2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

(i) Compliance with Ind AS

These financial statements have been prepared in accordance with the Indian
Accounting Standards (hereinafter referred to as the 'Ind AS') as notified by Ministry of
Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 ('Act') read with
of the Companies (Indian Accounting Standards) Rules, 2015 as amended and other
relevant provisions of the Act.

(ii) Historical cost convention

The financial statements have been prepared on a historical cost basis, except for the
following:

1) certain financial assets and liabilities that are measured at fair value;

2) assets held for sale - measured at lower of carrying amount or fair value less cost to
sell;

3) defined benefit plans - plan assets measured at fair value;

(iii) Current non-current classification

All assets and liabilities have been classified as current or non-current as per the
Company's normal operating cycle (twelve months) and other criteria set out in the
Schedule III to the Act.

(iv) Rounding off amounts

All amounts disclosed in the financial statements and notes have been rounded off to
the nearest lakhs as per the requirement of Schedule III, unless otherwise stated.

(b) Use of estimates and judgments

The estimates and judgments used in the preparation of the financial statements are
continuously evaluated by the Company and are based on historical experience and various
other assumptions and factors (including expectations of future events) that the Company
believes to be reasonable under the existing circumstances. Differences between actual
results and estimates are recognized in the period in which the results are known
materialized.

The said estimates are based on the facts and events, that existed as at the reporting date, or
that occurred after that date but provide additional evidence about conditions existing as at
the reporting date.

(c) Property, plant and equipment

The Company has applied for the one time transition exemption of considering the carrying
cost on the transition date i.e. April 1, 2016 as the deemed cost under IND AS. Hence
regarded thereafter as historical cost.

Freehold land is carried at cost. All other items of property, plant and equipment are stated
at cost less depreciation and impairment, if any. Historical cost includes expenditure that is
directly attributable to the acquisition of the items. 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. All other repairs and
maintenance are charged to the Statement of Profit and Loss during the reporting period in
which they are incurred.

Depreciation methods, estimated useful lives and residual value

Depreciation on Property, Plant and Equipments is provided on Written Down Value Method,
over the estimated useful lives of assets. The Company depreciates its Property, plant and
equipment over the useful life in the manner prescribed in Schedule II to the Act, and
management believe that useful life of assets are same as those prescribed in Schedule II to
the Act.

The residual values are not more than 5% of the original cost of the asset. The assets residual
values and useful lives are reviewed, and adjusted if appropriate, at the end of each
reporting period.

In case of pre-owned assets, the useful life is estimated on a case to case basis.

Gains and losses on disposals are determined by comparing proceeds with carrying amount.
These are included in the Statement of Profit and Loss.

(d) Investment properties

Investment property is property (land or a building or part of a building or both) held either to
earn rental income or for capital appreciation or for both, but neither for sale in the ordinary
course of business nor used in production or supply of goods or services or for administrative
purposes. Investment properties are stated at cost net of accumulated depreciation and
accumulated impairment losses, if any.

Depreciation on building is provided over it's useful life using the written down value method.

(e) Intangible assets

Computer software

Computer software is stated at cost, less accumulated amortization and impairments, if
any.

Amortization method and useful life

The Company amortizes computer software using the written down value method over the
period of 5 years.

(f) Lease

Operating Lease

As a lessee

Leases in which a significant portion of the risks and rewards of ownership are not
transferred to the Company, as lessee, are classified as operating leases. Payments made
under operating leases are charged to the Statement of Profit and Loss on a straight-line
basis over the period of the lease unless the payments are structured to increase in line with
expected general inflation to compensate for the Company's expected inflationary cost
increases.

As a lessor

Lease income from operating leases where the Company is a lesser is recognized in income
on a straight-line basis over the lease term unless the receipts are structured to increase in
line with expected general inflation to compensate for the excepted inflationary cost
increases. The respective leased assets are included in the balance sheet based on their
nature.

(g) Cash and Cash Equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents
includes cash on hand, bank overdraft, deposits held at call with financial institutions, other
short-term highly liquid investments 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 changes in value.

(h) Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at
amortised cost, less provision for impairment, if any.

(i) Inventories

Inventories of Raw Materials, Stores and spares and Finished Goods are stated 'at cost or
net realizable value, whichever is lower'. Cost comprise all cost of purchase, cost of
conversion and other costs incurred in bringing the inventories to their present location and
condition. Cost formulae used is 'First-in-First-out'. Due allowance is estimated and made for
defective and obsolete items, wherever necessary.

(j) Investments in subsidiaries, joint ventures and associates

Investments in subsidiaries, joint ventures and associates are recognized at cost as per Ind AS
27. Except where investments accounted for at cost shall be accounted for in accordance with
Ind AS 105, Non-current Assets Held for Sale and Discontinued Operations, when they are
classified as held for sale.

