2. SUMMARY OF MATERIAL ACCOUNTING
POLICIES

2.1 Basis of preparation & presentation and
statement of compliance

These standalone financial statements of the
Company have been prepared in accordance with
Indian Accounting Standards (Ind AS) prescribed under
the Section 133 of the Companies Act, 2013 ("the
Act") read with the Companies (Indian Accounting
Standards) Rules, 2015, as amended.

These financial statements have been prepared on a
historical cost basis, except for certain financial assets
and liabilities which have been measured at fair value.

Accounting policies have been consistently applied

except where a newly issued accounting standard is
initially adopted or a revision to an existing accounting
standard requires a change in the accounting policy
hitherto in use.

The standalone financial statements are presented in
INR and all values are rounded to the nearest Crores in
two digits, except where otherwise indicated.

2.2 Use of estimates and judgements

The preparation of the financial statements in
conformity with Ind AS requires the management
of the Company to make estimates, judgements
and assumptions. These estimates, judgements and
assumptions affect the reported balances of assets
and liabilities, disclosures relating to contingent
liabilities as at the date of the financial statements

and the reported amounts of income and expense for
the periods presented.

Estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the
estimates are revised.

Key sources of estimation of uncertainty at the date of
the financial statements, which may cause a material
adjustment to the carrying amounts of assets and
liabilities within the next financial year, is in respect of
impairment of investments, useful lives of property,
plant and equipment, provisions and contingent
liabilities and fair value measurement of financial
instruments. Key source of estimation of uncertainty
in respect of employee benefits and measurement
of deferred tax assets have been discussed in their
respective policies.

2.3 Critical accounting estimates

(i) Property, plant and equipment:

Property, plant and equipment represent a
significant proportion of the asset base of the
Company. The charge in respect of periodic
depreciation is derived after determining an
estimate of an asset's expected useful life and
the expected residual value at the end of its life.
The useful lives and residual values of Company's
assets are determined by management at
the time the asset is acquired and reviewed
at the end of each reporting period. The lives
are based on historical experience with similar
assets as well as anticipation of future events,
which may impact their life, such as changes in
technology. The policy for the same has been
explained under Note 2.10.

(ii) Impairment of Investments

The Company reviews it carrying value of
investments in associate and joint ventures
carried at cost annually, or more frequently
when there is indication for impairment.
If the recoverable amount is less than it carrying
amount, the impairment loss is accounted for.

(iii) Provisions

Provision is recognized when the Company has a
present obligation as a result of past event and

it is probable that an outflow of resources will
be required to settle the obligation, in respect
of which a reliable estimate can be made.
These are reviewed at each balance sheet date
adjusted to reflect the current best estimates.
The policy for the same has been explained
under Note 2.13.

(iv) Fair value measurement of
financial instruments

When the fair value of financial assets and
financial liabilities recorded in the balance
sheet cannot be measured based on quoted
prices in active markets, their fair value is
measured using valuation techniques including
the Discounted Cash Flow model. The inputs
to these models are taken from observable
markets where possible, but where this is not
feasible, a degree of judgement is required in
establishing fair values. Judgements include
considerations of inputs such as liquidity
risk, credit risk and volatility. Changes in
assumptions about these factors could affect
the reported fair value of financial instruments.
The policy has been further explained under
note 2.15, 2.16 and 2.17.

2.4 Current and non-current classification

The Company presents assets and liabilities in

the balance sheet 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.

All other assets are classified as non-current.

Liability is treated as current when it is:

• Expected to be settled in normal operating cycle

• Held primarily for the purpose of trading

• 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 or 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.

2.5 Revenue recognition

Sale of goods

Revenue from the sale of goods is recognized at
point in time when control of the goods is transferred
to the customer, usually on delivery of the goods,
customer acceptance and other indicators of transfer
of control of goods to the customer. Revenue from
sale of goods is measured at an amount that reflects
the consideration ("transaction price") expected to be
received in exchange for those goods.

Interest income

Interest income from a financial asset is recognized
when it is probable that the economic benefits will
flow to the Company and the amount of income can
be measured reliably. Interest income is accrued on a
time basis, by reference to the principal outstanding
and at the effective interest rate applicable, which
is the rate that exactly discounts estimated future
cash receipts through the expected life of the
financial asset to that asset's net carrying amount on
initial recognition.

Dividends

Revenue is recognized when the Company's right to

receive the dividend is established, which is generally
when shareholders approve the dividend.

2.6 Foreign Currencies

The Functional Currency of the company is in the

Indian rupee. Transactions in foreign currencies are
recorded at the exchange rate prevailing on the date
of the transaction. Realized gains and losses as well
as exchange differences arising on translation (at

year end exchange rates) of monetary assets and
monetary liabilities outstanding at the end of the year
are recognised in the statement of Profit and Loss.

Non -monetary assets and liabilities that all are
measured in terms of historical cost in foreign
currencies are not retranslated.

