a) Basis of preparation:

The financial statements of the Company have been
prepared in accordance with Indian Accounting
Standards (Ind AS) notified pursuant to Section 133
of the Companies Act 2013 read with Rule 3 of the
Companies (Indian Accounting Standards) Rules,
2015 and Companies (Indian Accounting Standards)
Amendment Rules, 2023 (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 applicable to the Financial
statements ('Standalone IND AS Financial Statements').

The Company has prepared the financial statements
on the basis that it will continue to operate as a going
concern and further, the financial statements have
been prepared on the historical cost basis except for
certain financial instruments that are measured at fair
values at the end of each reporting period, as explained
in the accounting policies below:

a. Derivative financial instruments,

b. Certain financial assets and liabilities measured
at fair value, and

c. Defined benefit plans - plan assets measured at
fair value;

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, regardless of whether that price
is directly observable or estimated using another
valuation technique. In estimating the fair value of an
asset or a liability, the Company takes into account
the characteristics of the asset or liability if market
participants would take those characteristics into
account when pricing the asset or liability at the
measurement date.

In addition, for financial reporting purposes, fair value
measurements are categorised into Level 1, 2, or 3
based on the degree to which the inputs to the fair value
measurements are observable and the significance of
the inputs to the fair value measurement in its entirety,
which are described as follows:

• Level 1 inputs are quoted prices (unadjusted) in
active markets for identical assets or liabilities
that the entity can access at the measurement
date

• Level 2 inputs are inputs, other than quoted prices
included within Level 1, that are observable for the
asset or liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the
asset or liability.

The financial statements are presented in ', which is
the functional currency and all values are rounded to
the nearest crore (' 00,00,000), except when otherwise
indicated.

b) 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:

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

• Held primarily for the purpose of trading

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

• 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:

• It is expected to be settled in the normal operating
cycle

• It is held primarily for the purpose of trading

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

• 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.

The Company classifies all other liabilities as non¬
current.

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

Based on the nature of services and the normal time
between the acquisition of assets and their realisation
into cash and cash equivalents, the Company has
ascertained its operating cycle as 12 months for the
purpose of current and non-current classification of
assets and liabilities.

c) Foreign Currency Transactions and Translation

The management of the Company has determined
Indian rupee ("'") as the functional currency of the
Company. In preparing the financial statements of the
Company, 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 retranslated at the rates prevailing at
that date.

Exchange differences on monetary items are recognised
in statement of profit and loss in the period in which
they arise except for:

• exchange differences on foreign currency

borrowings relating to assets under construction
for future productive use, which are included in
the cost of those assets when they are regarded as
an adjustment to interest costs on those foreign
currency borrowings

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).

In determining the spot exchange rate to use on
initial recognition of the related asset, expense
or income (or part of it) on the derecognition of
a non-monetary asset or non-monetary liability
relating to advance consideration, the date of the
transaction is the date on which the Company
initially recognises the non-monetary asset or
non-monetary liability arising from the advance
consideration. If there are multiple payments or
receipts in advance, the Company determines the
transaction date for each payment or receipt of
advance consideration.

d) Revenue from contract with customers:

The Company recognises revenue from the following
major sources, acting in the capacity of principal:

• Sale of consumer product

• Sale of services

• Other operating revenue
Sale of consumer product

The Company sells textile Products. The Company
recognizes revenue on the sale of goods, net of
discounts, sales incentives, estimated customer
returns and rebates granted, if any, when control of the
goods is transferred to the customer.

Discounts given include rebates, price reductions and
other incentives given to customers. The Company
bases its estimates on historical results, taking
into consideration the type of customer, the type of
transaction and the specifics of each arrangement.

Nature, timing of satisfaction of performance
obligation and transaction price (Fixed and variable)

The control of goods is transferred to the customer
depending upon the terms or as agreed with customer
or delivery basis (i.e. at the point in time when goods
are delivered to the customer or when the customer
purchases the goods from the Company warehouse).
Control is considered to be transferred to customer
when customer has ability to direct the use of such
goods and obtain substantially all the benefits from
it such as following delivery, the customer has full
discretion over the manner of distribution and price to
sell the goods, has the primary responsibility when on
selling the goods and bears the risks of obsolescence
and loss in relation to the goods.

Based on the terms of the contract and as per business
practice, the Company determines the transaction
price considering the amount it expects to be entitled
in exchange of transferring promised goods or services
to the customer. It excludes amount collected on behalf
of third parties such as taxes.

