2. M A T E R I A L A C C O U N T I N G P O L I C I E S :

The accounting policies set out below have been applied
consistently to all periods presented in these standalone
financial statements, unless otherwise indicated.

Current and non-current classification

All assets and liabilities are classified into current
and non-current.

Assets

An asset is classified as current when it satisfies any of the
following criteria:

i) it is expected to be realised in, or is intended for
sale or consumption in, the Company's normal
operating cycle;

ii) it is held primarily for the purpose of being traded;

iii) it is expected to be realised within 12 months after
the reporting date; or

iv) it is cash or cash equivalent unless it is restricted
from being exchanged or used to settle a liability for
at least 12 months after the reporting date.

Current assets include the current portion of non¬
current financial assets. All other assets are classified
as non-current.

Liabilities

A liability is classified as current when it satisfies any of
the following criteria:

i) it is expected to be settled in the Company's
operating cycle;

ii) it is held primarily for the purpose of being traded;

iii) it is due to be settled within 12 months after the
reporting date; or

iv) the Company does not have an unconditional right
to defer settlement of the liability for at least 12
months after the reporting date. Terms of a liability
that could, at the option of the counterparty, result in
its settlement by the issue of equity instruments do
not affect its classification.

Current liabilities include the current portion of non¬
current financial liabilities. All other liabilities are classified
as non-current.

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

Operating cycle

Operating cycle is the time between the acquisition of
assets for processing and their realisation in cash or cash
equivalents. Based on the nature of products and the time
between the acquisition of assets for processing and their
realisation in cash and cash equivalents, the Company
has ascertained its operating cycle as 12 months for the
purpose of current or non-current classification of assets
and liabilities.

a. Foreign currency transactions:

The standalone financial statements are presented
in Indian rupees, the functional currency of the
Company. Items included in the financial statements
of the Company are recorded using the currency
of the primary economic environment in which the
Company operates (the ‘functional currency').

Foreign currency transactions are translated into
the functional currency using exchange rates at the
date of the transaction. Foreign exchange gains and
losses from settlement of these transactions, and
from translation of monetary assets and liabilities at
the reporting date exchange rates are recognised in
the statement of profit and loss.

b. Financial instruments:

i. Recognition and initial measurement:

Trade receivables and debt securities issued are
initially recognised when they are originated.
All other financial assets and liabilities are
recognised are initially recognised when the
Company becomes a party to the contractual
provisions of the instrument.

A financial asset or financial liability, except
trade receivable which is recorded initially
at transaction price, is initially measured at
fair value plus, for an item not at fair value
through profit and loss (FVTPL), transaction
costs that are directly attributable to its
acquisition or issue.

ii. Classification and subsequent measurement:
Financial assets:

On initial recognition, a financial asset is
classified as measured at

- amortised cost;

- Fair Value through other comprehensive
income (FVOCI )- equity investment; or

- Fair value to profit and loss (FVTPL)

Financial assets are not reclassified subsequent
to their initial recognition, except if and in the
period the Company changes its business
model for managing financial assets.

A financial asset is measured at amortised cost
if it meets both of the following conditions and
is not designated as at FVTPL:

- the asset is held within a business model
whose objective is to hold assets 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.

On initial recognition of an equity investment
that is not held for trading, the Company may
irrevocably elect to present subsequent changes

in the investment's fair value in OCI (designated
as FVOCI - equity investment). This election is
made on an investment-by-investment basis.

All financial assets not classified as measured at
amortised cost or FVOCI as described above are
measured at FVTPL. This includes all derivative
financial assets. On initial recognition, the Company
may irrevocably designate a financial asset that
otherwise meets the requirements to be measured
at amortised cost or at FVOCI as at FVTPL if doing
so eliminates or significantly reduces an accounting
mismatch that would otherwise arise.

substantially different. In this case, a new
financial liability based on the modified terms is
recognised at fair value. The difference between
the carrying amount of the financial liability
extinguished and the new financial liability with
modified terms is recognised in statement of
profit and loss.

iv. Offsetting:

Financial assets and financial liabilities are
offset and the net amount presented in the
balance sheet when, and only when, the
Company currently has a legally enforceable
right to set off the amounts and it intends either
to settle them on a net basis or to realise the
asset and settle the liability simultaneously.

v. Derivative financial instruments:

The Company uses derivative financial
instruments, such as forward currency
contracts to hedge its foreign currency risk.
Such derivative financial instruments are initially
recognised at fair value on the date a derivative
contract is entered into and are subsequently
re-measured at fair value. Any changes therein
are recognised in the statement of profit and
loss account. Derivatives are carried as financial
asset when the fair value is positive and as
financial liability when fair value is negative.

c. Property, plant and equipment and capital work-in¬
progress:

i. Recognition and measurement:

Property, plant and equipment:

Items of property, plant and equipment are
measured at cost, which includes capitalised
borrowing costs, less accumulated depreciation
and accumulated impairment losses, if any.

