MATERIAL ACCOUNTING POLICIES
a Basis of Measurement

The Financial Statements of the company are consistently
prepared and presented under historical cost convention on
an accrued basis in accordance with IND AS except for certain
Financial Assets and Financial Liabilities that are measured at
fair value.

The financial statements are presented in Indian Rupees ('INR'),
which is the Company's functional and presentation currency
and all amounts are rounded to the nearest Lacs (except
otherwise indicated).

b Property, plant and equipment

(i) Property, plant and equipment situated in India are carried at
historical cost of acquisition, construction or manufacturing
cost, as the case may be less accumulated depreciation and
amortization. Freehold land is carried at cost of acquisition.
Cost represents all expenses directly attributable to bringing
the asset to its working condition capable of operating in the
manner intended.

(ii) Depreciation

Depreciation on Property, plant and equipment is provided
on Straight Line Method over their useful lives and in the
manner specified in Schedule II of the Companies Act, 2013
except in respect of certain categories of assets where the
useful life of the assets has been assessed based on a
technical evaluation. The estimated useful life and residual
values are reviewed at the end of each reporting period with
the effect of any change in estimate accounted for on a
prospective basis.

The company believes that the technically evaluated useful
lives of Automated Plant and Equipment different from
Schedule-II of companies Act 2013 best represents the
Period over which assets are expected to be used.

(iii) Component Accounting

When significant parts of property, plant and equipment
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. Likewise, when a major inspection is performed,
its cost is recognized in the carrying amount of the plant
and equipment as a replacement, if the recognition criteria
are satisfied. All other repair and maintenance costs
are recognized in the Statement of Profit and Loss as
incurred. The present value of the expected cost for the
decommissioning of the asset after its use is included in the
cost of the respective asset if the recognition criteria for a
provision are met.

(iv) Stores and Spares which meets the definition of Property,
plant and equipment and satisfying recognition criteria of
Ind AS - 16 are capitalized as Property, plant and equipment
and until that in capital work in progress.

(v) Lease Hold Assets are amortized over the period of lease.

(vi) Expenditure during construction/erection period is included
under Capital Work-in-Progress and is allocated to the
respective property plant and equipment on completion of
construction/ erection.

(vii) Property, plant and equipment are eliminated from financial
statement, either on disposal or when retired from active use.
Losses arising in the case of retirement of Property, plant
and equipment and gains or losses arising from disposal of
property, plant and equipment are recognized in Statement
of Profit and Loss in the year of occurrence.

(viii) The assets residual values, useful lives and methods of
depreciation are reviewed at each financial year end and
adjusted prospectively, if appropriate.

(ix) Capital work in progress includes cost of Property, Plant and
Equipment which are not ready for their intended use.

c Intangible assets:

(i) Intangible assets are recognized when it is probable that the
future economic benefits that are attributable to the assets
will flow to the Company and the cost of the asset can be
measured reliably. Intangible Assets are stated at cost which
includes any directly attributable expenditure on making
the asset ready for its intended use. Intangible assets with
finite useful lives are capitalized at cost and amortized on
a straight-line basis. In respect of patents and trademarks,
useful life has been estimated by the management as 10
years unless otherwise stated in the relevant documents and
in respect of SAP softwares as 10 year and other software
as 3 years.

(ii) Software: Internally generated intangibles, excluding
capitalized development costs, are not capitalized and the
related expenditure is reflected in profit and loss in the
period in which the expenditure is incurred.

The amortization period and the amortization 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 amortization period or method,
as appropriate, and are treated as changes in accounting
estimates. Intangible assets with indefinite useful lives (like

goodwill, brands), if any, are not amortized, but are tested
for impairment annually, either individually or at the cash¬
generating unit level. The assessment of indefinite useful
life is reviewed annually to determine whether indefinite life
continues to be supportable. If not, the change in useful life
from indefinite to finite life is made on prospective basis.

d Investment properties:

Investment properties are properties held either to earn rental
income or capital appreciation or for both but not for sale in the
ordinary course of business, use in production or supply of goods
or services or for other administrative purposes. Investment
properties are initially measured at cost including transaction
cost. Subsequent to initial recognition, investment properties
are stated at cost less accumulated depreciation or impairment
loss. Depreciation on investment properties are provided over
the estimated useful life and is not different than useful life as
mentioned in schedule II of the Companies Act 2013.