2.7 Employee Benefits

2.7.1 Defined contribution plans

(a) Provident Fund

The Company pays provident fund

contributions to publicly administered
provident funds as per local regulations.
The Company has no further payment
obligations once the contributions
have been paid. The contributions are
accounted for as defined contribution
plans and the contributions are
recognized as employee benefit expense
when they are due. Prepaid contributions
are recognized as an asset to the extent
that a cash refund or reduction in the
future payments is available.

(b) Superannuation:

Superannuation fund, which is defined

contribution schemes, are charged
to the Statement of Profit and Loss
on accrual basis. The Company has
no further obligations for future
superannuation fund benefits other than
its annual contributions.

(c) Employees state insurance scheme
ESIC):

The company pays ESIC contribution to
Employee State Insurance Corporation of
India as per ESIC Act 1948. The Company
has no further obligations other than its
monthly contributions.

2.7.2 Defined benefits plans (Gratuity)

For defined benefit retirement plans, the cost
of providing benefits is determined using the

projected unit credit method, with actuarial
valuations being carried out at the end of each
annual reporting period. Re-measurement,
comprising actuarial gains and losses, the effect
of the changes to the asset ceiling (if applicable)
and the return on plan assets (excluding net
interest), is reflected immediately in the balance
sheet with a charge or credit recognized in
other comprehensive income in the period in
which they occur. Re-measurement recognized

in other comprehensive income is reflected
immediately in retained earnings and is not
reclassified to profit or loss. Past service cost
is recognized in profit or loss in the period of a
plan amendment. Net interest is calculated by
applying the discount rate at the beginning of
the period to the net defined benefit liability
or asset. The retirement benefit obligation
recognized in the balance sheet represents
the actual deficit or surplus in the Company's
defined benefit plans. Any surplus resulting
from this calculation is limited to the present
value of any economic benefits available in the
form of refunds from the plans or reductions
in future contributions to the plans. A liability
for a termination benefit is recognized at
the earlier of when the entity can no longer
withdraw the offer of the termination benefit
and when the entity recognizes any related
restructuring costs.

2.7.3 Compensated absences

The Company provides for the compensated
absences subject to Company's certain rules.
The employees are entitled to accumulate leave
subject to certain limits, for future encashment
or availment. The liability is provided based
on the number of days of un-availed leave at
each Balance Sheet date on the basis of an
independent actuarial valuation using the
Projected Unit Credit method. The liability
which is not expected to occur within twelve
months after the end of the period in which
the employee renders the related services are
recognised based on actuarial valuation as at
the Balance Sheet date. Actuarial gains and
losses are recognised in full in the Statement of
Profit and Loss in the period in which they occur.

2.8 Leases:

The determination of whether an arrangement
is (or contains) a lease is based on the substance
of the arrangement at the inception of the lease.
The arrangement is, or contains, a lease if fulfilment
of the arrangement is dependent on the use of a
specific asset or assets and the arrangement conveys

a right to use the asset or assets, even if that right is
not explicitly specified in an arrangement.

Company as a lessee

The Company applies a single recognition and
measurement approach for all leases, except for
short-term leases and leases of low-value assets.
The Company recognises lease liabilities to make lease
payments and right-of-use assets representing the
right to use the underlying assets.

i) Right-of-use assets

The Company recognises right-of-use assets at
the commencement date of the lease (i.e., the
date the underlying asset is available for use).
Right-of-use assets are measured at cost, less
any accumulated depreciation and impairment
losses, and adjusted for any re-measurement
of lease liabilities. The cost of right-of-use
assets includes the amount of lease liabilities
recognised, initial direct costs incurred,
and lease payments made at or before the
commencement date less any lease incentives
received. Right-of-use assets are depreciated
on a straight-line basis over the shorter of
the lease term and the estimated useful
lives of the assets.

If ownership of the leased asset transfers to the
Company at the end of the lease term or the
cost reflects the exercise of a purchase option,
depreciation is calculated using the estimated
useful life of the asset.

The right-of-use assets are also subject to
impairment. Refer to the accounting policies in
section (2.19) Impairment of assets.

ii) Lease Liabilities

At the commencement date of the lease, the
Company recognises lease liabilities measured
at the present value of lease payments to be
made over the lease term. The lease payments
include fixed payments (including in substance
fixed payments) less any lease incentives
receivable, variable lease payments that depend
on an index or a rate, and amounts expected
to be paid under residual value guarantees.
The lease payments also include the exercise
price of a purchase option reasonably certain

to be exercised by the Company and payments
of penalties for terminating the lease, if the
lease term reflects the Company exercising the

option to terminate. Variable lease payments
that do not depend on an index or a rate
are recognised as expenses (unless they are
incurred to produce inventories) in the period
in which the event or condition that triggers the
payment occurs.