Cost of an item of property, plant and equipment
comprises its purchase price, including import
duties and non-refundable purchase taxes,
after deducting trade discounts and rebates,
any directly attributable cost of bringing the
item to its working condition for its intended
use and estimated costs of dismantling and
removing the item and restoring the site on
which it is located.

Cost of an item of property, plant and equipment
comprises its purchase price, including import
duties and non-refundable purchase taxes, after
deducting trade discounts and rebates, any
directly attributable cost of bringing the item to
its working condition for its intended use and

estimated costs of dismantling and removing
the item and restoring the site on which it is
located. Incomes and expenses related to the
incidental operations not necessary to bring the
item to the location and the condition necessary
for it to be capable of operating in the manner
intended by Management are recognized in the
Statement of profit and loss.

If significant parts of an item of property, plant
and equipment have different useful lives, then
they are accounted for as separate items (major
components) of property, plant and equipment.

Any gain or loss on disposal of an item of
property, plant and equipment is recognised in
statement of profit and loss.

Capital work-in-progress:

Cost of assets not ready for intended use, as
on the balance sheet date, is shown as capital
work-in-progress. Advances given towards
acquisition of fixed assets outstanding at each
balance sheet date are disclosed as other non¬
current assets. Capital work-in-progress in
respect of assets which are not ready for their
intended use are carried at cost, comprising of
direct costs, related incidental expenses and
attributable interest.

ii Subsequent expenditure:

Subsequent expenditure is capitalised only if it
is probable that the future economic benefits
associated with the expenditure will flow
to the Company.

iii. Depreciation:

Depreciation is calculated on cost of items
of property, plant and equipment less their
estimated residual values over their estimated
useful lives using the straight-line method,
and is generally recognised in the statement of
profit and loss.

Leasehold land and leasehold improvements
are amortised over the period of the lease.

The estimated useful lives of items of property,
plant and equipment are estimated by the
Management, which are equal to the life
prescribed under the Schedule II of the Act.

Depreciation methods, useful lives and residual
values are reviewed at each financial year-
end and adjusted if appropriate. Based on
technical evaluation and consequent advice,
the management believes that its estimates

of useful lives as given above best represent
the period over which management expects to
use these assets.

Depreciation on additions (disposals) is provided
on a pro-rata basis i.e. from (upto) the date on
which asset is ready for use (disposed of).

d. Intangible assets:

i. Recognition:

Other intangible assets are initially measured
at the cost. The cost of an intangible asset
comprises its purchase price including duties
and taxes and any costs directly attributable
to making the asset ready for their intended
use.. Such intangible assets are subsequently
measured at cost less accumulated amortisation
and any accumulated impairment losses.

ii. Subsequent expenditure:

Subsequent expenditure is capitalised only
when it increases the future economic benefits
embodied in the specific asset to which it
relates. All other expenditure is recognised in
statement of profit and loss as incurred.

iii. Amortisation:

Amortisation is calculated to write off the
cost of intangible assets less their estimated
residual values over their estimated useful lives
using the straight-line method, and is included
in depreciation and amortisation in statement
of profit and loss.

Amortisation method, useful lives and residual
values are reviewed at the end of each financial
year and adjusted if appropriate.

e. Investment property:

Investment property is property held either to earn
rental income or for capital appreciation or for both,
but not for sale in the ordinary course of business, use
in the production or supply of goods or services or for
administrative purposes. Upon initial recognition, an
investment property is measured at cost. Subsequent
to initial recognition, investment property is
measured at cost less accumulated depreciation and
accumulated impairment losses, if any. Depreciation
on Investment Property is provided using the straight
line method based on the useful lives specified in
Schedule II to the Companies Act, 2013.

The cost comprises purchase price, borrowing
costs if capitalisation criteria are met and directly
attributable cost of bringing the investment property
to its working condition for the intended use. Any
trade discounts and rebates are deducted in arriving
at the purchase price.

On disposal of investment property, the difference
between its carrying amount and net disposal
proceeds is charged or credited to the statement of
profit and loss.

