2. Significant accounting policies

This note provides a list of the significant accounting policies adopted in the preparation of the Financial Statements.
These polices have been consistently applied to all the years presented, unless otherwise stated.

2.1. Basis of Preparation

(i) Compliance with Ind AS

The Financial statements comply in all material respects with Indian Accounting Standards (Ind AS)
notified under Section 133 of the Companies Act, 2013 (the "Act") [Companies (Accounting Standards)
Rules, 2015] and other relevant provisions of the Act.

(ii) Historical cost convention

The financial statements have been prepared on going concern basis under the historical cost except for
the following:

• Certain Financial assets and liabilities which are measured at fair value.

• Defined benefit plans - plan assets measured at fair value; and

• Contingent Consideration

(iii) Current versus non-current classification

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

An asset is classified as current when it is:

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

• Held primarily for the purpose of trading

• Expected to be realised 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. A liability is classified as 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

All other liabilities are classified as non- current.

Deferred tax assets and liabilities are classified as non-current.

(iv) Rounding of amounts

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

2.2. Properties, plant and equipment (PPE) Recognition and initial measurements

Property, plant and equipment are stated at their cost of acquisition. The cost comprises purchase price,
borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its
Working condition for the intended use. Any trade discount and rebates are deducted in arriving at the
purchase price.

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. All
other repair and maintenance costs are recognized instatement of profit or loss as incurred.

Depreciation method, estimated useful lives and residual values

The classification of Plant and equipment into continuous and non-continuous process is done as per technical
certification and depreciation thereon is provided accordingly.

Depreciation on property, plant and equipment is provided on the straight-line method, computed on the
basis of useful lives as estimated by management which coincides with rates prescribed in Schedule II to the
Companies Act, 2013.

Cost of the leasehold land is amortized on a straight-line basis over the term of the lease.

The residual values, useful lives and method of depreciation of are reviewed at each financial year end and
adjusted prospectively, if appropriate.

De-recognition

An item of property, plant and equipment and any significant part initially recognized is derecognized upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on
de- Recognition of the asset (calculated as the Difference between the net disposal proceeds and the carrying
amount of the asset) is included in the other income/other expenses when the asset is derecognized.

2.3. Intangible Assets

Recognition and initial measurement

Intangible assets (including software) are stated at their cost of acquisition. The cost comprises purchase
price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset
to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at
the purchase price.

Amortisation method and period

Computer software is amortised on a pro-rata basis using the straight-line method over its estimated
useful life of 3 years from the date they are available for use. Amortisation method and useful lives are
reviewed periodically including at each financial year end. Investment Properties

2.4. Impairment of non-financial assets

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 purposes 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 or assets (cash-generating units). The Company's corporate assets (e.g. Central office building for
providing support to various CGUs) do not generate independent cash flows. To determinate impairment
of corporate assets, recoverable amount is determined for the CGUs to which the corporate assets
belongs.

2.5. Inventories

• Stores & Spares are valued at cost or at net realizable value, whichever is lower. Cost is arrived at
Weighted Average Basis.

• Raw Material, Semi-Finished Goods, Finished Goods are valued at Cost or Market Value whichever is
lower. Cost is arrived at FIFO method.

• Obsolescence and Damaged materials are valued at Realizable Value.

2.6. Operating Leases
As a lessee

Leases of property, plant and equipment where the Company, as a lessee, has substantial risks and
rewards of ownership are classified as finance leases. Finance leases are capitalized at the lease's inception
at the fire value of the leased asset or, if lower, the present value of the minimum lease payments. The
corresponding lease rental obligations, net of finance charges, are included in borrowings or other
financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost.
The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic
rate of interest on the remaining balance of the liability of each period.

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the
Company as lessee are clarified as operating leases. Payments made under operating leases are charges
to profit or 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 lessor's expected inflationary cost
increases.

As a Lessor

Lease income from operating leases where the Company is a lessor 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 expected inflationary costs increases. The respective leased assets are
included in the Balance Sheet based on their nature.

2.7. Investment and other financial assets
Classification

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

• those to be measured subsequently at fair value (either through other comprehensive income or
through profit or loss), and

• those to be 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.

For assets measured at fair value, gains and losses will either be recorded in profit or loss or other
comprehensive income. For investments in debt instruments, this will depend on the business model
in which the investment is held. For investments in equity instruments, this will depend on whether the
Company has made an irrevocable election at the time of initial recognition to account for the equity
investment at fair value through other comprehensive income.

The Company reclassifies debt investments when and only when its business model for managing those
assets changes.

Measurement

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a
financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the
acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit
or loss are expensed in profit or 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. There are three measurement categories into
which the Company classifies its debt instruments:

• Amortised 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 amortised cost. A gain or loss
on a debt instrument that is subsequently measured at amortised cost is recognised in profit or loss
when the asset is derecognised or impaired.

