7. Significant accounting policies followed by the
Company

A. Foreign currency

i. Foreign currency transactions

In accordance with IndAS 21, on accounting
for the effects of changes in foreign exchange
rates, Transaction in foreign currencies are
recognised at the prevailing exchange rates on
the transaction date. Realized gains and losses
on settlement of foreign currency transactions
are recognised in the profit and loss account,
foreign currency assets and liabilities at the year-
end are translated at the year-end exchange
rates, and the resultant exchange difference is
recognised in the profit and loss account.

Foreign currency differences are generally
recognised in profit or loss. Any income or
expense on account of exchange difference
either on settlement or on translation is
recognised in the Statement of profit and loss in
the year in which they arise.

The Company has adopted Appendix B to
IndAS 21, Foreign Currency transactions
and advance considerations notified in the
Companies (Indian Accounting Standards)
Rules, 2018. Accordingly, the exchange rate for
translation of foreign currency transaction; in
cases when Company receives or pays advance
consideration is earlier of:-

• the date of initial recognition of non¬
monetary prepayment asset or deferred
income liability or

• the date that the related item is recognized
in the financial statements.

If the transaction is recognized in stages;
then a transaction date will be established
for each stage.

B. Revenue Recognition

i) Revenue from contract with customers for
sale of goods and provision of services

The Company recognizes revenue from contracts
with the customers based on five step model
defined in IndAS 115. The Company satisfies
a performance obligation and recognizes
revenue over time, if any of the conditions
given in IndAS 115 are satisfied; else revenue

1. The amount of revenue can be
measured reliably;

2. It is probable that the economic benefits
associated with the transaction will flow
to the Company;

3. The stage of completion of the transaction
at the end of the reporting period can be
measured reliably; and

4. The costs incurred or to be incurred
in respect of the transaction can be
measured reliably.

Stage of completion is determined by the
proportion of actual costs incurred to-date, to
the estimated total costs of the transaction.

b. Transaction Price

The Company is required to determine the
transaction price in respect of each of its
contracts with customers.

Contract with customers for sale of goods
or services are either on a fixed price or on
variable price basis.

For allocating the transaction price, the
Company measures the revenue in respect of
each performance obligation of contract at
its relative standalone selling price. The price
that is regularly charged for an item when sold
separately is the best evidence of its standalone
selling price. In making judgment about
the standalone selling price, the Company
also assesses the impact of any variable
consideration in the contract, due to discounts
or penalties, the existence of any significant
financing component and any non-cash
consideration in the contract.

iii) I nterest income is accrued on a time basis, by
reference to the principal outstanding and
effective interest rate applicable.

iv) Dividend income is recognised when the right
to receive the payment is established.

Employee benefits

i. Short term employee benefits

Short-term employee benefits are expensed
as the related service is provided. A liability
is recognised for the amount expected to be
paid if the Company has a present legal or
constructive obligation to pay this amount as a
result of past service provided by the employee
and the obligation can be estimated reliably.

ii. Defined contribution plans

• Provident Fund Scheme

The Company makes specified monthly
contributions towards employee provident
fund directly to the Government under the
Employees Provident Fund Act, 1952.

• exchange differences arising from monetary
assets and liabilities

Interest income or expense is recognised using the
effective interest rate method.

E. Grants/ Subsidies

Government grants are recognised where there is
reasonable assurance that the grant will be received
and all attached conditions will be complied with.

Where the grant relates to an asset, the cost of the
asset is shown at gross value and grant thereon is
treated as capital grant. The capital grant will be
recognised as income in the statement of profit
and loss over the period and in proportion in which
depreciation is charged.

Revenue grants are recognised in the statement
of profit and loss in the same period as the related
cost, which they are intended to compensate,
are accounted for.

F. Borrowing cost

Borrowing costs directly attributable to the
acquisition, construction or production of qualifying
assets, which are assets that necessarily take a
substantial period of time to get ready for their
intended use or sale, are added to the cost of those
assets, until such time as the assets are substantially
ready for their intended use or sale. The Company
considers a period of twelve months or more as a
substantial period of time. Interest income earned
on the temporary investment of specific borrowings
pending their expenditure on qualifying assets
is deducted from the borrowing costs eligible for
capitalisation.

