Note No. 2 - Significant accounting policies:

a) Statement of compliance:

The financial statements have been prepared in accordance with the Indian Accounting Standards
(referred to as "Ind AS"] as prescribed under section 133 of the Companies Act, 2013 read with
Companies (Indian Accounting Standards] Rules as amended from time to time.

b) Basis of preparation of financial statements

These financial statements have been prepared on historical cost basis, except for certain financial
instruments which are measured at fair value or amortised cost at the end of each reporting period, as
explained in the accounting policies below. Historical cost is generally based on the fair value of the
consideration given in exchange for goods and services. 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. All assets and liabilities have been classified as current and non-current as per the
Company’s normal operating cycle. Based on the nature of services rendered to customers and time
elapsed between deployment of resources and the realisation in cash and cash equivalents of the
consideration for such services rendered, the Company has considered an operating cycle of 12 months.

i. The financial statements of the Company are prepared in accordance with and to comply in all material
aspect with the Indian Accounting Standards (Ind AS].

ii. The financial statements are presented in Indian Rupees ('INR'] and all values are rounded to the
nearest lacs, except otherwise indicated.

Previous year’s figures have been regrouped / reclassified wherever necessary to conform with the
current year’s classification / disclosures.

c) Use of estimates and judgments

i. The preparation of the financial statements in conformity with Ind AS requires Management to make
Judgments, estimates and assumptions that affect the application of accounting policies and reported
amounts of assets and liabilities, revenue and expenses, disclosure of contingent liabilities as at the
date of the financial statements Such assumptions are based on management’s evaluation of relevant
facts and circumstances as on date of financial statements. The actual out-come may diverge from these
estimates.

ii. Estimates and assumptions are reviewed on a periodic basis. Revisions to accounting estimates are
recognized in the period in which the estimates are revised and in any future period effect.

d) Property, plant and equipment

i. The cost of property, plant and equipment comprises its 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,
including relevant borrowing costs for qualifying assets and any expected costs of decommissioning.
Expenditure incurred after the property, plant and equipment have been put into operation, such as
repairs and maintenance, are charged to Statement of Profit and Loss in the period in which the costs
are incurred.

ii. Assets in the course of construction are capitalised in the assets under capital work in progress
account (CWIP). At the point when an asset is operating at management’s intended use, the cost of
construction is transferred to the appropriate category of property, plant and equipment and
depreciation commences. Where an obligation (legal or constructive) exists to dismantle or remove an
asset or restore a site to its former condition at the end of its useful life, the present value of the
estimated cost of dismantling, removing or restoring the site is capitalized along with the cost of
acquisition or construction upon completion and a corresponding liability is recognized. Revenue
generated from production during the trial period is capitalised.

e) Depreciation

i. Depreciation on tangible assets is provided as per the provisions of Part B of Schedule II of the
Companies Act, 2013. The management believes that the estimated useful lives are restrict and reflects
fare approximation of the period were which the assets are likely to be used.

ii. Depreciation on Property, plant and equipment is calculated on a straight -line basis, from the month
of addition, using estimated useful lives, as specified in schedule II to the Companies Act 2013, except
in respect of following assets:

f) Borrowing costs

i. Borrowing costs directly attributable to the acquisition, construction or production of qualifying
assets, which are assets that necessarily take a substantial period of time to get ready for their
intended use or sale, are added to the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale.

ii. All other borrowing costs are recognised in Statement of Profit and Loss in the period in which they are
incurred.

The Company determines the amount of borrowing costs eligible for capitalisation as the actual
borrowing costs incurred on that borrowing during the period less any interest income earned on
temporary investment of specific borrowings pending their expenditure on qualifying assets, to the extent
that an entity borrows funds specifically for the purpose of obtaining a qualifying asset. In case if the
Company borrows generally and uses the funds for obtaining a qualifying asset, borrowing costs eligible
for capitalisation are determined by applying a capitalisation rate to the expenditures on that asset. The
Company suspends capitalisation of borrowing costs during extended periods in which it suspends active
development of a qualifying asset.

g) Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and demand deposits
with an original maturity of three months or less and highly liquid investments that are readily
convertible into known amounts of cash and which are subject to an insignificant risk of changes in value
net of outstanding bank overdrafts as they are considered an integral part of the Company’s cash
management.

