Wonder Electricals Ltd. कंपली की लेखा नीति

Mar 31, 2025

3. Significant Accounting Policies

a. Basis of preparation of financial statements:-

The financial statements of the Company have been prepared in accordance
with Indian accounting standards (IND AS) notified under the Section 133 of
the Companies Act read with Rule 3 of Companies (Indian Accounting
Standards) Rules, 2015 and Companies (Indian Accounting Standards)
Amendment Rules, 2016.

Accounting policies have been consistently applied except where a newly
issued accounting standard is initially adopted or a revision to an existing
accounting standard requires a change in accounting policy hitherto in use.
Financial statements of the company are prepared under the historical cost
convention on the accrual basis except some assets and liabilities which have
been measured at their fair value.

The financial statements are presented in INR and all values are rounded to
the nearest rupees in lakh.

b. Current and 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:

(a) it expects to realise the asset, or intends to sell or consume it, in its normal
operating cycle;

(b) it holds the asset primarily for the purpose of trading;

(c) it expects to realise the asset within twelve months after the reporting
period; or

(d) the asset is cash or a cash equivalent (as defined in Ind AS 7) unless the
asset is restricted from being exchanged or used to settle a liability for at
least twelve months after the reporting period;

Current maturities of non-current asset are also termed as current assets.

An entity shall classify a liability as current when:

(a) it expects to settle the liability in its normal operating cycle;

(b) it holds the liability primarily for the purpose of trading;

(c) the liability is due to be settled within twelve months after the reporting
period; or

(d) it does not have an unconditional right to defer settlement of the liability
for at least twelve months after the reporting.

Current maturities of non-current liabilities are also termed as current
liability.

Company always classifies deferred tax assets (liabilities) as non-current
assets (liabilities).

All other liabilities are classified as non-current.

The operating cycle of a company is the time between the acquisition of
assets for processing and their realization in cash or cash equivalents. When
the entity’s normal operating cycle is not clearly identifiable, it is assumed to
be twelve months.

c. Foreign Currency

The company’s reporting currency and the functional currency for its
operations is Indian Rupees (INR) being the principal currency of the
economic environment in which it operates.

(i) Transaction and balances

A foreign currency transaction shall be recorded, on initial recognition in the
functional currency, by applying to the foreign currency amount the spot
exchange rate, of the date on which transaction first qualifies for recognition
as per Ind AS’s, between the functional currency and the foreign currency at
the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies outstanding
at the end of the reporting period are translated at the exchange rates
prevailing as at the end of reporting period. Non-monetary items that are
measured in terms of historical cost in a foreign currency are translated using
the exchange rates at the dates of the initial transactions. Non-monetary items
measured at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value is determined.

Exchange differences arising on the settlement of monetary assets and
liabilities or on translating monetary assets and liabilities at rates different
from those at which they were translated on initial recognition during the
period or in previous financial statements shall be recognized in statement of
profit and loss in the period in which they arise. When a gain or loss on a
non-monetary item is recognized in other comprehensive income, any
exchange component of that gain or loss shall be recognized in profit or loss,
any exchange component of that gain or loss shall be recognized in profit or
loss.

Earning & expenditure in foreign exchange are as below:

d. Fair value measurement

The Company measures some financial instruments at fair value at each
reporting date. Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market
participants at the measurement date. A fair value measurement of a non¬
financial asset takes into account a market participant''s ability to generate
economic benefits by using the asset in its highest and best use or by selling it
to another market participant that would use the asset in its highest and best
use. The Company uses valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair
value, maximizing the use of relevant observable inputs and minimizing the
use of unobservable inputs.

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:

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

- Level 2 — inputs other than quoted prices included in level 1 that are
observed for the assets or liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices)

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

The Company recognizes transfers between level of the fair value hierarchy at
the end of reporting period during which the change has occurred. The
management has an established control framework with respect to fair value
measurement.

e. Revenue recognition

(i) Sales of goods:-

Revenue from the sale of goods shall be recognised when all the following
conditions have been satisfied:

(a) the entity has transferred to the buyer the significant risks and rewards of
ownership of the goods;

(b) the entity retains neither continuing managerial involvement to the degree
usually associated with ownership nor effective control over the goods sold;

(c) the amount of revenue can be measured reliably;

d) it is probable that the economic benefits associated with the transaction
will flow to the entity; and

e) the costs incurred or to be incurred in respect of the transaction can be
measured reliably;

f) subsidies and other incentives are recognized on collection/receipt basis;

Revenue is measured at the fair value of the consideration received or
receivable, taking into account contractually defined terms of payment and
excluding taxes, levies or duties collected on behalf of the government/ other
statutory bodies. Taxes, levies or duties are not considered to be received by
the Company on its own account and excluded from net revenue.

