Testing of Accounting policies as stated in the financial statements of Raptakos, Brett and

Company Limited.

Use of Estimate and judgment :-

1. Property, Plant and Equipment (PPE) :- Property, Plant and Equipment are stated at cost
less accumulated depreciation and accumulated impairment losses except for freehold land
which is not depreciated. Cost includes purchase price after deducting trade discount /
rebate, import duties, non-refundable taxes, cost of replacing the component parts,
borrowing costs and other directly attributable cost of bringing the asset to its working
condition in the manner intended by the management.

Spares parts procured along with the Plant and Equipment or subsequently which meets the
definition and recognition criteria of PPE considering the concept of materiality are
capitalized and added to the carrying amount of such items. The carrying amount of those
spare parts that are replaced is derecognized when no future economic benefits are
expected from their use or upon disposal. Other machinery spares are treated as ‘stores and
spares’ forming part of the inventory. If the cost of the replaced part is not available, the
estimated cost of similar new parts is used as an indication of what the cost of the existing
part was when the item was acquired.

Livestock, which comprises of horses, though biological assets, are treated as PPE. These are
not held for sale and are valued at cost as there is no quoted market price and the
alternative fair value measurement are clearly unrealiable.

An item of PPE is derecognised on disposal or when no future economic benefits are

expected from use or disposal. Any gain or loss arising on derecognition of an item of
property, plant and equipment is determined as the difference between the net disposal
proceeds and the carrying amount of the asset and is recognized in Statement of Profit and
Loss when asset is derecognised.

Expenditure on acquisition of PPE for Research and Development (R&D) is included in PPE
and depreciation thereon is provided as applicable.

The depreciable amount of an asset is determined after deducting its residual value. Where
the residual value of an asset increases to an amount equal to or greater than the asset’s
carrying amount, no depreciation charge is recognised till the asset’s residual value
decreases below the asset’s carrying amount. Depreciation of an asset begins when it is
available for use, i.e., when it is in the location and condition necessary for it to be capable
of operating in the intended manner. Depreciation of an asset ceases at the earlier of the
date that the asset is classified as held for sale in accordance with IND AS 105 and the date
that the asset is derecognised. Depreciation on all assets is provided on written down basis.

Description of the Asset Estimated Useful life

Tangible:
 Land – Leasehold Primary period of lease
Building – Factory 30 Years
– Other than factory buildings 60 Years
Plant and Equipment 10-20 Years
Furniture and Fixtures 10 Years
Computer Servers 6 Years
Computers 3 Years
Office Equipment 5 Years
Vehicles 8 Years
Livestock 15 Years
Intangible:
Software 5 Years

Further, the Company has identified and determined separate useful life for each major
component of fixed assets, if they are materially different from that of the remaining assets,
for providing depreciation in compliance with Schedule II of the Companies Act, 2013.

Depreciation on fixed assets added/disposed off during the period is provided on pro-rata
basis with reference to the date of addition/disposal.

The assets’ residual values, useful lives and methods of depreciation are reviewed at each
financial year end and adjusted prospectively, if appropriate.

2. Intangible Assets:

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

Software (not being an integral part of the related hardware) acquired for internal use are
treated as intangible assets.

An item of Intangible asset is derecognised on disposal or when no future economic benefits

are expected from its use or disposal. Any profit or loss arising from derecognition of an
intangible asset are measured as the difference between the net disposal proceeds and the
carrying amount of the asset and are recognised in the Statement of Profit and Loss when
the asset is derecognised.

Intangible Assets are amortised over five years on written down basis over the estimated
useful economic life of the assets.

3. Investment Property:

Investment property is property held either to earn rental income or for capital appreciation
or for both, but not for sale in the ordinary course of business, use in the production or
 supply of goods or services or for administrative purposes. Upon initial recognition, an
investment property is measured at cost. Subsequent to initial recognition, investment
property is measured at cost less accumulated depreciation and accumulated impairment
losses if any.

