2.1 Material Accounting policies

2.1.1 Property, plant and equipment (including
capital work-in-progress)

Property, plant and equipment are stated
at costs less accumulated depreciation and
impairment loss, if any.

Depreciation is provided for property, plant and
equipment on the straight-line method over the
estimated useful life from the date the assets
are ready for intended use. The estimated useful
lives, residual values and depreciation method
are reviewed at the end of each reporting period,
with the effect of any changes in estimate
accounted for on a prospective basis.

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 other than leasehold
improvements.

Estimated Useful Life of the various categories
of Property, Plant & Equipment in the Company
are as below:

1. Plant & Machinery (SLM % 6.33 / 15 years)

2. Vehicles (SLM% 11.88 / 8 years)

3. Furniture (SLM% 9.50 / 10 years)

4. Office Equipments (SLM% 19 / 5 years)

5. Computers (SLM% 31.67 / 3 years)

6. Leasehold Improvement (SLM % 10 / 10
Years) based on the technical assessment
of the management considering the past
trend of renewal of leases.

2.1.2 Intangible assets

Intangible assets purchased are measured
at cost as of the date of acquisition, as
applicable, less accumulated amortisation and
accumulated impairment, if any.

Intangible assets comprise of aquired softwares
and are amortised on a straight line basis over
their estimated useful lives of 3 years. The
estimated useful lives of the intangible assets
and the amortisation period are reviewed at the
end of each financial year and the amortisation
period is revised to reflect the changed pattern,
if any.

2.1.3 Employee benefits

Defined contribution plan

The Company makes defined contribution
to Government Employee Provident Fund,
Government Employee Pension Fund, Employee
Deposit Linked Insurance and Employee
State Insurance, which are recognised in the
statement of Profit and loss on accrual basis. The
Company recognises contribution payable to
the provident fund scheme as an expenditure,
when an employee renders the service entitling
them to the contributions.

The Company has no obligation, other than the
contribution payable to the provident fund.

Retirement benefit costs and termination
benefits

Liabilities for gratuity funded in terms of a
scheme administered by the LIC are determined
using the projected unit credit method, with
actuarial valuations being carried out at
each balance sheet date. The liability or asset
recognised in the balance sheet in respect of
gratuity plan is the present value of the defined
benefit obligation at the end of the reporting
period less the fair value of plan assets.

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

benefit expense in the statement of profit and
loss.

Remeasurement, comprising actuarial gains and
losses and the return on plan assets (excluding
net interest), is reflected immediately in the
balance sheet with a charge or credit recognised
in other comprehensive income in the period in
which they occur. They are included in retained
earnings in the statement of changes in equity
and in the balance sheet.

Changes in the present value of the defined
benefit obligation resulting from plan
amendments or curtailments are recognised
immediately in profit or loss as past service cost.

2.1.4 Leases

The Company’s lease asset class primarily
consist of leases of buildings which are typically
made for fixed periods of one month to twelve
years.

The Company as a lessee: At the commencement
of the lease, the Company recognises a right
of use asset (ROU) and a corresponding lease
liability for all lease arrangements in which it is
a lessee, except for short term leases and low
value leases. Short-term leases are leases with
a lease term of 12 months or less, without a
purchase option. For those Short term and low
value leases, the Company recognises the lease
payments as an operating expense on a straight
line basis over the term of the lease. Certain lease
arrangements includes the options to extend or
terminate the lease before the end of the lease
term. ROU assets and lease liabilities includes
these options when it is reasonably certain that
they will be exercised.

The lease payments are discounted using the
interest rate implicit in the lease. If that rate
cannot be readily determined, which is generally
the case for leases in the Company, the lessee’s
incremental borrowing rate is used, being the
rate that the individual lessee would have to
pay to borrow the funds necessary to obtain an
asset of similar value to the right-of-use asset
in a similar economic environment with similar
terms, security and conditions.

Contracts might contain both lease and non¬
lease components. The Company allocates the
consideration in the contract to the lease and
non-lease components based on their relative
stand-alone prices.

