1. SIGNIFICANT ACCOUNTING POLICIES

a) Basis of preparation of Financial Statements

The financial statements of the Company have
been prepared in accordance with the Indian
Accounting Standards (Ind-AS) notified under the
Companies (Indian Accounting Standards) Rules, 2015
(as amended).

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

The financial statements have been prepared on a
historical cost basis except financial assets and
liabilities including derivative financial instruments and
investments, defined benefit plans which are to be
measured at fair value:

All assets and liabilities have been classified as current
and non-current as per the Company's normal
operating cycle and other criteria as set out in Schedule
III to the Companies Act, 2013 and Ind AS 1
"Presentation of financial statements".

b) Current versus non-current classification:

The Company presents assets and liabilities in
the balance sheet based on current/non-current
classification.

An asset is treated as current when it is:

• Expected to be realized or intended to be sold
or consumed in normal operating cycle; or

• Held primarily for the purpose of trading; or

• Expected to be realized within twelve months
after the reporting period; or

• Cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for at

least twelve months after the reporting period; or
All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in normal operating
cycle; or

• It is held primarily for the purpose of trading; or

• It is due to be settled within twelve months after
the reporting period; or

• There is no unconditional right to defer the
settlement of the liability for at least twelve
months after the reporting period.

The Company classifies all other liabilities as non¬
current.

Deferred tax assets and liabilities are classified
as non-current assets and liabilities respectively.

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.

c) Revenue Recognition

• Sales revenue is recognized when the significant
risks and rewards of ownership of goods have
passed to the buyer on dispatch or delivery of
goods, net of sales returns, trade discount and
GST and do not include the cost of materials used
for captive consumption.

• Export Incentives are accounted on accrual basis
and include the estimated value of incentives
receivable under the Duty Drawback Scheme and
the Remission of Duties and Taxes on Exported
Products (RoDTEP). Any difference at the time of
actual receipt is accounted for in the year of
receipt. The amount of export incentives has been
adjusted with the cost of raw materials
consumed.Gain/Loss, if any, on transfer of Duty
Credit Entitlements received under the DEPB
Scheme is accounted for in the year of transfer.

• Other operating revenue include revenue arising
from a Company's operating activities, i.e., either
its principal or ancillary revenue-generating
activities, but which is not revenue arising from
sale of products or rendering of services. The other
operating revenue of the company includes revenue
from freight, exchange rate fluctuations etc.

• 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.

d) Inventory Valuation

Inventories are valued at the lower of cost and
net realisable value. Cost of inventories, other
than for manufactured finished goods and goods
in process, is determined on Weighted Average
Cost Method (net of CENVAT/Input Tax credit
availed) of stock accounting. Cost of manufactured
finished goods and goods in process include cost
of raw materials consumed on weighted average

basis and appropriate portion of allocable
overheads and Taxes, wherever applicable. Scrap,
if any, at the year-end does not form part of the
closing inventory.

e) Evaluation of Trade Receivables, Loans &
Advances and Provisioning

Recoverability status of all the debtors and Loans
& Advances are duly evaluated/reviewed and
necessary provision/writing off is considered by the
Company on annual basis. Besides the same the
Company since financial year 2020-21 onwards
had been consistently reviewing/evaluating the
overdue debts on case to case basis in timely
manner and going for the required writing
off/provisioning depending upon the age of
related debtors/advancesas per the following:

Assets individually costing less than ' 5,000/- are
fully depreciated in the year of acquisition.

h) Impairment of Assets

Usually the Company reviews the carrying value
of assets for any possible impairment at each
balance sheet date. However, the assets that
are subject of 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 when the carrying amount of an asset
exceeds its recoverable amount. In assessing the
recoverable amount, higher of the assets' fair value
less cost to sell and value in use is considered.

i) Operating Lease

The Company, as a lessee, recognizes leasehold
rights and leasehold obligations for its leasing
arrangements, if the contract conveys the right to
control the use of an identified asset.

The leasehold rights are depreciated/amortized
using the straight-line method from the
commencement date over the shorter of lease
term or useful life of right to use.

The Company measures the lease liability at
the present value of the lease payments that are
not paid at the commencement date of the lease.
The lease payments are discounted using the
interest rate implicit in the lease if that rate can be
readily determined. If that rate cannot be readily
determined, the Company uses incremental
borrowing rate. For short-term and low value
leases, the Company recognizes the lease
payments as an operating expense on a straight¬
line basis over the lease term.