Warranty is not a separate performance obligation but assurance type
warranty and no separate provisions has been accounted for a warranty.

(ii) Rendering of services:

When the outcome of a transaction involving the rendering of services can be
estimated reliably, revenue associated with the transaction shall be recognised
by reference to the stage of completion of the transaction at the end of the
reporting period.

The outcome of a transaction can be estimated reliably when all the following
conditions are satisfied:

(a) the amount of revenue can be measured reliably;

(b) it is probable that the economic benefits associated with the transaction
will flow to the entity;

(c) the stage of completion of the transaction at the end of the reporting
period can be measured reliably; and

(d) the costs incurred for the transaction and the costs to complete the
transaction can be measured reliably;

(iii) Interest income

For all debt instruments measured either at amortised cost or at fair value
through other comprehensive income, interest income is recorded using the
effective interest rate (EIR).

Interest Income from Bank- interest income is recorded on a time-
proportionate basis that takes into account the effective interest rate (EIR)

Interest Received from Security with Electricity Board- Interest is recorded
on the basis of agreement with Electricity Board while depositing the security
amount.

Interest Received on IT Refund- Interest received at half percent per month as
per rate defined under Income Tax Act

Other Income- It comprises of Interest Income received from Banks,
Electricity board and other misc. interest.

f. Taxation

Income tax expense represents the sum of the current tax payable and
deferred tax. The current tax is based on taxable profit for the year, which is
determined pursuant to Income Tax Act, 1961. Current and deferred tax are
recognised in profit or loss, except when they relate to items that are
recognised in other comprehensive income, in which case, the current tax and
deferred tax are also recognised in other comprehensive income.

Deferred tax liability is recognised on temporary differences between the
carrying amounts of assets and liabilities in the financial statements and the
corresponding tax base used in the computation of taxable profit. Deferred tax
liabilities are generally recognised for all taxable temporary differences.
Deferred tax assets are generally recognised for all deductible temporary
difference to the extent that it is probable that taxable profits will be available
against which those deductible temporary differences can be utilized.
Deferred tax liabilities are recognised for taxable temporary differences
associated with investments in subsidiaries and associates, except where the
company is able to control the reversal of the temporary difference and it is
probable that the temporary difference will not reverse in the foreseeable
future.

The carrying amount of deferred tax assets is reviewed at the end of each
reporting period and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part of the asset to be
recovered. Unrecognised deferred tax assets are reassessed at the end of each
reporting year and are recognised to the extent that it has become probable
that sufficient taxable profit will be available to allow all or part of the
deferred tax asset to be recovered. Deferred tax assets and liabilities are
measured at the tax rates that are expected to apply in the period in which the
liability is settled or the asset is realized, based on tax rate (and tax laws) that
have been enacted or substantively enacted by the end of the reporting period.

g. Property, Plant and Equipment

Capital work in progress, plant and equipment is stated at cost, net of
accumulated depreciation and accumulated impairment losses, if any. Such
cost includes the cost of replacing part of plant and equipment and borrowing
cost for long-term construction projects. The cost of an item of property, plant
and equipment comprises:

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

(b) any costs directly attributable to bringing the asset to the location and
condition necessary for it to be capable of operating in the manner intended
by management.

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

Subsequent costs are included in the carrying amount of assets or recognised
as separate assets, as appropriate, only when it is probable that future
economic benefits associated with them will flow to the company and the cost
of the item can be measured reliably and it is expected to be used for more
than one year.

An item of Property, plant or equipment is derecognised upon disposal or
when no future economic benefits are expected from the continued use of
assets. Any gain or loss arising on the disposal or retirement of an item of
property, plant and equipment is recognised in profit and loss. Depreciation
on property, plant and equipment, except leasehold land, has been provided
on written down value method as per the useful life of assets prescribed in
Schedule II to the Companies Act, 2013.

The residual value of PPE for depreciation purpose is considered as 5% of the
original cost of the asset. The estimated useful life of the assets is reviewed at
the end of each financial year. Depreciation on the assets added / disposed of
during the year is provided on pro-rata basis with reference to the month of
addition / disposal. Value of leasehold land is amortised on the basis of lease
period or balance life of the project whichever is earlier.

1) Property and equipment comprise of Land of Rs. 4,42,04,328 for which
the company has title and management has intention to use this asset for
business purpose in near future.

2) The Company has recorded depreciation charge of Rs 711.07 Lakhs for
the period ended 31 March 2025.

h. Intangible Assets

Intangible assets acquired separately are measured on initial recognition at
cost. Following initial recognition, intangible assets are carried at cost less
any accumulated amortization and accumulated impairment losses.

i. Borrowing Costs

Borrowing cost attributable to the acquisition or construction of qualifying/
eligible assets are capitalized as part of the cost of such assets. A qualifying/
eligible asset is an asset that necessarily takes a substantial period of time to
get ready for intended use. All other borrowing cost are recognised as
expenses and are charged to revenue in the year.

j. Leases

Company as a lessee

The company has applied Ind AS 116 using the modified retrospective
approach and therefore the comparative information has not been restated and
continues to be reported under Ind AS 17.