The fair values of investment property is disclosed
in the notes. Fair values is determined either by an
independent valuer who holds a recognised and
relevant professional qualification and has recent
experience in the location and category of the
investment property being valued or stamp duty
price available on the government website/ with the
registration and stamps department.

Disposals

An item of property, plant and equipment and any
significant part initially recognised is derecognised
upon disposal or when no future economic benefits
are expected from its use. Gains or losses arising
from the retirement or disposal of property, plant and
equipment are determined as the difference between
the net disposal proceeds and the carrying amount
of the asset and are recognised in the statement of
profit and loss on the date of retirement or disposal.

f. Inventories:

Inventories are measured at the lower of cost
and net realisable value. The cost of inventories
is determined on a transaction moving weighted
average basis, and includes expenditure in acquiring
the inventories, production or conversion costs and
other costs incurred in bringing them to their present
location and condition. In case of manufactured
inventories and work-in-progress, cost includes an
appropriate share of fixed production overheads
on normal operating capacity. Cost includes direct
materials, labour, freight inwards, other direct cost,
a proportion of manufacturing overheads based on
normal operating capacity, net of refundable duties,
levies and taxes wherever applicable.

Net realisable value is the estimated selling price in the
ordinary course of business, less the estimated costs
of completion and selling expenses. The net realisable
value of work-in-progress is determined with reference
to the selling prices of related finished products.

Raw materials, components and other supplies held
for use in the production of finished products are
not written down below cost except in cases where

material prices have declined and it is estimated that
the cost of the finished products will exceed their net
realisable value.

The comparison of cost and net realisable value is
made on an item-by-item basis.

g. Impairment:

Financial assets (other than at 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 (‘ECL') to be measured through a
loss allowance. The Company recognises lifetime
expected losses for trade receivables including
unbilled receivables and contract assets that do
not constitute a financing transaction. 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 lifetime expected
credit losses if the credit risk on the financial asset
has increased significantly since initial recognition.
As a practical expedient, the Company uses a
provision matrix to determine impairment loss
allowance on portfolio of its trade receivables. The
provision matrix is based on its historically observed
default rates over the expected life of the trade
receivables and is adjusted for forward-looking
estimates. At every reporting date, the historical

observed default rates are updated and changes in
the forward-looking estimates are analysed.

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.
An assessment is made at each reporting date as
to whether there is any indication that previously
recognised impairment losses may no longer exist
or may have decreased. If such indication exists,

the Company estimates the asset's or cash-generating
unit'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 neither exceeds its
recoverable amount, nor exceeds 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 and loss unless the asset is carried
at a revalued amount, in which case the reversal
is treated as a revaluation increase. Goodwill has
indefinite useful life and tested for impairment annually
In assessing value in use, the estimated future cash
flows are discounted to their present value using a
post-tax discount rate that reflects current market
assessments of the time value of money and the
risks specific to the asset. In determining fair value
less costs of disposal, recent market transactions are
considered. If no such transactions can be identified,
an appropriate valuation model is used

h. Employee benefits:

i. Short-Term Employee Benefits

Short-term employee benefits including salaries and
performance incentives, are charged to standalone
statement of profit and loss on an undiscounted,
accrual basis during the period of employment.

Defined contribution plans:

A defined contribution plan is a post-employment
benefit plan under which an entity pays fixed
contributions into a separate entity and will have no
legal or constructive obligation to pay further amounts.

Company providing retirement benefit in the form of
provident fund and superannuation fund is a defined
contribution scheme. The contributions payable
to the provident fund and superannuation fund are
recognised as expenses, when an employee renders
the related services. The Company has no obligation,
other than the contribution payable to the funds.

Eligible employees of the company receive benefits
from provident fund, which is defined contribution
plan. Both the eligible employees and the company
make monthly contributions to the Government
administered provident fund scheme equal to a
specified percentage of the eligible employee's
salary. Amounts collected under the provident
fund plan are deposited with in a government
administered provident fund. The company has
no further obligation to the plan beyond its
monthly contributions.

Defined benefit plans:

Gratuity liability is a defined benefit obligation and
is provided for on the basis of an actuarial valuation
on projected unit credit method made at the end of
each financial year. The parent company has created
an approved gratuity fund, which has taken a group
gratuity cum insurance policy with Life Insurance
Corporation of India (LIC), for future payment of
gratuity to the employees. The Company accounts
for gratuity liability of its employees on the basis of
actuarial valuation carried out at the year end by an
independent actuary. When the calculation results in
a potential asset for the Company, the recognised
asset is limited to the present value of economic
benefits available in the form of any future refunds
from the plan or reductions in future contributions to
the plan (‘the asset ceiling'). In order to calculate the
present value of economic benefits, consideration is
given to any minimum funding requirements.

