1.3 Material accounting policies:

I. Property Plant and Equipment

a) Initial and subsequent recognition and CWIP:

Property Plant & Equipment are carried at the cost of acquisition or construction, less accumulated depreciation
and accumulated impairment, if any. The cost of items of Property Plant & Equipment includes taxes (other than
those subsequently recoverable from tax authorities), duties, freight and other directly attributable costs related
to the acquisition or construction of the respective assets. Know-how related to plans, designs and drawings of
buildings or plant and machinery is capitalized under relevant asset heads.

Subsequent costs are included in the assets carrying amount or recognized as separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the company and the
cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate
asset is derecognized when replaced. All other repairs & maintenance are charged to profit and loss during the
reporting period in which they are incurred.

Capital work-in-progress comprises of the cost of Property Plant and Equipment that are not ready for their
intended use at the reporting date. Any gain or loss on de-recognition (calculated as difference between the net
disposal proceeds and the carrying amount of the asset) is recognized in the Statement of Profit and Loss when
the asset is derecognized.

b) Depreciation & Amortization:

Depreciation is provided on a pro-rata basis on the straight-line method based on estimated useful life prescribed
under Schedule II to the Companies Act, 2013.

c) Impairment:

The carrying amounts of the Company's tangible assets are reviewed at each balance sheet date to determine whether
there is any indication of impairment. If any such indication exists, the assets' recoverable amounts are estimated in
order to determine the extent of impairment loss, if any. An impairment loss is recognized whenever the carrying
amount of an asset exceeds its recoverable amount. The impairment loss, if any, is recognized in the Statement of
Profit and Loss in the period in which impairment takes place.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate
of its recoverable amount, however subject to the increased carrying amount not exceeding the carrying amount that
would have been determined (net of amortization or depreciation) had no impairment loss been recognized for the
asset in prior accounting periods.

The residual values, useful lives and method of depreciation of property, plant and equipment is reviewed at each
financial year end and adjusted prospectively, if appropriate.

d) Non Current Assets Held for Sale:

Non-Current Assets are classified as Held for Sale if their carrying amount will be recovered principally through a sale
transaction rather than through continuing use and sale is considered highly probable. Also, such assets are classified
as held for sale only if the management expects to complete the sale within one year from the date of classification.

Non-current assets classified as held for sale are measured at the lower of their carrying amount and the fair value
less cost to sell. Noncurrent assets are not depreciated or amortized.

II. Intangible Assets:

a) Initial and subsequent recognition:

Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less
accumulated amortization and impairment, if any.

Separately purchased intangibles are initially measured at cost. Intangible assets acquired in a business
combination are recognized at fair value at the acquisition date. Subsequently intangible assets are carried at
cost less accumulated amortization and accumulated impairment loss, if any.

The useful lives of intangible assets is assessed as either finite or infinite. Finite-life intangible assets are
amortized on a straight-line basis over the period of their expected useful lives. Estimated useful lives of finite-life
intangible assets is as follows:

Computer Software - 3 years

b) Amortization:

The amortization period and the amortization method for finite-life intangible assets is reviewed at each financial
year end and adjusted prospectively, if appropriate.

III. Investments property

a) Initial and subsequent recognition:

Investment properties are properties that are held to earn rentals and /or for capital appreciation (including property
under construction for such purposes) and not occupied by the Company for its own use.

Investment properties are measured initially at cost, including transaction costs and net of recoverable taxes. The cost
includes the cost of replacing parts and borrowing costs if recognition criteria are met. When significant parts of the

investment property are required to be replaced at intervals, the Company depreciates them separately based on their
specific useful lives. All other repair and maintenance costs are recognized in profit or loss as incurred.

Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and
accumulated impairment loss, if any.

b) Depreciation:

Depreciation on Investment property, wherever applicable, is provided on straight line basis as per useful lives
prescribed in Schedule II to Companies Act, 2013.

c) De-recognition:

Investment properties are derecognized either when they have been disposed of or when they are being occupied
by the Company for its own use or when they are permanently withdrawn from use and no future economic benefit
is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the
asset is recognized in profit or loss in the period of de-recognition.

IV. Inventories:

Inventories are valued at lower of Cost and Net Realizable Value.