Subsequent expenditure is capitalised to the assets' carrying amount only when it is certain
that the future economic benefits associated with the expenditure will flow to the company
and cost of the item can be measured reliably. All other repairs and maintenance and other
cost are expensed when incurred.

Any gain or loss on disposal of an investment property is recognised in profit or loss.

4. Impairment of tangible (PPE) and intangible assets:

At the end of each reporting period, the Company reviews the carrying amounts of its PPE
and other intangible assets to determine whether there is any indication that these assets
have suffered an impairment loss. If any such indication exists, the recoverable amount of
the asset is estimated in order to determine the extent of the impairment loss. Where it is
not possible to estimate the recoverable amount of an individual asset, the Company
estimates the recoverable amount of the cash-generating unit (CGU) to which the asset
belongs. When the carrying amount of an asset or CGU exceeds its recoverable amount, the
asset is considered impaired and is written down to its recoverable amount. The resulting
impairment loss is recognised in the Statement of Profit and Loss.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the asset. In determining fair value less costs of disposal, recent
market transactions are taken into account. If no such transactions can be identified, an
appropriate valuation model is used.

Where an impairment loss subsequently reverses, the carrying amount of the asset or CGU is
increased to the revised estimate of its recoverable amount, but so that the increased
carrying amount does not exceed the carrying amount that would have been determined
had no impairment loss been recognised for the asset or CGU in prior years. A reversal of an
impairment loss is recognised in the Statement of Profit and Loss.

5. Inventories:

Inventories consisting of stores and spares, raw materials, packing materials, work in
progress, stock in trade and finished goods are valued at lower of cost and net realisable
value. However, materials held for use in production of inventories are not written down
below cost, if the finished products are expected to be sold at or above cost.
 Raw materials, packing materials, stores and spares and stock in trade at moving weighted
average cost.
Work-in-progress at raw material cost inclusive of packing material cost wherever
applicable. Intermediates at factory cost (which includes materials cost, direct labour and
direct utilities).

Finished Goods on all absorption cost basis including raw and packing material cost, labour,
factory overheads, excise and proportionate expenses incurred on freight and octroi,
wherever applicable.

Livestock born during the year owned by the company has been valued at nil.

Traded goods includes cost of purchase and other costs incurred in bringing the inventories
to their present location and condition.

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

6. Leases:

The Company as a Lessee

The Company assesses whether a contract contains a lease, at inception of a contract. A

contract is, or contains, a lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration. To assess whether a
contract conveys the right to control the use of an identified asset, the company assess
whether ;(I) the contract involves the use of an identified asset (II) the company has
substantially all of the economic benefits from use of the asset through the period of the
lease and (III) the company has the right tot direct the use of the asset.

As at the date of commencement of the lease, the company recognizes a right of use asset
(ROU) and the corresponding lease liability for all lease arrangements in which it is a lessee ,
except the leases with the term of 12 months or less (short term leases) and low value
leases. for these short term and low value leases, the company recognizes the lease
payments as an operating expense on a straight line basis over the term of the lease

Lease liability is measured by discounting the leases payments using the interest rate
implicite in the lease or, if not readily determinable using the incremental borrowing rate.

Lease payments are allocated between the principal and finance cost. The finance cost is
charged to statement of profit and loss over the lease period so as to produce a constant
periodic rate of interest on the remaining balance of the liability for each period.

The ROU assets are initially recognized at cost which comprises the initial amount of the
lease liability adjusted for any lease payment made at or prior to the commencement date
 of lease plus any initial direct cost less any lease incentive and restoration cost. They are
subsequently measured at cost less accumulated depreciation and impaired losses if any.
ROU assets are depreciated on a straight line basis over the assets useful life or the lease
whichever is shorter. Impairment of ROU assets is in accordance with the Company's
accounting policy for impairment of tangible and intangible assets.

The Company as a Lessor

Lease income from operating leases where the company is a lessor is recognized in the
statement of profit and loss on a straight line basis over the lease term.