As a lessee

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

The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted using the
interest rate implicit in the lease.

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

- Fixed payments, including in-substance fixed payments;

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

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

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

For Operating leases, security expenses is recognized on a straight line basis
over the term of the relevant lease.

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

When the lease liability is remeasured in this way, a corresponding
adjustment is made to the carrying amount of the right-of-use asset, or is
recorded in profit or loss if the carrying amount of the right-of-use asset has
been reduced to zero.

The company presents right-of-use assets that do not meet the definition of
investment property in ‘property, plant and equipment’ and lease liabilities in
‘loans and borrowings’ in the statement of financial position.

k. Inventories

Cost shall comprise:

For Raw Materials and Packing materials: Cost includes cost of purchase
and other costs incurred in bringing the inventories to their present location
and condition. Cost is determined on first in first out method basis.

Finished Goods and Work in progress: Cost includes cost of direct
materials and labour and a proportion of manufacturing overheads based on
the normal operating capacity, but excluding borrowing costs. Cost is
determined on first in first out basis material cost and includes cost of
conversion and cost incurred in bringing the goods to present location and
condition.

Stores & Spares: The Stock of stores & spare parts are charged to revenue
account except loose tools. Stores are valued at cost calculated on the basis of
first in first out method. Provisions are made for unserviceable, damaged,
obsolete, slow moving, defective stores and spares identified during the
physical stock taking.

Scrap

Scrap is valued at cost or net realizable value whichever is lower.

1. Impairment

At the end of each reporting period, entity assesses whether there is any
indication that an asset (tangible or intangible) may be impaired. If any such
indication exists, the entity estimates the recoverable amount of the asset.
Asset is impaired when its carrying value exceeds its recoverable amount.
Where an indication of impairment exists, the asset''s recoverable amount is
estimated. An asset''s recoverable amount is the higher of the asset''s or cash¬
generating unit''s value in use and its fair value less costs of disposal, and is
determined for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or group of
assets, in which case the recoverable amount is determined for the cash¬
generating unit to which the asset belongs.

---

Mar 31, 2024

3. Significant Accounting Policies

a. Basis of preparation of financial statements:-

The financial statements of the Company have been prepared in accordance with Indian accounting standards (IND AS) notified under the Section 133 of the Companies Act read with Rule 3 of Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in accounting policy hitherto in use. Financial statements of the company are prepared under the historical cost convention on the accrual basis except some assets and liabilities which have been measured at their fair value.

The financial statements are presented in INR and all values are rounded to the nearest rupees in lakh.

b. Current and 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:

(a) it expects to realise the asset, or intends to sell or consume it, in its normal operating cycle;

(b) it holds the asset primarily for the purpose of trading;

(c) it expects to realise the asset within twelve months after the reporting period; or

(d) the asset is cash or a cash equivalent (as defined in Ind AS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period;

Current maturities of non-current asset are also termed as current assets.

An entity shall classify a liability as current when:

(a) it expects to settle the liability in its normal operating cycle;

(b) it holds the liability primarily for the purpose of trading;

(c) the liability is due to be settled within twelve months after the reporting period; or

(d) it does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting.

Current maturities of non-current liabilities are also termed as current liability.

Company always classifies deferred tax assets (liabilities) as non-current assets (liabilities).

All other liabilities are classified as non-current.

The operating cycle of a company is the time between the acquisition of assets for processing and their realization in cash or cash equivalents. When the entity''s normal operating cycle is not clearly identifiable, it is assumed to be twelve months.

c. Foreign Currency

The company''s reporting currency and the functional currency for its operations is Indian Rupees (INR) being the principal currency of the economic environment in which it operates.

(i) Transaction and balances

A foreign currency transaction shall be recorded, on initial recognition in the functional currency, by applying to the foreign currency amount the spot exchange rate, of the date on which transaction first qualifies for recognition as per Ind AS''s, between the functional currency and the foreign currency at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies outstanding at the end of the reporting period are translated at the exchange rates prevailing as at the end of reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined.

