3 Summary of Material accounting polices

A Foreign currency transactions and balances:

Initial Recongnition:

Foreign currency transactions are recorded by the Company
by applying to the foreign currency amount the exchange
rate between the functional currency and foreign currency
at the date of the transaction.

Conversion:

Foreign currency monetary items are reported at functional
currency spot rate of exchange at reporting date. 'Non¬
monetary items that are measured in terms of historical cost
in a foreign currency are translated using the exchange rates
at the dates of the initial transactions. Non-monetary items
measured at fair value in a foreign currency are translated
using the exchange rates at the date when the fair value is
determined. The gain or loss arising on translation of non¬
monetary items measured at fair value is treated in line with
the recognition of the gain or loss on the change in fair value
of the item (i.e., translation differences on items whose fair
value gain or loss is recognised in OCI or profit or loss are
also recognised in OCI or profit or loss, respectively).

Exchange differences

Exchange differences arising on the settlement of monetary items
or on reporting monetary items of Company at rates different
from those at which they were initially recorded during the year,
or reported in previous financial statements, are recognised as
income or as expenses in the year in which they arise.

B Fair value measurement:

The Company measures financial instruments, such
as derivatives 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 principal or the most advantageous market must be
accessible by the Company.

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 economic best 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 are available to measure fair value, maximising the use
of relevant observable inputs and minimising the use of
unobservable inputs. All assets and liabilities for which fair
value is measured or disclosed in the financial statements
are categorised 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 recognised in the financial
statements on a recurring basis, the Company determines
whether transfers have occurred between levels in the
hierarchy by re-assessing categorisation (based on the lowest
level input that is significant to the fair value measurement as
a whole) at the end of each reporting period.

In estimating the fair value of an asset or a liability, the
Company uses market observable data to the extent it
is available. Where level 1 inputs are not available, the
Company engages third party qualified valuers to perform
the valuation. Any change in the fair value of each asset and
liability is also compared with relevant external sources to
determine whether the change is reasonable.

For the purpose of fair value disclosures, the Company has
determined classes of assets and liabilities on the basis of
the nature, characteristics and risks of the asset or liability
and the level of the fair value hierarchy as explained above."

C 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.

Financial assets

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in
the case of financial assets not recorded at fair value through
profit or loss, transaction costs that are attributable to the
acquisition of the financial asset. However, trade receivables
that do not contain a significant financing component are
measured at transaction price.

Subsequent measurement

For purposes of subsequent measurement, a 'financial asset'
is measured at the amortised cost, if both the following
conditions are met:

(a) The asset is held within a business model whose
objective is to hold assets for collecting contractual
cash flows, and

(b) Contractual terms of the asset give rise on specified
dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal
amount outstanding.

After initial measurement, such financial assets are
subsequently measured at amortised cost using the
effective interest rate (EIR) method. Amortised cost is
calculated by taking into account any discount or premium
on acquisition and fees or costs that are an integral part of
the EIR. The EIR amortisation is included in finance income
in the profit or loss.

Derecognition

A financial asset (or, where applicable, a part of a financial
asset or part of a company of similar financial assets) is
primarily derecognised (i.e. removed from the Company's
balance sheet) when:

(a) the rights to receive cash flows from the asset
have expired, or

(b) the Company has transferred its rights to receive cash
flows from the asset or has assumed an obligation
to pay the received cash flows in full without
material delay to a third party under a 'pass-through'
arrangement; and either

(i) the Company has transferred substantially all the risks
and rewards of the asset, or

(ii) the Company has neither transferred nor retained
substantially all the risks and rewards of the asset, but
has transferred control of the asset

When the Company has transferred its rights to receive
cash flows from an asset or has entered into a pass-through
arrangement, it evaluates if and to what extent it has retained
the risks and rewards of ownership. When it has neither
transferred nor retained substantially all of the risks and rewards
of the asset, nor transferred control of the asset, the Company
continues to recognise the transferred asset to the extent of the
Company's continuing involvement. In that case, the Company
also recognises an associated liability. The transferred asset
and the associated liability are measured on a basis that reflects
the rights and obligations that the Company has retained.