7. Government Grants:

Grants and subsidies from the government are recognised when there is reasonable
assurance that (i) the Company will comply with the conditions attached to them, and (ii) the
grant/subsidy will be received

When the grant or subsidy relates to revenue, it is recognised as income on a systematic

basis in the Statement of Profit and Loss over the periods necessary to match them with the
related costs, which they are intended to compensate. Where the grant relates to an asset,
it is recognised as income in equal amounts over the expected useful life of the related asset
or by deducting the grant in arriving at the carrying amount of the assets. Where the assets
have been fully depreciated with no future related cost, the grant is recognised in profit or
loss. When loans or similar assistance are provided by governments or related institutions,
with an interest rate below the current applicable market rate, the effect of this favourable
interest is regarded as a government grant. The loan or assistance is initially recognised and
measured at fair value and the government grant is measured as the difference between the
initial carrying value of the loan and the proceeds received. The loan is subsequently
measured as per the accounting policy applicable to financial liabilities in respect of loans/
assistance received subsequent to the date of transition. Government grants that are
receivable as compensation for expenses or losses already incurred or for the purpose of
providing immediate financial support with no future related costs are recognized in the
Statement of Profit and Loss in the period in which they become receivable. Grants related
to income are presented under other income in the Statement of Profit and Loss except for
grants received in the form of rebate or exemption which are deducted in reporting the
related expense.

8. Provisions, Contingent Liabilities and Contingent Assets:

Provisions are recognized when there is a present legal or constructive obligation as a result
of a past event and it is probable (i.e. more likely than not) that an outflow of resources
embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. Such provisions are determined
based on management estimate of the amount required to settle the obligation at the
balance sheet date. When the Company expects some or all of a provision to be reimbursed,
 the reimbursement is recognized as a standalone asset only when the reimbursement is
virtually certain.

If the effect of the time value of money is material, provisions are discounted using a current
pre-tax rate that reflects, the risks specific to the liability. When discounting is used, the
increase in the provision due to the passage of time is recognized as a finance cost.

Present obligations arising under onerous contracts are recognized and measured as
provisions. An onerous contract is considered to exist when a contract under which the
unavoidable costs of meeting the obligations exceed the economic benefits expected to be
received from it.

Contingent liabilities are disclosed on the basis of judgment of management / independent

experts. These are reviewed at each balance sheet date and are adjusted to reflect the
current management estimate.

Contingent Assets are not recognized, however, disclosed in financial statement when inflow
of economic benefits is probable.

9. Foreign Currency Transactions:

The financial statements of Company are presented in INR, which is also the functional
currency. In preparing the financial statements, transactions in currencies other than the
entity's functional currency are recognized at the rates of exchange prevailing at the dates of
the transactions. At the end of each reporting period, monetary items denominated in
foreign currencies are translated at the rates prevailing at that date. Non-monetary items
denominated in foreign currency are reported at the exchange rate ruling on the date of
transaction.

10. Share Capital and Securities Premium:

Ordinary shares are classified as equity, incremental costs directly attributable to the issue of
new shares are shown in equity as a deduction net of tax from the proceeds. Par value of
the equity share is recorded as share capital and the amount received in excess of the par
value is classified as securities premium.

11. Dividend Distribution to equity shareholders:

The Company recognizes a liability to make cash distributions to equity holders when the
distribution is authorized and the distribution is no longer at the discretion of the Company.
A distribution is authorized when it is approved by the shareholders. A corresponding
amount is recognized directly in other equity along with any tax thereon.

12. Cash Flows and Cash and Cash Equivalents :

 Statement of cash flows is prepared in accordance with the indirect method prescribed in
the relevant IND AS. For the purpose of presentation in the statement of cash flows, cash
and cash equivalents includes cash on hand, cheques and drafts on hand, deposits held with
Banks, 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

13. Revenue Recognition:

14. Borrowing costs:
Borrowing cost includes interest, commitment charges, brokerage, underwriting costs,
discounts / premiums, financing charges, exchange difference to the extent they are
regarded as interest costs and all ancillary / incidental costs incurred in connection with the
arrangement of borrowing.