Investment properties are derecognized either when they have
been disposed off or when they are permanently withdrawn
from use and no future economic benefit is expected from their
disposal. The difference between the net disposal proceeds and
the carrying amount of the assets is recognized in profit or loss
in the period of derecognized.

Though the company measures investment properties using
cost based measurement, the fair value of investment properties
is disclosed in the notes. Fair value of investment properties is
based on the valuation by a registered valuer as defined in Rule
2 of Companies (registered valuer and Valuation) Rules, 2017.

e Research and development cost:

Research Cost:

Revenue expenditure on research is expensed under the
respective heads of account in the period in which it is incurred
and is grouped as "Research and development expenses”.

Development Cost:

Development expenditure on new product is capitalized as
intangible asset, if technical and commercial feasibility as per
Ind AS 38 is demonstrated, else charged to statement of profit
and loss.

f Inventories:

Raw materials, Packing materials, Stores and Spares are valued
at lower of cost (on weighted moving average cost basis) and
net realizable value.

Stock in process is valued at lower of cost (on weighted moving
average cost basis) and net realizable value.

Finished goods are valued at lower of cost and net realizable
value. Cost for this purpose includes direct material, direct
labor, other variable cost and manufacturing overhead based on
normal operating capacity and depreciation.

Stock in Trade is valued at lower of cost and net realizable value

Scrap is valued at estimated realizable value.

g Financial instruments:

A financial instrument is any contract that at the same time gives
rise to a financial asset of one entity and a financial liability or
equity instrument of another entity. Financial instruments are
recognized as soon as the company becomes a contracting
party to the financial instrument. In cases where trade date and

settlement date do not coincide, for non-derivative financial
instruments the settlement date is used for initial recognition
or derecognition, while for derivatives the trade date is used.
Financial instruments stated as financial assets or financial
liabilities are generally not offset; they are only offset when a
legal right to set-off exists at that time and settlement on a net
basis is intended.

h Financial assets:

Financial assets include Investments, trade receivables, cash
and cash equivalents, derivative financial assets, loans and
also the equity / debt instruments held. Initially all financial
assets are recognized at amortized cost or fair value through
Other Comprehensive Income or fair value through Statement
of Profit or Loss, depending on its business model for those
financial assets and their contractual cash flow characteristics.
Subsequently, based on initial recognition/ classification, where
assets are measured at fair value, gain and losses are either
recognized entirely in the statement of profit and loss (i.e. fair
value through profit or loss), or recognized in other comprehensive
income (i.e. fair value through other comprehensive income).

(i) Investment in equity shares:

Investment in equity securities are initially measured at fair
value. Any subsequent fair value gain or loss for investments
held for investment is recognized through Statement of
profit and loss.

(ii) Investment in associates, joint venture and subsidiaries:
The Company's investment in subsidiaries and associates,
joint venture are at carried at cost except where impairment
loss recognized.

(iii) Trade receivables:

Trade receivables are recognized initially at fair value and
subsequently measured at amortized cost less credit loss/
impairment allowances/ provision for doubtful debts.

(iv) Loans & other financial assets:

Loans and other financial assets are financial assets with
fixed or determinable payments that are not quoted in
an active market. Such assets are recognized initially at
fair value plus any directly attributable transaction costs.
Subsequent to initial recognition, loans and other financial
assets are measured at amortized cost using the effective
interest method, less any impairment losses.

i Impairment of Financial assets:

In accordance with Ind AS 109, the company uses expected
credit loss (ECL) model for evaluating, measurement and
recognition of impairment loss.

j Financial liabilities:

(i) Classification:

The Company classifies all financial liabilities as
subsequently measured at amortized cost, except for
financial liabilities at fair value through profit and loss. Such
liabilities, including derivatives that are liabilities, shall be
subsequently measured at fair value.

(ii) Initial recognition and measurement:

All financial liabilities are recognized initially at fair value, in
the case of loans, borrowings and payables, net of directly
attributable transaction costs. Financial liabilities include
trade and other payables, loans and borrowings including
bank overdrafts and derivative financial instruments.

