3: Material Accounting Policies

A. Foreign Currency Transactions

Foreign currency transactions are translated into the functional currency at the exchange rates on the date the transaction first qualifies for
recognition.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting
date. Exchange difference arising on settlement or translation of monetary items are recognised in the Statement of Profit and Loss on net basis.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the
initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the
fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of
the gain or loss on the change in fair value of the item i.e., translation differences on items whose fair value gain or loss is recognised in OCI or
Statement of Profit and Loss are also recognised in OCI or Statement of Profit and Loss, respectively.

B. Property, Plant & Equipment

I. Recognition & Measurement

All items of property, plant and equipment (PPE) are stated at cost less accumulated depreciation and accumulated impairment loss, if any.
Cost of an item of PPE includes its purchase cost, non refundable taxes and duties, directly attributable cost of bringing the item to its working
condition for its intended use and borrowing cost if the recognition criteria is met.

In case of self-constructed assets, cost includes the costs of all materials used in construction, direct labour, allocation of directly attributable
overheads, directly attributable borrowing costs incurred in bringing the item to working condition for its intended use. The costs of testing
whether the asset is functioning properly, after deducting the net proceeds from selling items produced while bringing the asset to that location
and condition, are also added to the cost of self-constructed assets. The Company considers a Project to be 'unit of measure' for construction
of a manufacturing plant rather than individual assets comprising the project in appropriate cases for the purpose of capitalisation of
expenditure incurred during construction period.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate component
of property, plant and equipment.

Capital work-in-progress is stated at cost less impairment allowance (if any) which includes expenses incurred during construction period,
interest on amount borrowed for acquisition of qualifying assets and other expenses incurred in connection with project implementation in so
far as such expenses relate to the period prior to the commencement of commercial production.

II. Depreciation methods, estimated useful lives and residual value

Depreciation on all items of PPE is calculated using the straight line method to allocate their cost, net of their residual value, over their
estimated useful lives as prescribed in Schedule II to the Act except for following items where useful life is considered as lower than that
prescribed based on technical assessment:

Depreciation on an item of PPE purchased/sold during the year is provided on pro-rata basis.

C. Intangible Assets

Intangible assets are initially measured at cost. Such intangible assets are subsequently measured at cost less accumulated amortisation and
accumulated impairment losses, if any.

The Company amortises intangible assets with a finite useful life using the straight line method over three years.

D. Assets Held for Sale

Non-current assets or disposal groups comprising of assets and liabilities are classified as 'held for sale' when all the following criteria are met:
(i) decision has been made to sell, (ii) the assets are available for immediate sale in its present condition, (iii) the assets are being actively marketed
and (iv) sale has been agreed or is expected to be concluded within 12 months of the Balance Sheet date.

Subsequently, such non-current assets and disposal groups classified as 'held for sale' are measured at the lower of its carrying value and fair value
less costs to sell. Non-current assets held for sale are not depreciated or amortised.

E. Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

I. Financial Assets

Initial recognition and measurement:

The Company recognizes a financial asset in its Balance Sheet when it becomes party to the contractual provisions of the instrument. All financial
assets are recognized initially at fair value, plus in the case of financial assets not recorded at fair value through profit or loss (FVTPL), transaction
costs that are attributable to the acquisition of the financial asset.

Where the fair value of a financial asset at initial recognition is different from its transaction price, the difference between the fair value and the
transaction price is recognized as a gain or loss in the Statement of Profit and Loss at initial recognition if the fair value is determined through a
quoted market price in an active market for an identical asset (i.e. level 1 input) or through a valuation technique that uses data from observable
markets (i.e. level 2 input).

In case the fair value is not determined using a level 1 or level 2 input as mentioned above, the difference between the fair value and transaction
price is deferred appropriately and recognized as a gain or loss in the Statement of Profit and Loss only to the extent that such gain or loss arises due
to a change in factor that market participants take into account when pricing the financial asset.

However, trade receivables that do not contain a significant financing component are measured at transaction price.

Subsequent measurement:

For subsequent measurement, the Company classifies a financial asset in accordance with the below criteria:

a. The Company's business model for managing the financial asset and

b. The contractual cash flow characteristics of the financial asset.