Borrowing costs which are directly attributable to acquisition / construction of qualifying

assets that necessarily takes a substantial period of time to get ready for its intended use are
capitalized as a part of cost pertaining to those assets. All other borrowing costs are
recognised as expense in the period in which they are incurred.

15. Employee Benefits:

a) Short term Employee Benefits:

All employee benefits payable wholly within twelve months of rendering services are
classified as short term employee benefits. Benefits such as salaries, wages, short-
term compensated absences, performance incentives etc., are recognized during the
period in which the employee renders related services and are measured at
undiscounted amount expected to be paid when the liabilities are settled.

b) Long Term Employee Benefits:

The cost of providing long term employee benefit such as earned leave is measured
as the present value of expected future payments to be made in respect of services
provided by employees upto the end of the reporting period. The expected costs of
the benefit is accrued over the period of employment using the same methodology
as used for defined benefits post employment plans. Actuarial gains and losses
arising from the experience adjustments and changes in actuarial assumptions are
charged or credited to the Statement of Profit and Loss in which they arise except
those included in cost of assets as permitted. The benefit is valued annually by
independent actuary.
c) Post Employment Benefits:
The Company provides the following post employment benefits:
i. Defined benefit plans such as gratuity; and
ii. Defined contributions plans such as provident fund.
d) Defined benefits Plans:
 The cost of providing benefits on account of gratuity are determined using the
projected unit credit method on the basis of actuarial valuation made at the end of
each balance sheet date, which recognises each period of service as given rise to
additional unit of employees benefit entitlement and measuring each unit
separately to build up the final obligation. The yearly expenses on account of these
benefits are provided in the books of accounts.

Re-measurements comprising of actuarial gains and losses arising from experience

adjustments and change in actuarial assumptions, the effect of change in assets
ceiling (if applicable) and the return on plan asset (excluding net interest as defined
above) are recognized in other comprehensive income (OCI) except those included
in cost of assets as permitted in the period in which they occur. Re-measurements
are not reclassified to the Statement of Profit and Loss in subsequent periods.

Service cost (including current service cost, past service cost, as well as gains and
losses on curtailments and settlements) is recognized in the Statement of Profit and
Loss except those included in cost of assets as permitted in the period in which they
occur.
e) Defined Contribution Plans:
Payments to defined contribution retirement plans, viz., Provident Fund for eligible
employees, and Superannuation benefits are recognized as an expense when
employees have rendered the service entitling them to the contribution.
16. Taxes on Income:

Income tax expense represents the sum of tax currently payable and deferred tax. Tax is
recognized in the Statement of Profit and Loss, except to the extent that it relates to items
recognized directly in equity or in other comprehensive income.

f) Current Tax:

Current tax includes provision for Income Tax computed under Special provision
(i.e., Minimum alternate tax) or normal provision of Income Tax Act. Tax on Income
for the current period is determined on the basis on estimated taxable income and
tax credits computed in accordance with the provisions of the relevant tax laws and
based on the expected outcome of assessments/appeals.

g) Deferred Tax:

Deferred tax is recognised on temporary differences between the carrying amounts

of assets and liabilities in the balance sheet and the corresponding tax bases 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 differences, unabsorbed losses and unabsorbed
depreciation to the extent that it is probable that future taxable profits will be
 available against which those deductible temporary differences, unabsorbed losses
and unabsorbed depreciation can be utilised.

The carrying amount of deferred tax assets is reviewed at each balance sheet date
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.