The Company provides volume discount and rebate
schemes, to its customers on certain goods purchased
by the customer once the quantity of goods purchased
during the period exceeds a threshold specified in
the contract. Volume discount and rebate schemes
give rise to variable consideration. To estimate the
variable consideration to which it will be entitled, the
Company considers that either the expected value
method or the most likely amount method, depending
on which of them better predicts the amount of variable
consideration for the particular type of contract.

Sale of services

Revenue from services mainly consists of job work
income and is recognised when performance obligation
is satisfied. The transaction price of these services
is recognised as a contract liability upon receipt of
advance from the customer, if any.

Export Incentives

Export benefits arising from Duty Drawback scheme,
Remission of Duties and Taxes on Export Products
(RoDTEP) and other eligible export incentives are
recognised on post-export basis at the rate at which
the entitlements accrue and is included in the 'Other
Operating Income' (Revenue from operation).

Contract assets, contract liabilities and trade
receivables

Revenues in excess of invoicing are classified as
contract assets (which we refer as unbilled revenue)
while invoicing in excess of revenues (which we refer
to as unearned revenues) and advance from customers
are classified as contract liabilities. A receivable is
recognised by the Company when the control over the
goods is transferred to the customer such as when
goods are delivered as this represents the point in
time at which the right to consideration becomes
unconditional, as only the passage of time is required
before payment is due. The average credit period on
sale of goods is up to 90 days.

e) Income taxes:

Current tax

Current tax payable is based on taxable profit for the
year. Taxable profit differs from 'profit before tax' as
reported in the statement of profit and loss because
of items of income or expense that are taxable or
deductible in other years and items that are never
taxable or deductible. The Company's current tax is
calculated using tax rates that have been enacted by
the end of the reporting period.

Deferred tax

Deferred tax is recognised on temporary differences
between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax
bases used in the computation of taxable profit. While
preparing standalone financial statements, temporary
differences are calculated using the carrying amount

as per standalone financial statements and tax bases
as determined by reference to the method of tax
computation.

Deferred tax liabilities are recognised for all taxable
temporary differences, except:

• When the deferred tax liability arises from the
initial recognition of goodwill or an asset or liability
in a transaction that is not a business combination
and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss

• In respect of taxable temporary differences
associated with investments in subsidiaries,
associates and interests in joint ventures, when
the timing of the reversal of the temporary
differences can be controlled and it is probable
that the temporary differences will not reverse in
the foreseeable future.

Deferred tax liabilities are generally recognised for
all taxable temporary differences. Deferred tax assets
are generally recognised for all deductible temporary
differences, the carry forward of unused tax credits and
unused tax losses to the extent that it is probable that
taxable profits will be available against which deductible
temporary differences and the carry forward of unused
tax credits and unused tax losses can be utilised. Such
deferred tax assets and liabilities are not recognised
if the temporary difference arises from the initial
recognition (other than in a business combination)
of assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit. In
addition, deferred tax liabilities are not recognised if the
temporary difference arises from the initial recognition
of goodwill.

The carrying amount of deferred tax assets is reviewed
at the end of each reporting period and reduced to
the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of
the asset to be recovered.

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

The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from
the manner in which the Company expects, at the end
of the reporting period, to recover or settle the carrying
amount of its assets and liabilities.

Current and deferred tax are recognised in statement of
profit and loss, except when they relate to items that are
recognised in other comprehensive income or directly
in equity, in which case, the current and deferred tax
are also recognised in other comprehensive income
or directly in equity respectively. Where current tax
or deferred tax arises from the initial accounting for a
business combination, the tax effect is included in the
accounting for the business combination.

f) Property, Plant and Equipment

Assets held for use in the production or supply of goods
or services, or for administrative purposes, are stated in
the standalone balance sheet at cost less accumulated
depreciation and accumulated impairment losses.
Freehold land is not depreciated, however, it is subject
to impairment.

Properties in the course of construction for production,
supply or administrative purposes are carried at cost,
less any recognised impairment loss. Cost includes
professional fees and, for qualifying assets, borrowing
costs capitalised in accordance with the Company's
accounting policy. Such properties are classified to the
appropriate categories of property, plant and equipment
when completed and ready for intended use.

Likewise, subsequent cost incurred to overhaul the
plant and machineries and major inspection costs are
recognised in the carrying amount of the plant and
equipment as a replacement if the recognition criteria
are satisfied. The carrying amount of any component
accounted for as a separate asset is derecognised
when replaced. All other repairs and maintenance
are charged to statement of profit and loss during the
reporting period in which they are incurred.