Based on the above criteria, the Company classifies its financial assets into the following categories:

i. Financial assets measured at amortized cost

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

iii. Financial assets measured at fair value through profit or loss (FVTPL)

i. Financial assets measured at amortized cost:

A financial asset is measured at the amortized cost if both the following conditions are met:

a) The Company's business model objective for managing the financial asset is to hold financial assets in order to collect contractual cash flows,
and

b) 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.

This category applies to cash and bank balances, trade receivables, loans and other financial assets of the Company. Such financial assets are
subsequently measured at amortized cost using the effective interest method.

The amortized cost of a financial asset is also adjusted for loss allowance, if any.

ii. Financial assets measured at FVTOCI:

A financial asset is measured at FVTOCI if both of the following conditions are met:

a) The Company's business model objective for managing the financial asset is achieved both by collecting contractual cash flows and selling
the financial assets, and

b) 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.

The Company, through an irrevocable election at initial recognition, has measured certain investments in equity instruments at FVTOCI. The
Company has made such election on an instrument by instrument basis. These equity instruments are not held for trading. Pursuant to such
irrevocable election, subsequent changes in the fair value of such equity instruments are recognized in OCI. However, the Company recognizes
dividend income from such instruments in the Statement of Profit and Loss.

On Derecognition of such financial assets, cumulative gain or loss previously recognized in OCI is not reclassified to Statement of Profit and Loss.
However, the Company may transfer such cumulative gain or loss into retained earnings within equity.

iii. Financial assets measured at FVTPL:

A financial asset is measured at FVTPL unless it is measured at amortized cost or at FVTOCI as explained above. This is a residual category applied
to all other investments of the Company excluding investments in subsidiary companies. Such financial assets are subsequently measured at fair
value at each reporting date. Fair value changes are recognized in the Statement of Profit and Loss.

II. Financial Liabilities

Initial recognition and measurement:

The Company recognises a financial liability in its Balance Sheet when it becomes party to the contractual provisions of the instrument. All financial
liabilities are recognised initially at fair value minus, in the case of financial liabilities not recorded at fair value through profit or loss (FVTPL),
transaction costs that are attributable to the acquisition of the financial liability.

Where the fair value of a financial liability at initial recognition is different from its transaction price, the difference between the fair value and the
transaction price is recognised as a gain or loss in the Statement of Profit and Loss at initial recognition if the fair value is determined through a
quoted market price in an active market for an identical liability (i.e. level 1 input) or through a valuation technique that uses data from observable
markets (i.e. level 2 input).

In case the fair value is not determined using a level 1 or level 2 input as mentioned above, the difference between the fair value and transaction
price is deferred appropriately and recognised as a gain or loss in the Statement of Profit and Loss only to the extent that such gain or loss arises due
to a change in factor that market participants take into account when pricing the financial liability.

Subsequent measurement:

All financial liabilities of the Company are subsequently measured at amortised cost using the effective interest method.

Derecognition:

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

III. Derivative Financial Instruments

Derivative financial instruments viz. foreign exchange forward contracts, interest rate swaps and cross currency swaps to manage Company's
exposure to foreign exchange rate and interest rate risks are initially recognised at fair value at the date the derivative contracts are entered into and
are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in statement of profit and
loss immediately. The Company does not hold derivative financial instruments for speculative purposes.

F. Impairment

Assets that have an indefinite useful life are not subject to amortisation and are tested for impairment annually and whenever there is an indication
that the asset may be impaired.

Assets that are subject to depreciation and amortisation and assets representing investments in subsidiary companies are reviewed for
impairment, whenever events or changes in circumstances indicate that carrying amount may not be recoverable. Such circumstances include,
though are not limited to, significant or sustained decline in revenues or earnings and material adverse changes in the economic environment.

An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit (CGU) exceeds its recoverable amount.

G. Inventories

Inventories of raw materials, stores and spare parts, work in progress and finished goods are measured at lower of cost and net realisable value.
However, materials and other items held for use in production of inventories are not written down below cost if the finished goods in which they will
be used are expected to be sold at or above cost. In case of certain products, where cost cannot be ascertained reliably, the same are measured at
net realisable value.

