2. Material Accounting Policies:

A. Statement of compliance and basis of
Preparation

These Standalone Ind AS financial statements
have been prepared in accordance with Indian
Accounting Standards (Ind AS) notified under the
Companies (Indian accounting standards) rules
2015 (as amended from time to time) and
presentation requirements of Division II of
Schedule III to the Companies Act, 2013, (Ind AS
compliant Schedule III), as applicable to the
Standalone financial statement.

These Standalone Ind AS financial statements
have been prepared on a historical cost basis,
except for certain financial assets and liabilities
measured at fair value as explained in accounting

policy of fair value measurement [Note 2 B(c)]
and financial instruments [Note 2 B (m)] below.

The accounting policies adopted for preparation
and presentation of financial statements have
been consistent with the previous year.

The financial statements are presented in Indian
Currency (INR) which is the Company’s
functional and presentation currency, and all
values are rounded to the nearest Lakhs
(INR 00,000), except when otherwise indicated.

The Company has prepared the financial
statements on the basis that it will continue to
operate as going concern.

B. Summary of Material Accounting Policies:

a. Revenue

Revenue from contracts with customer is
recognized when control of the goods or services
are transferred to the customer at an amount that
reflects the consideration to which the Company
expects to be entitled in exchange for those
goods or services. The Company has generally
concluded that it is the principal in its revenue
arrangements, as it typically controls the goods or
services before transferring them to the
customer.

Sale of goods

Revenue from sale of goods is recognised at the
point in time when control of the asset is
transferred to the customer, which generally
coincides with delivery to customers. The credit
term is normally 7 to 120 days.

Revenue is recognised at an amount
representing the transaction price. In determining
the transaction price of sale of goods, the
Company considers the effects of variable
considerations such as trade discounts,
allowances and any taxes or duties collected on
behalf of the government such as goods and
services tax, etc. Revenue is only recognized to
the extent that it is highly probable a significant
reversal will not occur.

Rendering of Services

Revenue from services includes Service charges
and Job worker charges. Revenue from such
contracts are recognized at a point in time when
the services are rendered.

Interest income

Interest income from the financial assets is
recognized 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 calculated by using the effective
interest rate method with 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 assets to that
asset’s net carrying amount on initial recognition.

Rental income

The Company’s policy for recognition of revenue
from operating leases is described in Note 2 B

(i) below.

Export Benefits

Export benefits available under prevalent
schemes are accrued in the year in which the
goods are exported and no significant uncertainty
exists regarding its ultimate collection.

b. Contract Balances

i) Trade Receivable:

A receivable represents the Company’s
right to an amount of consideration that is
unconditional (i.e., only the passage of time
is required before payment of the
consideration is due). Refer to accounting
policies of financial assets in Note 2 B(m)
Financial instruments - initial recognition
an d su bsequ en t m easu remen t,
derecognition and impairment of financial
assets.

ii) Contract liabilities:

A contract liability is the obligation to
transfer goods or services to a customer for
which the Company has received
consideration (or an amount of
consideration is due) from the customer. If a
customer pays consideration before the
Company transfers goods or services to the
customer, a contract liability is recognised
when the payment is made, or the payment
is due (whichever is earlier). Contract
liabilities are recognised as revenue when
the Company performs under the contract.

c. Fair Value Measurement

The Company measures financial instruments at
fair value at each balance sheet date.

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. The fair value
measurement is based on the presumption that
the transaction to sell the asset or transfer the
liability takes place either:

(i) In the principal market for the asset or
liability, or

(ii) In the absence of a principal market, in the
most advantageous market for the asset or
liability

The fair value of an asset or a liability is measured
using the assumptions that market participants
would use when pricing the asset or liability,
assuming that market participants act in their best
economic interest.

A fair value measurement of a non-financial asset
takes into account a market participant’s ability to
generate economic benefits by using the asset in
its highest and best use or by selling it to another
market participant that would use the asset in its
highest and best use.

The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data is available to measure fair value,
maximizing the use of relevant observable inputs
and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is
measured or disclosed in the financial statements
are categorized within the fair value hierarchy,
described as follows, based on the lowest level
input that is significant to the fair value
measurement as a whole:

Level 1 — Quoted (unadjusted) market prices in
active markets for identical assets or liabilities.

Level 2 — Valuation techniques for which the
lowest level input that is significant to the fair
value measurement is directly or indirectly
observable.

Level 3 — Valuation techniques for which the
lowest level input that is significant to the fair
value measurement is unobservable.

For assets and liabilities that are recognized in the
financial statements on a recurring basis, the
Company determines whether transfers have
occurred between levels in the hierarchy by re¬
assessing categorization (based on the lowest
level input that is significant to the fair value
measurement as a whole) at the end of each
reporting period.

d. Employee Benefits

Post-employment benefits costs and termination
benefits

(i) Defined Contribution Plans

The Company’s contribution to Provident
fund, Employees State Insurance Scheme

and Labour welfare fund are considered as
Defined Contribution Plan and are charged
as employee benefits expense based on
the amount of contribution required to be
made as and when services are rendered
by the employees. The Company has no
further payment obligations once the
contribution has been paid. Prepaid
contributions are recognized as an asset to
the extent that a cash refund or reduction in
the future payment is available.

(ii) Defined Benefit Plans:

The Company’s liabilities towards gratuity
are determined using the projected unit
credit method, with actuarial valuation
being carried out at the end of each annual
reporting period.

Gratuity: The Company operates a defined
benefit gratuity plan in India, which requires
contributions to be made to a separately
administered fund set up as irrevocable
trust by the Company.

Re-measurement, comprising actuarial
gains or losses and the return on plan
assets (excluding net interest), is reflected
immediately in the Balance Sheet with a
charge or credit recognised in other
comprehensive income in the period in
which they occur.

Re-measurement recognised in other
comprehensive income is reflected
immediately in retained earnings and will
not be reclassified to the statement of profit
and loss. Past service cost is recognised in
the statement of profit and loss in the period
of a plan amendment.

Net interest is calculated by applying the
discount rate at the beginning of the period
to the net defined benefit liability or asset.
Defined benefit costs are categorised as
follows:

• Service cost (including current service
cost, past service cost, as well as gains
and losses on curtailments and
settlements);

• Net interest expense or income; and

• Remeasurement

The Company presents the first two
components of defined benefit costs in the
statement of profit and loss in the line item
“Employee Benefits Expenses”.
Curtailment gains and losses are
accounted for as past service costs.

The defined benefit obligation recognised
in the Balance Sheet represents the actual
deficit or surplus in the Company’s defined
benefit plans.

Short term and other long term employee benefits

Benefits accruing to employees in respect of wages,
salaries and compensated absences and which are
expected to be availed within twelve months
immediately following the year end are reported as
expenses during the year in which the employee
performs the service that the benefit covers and the
liabilities are reported at the undiscounted amount of
the benefit expected to be paid in exchange of related
service.

Where the availment or encashment is otherwise not
expected to wholly occur within the next twelve months,
the liability on account of the benefit is actuarially
determined using the projected unit credit method at
the present value of the estimated future cash flow
expected to be made by the Company in respect of
services provided by employees up to the reporting
date.

The benefits are discounted using the market yields at
the end of the reporting period on government bonds
that have terms approximating the terms of the related
obligations. Remeasurements as a result of
experience adjustments and changes in actuarial
assumptions (i.e., actuarial losses/ gains) are
recognised in the Statement of Profit and Loss.

The obligations are presented as current in the balance
sheet if the Company does not have an unconditional
right to defer settlement for at least twelve months after
the reporting period, regardless of when the actual
settlement is expected to occur.

e. Property, Plant and Equipment

Items of property, plant and equipment are
measured at cost, which includes capitalized
borrowing costs, less accumulated depreciation
and impairment losses, if any. The cost of an item
of property, plant and equipment comprises:

- its purchase price, including import duties
and non-refundable purchase taxes, after
deducting trade discounts and rebates.

- any costs directly attributable to bringing
the asset to its working condition for its
intended use.

- the initial estimate of the costs of
dismantling and removing the item and
restoring the site on which it is located.

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

components) of property, plant and equipment.

Any gain or loss on disposal of an item of property,
plant and equipment is recognized in the
statement of profit or loss.

Capital work-in-progress in respect of assets
which are not ready for their intended use are
carried at costs, comprising of direct costs,
related incidental expenses and attributable
interest. Capital work in progress is stated at cost
less impairment, if any.

Subsequent expenditure is capitalized only if it is
probable that the future economic benefit
associated with the expenditure will flow to the
Company.

Depreciable amount for assets is the cost of an
asset, less its estimated residual value.
Depreciation is recognised to write off the
depreciable amount of assets (other than freehold
land and assets under construction) over the
useful lives using the straight-line method. The
useful life of following assets is determined in
compliance with Part C of Schedule II of the
Companies Act, 2013.

However, for the following asset classes, the
useful life is determined based on technical
advice, considering factors such as the nature of
the asset, its estimated usage, the operating
conditions, and other relevant considerations.
The management believes that these estimated
useful lives are realistic and reflect fair
approximation of the period over which the assets
are likely to be used.

of consumption of the future economic benefits
embodied in the items of property, plant and
equipment.

An item of property, plant and equipment and any
significant part initially recognised is
derecognised upon disposal or when no future
economic benefits are expected from its use or
disposal. Any gain or loss arising on derecognition
of the asset (calculated as the difference between
the net disposal proceeds and the carrying
amount of the asset) is included in the statement
of profit and loss when the asset is derecognized.

f. Intangible Asset

Intangible assets acquired separately are
measured on initial recognition at cost. Following
initial recognition, intangible assets are carried at
cost less any accumulated amortisation and
accumulated impairment loss, if any. Subsequent
expenditure is capitalized only if it is probable that
the future economic benefits associated with the
expenditure will flow to the Company.

The useful lives of intangible assets are assessed
as either finite or indefinite. Intangible assets with
finite lives are amortised over the useful economic
life and assessed for impairment whenever there
is an indication that the intangible asset may be
impaired. The amortisation period and the
amortisation method for an intangible asset with a
finite useful life are reviewed at least at the end of
each reporting period. Changes in the expected
useful life or the expected pattern of consumption
of future economic benefits embodied in the asset
are considered to modify the amortisation period
or method, as appropriate, and are treated as
changes in accounting estimates. The
amortisation expense on intangible assets with
finite lives is recognised in the statement of profit
and loss unless such expenditure forms part of
carrying value of another asset.

Amortization is recognized on a straight-line basis
over their estimated useful lives. The estimated
useful life and amortisation method are reviewed
at the end of each reporting period, with the effect
of any changes in estimate being accounted for
on a prospective basis.

Estimated useful life of intangible assets are as
follows:

arising upon derecognition of the asset
(calculated as the difference between the net
disposal proceeds and the carrying amount of the
asset) is included in the statement of profit and
loss when the asset is derecognised.

g. Impairment of assets

At the end of each reporting period, the Company
reviews the carrying amounts of its tangible and
intangible assets to determine whether there is
any indication that those assets have suffered an
impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in
order to determine the extent of the impairment
loss (if any). When it is not possible to estimate
the recoverable amount of an individual asset, the
Company estimates the recoverable amount of
the cash-generating unit to which the asset
belongs.

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 is estimated
to be less than its carrying amount, the carrying
amount of the asset is reduced to its recoverable
amount. An impairment loss is recognised
immediately in Statement of profit or loss.

When an impairment loss subsequently reverses,
the carrying amount of the asset 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
recognised for the asset in prior years. A reversal
of an impairment loss is recognised immediately
in Statement of profit or loss.

h. Foreign Currency

The Company’s Standalone Ind AS financial
statements are presented in INR which is also the
Company’s functional currency.

Transactions in foreign currencies are recorded at
exchange rates prevailing on the date of the
transaction. Foreign currency denominated
monetary assets and liabilities are translated at
the exchange rate prevailing on the Balance
Sheet date and exchange gains and losses
arising on settlement and restatement are
recognised in the Statement of Profit and Loss.

Non-monetary items denominated in a foreign
currency are measured at historical cost and
translated at exchange rate prevalent at the date
of transaction.

i Leases

The Company assesses at contract inception
whether a contract is, or contains, a lease, i.e., if
the contract conveys the right to control the use of
an identified asset for a period of time in exchange
for consideration.

Company as a lessee

The Company applies a single recognition and
measurement approach for all leases, except for
short-term leases and leases of low-value assets.
The Company recognises lease liabilities to make
lease payments and right-of-use assets
representing the right to use the underlying
assets.

(i) Right of use assets

The Company recognises right-of-use
assets at the commencement date of the
lease (i.e., the date the underlying asset is
available for use). Right-of-use assets are
measured at cost, less any accumulated
depreciation and impairment losses, and
adjusted for any remeasurement of lease
liabilities. The cost of right-of-use assets
includes the amount of lease liabilities
recognised, initial direct costs incurred, and
lease payments made at or before the
commencement date less any lease
incentives received. Right-of-use assets
are depreciated on a straight-line basis over
the shorter of the lease term and the
estimated useful lives of the assets, as
follows:

(ii) Lease Liability

At the commencement date of the lease, the
Company recognises lease liabilities
measured at the present value of lease
payments to be made over the lease term.
The lease payments include fixed
payments (including in substance fixed
payments) less any lease incentives
receivable, variable lease payments that
depend on an index or a rate, and amounts
expected to be paid under residual value
guarantees. The lease payments also
include the exercise price of a purchase
option reasonably certain to be exercised

by the Company and payments of penalties
for terminating the lease, if the lease term
reflects the Company exercising the option
to terminate. Variable lease payments that
do not depend on an index or a rate are
recognised as expenses (unless they are
incurred to produce inventories) in the
period in which the event or condition that
triggers the payment occurs.

In calculating the present value of lease
payments, the Company uses its
incremental borrowing rate at the lease
commencement date because the interest
rate implicit in the lease is not readily
determinable. After the commencement
date, the amount of lease liabilities is
increased to reflect the accretion of interest
and reduced for the lease payments made.
In addition, the carrying amount of lease
liabilities is remeasured if there is a
modification, a change in the lease term, a
change in the lease payments (e.g.,
changes to future payments resulting from
a change in an index or rate used to
determine such lease payments) or a
change in the assessment of an option to
purchase the underlying asset. The
Company’s lease liabilities are included in
Interest-bearing borrowings.

(iii) Short-term leases and leases of low-
value assets

The Company applies the short-term lease
recognition exemption to its short-term
leases of office premises and storage
locations (i.e., those leases that have a
lease term of 12 months or less from the
commencement date and do not contain a
purchase option). It also applies the lease
of low-value assets recognition exemption
to leases of office equipment that are
considered to be low value. Lease
payments on short-term leases and leases
of low-value assets are recognised as
expense on a straight-line basis over the
lease term.

Company as a lessor

Leases in which the Company does not
transfer substantially all the risks and
rewards of ownership of an asset are
classified as operating leases. Rental
income arising is accounted for a straight¬
line basis over the lease terms. Initial direct
costs incurred in negotiating and arranging
an operating lease are added to the
carrying amount of the leased asset and
recognised over the lease term on the

same basis as rental income. Contingent
rents are recognised as revenue in the
period in which they are earned.

j. Inventories

Inventories are valued at cost or net realisable
value, whichever is lower, cost being determined
on weighted average basis. Cost includes all
charges for bringing the goods to their present
location and condition.

Raw materials: cost includes cost of purchase
and other costs incurred in bringing the
inventories to their present location and condition.
Cost is determined on first in, first out basis.

Finished goods and work in progress: cost
includes cost of direct materials and labour and a
proportion of manufacturing overheads based on
the normal operating capacity but excluding
borrowing costs. Cost is determined on first in,
first out basis.

Net realizable value represents the estimated
selling price for inventories less all estimated
costs of completion and costs necessary to make
the sale.

