2. Material accounting policies

2.1 Statement of compliance

The financial statements which comprise the Balance
Sheet, the Statement of Profit and Loss (including Other
Comprehensive Income), the Cash Flow Statement,
and the Statement of Changes in Equity ("financial
statements”) have been prepared in accordance with
Indian Accounting Standards (Ind AS) notified under
the Section 133 of the Companies Act, 2013 ("the Act”),
Companies (Indian Accounting Standards) Rules, 2015,
as amended, along with relevant amendment rules
issued thereafter and other relevant provisions of
the Act, as applicable. The Company has consistently
applied accounting policies to all periods.

2.2 Basis of preparation and presentation:

These financial statements have been prepared on
accrual basis and on the historical cost convention
except for certain financial instruments that are
measured at fair values at the end of each reporting
period, as explained in the accounting policies below.

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, regardless of whether that price
is directly observable or estimated using another
valuation technique. In estimating the fair value of
an asset or liability, the Company takes into account
the characteristics of the asset or liability of market
participants would take those characteristics into
account when pricing the asset or liability at the
measurement date. Fair value for measurement and /
or disclosure purposes in these financial statements
is determined on such a basis, except for share-based
payment transactions that are within the scope of

lnd AS 102, leasing transactions that are within the
scope of Ind AS 116, and measurements that have some
similarities to fair value but are not fair value, such as
value in use in Ind AS 36.

In addition, for financial reporting purposes, fair value
measurements are categorised into Level 1, 2, or 3 based
on the degree to which the inputs to the fair value
measurements are observable and the significance of
the inputs to the fair value measurement in its entirety,
which are described as follows:

• Level 1 inputs are quoted prices (unadjusted) in
active markets for identical assets or liabilities
that the entity can access at the measurement
date;

• Level 2 inputs are inputs, other than quoted prices
included within Level 1, that are observable for
the asset or liability, either directly or indirectly;
and

• Level 3 inputs are unobservable inputs for the
asset or liability.

2.3 Inventories:

Inventories are valued at lower of cost or net
realisable value after providing for obsolescence's
and other losses, where considered necessary. Cost
of inventories is ascertained on a 'weighted average'
basis. Materials and other supplies held for use in the
production of inventories are not written down below
cost if the related finished products are expected to be
sold at or above cost.

Cost in respect of raw materials and stores and spares
includes expenses incidental to procurement of the
same. Cost in respect of finished goods represents
prime cost and includes appropriate portion of
overheads.

Cost in respect of work-in-progress represents
cost incurred up to the stage of completion, cost of
materials remaining uncertified / incomplete by the
Company.

Goods-in-transit are valued at cost which represents
the costs incurred up to the stage at which the goods
are in-transit. Scrap material is valued at the net
realisable value after providing for obsolescence and
other losses (if any).

2.4 Foreign currency translation:

In preparing the financial statements of the Company,
transactions in currencies other than the entity's
functional currency (foreign currencies) are recognised
at the rates of exchange prevailing at the dates of
transaction. At the end of each reporting period,
monetary items denominated in foreign currencies
are retranslated at the rate prevailing at that date.
Non-Monetary items carried at fair value that are

denominated in foreign currencies are retranslated at
the rates prevailing at the date when the fair value was
determined. Non-Monetary items that are measured in
terms of historical cost in a foreign currency are not
restated.

Exchange differences on monetary items are
recognised in the Statement of profit and loss in the
period in which they arise.

2.5 Functional and presentation currency:

Items included in the financial statements of the
Company are measured using the currency of the
primary economic environment in which the entity
operates (i.e. the "functional currency”). The financial
statements are presented in Indian Rupee (?), the
national currency of India, which is the functional
currency of the Company.

2.6 Income taxes:

Income tax expense representing the sum of current
tax expenses and the net charge of the deferred taxes
is recognised in the income statement except to the
extent that it relates to items recognised directly in
equity or other comprehensive income.

Current income tax is provided on the taxable income
and recognised at the amount expected to be paid to or
recovered from the tax authorities, using the tax rates
and tax laws that have been enacted or substantively
enacted by the end of the reporting period.

Deferred tax is recognised on temporary differences
between the carrying amounts of assets and liabilities
in the Financial Statements and the corresponding
tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for
all taxable temporary differences. Deferred tax assets
are generally recognised for all deductible temporary
differences to the extent that it is probable that
taxable profits will be available against which those
deductible temporary differences can be utilised.

Deferred tax liabilities and assets are measured at the
tax rates that are expected to apply in the period in
which the liability is settled or the asset realised, based
on tax rates (and tax laws) that have been enacted
or substantively enacted by the end of the reporting
period.

The carrying amount of deferred tax assets is reviewed
at the end of each reporting period and reduced to
the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of
the deferred tax asset to be utilised.

2.7 Leases:

The Company evaluates if an arrangement qualifies
to be a lease as per the requirements of Ind AS
116. Identification of a lease requires significant

judgment. A contract is, or contains, a lease if the
contract conveys the right to control the use of an
identified asset for a period of time in exchange for
consideration. The determination of whether an
arrangement is (or contains) a lease is based on the
substance of the arrangement at the inception of
the lease. The arrangement is, or contains, a lease if
fulfilment of the arrangement is dependent on the
use of a specific asset or assets and the arrangement
conveys a right to use the asset or assets, even if that
right is not explicitly specified in an arrangement.

As a Lessee:

The Company's significant leasing arrangement
are in respect of land, office premises and plant
and equipment. The Company, at the inception of a
contract, assesses whether the contract is a lease or not
lease. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified
asset for a time in exchange for a consideration.

The Company recognises a right-of-use asset and
a lease liability at the lease commencement date.
The right-of-use asset is initially measured at cost,
which comprises the initial amount of the lease
liability adjusted for any lease payments made at or
before the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle
and remove the underlying asset or to restore the
underlying asset or the site on which it is located, less
any lease incentives received.

The right-of-use asset is subsequently depreciated
using the straight-line method from the
commencement date to the end of the lease term.

The lease liability is initially measured at the present
value of the lease payments that are not paid at the
commencement date, discounted using the Company's
incremental borrowing rate. It is remeasured when
there is a change in future lease payments arising
from a change in an index or rate, if there is a change
in the Company's estimate of the amount expected to
be payable under a residual value guarantee, or if the
Company changes its assessment of whether it will
exercise a purchase, extension or termination option.
When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying
amount of the right-of-use asset, or is recorded in
profit or loss if the carrying amount of the right-of-
use asset has been reduced to zero.

The Company has elected not to recognise right-of-
use assets and lease liabilities for short-term leases
that have a lease term of 12 months or less and leases
of low-value assets. The Company recognises the
lease payments associated with these leases as an
expense over the lease term.

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. Where
the Company is a lessor under an operating lease,
the asset is capitalized as investment property and
depreciated over its useful economic life. Payments
received under operating leases are recognised in the
Statement of Profit and Loss on a straight line basis
over the term of the lease.

2.8 Earnings per share:

Basic earnings per share are computed by dividing
the net profit attributable to the equity holders of the
company by the weighted average number of equity
shares outstanding during the period.

Dilutive potential equity shares are deemed converted
as of the beginning of the year, unless issued at a later
date. In computing diluted earnings per share, only
potential equity shares that are dilutive and that either
reduces earnings per share or increases loss per share
are included. The number of shares and potentially
dilutive equity shares are adjusted retrospectively for
all periods presented for the share splits.