating to current assets and current liabilities at the year end.

Difference between the forward exchange contract rate and the exchange rate as at the date of transaction is recognized as income or expense over the life of the said contract.

01.8 Leases

Assets acquired by way of finance lease are capitalized at the lower of the fair value and the present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between finance charge and reduction of the lease liability based on the implicit rate of return. Finance charges are charged in the Profit and Loss Account. Lease rentals paid in respect of operating leases are charged to Profit and Loss Account.

01.9 TAXATION

Current year Charge

01.9.1) Income Tax

The provision for taxation is based on assessable profits of the company as determined under the Income Tax Act, 1961.

01.9.2) Wealth Tax

Wealth Tax is provided under the Wealth Tax Rules, 1957.

01.9.3) Deferred Tax

The company is providing and recognizing deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence.