2. Material accounting policies

2.1 Basis of preparation & presentation:

The Standalone financial statements 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) and presentation requirements of Division II of Schedule
III to the Companies Act, 2013 (Act), (Ind AS compliant Schedule
III), as applicable to the Standalone financial statements.

These Standalone financial statements have been prepared
on a historical cost basis except for certain financial assets
and liabilities measured at fair value (refer accounting policy
regarding financial instruments) and consistent with previous
year. The Standalone financial statements are presented in
I and all values are rounded to the nearest millions, except
when otherwise indicated.

2.2 Current versus non-current classification:

The Company presents assets and liabilities in the balance
sheet based on current/ non-current classification.

All assets and liabilities have been classified as current or
non-current as per the Company's normal operating cycle
and other criteria set out in IAS 1, "Presentation of financial
statements".

Deferred tax assets and liabilities are classified as non-current
assets and liabilities. Based on the nature of products and the
time between the acquisition of assets for processing and their
realization in cash and cash equivalents, the Company has
ascertained its operating cycle as 12 months for the purpose
of current or non - current classification of assets and liabilities.

2.3 Use of judgements, estimates and assumptions:

The preparation of the financial statements in conformity
with Ind AS requires the management to make judgements,
estimates and assumptions which affects the reported amounts
of assets and liabilities and disclosures relating to contingent
liabilities as at the date of the Standalone financial statements
and the reported amounts of income and expenditure for
the periods presented. The management believes that the
estimates used in preparation of the Standalone financial
statements are prudent and reasonable.

Future results could differ from these estimates. Estimates and
underlying assumptions are reviewed on an ongoing basis.
The effects of changes in accounting estimates are reflected
in the Standalone financial statements in the period in
which results are known and, if material, are disclosed in the
Standalone financial statements.

Significant areas of estimation of uncertainty and critical
judgments in applying accounting policies that have the most
significant effect on the amounts recognized in the financial
statements are:

• Fair value measurement of financial instruments (Refer
Note 2.16)

• Provision for inventory obsolescence (Refer Note 2.9)

• Provision for expected credit losses of trade receivables
(Refer Note 2.17)

• Share based Payments (Refer Note 2.14)

2.4 Foreign currency translation:

Functional and presentation currency

The Standalone Financial statements are presented in Indian
rupees, which is the functional and presentation currency of
the Company.

Transactions and balances

In preparing the financial statements of the Company,
transactions in currencies other than the entity's functional
currency (foreign currencies) are recognized at the rates
of exchange prevailing at the dates of the transactions.

Foreign currency denominated monetary assets and liabilities
are translated at the exchange rate prevailing on the balance
sheet date. Exchange gains and losses arising on settlement or
translation are recognized in the statement of profit and loss.

Non-monetary assets and non-monetary liabilities
denominated in a foreign currency and measured at fair value
are translated at the exchange rate prevalent at the date when
the fair value was determined. Non-monetary items that are
measured in terms of historical cost in a foreign currency are
not retranslated.

Transaction gains or losses realized upon settlement of foreign
currency transactions are included in determining net profit
for the period in which the transaction is settled.

2.5 Property, plant and equipment

Property, plant and equipment are initially recognized at cost.
The initial cost of property, plant and equipment comprises its
purchase price, including non-refundable duties and taxes net
of any trade discounts and rebates.

The cost of property, plant and equipment includes interest on
borrowings (borrowing cost) directly attributable to acquisition,
construction or production of qualifying assets. Subsequent to
initial recognition, property, plant and equipment are stated
at cost less accumulated depreciation (other than freehold
land, which is stated at cost) and accumulated impairment
losses, if any. Capital work in progress is stated at cost, net of
accumulated impairment loss, if any.

The Company depreciates property, plant and equipment over
their estimated useful lives using the straight-line method as
per the useful life prescribed in Schedule II to the Act except in
respect of the following categories of assets, in whose case the
life of the assets has been assessed, based on technical advice,
taking into account the nature of the asset, the estimated
usage of the asset, the operating conditions of the asset, past
history of replacement, anticipated technological changes,
manufacturers warranties and maintenance support.

Notes:

1. Buildings constructed over leasehold land are
depreciated over the remaining lease term of land or
life as specified under Schedule II of the Act, whichever
is lower.

2. The Company, based on the technical assessment made by
technical experts and management estimate, depreciates
certain items of Plant & Machinery, Computers & Servers
and Tools & Equipment over estimated useful lives which
are different from the useful life prescribed in Schedule II
to the Act. The management believes that these estimated
useful lives are realistic and reflect fair approximation of
the period over which the assets are likely to be used.

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 recognized in the statement of
profit and loss.

