Shamrock Industrial Company Ltd. कंपली की लेखा नीति

Mar 31, 2025

24. Significant Accounting Policies

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

(A) Basis Of Preparation Of Financial Statement

The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of
the Companies Act, 2013 (the "Act") [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of
the Act.

The financial statements up to year ended March 31, 2017 were prepared in accordance with the accounting standards notified
under Companies (Accounting Standard) Rules, 2006 (as amended) and other relevant provisions of the Act. These financial
statements are the first financial statements of the Company under Ind AS. Refer Note no. 25 on ''First Time Adoption of Ind AS''
for an explanation of how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financia l
performance and cash flows which is separately presented in the annual report.

The financial statements for F.Y. 2024-25 were approved by the Company''s Board of Directors on 29^th May 2025.

These financial statements are presented in Indian Rupees (INR), which is also the functional currency. All the amounts have
been rounded off to the nearest lacs, unless otherwise indicated.

The Company follows the mercantile system of accounting and recognizes income and expenditure on an accrual basis. The
financial statements are prepared under the historical cost convention, except in case of significant uncertainties and except for
the following:

i. Certain financial assets and liabilities (Including Derivative Instruments) that are measured at fair value;

ii. Investments are measured at fair value.

(B) Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are inclusive of
excise duty and net of returns, trade discount taxes and amounts collected on behalf of third parties. The Company recognises
revenue when the amount of revenue can be reliably measured and it is probable that future economic benefits will flow to the
Company.

(I) Sales

(i) Domestic sales are recognised when significant risks and rewards are transferred to the buyer as per the contractual
terms or on dispatch where such dispatch coincides with transfer of significant risks and rewards to the buyer.

(ii) Export sales are recognised on the date of ship on board signifying transfer of rewards of ownership to the buyer as
per terms of sale and initially recorded at the relevant exchange rates prevailing on the date of transaction.

(iii) The Company recognises income from power generated on accrual basis. However, where the ultimate collection of
the same lacks reasonable certainty, revenue recognition is postponed to the extent of uncertainty.

(II) Other Income

(i) Interest Income

Interest income on financial asset is recognised using the effective interest rate method. The effective interest rate is
the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the
gross carrying amount of the financial asset. When calculating the effective interest rate, the Company estimates the
expected cash flows by considering all the contractual terms of the financial instruments.

(ii) Export Benefits

Export incentives are accounted for on export of goods if the entitlements can be estimated with reasonable accuracy
and conditions precedent to claim is fulfilled.

(iii) Dividends

Dividends are recognised in profit or loss only when the right to receive payment is established, it is probable that the
economic benefits associated with the dividend will flow to the group, and the amount of the dividend can be
measured reliably.

(C) Property, plant and equipment

On transition to Ind AS, The Company has elected to continue with the carrying value of all of its property, plant and equipment
recognised as at 1 April 2016 measured as per the previous GAAP and used those carrying value as the deemed cost of the
property, plant and equipment.

i. Freehold land is carried at historical cost including expenditure that is directly attributable to the acquisition of the
land.

ii. All other items of property, plant and equipment are stated at historical cost less accumulated depreciation. Historical
cost includes expenditure that is directly attributable to the acquisition of the items.

iii. Depreciation

(a) Fixed assets are stated at cost less accumulated depreciation.

(b) The 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.

(c) Leasehold Land is depreciated over the period of the Lease.

(D) Intangible assets

On transition to Ind AS, The Company has elected to continue with the carrying value of all of its intangible assets recognised as
at 1 April 2016 measured as per the previous GAAP and used those carrying value as the deemed cost of the intangible assets.

i. An intangible asset shall be recognised if, and only if: (a) it is probable that the expected future economic benefits that
are attributable to the asset will flow to the Company and (b) the cost of the asset can be measured reliably.

ii. Cost of technical know-how is amortised over a period of six years.

iii. Computer software is capitalised where it is expected to provide future enduring economic benefits. Capitalisation costs
include license fees and costs of implementation / system integration services. The costs are capitalised in the year in
which the relevant software is implemented for use. The same is amortised over a period of 5 years on straight-line
method.

(E) Inventories Valuation

i. Raw materials, components, stores & spares, packing material, semi-finished goods & finished goods are valued at lower
of cost and net realizable value.

ii. Cost of Raw Materials, components, stores & spares and packing material is arrived at Weighted Average Cost and Cost
of semi-finished good and finished good is arrived at estimated cost.

iii. Scrap is valued at net realizable value.

