2. MATERIAL ACCOUNTING POLICY
INFORMATION

2.1 Basis of preparation and presentation

The financial statements (standalone financial statement)
of the Company have been prepared in accordance with
Indian Accounting Standards (Ind AS) notified under the
Companies (Indian Accounting Standards) Rules, 2015 (as
amended from time to time), presentation requirements of
Division II of Schedule III to the Companies Act, 2013, (Ind AS
compliant Schedule III) and the guidelines issued by Securities
and Exchange Board of India, as applicable to the financial
statements.

The standalone financial statements have been prepared on a
historical cost convention, except for the following assets and
liabilities.

i) Certain financial assets and liabilities measured at
fair value (refer accounting policy regarding financial
instruments).

ii) Land and building measured at fair value.

iii) Defined benefit liabilities are measured at present value
of defined benefit obligation.

iv) Certain financial assets and liabilities at amortised cost.

Historical cost is generally based on the fair value of the
consideration given in exchange for goods and services. 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.

The financial statements have been prepared on accrual and
going concern basis.

The financial statements are presented in INR “(Indian Rupees)”
or “?''. All values are rounded to the nearest crores, and two
decimals thereof, except when otherwise indicated.

2.2 Significant judgements, accounting estimates
and assumptions

The preparation of the Company's financial statements in
conformity with the Indian Accounting Standards requires

management to make judgements, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets
and liabilities, and the accompanying disclosures (including
contingent liabilities). The management believes that the
estimates used in preparation of the financial statements are
prudent and reasonable. Uncertainty about these assumptions
and estimates could result in outcomes that require a material
adjustment to the carrying amount of assets or liabilities
affected in future periods.

The Company based its assumptions and estimates on
parameters available when the financial statements were
prepared. Existing circumstances and assumptions about
future developments, however, may change due to market
changes or circumstances arising that are beyond the
control of the Company. Such changes are reflected in the
assumptions when they occur. In the process of applying the
Company's accounting policies, management has made the
following judgements, estimates and assumptions, which have
the most significant effect on the amounts recognised in the
financial statements:

i) Estimation of defined benefit obligation

Employee benefit obligations are determined using actuarial
valuations. An actuarial valuation involves making various
assumptions that may differ from actual developments.
These include the estimation of the appropriate discount
rate, future salary increases and mortality rates. Due to the
complexities involved in the valuation and its long-term nature,
the employee benefit obligation is highly sensitive to changes
in these assumptions. All assumptions are reviewed at each
reporting date.

The parameter most subject to change is the discount rate. In
determining the appropriate discount rate, the management
considers the interest rates of government bonds with term
that correspond with the expected term of the defined benefit
obligation.

The mortality rate is based on publicly available mortality
tables. Those mortality tables tend to change only at interval
in response to demographic changes. Future salary increases
and gratuity increases are based on expected future inflation
rates for the respective countries.

ii) Deferred tax

Deferred tax is recognised in respect of temporary differences
between the carrying amounts of assets and liabilities for
financial reporting purposes and the corresponding amounts
used for taxation purposes. Significant management
judgement is required to determine the amount of deferred
tax assets that can be recognised, based upon the likely timing
and the level of future taxable profits together with future tax
planning strategies.

iii) Useful lives of depreciable/amortisable assets

Management reviews the estimated useful lives and residual
value of property, plant and equipment and intangibles at

the end of each reporting period. Factors such as changes
in the expected level of usage could significantly impact the
economic useful lives and the residual values of these assets.
Consequently, the future depreciation charge could be revised
and may have an impact on the profit of the future years.

iv) Provision for expected credit losses of trade
receivables

Trade receivables do not carry any interest and are stated at
their normal value as reduced by appropriate allowances for
estimated irrecoverable amounts. Individual trade receivables
are written off when management believes that there is
uncertainty of collections. Provision is recognised based on the
expected credit losses, which are the present value of the cash
shortfall over the expected life of the financial assets.

v) Estimation of provision for sales returns and
discounts/schemes

Certain contracts for the sale of stock-in-trade includes a
right of return and discounts/schemes that give rise to variable
consideration. In estimating the variable consideration, the
Company is required to use either the expected value method
or the most likely amount method based on which method
better predicts the amount of consideration to which it will be
entitled.