The cost is determined as follows:

a) Raw and Packing Materials are valued at cost or market value, whichever is lower, computed on weighted
average basis. The cost includes the cost of purchase and other expenses directly attributable to their acquisition
but excludes duties and taxes, which are subsequently recoverable.

b) The finished goods inventory is valued at cost or net realizable value whichever is lower. Cost includes material
cost, conversion, appropriate factory overheads, any tax or duties (as applicable) and other costs incurred in
bringing the inventories to their present location and condition.

c) Work-in-Process is valued at material cost and cost of conversion appropriate to their location in the manufacturing
cycle.

d) Stores, Spares and consumables are valued at cost, computed on First in First Out (FIFO) basis. The cost
includes the cost of purchase and other expenses directly attributable to their acquisition but excludes duties and
taxes that are subsequently recoverable, if any.

Slow-moving and damaged, unserviceable stocks are adequately provided wherever considered necessary.

V. Cash and Cash Equivalents:

Cash and cash equivalents for the purposes of Cash Flow Statements includes cash in hand, deposits with banks
and short term highly liquid investments, which are readily convertible into cash and have original maturities of three
months or less and which are subject to an insignificant risk of changes in value.

VI. Non-current Assets held for sale:

Non-current assets or disposal groups comprising of assets and liabilities are classified as 'held for sale' when all the
following criteria are met:

(i) decision has been made to sell

(ii) the assets are available for immediate sale in its present condition
(iii the assets are being actively marketed

(iv) sale has been agreed or expected to be concluded within 12 months of the Balance Sheet date

Subsequently, such non-current assets and disposal groups classified as held for sale are measured at the lower of its
carrying value and fair value less cost to sell. Non-current assets held for sale are not depreciated or amortized.

VII. Borrowing costs:

Borrowing costs, if any, directly attributable to the acquisition, construction or production of an qualifying asset (net of
income earned on temporary deployment of funds) that necessarily takes a substantial period of time to get ready for
its intended use or sale are capitalized. All other borrowing costs are charged to statement of profit and loss. 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
borrowing cost.

General Borrowing cost incurred in connection with qualifying assets is capitalized by applying the capitalization rate
on the quantum of such borrowings utilized for such assets.

VIII. Revenue recognition:

Revenue from contracts with customers is recognized when control of the goods or services are transferred to the
customer at an amount that reflects the consideration to which the company expects to be entitled in exchange for
those goods or services.

Revenue is measured based on the transaction price, which is the consideration, adjusted for discounts and other
incentives, if any, as specified in the contract with the customer. Revenue also excludes taxes or other amounts
collected from customers in its capacity as an agent. If the consideration in a contract includes a variable amount, the
company estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to
the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable
that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the associated
uncertainty with the variable consideration is subsequently resolved.

Dividend income is recognized in statement of profit and loss only when the right to receive payment is established,
which is generally when shareholders approve dividend.

Export incentives receivable under Duty Drawback Scheme and MEIS are accounted on accrual basis.

Interest income is recognized using the effective interest rate (EIR) method.

Insurance claims are recognized post filing of the claim with the insurer.

IX. Foreign Currency Transactions:

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing on the date of
transaction. Monetary items denominated in foreign currencies at the year end are re-measured at the exchange rate
prevailing on the balance sheet date. Non-monetary foreign currency items are carried at cost. Any income or expense
on account of exchange difference either on settlement or on restatement is recognized in the Statement of Profit and
Loss.

The Exchange Rate Difference and the forward premium on the loan taken for capital assets are being capitalized
along with Interest till the date of commissioning of the said capital assets.

X. Employee Benefits:

a) Short term employee benefits:

All employee benefits payable wholly within twelve months of rendering the service are classified as short term
employee benefits and they are recognized in the period in which the employee renders the related service. The
Company recognizes the undiscounted amount of short-term employee benefits expected to be paid in exchange
for services rendered as a liability (accrued expense) after deducting any amount already paid.

b) Long term employee benefits:

i) Defined contribution plans:

Contributions to defined contribution schemes such as employees state insurance, labour welfare fund,
superannuation scheme, employee pension scheme etc. are charged as an expense based on the amount
of contribution required to be made as and when services are rendered by the employees. Company's
provident fund contribution is made to a government administered fund and is charges as an expense in the
Statement of Profit and Loss. The above benefits are classified as Defined Contribution Schemes as the
Company has no further obligations beyond the monthly contributions.

ii) Defined benefit plans:

The Company operates a defined benefit gratuity plan, which required 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.

Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts
included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts
included in net interest on the net defined benefit liability) are recognized immediately, in the balance sheet
with a corresponding debit or credit to retained earnings through Other Comprehensive Income in the period

in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.

Past service costs are recognized in profit or loss on the earlier of:

- the date of the plan amendment or curtailment or

- the date that the Company recognizes related restructuring costs

- Net interest is calculated by applying the discount rate to the net defined liability or asset. The Company
recognizes the following changes in the net defined benefit obligation as an expense in the statement
of Profit and Loss:

- service costs comprising current service costs, pasts service costs, gains and losses on curtailments
and non-routine settlements.

- Net Interest expense or income.

c) Termination benefits:

Termination benefits in the nature of voluntary retirement benefits or termination benefits arising from restructuring
are recognized in the Statement of Profit or Loss. The Company recognizes termination benefits at the earlier of the
following dates:

- when the Company can no longer withdraw the offer of these benefits

- when the company recognizes costs for restructuring that is within the scope of IND AS 37 and involves the
payment of termination benefits.

XI. Fair Value Measurement:

The Company measures financial instruments at fair value on each Balance Sheet date. Fair value is the price that
would be received to sell an asset or settle a liability in an ordinary transaction between market participants at the
measurement date. The fair value measurement is based on presumption that the transaction to sell the asset or
transfer the liability takes place either:

- in the principal market for the asset or liability or

- in absence of principal market, in the most advantageous market for asset or liability. The principal or the most
advantageous market should be accessible to the Company.

The fair value of an asset or a liability is measured using the assumption that market participants would use when
pricing an asset or liability acting in their best economic interest. 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 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 market prices in active market 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.

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines
whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest
level input that is significant to the fair value measurement as whole) at the end of each reporting period.

External valuers are involved for valuation of significant assets, such as properties, unquoted financial assets etc.
Involvement of independent external valuers is decided upon annually by the Company. Further such valuation is done
annually at the end of the financial year and the impact if any on account of such fair valuation is taken in the annual
financial statements.

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

XII. Leases:

The Company's lease asset classes primarily consist of leases for land and buildings. The Company, at the inception
of a contract, assesses whether the contract is a lease or not lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified asset for a time in exchange for a consideration.

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 right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the
end of the lease term.

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 Company's incremental borrowing rate. 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 the 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 has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have
a lease term of 12 months or less and leases of low-value assets (assets of less than Rs. 1,00,000 in value). The
Company recognises the lease payments associated with these leases as an expense over the lease term.

In the comparative period, leases under which the Company assumes substantially all the risks and rewards of
ownership are classified as finance leases. When acquired, such assets are capitalized at fair value or present value
of the minimum lease payments at the inception of the lease, whichever is lower. Lease payments and receipts under
operating leases are recognised as an expense and income respectively, on a straight line basis in the statement of
profit and loss over the lease term except where the lease payments are structured to increase in line with expected
general inflation.

XIII. 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.

a) Financial Assets:

i) Initial recognition and measurement:

Financial assets are recognized when the Company becomes a party to the contractual provisions of the
instrument.

On initial recognition, all financial assets are recognized at fair value. In case of financial assets which are
recognized at Fair Value through Profit and Loss (FVTPL), its transaction costs are recognized in the statement
of profit and loss. In other cases, transaction costs are attributable to the acquisition value of the financial asset
are added to the value of financial asset.

Financial assets are not reclassified subsequent to their recognition, except and if and in the period the Company
changes its business model for managing financial assets.

ii) Subsequent measurement:

Financial assets are subsequently classified and measured at:

- Amortized cost

- Fair value through profit and loss (FVTPL)

- Fair value through other comprehensive income (FVTOCL)

Investments in Debt Instruments:

A debt instrument is measured at amortized cost or at FVTPL. Any debt instrument, which does not meet the criteria
for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. Debt instruments included within the
FVTPL category are measured at fair value with all changes recognized in the Statement of profit and loss.

a) Financial Assets measured at amortized cost:

Financial assets are measured at amortized cost when the asset is held within a business model, whose objective
is to hold assets for collecting contractual cash flows and contractual terms of the assets are such that they give
rise on specified dates to cash flows that are solely payments of principal and interest. Such financial assets
are subsequently measured at amortized cost using the effective interest rate method (EIR). The EIR is the rate
that discounts estimated future cash income through the expected life of financial instrument. The losses from
impairment are recognized in the statement of profit and loss.

b) Financial Assets measured at fair value through OCI (FVTOCI):

Financial assets under this category are measured initially as well as at each reporting date at fair value. Fair
value movements are recognized in the other comprehensive income.

c) Financial Assets measured at fair value through profit and loss:

Financial Assets under this category are measured initially as well as at each reporting date at fair value, with all
changes recognized in statement of profit and loss.

Investments in Equity Instruments:

All investments in equity instruments classified under financial assets are initially measured at fair value. The
Company may, on initial recognition, chooses to measure the same either at FVTOCI or FVTPL, which is done
on an instrument-by-instrument basis.

Fair value changes on an equity instrument is recognized as other income in the Statement of Profit and Loss
unless the Company has elected to measure irrevocably such instrument at FVTOCI. Fair value changes
excluding dividends, on an equity instrument measured at FVTOCI are recognized in OCI. Amounts recognized
in OCI are not subsequently reclassified to the Statement of Profit and Loss even on the sale of investment.
Dividend income on the investments in equity instruments are recognized as 'other income' in the Statement of
Profit and Loss.

Investment in Subsidiary, Joint Venture and Associate

Investments in equity instruments of Subsidiaries are measured at costs. Provision for impairment loss on such
investment is made only when there is a diminution in the value of investment which is other than temporary.

iii) Derecognition of Financial Assets:

A financial asset is derecognized only when the contractual rights to receive cash flows from the asset have
expired or the Company has transferred the financial asset and substantially all the risks and rewards of ownership
of the asset.

iv) Impairment of Financial Assets:

Expected credit losses are recognized for all financial assets subsequent to initial recognition other than financials
assets in FVTPL category.

Expected credit losses are measured through a loss allowance at an amount equal to:

- The 12-months expected credit losses (expected credit losses that result from those default events on the
financial instrument that are possible within 12 months after the reporting date); or

- Full lifetime expected credit losses (expected credit losses that result from all possible default events over
the life of the financial instrument).

For trade receivables Company applies simplified approach which requires lifetime ECL allowances to be
recognized from initial recognition of the receivables. The Company uses historical default rates to determine
impairment loss on the portfolio of trade receivables. At every reporting date these historical default rates are
reviewed and changes in the forward looking estimates are analyzed.

For other assets, the Company uses 12 month ECL to provide for impairment loss where there is no significant
increase in credit risk. If there is significant increase in credit risk lifetime ECL is used.

The impairment losses and reversals are recognized in Statement of Profit and Loss.

b) Financial Liabilities:

i) Initial recognition and measurement:

Financial liabilities are recognized when the Company becomes a party to the contractual provisions of the
instrument.

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, if any.

The Company's financial liabilities include trade and other payables, loans and borrowings including bank
overdrafts, financial guarantee contracts and derivative financial instruments.

ii) Subsequent measurement:

Financial liabilities are subsequently measured at amortized cost using the EIR method. Financial liabilities
carried at fair value through profit or losses are measured at fair value with all changes in fair value recognized
in the Statement of Profit and Loss.

Loans and borrowings:

After initial recognition, interest bearing loans and borrowings are subsequently measured at amortized cost
using the EIR method. Gains and losses are recognized in profit and loss when the liabilities are derecognized.

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 as finance costs in the statement of profit and
loss.

iii) Derecognition:

A financial liability is derecognized when the obligation specified in the contract is discharged, cancelled or
expires.

XIV. Derivatives:

The Company enters into various derivative financial instruments to manage its exposure to interest and foreign
exchange rate risks, like foreign exchange forward contracts and interest rate swaps.

Derivatives are initially recognized at fair value on the date the derivative contracts are entered into and are
subsequently re-measured to their fair value (Mark to Market) at the end of each reporting period. The resulting
gain or loss is recognized in the Statement of profit and loss. Company does not designate any of its derivative
instruments as hedge instruments. Derivatives are carried as financial assets when fair value is positive and as
financial liabilities when the fair value is negative.