Impairment of financial assets

In accordance with Ind AS 109, the Company applies
expected credit loss (ECL) model for measurement and
recognition of impairment loss on the following financial
assets and credit risk exposure:

(a) Financial assets that are debt instruments, and are
measured at amortised cost e.g., loans, deposits
and bank balances.

(b) Trade receivables that result from transactions that are
within the scope of Ind AS 115.

The Company follows 'simplified approach' for recognition
of impairment of trade receivables. The application of
simplified approach does not require the Company to track
changes in credit risk. Rather, it recognises impairment loss
allowance based on lifetime ECLs at each reporting date,
right from its initial recognition.

For recognition of impairment loss on other financial assets
and risk exposure, the Company determines that whether
there has been a significant increase in the credit risk since
initial recognition.

If credit risk has not increased significantly, 12-month ECL
is used to provide for impairment loss. However, if credit
risk has increased significantly, lifetime ECL is used. If, in a
subsequent period, credit quality of the instrument improves
such that there is no longer a significant increase in credit risk
since initial recognition, then the entity reverts to recognising
impairment loss allowance based on 12-month ECL.

Lifetime ECL are the expected credit losses resulting from all
possible default events over the expected life of a financial
instrument. The 12-month ECL is a portion of the lifetime
ECL which results from default events that are possible
within 12 months after the reporting date.

ECL is the difference between all contractual cash flows that
are due to the Company in accordance with the contract and
all the cash flows that the entity expects to receive (i.e., all cash
shortfalls), discounted at the original effective interest rate. When
estimating the cash flows, an entity is required to consider:

(i) All contractual terms of the financial instrument
(including prepayment, extension and similar options)
over the expected life of the financial instrument.
However, in rare cases when the expected life of the
financial instrument cannot be estimated reliably, then
the entity is required to use the remaining contractual
term of the financial instrument

(ii) Cash flows from the sale of collateral held or
other credit enhancements that are integral to the
contractual terms

As a practical expedient, the Company uses a provision
matrix to determine impairment loss allowance on portfolio
of its trade receivables. The provision matrix is based on its
historically observed default rates over the expected life of
the trade receivables and is adjusted for forward-looking
estimates. At every reporting date, the historical observed
default rates are updated and changes in the forward-looking
estimates are analysed. As per the matrix, receivables aged
upto 12 months are provided upto 75% and receivables
aged more than 12 months are provided upto 100%.

I nvestments in equity shares and preference shares of
subsidiaries and associates

The Company accounts for its investments in equity shares
of subsidiaries and associates at cost less accumulated
impairment losses (if any) in its financial statements.
Investment in preference shares of subsidiaries are also
accounted at cost less accumulated impairment losses if the
issuer classifies these instruments as equity instruments.

Investments in other entities

All other investments are measured at fair value, with value
changes recognised in statement of profit and loss, except
for those investments for which the Company has elected
to present the value changes in "other comprehensive
income". However, dividend on such equity investments
are recognised in statement of profit and loss when the
Company's right to receive payment is established.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as
financial liabilities at fair value through profit or loss ("FVTPL"),
loans and borrowings, payables, or as derivatives designated
as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognised initially at fair value
and, in the case of loans and borrowings and payables, net
of directly attributable transaction costs.

The Company's financial liabilities include trade and
other payables, loans and borrowings including bank
overdrafts, financial guarantee contracts and derivative
financial instruments.

Subsequent measurement

The measurement of financial liabilities depends on their
classification, as described below

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include
financial liabilities designated upon initial recognition as at
fair value through profit or loss.

