B. Summary of significant accounting policies

a) Revenue recognition
Sale of goods

The Company derives revenues primarily from sale
of traded goods.

Effective April 1, 2018, the Company has applied Ind
AS 115 'Revenue from Contracts with Customers'
which establishes a comprehensive framework for
determining whether, how much and when revenue
is to be recognised. Ind AS 115 replaces Ind AS 18
'Revenue' There is no impact of the adoption of the
new standard on the financial statements of the
Company.

Revenue is recognised on satisfaction of
performance obligation upon transfer of control
of products to end customers in an amount that
reflects the consideration the Company expects
to receive in exchange for those products. The
performance obligations in our contracts are
fulfilled at the time of delivery.

Revenue is measured based on transaction price
which is fair value of the consideration received
or receivable, after deduction of any discounts,
sales incentives / schemes and any taxes or duties
collected on behalf of the government such as
goods and services tax, etc.

Export Benefits

Export incentives (i.e. duty drawback and DEPB
license) are recognized in the year on the basis
of claims submitted to the appropriate authorities
provided there is no uncertainty to expect ultimate
collection at the time of making the claim.

Interest income

For all interest bearing financial assets measured at
amortized cost, interest income is recorded using
the effective interest rate (EIR). EIR is the rate that
exactly discounts the estimated future cash receipts
over the expected life of the financial instrument or
a shorter period, where appropriate, to the gross
carrying amount of the financial asset.

b) Property, plant and equipment

i. Recognition and measurement

Items of property, plant and equipment

(PPE) are stated at acquisition cost, net of
accumulated depreciation and accumulated
impairment losses, if any. The cost of an item
of PPE comprises its purchase price, including
import duties and other non-refundable taxes
or levies, borrowing costs if any and any
directly attributable cost of bringing the asset
to its working condition for its intended use.
Any trade discounts and rebates are deducted
in arriving at the purchase price.

Expenditure/income during construction period
is included under Capital work in progress, and
the same is allocated to the respective PPE on
the completion of their construction. Advances
given towards acquisition or construction of
PPE outstanding at each reporting date are
disclosed as Capital Advances under "Other
non-current assets"'

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.

ii. Subsequent expenditure

Subsequent expenditure is capitalised only
when it increases the future economic benefits
embodied in the specific asset to which it
relates. All other expenditure is recognised in
the Statement of Profit and Loss as incurred.

iii. Depreciation

Depreciation is provided on a pro-rata basis
on the straight line method ('SLM') as per the
useful life prescribed under Schedule II of the
Companies Act, 2013, which, in management's
opinion, reflect the estimates useful economic
lives of fixed assets.

Leasehold improvements are amortized over
the lease term. Depreciation for the year is
recognised in the Statement of Profit and Loss.

The following table gives the useful life of
different Property, plant and equipment as per
Schedule II:

iv. De-recognition

An item of property, plant and equipment
is eliminated from the standalone financial
statement on disposal or when no further
benefit is expected from its use and disposal.

Losses arising from retirement or gains or
losses arising from disposal of fixed assets
which are carried at cost are recognised in the
Statement of Profit and Loss.

v. Impairment of property, plant and equipment

The carrying values of assets at each Balance
Sheet date are reviewed for impairment if any
indication of impairment exists.

c) Intangible assets

i. Recognition and measurement

I ntangible assets are recognized only when it
is probable that the future economic benefits
that are attributable to the assets will flow to
the Company and the cost of such assets can
be measured reliably. Intangible assets that are
acquired by the Company are measured initially
at cost. After initial recognition, an intangible
asset is carried at its cost less any accumulated
amortisation and any accumulated impairment
loss. All costs relating to the acquisition are
capitalized.

ii. Subsequent expenditure

Subsequent expenditure is capitalised only
when it increases the future economic benefits
from the specific asset to which it relates.

iii. Amortisation

Intangible assets are amortised over their
estimated useful lives, from the date that they
are available for use based on the expected
pattern of consumption of economic benefits
of the asset.

The useful lives are reviewed by the
management at each financial year-end and
revised, if appropriate. In case of a revision, the
unamortized depreciable amount is charged
over the revised remaining useful life.