Exchange differences arising on the settlement of monetary assets and liabilities or on translating monetary assets and liabilities at rates different from those at which they were translated on initial recognition during the period or in previous financial statements shall be recognized in statement of profit and loss in the period in which they arise. When a gain or loss on a non-monetary item is recognized in other comprehensive income, any exchange component of that gain or loss shall be recognized in profit or loss, any exchange component of that gain or loss shall be recognized in profit or loss.

d. Fair value measurement

The Company measures some financial instruments at fair value at each reporting date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

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:

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

- Level 2 — inputs other than quoted prices included in level 1 that are observed for the assets or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

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

The Company recognizes transfers between level of the fair value hierarchy at the end of reporting period during which the change has occurred. The management has an established control framework with respect to fair value measurement.

e. Revenue recognition (i) Sales of goods:-

Revenue from the sale of goods shall be recognised when all the following conditions have been satisfied:

(a) the entity has transferred to the buyer the significant risks and rewards of ownership of the goods;

(b) the entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

(c) the amount of revenue can be measured reliably;

d) it is probable that the economic benefits associated with the transaction will flow to the entity; and

e) the costs incurred or to be incurred in respect of the transaction can be measured reliably;

f) subsidies and other incentives are recognized on collection/receipt basis;

Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes, levies or duties collected on behalf of the government/ other statutory bodies. Taxes, levies or duties are not considered to be received by the Company on its own account and excluded from net revenue.

Warranty is not a separate performance obligation but assurance type warranty and no separate provisions has been accounted for a warranty.

(ii) Rendering of services:

When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction shall be recognised by reference to the stage of completion of the transaction at the end of the reporting period.

The outcome of a transaction can be estimated reliably when all the following conditions are satisfied:

(a) the amount of revenue can be measured reliably;

(b) it is probable that the economic benefits associated with the transaction will flow to the entity;

(c) the stage of completion of the transaction at the end of the reporting period can be measured reliably; and

(d) the costs incurred for the transaction and the costs to complete the transaction can be measured reliably;

(iii) Interest income

For all debt instruments measured either at amortised cost or at fair value through other comprehensive income, interest income is recorded using the effective interest rate (EIR).

Interest Income from Bank- interest income is recorded on a time- proportionate basis that takes into account the effective interest rate (EIR)

Interest Received from Security with Electricity Board- Interest is recorded on the basis of agreement with Electricity Board while depositing the security amount.

Interest Received on IT Refund- Interest received at half percent per month as per rate defined under Income Tax Act

Other Income- It comprises of Interest Income received from Banks, Electricity board and other misc. interest.

f. Grants from government

Government Grants including non-monetary grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and that the grants will be received. Government grants related to depreciable assets is treated as deferred income and are recognised in Statement of Profit & Loss on a systematic basis over the useful life of asset. Government Grants related to assets are presented in the balance sheet by setting up the grant as deferred income. Grants related to income are presented as part of profit or loss under the general heading ''Other Income''.

A government grant that becomes receivable as compensation for expense or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs shall be recognised in profit or loss of the period in which it become receivable. A government grant may take form of a transfer of a non-monetary asset, such as land or other resources, for the use of company. In these circumstances, the fair value of the non- monetary asset is assessed and both the grant and asset are accounted for at that fair value.

g. Taxation

Income tax expense represents the sum of the current tax payable and deferred tax. The current tax is based on taxable profit for the year, which is determined pursuant to Income Tax Act, 1961. Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income, in which case, the current tax and deferred tax are also recognised in other comprehensive income.

Deferred tax liability is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax base used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary difference to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, except where the company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Unrecognised deferred tax assets are reassessed at the end of each reporting year and are recognised to the extent that it has become probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realized, based on tax rate (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

h. Property, Plant and Equipment

Capital work in progress, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of replacing part of plant and equipment and borrowing cost for long-term construction projects. The cost of an item of property, plant and equipment comprises:

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

(b) any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

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

Subsequent costs are included in the carrying amount of assets or recognised as separate assets, as appropriate, only when it is probable that future economic benefits associated with them will flow to the company and the cost of the item can be measured reliably and it is expected to be used for more than one year.

An item of Property, plant or equipment is derecognised upon disposal or when no future economic benefits are expected from the continued use of assets. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is recognised in profit and loss. Depreciation on property, plant and equipment, except leasehold land, has been provided on written down value method as per the useful life of assets prescribed in Schedule II to the Companies Act, 2013.

The residual value of PPE for depreciation purpose is considered as 5% of the original cost of the asset. The estimated useful life of the assets is reviewed at the end of each financial year. Depreciation on the assets added / disposed of during the year is provided on pro-rata basis with reference to the month of addition / disposal. Value of leasehold land is amortised on the basis of lease period or balance life of the project whichever is earlier.

1) Property and equipment comprise of Land of Rs. 4,42,04,328 for which the company has title and management has intention to use this asset for business purpose in near future.

2) The Company has recorded depreciation charge of Rs 580.46 Lakhs for the period ended 31 March 2024.

i. Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses.

j. Borrowing Costs

Borrowing cost attributable to the acquisition or construction of qualifying/ eligible assets are capitalized as part of the cost of such assets. A qualifying/ eligible asset is an asset that necessarily takes a substantial period of time to get ready for intended use. All other borrowing cost are recognised as expenses and are charged to revenue in the year.

k. Leases

Company as a lessee

The company has applied Ind AS 116 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under Ind AS 17.