(iii) Subsequent measurement:

All financial liabilities are re-measured at fair value through
statement of profit and loss include financial liabilities held
for trading and financial liabilities designated upon initial
recognition as at fair value through statement of profit and
loss. Financial liabilities are classified as held for trading if
they are incurred for the purpose of repurchasing in the near
term.

(iv) Loans and borrowings:

Interest bearing loans and borrowings are subsequently
measured at amortized cost using effective interest rate
(EIR) method. Gains and losses are recognized in Statement
of Profit and Loss when the liabilities are derecognized
as well as through EIR amortization process. The EIR
amortization is included as finance cost in the Statement of
Profit and Loss.

(v) De-recognition of financial liabilities:

A financial liability is derecognized when the obligation under
the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another from the
same lender on substantially different terms, or the terms
of an existing liability are substantially modified, such an
exchange or modification is treated as the de-recognition of
the original liability and the recognition of a new liability. The
difference in the respective carrying amounts is recognized
in the Statement of Profit and Loss.

(vi) Derivative financial instruments:

The Company uses derivative financial instruments such
as forward currency contracts and options to hedge its
foreign currency risks. Such derivative financial instruments
are initially recognized at fair value on the date on which a
derivative contract is entered into and are subsequently re¬
measured at fair value. The gain or loss in the fair values is
taken to Statement of Profit and Loss at the end of every
period. Profit or loss on cancellations/renewals of forward
contracts and options are recognized as income or expense
during the period.

k Impairment of non-financial assets:

At each reporting date, the company assesses whether there
is any indication that a non-financial asset may be impaired. If
any such indication exists, the recoverable amount of the non¬
financial asset is estimated in order to determine the extent of
the impairment loss, if any. Recoverable amount is determined:

• In the case of an individual asset, at the higher of the Fair
Value less cost to sell and the value in use,

• In the case of cash generating unit (a group of assets that
generates identified, independent cash flows) at the higher
of cash generating unit's fair value less cost of disposal and
the value in use.

Where it is not possible to estimate the recoverable amount of
an individual non-financial asset, the company estimates the
recoverable amount of the smallest cash generating unit to
which the non-financial asset belongs. The recoverable amount
is the higher of an asset's or cash generating unit's fair value less
costs of disposal and its value in use. If the recoverable amount
of a non-financial asset or cash generating unit is estimated
to be less than its carrying amount, the carrying amount of
the non-financial asset or cash generating unit is reduced to
its recoverable amount. Impairment losses are recognized
immediately in the statement of Profit and Loss. Where an
impairment loss subsequently reverses, the carrying amount of

the non-financial asset or cash generating unit is increased to
the revised estimate of its recoverable amount. However, this
increased amount cannot exceed the carrying amount that
would have been determined had no impairment loss been
recognized for that non-financial asset or cash generating unit
in prior periods. A reversal of an impairment loss is recognized
immediately in the statement of Profit and Loss.

l Foreign exchange transactions:

(i) Functional and presentation Currency:

The functional and reporting currency of company is INR.

(ii) Transaction and Balances:

Foreign exchange transactions are accounted for at
the exchange rate prevailing on the date of transaction.
All monetary foreign currency assets and liabilities are
converted at the exchange rate prevailing at reporting date.
All exchange gain or loss arising on translation of monetary
items are dealt with in statement of profit and loss.

m Revenue recognition:

The company derives revenue from sale of manufactured goods
and traded goods. In accordance with Ind AS 115, the company
recognizes revenue from sale of products and services at a time
when performance obligation is satisfied and upon transfer
of control of promised products or services to customer in an
amount that reflects the consideration the company expects to
receive in exchange for their products or services. The company
disaggregates the revenue based on nature of products/
Geography.

• Export incentive:

Export incentives are accounted for on export of goods, if
the entitlements can be estimated with reasonable accuracy
and conditions precedent to claim are reasonably expected
to be fulfilled.

• Dividend income:

Dividend income is accounted for when the right to
receive the same is established, which is generally when
shareholders approve the dividend.