Amortisation for the year is recognised in the
Statement of Profit and Loss.

iv. De-recognition

An intangible asset is de-recognised on
disposal or when no future economic benefits
are expected from its use and disposal. Losses
arising from retirement and gains or losses
arising from disposal 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 Statement
of Profit and Loss.

v. Impairment of intangible assets

Intangible assets that have an indefinite useful
life are not subject to amortisation and are tested
annually for impairment, or more frequently if
events or changes in circumstances indicate
that they might be impaired. Other assets
are tested for impairment whenever events
or changes in circumstances indicate that
the carrying amount may not be recoverable.
Management periodically assesses using,

external and internal sources, whether there is
an indication that an asset may be impaired.

An impairment loss is recognised if the carrying
amount of an asset exceeds its recoverable
amount. The recoverable amount is higher
of the asset's net selling price or value in use,
which means the present value of future cash
flows expected to arise from the continuing
use of the asset and its eventual disposal. The
impairment loss is recognized as an expense
in the Statement of Profit and Loss, unless the
asset is carried at revalued amount, in which
case any impairment loss of the revalued asset
is treated as a revaluation decrease to the extent
a revaluation reserve is available for that asset.

An impairment loss for an asset is reversed
if, and only if, the reversal can be related
objectively to an event occurring after the
impairment loss was recognized. The carrying
amount of an asset is increased to its revised
recoverable amount, provided that this amount
does not exceed the carrying amount that
would have been determined (net of any
accumulated amortization or depreciation) had
no impairment loss been recognized for the
asset in prior years. In case of revalued assets,
such reversal is not recognized.

d) Leases

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

i. the contract involves the use of identified
asset;

ii. t he Company has substantially all of the
economic benefits from the use of the
asset through the period of lease; and

iii. the Company has the right to direct the use
of the asset.

As a lessee

The Company will recognize a right-of-use
asset ("ROU") and a lease liability at the
lease commencement date if any. The ROU
is initially measured at cost, which comprises
the initial amount of the lease liability adjusted
for any lease payments made at or before the
commencement date, plus any initial direct
costs incurred and an estimate of costs to
dismantle and remove the underlying asset or
to restore the underlying asset or the site on
which it is located, less any lease incentives
received.

Certain lease arrangements include the option
to extend or terminate the lease before the end
of the lease term. The right-of-use assets and
lease liabilities include these options when
it is reasonably certain that the option will be
exercised.

The ROU is subsequently depreciated using the
straight-line method from the commencement
date to the end of the lease term.

The lease liability is initially measured at the
present value of the lease payments that are not
paid at the commencement date, discounted
using the interest rate implicit in the lease
or, if that rate cannot be readily determined,
the Company's incremental borrowing rate.
Generally, the Company uses its incremental
borrowing rate as the discount rate.

Lease payments included in the measurement
of the lease liability comprises fixed payments,
including in-substance fixed payments,
amounts expected to be payable under a
residual value guarantee and the exercise price
under a purchase option that the Company is
reasonably certain to exercise, lease payments
in an optional renewal period if the Company
is reasonably certain to exercise an extension
option.

The lease liability is subsequently measured
at amortised cost using the effective interest
method. It is remeasured when there is a change
in future lease payments arising from a change
in an index or rate, if there is a change in the
Company's estimate of the amount expected to
be payable under a residual value guarantee,
or if Company changes its assessment of
whether it will exercise a purchase, extension
or termination option.

When the lease liability is remeasured in this
way, a corresponding adjustment is made to
the carrying amount of the ROU, or is recorded
in Statement of Profit or Loss if the carrying
amount of the ROU has been reduced to zero.

Lease Liabilities are presented in 'Financial
Liabilities' and the 'ROU Asset' is presented
separately in the Balance Sheet. Lease
payments are classified as financing activities
in the Statement of Cash Flows.

Short-term leases and leases of low-value
assets

The Company has elected not to recognise
ROU and lease liabilities for short term leases
that have a lease term of 12 months or lower
and leases of low value assets. The Company
recognises the lease payments associated
with these leases as an expense over the lease
term. The related cash flows are classified as
Operating activities in the Statement of Cash
Flows.

and a financial liability or equity instrument of
another entity.

i. Financial assets

Classification

The Company shall classify financial
assets as subsequently measured at
amortised cost, fair value through other
comprehensive income or fair value
through profit or loss on the basis of its
business model for managing the financial
assets and the contractual cash flow
characteristics of the financial asset.