Financial liabilities designated upon initial recognition at fair
value through profit or loss are designated as such at the initial
date of recognition, and only if the criteria in Ind AS 109 are
satisfied. For liabilities designated as FVTPL, fair value gains/

losses attributable to changes in own credit risk are recognized
in OCI. These gains/ loss are not subsequently transferred to
Statement of Profit or Loss. However, the Company may transfer
the cumulative gain or loss within equity. All other changes in
fair value of such liability are recognised in the Statement of
Profit or Loss. The Company has not designated any financial
liability as at fair value through profit and loss.

Loans and borrowings

After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortised cost
using the EIR method. Gains and losses are recognised in
profit or loss when the liabilities are derecognised as well as
through the EIR amortisation process.

Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that are
an integral part of the EIR. The EIR amortisation is included
as finance costs in the Statement of Profit and Loss

The Company enters into arrangements whereby banks and
financial institutions make direct payments to suppliers for
raw materials and project materials. The banks and financial
institutions are subsequently repaid by the Company at a
later date providing working capital timing benefits. These are
normally settled within twelve months. The economic substance
of the transaction, considering the extended credit terms offered
by banks or financial institutions, the arrangement is determined
to be financing in nature and these are recognised as current
borrowings. Interest expense on these are recognised in the
finance cost. Payments made by banks and financial institutions
to the suppliers is treated as a borrowings and settlement of dues
to suppliers by the Company is treated as an operating cash
outflow reflecting the substance of the payment.

Derecognition

A financial liability is derecognised when the obligation
under the liability is discharged or cancelled or expires.
An exchange between with a lender of debt instruments
with substantially different terms is accounted for as an
extinguishment of the original financial liability and the
recognition of a new financial liability.

Similarly, a substantial modification of the terms of an existing
financial liability is accounted for as an extinguishment
of the original financial liability and the recognition of a
new financial liability. The difference between the carrying
amount of the financial liability derecognised and the
consideration paid and payable is recognised in the
standalone statement of profit and loss.

Reclassification of financial assets

The Company determines classification of financial assets
and liabilities on initial recognition. After initial recognition,
no reclassification is made for financial assets which are
equity instruments and financial liabilities. For financial assets
which are debt instruments, a reclassification is made only if
there is a change in the business model for managing those
assets. Changes to the business model are expected to be
infrequent. The Company's senior management determines
change in the business model as a result of external or internal
changes which are significant to the Company's operations.

Such changes are evident to external parties. A change in the
business model occurs when the Company either begins or
ceases to perform an activity that is significant to its operations.
If the Company reclassifies financial assets, it applies the
reclassification prospectively from the reclassification date
which is the first day of the immediately next reporting period
following the change in business model. The Company does
not restate any previously recognised gains, losses (including
impairment gains or losses) or interest.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net
amount is reported in the Balance Sheet if there is a currently
enforceable legal right to offset the recognised amounts
and there is an intention to settle on a net basis, to realise the
assets and settle the liabilities simultaneously.

Derivative instruments

The Company uses derivative financial instruments, such
as forward currency contracts to hedge its foreign currency
risks. Such derivative financial instruments are initially
recognised at fair value on the date on which a derivative
contract is entered into and are subsequently re-measured
at fair value. Derivatives are carried as financial assets when
the fair value is positive and as financial liabilities when
the fair value is negative. Any gains or losses arising from
changes in the fair value of derivatives are taken directly to
standalone statement of profit or loss.

Changes in the fair value of derivative contracts that economically
hedge monetary assets and liabilities in foreign currencies, and
for which no hedge accounting is applied, are recognised in the
standalone statement of profit and loss. The changes in fair value
of such derivative contracts, as well as the foreign exchange
gains and losses relating to the monetary items, are recognised
in the standalone statement of profit and loss.

D Property, plant and equipment

i) Recognition and measurement

Items of property, plant and equipment and investment
property are measured at cost less accumulated
depreciation and accumulated impairment losses if any,
except for freehold land which is carried at historical cost.

