2. Material accounting policies

2.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with
Indian Accounting Standards (Ind AS) notified under the Companies (Indian
Accounting Standards) Rules, 2015 and the Companies (Indian Accounting
Standards) (Amendment) Rules, 2016.

The financial statements have been prepared on a historical cost basis, except for
the certain assets and liabilities which have been measured at different basis and
such basis has been disclosed in relevant accounting policy.

The financial statements are presented in INR and all values are rounded to the
nearest lacs (INR 00,000), except when otherwise indicated.

2.2 Significant accounting policies

a. Current versus non-current classification

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

An asset/liability is treated as current when it is:

• Expected to be realised or intended to be sold or consumed or settled in
normal operating cycle

• Held primarily for the purpose of trading

• Expected to be realised/settled 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

• 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.

The Company classifies all other liabilities as non-current.

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

b. Property, plant and equipment

i) Tangible assets

Property, plant and equipment are stated at cost [i.e., cost of acquisition or
construction inclusive of freight, erection and commissioning charges, non¬
refundable duties and taxes, expenditure during construction period, borrowing
costs (in case of a qualifying asset) upto the date of acquisition/ installation], net of
accumulated depreciation.

When significant parts of property, plant and equipment (identified individually as
component) are required to be replaced at intervals, the Company derecognizes
the replaced part, and recognizes the new part with its own associated useful life
and it is depreciated accordingly. Whenever major inspection/overhaul/repair is
performed, its cost is recognized in the carrying amount of respective assets as a
replacement, if the recognition criteria are satisfied. All other repair and
maintenance costs are recognized in the statement of profit and loss.

The present value of the expected cost for the decommissioning of an asset after its
use is included in the cost of the respective asset if the recognition criteria for a
provision are met.

Property, plant and equipments are eliminated from financial statements, either on
disposal or when retired from active use. Losses/gains arising in case
retirement/disposals of property, plant and equipment are recognized in the
statement of profit and loss in the year of occurrence.

Depreciation on property, plant and equipments are provided to the extent of
depreciable amount on the straight line (SLM) Method. Depreciation is provided at
the rates and in the manner prescribed in Schedule II to the Companies Act, 2013.

The residual values, useful lives and methods of depreciation/amortization of
property, plant and equipment are reviewed at each financial year end and
adjusted prospectively, if appropriate.

ii) Capital work in progress

Capital work in progress includes construction stores including material in
transit/ equipment / services, etc. received at site for use in the projects.

All revenue expenses incurred during construction period, which are exclusively
attributable to acquisition / construction of fixed assets, are capitalized at the
time of commissioning of such assets.

c. Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or
production of an asset that necessarily takes a substantial period of time to get
ready for its intended use or sale are capitalised as part of the cost of the
respective asset. All other borrowing costs are expensed in the period in which
they occur.

d. Impairment of non-financial assets

The Company assesses, at each reporting date, whether there is an indication that
an asset may be impaired. If any indication exists, or when annual impairment
testing for an asset is required, the Company estimates the asset's recoverable
amount. An asset's recoverable amount is the higher of an asset's or cash¬
generating unit's (CGU) fair value less costs of disposal and its value in use.
Recoverable amount is determined for an individual asset, unless the asset does
not generate cash inflows that are largely independent of those from other assets
or groups of assets. When the carrying amount of an asset or CGU exceeds its
recoverable amount, the asset is considered impaired and is written down to its
recoverable amount.

Impairment losses of continuing operations, including impairment on
inventories, are recognised in the statement of profit and loss.

e. Inventories

Items of inventories are measured at lower of cost or market value. Cost of
inventories comprises of cost of purchase, cost of conversion and other costs
including manufacturing overheads incurred in bringing them to their respective
present location and condition. Cost of raw material, stores and spares, packing
materials, trading and other products are determined on weighted average basis.

f. Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits
will flow to the Company and the revenue can be reliably measured, regardless of
when the payment is being made. Revenue from operations includes sale of
goods, services and excise duty, adjusted for discounts (net).

Interest income is recognized on a time proportion basis taking into account the
amount outstanding and the interest rate applicable.

Dividend Income is recognised for as and when declared by respective company.

g. Foreign currency transactions

The Company's financial statements are presented in INR, which is also its
functional currency.

Foreign currency transactions are initially recorded in functional currency using
the exchange rates at the date the transaction.

At each balance sheet date, foreign currency monetary items are reported using
the exchange rate prevailing at the year end.

Exchange differences arising on settlement or translation of monetary items are
recognised in statement of profit and loss.

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.

h. Taxes on income

Deferred tax

Deferred tax is provided using the liability method on temporary differences
between the tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes at the reporting date.

Deferred tax assets are recognised for all deductible temporary differences, the
carry forward of unused tax credits and any unused tax losses. Deferred tax
assets are recognised to the extent that 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 utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected
to apply to the period when the asset is realized or the liability is settled, based
on tax rates (and tax laws) that have been enacted or substantively enacted at the
balance sheet date. Tax relating to items recognized directly in equity/other
comprehensive income is recognized in respective head and not in the statement
of profit & loss.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable
right exists to set off current tax assets against current tax liabilities and the
deferred taxes relate to the same taxable entity and the same taxation authority.