2.1.5 Financial Instruments

A) Initial Recognition

Financial assets and liabilities are recognised
when the Company becomes a party to the
contractual provisions of the instrument.

All financial assets and liabilities are
recognised at fair value on initial recognition,
except for trade receivables which are initially
measured at transaction price. Transaction
costs that are directly attributable to the
acquisition or issue of financial assets and
financial liabilities (other than financial
assets and financial liabilities at fair value
through statement of profit and loss) are
added to or deducted from the fair value
measured on initial recognition of financial
asset or financial liability. Transaction costs
directly attributable to the acquisition of
financial assets or financial liabilities at fair
value through profit or loss are recognised
immediately in profit or loss.

B) Subsequent Measurement
Financial assets

Cash and cash equivalents

Cash comprises cash on hand and demand
deposits with banks. Cash equivalents
are short-term balances (with an original
maturity of three months or less from
the date of acquisition), highly liquid
investments that are readily convertible
into known amounts of cash and which are
subject to insignificant risk of changes in
value.

Financial assets at amortised cost

Financial assets subsequently measured
at amortised cost if these financial assets
are held within a business whose objective
is to hold these assets in order to collect
contractual cash flows and the contractual
terms of the financial asset give rise on
specified dates to cash flows that are solely
payments of principal and interest on the
principal amount outstanding.

Financial assets at fair value through
other comprehensive income (FVTOCI)

Financial assets are measured at fair value
through other comprehensive income if
these financial assets are held within a

business whose objective is achieved by
both collecting contractual cash flows and
selling financial assets and the contractual
terms of the financial asset gives rise on
specified dates to cash flows that are
solely payments of principal and interest
on the principal amount outstanding. The
Company has not made an irrevocable
election for its investments to present
the subsequent changes in fair value in
other comprehensive income based on its
business model.

Financial assets at fair value through
profit and loss (FVTPL)

Financial assets are measured at fair
value through profit and loss unless it is
measured at amortised cost or at fair value
through other comprehensive income on
initial recognition. The transaction costs
directly attributable to the acquisition of
financial assets and liabilities at fair value
through profit and loss are immediately
recognised in statement of profit and loss.
The Company has elected to measure its
investments at fair value through profit and
loss.

Foreign exchange gains and losses

The fair value of foreign assets denominated
in a foreign currency is determined in that
foreign currency and translated at the spot
rate at the end of each reporting period.
For the foreign currency denominated
financial assets measured at amortised cost
and FVTPL, the exchange differences are
recognised in statement of profit and loss.

Financial liabilities and Equity

Financial liabilities at amortized cost

Financial liabilities are subsequently carried
at amortized cost using the effective
interest method.For trade and other
payables maturing within one year from the
Balance Sheet date, the carrying amounts
approximate fair value due to the short
maturity of these instruments.

Borrowings & Security Deposits

Any difference between the proceeds (net
of transaction costs) and the repayment
amount is recognised in profit or loss over
the period of the liability and subsequently

measured at amortised cost using the
effective interest method. Gains and losses
are recognised in the profit or loss when
the liabilities are derecognised as well as
through the EIR amortisation process.

Equity instruments

An equity instrument is contract that
evidences residual interest in the assets
of the Company after deducting all of its
liabilities. Equity instruments recognised
by the Company are recognised at the
proceeds received net off direct issue cost.

Foreign exchange gains and losses

For financial liabilities that are denominated
in a foreign currency and are measured at
amortized cost at the end of each reporting
period, the foreign exchange gains and
losses are determined based on the
amortized cost of the instruments and are
recognized in ‘Other income”.

The fair value of financial liabilities
denominated in a foreign currency is
determined in that foreign currency and
translated at the spot rate at the end of
the reporting period. For financial liabilities
that are measured as at FVTPL, the foreign
exchange component forms part of the fair
value gains or losses and is recognized in
the profit and loss.

C) Derecognition

Financial Asset

The Company derecognises a financial
asset when the contractual rights to the
cash flows from the financial asset expire
or it transfers the financial asset and the
transfer qualifies for derecognition under
Ind AS 109.

