2.1 Basis of preparation of financial statements

The standalone financial statements of the Company
have been prepared and presented in accordance
with Indian Accounting Standards (Ind AS) as per
Companies (Indian Accounting Standards) Rules,
2015 and Companies (Indian Accounting Standard)
Amendment Rules, 2016 as notified under section 133
of Companies Act, 2013 (the "Act") and other relevant
provisions of the Act. These financial statements
have been prepared on a historical cost convention on
accrual basis, except for certain financial assets and
financial liabilities (including derivative instruments),
which are measured at fair value.

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

The Company presents assets and liabilities in
the balance sheet based on current / non-current
classification. The operating cycle is the time between
the acquisition of assets for processing and their
realization in cash and cash equivalents. The Company
has identified twelve months as its operating cycle.
Cash or cash equivalent is treated as current, unless
restricted from being exchanged or used to settle a

liability for at least twelve months after the reporting
period. In respect of other assets, it is treated as current
when it is:

i) expected to be realized or intended to be sold or
consumed in the normal operating cycle

ii) held primarily for the purpose of trading

iii) expected to be realized within twelve months after
the reporting period.

A liability is treated as current when:

i) it is expected to be settled in the normal operating
cycle

ii) it is held primarily for the purpose of trading

iii) i t is due to be settled within twelve months after
the reporting period, or

iv) there is no unconditional right to defer the
settlement of the liability for at least twelve
months after the reporting period.

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

The financial statements are presented in Indian Rupees
which is also the Company’s functional currency. All
amounts have been rounded off to the nearest Lakhs,
except share data and as otherwise stated.

2.2 Critical accounting estimates, assumptions and
judgements

The preparation of financial statements requires
management to make certain estimates and
assumptions that affect the amounts reported in
the financial statements and notes thereto. The
management believes that these estimates and
assumptions are reasonable and prudent. However,
actual results could differ from these estimates.
Any revision to accounting estimates is recognized
prospectively in the current and future period.

i) Estimation of fair value of unlisted securities -
The fair value of unlisted securities is determined
using the valuation techniques. The Company
uses its judgement to select the methods and
make assumptions at end of each reporting
period. The inputs to these models are taken from

observable markets where possible, but where this
is not feasible, a degree of judgement is required
in establishing fair values. Judgements include
considerations of inputs such as liquidity risk,
credit risk and volatility. Changes in assumptions
about these factors could affect the reported fair
value of financial instruments.

ii) Defined benefit obligation - The cost of the defined
benefit plans and the present value of the defined
benefit obligation are based on actuarial valuation
using the projected unit credit method. An actuarial
valuation involves making various assumptions
that may differ from actual developments in the
future. These include the determination of the
discount rate, future salary increases, etc. Due to
the complexities involved in the valuation and its
long term nature, a defined benefit obligation is
highly sensitive to changes in these assumptions.
All assumptions are reviewed at each Balance
Sheet date.

iii) Estimation and evaluation of provisions and
contingencies relating to tax litigation - Provision
for tax liabilities require judgements on the
interpretation of tax legislation, developments in
case law and the potential outcomes of tax audits
and appeals which may be subject to significant
uncertainty. Therefore the actual results may vary
from expectations resulting in adjustments to
provisions, the valuation of deferred tax assets,
cash tax settlements and therefore the tax charge
in the statement of profit or loss.

iv) Estimation Warranty claims - Provision is made for
estimated warranty claims in respect of product
sold which are still under warranty at the end of
the reporting period. The claims are expected to
be settled in the next financial year. The Company
estimates the provision based on historical
warranty claim information and any recent trends
that may suggest future claims could differ from
the historical amounts.

v) Useful lives of property, plant and equipment('PPE')
and intangible assets: The Company reviews
the useful life of property, plant and equipment
& intangible assets at the end of each reporting
period. This reassessment may result in change in
depreciation expense in future periods.

revenue based on the relatable allocation of the
discounts/ incentives to each of the underlying
performance obligation that corresponds to
the progress by the customer towards earning
the discount/ incentive. Also, when the level of
discount varies with increases in levels of revenue
transactions, the Company recognizes the liability
based on its estimate of the customer's future
purchases. If it is probable that the criteria for the
discount will not be met, or if the amount thereof
cannot be estimated reliably, then discount is not
recognized until the payment is probable and the
amount can be estimated reliably. The Company
recognizes changes in the estimated amount of
obligations for discounts in the period in which the
change occurs.

ii) Interest income

Generally, interest income from debt instruments
is recognized 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 value of a financial asset.
While calculating the effective interest rate, the
Company estimates the expected cash flows
by considering all the contractual terms of the
financial instrument (for example, prepayment,
extension, call and similar options), but does not
consider the expected credit losses.

iii) Dividends

Dividends are recognized 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 dividend can be reliably measured.

iv) Export benefits

Export incentives are recognized as income as per
the terms of the scheme in respect of the exports
made and included as part of other operating
income.

2.4 Property, plant and equipment

i) Plant and equipment

Cost includes purchase price, taxes and duties,
labor cost and directly attributable overheads

incurred up to the date the asset is ready for its
intended use. However, cost excludes Goods and
service taxes, to the extent credit of the duty or
tax is availed of. 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 and the
cost of the item can be measured reliably.

The carrying amount of any component
accounted for as separate asset is derecognized
when replaced. All other repairs and maintenance
are charged to Profit or Loss during the reporting
period in which they are incurred.

Gains and losses on disposals are determined by
comparing proceeds with carrying amount. These
are included in profit or loss within other gains/
(losses).

Advances paid towards the acquisition of property,
plant and equipment outstanding at each balance
sheet date is classified as capital advances under
other non-current assets and the cost of assets
not put to use before such date are disclosed
under 'Capital work-in-progress’. Subsequent
expenditures relating to property, plant and
equipment is capitalized only when it is probable
that future economic benefits associated with
these will flow to the Company and the cost of the
item can be measured reliably.

ii) Depreciation

Depreciation on Property, plant & equipment
(other than land) is charged over the estimated
useful life of the asset or part of the asset (after
considering double/triple shift) as evaluated
by the Management, on straight line method,
in accordance with Part A of Schedule II to the
Companies Act 2013.

Tools and dies are depreciated based on quantity
of components manufactured and the life of tools
and dies, subject to a maximum of two to three
years.

On tangible fixed assets added / disposed of
during the year, depreciation is charged on pro¬
rata basis from the date of addition or till the date
of disposal.

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.

2.5 Intangible assets

Intangible assets include cost of acquired software,
license and technical know how. Intangible assets are
initially measured at acquisition cost including any
directly attributable costs of preparing the asset for its
intended use. Expenditure on projects which are not yet
ready for intended use are carried as intangible assets
under development. Intangible assets with finite lives
are amortized over their estimated useful economic
life and assessed for impairment whenever there is an
indication that the intangible asset may be impaired.

Intangible assets are amortized on the following basis:

a) Softwares - Over a period of five years

b) SAP - Over a period of ten years

c) Licenses - Over a period of two to five years

d) Technical Knowhow - Over a period of five years

Useful lives are reviewed at every balance sheet date
and revisited to a lower life when warranted.

2.6 Impairment of assets

Assets that have an indefinite useful life are not subject
to amortization and are tested annually for impairment.
Assets that are subject to amortization are reviewed
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.

Recoverable amount is the higher of fair value less
costs of disposal and value in use. In assessing value
in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate
that reflects current market assessments of the time
value of money and the risks specific to the asset for
which the estimates of future cash flows have not been
adjusted.

If the recoverable amount of an asset (or cash¬
generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (or cash¬
generating unit) is reduced to its recoverable amount.
An impairment loss is recognized immediately in the
Statement of Profit and Loss.

When an impairment loss subsequently reverses, the
carrying amount of the asset (or a cash-generating
unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying
amount does not exceed the carrying amount that
would have been determined had no impairment loss
been recognized for the asset (or cash-generating
unit) in prior years. A reversal of an impairment loss
is recognized immediately in Statement of Profit and
Loss.

2.7 Foreign currency transaction

On initial recognition, all foreign currency transactions
are recorded at exchange rates prevailing on the date
of the transaction. Monetary assets and liabilities,
denominated in a foreign currency, are translated at the
exchange rate prevailing on the Balance Sheet date and
the resultant exchange gains or losses are recognized
in the Statement of Profit and Loss. A monetary item
for which settlement is neither planned nor likely to
occur in the foreseeable future is considered as a part
of the entity’s net investment in that foreign operation.

2.8 Inventories

i) Raw materials

Raw materials are valued at lower of cost and net
realizable value. However, materials and other
items held for use in the production of inventories
are not written down below cost if the finished
products in which they will be incorporated are
expected to be sold at or above cost. Cost is
determined at weighted average cost.

ii) Work in progress and finished goods

Work in progress and finished goods are valued
at lower of cost and net realizable value. Cost
includes the combined cost of material, labor and
a proportion of manufacturing overheads based
on normal operating capacity. Costs are assigned
to individual items of inventory on the basis of
weighted average costs. Cost is determined at
weighted average cost.

iii) Stores and spares

Stores and spares consists of primary packing
materials, engineering spares and consumables,
which are used in operating machines or consumed
as indirect materials in the manufacturing process,
has been valued using weighted average cost
method. The cost comprises of costs of purchase,
duties and taxes (other than those subsequently
recoverable),conversion cost and other costs
incurred in bringing the inventories to their present
location and condition, as applicable on or after
deducting rebates and discounts, if any. Net
realizable value is the estimated selling price in the
ordinary course of business less estimated cost to
completion and applicable selling expenses.