(F) Cash And Cash Equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents include cash on hand, other short¬
term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of
cash and which are subject to an insignificant risk of changes in value.

(G) Trade and other receivables from customers

Credit risk in respect of trade and other receivables is managed through credit approvals, establishing credit limits and
monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant
increase in the credit risk on an on-going basis through each reporting period. To assess whether there is a significant increase
in credit risk the Company compares the risk of default occurring on assets as at the reporting date with the risk of default as at
the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

i) Actual or expected significant adverse changes in business.

ii) Actual or expected significant changes in the operating results of the counterparty.

iii) Financial or economic conditions that are expected to cause a significant change to the counter parties ability to meet
its obligation.

iv) Significant changes in the value of the collateral supporting the obligation or in the quality of third party guarantees or
credit enhancements.

Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a
repayment plan with the Company. When loans or receivables have been written off, the Company continues to engage in
enforcement activity to attempt to recover the receivable due, when recoverable are made, these are recognised as income in the
statement of profit and loss.

The Company measures the expected credit loss of trade receivables and loan from individual customers based on historical
trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss
experience and past trends. Based on the historical data, loss on collection of receivable is not material hence no additional
provision considered.

(H) Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are
unpaid. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest
method.

(I) Borrowing Cost

i. Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid
on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable
that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the
extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as
a prepayment for liquidity services and amortised over the period of the facility to which it relates.

ii. Borrowings are classified as current financial liabilities unless the group has an unconditional right to defer settlement
of the liability for at least 12 months after the reporting period. Where there is a breach of a material provision of a
long-term loan arrangement on or before the end of the reporting period with the effect that the liability becomes
payable on demand on the reporting date, the entity does not classify the liability as current, if the lender agreed, after
the reporting period and before the approval of the financial statements for issue, not to demand payment as a
consequence of the breach.

(J) Foreign Currency Transaction

i. In respect of foreign exchange transaction, the transaction in foreign currency is recorded in rupees by applying the
exchange rate prevailing at the time of the transaction. Amount short or excess realised/incurred is transferred to
Statement of Profit and Loss.

ii. All foreign currency liabilities / assets not covered by forward contracts are restated at the rates prevailing at the year
end and any exchange differences are debited / credited to the Statement of Profit & Loss.

(K) Investments

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

(L) Employee Benefit

i. Short term employee benefits are recognised as an expense at the undiscounted amounts in the Statement of Profit &
Loss for the year in which the related service is rendered.

ii. Contribution payable to recognised provident fund and superannuation scheme which is defined contribution scheme
is charged to Statement of Profit & Loss. Gratuity and Leave encashment which are defined benefits are accrued based
on actuarial valuation as at Balance Sheet date by an independent actuary. The Company has opted for a Group
Gratuity-cum-Life Assurance Scheme of the Life Insurance Corporation of India (LIC), and the contribution is charged
to the Statement of Profit & Loss each year. The Company has funded the liability on account of leave benefits through
LIC''s Group Leave Encashment Assurance Scheme and the Contribution is charged to Statement of Profit and Loss.

iii. The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the present value of
the defined benefit obligation at the end of the reporting period less the fair value of plan assets excluding non¬
qualifying asset (reimbursement right). The defined benefit obligation is calculated annually by actuaries using the
projected unit credit method. The present value of the defined benefit obligation is determined by discounting the
estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds
that have terms approximating to the terms of the related obligation. The net interest cost is calculated by applying the
discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included
in employee benefit expense in the statement of profit and loss. Remeasurement gains and losses arising from
experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly
in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the
balance sheet.

(M) Segment Report

i. The company identifies primary segment based on the dominant source, nature of risks and returns and the internal
organization and management structure. The operating segment are the segments for which separate financial
information is available and for which operating profit/loss amounts are evaluated regularly by the executive
Management in deciding how to allocate resources and in assessing performance.

ii. The analysis of geographical segments is based on the areas in which major operating divisions of the Company
operate.

(N) Leases

i. Lease rentals in respect of assets acquired under operating leases are charged off to the Statement of Profit and Loss.
Lease rentals in respect of assets given under operating leases are credited to the Statement of Profit & Loss.

ii. Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are
classified as operating leases.

iii. Leases in which the company does not transfer substantially all the risks and benefits of ownership of the asset are
classified as operating leases. Assets subject to operating leases are included in fixed assets. Lease income on an
operating lease is recognised in the statement of profit and loss on a straight-line basis over the lease term. Costs,
including depreciation, are recognised as an expense in the statement of profit and loss. Initial direct costs such as
legal costs, brokerage costs, etc., are recognised immediately in the statement of profit and loss.