As a lessee

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

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease.

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

- Fixed payments, including in-substance fixed payments;

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

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

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

For Operating leases, security expenses is recognized on a straight line basis over the term of the relevant lease.

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

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The company presents right-of-use assets that do not meet the definition of investment property in ''property, plant and equipment'' and lease liabilities in ''loans and borrowings'' in the statement of financial position.

l. Inventories

Cost shall comprise:

For Raw Materials and Packing materials: Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on first in first out method basis.

Finished Goods and Work in progress: Cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity, but excluding borrowing costs. Cost is determined on first in first out basis material cost and includes cost of conversion and cost incurred in bringing the goods to present location and condition.

Traded goods: Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on first in first out basis. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

Stores & Spares: The Stock of stores & spare parts are charged to revenue account except loose tools. Stores are valued at cost calculated on the basis of first in first out method. Provisions are made for unserviceable, damaged, obsolete, slow moving, defective stores and spares identified during the physical stock taking.

Scrap

Scrap is valued at cost or net realizable value whichever is lower.

m. Impairment

At the end of each reporting period, entity assesses whether there is any indication that an asset (tangible or intangible) may be impaired. If any such indication exists, the entity estimates the recoverable amount of the asset. Asset is impaired when its carrying value exceeds its recoverable amount. Where an indication of impairment exists, the asset''s recoverable amount is estimated. An asset''s recoverable amount is the higher of the asset''s or cash- generating unit''s value in use and its fair value less costs of disposal, and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets, in which case the recoverable amount is determined for the cash-generating unit to which the asset belongs.

---

Mar 31, 2023

1. Organization structure and nature of Business- Wonder Electricals Limited is a listed public company limited by shares, incorporated and domiciled in India. Its registered office is located at Okhla Industrial Estate, Phase-III, Delhi, India and factories at Bhagwanpur, Roorkee in the state of Uttarakhand and at Manoharabad Mandal, Medak, Hyderabad in the state of Telangana. The Company is engaged in the manufacturing of electric goods. Company has diversified market not only in domestic but also has global presence.

2. Additional Notes to the financial statementsA) Contingent liabilities: -

There is no contingent liability at the year end.

B) Books of accounts of the company have been maintained at Factories at Bhagwanpur, Roorkee, Uttarakhand and Hyderabad, Telangana.

3. Significant Accounting Policiesa. Basis of preparation of financial statements:-

The financial statements of the Company have been prepared in accordance with Indian accounting standards (IND AS) notified under the Section 133 of the Companies Act read with Rule 3 of Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in accounting policy hitherto in use. Financial statements of the company are prepared under the historical cost convention on the accrual basis except some assets and liabilities which have been measured at their fair value.

The financial statements are presented in INR and all values are rounded to the nearest rupees in lakh.

b. Current and 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:

(a) it expects to realise the asset, or intends to sell or consume it, in its normal operating cycle;

(b) it holds the asset primarily for the purpose of trading;

(c) it expects to realise the asset within twelve months after the reporting period; or

(d) the asset is cash or a cash equivalent (as defined in Ind AS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period;

Current maturities of non-current asset are also termed as current assets.

An entity shall classify a liability as current when:

(a) it expects to settle the liability in its normal operating cycle;

(b) it holds the liability primarily for the purpose of trading;

(c) the liability is due to be settled within twelve months after the reporting period; or

(d) it does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting.

Current maturities of non-current liabilities are also termed as current liability.

Company always classifies deferred tax assets (liabilities) as non-current assets (liabilities).

All other liabilities are classified as non-current.

The operating cycle of a company is the time between the acquisition of assets for processing and their realization in cash or cash equivalents. When the entity’s normal operating cycle is not clearly identifiable, it is assumed to be twelve months.

c. Foreign Currency

The company’s reporting currency and the functional currency for its operations is Indian Rupees (INR) being the principal currency of the economic environment in which it operates.

(i) Transaction and balances

A foreign currency transaction shall be recorded, on initial recognition in the functional currency, by applying to the foreign currency amount the spot exchange rate, of the date on which transaction first qualifies for recognition as per Ind AS’s, between the functional currency and the foreign currency at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies outstanding at the end of the reporting period are translated at the exchange rates prevailing as at the end of reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined.

Exchange differences arising on the settlement of monetary assets and liabilities or on translating monetary assets and liabilities at rates different from those at which they were translated on initial recognition during the period or in previous financial statements shall be recognized in statement of profit and loss in the period in which they arise. When a gain or loss on a non-monetary item is recognized in other comprehensive income, any

exchange component of that gain or loss shall be recognized in profit or loss, any exchange component of that gain or loss shall be recognized in profit or loss.