Costs of conversion and other costs are
determined on the basis of standard cost method
adjusted for variances between standard costs
and actual costs.

k. Taxes on Income
Current Income Tax

Tax expense comprises of current tax expense
and deferred tax.

Current income tax assets and liabilities are
measured at the amount expected to be
recovered from or paid to the taxation authorities
in accordance with Income Tax Act, 1961. The tax
rates and tax laws used to compute the tax are
those that are enacted or substantially enacted at
the reporting date.

Current income tax relating to items recognised
outside profit or loss is recognised outside profit
or loss (either in other comprehensive income or
in equity). Current tax items are recognised in
correlation to the underlying transaction either in
OCI or directly in equity.

Management periodically evaluates positions
taken in the tax returns with respect to situations
in which applicable tax regulations are subject to
interpretation and considers whether it is
probable that a taxation authority will accept an
uncertain tax treatment. The Company shall
reflect the effect of uncertainty for each uncertain
tax treatment by using either most likely method
or expected value method, depending on which
method predicts better resolution of the
treatment.

Deferred Tax

Deferred Tax is provided using the balance sheet
approach 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 liabilities are recognised for all
taxable temporary differences, except:

- When the deferred tax liability arises from
the initial recognition of goodwill or an asset
or liability in a transaction that is not a
business combination and, at the time of the
transaction, affects neither the accounting
profit nor taxable profit or loss and does not
give rise to equal taxable and deductible
temporary differences;

- In respect of taxable temporary differences
associated with investments in subsidiaries,
associates and interests in joint ventures,
when the timing of the reversal of the
temporary differences can be controlled and
it is probable that the temporary differences
will not reverse in the foreseeable future

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 utilized,
except:

- When the deferred tax asset relating to the
deductible temporary difference arises from
the initial recognition of an asset or liability
in a transaction that is not a business
combination and, at the time of the
transaction, affects neither the accounting
profit nor taxable profit or loss and does not
give rise to equal taxable and deductible
temporary differences;

- In respect of deductible temporary
differences associated with investments in
subsidiaries, associates and interests in
joint ventures, deferred tax assets are
recognised only to the extent that it is
probable that the temporary differences will
reverse in the foreseeable future and
taxable profit will be available against which
the temporary differences can be utilised

The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced to
the extent that it is no longer probable that
sufficient taxable profit will be available to allow all
or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are re¬
assessed at each reporting date and are
recognised to the extent that it has become
probable that future taxable profits will allow the
deferred tax asset to be recovered.

In assessing the recoverability of deferred tax
assets, the Company relies on the same forecast
assumptions used elsewhere in the financial
statements and in other management reports,
which, among other things, reflect the potential
impact of climate-related development on the
business, such as increased cost of production as
a result of measures to reduce carbon emission.

Deferred tax assets and liabilities are measured
at the tax rates that are expected to apply in the
year 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 reporting date.

Deferred tax relating to items recognised outside
profit or loss is recognised outside profit or loss
(either in other comprehensive income or in
equity). Deferred tax items are recognised in
correlation to the underlying transaction either in
OCI or directly in equity.

The Company offsets deferred tax assets and
deferred tax liabilities if and only if it has a legally
enforceable right to set off current tax assets and
current tax liabilities and the deferred tax assets
and deferred tax liabilities relate to income taxes
levied by the same taxation authority on either the
same taxable entity which intends either to settle
current tax liabilities and assets on a net basis, or
to realise the assets and settle the liabilities
simultaneously, in each future period in which
significant amounts of deferred tax liabilities or
assets are expected to be settled or recovered.

Goods and Services Tax (GST) paid on
acquisition of assets or on incurring
expenses

Expenses and assets are recognised net of the
amount of GST/ value added taxes paid, except:

- When the tax incurred on a purchase of
assets or services is not recoverable from
the taxation authority, in which case, the tax
paid is recognised as part of the cost of
acquisition of the asset or as part of the
expense item, as applicable;

- When receivables and payables are stated
with the amount of tax included

The net amount of tax recoverable from, or
payable to, the taxation authority is included
as part of other current/non-current assets/
liabilities in the balance sheet.