Depreciation of these assets, on the same basis as
other property assets, commences when the assets are
ready for their intended use.

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.

Any gain or loss arising on the disposal or retirement of
an item of property, plant and equipment is determined
as the difference between the sales proceeds and the
carrying amount of the asset and is recognised in
statement of profit and loss.

Stand-by equipment and servicing equipment are
recognised as property, plant and equipment if they
are held for use in the production or supply of goods
or services, for rental to others, or for administrative
purposes and are expected to be used during more
than one period. Property, plant and equipment which
are not ready for intended use as on the date of Balance
Sheet are disclosed as 'Capital work-in-progress'.

Capital work-in-progress is stated at cost, net of
accumulated impairment loss, if any.

Non-current assets held for sale

The Company classifies non-current assets as held
for sale if their carrying amounts will be recovered
principally through a sale rather than through
continuing use.

Non-current assets classified as held for sale are
measured at the lower of their carrying amount and fair
value less costs to sell. Costs to sell are the incremental
costs directly attributable to the disposal of an asset,
excluding finance costs and income tax expense.

For these purposes, sale transactions include
exchanges of non-current assets for other non-current
assets when the exchange has commercial substance.
The criteria for held for sale classification is regarded
met only when the assets is available for immediate
sale in its present condition, subject only to terms that
are usual and customary for sales of such assets, its
sale is highly probable; and it will genuinely be sold, not
abandoned. The Company treats sale of the asset to be
highly probable when:

• The appropriate level of management is committed
to a plan to sell the asset,

• An active programme to locate a buyer and
complete the plan has been initiated (if applicable),

• The asset is being actively marketed for sale at a
price that is reasonable in relation to its current
fair value,

• The sale is expected to qualify for recognition as
a completed sale within one year from the date of
classification, and

Actions required to complete the plan indicate that it
is unlikely that significant changes to the plan will be
made or that the plan will be withdrawn.

Depreciation methods, estimated useful lives and
residual value:

Depreciation is recognised so as to write off the cost
of assets (other than freehold land) less their residual
values over their useful lives, using the straight-line
method. The estimated useful lives, residual values
and depreciation method are reviewed at the end of
each reporting period, with the effect of any changes
in estimate accounted for on a prospective basis.
Depreciation on property, plant and equipment has
been provided on straight-line method as per the
useful life prescribed in Schedule II of the Companies
Act, 2013, except in case of following assets, where
useful life used is different than those prescribed in
part C of Schedule II:

Based on technical evaluation done by the Chartered
Engineer, the management believes that the useful lives
as given above, best represent, the period over which
management expects to use these assets. Hence, the
useful lives for these assets is different from the useful
lives as prescribed under Part C of Schedule II of the
Companies Act, 2013.

The residual values are not more than 5% of the original
cost of the asset.

The residual values, useful lives and method of
depreciation of property, plant and equipment are
reviewed at each financial year end and any changes
there in are considered as change in estimate and
accounted prospectively.

Goods and Services Tax (GST) paid on acquisition of
assets or on incurring expenses

Expenses and assets are recognised net of the amount
of GST/ value added taxes paid, except:

• When the tax incurred on a purchase of assets
or services is not recoverable from the taxation
authority, in which case, the tax paid is recognised
as part of the cost of acquisition of the asset or as
part of the expense item, as applicable

• When receivables and payables are stated with the
amount of tax included

The net amount of tax recoverable from, or payable
to, the taxation authority is included as part of other
current/non-current assets/ liabilities in the balance
sheet.

g) Intangible assetsIntangible assets acquired separately

Intangible assets with finite useful lives that
are acquired separately are carried at cost less
accumulated amortisation and accumulated
impairment losses. Amortisation is recognised on a
straight-line basis over their estimated useful lives.
The estimated useful life and amortisation method are
reviewed at the end of each reporting period, with the
effect of any changes in estimate being accounted for
on a prospective basis. Intangible assets with indefinite
useful lives that are acquired separately are carried
at cost less accumulated impairment losses, if any.
The assessment of indefinite life is reviewed annually
to determine whether the indefinite life continues to
be supportable. If not, the change in useful life from
indefinite to finite is made on a prospective basis.

Intangible assets acquired in a business combination

Intangible assets acquired in a business combination
and recognised separately from goodwill are initially
recognised at their fair value at the acquisition date
(which is regarded as their cost).

Subsequent to initial recognition, intangible assets
acquired in a business combination are reported on
the same basis as intangible assets that are acquired
separately.