Earning & expenditure in foreign exchange are as below:

Particulars	Current Year ('')	Previous Year ('')
Earning in foreign exchange	15,36,770/-	10,76,020/-
Expenditure in foreign exchange	Nil	24,74,349/-

d. Fair value measurement

The Company measures some financial instruments at fair value at each reporting date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

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:

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

- Level 2 — inputs other than quoted prices included in level 1 that are observed for the assets or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

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

The Company recognizes transfers between level of the fair value hierarchy at the end of reporting period during which the change has occurred. The management has an established control framework with respect to fair value measurement.

e. Revenue recognition(i) Sales of goods: -

Revenue from the sale of goods shall be recognised when all the following conditions have been satisfied:

(a) the entity has transferred to the buyer the significant risks and rewards of ownership of the goods;

(b) the entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

(c) the amount of revenue can be measured reliably;

d) it is probable that the economic benefits associated with the transaction will flow to the entity; and

e) the costs incurred or to be incurred in respect of the transaction can be measured reliably.

f) subsidies and other incentives are recognized on collection/receipt basis.

Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes, levies or duties collected on behalf of the government/ other statutory bodies. Taxes, levies or duties are not considered to be received by the Company on its own account and excluded from net revenue.

Warranty is not a separate performance obligation but assurance type warranty and no separate provisions has been accounted for a warranty.

(ii) Rendering of services:

When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction shall be recognised by reference to the stage of completion of the transaction at the end of the reporting period.

The outcome of a transaction can be estimated reliably when all the following conditions are satisfied:

(a) the amount of revenue can be measured reliably;

(b) it is probable that the economic benefits associated with the transaction will flow to the entity;

(c) the stage of completion of the transaction at the end of the reporting period can be measured reliably; and

(d) the costs incurred for the transaction and the costs to complete the transaction can be measured reliably

(iii) Interest income

For all debt instruments measured either at amortised cost or at fair value through other comprehensive income, interest income is recorded using the effective interest rate (EIR).

Interest Income from Bank- interest income is recorded on a time- proportionate basis that takes into account the effective interest rate (EIR)

Interest Received from Security with Electricity Board- Interest is recorded on the basis of agreement with Electricity Board while depositing the security amount.

Interest Received on IT Refund- Interest received at half percent per month as per rate defined under Income Tax Act

Other Income- It comprises of Interest Income received from Banks, Electricity board and other misc. interest.

f. Grants from government

Government Grants including non-monetary grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and that the grants will be received. Government grants related to depreciable assets is treated as deferred income and are recognised in Statement of Profit & Loss on a systematic basis over the useful life of asset. Government Grants related to assets are presented in the balance sheet by setting up the grant as deferred income. Grants related to income are presented as part of profit or loss under the general heading ‘Other Income’.

A government grant that becomes receivable as compensation for expense or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs shall be recognised in profit or loss of the period in which it become receivable. A government grant may take form of a transfer of a non-monetary asset, such as land or other resources, for the use of company. In these circumstances, the fair value of the nonmonetary asset is assessed and both the grant and asset are accounted for at that fair value.

g. Taxation

Income tax expense represents the sum of the current tax payable and deferred tax. The current tax is based on taxable profit for the year, which is determined pursuant to Income Tax Act, 1961. Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income, in which case, the current tax and deferred tax are also recognised in other comprehensive income.

Deferred tax liability is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax base used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary difference to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, except where the company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Unrecognized deferred tax assets are reassessed at the end of each reporting year and are recognised to the extent that it has become probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realized, based on tax rate (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

h. Property, Plant and Equipment

Capital work in progress, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of replacing part of plant and equipment and borrowing cost for long-term construction projects. The cost of an item of property, plant and equipment comprises:

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

(b) any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

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

Subsequent costs are included in the carrying amount of assets or recognised as separate assets, as appropriate, only when it is probable that future economic benefits associated with them will flow to the company and the cost of the item can be measured reliably and it is expected to be used for more than one year.

An item of Property, plant or equipment is derecognised upon disposal or when no future economic benefits are expected from the continued use of assets. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is recognised in profit and loss. Depreciation on property, plant and equipment, except leasehold land, has been provided on written down value method as per the useful life of assets prescribed in Schedule II to the Companies Act, 2013.

The residual value of PPE for depreciation purpose is considered as 5% of the original cost of the asset. The estimated useful life of the assets is reviewed at the end of each financial year. Depreciation on the assets added / disposed of during the year is provided on pro-rata basis with reference to the month of addition / disposal. Value of leasehold land is amortised on the basis of lease period or balance life of the project whichever is earlier.

