2. Significant accounting policies

2.1. Basis of preparation

The standalone financial statements of the Company have been prepared in accordance with Indian Accounting Standards
(Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and
presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule III (as
amended)), as applicable.

The standalone financial statements have been prepared on a historical cost basis, except for certain financial assets and
financial liabilities which have been measured at fair value (refer accounting policy regarding financial instruments)

The Standalone financial statements are presented in INR, and all values are rounded off to the nearest lakhs, except when
otherwise indicated.

2.2. Impact of COVID-19 Pandemic

The Company has considered the possible effects that may result from COVID-19 in the preparation of these standalone
financial statements including the recoverability of carrying amounts of financial and non-financial assets. In developing
the assumptions relating to the possible future uncertainties in the economic conditions because of COVID-19, the
Company has, at the date of approval of these standalone financial statements, used internal and external sources of
information which are relevant and expects that the carrying amount of these assets will be recovered. The impact of
COVID-19 on the Company's financial statements may differ from that estimated as at the date of approval of these
standalone financial statements. However, the impact assessment of COVID-19 is a continuing process, given the
uncertainties associated with its nature and duration. The Company will continue to monitor any material changes to
future economic conditions and the consequent impact on its business, if any and make any necessary adjustments in the
relevant financial period.

2.3. Summary of significant accounting policies

a) Current versus 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:

i. Expected to be realised or intended to be sold or consumed in normal operating cycle

ii. Held primarily for the purpose of trading

iii. Expected to be realised within twelve months after the reporting period, or

iv. 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:

i. It is expected to be settled in normal operating cycle

ii. It is held primarily for the purpose of trading

iii. It is due to be settled within twelve months after the reporting period, or

iv. There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting
period

The terms of the liability that could, at the option of the counterparty, result in its settlement by the issue of equity
instruments do not affect its classification.

All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

Based on the nature of products/activities, the Company has determined its operating cycle as twelve months for the above
purpose of classification as current and non-current.

b) Property, plant and equipment

Property, plant and equipment are stated at cost, net of accumulated depreciation and accumulated impairment losses, if
any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of
bringing the asset to its working condition for the intended use but excludes duties and taxes that are recoverable from
tax authorities. Any trade discounts and rebates are deducted in arriving at the purchase price.

Machinery spares which can be used only in connection with an item of fixed asset and whose use is expected to be
irregular are capitalised and depreciated over the useful life of the principal item of the relevant assets. Subsequent
expenditure relating to fixed assets is capitalised only if it is probable that future economic benefits associated with the
item will flow to the entity and the cost of the item can be measured reliably

Material replacement cost is capitalized provided (a) it is probable that future economic benefits associated with the item
will flow to the entity and (b) the cost of the item can be measured reliably. When replacement cost is eligible for
capitalization, the carrying amount of those parts that are replaced in derecognized. When significant parts of plant and
equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful
life.

Property, plant and equipment retired from active use and held for sale are stated at the lower of their net book value and
net realisable value and are disclosed separately in the Balance Sheet.

The Company identifies and determines cost of each component/part of the asset separately, if the component/part has a
cost which is significant to the total cost of the asset and has useful life that is materially different from that of the
remaining asset.

Capital Work-in-Progress: Projects under which assets are not ready for their intended use and other capital work-in¬
progress are carried at cost, comprising direct cost and attributable interest. Once it becomes available for use, their cost
is re-classified to appropriate caption and subjected to depreciation.

c) Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible
assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated
intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit
or loss in the period in which the expenditure is incurred.

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

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

Property, Plant and Equipment and Intangibles are depreciated / amortised based on their useful lives which are in line
with Schedule II of Companies Act, 2013

e) Leases

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

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

(i). Right-of-use assets

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

If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a
purchase option, depreciation is calculated using the estimated useful life of the asset.

The right-of-use assets are also subject to impairment. Refer to the accounting policies in section (f) Impairment of non¬
financial assets.

(ii) . Lease liabilities

At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed
payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts
expected to be paid under residual value guarantees. Variable lease payments that do not depend on an index or a rate are
recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that
triggers the payment occurs.

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

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

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

Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are
classified as operating leases. Rental income from operating lease is recognised on a straight-line basis over the term of
the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying
amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are
recognised as revenue in the period in which they are earned.

Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the
Company to the lessee. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of
return on the net investment outstanding in respect of the lease.

Sale and lease back arrangements

Profit or loss on sale and lease back arrangements resulting in operating leases is recognized immediately in case the
transaction is established at fair value. If the sale price is below fair value, any profit or loss is recognised immediately
except that, if the loss is compensated by future lease payments at below market price, it is deferred and amortised in
proportion to the lease payments over the period for which the asset is expected to be used. If the sale price is above fair
value, the excess over the fair value is deferred and amortized over the period for which the asset is expected to be used.
The sale and lease back arrangements entered in by the Company which result in operating lease wherever applicable are
as per the standard commercial terms prevalent in the industry. The Company does not have an option to buy back the
asset, nor does it have an unilateral option to renew or extend the lease after the expiry of the lease.

f) Impairment of non-financial assets

The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any
indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s
recoverable amount. 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.

The Company bases its impairment calculation on detailed budgets and forecast calculations which are prepared
separately for each of the Company’s CGUs to which the individual assets are allocated. These budgets and forecast
calculations are generally covering a period of five years. For longer periods, a long-term growth rate is calculated and
applied to project future cash flows after the fifth year. To estimate cash flow projections beyond periods covered by the
most recent budgets/forecasts, the Company extrapolates cash flow projections in the budget using a steady or declining
growth rate for subsequent years, unless an increasing rate can be justified. In any case, this growth rate does not exceed
the long-term average growth rate for the products, industries, or country or countries in which the entity operates, or for
the market in which the asset is used.

Impairment including impairment on inventories, are recognized in the statement of profit and loss. For assets excluding
goodwill, 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 statement of profit or loss unless the asset is carried at a revalued amount,
in which case, the reversal is treated as a revaluation increase. After impairment, depreciation is provided on the revised
carrying amount of the asset over its remaining useful life.

g) Inventories

Raw materials and stores & spare parts are valued at lower of weighted average cost and estimated net realisable value.
Cost includes freight, taxes and duties and is net of credit under GST, VAT, CENVAT scheme, where applicable.

Work-in-progress and finished goods are valued at lower of weighted average cost and estimated net realisable value.
Cost includes all direct costs and appropriate proportion of overheads to bring the goods to the present location and
condition.

Due allowance is made for slow/non-moving items. 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 used are expected to be sold at or above
cost.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion
and estimated costs necessary to make the sale.

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

h) Revenue from contracts with customers and Other income

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

However, Goods and Service tax (GST) are not received by the Company on its own account. Rather, it is tax collected
on value added to the commodity by the seller on behalf of the government. Accordingly, it is excluded from revenue.

The specific recognition Criteria described below must also be met before revenue is recognised.

i. Sale of products/ goods

Revenue from sale of goods is recognised at the point in time when control of the asset is transferred to the customers.
The normal credit term is in the range of 30 to 90 days upon delivery except for some customers who are on advance
payment terms. Revenue from sale of goods is measured at the fair value of the consideration received or receivable, net
of returns and allowances, trade discounts and volume rebates.

Generally, the Company receives short-term advances from its customers. Using the practical expedient in Ind AS 115,
the Company does not adjust the promised amount of consideration for the effects of a significant financing component

if it expects, at contract inception, that the period between the transfer of the promised good or service to the customer
and when the customer pays for that good or service will be one year or less.

ii. Service Income

Revenue from rendering of services is recognized with reference to the stage of completion determined based on estimate
of work performed, and when the outcome of the transaction can be estimated reliably.

Contract balances

Contract assets

A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company
performs by transferring goods or services to a customer before the customer pays consideration or before payment is
due, a contract asset is recognised for the earned consideration that is conditional.

Contract assets are subject to impairment assessment. Refer to accounting policies of financial assets in section (s)
Financial instruments - initial recognition and subsequent measurement.

Trade receivables

A receivable represents the Company’s right to an amount of consideration that is unconditional (i.e., only the passage of
time is required before payment of the consideration is due). Refer to accounting policies of financial assets in section (s)
Financial instruments - initial recognition and subsequent measurement.

Contract liabilities

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

Cost to obtain a contract

The Company pays sales commission to agents for obtaining the contract. The Company has elected to apply the optional
practical expedient for costs to obtain a contract which allows the Company to immediately expense sales commissions
because the amortisation period of the asset that the Company otherwise would have used is one year or less.

iii. Interest income

Revenue is recognised on a time proportion basis using the effective interest rate (EIR). Interest income is included in
finance income in the statement of profit and loss.

iv. Dividend income

Dividend income is accounted for when the right to receive it is established.

v. Rental Income

Rental income arising from operating leases is accounted for on a straight-line basis over the lease terms and is included
in revenue in the statement of profit and loss due to its operating nature.

i) Foreign currency transactions

The financial statements are presented in Indian Rupees, which is the functional currency of the Company.

Initial recognition: Transactions in foreign currencies entered into by the Company are accounted at the exchange rates
prevailing on the date the transaction first qualifies for the recognition.

Measurement as at Balance Sheet date: Foreign currency monetary items of the Company outstanding at the Balance
Sheet date are translated at the functional currency spot rates of exchange at the 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.

Treatment of Exchange Differences: Exchange differences arising on settlement/restatement of foreign currency
monetary assets and liabilities of the Company are recognised as income or expense in profit or loss.

j) Government Grants

Government grants are recognised where there is reasonable assurance that the grant will be received and all attached
conditions will be complied with.

When the grant or subsidy from the Government relates to an expense item, it is recognised as income on a systematic
basis in the statement of profit and loss over the period necessary to match them with the related costs, which they are
intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts
over the expected useful life of the related asset.

When the Company receives grants of non-monetary assets, the asset and the grant are recorded at fair value amounts and
released to profit or loss over the expected useful life in a pattern of consumption of the benefit of the underlying asset,
i.e. by equal annual instalments. When loans or similar assistance are provided by governments or related institutions,
with an interest rate below the current applicable market rate, the effect of this favourable interest is regarded as a
government grant. The loan or assistance is initially recognised and measured at fair value of the proceeds received. The
loan is subsequently measured as per the accounting policy applicable to financial liabilities.

Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving
the same.

k) Research and development

Revenue expenditure on research and development is expensed when incurred. Capital expenditure on research and
development is capitalised under Property, Plant and Equipment and depreciated in accordance with the entity’s
accounting policy on depreciation.

l) Retirement and other employee benefits

Retirement benefit in the form of Provident Fund, superannuation fund and employee state insurance scheme are
considered as defined contribution plans and are charged as an expense based on the amount of contribution required to
be made and when services are rendered by the employees. There are no other obligations other than the contribution
payable to the respective fund.

Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on Projected
Unit Credit method made at the end of each financial year.

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 recognised immediately in the balance sheet with a corresponding debit or credit

to retained earnings through OCI in the period in which they occur. Net interest is calculated by applying the discount
rate to the net defined benefit liability or asset. The Company recognises the following changes in the net defined benefit
obligation as an expense in the statement of profit and loss:

Ý Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine
settlements; and

Ý Net interest expense or income

Compensated absences, which are expected to occur within the next 12 months, is treated as short-term employee benefit.
The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of
the unused entitlement that has accumulated at the reporting date.

The Company treats compensated absences expected not to occur within twelve months, as long-term employee benefit
for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using
the projected unit credit method at the year-end. Actuarial gains/losses are immediately taken to the statement of profit
and loss and are not deferred. The obligations are presented as current liabilities in the balance sheet if the entity does not
have an unconditional right to defer the settlement for at least twelve months after the reporting date.

m) Taxes

Income tax expense comprises current and deferred taxes. Income tax expense is recognized in the statement of profit and
loss except to the extent it relates to items recognized directly in equity, in which case it is recognized in equity.

Current income tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at
the reporting date.

Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other
comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either
in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations
in which applicable tax regulations are subject to interpretation and considers whether it is probable that a taxation
authority will accept an uncertain tax treatment. The Company shall reflect the effect of uncertainty for each uncertain
tax treatment by using either most likely method or expected value method, depending on which method predicts better
resolution of the treatment.

Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and
any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can
be utilised.

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

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

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

Deferred tax assets and deferred tax liabilities are offset if and only if it has a legally enforceable right to set off current
tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation
authority.