Cost of raw materials, stores and spares include its purchase cost and other costs incurred in bringing them to their present location and condition.
Cost of work in progress and finished goods include direct materials, direct labour and appropriate proportion of variable and fixed overheads, the
latter being allocated on the basis of normal operating capacity. Costs are assigned to individual item of inventory on weighted average method.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs
necessary to make the sale.

H. Income Tax

Income Tax comprises current and deferred tax and is recognised in Statement of Profit and Loss except to the extent that it relates to an item
recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or in equity as
the case may be.

I. Current Tax

Current tax comprises the expected tax payable on the taxable income for the year and any adjustments to the tax payable in respect of previous
years. It is measured using tax rates and tax laws enacted by the reporting date.

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 i.e tax base.

Deferred Tax assets are recognised to the extent that it is probable that future taxable amounts will be available to utilise those temporary
differences, carried forward tax losses and unused tax credits.

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 tax
laws that have been enacted or substantively enacted by the reporting date.

Minimum Alternate Tax credit is recognised as deferred tax asset only when and to the extent there is convincing evidence that the Company will pay
normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset
is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified
period.

I. Revenue Recognition

I. Revenue from Contract with Customer:

The Company derives revenue primarily from sale of manufactured and traded goods. Revenue is recognized on satisfaction of performance
obligation upon transfer of goods to a customer at an amount that reflects the consideration to which the company is expected to be entitled to in
exchange for those goods.

The transaction price of goods sold is net of variable consideration on account of returns, trade allowances, rebates and amounts collected on
behalf of third parties. This variable consideration is estimated based on the expected value of outflow. The company recognizes revenue when it is
probable that future economic benefits will flow to the Company and the amount of revenue can be reliably measured.

Sale of Products: Revenue from sale of products is recognized when the control on the goods have been transferred to the customer. The
performance obligation in case of sale of product is satisfied at a point in time i.e., when material is shipped to the customer or on delivery to the
customer, as may be specified in the contract.

II. Interest Income

Interest income from debt instruments is recognised on accrual basis using effective interest rate method applicable on such debt instrument.

III. Dividend

Dividend income is recognised when the Company's right to receive the payment is established.

J. Employee Benefits

I. Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and expensed as the relative service is provided. A liability is
recognised for the amount expected to be paid e.g. towards bonus, 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 amount of obligation can be estimated reliably.

II. Defined contribution plan

Provident Fund, a defined contribution plan, is a post employment benefit plan under which the Company pays contributions into a separate entity
and has no legal or constructive obligation to pay further amounts. The Company recognises the contributions payable towards the provident fund
as an expense in the Statement of Profit and Loss in the periods during which the related services are rendered by employees.

III. Defined benefit plan

A defined benefit plan is a post employment benefit plan other than a defined contribution plan. The Company has unfunded Gratuity liability
towards this which is provided on the basis of actuarial valuation made by an external valuer at the end of each financial year using the projected
unit credit method.

Remeasurements, comprising of actuarial gains and losses are immediately recognised in the balance sheet with corresponding debit or credit to
Other Equity through OCI. Remeasurements are not classified to profit or loss in subsequent periods.

Net interest and changes in the present value of defined benefit obligation resulting from plan amendments or curtailments are recognised in profit
or loss.

IV. Other long term employee benefits

The liabilities for earned leave are measured and provided on the basis of actuarial valuation made by an external valuer at the end of each financial
year using the projected unit credit method. Remeasurement gains or losses are recognised in Statement of Profit and Loss in the period in which
they arise.

K. Borrowing Costs

Borrowing costs consists of interest and other costs incurred in connection with the borrowing of funds. Borrowing costs attributable to the
acquisition or construction of a qualifying asset that necessarily takes a substantial period of time to get ready for its intended use are capitalised as
part of the cost of the asset. Income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is
deducted from the borrowings costs eligible for capitalisation. All other borrowing costs are expensed in the period in which they are incurred.
Transaction costs in respect of long-term borrowings are amortised over the tenor of respective loans using effective interest method. Borrowing
cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

L. Exceptional items

When items of income and expense in the statement of profit and loss from ordinary activities are of such size, nature or incidence that their
disclosure is relevant to explain the performance of the Company for the period, the nature and amount of such material items are disclosed
separately as exceptional items.

M. Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and in hand and short term deposits with remaining maturity of 3 months
or less, which are subject to an insignificant risk of change in value.