Remeasurements of the net defined benefit liability,
which comprise actuarial gains and losses, the
return on plan assets (excluding interest) and the
effect of the asset ceiling (if any, excluding interest),
are recognised in other comprehensive income
(OCI). The Company determines the net interest
expense (income) on the net defined benefit liability
(asset) for the period by applying the discount rate
used to measure the defined benefit obligation at
the beginning of the annual period to the then-net
defined benefit liability (asset), taking into account
any changes in the net defined benefit liability
(asset) during the period as a result of contributions
and benefit payments. Net interest expense and
other expenses related to defined benefit plans are
recognised in statement of profit and loss.

When the benefits of a plan are changed or when a
plan is curtailed, the resulting change in benefit that
relates to past service (‘past service cost' or ‘past
service gain') or the gain or loss on curtailment is
recognised immediately in Statement of profit and
Loss. The Company recognises gains and losses on
the settlement of a defined benefit plan when the
settlement occurs.

ii. Compensated absences:

The employees can carry-forward a portion of
the unutilised accrued compensated absences
and utilise it in future service periods or
receive cash compensation on termination of
employment. Since the compensated absences
do not fall due wholly within twelve months
after the end of such period, the benefit is
classified as a long-term employee benefit.
The Company records an obligation for such

compensated absences in the period in which
the employee renders the services that increase
this entitlement. The obligation is measured
on the basis of actuarial valuation using the
projected unit credit method.

i. Revenue

Revenue towards satisfaction of a performance
obligation is measured at the amount of transaction
price(net of variable consideration) allocated to that
performance obligation . The transaction price of the
goods sold and services rendered is net of variable
considerations on account of various discounts
and schemes offered by the company as part
of the contract

The Company recognises revenue when the amount
of revenue can be reliably measured, it is probable
that future economic benefits will flow to the entity
and specific criteria have been met for each of the
Company's activities as described below.

Contract assets are recognised when there is
excess of revenue earned over billings on contracts.
Contract assets are classified as unbilled receivables
(only act of invoicing is pending) when there
is unconditional right to receive cash, and only
passage of time is required, as per contractual
terms. Contract Liabilities are recognised when there
is billing in excess of revenue and advance received
from customers.

Sale of goods:

The performance obligations in our contracts are
fulfilled at the time of dispatch, delivery or upon
formal customer acceptance depending on customer
terms. and no significant uncertainty exists regarding
the amount of the consideration that will be derived
from the sale of goods. Export incentives are
accounted for to the extent considered recoverable
by the management.

Sales of services:

Revenue from rendering of services is recognised
when the performance of agreed contractual task
has been completed.

An estimate is made for powder factor or price fall
clause provision and a corresponding liability is
recognised for this amount using a best estimate
based on accumulated experience.

The Company estimates provision for powder
factor on revenue from sale of products to certain
customers which is generally the percentage of
blast output achieved at the time of blasting of the
products at the customer‘s site. Powder factor is

based on the agreement with customer, volume of
output achieved at the site, which is measured at a
later date. Accordingly, the provision is made based
on the likely powder factor to be achieved on current
sales of products, which is reduced from the revenue
for the period.

j. Recognition of interest income or expense,
guarantee commission income and dividend:

Interest income is recognized on a time proportion
basis considering the carrying amount and the
effective interest rate. Interest income is included
under the head ‘Other income' in the statement of
profit and loss.

Financial guarantee contracts are recognised initially
as a liability at fair value, adjusted for transaction
costs that are directly attributable to the issuance
of the guarantee.

The Company has adopted gross approach under
Ind AS 109 and has recorded corporate guarantee
liability and asset equivalent to the fair value of
the future premium receivable. The fair value of the
financial guarantee contract at inception is likely to
equal the premium receivable over the agreement
period. The Company recognizes a liability for
the amount of premium to be receivable over the
period and subsequently measure the financial
guarantee contract at the higher of the amount of
loss allowance determined in accordance with Ind
AS 109 and the amount initially recognised, less
cumulative amount of income recognised (based on
amortisation of the premium) in accordance with Ind
AS.Gains or losses on financial guarantee contracts
and loan commitments issued by the Company that
are designated by the Company as at fair value
through profit or loss are recognised in Statement of
Profit and Loss.

