2. MATERIAL ACCOUNTING POLICIES

A summary of the material accounting policies
applied in the preparation of the Standalone Financial
Statements are as given below. These accounting
policies have been applied consistently to all periods
presented in the Standalone Financial Statements.

2.1 Basis of Preparation

2.1.1 Statement of compliance

The Standalone Financial statements have been
prepared in accordance with Indian Accounting
Standards (Ind AS) prescribed under the Section
133 of the Companies Act, 2013 notified under
the Companies (Indian Accounting Standards)
Rules, 2015 (as amended from time to time) and
presentation including disclosure requirements
of Division II of Schedule III to the Companies
Act, 2013, (Ind AS compliant Schedule III),
as applicable to the CFS and the accounting
principles generally accepted in India. The
Company has consistently applied accounting
policies to all periods.

The Company has prepared the financial
statements on the basis that it will continue to
operate as a going concern.

2.1.2 Historical Cost Convention

The Standalone Financial statements of the
Company are prepared in accordance with
Indian Accounting Standards (Ind AS), under the
historical cost convention and on accrual basis
as per the provisions of the Companies Act,
2013 ("the Act"), except for the following items:

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

- Defined benefit plans - Plan assets are
measured at fair value.

Functional and presentation currency

Items included in the Standalone Financial
statements are measured using the currency of
the primary economic environment in which the
entity operates (‘the functional currency'). The
Standalone Financial Statements are presented
in Indian rupee ('), which is also the Company's
functional currency. All amounts have been
rounded-off to the nearest Million, up to two
places of decimal, unless otherwise indicated.
Amounts having absolute value of less than
' 1000 have been rounded and are presented
as ' 0.00 Millions in the Standalone Financial
Statements.

Summary of material accounting policies

2.2 Current vs non-current classification

The Company presents assets and liabilities
in the Standalone statement of assets and
liabilities based on current/ non-current
classification.

An asset is treated as current when it is:

• Expected to be realized or intended to be
sold or consumed in normal operating
cycle

• Held primarily for the purpose of trading

• Expected to be realized within twelve
months after the reporting period, or

• Cash or cash equivalent unless restricted
from being exchanged or used to settle a
liability for at least twelve months after the
reporting period.

The Company classifies all other assets as non¬
current.

A liability is current when:

• It is expected to be settled in normal
operating cycle

• It is held primarily for the purpose of trading

• It is due to be settled within twelve months
after the reporting period, or

• There is no unconditional right to defer the
settlement of the liability for at least twelve
months after the reporting period.

The Company classifies all other liabilities 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
realization in cash and cash equivalents. The
Company has identified twelve months as its
operating cycle.

2.3 Property plant and equipment

Recognition and Initial Measurement

Property, plant and equipment is recognized
when it is probable that future economic
benefits associated with the item will flow
to the Company and the cost of each item
can be measured reliably. Property, plant and
equipment are initially stated at their cost.

Cost of asset includes:

a) Purchase price, net of any trade discounts
and rebates

b) Cost directly attributable to the acquisition
of the assets which incurred in bringing
asset to its working condition for the
intended use

c) Present value of the estimated costs
of dismantling & removing the items &
restoring the site on which it is located if
recognition criteria are met.

Amounts paid towards the acquisition of
property, plant and equipment outstanding as
of each reporting date and the cost of property,
plant and equipment not ready for intended use
before such date are disclosed under capital

advances and capital work-in-progress (CWIP)
respectively.

Significant Parts of an item of PPE (including
major inspections) having different useful lives
& material value or other factors are accounted
for as separate components. All other repairs
and maintenance costs are recognized in the
statement of profit and loss as incurred.

Subsequent measurement

Property, plant and equipment are subsequently
measured at cost net of accumulated
depreciation and accumulated impairment
losses, if any. Subsequent expenditure is

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

Depreciation and useful lives

Depreciation on property, plant and equipment
is provided on straight line basis over the
estimated useful lives of the assets as specified
in schedule II of the Companies act, 2013 except
for assets used in manufacturing of Medical
Products which are depreciated over a period
of 3 years based on the management's internal
assessment.

year / period end and changes, if any, are
accounted for prospectively. An intangible
asset is de-recognised on disposal, or when
no future economic benefits are expected from
use or disposal. Gains or losses arising from
derecognition of an intangible asset, measured
as the difference between the net disposal
proceeds and the carrying amount of the asset
are recognised in the Standalone Statement of
Profit and Loss.

2.5 Impairment of non-financial assets

At each reporting date, the Company assesses,
whether there is an indication that an asset
may be impaired. If any indication exists, or
when annual impairment testing for an asset
is required, the Company estimates the asset's
recoverable amount. An asset's recoverable
amount is the higher of an asset's or cash¬
generating unit's (CGU) fair value less costs
of disposal and its value in use. 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 Company's of assets. When the
carrying amount of an asset or CGU exceeds
its recoverable amount, the asset is considered
impaired and is written down to its recoverable
amount and the impairment loss, including
impairment on inventories are recognized in the
Standalone Statement of Profit and loss.