(O) Earnings Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by
the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the
Company’s earnings per share are the net profit for the period. The weighted average number equity shares outstanding
during the period and all periods presented is adjusted for events, such as bonus shares, other than the conversion of
potential equity shares, which have changed the number of equity shares outstanding, without a corresponding change in
resources. For the purpose of calculating diluted earnings per share, the net profit of loss for the period attributable to
equity shareholders and the weighted average number of share outstanding during the period is adjusted for the effects of
all dilutive potential equity shares.

(P) Taxation

i. The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the
applicable income tax rate for the jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences, to unused tax losses and unabsorbed depreciation.

Current and deferred tax is recognized in the Statement of Profit and Loss except to the extent it relates to items
recognized directly in equity or other comprehensive income, in which case it is recognized in equity or other
comprehensive income.

ii. Provision for Income tax is made on the basis of the estimated taxable income for the current accounting period in
accordance with the Income- tax Act, 1961 and Revised Income Computation and Disclosure Standards (ICDS) of the
Income-tax Act, 1961.

iii. Deferred tax is provided using the liability method, on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined using tax
rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to
apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. The carrying

amount of deferred tax assets is reviewed at each reporting date and adjusted to reflect changes in probability that
sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets are
recognised for all deductible temporary differences and unused tax losses only if it is probable that future taxable
amounts will be available to utilize those temporary differences and losses. Deferred tax assets and liabilities are offset
when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances
relate to the same taxation authority.

iv. Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively.

(Q) Impairment of Assets

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such
indication exists, the management estimates the recoverable amount of the asset. If such recoverable amount of the asset
or the recoverable amount of the cash generating unit to which the assets belongs is less than its carrying amount, the
carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in
the statement of profit and loss. If at the balance sheet date there is an indication that if a previously assessed impairment
loss no longer exists, the recoverable amount is reassessed, and the asset is reflected at the recoverable amount subject to a
maximum of depreciated historical cost.

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Mar 31, 2024

24. Significant Accounting Policies

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

(A) Basis Of Preparation Of Financial Statement

The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of
the Companies Act, 2013 (the "Act") [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of
the Act.

The financial statements up to year ended March 31, 2017 were prepared in accordance with the accounting standards notified
under Companies (Accounting Standard) Rules, 2006 (as amended) and other relevant provisions of the Act. These financial
statements are the first financial statements of the Company under Ind AS. Refer Note no. 53 on ''First Time Adoption of Ind AS''
for an explanation of how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial
performance and cash flows which is separately presented in the annual report.

The financial statements were authorized for issue by the Company''s Board of Directors on 19^th May 2023.

These financial statements are presented in Indian Rupees (INR), which is also the functional currency. All the amounts have
been rounded off to the nearest lacs, unless otherwise indicated.

The Company follows the mercantile system of accounting and recognizes income and expenditure on an accrual basis. The
financial statements are prepared under the historical cost convention, except in case of significant uncertainties and except for
the following:

i. Certain financial assets and liabilities (Including Derivative Instruments) that are measured at fair value;

ii. Investments are measured at fair value.

(B) Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are inclusive of
excise duty and net of returns, trade discount taxes and amounts collected on behalf of third parties. The Company recognises
revenue when the amount of revenue can be reliably measured and it is probable that future economic benefits will flow to the
Company.

(I) Sales

(i) Domestic sales are recognised when significant risks and rewards are transferred to the buyer as per the contractual
terms or on dispatch where such dispatch coincides with transfer of significant risks and rewards to the buyer.

(ii) Export sales are recognised on the date of ship on board signifying transfer of rewards of ownership to the buyer as per
terms of sale and initially recorded at the relevant exchange rates prevailing on the date of transaction.

(iii) The Company recognises income from power generated on accrual basis. However, where the ultimate collection of the
same lacks reasonable certainty, revenue recognition is postponed to the extent of uncertainty.

(II) Other Income

(i) Interest Income

Interest income on financial asset is recognised using the effective interest rate method. The effective interest rate is the
rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross
carrying amount of the financial asset. When calculating the effective interest rate, the Company estimates the expected
cash flows by considering all the contractual terms of the financial instruments.

