MATERIAL ACCOUNTING

POLICIES

Basis of Preparation

The Financial Statements of the Company have been prepared to comply with the Indian
Accounting standards ('Ind AS'), including the Rules notified under the relevant provisions of the
Companies Act, 2013, (as amended from time to time) and Presentation and disclosure
requirements of Division II of schedule III to the Companies Act, 2013, (Ind AS Compliant Schedule
III) as amended from time to time. The Company follows indirect method prescribed in Ind AS 7 -
Statement of Cash Flows for presentation of its cash flows.

The Company's Financial Statements are presented in Indian Rupees, which is also its functional
currency and all values are rounded to the nearest lakhs (00,000), except when otherwise indicated.

Use of estimates

The preparation of standalone financial statements in conformity with the recognition and
measurement principles of Ind AS requires management to make estimates, judgements and
assumptions that affect the reported balances of assets and liabilities, disclosures of contingent
liabilities and income and expenses and accompanying disclosures as at the date of standalone
financial statements and the reported amounts of income and expenses for the periods presented.
Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimates are revised and future periods are
affected.

The Company uses the following critical accounting estimates in preparation of its standalone
financial statements

Useful lives of property, plant and

(i) equipment

Fair value measurement of financial

(ii) instruments

Provision for income tax and deferred tax

(iii) assets

(iv) Provisions and contingent liabilities
Property, Plant and Equipment

Property, plant and equipment (including furniture, fixtures, vehicles, etc.) held for use in the
production or supply of goods or services, or for administrative purposes, are stated in the balance
sheet at cost less accumulated depreciation and accumulated impairment losses. Cost of acquisition
is inclusive of freight, duties, taxes and other incidental expenses. When significant parts of plant
and equipment are required to be replaced at intervals, the Company depreciates them separately
based on their specific useful lives. Freehold land is not depreciated.

Depreciation on Property, Plant and Equipment is provided using g straight line method.
Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the
Companies Act, 2013 except in respect of the following assets, where useful life is as under:

The books of accounts of the company doesn't carry any Property, Plant and Equipment during the
reporting period, hence this accounting standard does not have financial impact on the financial
statements of the company.

Leases

The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS
116. Identification of a lease requires significant judgement. The Company uses significant
judgement in assessing the lease term (including anticipated renewals) and the applicable discount
rate.

Initially the right of use assets measured at cost which comprises initial cost of the lease liability
adjusted for any lease payments made at or before the commencement date plus any initial direct
costs incurred. Subsequently measured at cost less any accumulated depreciation/ amortisation,
accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability.
The right-of-use assets is depreciated/ amortised using the straight-line method from the
commencement date over the shorter of lease term or useful life of right-of-use asset.

The books of accounts of the company doesn't have any leased assets during the reporting period,
hence this accounting standard does not have financial impact on the financial statements of the
company.

Financial instruments

A financial instrument is any contract that gives rise to asset of one entity and a financial liability
or equity instrument of another entity. Financial instruments also include derivative contracts such
as foreign currency forward contracts, cross currency interest rate swaps, interest rate swaps and
currency options; and embedded derivatives in the host contract.

Financial Assets

Initial recognition and measurement

All financial assets and liabilities are initially recognized at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities, which are
not at fair value through profit or loss, are adjusted to the fair value on initial recognition.

Subse quent Me asurement

a) Financial assets measured at amortized cost (AC): A financial asset is 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.

b) Financial assets at fair value through other comprehensive income (FVTOCI): A financial asset
is measured at FVTOCI 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 p rincipal amount outstanding.

c) Financial assets measured at fair value through profit or loss (FVTPL): A Financial asset which
is not classified in any of above categories are measured at FVTPL e.g., investments in mutual funds.
Financial assets are reclassified subsequent to their recognition, if the Company changes its business
model for managing those financial assets. Changes in business model are made and applied
prospectively from the reclassification date which is the first day of immediately next reporting
period following the changes in business model in accordance with principles laid down under ind
AS 109 -Financial Instruments.

Derecognition of financial assets

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:

- The rights to receive cash flows from the asset have expired, or

- 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 (a) the company has transferred substantially
all the risks and rewards of the asset, or (b) 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 recognize the transferred
asset to the extent of the company's continuing involvement. In that case, the company also
recognizes 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.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured
at the lower of the original carrying amount of the asset and the maximum amount of consideration
that the company could be required to repay.

On derecognition of a financial asset, the difference between the carrying amount of the asset (or
the carrying amount allocated to the portion of the asset derecognised) and the sum of (i) the
consideration received (including any new asset obtained less any new liability assumed) and (ii)
any cumulative gain or loss that had been recognised in OCI is recognised in profit or loss.