h) Inventories

Cost of inventories includes cost of purchase, costs of conversion and other costs incurred in bringing the
inventories to their present location and condition. Inventories of stores, spare parts, coal, fuel and loose
tools are stated at the lower of weighted average cost or net realizable value. Net realisable value
represents the estimated selling price for inventories in the ordinary course of business less all estimated
costs of completion and estimated costs necessary to make the sale. In continuation with the accounting
policies followed last year, the Company has considered Dies and Moulds as part of Inventory as the
consumable items and the same is amortised as done in the earlier as well as current financial years.

i) Revenue recognition

i) Sale of goods

Revenue is recognised to the extent that it is probable that economic benefit will flow to the Company
and that the revenue can be reliably measured. Revenue is measured at the fair value of the
consideration received or receivable. Revenue is reduced for estimated rebates and other similar
allowances.

In accordance with Ind AS 18 on "Revenue" and Schedule III to the Companies Act, 2013, Sales for the
previous year ended 31st March, 2018 and for the period 1st April to 30 June, 2017 were reported
gross of Excise Duty and net of Value Added Tax (VAT) / Sales Tax. Excise Duty was reported as
separate expense line item. Consequent to the introduction of Goods and Service Tax (GST) with effect
from 1 July, 2017, VAT/Sales tax , Excise Duty etc. have been subsumed into GST and accordingly the
same is not recognised as part of sales as per the requirements’ of Ind AS 18.

ii) 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

iii) Income from Services

Income from services rendered is recognised based on the terms of the agreements as and when
services are rendered and are net of applicable taxes.

j) Foreign currency transactions and foreign operations

The functional currency of the Company is the Indian Rupees (INR). These financial statements are
presented in Indian Rupees.

Foreign currency transactions are recorded in the functional currency by applying to the foreign currency
amount the exchange rate between the functional currency and the foreign currency at the date of the
transaction. All foreign currency monetary assets and monetary liabilities as at the Balance Sheet date are
translated into the functional currency at the applicable exchange rate prevailing on that date. All the
exchange differences arising on translation, are recognised in the Statement of Profit and Loss.
Non-monetary assets and non-monetary liabilities denominated in foreign currency and measured at
historical cost are translated at the exchange rate prevalent at the date of the transaction.

Gain or losses upon settlement of foreign currency transactions are recognized in the Statement of Profit
and Loss for the period in which the transaction is settled.

k) Employee benefits

Short term employee benefits:

Short-term employee benefits are expensed as related service as provided. A liability is recognized for the
amount expected to be paid if the Company has a present legal or constructive obligation to pay this
amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Defined contribution plans

Contribution towards provident fund is made to the recognized funds, where the Company has no further
obligations. Such benefits are classified as defined contribution schemes as the Company does not carry
any further obligations, apart from the contributions made on monthly basis.

Defined benefit plans:

Provision for incremental liability in respect of gratuity and leave encashment is made as per independent
actuarial valuation on projected unit credit method made at the year-end.

Re-measurement of the net defined benefit liability, which comprise actuarial gains and losses and the
return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are
recognized immediately in other comprehensive income (OCI). Net interest expenses (income) on the
defined liability (asset) is computed by applying the discount rate, used to measure the net defined
liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized
in statement of profit or loss.

l) Income Tax

Income tax comprises current and deferred tax. Income tax expense is recognized in the statement of
profit and loss, except to the extent it relates to items directly recognized in equity or in other
comprehensive income.

i) Current tax

Current tax is the amount of tax payable based on the 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.

ii) 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 utilised. Such deferred tax assets and liabilities are not recognised if the temporary
difference arises from the initial recognition (other than in a business combination) of assets and
liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition,
deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition
of goodwill.

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.

Minimum Alternate Tax ('MAT')

Minimum Alternate Tax ('MAT') credit is recognised as an asset only when and to the extent there is
convincing evidence that the Company will pay normal income-tax during the specified period. In the year
in which the MAT credit becomes eligible to be recognised as an asset, the said asset is created by way of a
credit to the statement of profit and loss. The Company reviews the same at each balance sheet date and
writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing
evidence to the effect that Company will pay normal income-tax during the specified period.

Current and deferred tax for the year: Current and deferred tax are recognised in 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. Where current tax or deferred tax arises from the initial accounting for a
business combination, the tax effect is included in the accounting for the business combination.

m) Earnings per share

The Company presents basic and diluted earnings per share ("EPS") data for its ordinary shares. Basic EPS
is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the
average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting
the profit or loss attributable to ordinary shareholders.