In assessing value in use, the estimated future
cash flows are 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 asset.

For assets excluding goodwill, an assessment
is made at each reporting date to determine
whether there is an indication that previously
recognized impairment losses no longer exist
or have decreased. If such indication exists,
the Company estimates the asset's or CGU's
recoverable amount. A previously recognized
impairment loss is reversed only if there has been
a change in the assumptions used to determine
the asset's recoverable amount since the last
impairment loss was recognized. The reversal
is limited so that the carrying amount of the
asset does not exceed its recoverable amount,
nor exceed the carrying amount that would have
been determined, net of depreciation, had no

impairment loss been recognized for the asset
in prior period. Such reversal is recognized in the
Standalone Statement of Profit and loss.

2.6 Inventories

a) Inventories (including traded goods)
are valued at the lower of cost and net
realizable value. Costs incurred in bringing
each product to its present location and
condition are accounted for as follows:

• Raw materials: 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 basis.

• Finished goods and intermediate
products (including manufactured
components): Cost includes cost
of direct materials and labour and
a proportion of manufacturing
overheads based on the normal
operating capacity. Cost is determined
on first in, first out basis.

• Stores and spares, consumables and
packing materials cost includes direct
expenses and is determined on the
basis of first in first out method.

b) Net realizable value 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. The comparison of cost and net
realizable value is made on an item-by¬
item basis.

2.7 Revenue recognition

Revenue is measured at the transaction price
that is allocated to the performance obligation
and it excludes amounts collected on behalf
of third parties and is adjusted for variable
considerations. Any subsequent change in
the transaction price is then allocated to the
performance obligations in the contract on
the same basis as at contract inception. The
Company recognizes revenue for variable
consideration when it is probable that a
significant reversal in the amount of cumulative
revenue recognized will not occur. The Company
estimates the amount of revenue to be
recognized on variable consideration using most
likely amount method. Consequently, amounts
allocated to a satisfied performance obligation
are recognised as revenue, or as a reduction of
revenue, in the period in which the transaction
price changes. Contract modifications are
accounted for when additions, deletions or
changes are approved either to the contract
scope or contract price.

a) Sale of products and Services

Revenue from sale of products is recognized
at the point in time when control of the
goods is transferred to the customer at the
time of shipment to or receipt of goods by
the customers at an amount that reflects
the consideration to which the Company
expects to be entitled in exchange for those
goods or services.

The Company has concluded that it is the
principal in its revenue arrangements as
it typically controls the goods or services
before transferring them to the customer.

Sales-related obligation associated
with sale of goods cannot be purchased
separately and they serve as an assurance
that the products sold comply with agreed-
upon specifications. Accordingly, the
Company accounts for such obligation
in accordance with Ind AS 37 Provisions,
Contingent Liabilities and Contingent
Assets.

The goods and service tax (GST) is not
received by the Company on its own
account. Rather, it is tax collected on
behalf of the government. Accordingly, it is
excluded from revenue.

b) Other Operating Revenue

Export incentive is recognized when there
is reasonable assurance that the Company
will comply with the conditions and the
incentive will be received.

c) Other Revenue

• Interest income: Interest income
is recognised as interest accrues
using the effective interest method
("EIR") that is the rate that exactly
discounts estimated future cash
receipts through the expected life of

the financial instrument to the net
carrying amount of the financial asset.

• Dividends: Dividend income is
recognised when the right to receive
payment is established.

• Rental income: Rental income
arising from operating leases or on
investment properties is accounted
for on a straight-line basis over the
lease terms & included in other non¬
operating income in Statement of
Profit and Loss.

• Insurance Claims: Insurance claims
are accounted for as and when
admitted by the concerned authority.

d) Contract balances

• Contract assets: A contract asset is
the right to consideration in exchange
for goods or services transferred to the
customer. If the Company performs
by transferring goods or services to
a customer before the customer pays
consideration or before payment is
due, a contract asset is recognized
for the earned consideration that is
conditional.

• Trade receivables: A receivable
represents the Company's right to
an amount of consideration that is
unconditional (i.e., only the passage
of time is required before payment of
the consideration is due).

• Contract liabilities: A contract liability
is the obligation to transfer goods or
services to a customer for which the
Company has received consideration
(or an amount of consideration
is due) from the customer. If a
customer pays consideration before
the Company transfers goods or
services to the customer, a contract
liability is recognized when the
payment is made, or the payment is
due (whichever is earlier). Contract
liabilities are recognized as revenue
when the Company performs under
the contract.

e) Right of return

The Company provides a customer with
a right to return in case of any defects or
on grounds of quality. The Company uses
the expected value method to estimate the
goods that will not be returned because
this method best predicts the amount
of variable consideration to which the
Company will be entitled. The requirements
in Ind AS 115 on constraining estimates of
variable consideration are also applied in
order to determine the amount of variable
consideration that can be included in the
transaction price.