(k) Investments and other financial assets

(i) Classification

The Company classifies its financial assets in the following measurement categories:

(1) those to be measured subsequently at fair value (either through other
comprehensive income, or through the Statement of Profit and Loss), and

(2) those measured at amortised cost.

The classification depends on the Company's business model for managing the financial
assets and the contractual terms of the cash flows.

(ii) Measurement

At initial recognition, the Company measures a financial asset at its fair value. Transaction
costs of financial assets carried at fair value through the Profit and Loss are expensed in
the Statement of Profit and Loss.

Debt instruments:

Subsequent measurement of debt instruments depends on the Company's business
model for managing the asset and the cash flow characteristics of the asset. The
Company classifies its debt instruments into following categories:

(1) Amortized cost: Assets that are held for collection of contractual cash flows where
those cash flows represent solely payments of principal and interest are measured at
amortized cost. Interest income from these financial assets is included in other income
using the effective interest rate method.

(2) Fair value through profit and loss: Assets that do not meet the criteria for amortized
cost are measured at fair value through Profit and Loss. Interest income from these
financial assets is included in other income.

Equity instruments:

The Company measures its equity investment other than in subsidiaries, joint ventures
and associates at fair value through profit and loss. However where the Company's
management makes an irrevocable choice on initial recognition to present fair value gains
and losses on specific equity investments in other comprehensive income (Currently no
such choice made), there is no subsequent reclassification, on sale or otherwise, of fair
value gains and losses to the Statement of Profit and Loss.

(iii) Impairment of financial assets

The Company measures the expected credit loss associated with its assets based on
historical trend, industry practices and the business environment in which the entity
operates or any other appropriate basis. The impairment methodology applied depends
on whether there has been a significant increase in credit risk.

(iv) Income recognition
Interest income

Interest income from debt instruments is recognized using the effective interest rate
method.

Dividends

Dividends are recognized in the Statement of Profit and Loss only when the right to
receive payment is established.

(l) Impairment of non-financial assets

Property, plant and equipments (PPE) and intangible assets (IA) that have an indefinite useful
life are not subject to amortization and are tested annually for impairment or more
frequently if events or changes in circumstances indicate that they might be impaired. Other
assets are tested for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An impairment loss is recognized for the amount
by which the asset's carrying amount exceeds its recoverable amount. The recoverable
amount is the higher of an asset's fair value less costs of disposal and value in use. For the
purpose of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash inflows which are largely independent of the cash inflows from
other assets or group of assets (cash-generating units). Non-financial assets other than
goodwill that suffered impairment are reviewed for possible reversal of the impairment at
the end of each reporting period.

(m) Non-current assets held for sale

Non-current assets are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continuing use and a sale is
considered highly probable. They are measured at the lower of their carrying amount and
fair value less costs to sell, except for assets such as deferred tax assets, assets arising from
employee benefits, financial assets and contractual rights under insurance contracts, which
are specifically exempt from this requirement.

Non-current assets are not depreciated or amortized while they are classified as held for sale.
Interest and other expenses attributable to the liabilities of a Disposal Company classified as
held for sale continue to be recognized.

(n) Derivative financial instruments

Derivative financial instruments such as forward contracts, option contracts and cross currency
swaps, to hedge its foreign currency risks are initially recognized at fair value on the date a
derivative contract is entered into and are subsequently re-measured at their fair value with
changes in fair value recognized in the Statement of Profit and Loss in the period when they
arise.

(o) Segment Reporting:

Geographical segments are reported in a manner consistent with the internal reporting
provided to the chief operating decision maker.

(p) Borrowings

Borrowings are initially recognised at net of transaction costs incurred and measured at
amortised cost. Any difference between the proceeds (net of transaction costs) and the
redemption amount is recognised in the Statement of Profit and Loss over the period of the
borrowings using the effective interest method. Fees paid on the establishment of loan
facilities are recognised as transaction costs of the loan to the extent that it is probable
that some or all of the facility will be drawn down. In this case, the fee is deferred until the
draw down occurs. To the extent there is no evidence that it is probable that some or all of
the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services
and amortised over the period of the facility to which it relates.

Borrowings are removed from the balance sheet when the obligation specified in the
contract is discharged, cancelled or expired. The difference between the carrying amount
of a financial liability that has been extinguished or transferred to another party and the
consideration paid, including any non-cash assets transferred or liabilities assumed, is
recognised in profit or loss as other income.

Preference shares, which are mandatorily redeemable on a specific date are classified as
liabilities. The dividend on these preference shares is recognised in Statement of Profit and
Loss as finance costs.

(q) Borrowing costs

Interest and other borrowing costs attributable to qualifying assets are capitalized. Other
interest and borrowing costs are charged to Statement of Profit and Loss.