2. SIGNIFICANT ACOUNTING POLICIES

a. Basis of preparation

The standalone financial statements are prepared in accordance with Indian Accounting Standards (Ind AS)
under the historical cost convention on the accrual basis except for certain financial instruments which are
measured at fair values, the provisions of the Companies Act, 2013('Act') (to the extent notified) and guidelines
issued by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section133 of the
Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian
Accounting Standards) Amendment Rules,2016.

The standalone financial statements are presented in Indian Rupees, which is also the Company's functional
currency. All amounts have been rounded off to the nearest Lakhs, except where otherwise indicated.

b. Significant Management judgments, estimates and assumptions

The preparation of the financial statements in conformity with Ind AS requires management to make estimates,
judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting
policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at
the date of the financial statements and reported amounts of revenue and expenses during the period. Accounting
estimates could change from period to period. Actual results could differ from those estimates. Appropriate
changes in estimates are made as management becomes aware of changes in circumstances surrounding the
estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made
and, if material, their effects are disclosed in the notes to the financial statements.

The following are significant management judgments in applying the accounting policies of the Company that have
the most significant effect:

i. Recognition of deferred tax assets:

The extent to which deferred tax assets can be recognized is based on the assessment of the probability of the
Company's future taxable income against which the deferred tax assets can be utilized.

ii. Useful lives of property plant & equipment and intangible assets:

The Company uses its technical expertise along with historical and industry trends for determining the economic
life of an asset/component of an asset. The useful lives are reviewed by management periodically and revised, if

appropriate. In case of a revision, the unamortized depreciable amount is charged over the remaining useful life of
an asset.

iii. Defined benefit obligations:

The defined benefit obligations measured using actuarial valuation techniques. An actuarial valuation involves
making key assumption of life expectancies, salary increases and withdrawal rates. Variation in these assumptions
may impact the defined benefit obligation.

iv. Impairment assessment of Investment in Subsidiaries, Jointly Controlled Entities and Associates:

The Company testes impairment for investments and provides for impairment where the carrying amount of
investments exceeds it's recoverable amount. The recoverable amount is higher of “value in use” and “fair value less
cost of disposal”. The Company calculates value in use as net present value of forecasted cash flows through
investment. Fair value less cost of disposal is calculated through Market Multiple method, for which transaction
multiples of comparable companies are taken.

v. Impairment Assessment of Assets:

The Company reviews it's carrying value of assets annually to assess whether there is any indication for impairment.
If any such indication exists, the Company estimates the recoverable amount of such assets based on value in use
calculations. These calculations require the use of estimates such as discount rates and growth rates.

vi. Leases:

The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. The Ind AS
116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option
to extend or terminate the lease, if the use of such option is reasonably certain. The Company uses significant
judgement

in assessing the lease term (including anticipated renewals) and the applicable discount rate.
viii. Contingencies:

Management judgement is required for estimating the possible outflow of resources, if any, in respect of
contingencies, claim, litigations etc. against the Company as it is not possible to predict the outcome of pending
matters with accuracy.

c. Revenue Recognition

The company recognizes revenue when the amount of revenue can be measured reliably and it is probable that
the economic benefits associated with the transaction will flow to the entity.

(i) Sales of Goods

Revenue from the sale of goods is recognized, when all significant risks and rewards are transferred to the buyer,
as per the terms of the contracts and no significant uncertainty exists regarding the amount of the consideration
that will be derived from the sales of goods. Revenue towards satisfaction of a performance obligation is
measured at the amount of transaction price (net of variable consideration) allocated to that performance
obligation. The transaction price of goods sold and services rendered is net of variable consideration on account
of various discounts and schemes offered by the Company as part of the contract.

(ii) Lease Income

Lease income from operating leases shall be recognized in income on a straight-line basis over the lease term.

(iii) Interest Income

Interest income is recognized using the effective interest rate (EIR). EIR is the rate that exactly discounts the
estimated future cash receipts over the expected life of the financial instrument or a shorter period, where
appropriate, to the gross carrying amount of the financial asset. When calculating the effective interest rate, the
Company estimates the expected cash flows by considering all the contractual terms of the financial instrument
but does not consider the expected credit losses.

(iv) Investment Income

All equity investments in scope of Ind AS 109 are measured at fair value. For equity instruments, the company
may make an irrevocable election to present in other comprehensive income subsequent changes in the fair
value. The company makes such election on an instrument-by-instrument basis. The classification is made on
initial recognition and is irrevocable.

If the company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to
P&L, even on sale of investment. However, the company may transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized
in the P&L.

d. Current and 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;

- Held primarily for the purpose of trading;

- 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.

All other assets are classified as non-current.

A liability is current when:

- It is expected to be settled in normal operating cycle;

- It is held primarily for the purpose of trading;

- 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.

e. Employees Benefits

(i) Short Term Employee Benefits

Short Term Employee Benefits are recognized as an expense on an undiscounted basis in the statement of profit
and loss of the year in which the related service is rendered.

(ii) Post-Employment Benefits
Defined Contribution Plans

Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no
obligation, other than the contribution payable to the provident fund. The Company recognizes contribution
payable to the provident fund scheme as an expense, when an employee renders the related service.

Defined Benefit Plans

The Company provides for gratuity, a defined benefit retirement plan ('the Gratuity Plan') covering eligible
employees of the Company. The Gratuity Plan provides a lump-sum payment to vested employees at retirement,
death, incapacitation or termination of employment, of an amount based on the respective employee's salary
and the tenure of employment with the Company.

Liabilities with regard to the Gratuity Plan are determined by actuarial valuation, performed by an independent
actuary, at each balance sheet date using the projected unit credit method.

The Company recognizes the net obligation of a defined benefit plan in its balance sheet as an asset or liability.
Re-measurements comprising of actuarial gains and losses, the effect of the asset ceiling (excluding amounts
included in net interest on the net defined benefit liability) and the return on plan assets (excluding amounts
included in net interest on the net defined benefit liability) are recognized in Other Comprehensive Income
which are not reclassified to profit or loss in subsequent periods.

f. Property, Plant and Equipment

Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any. Such
cost includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its
working condition for its intended use, net charges on foreign exchange contracts and adjustments arising from
exchange rate variations attributable to the assets. Costs directly attributable to acquisition are capitalized until
the property, plant and equipment are ready for use, as intended by management. The company depreciates
property, plant and equipment using Straight line Method over their estimated useful lives as prescribed under
Part C of Schedule II of the Companies Act 2013.

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date
is classified as capital advances under other 'non-current assets and the cost of assets not put to use before such

date are disclosed under 'Capital work-in-progress'. Subsequent expenditures relating to property, plant and
equipment is capitalized only when it is probable that future economic benefits associated with these will flow
to the Company and the cost of the item can be measured reliably. Repairs and maintenance costs are recognized
in net profit in the Statement of Profit and Loss when incurred. The cost and related accumulated depreciation
are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses
are recognized in the Statement of Profit and Loss. Assets to be disposed off are reported at the lower of the
carrying value or the fair value less cost to sell.

g. Inventories

Inventories of raw materials, stores and spares, trading goods, work-in-process and finished goods are
valued at cost or net realizable value, whichever is lower. However, materials and other items held for
use in the production of inventories are not written down below cost if the finished products in which
they will be incorporated are expected to be sold at or above cost. The cost in respect of the aforesaid
items of inventory is computed as under:

- In case of raw materials, at average cost-plus direct expenses.

- In case of stores & spares, at average cost-plus direct expenses.

- In case of work-in-process, at raw material cost plus conversion cost depending upon the stage of
completion.

- In case of finished goods, at raw material cost plus conversion cost, packing cost, excise duty and other
overheads incurred to bring the goods to their present condition and location.

h. Earnings per Share

Basic earnings per equity share are computed by dividing the net profit attributable to the equity shareholders
of the company by the weighted average number of equity shares outstanding during the period. Diluted
earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company
by the weighted average number of equity shares considered for deriving basic earnings per equity share and
also the weighted average number of equity shares that could have been issued upon conversion of all dilutive
potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the
equity shares been actually issued at fair value (i.e., the average market value of the outstanding equity shares).
Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later
date. Dilutive potential equity shares are determined independently for each period presented. The weighted
average number of ordinary shares outstanding during the period is the number of ordinary shares outstanding
at the beginning of the period, adjusted by the number of ordinary shares bought back or issued during the
period multiplied by a time-weighting factor. The time-weighting factor is the number of days that the shares
are outstanding as a proportion of the total number of days in the period; a reasonable approximation of the
weighted average is adequate in many circumstances.

i. Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset
are capitalized as part of the cost of the asset. Other borrowing costs are recognized as an expense in the period
in which they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection
with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an
adjustment to the borrowing costs.

j. Income Taxes

Income tax expense comprises current and deferred income tax. Income tax expense is recognized in net profit
in the statement of profit and loss except to the extent that it relates to items recognized directly in equity, in
which case it is recognized in other comprehensive income. Current income tax for current and prior periods is
recognized 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 balance sheet date. Deferred income tax assets
and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the financial statements. Deferred tax assets are reviewed at each reporting date
and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on
deferred income tax assets and liabilities is recognized as income or expense in the period that includes the
enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is
probable that future taxable profit will be available against which the deductible temporary differences and tax
losses can be utilized. Deferred income taxes are not provided on the undistributed earnings of subsidiaries and
branches where it is expected that the earnings of the subsidiary or branch will not be distributed in the
foreseeable future. The company offsets current tax assets and current tax liabilities, where it has a legally
enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to
realize the asset and settle the liability simultaneously. The income tax provision for the interim period is made
based on the best estimate of the annual average tax rate expected to be applicable for the full financial year. T ax
benefits of deductions earned on exercise of employee share options in excess of compensation charged to
income are credited to share premium.

k. Foreign Currency Transactions

(i) Functional and Presentation currency

The functional currency of the company is Indian rupee. These financial statements are presented in Indian
Rupee (rounded off to Lacs).