Financial Liability

A financial liability (or a part of a financial
liability) is derecognised from the
Company’s Balance Sheet when the
obligation specified in the contract is
discharged or cancelled or expires.

>.1.6 Trade receivables

Trade receivables are amounts due from
customers for goods sold or services provided i n
the ordinary course of business and reflect the
Company’s unconditional right to consideration

(that is, payment is due only on the passage of
time).

Trade receivables are recognised initially at
the transaction price as they do not contain
significant financing components. The
Company holds the trade receivables with the
objective of collecting the contractual cash flows
and therefore measures them subsequently
at amortised cost using the effective interest
method, less loss allowance.

For trade receivables and contract assets, the
Company applies the simplified approach
required by Ind AS 109, which requires expected
lifetime losses to be recognised from initial
recognition of the receivables.

2.1.7 Inventories

Inventories of raw materials are valued at the
lower of cost (on weighted average basis) and
the net realisable value after providing for
obsolescence and other losses, where considered
necessary. Cost includes cost of purchase and
other costs in bringing the inventories to their
present location and condition.

Inventories of work-in-progress, finished good
and stock-in-trade are valued at the lower of
cost (on weighted average basis) and the net
realisable value after providing for obsolescence
and other losses, where considered necessary.
Cost of work-in-progress and finished goods
include cost of conversion.

Net realisable value represents the estimated
selling price for inventories less all estimated
costs of completion and costs necessary to
make the sale.

2.1.8 Revenue

Revenue from contract with customer is
recognised, when control of the goods or
services are transferred to the customer, at
an amount that reflects the consideration to
which the Company is expected to be entitled
in exchange for those goods or services. The
specific recognition criteria described below
must also be met before revenue is recognised.
Revenue is recognised as follows:

Sale of goods

Revenue from contracts with customers

Revenue from contracts with customers is
recognised upon transfer of control of promised

goods/ services to customers at an amount that
reflects the consideration to which the Company
expect to be entitled for those goods/ services.

To recognise revenues, the Company applies the
following five-step approach:

• Identify the contract with a customer;

• Identify the performance obligations in the
contract;

• Determine the transaction price;

• Allocate the transaction price to the
performance obligations in the contract;
and

• Recognise revenues when a performance
obligation is satisfied.

Revenue from sale of goods

Revenue from sale of goods is recognised
when goods are delivered and control has been
transferred to the customer. Revenue towards
satisfaction of a performance obligation is
measured at the amount of transaction price
(net of variable consideration and returns)
allocated to that performance obligation. The
transaction price of goods sold and services
rendered is net of variable consideration on
account of various discounts and schemes
offered by the Company as part of the contract
includes estimated customer returns.

Goods and Service Tax (GST) is not received by
the Company in its own account. Rather, it is
tax collected on value added to the commodity
by the seller on behalf of the government.
Accordingly, it is excluded from revenue.

Sales are recognised, net of returns and trade
discounts, rebates, and Goods and Services Tax
(GST).

Assets and liabilities arising from right to
return

Under the Company’s standard contract terms,
customers have a right of return goods as per
Company’s policy.

Right to return assets

A right of return gives an entity a contractual
right to recover the goods from a customer (right
to return asset), if the customer exercises its
option to return the goods and obtain a refund.
The asset is measured at the carrying amount of

the inventory, less any expected costs to recover
the goods, including any potential decreases in
the value of the returned goods.

Refund liabilities

A refund liability is the obligation to refund
part or all of the consideration received (or
receivable) from the customer. The Company
has therefore recognised refund liabilities in
respect of customer’s right to return. The liability
is measured at the amount the Company
ultimately expects it will have to return to the
customer. The Company updates its estimate of
refund liabilities (and the corresponding change
in the transaction price) at the end of each
reporting period.

The Company has presented its right to return
assets and refund liabilities under other current
assets and other current liabilities, respectively.