Revenue is recognised when the Company's right to
receive the dividend is established by the reporting
date. Dividend income is included

under the head ‘Other income' in the statement of
profit and loss.

k. Income-tax:

Income-tax comprises current and deferred tax. It
is recognised in statement of profit and loss except
to the extent that it relates to an item recognised
directly in equity or in other comprehensive income.

i. Current tax:

Current tax comprises the expected tax payable
or receivable on the taxable income or loss for
the year and any adjustment to the tax payable

or receivable in respect of previous years.
The amount of current tax reflects the best
estimate of the tax amount expected to be paid
or received after considering the uncertainty,
if any, related to income taxes. It is measured
using tax rates (and tax laws) enacted or
substantively enacted by the reporting date.

Current tax assets and current tax liabilities
are offset only if there is a legally enforceable
right to set off the recognised amounts, and it
is intended to realise the asset and settle the
liability on a net basis or simultaneously.

Current tax is recognised in statement of profit
or loss, except when they relate to items that
are recognised in other comprehensive income
or directly in equity, in which case, the current
tax is also recognised in other comprehensive
income or directly in equity respectively.

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.

ii. Deferred tax:

Deferred tax is recognised in respect of temporary
differences between the carrying amounts of
assets and liabilities for financial reporting
purposes and the corresponding amounts
used for taxation purposes. Deferred tax is also
recognised in respect of carried forward tax losses
and tax credits. Deferred tax is not recognised
for temporary differences arising on the initial
recognition of assets or liabilities in a transaction
that is not a business combination and that
affects neither accounting nor taxable statement
of profit and loss at the time of the transaction.

Deferred tax assets are recognised to the extent
that it is probable that future taxable profits will
be available against which they can be used. The
existence of unused tax losses is strong evidence
that future taxable profit may not be available.
Therefore, in case of a history of recent losses, the
Company recognises a deferred tax asset only to
the extent that it has sufficient taxable temporary
differences or there is convincing other evidence
that sufficient taxable profit will be available
against which such deferred tax asset can be
realised. Deferred tax assets - unrecognised or
recognised, are reviewed at each reporting date
and are recognised/ reduced to the extent that it
is probable/ no longer probable respectively that
the related tax benefit will be realised.

Deferred tax is measured at the tax rates that
are expected to apply to the period when
the asset is realised or the liability is settled,
based on the laws that have been enacted or
substantively enacted by the reporting date.

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

Deferred tax assets and liabilities are offset
if there is a legally enforceable right to offset
current tax liabilities and assets, and they
relate to income taxes levied by the same tax
authority on the same taxable entity, or on
different tax entities, but they intend to settle
current tax liabilities and assets on a net basis
or their tax assets and liabilities will be realised
simultaneously.

Minimum alternate tax (MAT) paid in a year is
charged to the Statement of Profit and Loss
as current tax for the year. The Company
recognises MAT credit available as deferred tax
asset only when there is convincing evidence
that sufficient taxable profit will be available
to allow all or part of MAT credit to be utilised
during the specified period, i.e., the period for
which such credit is allowed to be utilised. In
the year in which the Company recognises MAT
credit as an asset, it is created by way of credit
to the Statement of Profit and Loss and shown
as part of deferred tax asset. The Company
reviews the “MAT credit entitlement” asset at
each reporting date and writes down the asset
to the extent that it is no longer probable that it
will pay normal tax during the specified period.

l. Borrowing cost:

Borrowing costs include interest, amortisation of
ancillary costs incurred. Costs in connection with the
borrowing of funds to the extent not directly related to
the acquisition of qualifying assets are charged to the
statement of profit and loss over the tenure of the loan.
Borrowing costs, allocated to and utilised for
qualifying assets, pertaining to the period from
commencement of activities relating to construction/
development of the qualifying asset up to the date
of capitalisation of such asset is added to the cost
of the assets. Capitalisation of borrowing costs is
suspended and charged to the statement of profit
and loss during extended periods when active
development activity on the qualifying assets is
interrupted. Interest income earned on temporary
investment of specific borrowing pending their

expenditure on qualifying assets is deducted from
the borrowing costs eligible for capitalisation.

Interest expense on borrowings is recorded using
the effective interest rate (EIR). EIR is the rate that
discounts the estimated future cash receipts over the
expected life of the financial instrument or a shorter
period, where appropriate, to the gross carrying
amount of the financial assets. When calculating
the EIR, 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.