• Fair value through other comprehensive income (FVOCI): Assets that are held for collection of
contractual cash flows and for selling the financial assets, where the assets' cash flows represent
solely payments of principal and interest, are measured at fair value through other comprehensive
income (FVOCI). Movements in the carrying amount are taken through OCI, except for the
recognition of impairment gains or losses, interest income and foreign exchange gains and losses
which are recognised in the profit or loss. When the financial asset is derecognised, the cumulative
gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised
in 'Other income'.

• Fair value through profit or loss: Assets that do not meet the criteria for amortised cost or FVOCI are
measured at fair value through profit or loss. A gain or loss on a debt instrument that is subsequently
measured at fair value through profit or loss is recognised in profit or loss and presented net in the
Statement of Profit and Loss within 'Other income' in the period in which it arises.

Equity instruments

The Company subsequently measures all equity investments at fair value. Where the Company's
management has elected to present fair value gains and losses on equity investments in other
comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit
or loss. Changes in the fair value of financial assets at fair value through profit or loss are recognised in
'Other income' in the Statement of Profit and Loss.

Impairment of financial assets

The Company assesses on a forward looking basis the expected credit losses associated with its assets
carried at amortised cost and FVOCI debt instruments. The impairment methodology applied depends
on whether there has been a significant increase in credit risk.

For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109,'Financial
Instruments', which requires expected lifetime losses to be recognised from initial recognition of the
receivables.

De-recognition of financial assets

A financial asset is derecognised only when

• the Company has transferred the rights to receive cash flows from the financial asset or

• retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual
obligation to pay the cash flows to one or more recipients.

Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially
all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised.
Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset,
the financial asset is not derecognised.

Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards
of ownership of the financial asset, the financial asset is derecognised if the Company has not retained
control of the financial asset. Where the Company retains control of the financial asset, the asset is
continued to be recognised to the extent of continuing involvement in the financial asset.

Income recognition Interest income

Interest income from debt instruments is recognised using the effective interest rate method. The
effective interest rate is the rate that exactly discounts estimated future cash receipts through the
expected life of the financial asset to the gross carrying amount of a financial asset. When calculating the
effective interest rate, the Company estimates the expected cash flows by considering all the contractual
terms of the financial instrument but does not consider the expected credit losses.

Dividends

Dividends are recognised in profit or loss only when the right to receive payment is established, it is
probable that the economic benefits associated with the dividend will flow to the Company, and the
amount of the dividend can be measured reliably.

Fair value of financial instruments

In determining the fair value of financial instruments, the Company uses a variety of methods and
assumptions that are based on market conditions and risks existing at each reporting date. The methods
used to determine fair value include discounted cash flow analysis and available quoted market prices.
All methods of assessing fair value result in general approximation of value, and such value may never
actually be realised.

2.8. Derivative instruments

The Company enters into certain derivative contracts to hedge risks which are not designated as hedges.
Derivative instruments are initially recognised at fair value on the date a derivative contract is entered into
and are subsequently re-measured to their fair value at the end of each reporting period, with changes
included in 'Other income'/'Other expenses'

2.9. Offsetting financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if
there is a currently enforceable legal right to offset the recognised amounts and there is an intention to
settle on a net basis, to realise the assets and settle the liabilities simultaneously.

2.10. Trade Receivables

Trade receivables are amounts due from customers for goods sold or services rendered in the ordinary
course of business. Trade receivables are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method, less provision for impairment.

2.11. Cash and Cash equivalents

For the purpose of presentation in the Cash Flow Statement, cash and cash equivalents includes cash on
hand, 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.

2.12. Trade payables

These amounts represent liabilities for goods and services provided to the Company prior to the end
of financial year which are unpaid. The amounts are unsecured and are usually paid within 90 days of
recognition. Trade and other payables are presented as current liabilities unless payment is not due within
12months after the reporting period. They are recognised initially at their fair value and subsequently
measured at amortised cost using the effective interest method.

2.13. Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference between the proceeds (net of transaction
costs) and the redemption amount is recognised in profit or 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.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer
settlement of the liability for at least 12 months after the reporting period.

2.14. Non-current assets (or disposal groups) held for sale

Non-current assets (or disposal groups) 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.

An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group)
to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs
to sell of an asset (or disposal group), but not in excess of any cumulative impairment loss previously
recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset (or
disposal group) is recognised at the date of de-recognition.

Non-current assets (including those that are part of a disposal group) are not depreciated or amortised
while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a
disposal group classified as held for sale continue to be recognised.

Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale
are presented separately from the other assets in the balance sheet. The liabilities of a disposal group
classified as held for sale are presented separately from other liabilities in the Balance Sheet.

2.15. Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company
and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is
measured at the fair value of the consideration received or receivable, taking into account contractually
defined terms of payment and excluding taxes or duties collected on behalf of the government.

The specific recognition criteria described below must also be met before revenue is recognised.

Sale of goods

Revenue from the sale of goods is recognized when the significant risks and rewards of ownership of
the goods have passed to the buyer, usually on delivery of the goods. Revenue from the sale of goods
is measured at the fair value of the consideration received or receivable, net of returns and allowances,
trade discounts and volume rebates.

