2. A. Material accounting policies / critical accounting estimates and judgements

I. Statement of Compliance

The financial statements of the company have been prepared in accordance with the Indian
Accounting Standards (“IND AS”) specified under section 133 of the Companies Act, 2013 (‘‘the
Act”) read with the Companies (Indian Accounting Standard) Rules, 2015, as amended from
time to time. The financial statements have been prepared on going concern basis and all the
applicable Ind AS effective as on the reporting date have been complied with.

II. Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention on accrual
basis except for certain financial instruments which are measured at fair value.

Accounting policies have been consistently applied except where a newly issued accounting
standard is initially adopted or revision to an existing accounting standard requires a change in
the accounting policy hitherto in use.

III. Functional and presentation currency

The functional currency of the company is Indian rupee (INR). The financial statements are
presented in Indian rupees (INR) and all values are rounded to nearest lakh up to two decimals,
unless otherwise stated.

IV. Use of estimates and judgements

The preparation of financial statements, in conformity with Ind AS requires management to
make estimates, judgements and assumptions. These estimates, judgements and assumptions
affect the application of accounting policies and the reported amounts of assets and liabilities, the
disclosures of contingent assets and liabilities at the date of the financial statements and reported
amounts of revenues and expenses during the period. The application of accounting policies that
require critical accounting estimates involving complex and subjective judgements and use of
assumptions in these financial statements have been disclosed in notes. Accounting estimates
could change from period to period. Actual results could differ from those estimates. Appropriate
changes in estimates are made as management become aware of changes in circumstances
surrounding the estimates. Changes in estimates are reflected in the financial statements in the
period in which changes are made, and if material, their effects are disclosed in the notes to the
financial statements.

V. Current versus 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.

a. Held primarily for the purpose of trading.

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

c. 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.

A Liability is treated as current when:

a. It is expected to be settled in normal operating cycle.

b. It is held primarily for the purpose of trading.

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

d. 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.

VI. Fair Value Measurement

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.

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market
participants would use when pricing the asset or liability, assuming that market participants act
in their economic best interest.

A fair value measurement of a non-fmancial asset takes into account a market participant’s
ability to generate economic benefits by using the asset in its highest and best use or by selling it
to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximizing the use of relevant observable
inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements
are categorized 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 —Inputs are not based on observable market data (unobservable inputs). Fair values are
determined in whole or in part using a valuation model based on assumptions that are neither
supported by prices from observable current market transactions in the same instrument nor are
they based on available market data.

For assets and liabilities that are recognized in the financial statements on a recurring basis, the
Company determines whether transfers have occurred between levels in the hierarchy by re¬
assessing categorization (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting period or each case.

For the purpose of fair value disclosures, the Company has determined classes of assets and
liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level
of the fair value hierarchy as explained above.

This note summarizes accounting policy for fair value. Other fair value related disclosures are
given in the relevant notes.

• Disclosures for valuation methods, significant estimates and assumptions

• Quantitative disclosures of fair value measurement hierarchy

• Investment in unquoted equity shares financial instruments

• Financial instruments

VII. Property, plant and equipment

All items of property, plant and equipment are stated at cost less accumulated depreciation and
impairment if any. Freehold land is stated at cost and not depreciated. The Cost of an item of
Property, Plant and Equipment comprises:

> Its purchase price net of recoverable taxes wherever applicable and any attributable expenditure
(directly or indirectly) for bringing the asset to its working condition for its intended use.

> Subsequent expenditures relating to property, plant and equipment is capitalized only when it is
probable that future economic benefits associated with these will flow to the Company and the
cost of the item can be measured reliably.

> Initial estimate of the costs of dismantling and removing the item and restoring the site on which
it is located, if any, the obligation for which an entity incurs either where the item is acquired or

as a consequence of having used the item during a particular period for purposes other than to
produce inventories during that period.

Depreciation on property, plant and equipment has been provided on the straight line method as
per the useful life prescribed in Schedule II to the Companies Act, 2013

Depreciation is calculated on pro-rata basis from the date of installation till the date the asset is
sold or discarded.

Advances paid towards the acquisition of property, plant and equipment outstanding at each
balance sheet date is classified as capital advances under other non-current assets and the cost of
assets not put to use before such date are disclosed under Capital work-in-progress. The
depreciation method, useful lives and residual value are reviewed periodically and at the end of
each reporting period.

Vm. Intangible Assets

Intangible assets are stated at cost less accumulated amount of amortisation and impairment if
any. Intangible assets are amortised over their respective individual estimated useful lives on a
straight line basis, from the date that they are available for use. The estimated useful life of an
identifiable intangible asset is based on a number of factors including the effects of obsolescence
etc. The amortization method, estimated useful lives are reviewed periodically and at end of each
reporting period.

IX. Impairment of Non-financial assets

The impairment assessment for all assets is made at each porting date to determine whether
there is an indication that previously recognised impairment losses no longer exist or have
decreased. If such indication exists, the Company estimates the assets or CGU’s recoverable
amount. A previously recognised 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 recognised. 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 recognised for the asset in prior years. Such reversal
is recognised in the statement of profit or loss.

X. Inventories

Raw materials and stores, work in progress, traded and finished goods are stated at the lower of
cost and net realisable value. Cost of raw materials and stores is computed on FIFO basis plus
direct expenditure, Cost of work in progress and finished goods comprises direct materials,
direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter
being allocated on the basis of normal operating capacity. Cost of inventories also include all
other costs incurred in bringing the inventories to their present location and condition. Costs of
purchased inventory are determined after deducting rebates and discounts. Net realizable value is
the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale.

XI. Borrowing costs

General and specific borrowing costs that are directly attributable to the acquisition, construction
or production of a qualifying asset are capitalised during the period of time that is required to
complete and prepare the asset for its intended use or sale. Qualifying assets are assets that
necessarily take a substantial period of time to get ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
Other borrowing costs are expense in the period in which they are incurred.