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 realised, based on tax
rates (and tax laws) that have been enacted or substantively enacted by the balance
sheet date. The measurement of deferred tax liabilities and assets reflects the tax
consequences that would follow from the manner in which the Company expects, at
the reporting date, to recover or settle the carrying amount of its assets and
liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right
to set off current tax assets against current tax liabilities and when they relate to
income taxes levied by the same taxation authority and the Company intends to
settle its current tax assets and liabilities on a net basis.
17. Earnings per Share:
Basic earnings per share is calculated by dividing the profit from continuing operations and
total profit, both attributable to equity shareholders of the Company by the weighted
average number of equity shares outstanding during the period.
18. Current versus non-current classification:
The Company presents assets and liabilities in the Balance Sheet based on current/non-
current classification.
h) An asset is current when it is:
 Expected to be realized or intended to be sold or consumed in the normal
operating cycle,
 Held primarily for the purpose of trading,
 Expected to be realised within twelve months after the reporting period, or
 Cash or cash equivalent unless restricted from being exchanged or used to
settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

i) A liability is current when:

 It is expected to be settled in the normal operating cycle,
 It is held primarily for the purpose of trading,
 It is due to be settled within twelve months after the reporting period, or
 There is no unconditional right to defer the settlement of the liability for at
least twelve months after the reporting period.

All other liabilities are classified as non-current.

j) Deferred tax assets and liabilities are classified as non-current assets and liabilities.
 The operating cycle is the time between the acquisition of assets for processing and
their realization in cash and cash equivalents.
19. Fair value measurement:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date, regardless of
whether that price is directly observable or estimated using another valuation technique. In
estimating the fair value of an asset or a liability, the Company takes into account the
characteristics of asset and liability if market participants would take those into
consideration. Fair value for measurement and / or disclosure purposes in these financial
statements is determined in such basis except for transactions in the scope of Ind AS 2, 17
and 36. Normally at initial recognition, the transaction price is the best evidence of fair
value.

The fair value of an asset or a liability is measured using the assumptions that market
participants would use when pricing the asset or liability, assuming that market participants
act in their economic best interest. A fair value measurement of a non-financial asset takes
into account a market participant’s ability to generate economic benefits by using the asset
in its highest and best use or by selling it to another market participant that would use the
asset in its highest and best use.

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

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

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

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

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

Financial assets and Financial liabilities that are recognized at fair value on a recurring basis,
the Company determines whether transfers have occurred between levels in the hierarchy
by re-assessing categorization at the end of each reporting period.

20. Financial Instruments :

A financial instrument is any contract that gives rise to a financial asset of one entity and a
financial liability or equity instrument of another entity. The Company recognizes a financial
asset or financial liability in its balance sheet only when the entity becomes party to the
contractual provisions of the instrument.
k) Financial Assets :-
A financial asset inter-alia includes any asset that is cash, equity instrument of
another entity or contractual obligation to receive cash or another financial asset or
to exchange financial asset or financial liability under condition that are potentially
favourable to the Company.
i. Investments in subsidiaries :-
Investments in equity shares of subsidiaries are carried at cost less
impairment. Impairment is provided for on the basis explained in Para C (3)
above.
Financial assets other than investment in subsidiaries
Financial assets of the Company comprise trade receivable, cash and cash
equivalents, Bank balances, Investments in equity shares of companies other
than in subsidiaries, investment other than equity shares, loans/advances to
employee / related parties / others, security deposit, claims recoverable etc.
ii. Initial recognition and measurement :-
All financial assets are recognized initially at fair value plus, in the case of
financial assets not recorded at fair value through profit or loss, transaction
costs that are attributable to the acquisition of the financial asset. However,
Trade receivables that do not contain a significant financing component are
measured at Transaction price. Transaction costs of financial assets carried
at fair value through profit or loss are expensed in Statement of Profit and
Loss. Where transaction price is not the measure of fair value and fair value
is determined using a valuation method that uses data from observable
market, the difference between transaction price and fair value is
recognized in Statement of Profit and Loss and in other cases spread over
life of the financial instrument using effective interest method.