The Company estimates variable considerations to be included
in the transaction price for the sale returns and discounts/
schemes.

vi) Leases - estimating the incremental borrowing rate

The Company cannot readily determine the interest rate
implicit in the lease, therefore, it uses its incremental borrowing
rate (IBR) to measure lease liabilities. The IBR is the rate of
interest that the Company would have to pay to borrow over a
similar term, and with a similar security, the funds necessary to
obtain an asset of a similar value to the right-of-use asset in a
similar economic environment. The IBR therefore reflects what
the Company 'would have to pay', which requires estimation
when no observable rates are available or when they need to
be adjusted to reflect the terms and conditions of the lease. The
Company estimates the IBR using observable inputs (such as
market interest rates) when available and is required to make
certain entity-specific estimates.

vii) Impairment of investment

The impairment provisions for investment are based on
assumptions about risk of default and expected cash loss rates.
The Company uses judgement in making these assumptions
and selecting the inputs to the impairment calculation, based
on Company's past history, existing market conditions as well
as forward-looking estimates at the end of each reporting
period.

Current liabilities includes current portion of non-current
financial liabilities.

All other liabilities are classified as non-current.

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 realisation in cash and cash
equivalents. The Company has identified twelve months as its
operating cycle.

2.4 Dividend

The Company recognises a liability to make cash or non¬
cash distributions to equity holders of the Company when
the distribution is authorised and the distribution is no longer
at the discretion of the Company. As per the corporate laws
in India, a distribution is authorised when it is approved by the
shareholders. A corresponding amount is recognised directly in
other equity.

2.5 Property, plant and equipment

Recognition and measurement

An item of property, plant and equipment recognized as an
asset if and only if 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. Items of property,
plant and equipment are measured at cost less accumulated
depreciation and accumulated impairment losses. Cost
includes expenditure that is directly attributable to bringing
the asset, inclusive of non-refundable taxes and duties, to
the location and condition necessary for it to be capable of
operating in the manner intended by management. When
parts of an item of property, plant and equipment have
different useful life, they are recognized separately. Items of
spare parts, stand-by equipment and servicing equipment
which meet the definition of property, plant and equipment
are capitalized. Property, plant and equipment which are not
ready for intended use as on the date of balance sheet are
disclosed as 'capital work-in-progress'.

Land and building are valued at fair value. Surplus from
revaluation is transferred to revaluation reserve. The revaluation
is done annually for land and building.

When significant parts of property, plant and equipment are
required to be replaced at intervals, the Company recognises
such parts as individual assets with specific useful lives
and depreciates them accordingly. Likewise, when a major
inspection is performed, its cost is recognised in the carrying
amount of the plant and equipment as a replacement if
the recognition criteria are satisfied. All other repair and
maintenance costs are recognised in the statement of profit
and loss as incurred.

Depreciation is recognized in the statement of profit or loss on
a written down value over the estimated useful life of each item
of property, plant and equipment. Depreciation on additions
to/deductions from property, plant and equipment during the
year is charged on pro-rata basis from/up to the date on which
the asset is available for use/disposed.

Depreciation on property, plant and equipment is provided
on their estimated useful life as prescribed by Schedule II of
Companies Act, 2013 as follows:

An item of property, plant and equipment and any significant
part initially recognised is derecognised upon disposal or
when no future economic benefits are expected from its use
or disposal. Any gain or loss arising on de-recognition of the
asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is included in
the statement of profit and loss when the asset is derecognised.

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

2.6 Intangible assets

Recognition and measurement

Intangible assets include software and trademarks, that are
acquired by the Company, that are measured initially at cost.
After initial recognition, an intangible asset is carried at its cost
less any accumulated amortisation and any accumulated
impairment loss, if any.

Gains or losses 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.

Subsequent expenditure

Subsequent expenditure related to an item of intangible asset
is added to its book value only if it increases the future benefits
from the existing asset beyond its previously assessed standard
or period of performance. All other expenses are charged to
the Statement of Profit and Loss for the year during which such
expenses are incurred.

Intangible assets include software and trademarks that are
amortised over the useful economic life of 3-6 years and 10
years respectively. Amortisation is recognized in the statement
of profit or loss on a written down value over the estimated
useful life of each item of intangible asset. The amortisation
period and the amortisation method for an intangible asset
with a finite useful life are reviewed at least at the end of each
reporting period.

2.7 Impairment of non-financial assets

The Company's non-financial assets, other than inventories
and deferred tax assets, are reviewed at each reporting date to
determine whether there is any indication of impairment. If any
such indication exists, then the asset's recoverable amount is
estimated. For impairment testing, assets that do not generate
independent cash inflows are grouped together into cash¬
generating units (CGUs). Each CGU represents the smallest
group of assets that generates cash inflows that are largely
independent of the cash inflows of other assets or CGUs.