(ii) Transaction and balances

The foreign currency transactions are recorded, on initial recognition in the functional currency, by applying to
the foreign currency amount the spot exchange rate between the functional currency and the foreign currency
at the date of the transaction.

The foreign currency monetary items are translated using the closing rate at the end of each reporting period.
Non-monetary items that are measured in terms of historical cost in a foreign currency shall be translated using
the exchange rate at the date of the transaction. Exchange differences arising on the settlement of monetary
items or on translating monetary items at rates different from those at which they were translated on initial
recognition during the period or in previous financial statements shall be recognized in profit or loss in the
period in which they arise.

Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the statements of
profit and loss, within finance cost. All other foreign exchange gains and losses are presented in the statement of
profit and loss on net basis.

l. Leases

Leases under which the company assumes substantially all the risks and rewards of ownership are classified as
finance leases. When acquired, such assets are capitalized at fair value or present value of the minimum lease
payments at the inception of the lease, whichever is lower. Lease under which the risks and rewards incidental
to ownership are not transferred to lessee is classified as operating lease. Lease payments under operating leases
are recognized as an expense on a straight-line basis in net profit in the statement of profit and loss over the
lease term.

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

The contract conveys the right to control the use of an identified asset, if it involves the use of an identified asset
and the company has substantially all of the economic benefits from use of the asset and has right to direct the
use of identified asset. The cost of the right-of-use asset shall comprise of the amount of the initial measurement
of lease liability adjusted for any lease payments made at or before the commencement date plus any initial
direct costs incurred. The right-of-use assets are subsequently measured at cost less any accumulated
depreciation, accumulated impairment loss, if any and an adjusted for any re-measurement of the lease liability.
The right-of-use assets is depreciated using the straight-line method from the commencement date over the
shorter of lease term or useful life of right-of-use asset

m. 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) Initial Recognition and measurement

On initial recognition, all financial assets and liabilities are recognized initially at fair value, plus or minus, in the
case of financial assets or financial liability not recorded at fair value through profit or loss (FVTPL), transaction
costs that are attributable to the acquisition of the financial asset or financial liability. However, trade receivables
that do not contain a significant financing component are measured at transaction price.

(ii) Subsequent measurement

(a) Non-derivative financial instruments
(i) Financial assets carried at amortized cost

A financial asset is subsequently measured at amortized 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.

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

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.

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

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

(iv) Financial liabilities

The financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade
and other payables maturing within one year from the balance sheet date, the carrying amounts approximate
fair value due to the short maturity of these instruments.

(b) Equity Share capital

(i) Equity Shares

Equity shares issued by the company are classified as equity. Incremental costs directly attributable to the
issuance of new ordinary shares and share options are recognized as a deduction from equity, net of any tax
effects.

(ii) De-recognition of financial instruments

A financial asset is derecognized when the contractual rights to the cash flows from the financial asset expire or
it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability
is derecognized when the obligation specified in the contract is discharged or cancelled or expired.

(iii) Fair value measurement of financial instruments

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

Based on the three level fair value hierarchies, the methods used to determine the fair value of financial assets
and liabilities include quoted market price, discounted cash flow analysis and valuation certified by the external
valuer.

In case of financial instruments where the carrying amount approximates fair value due to the short maturity of
those instruments, carrying amount is considered as fair value.

n. Impairment of Assets

a. Financial assets

The company recognizes loss allowances using the Expected Credit Loss (ECL) model for the financial assets
which are not fair valued through profit or loss.

Loss allowance for trade receivables with no significant financing component is measured at an amount equal to
lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-
month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those
are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the
loss allowance at the reporting date to the amount that is required to be recognized as an impairment gain or
loss in statement of profit or loss.

b. Non-financial assets

Intangible assets and property, plant and equipment

Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or
changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of
impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use)
is determined on an individual asset basis unless the asset does not generate cash flows that are largely
independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to
which the asset belongs.

If such assets are considered to be impaired, the impairment to be recognized in the statement of profit and loss
is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount
of the asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the
estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised
recoverable amount, provided that this amount does not exceed the carrying amount that would have been
determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for
the asset in prior years.

o. Cash and cash equivalents

The Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits
with a maturity period of three months or less from the balance sheet date, which are subject to an insignificant
risk of changes in value.

p. Cash flow statement

The cash flow statement is prepared in accordance with the Indian Accounting Standard (Ind AS) - 7 “Statement
of Cash flows” using the indirect method for operating activities.