Finance expenses are recognised immediately in the
Statement of Profit and Loss, unless they are directly
attributable to qualifying assets, in which case they
are capitalised in accordance with the Company's
policy on borrowing costs.

All other borrowing costs are recognised in the
Statement of Profit and Loss in the period in which
they are incurred.

G. Taxation

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

i) Current tax

The Company's current tax is calculated using
tax rates that have been enacted or substantively
enacted by the end of the reporting period in
the countries where the Company, its branches
and jointly controlled operations operate and
generate taxable income.

Management periodically evaluates positions
taken in tax returns with respect to situations
in which applicable tax regulations is subject to
interpretations. It establishes provisions, where
appropriate, on the basis of amounts expected
to be paid to the tax authorities.

ii) Deferred tax

Deferred tax is recognised on temporary
differences between the carrying amounts of
assets and liabilities in the financial statements
and the corresponding tax bases used in the
computation of taxable profit. Deferred tax
liabilities are generally recognised for all taxable
temporary differences. Deferred tax assets
are generally recognised for all deductible
temporary differences to the extent that it is
probable that taxable profits will be available
against which those deductible temporary
differences can be utilised. Such deferred
tax assets and liabilities are not recognised
if the temporary difference arises from the
initial recognition (other than in a business
combination) of assets and liabilities in a
transaction that affects neither the taxable
profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable
temporary differences associated with interests
in jointly controlled operations except where
it is probable that the temporary difference
will not reverse in the foreseeable future.
Deferred tax assets arising from deductible
temporary differences associated with such
interests are only recognised to the extent that
it is probable that there will be sufficient taxable
profits against which to utilise the benefits of the
temporary differences and they are expected to
reverse in the foreseeable future.

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

Deferred tax assets / liabilities in respect of
temporary differences which originate and
reverse during the tax holiday period are not
recognised. Deferred tax assets / liabilities in
respect of temporary differences that originate
during the tax holiday period but reverse after
the tax holiday period are recognised.

H. Inventories

Inventories are measured at the lower of cost and
net realizable value. Inventory of scrap is valued at
estimated realizable value. The cost of inventories
is determined using FIFO method. Cost includes
direct materials, labour, other direct cost and

manufacturing overheads. Inventories of finished
goods also includes applicable taxes.

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

I. Property, plant and equipment

i) Recognition and measurement

Items of property, plant and equipment are
measured at cost less accumulated depreciation
and any accumulated impairment losses.

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.

Income and expenses related to the incidental
operations, not necessary to bring the item to
the location and condition necessary for it to be
capable of operating in the manner intended by
management, are recognised in profit or loss.

If significant parts of an item of property, plant
and equipment have different useful lives, then
they are accounted and depreciated for as
separate items (major components) of property,
plant and equipment

Any gain or loss on disposal of an item of
property, plant and equipment is recognised in
statement of profit and loss.

ii) Subsequent expenditure

Subsequent expenditure is capitalised only if it
is probable that the future economic benefits
associated with the expenditure will flow to
the Company and the cost of the item can be
measured reliably.

iii) Depreciation

Depreciation is provided, pro rata to the
period of use, based on useful lives specified in
Schedule II to the Companies Act, 2013 except in

the case where the estimated useful life based
on management experience and technical
evaluation differs.

Depreciation is charged on the Straight¬
Line method (SLM) in the Company.
Depreciation methods, useful lives and residual
values are reviewed at each reporting date and
adjusted, if appropriate.

Capital expenditure in respect of which
ownership does not vest with the Company is
amortized over a period of five years.

Assets held under finance leases are depreciated
over their expected useful lives on the same
basis as owned assets. However, when there is
no reasonable certainty that ownership will be
obtained by the end of the lease term, assets are
depreciated over the shorter of the lease term
and their useful lives.