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 directly attributable cost of
bringing the item to its working condition for its intended
use and estimated costs of dismantling and removing the
item and restoring the site on which it is located.

The cost of a self-constructed item of property, plant
and equipment comprises the cost of materials and
direct labour, any other costs directly attributable to
bringing the item to working condition for its intended
use, and estimated 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 recognised in the statement of
profit and loss.

Advances paid towards the acquisition of property,
plant and equipment, outstanding at each balance
sheet date are shown under other non-current assets.
The cost of property, plant and equipment not ready
for its intended use at each balance sheet date are
disclosed as capital work-in-progress.

ii) Subsequent expenditure

Subsequent expenditure relating to property, plant
and equipment is capitalized only when it is probable
that future economic benefits associated with the
expenditure will flow to the Company and the cost of
the item can be measured reliably. All other expenses
on existing fixed assets, including day-to-day repair and
maintenance expenditure and cost of replacing parts, are
charged to the standalone statement of profit and loss
for the year during which such expenses are incurred.

An item of property, plant and equipment is
derecognised upon disposal or when no future
economic benefits are expected to arise from the
continued use of the asset. The gain or loss arising on
the disposal or retirement of an asset is determined as
the difference between the net disposal proceeds and
the carrying amount of the asset and is recognised in
the statement of profit and loss.

iii) Depreciation

Depreciation on property, plant and equipment is at
rates calculated to write off the cost, less estimated
residual value, of each asset on a straight-line method
over the useful lives of the assets estimated by the
Management. Depreciation for assets purchased / sold
during a period is proportionately charged. Leasehold
improvements are amortized over the lease term or
useful lives of assets, whichever is lower. The useful life
of the items of property, plant and equipment estimated
by the management for the current and comparative
year are in line with the useful life as per Schedule II of
the Companies Act, 2013, except in respect of following
categories of asset in whose case the life of certain
assets has been assessed based on technical advice
taking into account the nature of the asset, the estimated
usage of the asset, the operating condition of the asset,
past history of replacement, maintenance support etc.

E Investment Property

Investment property, which is property held to earn rentals
and/or for capital appreciation, is measured initially at
cost, including transaction costs. Subsequent to initial
recognition, investment property is stated at cost less
accumulated depreciation and accumulated impairment
losses in accordance with Ind AS 16's requirements for cost
model. Depreciation is recognised so as to write-off the cost
less residual value over the useful life of 30 years, using the
straight-line method.

An investment property is derecognised upon disposal or
when the investment property is permanently withdrawn
from use and no future economic benefits are expected from
the disposal. Any gain or loss arising on derecognition of
the property (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is
included in profit or loss in the period in which the property
is derecognised.

F Intangible assets

i) Recognition and measurement

Intangible assets acquired separately are measured
on initial recognition at cost. The cost of intangible
assets acquired in a business combination is their
fair value at the date of acquisition. Following initial
recognition, intangible assets are carried at cost less
any accumulated amortisation and accumulated
impairment losses. Internally generated intangibles
are not capitalised and the related expenditure is
reflected in profit or loss in the period in which the
expenditure is incurred.

Intangible assets with finite lives are amortised over the
useful economic life in line with Companies Act, 2013.
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
standalone statement of profit and loss.

ii) Derecognition of intangible assets

Gains or losses arising from derecognition of an
intangible asset are measured as the difference
between the net disposal proceeds and the carrying
amount of the asset and are recognised in the
standalone statement of profit or loss when the asset
is derecognised.

G Inventories

Inventories are valued at lower of cost and net realizable
value. Raw 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. Cost is determined
based on weighted average method. Cost includes
cost of purchase and other costs incurred in bringing
the inventories to their present location and condition.
Finished goods includes cost of direct materials and labour
and a proportion of manufacturing overheads based on the
normal operating capacity, but excluding borrowing costs.