(ii) Export Benefits

Export incentives are accounted for on export of goods if the entitlements can be estimated with reasonable accuracy and
conditions precedent to claim is fulfilled.

(iii) Dividends

Dividends are recognised in profit or loss only when the right to receive payment is established, it is probable that the
economic benefits associated with the dividend will flow to the group, and the amount of the dividend can be measured
reliably.

(C) Property, plant and equipment

On transition to Ind AS, The Company has elected to continue with the carrying value of all of its property, plant and equipment
recognised as at 1 April 2016 measured as per the previous GAAP and used those carrying value as the deemed cost of the
property, plant and equipment.

i. Freehold land is carried at historical cost including expenditure that is directly attributable to the acquisition of the
land.

ii. All other items of property, plant and equipment are stated at historical cost less accumulated depreciation. Historical
cost includes expenditure that is directly attributable to the acquisition of the items.

iii. Depreciation

(a) Fixed assets are stated at cost less accumulated depreciation.

(b) The 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.

(c) Leasehold Land is depreciated over the period of the Lease.

(D) Intangible assets

On transition to Ind AS, The Company has elected to continue with the carrying value of all of its intangible assets recognised as
at 1 April 2016 measured as per the previous GAAP and used those carrying value as the deemed cost of the intangible assets.

i. An intangible asset shall be recognised if, and only if: (a) it is probable that the expected future economic benefits that
are attributable to the asset will flow to the Company and (b) the cost of the asset can be measured reliably.

ii. Cost of technical know-how is amortised over a period of six years.

iii. Computer software is capitalised where it is expected to provide future enduring economic benefits. Capitalisation costs
include license fees and costs of implementation / system integration services. The costs are capitalised in the year in
which the relevant software is implemented for use. The same is amortised over a period of 5 years on straight-line
method.

(E) Inventories Valuation

i. Raw materials, components, stores & spares, packing material, semi-finished goods & finished goods are valued at lower
of cost and net realizable value.

ii. Cost of Raw Materials, components, stores & spares and packing material is arrived at Weighted Average Cost and Cost
of semi-finished good and finished good is arrived at estimated cost.

iii. Scrap is valued at net realizable value.

(F) Cash And Cash Equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents include cash on hand, other short¬
term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of
cash and which are subject to an insignificant risk of changes in value.

(G) Trade and other receivables from customers

Credit risk in respect of trade and other receivables is managed through credit approvals, establishing credit limits and
monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

The Company considers the probability of default upon initial recognition of asset and whether there has been a significant
increase in the credit risk on an on-going basis through each reporting period. To assess whether there is a significant increase
in credit risk the Company compares the risk of default occurring on assets as at the reporting date with the risk of default as at
the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

i) Actual or expected significant adverse changes in business.

ii) Actual or expected significant changes in the operating results of the counterparty.

iii) Financial or economic conditions that are expected to cause a significant change to the counterparties ability to meet
its obligation.

iv) Significant changes in the value of the collateral supporting the obligation or in the quality of third party guarantees or
credit enhancements.

Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a
repayment plan with the Company. When loans or receivables have been written off, the Company continues to engage in
enforcement activity to attempt to recover the receivable due, when recoverable are made, these are recognised as income in the
statement of profit and loss.

The Company measures the expected credit loss of trade receivables and loan from individual customers based on historical
trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss
experience and past trends. Based on the historical data, loss on collection of receivable is not material hence no additional
provision considered.

(H) Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are
unpaid. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest
method.

(I) Borrowing Cost

i. Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid
on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable
that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the
extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as
a prepayment for liquidity services and amortised over the period of the facility to which it relates.

ii. Borrowings are classified as current financial liabilities unless the group has an unconditional right to defer settlement
of the liability for at least 12 months after the reporting period. Where there is a breach of a material provision of a
long-term loan arrangement on or before the end of the reporting period with the effect that the liability becomes
payable on demand on the reporting date, the entity does not classify the liability as current, if the lender agreed, after
the reporting period and before the approval of the financial statements for issue, not to demand payment as a
consequence of the breach.

(J) Foreign Currency Transaction

i. In respect of foreign exchange transaction, the transaction in foreign currency is recorded in rupees by applying the
exchange rate prevailing at the time of the transaction. Amount short or excess realised/incurred is transferred to
Statement of Profit and Loss.

ii. All foreign currency liabilities / assets not covered by forward contracts, are restated at the rates prevailing at the year
end and any exchange differences are debited / credited to the Statement of Profit & Loss.