Leasehold land is amortised over the period of
lease on a straight-line basis.

Short term leases and leases of low value
assets

Payments associated with short-term leases of
equipment and all leases of low-value assets
are recognised on a straight-line basis as an
expense in profit or loss. Short-term leases are
leases with a lease term of 12 months or less.

The estimated useful life of these Property, Plant
and Equipment is mentioned below:

An item of property, plant and equipment is
derecognised upon disposal or when no future
economic benefits are expected to arise from
the continued use of the asset. Any gain or loss
arising on the disposal or retirement of an item
of property, plant and equipment is determined
as the difference between the sales proceeds
and the carrying amount of the asset and is
recognised in the Statement of Profit and Loss.

iv) Capital work-in-progress

Capital work-in-progress comprises of assets
in the course of construction for production
or/and supply of goods or services or
administrative purposes, or for purposes not

yet determined, are carried at cost, less any
recognised impairment loss. At the point when
an asset is operating at management's intended
use, the cost of construction is transferred to
the appropriate category of property, plant
and equipment. Costs associated with the
commissioning of an asset are capitalised where
the asset is available for use and commissioning
has been completed.

J. Share-based payments:

a) Employees of the Company receives
remuneration in the form of share-based
payments, whereby employees render services
as consideration for equity instruments (equity-
settled transactions).

b) The cost of equity-settled transactions is
determined by the fair value at the date
when the grant is made using an appropriate
valuation model.

c) That cost is recognised, together with a
corresponding increase in share-based payment
(SBP) reserves in equity, over the period in which
the performance and/ or service conditions are
fulfilled. The cumulative expense recognised for
equity-settled transactions at each reporting
date until the vesting date reflects the extent
to which the vesting period has expired and
the Company's best estimate of the number of
equity instruments that will ultimately vest.

d) When the terms of an equity-settled award are
modified, the minimum expense recognised is
the expense had the terms not been modified,
if the original terms of the award are met.
An additional expense is recognised for any
modification that increases the total fair value
of the share-based payment transaction
or is otherwise beneficial to the employee
as measured at the date of modification.
Where an award is cancelled by the entity or by
the counterparty, any remaining element of the
fair value of the award is expensed immediately
through profit or loss.

e) The dilutive effect of outstanding options is
reflected as additional share dilution in the
computation of diluted earnings per share.

K. Leases

The Company has adopted IndAS 116, effective from
annual reporting period beginning April 1, 2019 and
applied the standard to its existing leases, with the
modified retrospective method. This has resulted
into recognition of Right of use assets at an amount
equal to Lease liability on date of initial application.

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.

Company as a lessee

The Company accounts for each lease component
within the contract as a lease separately from non¬
lease components of the contract and allocates
the consideration in the contract to each lease
component on the basis of the relative stand-alone
price of the lease component and the aggregate
stand-alone price of the non-lease components.

The Company recognises right-of-use asset
representing its right to use the underlying asset
for the lease term at the lease commencement
date. The cost of the right-of-use asset measured
at inception is comprising of the amount of the
initial measurement of the lease liability adjusted
for any lease payments made at or before the
commencement date less any lease incentives
received. The right-of-use assets is subsequently
measured at cost less any accumulated depreciation,
accumulated impairment losses, if any and adjusted
for any re-measurement of the lease liability.
The right of- use assets are depreciated using the
straight-line method from the commencement date
over the shorter of lease term or useful life of right-
of-use asset. The estimated useful lives of right-of-use
assets are determined on the same basis as those of
property, plant and equipment. Right-of-use assets
are tested for impairment whenever there is any
indication that their carrying amounts may not be
recoverable. Impairment loss, if any, is recognised in
the statement of profit and loss.