Impairment of financial assets

The Company assesses on a forward looking basis the expected credit losses associated with its
assets carried at amortised cost and at FVOCI.

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 revert to recognizing
impairment loss allowance ba sed 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 on a financial instrument that are possible within 12 months after the
reporting date.

With regard to trade receivable, the Company applies the simplified approach as permitted by Ind
AS 109, Financial Instruments, which requires expected lifetime losses to be recognised from the
initial recognition of the trade receivables.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through
profit or loss or amortised cost, as appropriate.

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

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:
Financial Liabilities measured at amortised cost

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 los s.

Financial liabilities at fair value through profit or loss

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

Gains or losses on liabilities held for trading are recognised in the 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 P&L.
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.

Financial guarantee contracts

Financial guarantee contract issued by the Company is contracts that require a payment to be made
to reimburse the holder for a loss it incurs because, the specified debtor fails to make a payment
when due in accordance with the terms of a debt instrument. Financial guarantee contracts are
recognised initially as a liability at fair value, adjusted for transaction costs that are directly
attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher
of the amount of loss allowance determined as per impairment requirements of Ind AS 109, and the
transaction amount recognised less cumulative amortisation.

Derecognition of financial liabilities

The company derecognises a financial liability when its contractual obligations are discharged or
cancelled, or expire.

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 recognized 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, or to realise the asset and settle the liability simultaneously.

Investments

Investments are classified as Non-Current and Current investments.

Investments, which are readily realisable and are intended to be held for not more than one year
from the date on which such investments are made, are classified as current investments. All
other investments are classified as non-current investments.

Employee Benefits
Short-term Employee Benefits

All employee benefits falling due wholly within 12 months of rendering the service are classified as
short term employee benefits. The benefits like salaries, wages, short term compensated absences,
etc. and the expected cost of bonus, exgratia and performance incentives, are charged to Statement
of Profit& Loss of the year in which the employee renders the related service.

Post-employment benefits and Other Long-Term
Employee benefits

a) Defined Contribution Plans: These are plans in which the company pays pre-defined amounts
to separate funds and does not have any legal or informal obligation to pay additional sums. These
comprise of contribution to the Employees Provident Fund, ESI and the like. The company's
payments to the Defined contribution plans are charged to the Statement of Profit & Loss of the
year when the employees render the related service that the payment covers.

(b) Defined Benefit Plans: Defined benefit plans includes gratuity and earner leave accrued to
employees, liability of which is provided in the books of account on the basis of actuarial valuation
made at the end of year.

Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
Company and the revenue can be reliably measured. The following specific recognition criteria
must also be met before revenue is recognized:

a) Sales Revenue is recognized on dispatch to customers as per the terms of the order. Gross sales
are net of returns and applicable trade discounts and excluding GST billed to the customers.

b) Interest income is recognized on a time proportion basis taking into account the amount
outstanding and the applicable interest rate. Interest income is included under the head "other
income" in the s tatement of profit and loss.

c) All other incomes are recognized based on the communications held with the parties and based
on the certainty of the incomes.

Statement of Cashflows

Statement of Cash Flows are reported using the indirect method, whereby Profit After Tax is
adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or
future operating cash receipts or payments and item of income or expenses associated with
Investing or Financing activities. The Cash Flows are segregated into Operating, Investing and
Financing activities.

Taxation

The Tax Expense for the period comprises of current and deferred tax.

Current tax comprises taxes on income and measured at the amount expected to be paid to the tax
authorities, using the applicable tax rates. Deferred tax expense or benefit is recognised on timing
differences being the difference between taxable income and accounting income that originate in
one period and is likely to reverse in one or more subsequent periods. Deferred tax assets and
liabilities are measured using the tax rates and tax laws that have been enacted or substantively
enacted by the balance sheet date.

Foreign currency transactions

Transactions in currencies other than the Company's Functional Currency (foreign currencies) are
recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each
reporting period, monetary items denominated in foreign currencies are translated using closing
exchange rate

prevailing on the last day of the reporting period.

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).

Inventories

Inventories comprising Raw materials, work-inprogress, stores and spares, loose tools, traded
goods and finished goods are stated at the lower of cost and net realisable value. Costs of
inventories are determined on a moving average.

Finished goods and work-in-progress include appropriate proportion of manufacturing overheads
at normal capacity and where applicable, duty. Net realisable value represents the estimated selling
price for inventories less all estimated costs of completion and costs necessary to make the sale.