Income from gift voucher

Customer discounts offered with purchase give
rise to a separate obligation as it entitles the
customers to redeem these discount vouchers
against the future purchase transaction price.
The transaction price is allocated to different
performance obligations on a relative stand¬
alone selling price basis. The Company estimates
the stand-alone selling price for a customer’s
option to acquire additional goods considering
the likelihood that the discount would be
exercised.

For other customer discounts, sales are
recognised when the discounts are redeemed,
and the goods are sold to the customer.

2.1.9 Dividend and Interest Income

Interest income from a financial asset is
recognised 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. Dividend Income
is accounted for when right to receive it is
established.

2.2.1 Foreign currencies

Determination of functional currency:

Currency of the primary economic environment
in which the Company operates ("the functional
currency”) is Indian Rupee (INR) in which the
Company primarily generates and expends cash.
Accordingly, the Management has assessed its
functional currency to be Indian Rupee (INR).

Transactions in foreign currency are recorded
on the basis of the exchange rate prevailing as
on the date of transaction. Monetary assets and
liabilities denominated in foreign currency are
restated at rates prevailing at the year-end. The
net loss or gain arising out of such restatement
is dealt with in the Statement of Profit and Loss.

Non-monetary assets and non-monetary
liabilities denominated in a foreign currency
and measured at fair value are translated at the
exchange rate prevalent at the date when the
fair value was determined. Non-monetary assets
and non-monetary liabilities denominated in a
foreign currency and measured at historical cost
are translated at the exchange rate prevalent at
the date of the transaction. The related revenue
and expense are recognised using the same
exchange rate.

2.2.2 Taxation

Income tax expense represents the sum of
the tax currently payable and deferred tax.
Current and deferred tax are recognised in the
statement of profit and loss, except when they
relate to items that are recognised in other
comprehensive income or directly in equity, in
which case, the current and deferred tax are also
recognised in other comprehensive income or
directly in equity respectively.

Current tax

The tax currently payable is based on taxable
profit for the year. Taxable profit differs from
‘profit before tax’ as reported in the statement
of profit and loss because of items of income
or expense that are taxable or deductible in
other years and items that are never taxable
or deductible. The Company’s current tax
is calculated using tax rates that have been
enacted or substantively enacted by the end of
the reporting period.

Deferred tax

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 recognised 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
realized, based on tax rates (and tax laws) that
have been enacted or substantively enacted by
the end of the reporting period.

The measurement of deferred tax liabilities and
assets reflects the tax consequences that would
follow from the manner in which the Company
expects, at the end of the reporting period, to
recover or settle the carrying amount of its
assets and liabilities.

2.2.3 Property, plant and equipment and
Depreciation on Property, Plant and Equipment

The cost of property, plant and equipment
includes purchase price net of any trade
discounts and rebates, any import duties and
other taxes (other than those subsequently
recoverable from the tax authorities), any
directly attributable expenditure on making
the asset ready for its intended use, other
incidental expenses and interest on borrowings
attributable to acquisition of qualifying fixed
assets up to the date the asset is ready for its
intended use. All upgradation / enhancements
are charged off as revenue expenditure unless
they bring similar significant additional benefits.

Subsequent expenditure on property, plant
and equipment after its purchase / completion
is capitalized only if such expenditure results
in an increase in the future economic benefits
from such asset beyond its previously assessed
standard of performance. The carrying amount
of any component accounted for as a separate
asset is derecognised when replaced.

The residual values are 5% of the original cost of
the asset.

Assets individually costing less than or equal
to ' 5,000 are fully depreciated in the year of
acquisition.

Capital work in progress

Projects under which tangible property, plant
and equipment not ready for their intended use
are disclosed under capital work-in-progress.
The capital work- in-progress are carried at
cost, comprising direct cost, related incidental
expenses and attributable interest.

2.2.4 Leases

The Company assesses whether a contract
contains a lease, at inception of a contract. A
contract is, or contains, a lease if the contract
conveys the right to control the use of an
identified asset for a period of time in exchange
for consideration. To assess whether a contract
conveys the right to control the use of an
identified asset, the Company assesses whether:
(i) the contract involves the use of an identified
asset (ii) the Company has substantially all of the
economic benefits from use of the asset through
the period of the lease (iii) the Company has the
right to direct the use of the asset.