The Company measures the lease liability at the
present value of the lease payments that are not
paid at the commencement date of the lease.
The lease payments are discounted using the
Company's genral borrowing rate. For leases with
reasonably similar characteristics, the Company,
on a lease by lease basis, may adopt either the
incremental borrowing rate specific to the lease
or the incremental borrowing rate for the portfolio
as a whole. The lease payments include fixed
payments, variable lease payments, residual value
guarantees, exercise price of a purchase option
where the Company is reasonably certain to
exercise that option and payments of penalties for
terminating the lease, if the lease term reflects the
lessee exercising an option to terminate the lease.
The lease liability is subsequently re-measured
by increasing the carrying amount to reflect
interest on the lease liability, reducing the carrying
amount to reflect the lease payments made and
re-measuring the carrying amount to reflect
any reassessment or lease modifications or to
reflect revised in-substance fixed lease payments.
The Company recognises the amount of the re¬
measurement of lease liability due to modification
as an adjustment to the right-of-use asset and
statement of profit and loss depending upon the

nature of modification. Where the carrying amount
of the right-of-use asset is reduced to zero and
there is a further reduction in the measurement
of the lease liability, the Company recognises
any remaining amount of the re-measurement in
statement of profit and loss.

The Company has elected not to apply the
requirements of IndAS 116 Leases to;

1. Short-term leases of all assets that have a lease
term of 12 months or less, and

2. Leases for which the underlying asset is of low
value as agreed by the management.

The lease payments associated with above 2 types of
leases are recognized as an expense on a straight-line
basis over the lease term.

L. Financial Instruments

Financial assets and financial liabilities are recognized
when the Company becomes a party to the
contractual provisions of the instruments.

a) Financial Assets

Financial assets comprises of investments in
equity instruments, cash and cash equivalents,
loans and other financial assets.

Initial Recognition:

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 financial assets. Purchase or
sales of financial assets that requires delivery of
assets within a period of time frame established
by regulation or convention in the market
place are recognized on the trade date, i.e.
the date the Company committed to purchase
or sell the assets.

Subsequent Measurement:

i) . Financial assets measured at amortized Cost:

Financial assets are subsequently
measured at amortized cost if theses
financial assets are held within a business
whose objective is to hold theses assets
in order to collect contractual cash flows
and where contractual terms of financial
assets give rise on specified dates to
cash flows that are solely payments of
principal and interest on the principal
amount outstanding.

ii) . Financial assets at Fair Value through Other

Comprehensive Income (FVTOCI):

Financial Assets that are held within
a business model whose objective is
achieved by both collective contractual
cash flows and selling financial assets and

the contractual terms of financial assets
give rise on specified dates to cash flows
that are solely payments of principal
and interest on the principal amount
outstanding are subsequently measure
at FVTOCI are recognized in Other
Comprehensive Income.

Equity instruments held for trading are
classified as at fair value through profit or
loss (FVTPL). For other equity instruments
the Company classifieds the same as
FVTOCI. The classification is made on initial
recognition and is irrevocable. Fair Value
changes on equity instruments at FVTOCI,
excluding dividends are recognized in
Other Comprehensive Income (OCI)

iii). Fair Value through Profit or Loss (FVTPL):

Financial Assets are measured at FVTPL if
does not meet the criteria for classification
as measured at amortized cost or at
FVTOCI. All fair changes are recognized in
the Statement of Profit and Loss.

De-recognition of Financial Assets:

Financial Assets are derecognized when the
contractual rights to cash flows from the
financial assets expire or the financial assets is
transferred, and he transfer qualifies for de¬
recognition. On de-recognition of the financial
assets in its entirety, the difference between
the carrying amount (measured at the date of
de-recognition) and the consideration received
(including any new assets obtained less any new
liabilities assumed) shall be recognized in the
statement of Profit and Loss.

b) Financial Liabilities

The Company's financial liabilities include
following:

o Borrowing from Banks

o Borrowing from Others

o Trade Payables

o Other Financial Liabilities

Classification

The Company's financial liabilities are measured
at amortized cost.

Initial Recognition and Measurement

Financial liabilities are initially recognized at
fair value plus any transaction costs, (if any)
which are attributable to acquisition of the
financial liabilities.

Subsequent Measurement:

Financial liabilities are subsequently measured
at amortised cost using the effective interest
rate method.