The application of Ind AS 115 did not
have any material impact on recognition
and measurement principles. However,
it results in additional presentation and
disclosure requirements for the Company.

The Company has also applied the practical
expedient under Ind AS 115 for incremental
cost of obtaining a contract and has
recognized such cost as an expense when
incurred if the amortization period of the
asset is one year or less.

2.8 Taxes

Tax expense comprises current tax expense and

deferred tax.

a) Current income tax

Current tax assets and liabilities are
measured at the amount expected to be
recovered from or paid to the taxation
authorities in accordance with relevant
tax regulations. The tax rates and tax laws
used to compute the amount are those that
are enacted or substantively enacted, at
the reporting date in the countries where
the Company operates and generates
taxable income. Current income tax
relating to items recognised outside
profit or loss is recognised outside profit
or loss (either in other comprehensive
income or in equity). Current tax items are
recognised in correlation to the underlying
transaction either in OCI or directly in
equity. Management periodically evaluates
positions taken in the tax returns with
respect to situations in which applicable
tax regulations are subject to interpretation

and considers whether it is probable that a
taxation authority will accept an uncertain
tax treatment.

Current tax assets and tax liabilities
are offset where the entity has a legally
enforceable right to offset and intends
either to settle on a net basis, or to
realize the asset and settle the liability
simultaneously.

b) Deferred tax

Deferred tax is provided using the liability
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 liabilities are recognised for all
taxable temporary differences.

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

Deferred tax is recognized in Standalone
Statement of Profit and loss except to
the extent it relates to items recognized
outside profit or loss, in which case is
recognized outside profit or loss (either
in other comprehensive income or in
equity). Deferred tax items are recognized
in correlation to the underlying transaction
either in OCI or directly in equity.

The carrying amount of deferred tax assets
is reviewed at each reporting date and
reduced to the extent that it is no longer
probable that sufficient taxable profit will be
available to allow all or part of the deferred
tax asset to be utilized. Unrecognized
deferred tax assets are re-assessed at
each reporting date and are recognized to
the extent that it has become probable that
future taxable profit will allow the deferred
tax asset to be recovered.

In assessing the recoverability of deferred
tax assets, the Company relies on the

same forecast assumptions used
elsewhere in the financial statements
and in other management reports, which,
among other things, reflect the potential
impact of climate-related development
on the business, such as increased cost
of production as a result of measures to
reduce carbon emission.

Deferred tax assets and liabilities are
measured at the tax rates that are expected
to apply in the period when the asset is
realized 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 relating to items recognised
outside profit or loss is recognised outside
profit or loss (either in other comprehensive
income or in equity). Deferred tax items are
recognised in correlation to the underlying
transaction either in OCI or directly in equity

The Company offsets deferred tax assets
and deferred tax liabilities if and only if it
has a legally enforceable right to set off
current tax assets and current tax liabilities
and the deferred tax assets and deferred
tax liabilities relate to income taxes levied
by the same taxation authority on either
the same taxable entity or different taxable
entities which intend either to settle current
tax liabilities and assets on a net basis, or
to realise the assets and settle the liabilities
simultaneously, in each future period in
which significant amounts of deferred
tax liabilities or assets are expected to be
settled or recovered.

2.9 Foreign currencies

The Company's Standalone financial statements
are presented in ', which is also the Company's
functional currency. Foreign currency
transactions are recorded in the functional
currency, by applying the exchange rate between
the functional currency and the foreign currency
at the date of the transaction.

Foreign currency monetary items outstanding
at the reporting date are converted to functional
currency using the closing rate (Closing selling
rates for liabilities and closing buying rate for
assets). Non- monetary items denominated in a

foreign currency which are carried at historical
cost are reported using the exchange rate at the
date of the transactions.

Exchange differences arising on settlement of
monetary items, or restatement as at reporting
date, at rates different from those at which
they were initially recorded, are recognized in
the Standalone Statement of Profit and loss in
the period in which they arise. These exchange
differences are presented in the Standalone
Statement of Profit and loss on net basis.

2.10 Employee benefit

a) Short-term employee benefits

Employee benefits such as salaries, short
term compensated absences, and other
benefits falling due wholly within twelve
months of rendering the service are
classified as short-term employee benefits
and undiscounted amount of such benefits
are expensed in the Standalone Statement
of Profit and loss in in the period in which
the employee renders the related services.

b) Post-employment benefits

• Defined Contribution Plan: A defined
contribution plan is a plan under which
the Company pays fixed contributions
into a separate entity and will have no
legal or constructive obligation to pay
further amounts.