Name of company	Type of Asset	Method of Depreciation	Useful life (years)
Wonder Electricals Limited	Building	Written Down Value method	30
	Furniture & Fixture		10
	Office Equipment		5
	Plant & Machinery		15
	Vehicles		10
	Computer & Others		3

1) Property and equipment comprise of Land of Rs. 4,42,04,328 for which the company has title and management has intention to use this asset for business purpose in near future.

2) The Company has recorded depreciation charge of Rs 541.18 Lakhs for the period ended 31 March 2023.

i. Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses.

j. Borrowing Costs

Borrowing cost attributable to the acquisition or construction of qualifying/ eligible assets are capitalized as part of the cost of such assets. A qualifying/ eligible asset is an asset that necessarily takes a substantial period of time to get ready for intended use. All other borrowing cost are recognised as expenses and are charged to revenue in the year.

k. LeasesCompany as a lessee

The company has applied Ind AS 116 using the modified retrospective approach and therefore the comparative information has not been restated and continues to be reported under Ind AS 17.

As a lessee

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

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease.

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

- Fixed payments, including in-substance fixed payments;

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

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

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

For Operating leases, security expenses is recognized on a straight line basis over the term of the relevant lease.

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

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The company presents right-of-use assets that do not meet the definition of investment property in ‘property, plant and equipment’ and lease liabilities in ‘loans and borrowings’ in the statement of financial position.

l. Inventories

Cost shall comprise:

For Raw Materials and Packing materials: Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on first in first out method basis.

Finished Goods and Work in progress: Cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity, but excluding borrowing costs. Cost is determined on first in first out basis material cost and includes cost of conversion and cost incurred in bringing the goods to present location and condition.

Traded goods: Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on first in first out basis. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

Stores & Spares: The Stock of stores & spare parts are charged to revenue account except loose tools. Stores are valued at cost calculated on the basis of first in first out method. Provisions are made for unserviceable, damaged, obsolete, slow moving, defective stores and spares identified during the physical stock taking

Scrap

Scrap is valued at cost or net realizable value whichever is lower.

m. Impairment

At the end of each reporting period, entity assesses whether there is any indication that an asset (tangible or intangible) may be impaired. If any such indication exists, the entity

estimates the recoverable amount of the asset. Asset is impaired when its carrying value exceeds its recoverable amount. Where an indication of impairment exists, the asset''s recoverable amount is estimated. An asset''s recoverable amount is the higher of the asset''s or cash- generating unit''s value in use and its fair value less costs of disposal, and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets, in which case the recoverable amount is determined for the cash-generating unit to which the asset belongs.

n. Provisions, Contingent Liabilities & Contingent Assets

Provisions are recognised when the company has a present obligation (legal or constructive) as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. Where the time value of money is material, provisions are stated at the present value of the expenditure expected to settle the obligation. All provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future uncertain events not wholly within the control of the company, are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote. Contingent Assets are not recognised in the financial statements. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate. Where an inflow of economic benefits is probable, an entity shall disclose a brief description of the nature of the contingent assets at the end of the reporting period, and, where practicable, an estimate of their financial effect.

o. Employee benefits expenses

Employee benefits include salaries, wages, contribution to provident fund, gratuity, leave encashment towards un-availed leave, compensated absences, post-retirement medical benefits and other terminal benefits.

The company operates a defined benefit gratuity plan in India, which requires contributions to be made to a separately administered fund. The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method. Remeasurement of defined benefit plans in respect of post-employment are charged to the Other Comprehensive Income. Past Service cost is recognized in the statement of profit & loss in the period of plan amendment.

Defined contribution plan:

Company’s contributions paid/payable during the year to Provident Fund, Superannuation Fund and Employee state insurance are recognised in statement of profit and loss.

Compensated absence:

Liability for compensated absence is provided based on accumulated leave credit outstanding to employees as on the date of balance sheet.

Liabilities for short term employee benefits are measured at undiscounted amount of the benefits expected to be paid and charged to Statement of Profit & Loss in the year in which the related service is rendered.

Whereas Company is maintaining the Gratuity funds with LIC and making the premium payment over the period for its maintenance. The post-employment benefits like pension and gratuity are taken under Other Current Assets.

p. Financial instrumentsA. Financial assets:-

(i) Initial recognition and measurement

All financial assets are recognised initially at fair value plus or minus, 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 recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.

(ii) Subsequent measurement

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

• Amortised cost — Debt instruments

• Fair value through other comprehensive income (FVTOCI) - Debt Investment

• Fair value through other comprehensive income (FVTOCI) — Equity investment

• Fair value through profit or loss (FVTPL) — Derivatives, preference shares and debt instruments.

(iii) Amortised cost

A ‘Financial asset'' is measured at the amortised cost if both the following conditions are met and is not designated as at FVTPL:

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

- 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.