The recoverable amount of a CGU (or an individual asset) is the
higher of its value in use and its fair value less costs to sell. Value
in use is based on the estimated future cash flows, 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 CGU (or the asset).

An impairment loss is recognised if the carrying amount of
an asset or CGU exceeds its estimated recoverable amount.
Impairment losses are recognised in the Statement of Profit
and Loss. Impairment loss recognised in respect of a CGU is
allocated to reduce the carrying amounts of the assets of the
CGU (or group of CGUs) on a pro rata basis.

In respect of assets for which impairment loss has been
recognised in prior periods, the Company reviews at each
reporting date whether there is any indication that the loss has
decreased or no longer exists. An impairment loss is reversed
if there has been a change in the estimates used to determine
the recoverable amount. Such a reversal is made only to the
extent that the asset's carrying amount does not exceed the
carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been
recognised.

2.8 Inventories

Inventories are valued at the lower of cost and net realisable
value.

Stock-in-trade:

Cost: cost includes cost of purchase and other costs incurred in
bringing the inventories to their present location and condition.
Cost is determined on First In First Out (FIFO) basis.

Net realisable value (NRV): NRV is the estimated selling
price in the ordinary course of business, less estimated costs

of completion and the estimated costs necessary to make the
sale.

2.9 Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash
at banks and on hand and short-term deposits with an original
maturity of three months or less, that are readily convertible
to a known amount of cash and which are subject to an
insignificant risk of changes in value.

For the purpose of the standalone statement of cash flows,
cash and cash equivalents consist of cash and short-term
deposits, as defined above, as they are considered an integral
part of the Company's cash management.

2.10 Investment in subsidiary

Investments in subsidiary is carried at cost less accumulated
impairment losses, if any. Where an indication of impairment
exists, the carrying amount of the investment is assessed
and written down immediately to its recoverable amount. On
disposal of these investments, the difference between net
disposal proceeds and the carrying amounts are recognised in
the statement of profit and loss.

2.11 Financial instruments

Recognition and initial measurement

Financial instruments are recognised when the Company
becomes a party to the contractual provisions of the
instrument and are measured initially at fair value adjusted
for transaction costs, except for those carried at fair value
through profit or loss which are measured initially at fair value.
These excludes trade receivables, cash and cash equivalents,
other bank balances, fixed deposits with banks, investments,
loans and other financial assets. A financial instrument is
measured initially at fair value adjusted for transaction costs,
except for those carried at fair value through profit or loss
(FVTPL) which are measured initially at fair value. Company
measure trade receivables at their transaction price unless the
trade receivables contains a significant financing component
in accordance with Ind AS 115. The general terms of the
payment is between 60-180 days and there is no significant
financing component.

Classification and subsequent measurement
Financial assets

On initial recognition, a financial asset is classified as
measured at amortised cost or at FVTPL. Financial assets are
not reclassified subsequent to their initial recognition, except if
and in the period the Company changes its business model for
managing financial assets.

A financial asset is measured at amortised cost if it meets both
of the following conditions and is not designated as at FVTPL:

- the asset is held within a business model whose objective
is to hold assets 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.

All financial assets not classified as measured at amortised
cost as described above are measured at FVTPL.

For all other equity instruments, the Company decides
to classify the same either as at fair value through other
comprehensive income (FVOCI) or fair value through profit
and loss (FVTPL). On initial recognition, the Company may
irrevocably designate a financial asset that otherwise meets
the requirements to be measured at amortised cost at FVTPL
if doing so eliminates or significantly reduces an accounting
mismatch that would otherwise arise.

Financial assets: Business model assessment

The Company makes an assessment of the objective of the
business model in which a financial asset is held at a portfolio
level because this best reflects the way the business is managed
and information is provided to management. The information
considered includes:

- the stated policies and objectives for the portfolio and
the operation of those policies in practice. These include
whether management's strategy focuses on earning
contractual interest income, maintaining a particular
interest rate profile, matching the duration of the financial
assets to the duration of any related liabilities or expected
cash outflows or realising cash flows through the sale of
the assets;

- how the performance of the portfolio is evaluated and
reported to the Company's management;

- the risks that affect the performance of the business
model (and the financial assets held within that business
model) and how those risks are managed;

- how managers of the business are compensated - e.g.
whether compensation is based on the fair value of the
assets managed or the contractual cash flows collected;
and

- the frequency, volume and timing of sales of financial
assets in prior periods, the reasons for such sales and
expectations about future sales activity.