In calculating the present value of lease
payments, the Company uses its incremental
borrowing rate at the lease commencement
date because the interest rate implicit in the
lease is not readily determinable. After the
commencement date, the amount of lease
liabilities is increased to reflect the accretion
of interest and reduced for the lease payments
made. In addition, the carrying amount of lease
liabilities is remeasured 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) or a change
in the assessment of an option to purchase the
underlying asset.

iii) Short-term leases and leases of
low-value assets

The Company applies the short-term lease
recognition exemption to its short-term leases
(i.e., those leases that have a lease term of
12 months or less from the commencement
date and do not contain a purchase option).
It also applies the lease of low-value assets
recognition exemption to leases that are
considered to be low value. Lease payments on
short-term leases and leases of low-value assets
are recognised as expense on a straight-line
basis over the lease term.

Company as a lessor

Leases in which the Company does not transfer
substantially all the risks and rewards incidental to
ownership of an asset are classified as operating leases.
Rental income arising is accounted for on a straight-line
basis over the lease terms. Initial direct costs incurred
in negotiating and arranging an operating lease are
added to the carrying amount of the leased asset and
recognised over the lease term on the same basis as

rental income. Contingent rents are recognised as
revenue in the period in which they are earned.

2.9 Income Taxes
Current Tax

Current income tax assets and liabilities are measured
at the amount expected to be recovered from or
paid to the taxation authorities. The tax rates and tax
laws used to compute the amount are those that are
enacted or substantively enacted, at the reporting
date in India where it generates taxable income,
Current income tax relating to items recognized
outside profit or Loss is recognized outside profit
or loss (either in other comprehensive income or
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 establishes provisions
where appropriate.

Deferred Taxes

Deferred tax is recognised on temporary differences
between the carrying amounts of assets and liabilities
in the financial statements and the corresponding
tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognized for all
taxable temporary differences. Deferred tax assets
are generally recognised for all deductible temporary
differences to the extent that it is probable that
taxable profits will be available against which those
deductible temporary differences can be utilized.
Such deferred tax assets and liabilities are not
recognised if the temporary difference arises from
the initial recognition of assets and liabilities in a
transaction that affects neither the taxable profit nor
the accounting profit.

The carrying amount of deferred tax assets is reviewed
at the end of each reporting period and reduced to
the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of
the asset to be recovered. Deferred tax liabilities and
assets are measured at the tax rates that are expected
to apply in the period in which the liability is settled or
the asset realised, based on tax rates (and tax laws)
that have been enacted or substantively enacted by
the end of the reporting period.

For operations carried out under tax holiday period
(80IA benefits of Income Tax Act, 1961), deferred tax

assets or liabilities, if any, have been established for
the tax consequences of those temporary differences
between the carrying values of assets and liabilities
and their respective tax bases that reverse after the
tax holiday ends.

Deferred tax assets and liabilities are offset when they
relate to income taxes levied by the same taxation
authority and the relevant entity intends to settle its
current tax assets and liabilities on a net basis.

Deferred tax assets include Minimum Alternative

Tax (MAT) paid in accordance with the tax laws in
India, which is likely to give future economic benefits
in the form of availability of set off against future
income tax liability. Accordingly, MAT is recognized

as deferred tax asset in the balance sheet when the
asset can be measured reliably, and it is probable that
the future economic benefit associated with the asset
will be realized.

2.10 Property, Plant and Equipment

Property, plant and equipment are stated at cost
less accumulated depreciation and accumulated
impairment losses, if any. Cost includes purchase

price and any directly attributable cost of bringing
the asset to its working condition for its intended use
and for qualifying assets, borrowing costs capitalised
in accordance with the Company's accounting policy.
Depreciation commences when the assets are ready
for their intended use. Freehold land and Assets held
for sale are not depreciated.

Depreciation is provided for property, plant and
equipment so as to expense the cost less residual
value over their estimated useful lives based on
a technical evaluation. The estimated useful lives
and residual value are reviewed at the end of each
reporting period, with the effect of any change in
estimate accounted for on a prospective basis.

Depreciation is not recorded on capital work-in¬
progress until construction and installation is
complete and the asset is ready for its intended use.

2.11 Intangible Assets

Intangible assets acquired separately are carried
at cost less any accumulated amortization and
accumulated impairment losses. Internally generated
intangibles, excluding capitalised development costs,

are not capitalised and the related expenditure is
reflected in the statement of profit or loss in the
period in which the expenditure is incurred.

Intangible assets are amortised over the useful
economic life and assessed for impairment whenever
there is an indication that the intangible asset
may be impaired. The amortization period and the
amortization method for an intangible asset are
reviewed at least at the end of each reporting period.
Changes in the expected useful life or the expected
pattern of consumption of future economic benefits
embodied in the asset are considered to modify
the amortization period or method, as appropriate,
and are treated as changes in accounting estimates.
The amortization expense on intangible assets
is recognized in the statement of profit and loss
unless such expenditure forms part of carrying value
of another asset.

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

2.12 Inventories

I nventories are valued at the lower of cost and net
realisable value. Cost of inventories is determined
on weighted average. Cost for this purpose includes
cost of direct materials, direct labour, appropriate
share of overheads. Net realisable value represents
the estimated selling price in the ordinary course of
business less all estimated costs of completion and
estimated costs necessary to make the sale.

Obsolete, defective, unserviceable and slow /

non-moving stocks are duly provided for and valued at
net realisable value.