iii. Subsequent measurement :-

For purposes of subsequent measurement financial assets are classified in

three categories:
 Financial assets measured at amortized cost
 Financial assets at fair value through OCI
 Financial assets at fair value through profit or loss

iv. Financial assets measured at amortized cost :-

Financial assets are measured at amortized cost if the financials asset is held
within a business model whose objective is to hold financial assets in order
to collect contractual cash flows and the contractual terms of the financial
asset give rise on specified dates to cash flows that are solely payments of
 principal and interest on the principal amount outstanding. These financials
assets are amortized using the effective interest rate (EIR) method, less
impairment. Amortized cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that are an integral
part of the EIR. The EIR amortization is included in finance income in the
statement of profit and loss. The losses arising from impairment are
recognized in the statement of profit and loss in finance costs.

v. Financial assets at fair value through OCI (FVTOCI) :-

Financial assets are measured at fair value through other comprehensive

income if the financial asset is held within a business model whose objective
is achieved by both collecting contractual cash flows and selling financial
assets and the contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding. At initial recognition, an irrevocable election
is made (on an instrument-by-instrument basis) to designate investments in
equity instruments other than held for trading purpose at FVTOCI. Fair value
changes are recognized in the other comprehensive income (OCI). However,
the Company recognizes interest income, impairment losses and reversals
and foreign exchange gain or loss in the income statement. On
derecognition of the financial asset other than equity instruments,
cumulative gain or loss previously recognised in OCI is reclassified to income
statements/retained earnings.
vi. Financial assets at fair value through profit or loss (FVTPL) :-

Any financial asset that does not meet the criteria for classification as at
amortized cost or as financial assets at fair value through other
comprehensive income, is classified as financial assets at fair value through
profit or loss. Further, financial assets at fair value through profit or loss also
include financial assets held for trading and financial assets designated upon
initial recognition at fair value through profit or loss. Financial assets are
classified as held for trading if they are acquired for the purpose of selling or
repurchasing in the near term. Financial assets at fair value through profit or
loss are fair valued at each reporting date with all the changes recognized in
the Statement of profit and loss.
vii. Derecognition :-

The Company derecognises a financial asset only when the contractual

rights to the cash flows from the asset expire, or when it transfers the
financial asset and substantially all the risks and rewards of ownership of the
asset to another entity. If the Company neither transfers nor retains
substantially all the risks and rewards of ownership and continues to control
the transferred asset, the Company recognizes its retained interest in the
asset and an associated liability for amounts it may have to pay.
 viii. Impairment of financial assets :-
The Company assesses impairment based on expected credit loss (ECL)
model on the following:

 Financial assets that are measured at amortised cost.

 Financial assets measured at fair value through other
comprehensive income (FVTOCI).

ECL is measured through a loss allowance on a following basis:-

 The 12 month expected credit losses (expected credit losses that

result from those default events on the financial instruments that
are possible within 12 months after the reporting date)
 Full life time expected credit losses (expected credit losses that
result from all possible default events over the life of financial
instruments)

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

trade receivables or contract assets resulting from normal business
transactions. The application of simplified approach does not require the
Company to track changes in credit risk. However, it recognises impairment
loss allowance based on lifetime ECLs at each reporting date, from the date
of initial recognition.

For recognition of impairment loss on other financial assets, the Company

determines whether there has been a significant increase in the credit risk
since initial recognition. If credit risk has increased significantly, lifetime ECL
is provided. For assessing increase in credit risk and impairment loss, the
Company assesses the credit risk characteristics on instrument-by-
instrument basis.

ECL is the difference between all contractual cash flows that are due to the
Company 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.

Impairment loss allowance (or reversal) recognized during the period is

recognized as expense/income in the statement of profit and loss.

l) Financial Liabilities :-

The Company’s financial liabilities include loans and borrowings including book
overdraft, trade payable, accrued expenses and other payables.

ix. Initial recognition and measurement :-

 All financial liabilities at initial recognition are classified as financial liabilities
at amortized cost or financial liabilities at fair value through profit or loss, as
appropriate. All financial liabilities are recognized initially at fair value and, in
the case of loans and borrowings and payables, net of directly attributable
transaction costs. Any difference between the proceeds (net of transaction
costs) and the fair value at initial recognition is recognised in the Statement
of Profit and Loss or in the “Expenditure Attributable to Construction” if
another standard permits inclusion of such cost in the carrying amount of an
asset over the period of the borrowings using the effective rate of interest.