2.9 Employee benefits:

i) Short term obligations:

Liabilities for wages and salaries, including non¬
monetary 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 recognized 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. The liabilities are
presented as current employee benefit obligations
in the balance sheet.

ii) 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 as
the present value of the expected future payments
to be made in respect of services provided by

employee upto the end of 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.

Remeasurements as a result of experience
adjustments and changes in actuarial
assumptions are recognized in profit or loss. The
obligations are presented as current liabilities in
the balance sheet if the entity does not have an
when the actual settlement is expected to occur.

iii) Post-employment obligation:

a) Defined contribution plan

Contribution to Provident Fund in India are in
the nature of defined contribution plan and
are made to a recognized fund. Contribution
to Superannuation Fund is in the nature of
defined contribution plan and is remitted
to insurance Company in accordance with
the scheme framed by the Corporation.

The Company has no legal or constructive

obligations to pay contributions in addition to
its fixed contributions, which are recognized
as an expense in the period that related
employee services are received.

i) Provident fund

The eligible employees of the Company
are entitled to receive benefits under
provident fund schemes defined
contribution plans, in which both
employees and the Company make
monthly contributions at a specified
percentage of the employees’ salary.
The contributions are paid to the
Government administered provident
fund scheme.

ii) Superannuation fund

Contribution made towards
Superannuation Fund (funded by
payments to an insurance Company)
which is a defined contribution plan, is
charged as expenses on accrual basis.
There are no obligations other than the
contribution made to respective fund.

b) Defined Benefit plan

i) Gratuity

The liability recognized in the statement
of financial position for defined benefit
plans is the present value of the
defined benefit obligation (DBO) at the
reporting date less the fair value of plan
assets. The Company estimates the
DBO annually with the assistance of
independent actuaries. This is based
on standard rates of inflation, salary
growth rate and mortality. Discount
factors are determined close to each
year-end by reference to government
securities that are denominated in the
currency in which the benefits will be
paid and that have terms to maturity
approximating the terms of the related
gratuity liability.

Service cost on the Company’s
defined benefit plan is included in
employee benefits expense. Employee
contributions, all of which are
independent of the number of years of
service, are treated as a reduction of
service cost. Actuarial gains and losses
resulting from measurements of the net
defined benefit liability are included in
other comprehensive income.

ii) The Company also extends defined
benefit plans in the form of compensated
absences to employees. Provision for
compensated absences is made on
the basis of valuation by independent
actuary.

2.10 Income tax

Tax expense comprises of current and deferred taxes.
The income tax expense or credit for the period is the
tax payable on the current period’s taxable income
based on the applicable income tax rate for each
jurisdiction adjusted by changes in deferred tax assets
and liabilities attributable to temporary differences and
to unused tax losses.

i) Current income tax

The current income tax charge is calculated on
the basis of the tax laws enacted or substantively
enacted at the end of the reporting period.
Management periodically evaluates positions
taken in tax returns with respect to situations
in which applicable tax regulation is subject to
interpretation. It establishes provisions where
appropriate on the basis of amounts expected to
be paid to the tax authorities.

ii) Deferred income tax

Deferred income tax is recognized using the
balance sheet approach. Deferred income tax is
determined using tax rates (and laws) that have
been enacted or substantially enacted by the
end of the reporting period and are expected to
apply when the related deferred income tax asset
is realized or the deferred income tax liability is
settled. Deferred tax is provided in full, using the
liability method, on temporary differences arising
between the tax bases of assets and liabilities and
their carrying amounts in the financial statements,
except when the deferred income tax arises from
the initial recognition of goodwill or an asset or
liability in a transaction that is not a business
combination and affects neither accounting nor
taxable profits or loss at the time of the transaction.

Deferred income tax assets are recognized to
the extent it is probable that taxable profit will be
available against which the deductible temporary
differences and the carry forward of unused tax
credits and unused tax losses can be utilized.

Deferred tax assets and liabilities are offset when
there is a legally enforceable right to offset current
tax assets and liabilities and when the deferred
tax balances relate to the same taxation authority.
Current tax assets and tax liabilities are offset
where there is a legally enforceable right to offset.

Current and deferred tax is recognized in profit or
loss, except to the extent that it relates to items
recognized in other comprehensive income or
directly in equity. In this case, the tax is also
recognized in other comprehensive income or
directly in equity, respectively.