The Effective Interest Rate Method is a method
of calculating the amortised cost of a financial
liability and of allocating interest expenses over
the relevant period. The effective interest rate is
the rate that exactly discounts estimated future
cash payments (including transaction costs
and other premiums or discounts) through the
expected life of the financial liability.

De-recognition of Financial Liabilities:

Financial liabilities shall be derecognized when,
and only when it is extinguished i.e. when the
obligation specified in the contract is discharged
or cancelled or expires.

c) Offsetting of Financial assets and Financial
Liabilities:

Financial assets and Financial Liabilities are offset
and the net amount is presented in Balance
Sheet when, and only when, the Company has
legal right to offset the recognized amounts and
intends either to settle on the net basis or to
realize the assets and liabilities simultaneously.

d) Reclassification of Financial Instruments:

The Company determines classification
of financial assets and liabilities on initial
recognition. After initial recognition, no
reclassification is made for financial assets
which are categorized as equity instruments
at FVTOCI, and financial assets or liabilities
that are specifically designated as FVTPL.
For financial assets which are debt instruments,
a reclassification is made only if there is a change
in business model for managing those assets.
Changes to the business model are expected
to be very infrequent. The management
determines the change in a business model as
a results of external of internal changes which
are significant to the Company's Operations.
A Change in business occurs when the
Company either befins or ceases to perform
an activity that is significant to its operations.
IF the Company reclassifies financial assets,
it applies the reclassification prospectively
effective from the reclassification date which is
the first day of the immediately next reporting
period following the change in business model.
The Company does not restate any previously
recognized gains, losses (including impairment
gains or losses) or interest.

M. Fair Value Measurement

A number of Company's accounting policies and

disclosures require the determination of fair value, for

both financial and non-financial assets and liabilities.

Fair value is the price that would be received on
sell of an assets or plaid to transfer a liability in an
orderly transaction between market participants at
the measurement date. A fair value measurement
assumes that the transaction to sell the asset or
transfer the liability takes place either in the principal
market for the assets or liabilities or in the absence
of a principal market, in the most advantageous
market for the assets or liability. The principal market
or the most advantageous market must be accessible
to the Company.

The fair value of an asset or liability is measured
using the assumptions that market participants
would use when pricing the assets 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 assets in
its highest the best use or by selling it to another
market participant that would use the assets 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 assets and liabilities for which fair value is measured
or disclosed in the Ind As Financial Statements are
categorized within the fair value hierarchy based
on the lowest level input that is significant to the
fair value measurement as a whole. The fair value
hierarchy is described as below;

a) Level 1 - unadjusted quoted prices in active
markets for identical assets and liabilities.

b) Level 2 - Input other than quoted prices
included within Level 1 that are observable for
the asset or liabilities, either directly or indirectly.

c) Level 3 - unobservable inputs for the
asset or liability.

For assets and liabilities that are recognized in the Ind
As Financial Statements at fari 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.

For the purpose of fair value disclosures, the Company
has determined classes of assets and liabilities on the
basis of the nature, characteristics and risk of the
asset or liability and the level of fair value hierarchy.

Fair values have been determined for measurement
and / or disclosure purposes based on the following
methods. When appliable, further information about
the assumptions made in determining fair values is
disclosed in the notes specific to that assets or liability.

a) Investment in equity and debt securities

The fair value is determined by reference to
their quoted price at the reporting date. In the
absence of quoted price, the value of the financial
asset is measured using valuation techniques.

d) Trade and other receivables

The fair value of trade and other receivables is
estimated as the present value of future cash
flows, discounted at the market rate of interest
at the reporting date. However, in respect of
such financial instruments, fair value generally
approximates the carrying amount due to short
term nature of such assets.

c) Non derivative financial liabilities

Fair value, which is determined for disclosure
purposes, is calculated based on the present
value of future principal and interest cash flows,
discounted at the market rate of interest at the
reporting date. For finance leases, the market
rate of interest is determined by reference to
similar lease agreements.