Modifications to a lease agreement beyond the
original terms and conditions are generally
accounted for as a remeasurement of the lease
liability with a corresponding adjustment to the
right-of-use asset. Any gain or loss on modification
is recognised in the statement of profit and loss.

j) Valuation of Investments

Long term Investments are valued at cost and
Short-Term Investments are valued at lower of cost
and fair value, calculated individually for each
investment.

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

Financial Assets

Initial Recognition and Measurement

All financial assets are recognised initially at fair
value plus, in the case of financial assets not
recorded at fair value through profit or loss,
transaction costs that are attributable to the
acquisition of the financial assets. These include
trade receivables, cash & cash equivalents, bank
balances other than cash & cash equivalents and
other financial assets.

Classification and Subsequent Measurement

Financial assets are subsequently measured at
amortised cost or fair value through other
comprehensive income or fair value through profit
or loss depending on its business model for
managing those financial assets and the asset
contractual cash flow characteristics.

Financial Assets at Amortised Cost

A financial asset is subsequently measured at
amortised cost if it is held within a business model
whose objective is to hold the asset 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)

A financial asset is subsequently measured at fair
value through other comprehensive income if it is
held within a business model whose objective is
achieved by both collecting contractual cash flows
and selling financial assets 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. The company may make an
irrevocable election to present subsequent
changes in the fair value of equity investment not
held for trading in other comprehensive income.

Financial Assets at Fair Value through Profit or Loss
(FVTPL)

A financial asset which is not classified in any of
the above categories is subsequently measured
at fair value through profit or loss.

Derecognition

The Company derecognises a financial asset
only when the contractual rights to the cash
flows from the asset expires or it transfers the
financial asset and substantially all the risks and
rewards of ownership of the asset to another
entity and does not retain control of the asset.

Impairment of Financial Assets

Financial assets, other than those at fair value
through profit or loss, are assessed for indicators
of impairment at the end of each reporting period.
The Company recognises a loss allowance for
expected credit losses on financial assets. In case
of trade receivables, the Company follows the
simplified approach permitted by Ind AS 109
"Financial Instruments" for recognition of
impairment loss allowance. The application of
simplified approach does not require the
Company to track changes in credit risk. The
Company calculates the expected credit losses
on trade receivables using a provision matrix on
the basis of its historical credit loss experience.

Financial Liabilities

Initial Recognition and Measurement

Financial liabilities include borrowings, lease
liability, trade payables and other financial
liabilities. All financial liabilities are recognised
initially at fair value and in the case of borrowings
and trade payables, net of directly attributable
transaction costs.

Classification and Subsequent Measurement

The financial liabilities are classified as either
'financial liabilities at fair value through profit
or loss' or 'financial liabilities at amortised cost'.
Financial liabilities at Fair Value through Profit or
Loss Financial liabilities are classified at fair value
through profit or loss when the financial liability
is held for trading or are designated upon initial
recognition as fair value through profit or loss. It

includes derivative financial instruments entered
into by the Company that are not designated
as hedging instruments in hedge relationships.
All changes in the fair value of such liability are
recognised in the statement of profit and loss.

Financial liabilities at Amortised Cost

Other financial liabilities (including borrowings and
trade payables etc.) are subsequently measured
at amortised cost using effective interest method.

Derecognition

A financial liability is derecognised when the
obligation under the liability is discharged or
cancelled or expired. Any gain or loss arising on
derecognition is included in the statement of
profit and loss when the liability is derecognised.

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.

Effective Interest Method (EIR)

Financial assets and liabilities are subsequently
measured at amortised cost using the effective
interest rate method. Amortised cost is calculated
by taking into account any discount or premium
on acquisition and fees or costs that are an
integral part of the EIR.

Derivative Financial Instruments

The Company uses derivative financial instruments,
such as forward contracts to hedge its foreign
currency. Such derivative financial instruments are
initially recognised at fair value on the date on
which a derivative contract is entered into and are
subsequently remeasured at fair value.

Derivatives are carried as financial assets when
the fair value is positive and as financial liabilities
when the fair value is negative.

Any gains or losses arising from changes in the
fair value of derivatives are taken to statement
of profit and loss.

Classification as Debt or Equity Debt and equity
instruments issued by the Company are classified
as either financial liabilities or as equity in
accordance with the substance of the contractual
arrangements and the definition of a financial
liabilities and an equity instrument.

Equity Instruments

An Equity instrument is any contract that evidences
a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments
issued by Company are recognised at the proceeds
received. Transaction costs related to issue of
equity instruments is reduced from equity. Dividend
paid on equity instruments is directly reduced from
equity.