1 SIGNIFICANT ACCOUNTING POLICIES

The Significant accounting policies have been
predominantly presented below in the order of the
Accounting Standards (AS) specified under Section
133 of the Companies Act, 2013, read with Rule 7 of the
Companies (Accounts) Rules, 2014.

1.1 Basis of Accounting and Preparation of Financial
Statements

The financial statements of the Company have been
prepared in accordance with the Generally Accepted
Accounting Principles in India (Indian GAAP) to comply
with the Accounting Standards specified under section
133 of the Companies Act, 2013 ("the Act"), read with
rule 7 of the Companies (Accounts) Rules 2014 and the
relevant provisions of the Act as applicable. The financial
statements have been prepared on an accrual basis and
under the historical cost convention. The accounting
policies adopted in the preparation of financial
statements are consistent with those of previous years.

1.2 Use of estimates

The preparation of financial statements in conformity
with Indian GAAP requires management to make
judgements, estimates and assumptions that affect
the reported amount of assets, liabilities, revenues
and expenses and disclosure of contingent liabilities
as on the date of the reporting period. The estimates
and assumptions used in the accompanying financial
statements are based upon management's evaluation
of the relevant facts and circumstances as of the date
of financial statements which in management's opinion
are prudent and reasonable. Actual results may differ
from the estimates used in preparing the accompanying
financial statements. Any revision to accounting
estimates is recognized prospectively in current and
future periods.

1.3 Revenue Recognition

Revenue is recognized to the extent that it is probable
that the economic benefits will flow to the Company and
the revenue can be reliably measured. The following
specific recognition criteria must also be met before
revenue is recognized:

i) Sales

Revenue from sale of goods is recognized when all
the significant risks and rewards of ownership of
the goods have been passed to the buyer, usually
on delivery of the goods. The Company collects
Goods and Service tax (GST) on behalf of the
government and, therefore, these are not economic
benefits flowing to the Company. Hence, they are
excluded from revenue.

ii) Interest

Interest income is recognized on a time proportion
basis taking into account the amount outstanding
and the applicable interest rate. Interest income
is included under the head "other income" in the
statement of profit and loss..

iii) Export Benefit

Export Incentives in form of MEIS \ RoDTEP
(effective from 01/01/2022) Income is recognized
in books of account on accrual basis.

iv) Dividend Income

Dividend income on investments is accounted
for when the right to receive the payment is
established.

1.4 Property, Plant & Equipment and Capital Work in
Progress

Tangible Assets are stated at cost of acquisition/
construction less accumulated depreciation,
amortization and impairment loss (if any). Cost comprises
of purchase price, import duties and other non-refundable
taxes or levies and any directly attributable cost to bring
the assets ready for their intended use. Direct expenses,
as well as pro rata identifiable indirect expenses on
projects during the year of construction are capitalized.
Only expenditures that increase the future economic
benefits from the existing asset beyond its previously
assessed standard of performance is included in the
gross book value, e.g., an increase in capacity. The cost
of an addition or extension to an existing asset which is
of a capital nature and which becomes an integral part
of the existing asset is added to its gross book value.
Any addition or extension, which has a separate identity

and is capable of being used after the existing asset is
disposed off, is accounted for separately. The fixed assets
retired from active use are stated at net book value or net
realizable value, whichever is lower. The loss arising due
to write-down is recognized in the statement of profit and
loss. An item of fixed asset is eliminated from the financial
statements on disposal. Gains or losses arising on disposal
are recognized in the statement of profit and loss.

Capital Work In progresses stated at cost less impairment
losses, if any, cost comprises of expenditures incurred
in respect of capital projects under development and
includes any attributable/allocable cost and other
incidental expenses.

Intangible Assets Under Development

Costs incurred on the acquisition of SAP software
licenses and directly attributable implementation
expenses are capitalized as Intangible Assets under
Development. These accumulated costs are tracked as
Intangible assets under development and transferred to
'Computer Software' only when the ERP module goes
live and is available for its intended use.

1.5 Depreciation /Amortization

Depreciable amount for assets is the cost of an asset,
or other amount substituted for cost, less its estimated
residual value. Depreciation on all the tangible fixed
assets is provided on Written Down Value (WDV)
Method as per the useful life prescribed in Schedule II
to the Companies Act, 2013.

Any addition or extension to an existing asset which is
of a capital nature and which becomes an integral part
of the existing asset is depreciated at the rate which is
applied to the existing asset. Depreciation on sale of
assets is provided till the date of sale. Depreciation on
tangible assets is ceased when a fixed asset is retired
from active use and held for disposal or is disposed off.