Initial recognition and measurement

Financial assets are recognised when the
Company becomes a party to a contract
that gives rise to a financial asset of one
entity or equity instrument of another entity.
Financial assets are initially measured
at fair value. Transaction costs that are
directly attributable to the acquisition or
issue of financial assets, other than those
designated as fair value through profit or
loss (FVTPL), are added to or deducted
from the fair value of the financial assets,
as appropriate, on initial recognition.
Transaction costs directly attributable to
the acquisition of financial assets at FVTPL
are recognised immediately in Statement
of Profit and Loss.

Measurement of fair values

The Company measures financial
instruments at fair value in accordance
with the accounting policies mentioned
above. 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:

- in the principal market of the asset or
liability; or

- in the absence of a principal market, in
the most advantageous market for the
asset or liability.

All assets and liabilities for which fair value
is measured or disclosed in the financial
statements are categorized within the fair
value hierarchy that categorizes financial
assets into three levels. As described
as follows, these levels are based on the
inputs to valuation techniques used to
measure fair value. The fair value hierarchy
gives highest priority to quoted prices
in active markets for identical assets
or liabilities (Level 1 inputs) and lowest

priority to unobservable inputs (level 3
inputs).

Level 1: Fair value based on quoted,
unadjusted prices on active markets

Level 2: Fair value based on parameters for
which directly or indirectly quoted prices
on active market are available

Level 3: Fair value based on parameters for
which there is no observable market data

The Company recognises transfers
between levels of the fair value hierarchy
at the end of the reporting period during
which the change has occurred.

Subsequent measurement

The Company classifies financial assets as
subsequently measured at amortised cost,
fair value through other comprehensive
income ("FVOCI") or fair value through
profit or loss ("FVTPL") on the basis of
following:

- The entity's business model for
managing the financial assets and

- The contractual cash flow
characteristics of the financial asset.

Amortised cost

A financial asset shall be classified and
measured at amortised cost if both of the
following conditions are met:

- The financial asset is held within a
business model whose objective is to
hold financial assets 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.

De-recognition

A financial asset (or, where applicable,
a part of a financial asset or part of a
Company of similar financial assets) is
primarily de-recognised (i.e. removed from
the Company's Balance Sheet) when:

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

ii. 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 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.

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.

Impairment of financial assets

Financial assets of the Company comprise
of trade receivable and other receivables
consisting of debt instruments such as
security deposits and bank balance. Trade
and other receivables are recognised
initially at fair value and subsequently
measured at amortised cost using the
effective interest method, less provision
for impairment. An impairment loss for
trade and other receivables is established
when there is objective evidence that the
Company will not be able to collect all
amounts due according to the original
terms of the receivables. Impairment
losses if any, are recognised in Statement
of Profit and Loss for the year.

The Company recognises loss allowance
using expected credit loss model for
financial assets which are not measured at
Fair Value Through Profit or Loss. Expected
credit losses are weighted average of credit
losses with the respective risks of default
occurring as the weights. Credit loss 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 Company expects
to receive, discounted at original effective

rate of interest. For Trade receivables, the
Company measures loss allowance at an
amount equal to lifetime expected credit
losses. The Company computes expected
credit loss allowance based on a provision
matrix which takes into account historical
credit loss experience and adjusted for
forward-looking information.

ii. Financial liabilities
Classification

The Company classifies all financial
liabilities as subsequently measured
at amortised cost, except for financial
liabilities at fair value through profit or loss.

Initial recognition and measurement

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.

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 Statement of Profit and Loss when the
liabilities are derecognized. 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.

De-recognition

A financial liability is de-recognised
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 recognised
in the Statement of Profit and Loss.

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
realize the assets and settle the liabilities
simultaneously.

h) Employee benefits

Short-term employee benefits

Employee benefits payable wholly within
twelve months of rendering the service are
classified as short-term employee benefits.
These benefits include salaries and wages,
bonus and ex-gratia. The undiscounted amount
of short-term employee benefits expected to
be paid in exchange for the employee service
is recognized as an expense as the related
service is rendered by the employee. A liability
is recognised for the amount expected to be
paid if the Company has a present legal or
constructive obligation to pay this amount as a
result of past service provided by the employee
and the obligation can be estimated reliably.

Post-employment benefits

Defined contribution plans

A defined contribution plan is a post¬
employment benefit plan under which an entity
pays specified contributions to a separate
entity and has no obligation to pay any further
amounts. The Company makes specified
monthly contributions towards employee
provident fund to Government administered
provident fund scheme which is a defined
contribution plan. The Company's contribution
to Provident Fund, ESIC and Labour Welfare
Fund are recognised as an expense in the
Statement of Profit and Loss during the period
in which the employee renders related service.