H Impairment of non-financial assets

The Company's non-financial assets, other than inventories
and deferred tax assets, are reviewed at each reporting date
to determine whether there is any indication of impairment.
If any such indication exists, then the asset's recoverable
amount is estimated to determine the extent of impairment
loss, if any. An asset's recoverable amount is the higher of
an asset's or cash-generating unit's (CGU) fair value less
costs of disposal and its value in use. Recoverable amount is
determined for an individual asset, unless the asset does not
generate cash inflows that are largely independent of those
from other assets or groups of assets. When the carrying
amount of an asset or CGU exceeds its recoverable amount,
the asset is considered impaired and is written down to its
recoverable amount.

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. In
determining fair value less costs of disposal, recent market
transactions are taken into account. If no such transactions
can be identified, an appropriate valuation model is used.
These calculations are corroborated by valuation multiples,
quoted share prices for publicly traded companies or other
available fair value indicators.

Impairment losses, including impairment on inventories, are
recognised in the standalone statement of profit and loss.
An assessment is made at each reporting date to determine
whether there is an indication that previously recognised
impairment losses no longer exist or have decreased. If
such indication exists, the Company estimates the asset's
or CGU's recoverable amount. A previously recognised
impairment loss is reversed only if there has been a change in
the assumptions used to determine the asset's recoverable
amount since the last impairment loss was recognised. The
reversal is limited so that the carrying amount of the asset
does not exceed its recoverable amount, nor exceed the
carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognised for
the asset in prior years. Such reversal is recognised in the
standalone statement of profit and loss unless the asset is
carried at a revalued amount, in which case, the reversal is
treated as a revaluation increase.

I Employee benefits

i) Short term employee benefits

Employee benefits payable wholly within twelve
months of receiving services are classified as short¬
term employee benefits. These benefits include salary
and wages, bonus and ex-gratia. The undiscounted
amount of short-term employee benefits to be paid

in exchange for employee services is recognized
as an expense as the related service is rendered
by the employees.

ii) Defined contribution plans

A defined contribution plan is post-employment
benefit plan under which an entity pays specified
contributions to separate entity and has no obligation
to pay any further amounts. The Company makes
specified obligations towards employee provident
fund and employee state insurance to Government
administered provident fund scheme and ESI scheme
which is a defined contribution plan. The Company's
contributions are recognized as an expense in the
standalone statement of profit and loss during
the period in which the employee renders the
related service.

iii) Defined benefit plans

The Company's gratuity benefit scheme is a defined
benefit plan. The Company's net obligation in respect
of a defined benefit plan is calculated by estimating the
amount of future benefit that employees have earned
and returned for services in the current and prior years;
that benefit is discounted to determine its present
value. The calculation of Company's obligation under
the plan is performed periodically by a qualified
actuary using the projected unit credit method.

The discount rates used for determining the present
value of the obligation under defined benefit plan are
based on the market yields on Government Securities
as at the Balance Sheet date. The Company's
gratuity scheme is administered by Life Insurance
Corporation of India.

When the benefits of the plan are changed or when
a plan is curtailed, the resulting change in the benefit
that related to past service ('past service cost' or 'past
service gain') or the gain or loss on curtailment is
recognized immediately in standalone statement of
profit or loss. The Company recognizes gains or losses
on the settlement of a defined benefit plan when the
settlement occurs.

Remeasurements, 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 recognised immediately in
the Balance Sheet with a corresponding debit or credit
to retained earnings through Other comprehensive
income ("OCI") in the period in which they occur.
Remeasurements are not reclassified to standalone
statement of profit and loss in subsequent years.

iv) Compensated absences

The employees can carry-forward a portion of the
unutilized accrued compensated absences and utilize
in future service years or receive cash compensation
on termination of employment. The Company records

an obligation for such compensated absences in the
year in which the employee renders the services that
increase this entitlement. The obligation is measured
on the basis of independent actuarial valuation using
the projected unit credit method.