2.16. Government Grants

Grants from the government are recognised at their fair value where there is a reasonable assurance that
the grant will be received and the Company will comply with all attached conditions.

2.17. 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.

Other borrowing costs are expensed in the period in which they are incurred.

2.18. Foreign currency transactions and translation

(i) Functional and presentation currency

Items included in the financial statements of the Company are measured using the currency of the
primary economic environment in which the Company operates ('the functional currency'). The
financial statements are presented in Indian Rupee (Rupees or H), which is the Company's functional
and presentation currency.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates
at the dates of the transactions. At the year-end, monetary assets and liabilities denominated in
foreign currencies are restated at the year-end exchange rates. The exchange differences arising
from settlement of foreign currency transactions and from the year-end restatement are recognised
in profit and loss.

Foreign exchange differences regarded as an adjustment to borrowing costs, if any, are presented
in the Statement of Profit and Loss, within 'Finance costs'. All other foreign exchange gains and
losses are presented in the Statement of Profit and Loss on a net basis within 'Other income/Other
expenses'.

Non-monetary items that are measured at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value was determined. Translation differences on assets and
liabilities carried at fair value are reported as part of the fair value gain or loss.

2.19. Employee benefits

(i) Short-term employee benefits

Liabilities for short-term employee benefits that are expected to be settled wholly within 12 months after
the end of the period in which the employees render the related service are recognised in respect of
employees' services up to the end of the reporting period and are measured at the amounts expected to
be paid when the liabilities are settled.

(ii) Post-employment benefits. Defined benefit plans

The liability or asset recognised in the Balance Sheet in respect of defined benefit plans is the present
value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets.
The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.

The present value of the defined benefit obligation is determined by discounting the estimated future
cash outflows by reference to market yields at the end of the reporting period on government bonds that
have terms approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit
obligation and the fair value of plan assets. This cost is included in 'Employee benefits expense' in the
Statement of Profit and Loss.

Re-measurement gains and losses arising from experience adjustments and changes in actuarial
assumptions are recognised in the period in which they occur, directly in other comprehensive income.
These are included in retained earnings in the Statement of Changes in Equity.

The Company has gratuity as defined benefit plan where the amount that an employee will receive
on retirement is defined by reference to the employee's length of service and final salary. The liability
recognised in the balance sheet for Defined Benefit Plans as the present value of the Defined Benefit
Obligation (DBO) at the reporting date. Management estimates the DBO annually with the assistance
of Independent actuaries. Actuarial gains and losses resulting from re-measurements of the liability are
included in other comprehensive income.

During the Year the Company has not renewed the group gratuity scheme policy held with The Life
Insurance Corporation of India (LIC). Therefore, gratuity valuation has been done through Independent
agency as per Ind-AS19 (Employee Benefits). As per the valuation made by the Independent Agency the
present value of accrued gratuity comes to ^ 9,96,923/- on estimates of discounts @ 6.68% and escalation
on salaries @ 5% which has taken in Notes to accounts.

Defined contribution plans

Contributions under defined contribution plans payable in keeping with the related schemes are
recognised as expenses for the period in which the employee has rendered the service.

(iii) Other long-term employee benefits

The liabilities for earned leave are not expected to be settled wholly within 12 months after the end of
the period in which the employees render the related service. They are therefore measured annually by
actuaries as the present value of expected future payments to be made in respect of services provided by
employees up to the end of the reporting period using the projected unit credit method. The benefits are
discounted using the market yields at the end of the reporting period that have terms approximating to
the terms of the related obligation. Re-measurements as a result of experience adjustments and changes
in actuarial assumptions are recognised in profit or loss.

The obligations are presented under 'Employee benefit obligations' (current) in the Balance Sheet if
the entity does not have an unconditional right to defer settlement for at least twelve months after the
reporting period, regardless of when the actual settlement is expected to occur.

2.20. Income Taxes

Tax expense recognized instatement of profit or loss comprises the sum of deferred tax and current tax
except the ones recognized in other comprehensive income or directly in equity.

Calculation of current tax is based on tax rates and tax laws that have been enacted for the reporting
period.

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 other comprehensive income or directly inequity.

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 assets are recognized to the extent that it is probable that the underlying tax loss or
deductible temporary difference will be utilized against future taxable income. This is assessed based
on the Company's forecast of future operating results, adjusted for significant non-taxable income and
expenses and specific limits on the use of any unused tax loss or credit. 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 utilised.
Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent
that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when
the asset is realised 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 recognized outside profit or loss (either in other comprehensive income or inequity).

Deferred income tax expense is calculated based on the differences between the carrying value of
assets and liabilities for financial reporting purposes and their respective tax bases that are considered
temporary in nature. Valuation of deferred tax assets is dependent on management's assessment of
future recoverability of the deferred benefit. Expected recoverability may result from expected taxable
income in the future, planned transactions or planned optimizing measures. Economic conditions may
change and lead to a different conclusion regarding recoverability.