Defined Benefit Plan

The Company's gratuity benefit scheme is a
defined benefit plan covering eligible employees
in accordance with the Payment of Gratuity
Act, 1972. The Company's net obligation in
respect of the defined benefit plan is calculated
by estimating the amount of future benefit
that employees have earned in return for their
service in the current and prior periods; that
benefit is discounted to determine its present
value. Any unrecognized past service costs and
the fair value of any assets are deducted. The
calculation of the Company's obligation under
the plans is performed annually by a qualified
actuary using the projected unit credit method
at the Balance Sheet date.

Re-measurement of the net defined benefit
liability, which comprise actuarial gains and
losses, are recognised immediately in other
comprehensive income (OCI). The service
and interest cost related to defined benefit
plans are recognised in employee benefits in
the Statement of Profit and Loss. When the
benefits of a plan are improved, the portion of
the increased benefit related to past service
by employees is recognised in the Statement
of Profit and Loss on a straight line basis over

the average period until the benefits become
vested. The Company recognises gains and
losses on the curtailment or settlement of a
defined benefit plan when the curtailment or
settlement occurs.

i) Taxation

Income-tax expense comprise current tax
(i.e. amount of tax for the period determined
in accordance with the income-tax law) and
deferred tax charge or credit if the (reflecting
the tax effects of timing differences between
accounting income and taxable income for the
period). It is recognised in Statement of Profit
and Loss except to the extent that it relates to
items recognised directly in equity or in OCI.

Current tax

Current tax is measured at that amount
expected to be paid to (recovered from) the
taxation authorities, on the taxable income or
loss determined in accordance with Income
Tax Act, 1961 and includes any adjustment
to the tax payable or receivable in respect of
previous years.

Deferred tax

Deferred tax is provided, on all temporary
differences at the reporting date between
the tax bases of assets and liabilities and
their carrying amounts for financial reporting
purposes. Deferred tax assets and liabilities are
measured at the tax rates that are expected to
be applied to the temporary differences when
they reverse, based on the laws that have
been enacted or substantively enacted at the
reporting date. Tax relating to items recognised
directly in equity or OCI is recognised in equity
or OCI and not in the Statement of Profit and
Loss. A deferred tax asset is recognized to the
extent that it is probable that future taxable
profits will be available against which the
temporary difference can be utilised. Deferred
tax assets are reviewed at each reporting date
and are reduced to the extent that it is no
longer probable that future taxable profits will
be available.

j) Impairment of non-financial asset (excluding
inventories and deferred tax assets)

Non-financial assets are subject to impairment
tests whenever events or changes in
circumstances indicate that their carrying
amount may not be recoverable. Where
the carrying value of an asset exceeds its
recoverable amount (i.e. the higher of value in
use and fair value less costs to sell), the asset is
written down accordingly.

Where it is not possible to estimate the
recoverable amount of an individual asset, the
impairment test is carried out on the smallest

group of assets to which it belongs for which
there are separately identifiable cash flows; its
cash generating units ('CGUs').

k) Earnings per share

Basic and diluted earnings per share are
computed by dividing the net profit attributable
to equity shareholders for the year, by the
weighted average number of equity shares
outstanding during the year.

Diluted earnings per share adjusts the figures
used in the determination of basic earnings per
share to take into account:

i. the after income tax effect of interest and
other financing costs associated with
dilutive potential equity shares, and

ii. the weighted average number of additional
equity shares that would have been
outstanding assuming the conversion of
all dilutive potential equity shares.

l) Borrowing costs

Borrowing costs are interest and other costs
related to borrowing that the Company incurs
in connection with the borrowing of funds and
is measured with reference to the effective
interest rate applicable to the respective
borrowing. Borrowing costs include interest
costs measured at Effective Interest Rate (EIR)
and exchange differences arising from foreign
currency borrowings to the extent they are
regarded as an adjustment to the interest cost.
Ancillary borrowing costs are amortised over
the tenure of the loan.

Borrowing costs that are attributable to
acquisition or construction of qualifying assets
are capitalized as a part of cost of such assets
till the time the asset is ready for its intended
use. A qualifying assets is the one that
necessarily takes substantial period of time to
get ready for intended use. Other borrowing
costs are recorded as an expense in the year
in which they are incurred. Ancillary borrowing
costs are amortised over the tenure of the loan.