1.5 Summary of Material Accounting Policies

(a) Property, Plant and Equipment (PPE)

PPE are stated at cost, net of recoverable taxes, discount, government grants/subsidies and rebates, etc. less
accumulated depreciation and impairment loss, if any. Such cost includes purchase price, borrowing cost and any
cost directly attributable to bringing the assets to its working condition for its intended use.

Subsequent costs are included in the asset’s carrying amount or recognized as a 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.

Spare parts in the nature of PPE are capitalised and depreciated over their remaining useful lives.

Gains or losses arising from de-recognition of PPE is measured as the difference between the net disposable
proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the
asset is de-recognised.

(b) Intangible Assets

License fees and associated implementation costs incurred for Computer Software are measured initially at cost only
when it is probable that future economic benefits associated with the item will flow to the Company and the cost can
be measured reliably. After initial recognition, an intangible asset is carried at its cost, less accumulated amortisation
and accumulated impairment losses, if any.

(c) Non-current assets (or disposal groups) classified as held for sale:

Non-current assets held for sale are presented separately in the Balance Sheet when the following criteria are met:

• The Company is committed to sale the asset;

• The assets are available for sale immediately;

• An active plan of sale has commenced; and

• Sale is expected to be completed within 12 months.

Assets held for sale and disposal groups are measured at the lower of their carrying amount and fair value less cost
to sell. Assets held for sale are no longer amortised or depreciated.

(d) Depreciation/Amortisation

Depreciation on PPE is provided on straight line method at the rates determined based on the useful lives of respective
assets as prescribed in the Schedule II of the Companies Act, 2013 and/or useful life reviewed and assessed by the
Company based on technical evaluation of relevant class of assets, as detailed below:

Depreciation on PPE added/disposed-off/discarded during the year is provided on pro-rata basis with respect to the
month of addition/disposal/discarding.

Right-of-use Assets (Land) is amortised on a straight line basis over the period of Lease (99 Years).

Right-of-use Assets (Building) is amortised on a straight line basis over the period of lease term (5 Years).

Intangible Asset is measured at cost and amortised so as to reflect the pattern in which the assets economic benefits
are consumed. The useful life of Computer Software has been estimated as five years.

Depreciation method, useful lives and residual values are reviewed at each financial year end and adjusted, if
considered appropriate.

(e) Impairment of Non-Financial Assets

Assessment is done at each balance sheet date as to whether there is any indication that an asset (PPE and Intangible)
may be impaired. If any such indication exists, an estimate of the recoverable amount of the asset /cash generating
unit (CGU) is made. Recoverable amount is higher of an asset’s or cash generating unit’s net selling price and its
value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing
use of an asset and from its disposal at the end of its useful life. For the purpose of assessing impairment, 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. The smallest identifiable group of assets that
generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or
groups of assets, is considered as a cash generating unit (CGU). An asset or CGU whose carrying value exceeds its
recoverable amount is considered impaired and is written down to its recoverable amount. Assessment is also done
at each reporting date as to whether there is any indication that an impairment loss recognised for an asset in prior
accounting periods may no longer exist or may have decreased.

(f) Government Grants and Subsidies

Grants and subsidies (including industrial investment promotion incentives linked to fixed capital investment in Property,
Plant and Equipment, etc.) from the Government(s) are recognised when there is reasonable assurance that the
conditions attached to them will be complied and grants/subsidies will be received. Government subsidies/incentives
inextricably based upon and linked to fixed capital investments in Property, Plant and Equipment for setting up a new
industrial undertaking or for substantial expansion/technological upgradation/diversification of an existing industrial
undertaking where no repayment is stipulated are deducted from the carrying amount of Property, Plant and Equipment.

Export benefits availed as per prevalent schemes are accounted for in the year in which the goods are exported
subject to the condition that there exists no significant uncertainty with regard to their ultimate collection.

Cost comprise all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their
present location and condition. Net realizable value is the estimated selling price in the ordinary course of business,
less estimated cost of completion and estimated cost necessary to make the sale.

(h) Fair Value Measurement

The Company measures financial instruments such as investment and derivatives at fair value at each balance sheet
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 to which the
Company has access at that date.

All assets and liabilities for which fair value is measured or disclosed in the standalone 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 the purpose of fair value disclosure, the Company has determined classes of assets and liabilities on the basis of
nature, characteristics and risks of the assets or liabilities and the level of the fair value hierarchy as explained above.

Management determines the policies and procedures for both recurring fair value measurement, such as derivative
instruments and unquoted financial assets and for non-recurring measurement, such as assets held for disposal.

(i) 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.

(1) Financial Assets

(a) Initial Recognition and Measurement

All financial assets are initially recognized at fair value. Transaction costs that are directly attributable to the
acquisition or issue of financial assets and liabilities, which are not fair value through profit and loss, are
adjusted to the fair value on initial recognition. However, trade receivable that do not contain a significant
financing component are measured at transaction price.

(b) Subsequent Measurement

Financial Assets other than Equity Instruments

(i) Financial Assets carried at Amortised cost:

A financial asset is subsequently measured at amortized cost if it is held within a business model whose
objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the
financial asset give rise on specified dates to cash flows that are solely payments of principal and
interest on principal outstanding. Interest income from these financial assets is included in other income
using the effective rate interest (“EIR”) method.