(K) Investments

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

(L) Employee Benefit

i. Short term employee benefits are recognised as an expense at the undiscounted amounts in the Statement of Profit &
Loss for the year in which the related service is rendered.

ii. Contribution payable to recognised provident fund and superannuation scheme which is defined contribution scheme
is charged to Statement of Profit & Loss. Gratuity and Leave encashment which are defined benefits are accrued based
on actuarial valuation as at Balance Sheet date by an independent actuary. The Company has opted for a Group
Gratuity-cum-Life Assurance Scheme of the Life Insurance Corporation of India (LIC), and the contribution is charged
to the Statement of Profit & Loss each year. The Company has funded the liability on account of leave benefits through
LIC''s Group Leave Encashment Assurance Scheme and the Contribution is charged to Statement of Profit and Loss.

iii. The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the present value of
the defined benefit obligation at the end of the reporting period less the fair value of plan assets excluding non¬
qualifying asset (reimbursement right). The defined benefit obligation is calculated annually by actuaries using the
projected unit credit method. The present value of the defined benefit obligation is determined by discounting the
estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds
that have terms approximating to the terms of the related obligation. The net interest cost is calculated by applying the
discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included
in employee benefit expense in the statement of profit and loss. Remeasurement gains and losses arising from

experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly
in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the
balance sheet.

(M) Segment Report

i. The company identifies primary segment based on the dominant source, nature of risks and returns and the internal
organization and management structure. The operating segment are the segments for which separate financial
information is available and for which operating profit/loss amounts are evaluated regularly by the executive
Management in deciding how to allocate resources and in assessing performance.

ii. The analysis of geographical segments is based on the areas in which major operating divisions of the Company
operate.

(N) Leases

i. Lease rentals in respect of assets acquired under operating leases are charged off to the Statement of Profit and Loss.
Lease rentals in respect of assets given under operating leases are credited to the Statement of Profit & Loss.

ii. Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are
classified as operating leases.

iii. Leases in which the company does not transfer substantially all the risks and benefits of ownership of the asset are
classified as operating leases. Assets subject to operating leases are included in fixed assets. Lease income on an
operating lease is recognised in the statement of profit and loss on a straight-line basis over the lease term. Costs,
including depreciation, are recognised as an expense in the statement of profit and loss. Initial direct costs such as
legal costs, brokerage costs, etc., are recognised immediately in the statement of profit and loss.

(O) Earnings Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by
the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the
Company’s earnings per share are the net profit for the period. The weighted average number equity shares outstanding
during the period and all periods presented is adjusted for events, such as bonus shares, other than the conversion of
potential equity shares, which have changed the number of equity shares outstanding, without a corresponding change in
resources. For the purpose of calculating diluted earnings per share, the net profit of loss for the period attributable to
equity shareholders and the weighted average number of share outstanding during the period is adjusted for the effects of
all dilutive potential equity shares.

(P) Taxation

i. The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the
applicable income tax rate for the jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences, to unused tax losses and unabsorbed depreciation.

Current and deferred tax is recognized in the Statement of Profit and Loss except to the extent it relates to items
recognized directly in equity or other comprehensive income, in which case it is recognized in equity or other
comprehensive income.

ii. Provision for Income tax is made on the basis of the estimated taxable income for the current accounting period in
accordance with the Income- tax Act, 1961 and Revised Income Computation and Disclosure Standards (ICDS) of the
Income-tax Act, 1961.

iii. Deferred tax is provided using the liability method, on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined using tax
rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to
apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. The carrying
amount of deferred tax assets is reviewed at each reporting date and adjusted to reflect changes in probability that
sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets are
recognised for all deductible temporary differences and unused tax losses only if it is probable that future taxable
amounts will be available to utilize those temporary differences and losses. Deferred tax assets and liabilities are offset
when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances
relate to the same taxation authority.

iv. Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively.

(Q) Impairment of Assets

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such
indication exists, the management estimates the recoverable amount of the asset. If such recoverable amount of the asset

or the recoverable amount of the cash generating unit to which the assets belongs is less than its carrying amount, the
carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in
the statement of profit and loss. If at the balance sheet date there is an indication that if a previously assessed impairment
loss no longer exists, the recoverable amount is reassessed, and the asset is reflected at the recoverable amount subject to a
maximum of depreciated historical cost.