• Interest income:

For all Financial instruments measured at amortized cost,
interest income is recorded using effective interest rate (EIR),
which is the rate that exactly discounts the estimated future
cash payments or receipts through the expected life of the
financial instrument or a shorter period, where appropriate,
to the net carrying amount of the financial asset. Interest
income is included in other income in statement of profit and
loss.

• Rental income:

Rental income on investment properties and on operating
lease are accounted for on accrual basis.

n Government Grant

• Grants from the government are recognized at their fair value
where there is a reasonable assurance that the grant will be
received and the Company has complied with all attached
conditions.

• Government grants relating to income are deferred and
recognized in the profit or loss over the period necessary
to match them with the costs that they are intended to
compensate and presented within other income.

• Government grants relating to the purchase of property,
plant and equipment are included in non-current liabilities
as deferred income and are credited to profit or loss on a
straight-line basis over the expected lives of the related
assets and presented within other income.

• In respect of Property, Plant and Equipment purchased
under Export Promotion Capital Goods (EPCG) scheme of
Government of India, exemption of custom duty under the
scheme is treated as, Government Grant and is recognized
in Statement of Profit and Loss on fulfilment of associated
export obligations.

o Employees Benefits:

i) Short term employee Benefit:

All employees' benefits payable wholly within twelve months
rendering services are classified as short term employee
benefits. Benefits such as salaries, wages, short-term
compensated absences, performance incentives etc., and
the expected cost of bonus, ex-gratia are recognized during
the period in which the employee renders related service.

ii) Defined Contribution Plan:

Contributions to the Employees' Provident Fund and
Employee's State Insurance are recognized as Defined
Contribution Plan and charged as expenses in the year in
which the employees render the services.

iii) Defined Benefit Plan:

The Leave Encashment (Unfunded) and Gratuity (Funded)
are defined benefit plans. The cost of providing benefits
under the defined benefit plan is determined using the
projected unit credit method with actuarial valuations being
carried out at each balance sheet date, which recognizes
each period of service as giving rise to additional unit
of employee benefit entitlement and measure each unit
separately to build up the final obligation. 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 the plan
assets (excluding amounts included in net interest on the
net defined benefit liability), are recognized immediately in
the balance sheet with a corresponding debit or credit to
retained earnings through other comprehensive income in
the period in which they occur. Re-measurements are not
classified to the statement of profit and loss in subsequent
periods. Past Service cost is recognized in the statement of
profit and loss in the period of plan amendment. Net Interest
is calculated by applying the discount rate to the net defined
benefit liability or asset.

The Company recognizes the following changes in the net
defined benefit obligations under employee benefit expenses
in the statement of profit and loss.

• Service costs comprising current service costs, gains
and losses on curtailments and non-routine Settlements.

• Net interest income or expense.

iv) Long term Employees Benefits:

Compensated absences which are not expected to occur
within twelve months after the end of the period in which the
employee renders the related services are recognized as a
liability at the present value of the defined benefit obligation
at the balance sheet date.

v) Termination benefits:

Termination benefits are recognized as an expense in the
period in which they are incurred.

The Company shall recognize a liability and expense for
termination benefits at the earlier of the following dates:

(a) when the entity can no longer withdraw the offer of those
benefits; and

(b) when the entity recognizes costs for a restructuring
that is within the scope of Ind AS 37 and involves the
payment of termination benefits.

p Share based payments:

Equity settled share based payments to employees are measured
at fair value of equity instrument at the grant date. The fair value
determined at grant date is expensed on straight line basis over
the vesting period based on the company's estimate of equity
instrument that will eventually vest with corresponding increase
in equity. At the end of each reporting period, the company
revise its estimate of number of equity instruments expected to
vest. The impact of revision of the original estimates, if any, is
recognized in statement of profits and loss such that cumulative
expense reflect the revised estimate with a corresponding
adjustment to Share based Payments Reserve. The dilutive
effect of outstanding option is reflected as additional dilution in
computation of diluted earning per share.

q Borrowing costs:

(i) Borrowing costs that are specifically attributable to the
acquisition, construction, or production of a qualifying
asset are capitalized as a part of the cost of such asset till
such time the asset is ready for its intended use or sale.
A qualifying asset is an asset that necessarily requires a
substantial period of time (generally over twelve months) to
get ready for its intended use or sale.