(iv) Equity Investment

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

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company''s continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

(v) Impairment of financial assets

In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:

Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, trade receivables and bank balance.

Financial assets that are debt instruments and are measured as at FVTOCI

Trade receivables or any contractual right to receive cash or another financial asset that

result from transactions that are within the scope of Ind AS 11 and Ind AS 18.

Financial guarantee contracts which are not measured as at FVTPL

The Company follows ‘simplified approach’ for recognition of impairment loss allowance on:

Trade receivables or contract revenue receivables; and The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition. For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.

ECL is the difference between all the contractual cash flows that are due to the group in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required to consider:

All the contractual terms of the financial instrument (including prepayment, extension, call and similar options) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual cash terms of the financial instruments.

Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

(vi) Financial Liabilities

A financial liability is any liability that is: a) a contractual obligation :

i) to deliver cash or another financial asset to another entity; or

ii) to exchange financial assets or financial liabilities with another entity under conditions that are potentiallyunfavourable to the entity; or

b) a contract that will or may be settled in the entity’s own equity instruments and is:

i) a non-derivative for which the entity is or may be obliged to deliver a variable number of the entity’s own equityinstruments; or

ii) a derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity’s own equity instruments. For this purpose, rights, options or warrants to acquire a fixed number of the entity’s own equity instruments for a fixed amount of any currency are equity instruments if the entity offers the rights, options or warrants pro rata to all of its existing owners of the same class of its own non- derivative equity instruments. Apart from the aforesaid, the equity conversion option embedded in a convertible bond denominated in foreign currency to acquire a fixed number of the entity’s own equity instruments is an equity instrument if the exercise price is fixed in any currency.

Also, for these purposes the entity''s own equity instruments do not include puttable financial instruments that are classified as equity instruments in accordance with paragraphs 16A and 16B, instruments that impose on the entity an obligation to deliver to another party a pro rata share of the net assets of the entity only on liquidation and are classified as equity instruments in accordance with instruments that are contracts for the future receipt or delivery of the entity’s own equity instruments. As an exception, an instrument that meets the definition of a financial liability is classified as an equity instrument if it has all the features and meets the conditions in paragraphs 16A and 16B or paragraphs 16C and 16D.

Initial Recognition and measurement

All financial liabilities are recognised initially at fair value plus or minus, 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.

Subsequent recognition

Instrument	Subsequent recognition
Held for trading	Fair value
Financial guarantee contracts	Higher of loss allowance and amount recognised less cumulative amortization
Loans and borrowings	Amortised cost

(vii) Derecognition

A financial liability is derecognised 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 between the carrying amount of a financial liability (or part of a financial Liability) extinguished or transferred to another party and the consideration paid, including any non- cash assets transferred or liabilities assumed, shall be recognised in profit or loss.

(viii) Reclassification of financial assets

The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Company''s senior management determines change in the business model as a result of external or internal changes which are significant to the Company''s operations. Such changes are evident to external parties. A change in the business model occurs when the Company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model

q. Cash and Cash equivalents

Cash and Cash equivalents in the balance sheet comprises cash on hand, at bank and short-term deposits with banks. The Company considers all highly liquid financial instruments, which are readily convertible into cash and have original maturities of three months or less from the date of purchase, to be cash equivalents. Such cash equivalents are subject to insignificant risk of changes in value.

In Cash Flow statement prepared by the company, Cash flows are reported using indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transaction of non- cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

r. Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of any extra ordinary items, if any) as

adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed 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.

s. Trade receivables

Trade receivables represents amount billed to customers as credit sales and are net off;

a) Any amount billed but for which revenues are reversed under the different accounting standard and

b) Impairment for trade receivables, which is estimated for amounts not expected to be collected in full.

t. Loans and Advances

Loans and advances are non-derivative financial assets with fixed and determinable payments. This category includes the loans, cash and bank balances, other financial assets and other current assets.

Subsequent to initial measurement, loans and receivables are carried at amortized cost based on effective interest rate method less appropriate allowance for doubtful receivables.

Loans and advances are further classified as current and non-current depending on whether they will be realized within 12 months after the balance sheet date or beyond.

u. Investment: -

There is no investment made by the company in securities or shares during the year.

NOTE NO: 2525.1 Corporate Social Responsibility Activities

On account of Corporate Social Responsibility Activities (CSR), the company has spent Rs. 14,22,918/- for current year and also spent excess amount of Rs. 87,46,433/- for future liabilities under the provisions of CSR Activities which is booked under the group of Other

Current Assets of Financial Statements._

S. No.	Particulars	Amount (?)
1.	amount required to be spent by the company during the year;	14,22,918/-
2.	amount of expenditure incurred,	14,22,918/-
3.	shortfall at the end of the year,	Nil
4.	total of previous years shortfall,	Nil
5.	reason for shortfall,	NA