Transfers of financial assets to third parties in transactions
that do not qualify for derecognition are not considered sales
for this purpose, consistent with the Company's continuing
recognition of the assets.

Financial assets that are held for trading or are managed and
whose performance is evaluated on a fair value basis are
measured at FVTPL.

Financial assets: Assessment whether contractual cash flows
are solely payments of principal and interest

For the purposes of this assessment, 'principal' is defined as the
fair value of the financial asset on initial recognition. 'Interest' is
defined as consideration for the time value of money and for
the credit risk associated with the principal amount outstanding
during a particular period of time and for other basic lending
risks and costs (e.g. liquidity risk and administrative costs), as
well as a profit margin.

In assessing whether the contractual cash flows are solely
payments of principal and interest, the Company considers
the contractual terms of the instrument. This includes assessing
whether the financial asset contains a contractual term that
could change the timing or amount of contractual cash flows
such that it would not meet this condition. In making this
assessment, the Company considers:

- contingent events that would change the amount or
timing of cash flows;

- terms that may adjust the contractual coupon rate,
including variable interest rate features;

- prepayment and extension features; and

- terms that limit the Company's claim to cash flows from
specified assets (e.g. non-recourse features).

A prepayment feature is consistent with the solely payments
of principal and interest criterion if the prepayment amount
substantially represents unpaid amounts of principal and
interest on the principal amount outstanding. Additionally, for
a financial asset acquired at a significant discount or premium
to its contractual par amount, a feature that permits or requires
prepayment at an amount that substantially represents the
contractual par amount plus accrued (but unpaid) contractual
interest is treated as consistent with this criterion if the fair
value of the prepayment feature is insignificant at initial
recognition. Financial assets at amortised cost are measured
at amortised cost using the effective interest method. Interest
income recognised in Statement of Profit and Loss.

Financial liabilities

Financial liabilities are classified as measured at
amortised cost or FVTPL. A financial liability is classified
as at FVTPL if it is classified as held for trading. Financial
liabilities at FVTPL are measured at fair value and
net gains and losses, including any interest expense,
are recognised in Statement of Profit and Loss. Other
financial liabilities are subsequently measured at
amortised cost using the effective interest method.
Interest expense and foreign exchange gains and losses
are recognised in Statement of Profit and Loss. Any gain
or loss on derecognition is also recognised in Statement
of Profit and Loss.

Derecognition
Financial assets

The Company derecognises a financial asset when
the contractual rights to the cash flows from the
financial asset expire, or it transfers the rights to receive
the contractual cash flows in a transaction in which
substantially all of the risks and rewards of ownership
of the financial asset are transferred or in which the
Company neither transfers nor retains substantially all of
the risks and rewards of ownership and does not retain
control of the financial asset. If the Company enters into
transactions whereby it transfers assets recognised on
its balance sheet, but retains either all or substantially
all of the risks and rewards of the transferred assets, the
transferred assets are not derecognised.

Financial liabilities

The Company derecognises a financial liability when
its contractual obligations are discharged or cancelled
or expire. The Company also derecognises a financial
liability when its terms are modified and the cash flows
under the modified terms are substantially different. In
this case, a new financial liability based on the modified
terms is recognised at fair value. The difference between
the carrying amount of the financial liability extinguished
and the new financial liability with modified terms is
recognised in Statement of Profit and Loss.

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.

2.12 Fair value measurement

The Company measures certain financial instruments at
fair value at each reporting date.

Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the
liability takes place either:

i. in the principal market for the asset or liability, or

ii. in the absence of a principal market, in the most
advantageous market for the asset or liability.

The principal or the most advantageous market must be
accessible by the Company.

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, maximising the
use of relevant observable inputs and minimising the use
of unobservable inputs.

All assets and liabilities for which fair value is measured
or disclosed in the financial statements are categorised
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.

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

At each reporting date, the Company's management
analyses the movements in the values of assets and
liabilities which are required to be re-measured or re¬
assessed as per the Company's accounting policies.
For this analysis, the Company's management verifies
the major inputs applied in the latest valuation by
agreeing the information in the valuation computation
to contracts and other relevant documents.

The Company's management also compares the change
in the fair value of each asset and liability with relevant
external sources to determine whether the change is
reasonable.

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.