x. Subsequent measurement :-

The subsequent measurement of financial liabilities depends upon the

classification as described below:-

Financial Liabilities classified as Amortised Cost:

Financial Liabilities that are not held for trading and are not designated as at
FVTPL are measured at amortised cost at the end of subsequent accounting
periods. Amortised cost is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an integral part of the
Effective Interest Rate. Interest expense that is not capitalised as part of
costs of assets is included as Finance costs in the Statement of Profit and
Loss.

xi. Financial Liabilities at Fair value through profit and loss (FVTPL) :-

FVTPL includes financial liabilities held for trading and financial liabilities
designated upon initial recognition as FVTPL. Financial liabilities are
classified as held for trading if they are incurred for the purpose of
repurchasing in the near term. Financial liabilities have not been designated
upon initial recognition at FVTPL.

xii. Derecognition :-

A financial liability is derecognised when the obligation under the liability is

discharged / cancelled / expired. 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 de recognition of the original
liability and the recognition of a new liability. The difference in the
respective carrying amounts is recognized in the statement of profit and
loss.

xiii. Offsetting of financial instruments :-

 Financial assets and Financial liabilities are offset and the net amount is
reported in the balance sheet if there is a currently enforceable legal right to
offset the recognised amounts and there is an intention to settle on a net
basis, to realise the assets and settle the liabilities simultaneously.

m) Derivatives :-

Derivative instruments are initially recognized at fair value on the date a derivative
contract is entered into and are subsequently re-measured to their fair value at the
end of each reporting period. The accounting for subsequent changes in fair value
depends on whether the derivative is designated as a hedging instrument, and if so,
the nature of the item being hedged and the type of hedge relationship designated.
The resulting gain or loss is recognized in the Statement of Profit and Loss
immediately unless the derivative is designated and effective as a hedging
instrument and is recognized in Other Comprehensive Income (OCI). Cash flow
hedges shall be reclassified to profit or loss as a reclassification adjustment in the
same period or periods during which the hedged expected future cash flows affect
profit or loss.

xiv. Embedded Derivatives :-

Derivative embedded in host contract are separated only if the economic
characteristics and risk of the embedded derivatives are not closely related
to economic characteristics and risks of the host and are measured at fair
value through profit or loss. Embedded derivatives closely related to the
host contracts are not separated.

21- A) Ministry of Corporate Affairs (MCA) vide notification dated 24th

March 2021, has amended Schedule III to the Companies Act, 2013 to
enhance the disclosure requirements in financial statements. The financial
statements have been prepared after incorporating the amendments to the
extent they are applicable.

21 - B) Recent accounting pronouncements The Ministry of Corporate Affairs

(MCA) on 31st March 2023 through Companies (Indian Accounting
Standards) Amendment Rules, 2023 has notified the following amendments
to IND AS which are applicable for the annual periods beginning on or after
1st April, 2023.

IND AS 1 – Presentation of Financial Statements

This amendment requires the Company to disclose its material accounting

policies rather than their significant accounting policies.
The Company will carry out a detailed review of accounting policies to
determine material accounting policy information to be disclosed going
forward.

The Company does not expect this amendment to have any material impact
in its financial statements.

IND AS 8 – Accounting Policies, Changes in Accounting Estimates and Errors

This amendment has changed the definition of a “change in accounting

estimates” to a definition of “accounting estimates”. The amendment
clarifies how companies should distinguish changes in accounting policies
from changes in accounting estimates.

The Company does not expect this amendment to have any material impact
in its financial statements.

IND AS 12 – Income Taxes

This amendment has done away with the recognition exemption on initial
recognition of assets and liabilities that give rise to equal and offsetting
temporary differences.

The Company does not expect this amendment to have any material impact
in its financial statements.
Testing of Accounting policies as stated in the financial statements of Raptakos, Brett and
Company Limited.