I ntangible fixed assets in the nature of software are
amortized over a period of time from the date of addition.
Amortization of an intangible asset commences when
the asset is available for use and ceases when the
asset is retired from active use or is disposed off.
Residual value for the purpose of amortization is taken as
zero. At each balance sheet date, the company reviews
the amortization period and amortization method.

1.6 Impairment of property plant and equipment (PPE)
and intangible assets (IA)

The company assesses at each reporting date whether
there is an indication that an asset may be impaired. If any
indication exists, or when annual impairment testing for
an asset is required, the company estimates the assets

recoverable amount. An assets recoverable amount is
the higher of an assets or cash-generating units (CGU)
net selling price and its value in use. The recoverable
amount is determined for an individual asset, unless the
asset does not generate cash inflows that are largely
independent of those from other assets or groups of
assets. Where 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.
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 net selling price, recent market
transactions are taken into account, if available. If no
such transactions can be identified, an appropriate
valuation model is used.

The company bases its impairment calculation on
detailed budgets and forecast calculations which
are prepared separately for each of the company's
cash-generating units to which the individual assets
are allocated. These budgets and forecast calculations
are generally covering a period of five years. For longer
periods, a long-term growth rate is calculated and
applied to project future cash flows after the fifth year.

Impairment losses, including impairment on PPE and IA,
are recognized in the statement of profit and loss.

1.7 Investments

Investments which are intended for sale/maturing within
twelve months are classified as Current Investments.
Others are classified as Long-Term Investments. Cost of
Investments comprises of the purchase price and any
directly attributable expenses incurred.

Current Investments are carried at the lower of cost and
fair value computed individually. Long term investments
are carried at cost. Provision for diminution in value of
long-term investments is made, only if, in the opinion of
the management, such a decline is regarded as being
other than temporary.

On disposal of an investment, the difference between its
carrying amount and net disposal proceeds is charged
or credited to the statement of profit and loss.

1.8 Inventories

Cost of inventories comprises of cost of purchase and
all costs incurred in bringing them to their respective
present location and condition.

Cost has been determined as under:

i) Raw Material on FIFO basis

ii) Packing Material is valued on FIFO basis.

iii) Stock in process- Raw material cost and
proportionate conversion cost

iv) Goods-in-Transit is valued at purchase cost.

v) Finished Goods - at cost or net realizable value
whichever is less.

1.9 Foreign Currency Transactions
Initial Recognition

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

Subsequent Measurement

Foreign currency monetary items are retranslated using
the exchange rate prevailing at the reporting date.
Non-monetary items, which are measured in terms of
historical cost denominated in a foreign currency, are
reported using the exchange rate at the date of the
transaction. Non-monetary items, which are measured
at fair value or other similar valuation denominated in a
foreign currency, are translated using the exchange rate
at the date when such value was determined. All other
exchange differences are recognized as income or as
expenses in the period in which they arise.

1.10 Leases

Rent, Rates and Taxes (including lease rent) represent
operating leases which are recognized as an expense
respectively in the Statement of Profit and Loss.
Erstwhile, Lease charges paid at the onset of the
agreement is amortized over the period of lease on
straight line basis.

1.11 Borrowing Costs

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

Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily
takes a substantial period of time to get ready for its
intended use or sale are capitalized as part of the cost
of the respective asset. All other borrowing costs are
expensed in the period they occur.

1.12 Taxation

Tax expense comprises of current and deferred tax.
Current Tax

Provision for current tax is made for the tax liability
payable on taxable income after considering tax

allowances, deductions and exemptions determined in
accordance with the prevailing tax laws.

Consequent to the adoption of the new tax regime
under Section 115BAA of the Income-tax Act, 1961,
the Company has opted to pay corporate tax at
a concessional base rate of 22% (plus applicable
surcharge and cess) starting from the current financial
year.

Deferred Tax

Deferred tax liability or asset is recognized for timing
differences between the profits / losses offered for
income tax and profits / losses as per the financial
statements. Deferred tax assets and liabilities are
measured using the tax rates and tax laws that have
been enacted or substantively enacted at the Balance
Sheet date.

Deferred tax asset is recognized only to the extent there
is reasonable certainty that the assets can be realized in
future; however, where there is unabsorbed depreciation
or carried forward loss under taxation laws, deferred tax
asset is recognized only if there is a virtual certainty of
realization of such asset. Deferred tax asset is reviewed
as at each Balance Sheet date and written down or
written up to reflect the amount that is reasonably /
virtually certain to be realized.