The right-of-use assets are initially recognised at
cost, which comprises the initial amount of the
lease liability adjusted for any lease payments
made at or prior to the commencement date
of the lease plus any initial direct costs less
any lease incentives. They are subsequently
measured at cost less accumulated depreciation
and impairment losses. Right-of-use assets are
depreciated from the commencement date on
a straight-line basis over the shorter of the lease
term and useful life of the underlying asset.

Right of use assets are evaluated for recoverability
whenever events or changes in circumstances
indicate that their carrying amounts may not
be recoverable. For the purpose of impairment

testing, the recoverable amount (i.e. the higher
of the fair value less cost to sell and the value-in¬
use) is determined on an individual asset basis
unless the asset does not generate cash flows
that are largely independent of those from other
assets. In such cases, the recoverable amount is
determined for the Cash Generating Unit (CGU)
to which the asset belongs.

The lease liability is initially measured at
amortised cost at the present value of the
future lease payments. Lease liabilities are re¬
measured with a corresponding adjustment to
the related right of use asset if the Company
changes its assessment if whether it will exercise
an extension or a termination option.

Variable lease payments that depend on sales
are recognised in profit or loss in the period
in which the condition that triggers those
payments occurs.

Lease payments are allocated between principal
and finance cost. The finance cost is charged
to profit or loss over the lease period so as to
produce a constant periodic rate of interest on
the remaining balance of the liability for each
period.

Ministry of Corporate Affairs (MCA) vide its
notification dated September 18, 2021, has
provided practical expedient for the companies
to recognise the short term waivers received on
account of Covid 19 pandemic, upto September
2022, as ‘Other Income’ in the Statement of
Profit and Loss if all the conditions are met.
The Company had applied the expedient to all
eligible rent concessions.

2.2.5 Intangible assets

An intangible asset is derecognised on disposal,
or when no future economic benefits are
expected from use or disposal. Gains or losses
arising from derecognition of an intangible asset
are measured as the difference between the net
disposal proceeds and the carrying amount of
the asset, and are recognised in profit or loss
when the asset is derecognised.

2.2.6 Impairment

Financial assets (other than fair value)

The Company assesses at each date of balance
sheet whether a financial asset or a group of
financial assets is impaired. Ind AS 109 requires
expected credit losses to be measured through a

loss allowance. The Company recognises lifetime
expected losses for all contract assets and / or
all trade receivables that do not constitute a
financing transaction.

The Company applies simplified approach of
expected credit loss model for recognising
Impairment loss on trade receivables, other
contractual rights to receive cash or other
financial asset. Expected credit losses are the
weighted average of credit losses with the
respective risks of default occurring as the
weights. Expected credit loss is the difference
between all contractual cash flows that are due
to the Company in accordance with the contract
and all the cash flows that the Company expects
to receive (i.e. all cash shortfalls), discounted at
the original effective interest rate.

For all other financial assets, expected credit
losses are measured at an amount equal to the
12 month expected credit losses or at an amount
equal to the life time expected credit losses if the
credit risk on the financial asset has increased
significantly since initial recognition.

Non-financial assets

Property, plant and equipment and intangible
assets with finite life are evaluated for
recoverability whenever there is any indication
that their carrying amounts may not be
recoverable. If any such indication exists, the
recoverable amount (i.e. higher of the fair
value less cost to sell and the value-in-use) is
determined on an individual asset basis unless
the asset does not generate cash flows that
are largely independent of those from other
assets. In such cases, the recoverable amount is
determined for the cash generating unit (CGU)
to which the asset belongs.

If the recoverable amount of an asset (or
CGU) is estimated to be less than its carrying
amount, the carrying amount of the asset (or
CGU) is reduced to its recoverable amount. An
impairment loss is recognised in the statement
of profit and loss.