The Company makes specified
monthly contribution towards
provident fund (‘PF') and employee
state insurance scheme (‘ESI') which
is a defined contribution plan. The
Company's contribution is recognized
as an expense in the Standalone
statement of profit and loss during
the period in which the employee
renders the related service.

• Defined Benefit Plan: A defined
benefit plan is a post-employment
benefit plan other than a defined
contribution plan. Under such plans,
the obligation for any benefits remains
with the Company. The Company's
liability towards gratuity and leave
Encashment is in the nature of defined
benefit plan.

The Company has an obligation
towards gratuity, a defined benefit
retirement plan covering eligible
employees. The plan provides for
a lump sum payment to vested
employees at retirement, death while
in employment or on termination of
employment of an amount based on
the respective employee's salary and
the tenure of employment. Vesting
occurs upon completion of five years
of service. The Company makes
periodic contributions to the Kotak
Mahindra Life Insurance Limited, Bajaj
Allianz Life Insurance Co. Ltd, Tata Aia
Life Insurance Co Ltd and Reliance
Nippon Life Insurance Co. Ltd. for the
Gratuity Plan in respect of employees.

The employees' leave encashment
scheme is managed by HDFC Life
Insurance Company Limited which
is a defined benefit plan. The present
value of obligation is determined
based on actuarial valuation using
the Projected Unit Credit Method and
is recognised on the basis of eligible
leave balances of employees' as on
valuation date.

The liability in respect of gratuity
and leave encashment is accrued in
the books of accounts on the basis
of actuarial valuation carried out by
an independent actuary using the
Projected Unit Credit Method.

The Company's net obligation is
measured at the present value of the
estimated future cash flows using
a discount rate based on the market
yield on government securities of
a maturity period equivalent to the
weighted average maturity profile of
the defined benefit obligations at each
reporting date.

Re-measurement, comprising

actuarial gains and losses, is
recognized in other comprehensive
income and is reflected in retained
earnings and the same is not eligible
to be reclassified to Standalone
Statement of Profit and loss.

Defined benefit costs comprising
current service cost, past service
cost, interest cost and gains or losses
on settlements are recognized in the
Standalone Statement of Profit and
loss as employee benefits expense.
Gains or losses on settlement of any
defined benefit plan are recognized
when the settlement occurs. Past
service cost is recognized as expense
at the earlier of the plan amendment
or curtailment and when the Company
recognizes related restructuring costs
or termination benefits.

c) Other long-term employee benefits

Benefits under the Company's
compensated absences constitute other
long-term employee benefits, recognized
as an expense in the Standalone Statement
of Profit and loss for the period in which
the employee has rendered services. The
obligation recognized in respect of these
long-term benefits is measured at present
value of the obligation based on actuarial
valuation using the Projected Unit credit
method.

Long term employee benefit costs
comprising current service cost, interest
cost and gains or losses on curtailments
and settlements, re-measurements
including actuarial gains and losses are
recognized in the Standalone Statement
of Profit and loss as employee benefit
expenses.

d) Share based payments - Employee Stock
Option Scheme (‘ESOP')

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

The fair value of options granted
under Employee Stock Option Plan is
recognized as an employee benefits with a
corresponding increase in equity. The total
amount to be expensed is determined by
reference to the fair value of the options
determined under Black-Scholes model.
The total expense is recognized over

the vesting period, which is the period
over which all of the specified vesting
conditions are to be satisfied. At the end of
each period, the entity revises its estimates
of the number of options that are expected
to vest based on the non-market vesting
and service conditions. It recognizes the
impact of the revision to original estimates,
if any, in profit or loss, with a corresponding
adjustment to equity. Upon exercise of
share options, the proceeds received are
allocated to share capital up to the par
value of the shares issued with any excess
being recorded as share premium. If the
options are forfeited or not exercised after
vesting date, related expenses already
recognized in statement of profit and loss
are not reversed but transferred to other
component within equity.

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

2.H Cash and cash equivalents

Cash and cash equivalent include cash on hand,
cash at banks and short-term deposits with
original maturities of three months or less that
are readily convertible to known amounts of
cash and which are subject to an insignificant
risk of change in value.

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

2.12 Borrowing Cost

Borrowing costs directly attributable to the
acquisition, construction of qualifying assets
are capitalised as part of the cost of such assets
upto the assets are substantially ready for their
intended use.

The loan origination costs directly attributable
to the acquisition of borrowings (e.g. loan
processing fee, upfront fee) are amortised on the
basis of the Effective Interest Rate (EIR) method
over the term of the loan. All other borrowing
costs are recognised in the Standalone
Statement of Profit and loss in the period in
which they are incurred.