(ii) For general borrowing used for the purpose of obtaining a
qualifying asset, the amount of borrowing costs eligible for
capitalization is determined by applying a capitalization rate
to the expenditures on that asset. The capitalization rate is
the weighted average of the borrowing costs applicable to
the borrowings of the Company that are outstanding during
the period, other than borrowings made specifically for the
purpose of obtaining a qualifying asset. The amount of
borrowing costs capitalized during a period does not exceed
the amount of borrowing cost incurred during that period.

(iii) All other borrowing costs are recognized as expense in the
period in which they are incurred.

r Leases:

Company as a Lessee:

In accordance with IND AS 116, the Company recognizes right of
use assets representing its right to use the underlying asset for
the lease term at the lease commencement date. The cost of right
of use asset measured at inception shall comprise of the amount
of the initial measurement of the lease liability adjusted for any
lease payment made at or before commencement date less any
lease incentive received plus any initial direct cost incurred and
an estimate of cost to be incurred by lessee in dismantling and
removing underlying asset or restoring the underlying asset or
site on which it is located. The right of use asset is subsequently
measured at cost less accumulated depreciation, accumulated

impairment losses, if any, and adjusted for any remeasurement
of 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. The
estimated useful lives of right of use assets are determined on
the same basis as those of property, plant and equipment. Right
of use assets are tested for impairment whenever there is any
indication that there carrying amounts may not be recoverable.
Impairment loss, if any, is recognized in statement of profit and
loss.

The Company measures the lease liability at the present value of
the lease payments that are not paid at the commencement date
of 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.

The lease liability is subsequently remeasured by increasing the
carrying amount to reflect interest on lease liability, reducing
the carrying amount to reflect the lease payments made and
remeasuring the carrying amount to reflect any reassessment or
lease modification or to reflect revised- in-substance fixed lease
payments, the company recognizes amount of remeasurement
of lease liability due to modification as an adjustment to right
of use assets and statement of profit and loss depending upon
the nature of modification. Where the carrying amount of right
of use assets is reduced to zero and there is further reduction
in measurement of lease liability, the Company recognizes any
remaining amount of the remeasurement in statement of profit
and loss.

The Company has elected not to apply the requirements of IND
AS 116 to short term leases of all assets that have a lease term
of twelve month or less and leases for which the underlying
asset is of low value. The lease payments associated with these
leases are recognized as an expense on straight line basis over
lease term.

Company as a Lessor:

At an inception date, leases are classified as financial lease or
operating lease. Leases where the company does not transfer
substantially all risk and reward incidental to the ownership of
the asset are classified as operating lease. Lease rental under
operating lease are recognised as income in profit and loss
account on straight line basis.

s Taxes on income:

(i) Current Tax:

1. Tax on income for the current period is determined on
the basis of estimated taxable income and tax credits
computed in accordance with the provisions of the
Income-Tax Act 1961 and based on the expected
outcome of assessments / appeals.

2. Current income tax relating to items recognized directly
in equity is recognized in equity and not in the statement
of profit and loss.

Management periodically evaluates positions taken
in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation
and establishes provisions where appropriate.

(ii) Deferred tax:

1. Deferred tax is accounted for using the balance sheet
liability method in respect of temporary differences
between the carrying amount of assets and liabilities
in the financial statements and the corresponding tax
basis used in the computation of taxable profit as well
as for unused tax losses or credits. In principle, deferred
tax liabilities are recognized for all taxable temporary
differences and deferred tax assets are recognized
to the extent that it is probable that taxable profits
will be available against which deductible temporary
differences can be utilized. Deferred tax assets and
liabilities are also recognized on temporary differences
arising from business combinations except to the extent
they arise from goodwill that is not taken into account
for tax purposes.

2. Deferred taxes are calculated at the enacted or
substantially enacted tax rates that are expected to
apply when the asset or liability is settled.

3. Deferred tax is charged or credited to the income
statement, except when it relates to items credited or
charged directly to other comprehensive income in
equity, in which case the corresponding deferred tax is
also recognized directly in equity.