(ii) Financial Assets at Fair value through Other Comprehensive Income (FVTOCI):

A financial asset is subsequently measured at fair value through other comprehensive income if it is
held within a business model whose objective is achieved by both collecting contractual cash flows and
selling financial assets and the contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest on principal outstanding. They are
subsequently measured at each reporting date at fair value, with all fair value movements recognised in
Other Comprehensive Income (OCI). On de-recognition of the asset, cumulative gain or loss previously
recognised in Other Comprehensive Income is reclassified from the OCI to the Statement of Profit and
Loss.

(iii) Financial Asset at Fair Value through Profit or Loss (FVTPL):

A financial asset which is not classified in any of the above categories are subsequently fair valued
through profit and loss.

Equity Instruments

(i) Equity Instrument Valued at Cost:

The Company has accounted for its Investment in Subsidiary at cost.

(ii) Other Equity Investments

All other equity investments are measured at fair value. Equity Investments, which are held for trading
are classified as Fair value through the Statement of Profit and Loss. For equity investments other than
held for trading, the Company has exercised irrevocable option to recognise fair value changes in
‘Other Comprehensive Income’ (“OCI”) save & except passive long-trem investments in a power producer
company for sourcing of renewable energy which are measured at cost by treating it as fair value
through Profit and Loss (FVTPL) as per the governing terms and conditions of the Power Purchase
Agreement (Refer Note No.4). The Company makes such election on an instrument-by-instrument
basis for those investments which are strategic and are not intended for sale. If the Company decides
to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding
dividends, are recognised in the OCI. Gain/ losses on disposal of such investments are transferred from
OCI to Retained Earnings.

(c) Derecognition of Financial Asset

The Company derecognizes financial asset when the contractual rights to the cash flows from the financial
asset expire or it transfers the financial asset and the transfer qualifies for de-recognition under Ind AS 109.

(d) Impairment of Financial Assets (Other than financial assets at fair value)

The Company assesses at each date of Balance Sheet whether a financial asset or a group of financial
assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance.
The Company determines expected credit losses after taking into account the past history of recovery, risk
of default of the counterparty, existing market conditions, etc. The impairment methodology is applied on
individual customer basis and depends on whether there has been a significant increase in the credit risk
since initial recognition.

(2) Financial Liabilities

(a) Recognition and Initial Measurement:

Financial liabilities at initial recognition are classified at fair value through profit or loss, loans and borrowings,
payables or as derivatives, as appropriate. All financial liabilities are recognized initially at fair value and, in
the case of loans and borrowings and payables, net of directly attributable transaction costs.

(b) Subsequent Measurement:

Financial liabilities are measured subsequently at amortized cost or FVTPL. A financial liability is classified
as FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial
recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any
interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at
amortized cost using the effective interest rate method. Interest expense and foreign exchange gains and
losses are recognized in profit or loss. Any gain or loss on de-recognition is also recognised in the Statement
of Profit and Loss.

(c) Derecognition:

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or
expired.

(3) Offsetting Financial Instruments:

Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is a
legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or
realize the asset and settle the liability simultaneously.

(4) Derivative Financial Instruments:

The Company enters into derivative financial instruments viz. foreign exchange forward contracts and interest
rate swaps and to manage its exposure to interest rate and foreign exchange rate risks. Derivatives are initially
recognized at fair value on the date when the derivative contracts are entered into and are subsequently re¬
measured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in the
Statement of Profit and Loss immediately.

(j) Income Taxes

Tax expense comprises current income tax and deferred tax. Current income tax expense is measured at the amount
expected to be paid to the taxation authorities in accordance with the governing provisions of the Income-Tax Act,
1961. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted,
at the reporting date.

Deferred tax is provided using the balance sheet method on temporary differences between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax assets
and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the
liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting
date.

Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which
the deductible temporary differences, the carry forward of unused tax credits and unused tax losses can be utilised.

Income tax (Current and Deferred) is recognized in the Statement of Profit and Loss except to the extent it relates to
the items recognised directly in equity or other comprehensive income.

Current tax assets and Current tax liabilities are offset, if a legally enforceable right exists to set of the recognised
amounts and where it intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

(k) Revenue from Contract with Customer

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

Revenue is measured at the value of the consideration received or receivable, taking into account contractual terms
and conditions. Taxes (GST) collected on behalf of the government are excluded from revenue. Revenue is recognized
to the extent it is probable that the economic benefits will flow to the Company and the revenue and costs, if applicable,
can be measured reliably. Revenue is disclosed net of returns and incentives, as applicable. Variable consideration
includes volume discounts, price concessions, liquidated damages, incentives, etc. The Company estimates the
variable consideration with respect to above based on an analysis of accumulated historical experience. The variable
consideration is adjusted as and when the expectation regarding the same changes.

Performance obligation in case of Revenue from sale of goods is satisfied at a point in time and is recognized when
control of goods is transferred to the customers. Generally, control is transferred upon shipment of goods to the
customer or when the goods is made available to the customer, provided transfer of title to the customer occurs and
the Company has not retained any significant risks of ownership or future obligations with respect to the goods
shipped.

Services Income is recognised over the period as per the terms and conditions of the contract. Interest income is
recognised on time proportion basis. Dividend income is recognised when the right to receive payment is established.

Export benefits availed as per the prevalent schemes are accrued each year in which the goods are exported and
when no significant uncertainty exist regarding the ultimate collection.

(l) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction, production or development 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.
All other borrowing costs are recognised in the Statement of Profit and Loss in the period in which they are incurred.
Transaction cost in respect of long term borrowing are amortised over the tenure of respective loans using Effective
Interest Rate (EIR) method.