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

Intangible assets are stated at cost less accumulated
amortization and accumulated impairment. Intangible assets
are amortized over their estimated useful life on a straight-line
basis as follows:

Gains or losses arising from de-recognition of an intangible
asset, measured as the difference between the net disposal
proceeds and the carrying amount of the asset, are recognized
in statement of profit and loss when the asset is de-recognized.

2.7 Leases
Company as lessee

The Company assesses at contract inception whether a
contract is or contains a lease. That is, if the contract conveys
the right to control the use of an identified asset for a period
of time in exchange for consideration.

At the date of commencement of the lease, the Company
recognizes a right-of-use asset ("ROU") and a corresponding
lease liability for all lease arrangements in which it is a
lessee, except for leases with a term of twelve months or less
(short-term leases) and low value leases. For these short-term
and low value leases, the Company recognizes the lease
payments as an operating expense on a straight-line basis over
the term of the lease.

i) Right-of-use assets

The right-of-use assets are initially recognized at cost, which
comprises the initial amount of the lease liability adjusted for
any lease payments made at or prior to the commencement
date of the lease plus any initial direct costs less any lease
incentives. They are subsequently measured at cost less
accumulated depreciation and impairment losses and
adjusted for any remeasurement of lease liabilities.
Right-of-use assets are depreciated from the commencement
date on a straight-line basis over the shorter of the lease term
and useful life of the underlying asset. Right of use assets are
evaluated for recoverability whenever events or changes in
circumstances indicate that their carrying amounts may not
be recoverable. The right-of-use assets are also subject to
impairment.

ii) Lease liabilities

The lease liability is initially measured at amortized cost at
the present value of the future lease payments. The lease
payments are discounted using the interest rate implicit in
the lease or, if not readily determinable, using the incremental
borrowing rates in the country of domicile of the leases.
After the commencement date, the amount of lease liabilities
is increased to reflect the accretion of interest and reduced
for the lease payments made or a change in the assessment
of extension or termination options. Lease liabilities are
remeasured with a corresponding adjustment to the related
right of use asset if there is a modification, a change in the
lease term, a change in the lease payments (e.g., changes to
future payments resulting from a change in an index or rate
used to determine such lease payments). Lease liability and
ROU asset have been separately presented in the Balance
Sheet and lease payments have been classified as financing
cash flows.

2.8 Income taxes:

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

Current and deferred tax is recognized in statement of profit
and loss, except to the extent that it relates to items recognized
in other comprehensive income or directly in equity. In this
case, the tax is also recognized in other comprehensive income
or directly in equity, respectively.

The current tax and deferred tax are calculated on the basis of
the tax rates and tax laws enacted or substantively enacted at
the end of the reporting period in India.

Deferred tax is provided using the balance sheet method, on
temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the Standalone
financial statements. However, deferred tax liabilities are not
recognized if they arise from the initial recognition of goodwill.
Deferred tax is also not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than
a business combination that at the time of the transaction
affects neither accounting profit nor taxable profit/loss and
does not give rise to equal taxable and deductible temporary
differences.

Deferred tax assets are recognized for all deductible temporary
differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilize those
temporary differences and losses.

2.9 Inventories:

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

Inventories consist of raw materials, stores and spares, work
in progress and finished goods. The cost of all categories
of inventories is based on the weighted average method.
Cost includes expenditures incurred in acquiring the
inventories, production or conversion costs and other costs
incurred in bringing them to their existing location and
condition. In the case of finished goods and work in progress,
cost includes an appropriate share of overheads based on
normal operating capacity. Stores and spares consist of
packing materials, engineering spares (such as machinery
spare parts) and consumables (such as lubricants and oils),
which are used in operating machines or consumed as indirect
materials in the manufacturing process.

Net realizable value represents the estimated selling price for
inventories less all estimated costs of completion and costs
necessary to make the sale.

The factors that the Company considers in determining the
provision for slow moving, excess or obsolete inventory
items includes production plan, orders in hand, forecast
inventory usage, committed and expected orders, alternative
usage. The Company considers all these factors and adjusts
the inventory provision to reflect its actual experience on a
periodic basis.

2.10 Cash and cash equivalents:

Cash comprises cash on hand, in bank and demand deposits
with banks. The Company considers all highly liquid financial
instruments, which are readily convertible into cash and have
original maturities of three months or less from the date of

purchase, to be cash equivalents. Such cash equivalents are
subject to insignificant risk of changes in value.

For the purpose of the statement of cash flows, cash and cash
equivalents consist of cash on hand, in bank and demand
deposits with banks, as defined above, net of outstanding
bank overdrafts as they are considered an integral part of the
Company's cash management.