Derecognition of intangible assets

An intangible asset is derecognised on disposal, or when
no future economic benefits are expected from use or
disposal. Gains or losses arising from derecognition
of an intangible asset, measured as the difference
between the net disposal proceeds and the carrying
amount of the asset are recognised in statement of
profit and loss when the asset is derecognised.

Useful lives of intangible assets

Estimated useful lives of the intangible assets are as
follows:

h) Borrowing costs

Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which
are assets that necessarily take a substantial period
of time to get ready for their intended use or sale, are
added to the cost of those assets, until such time as
the assets are substantially ready for their intended
use or sale. Interest income earned on the temporary
investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the
borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in the
statement of profit and loss in the period in which they
are incurred.

The Company may incur borrowing costs during an
extended period in which it suspends the activities
necessary to prepare an asset for its intended use or
sale. Such costs are costs of holding partially completed
assets and do not qualify for capitalisation. However,
an entity does not normally suspend capitalising
borrowing costs during a period when it carries out
substantial technical and administrative work. The
Company also does not suspend capitalising borrowing
costs when a temporary delay is a necessary part of the
process of getting an asset ready for its intended use or
sale.

The Company shall cease capitalising borrowing
costs when substantially all the activities necessary to
prepare the qualifying asset for its intended use or sale
are complete.

i) Investment Property

Investment properties are measured initially at cost,
including transaction costs. Subsequent to initial
recognition, investment properties are stated at cost
less accumulated depreciation and accumulated
impairment loss, if any.

The cost includes the cost of replacing parts and
borrowing costs for long-term construction projects if
the recognition criteria are met. When significant parts
of the investment property are required to be replaced
at intervals, the Company depreciates them separately

profit or loss, transaction costs that are
attributable to the acquisition of the financial
asset. However, trade receivable that do not
contain a significant financing component
are measured at transaction price.

B) Subsequent measurement

For purposes of subsequent measurement,
financial assets are classified in four
categories:

• Debt instruments at amortised cost

A 'debt instrument' is measured at the
amortised cost if both the following
conditions are met:

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

• 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.

This category is the most relevant to the
Company. 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 other income
in the statement of profit and loss. The
losses arising from impairment are
recognised in the profit or loss. This
category generally applies to trade and
other receivables.

• Debt instruments at fair value through
other comprehensive income (FVTOCI)

A 'debt instrument' is classified as
at the FVTOCI if both of the following
criteria are met:

• The objective of the business model
is achieved both by collecting

contractual cash flows and setting
the financial assets, and

• The asset's contractual cash flows
represent SPPI.

Debt instruments included within the
FVTOCI category are measured initially
as well as at each reporting date at
fair value. Fair value movements are
recognised in the other comprehensive
income (OCI). On derecognition of the
asset, cumulative gain or loss previously
recognised in OCI is reclassified from
the equity to statement of profit and
loss. Interest earned whilst holding
FVTOCI debt instrument is reported as
interest income using the EIR method.

• Debt instruments at fair value through
profit or loss (FVTPL)

FVTPL is a residual category for debt
instruments. Any debt instrument,
which does not meet the criteria for
categorisation as at amortised cost or
as FVTOCI, is classified as at FVTPL.

In addition, the Company may elect to
designate a debt instrument, which
otherwise meets amortised cost or
FVTOCI criteria, as at FVTPL. However,
such election is allowed only if doing so
reduces or eliminates a measurement
or recognition inconsistency (referred
to as 'accounting mismatch'). Debt
instruments included within the FVTPL
category are measured at fair value with
all changes recognised in the statement
of profit and loss.

• Equity instruments measured at fair
value through other comprehensive
income (FVTOCI)

All equity investments in scope of Ind
AS 109 are measured at fair value.
Equity instruments which are held for
trading and contingent consideration
recognised by an acquirer in a business
combination to which Ind AS103 applies
are classified as at FVTPL. For all
other equity instruments, the Company
may make an irrevocable election to
present in other comprehensive income
subsequent changes in the fair value.
The Company makes such election on
an instrument-by-instrument basis.
The classification is made on initial
recognition and is irrevocable.

If the Company decides to classify an
equity instrument as at FVTOCI, then all
fair value changes on the instrument,
excluding dividends, are recognised
in the OCI. There is no recycling of the
amounts from OCI to statement of profit
& loss, even on sale of investment.
However, the Company may transfer the
cumulative gain or loss within equity.

Equity instruments included within the
FVTPL category are measured at fair
value with all changes recognised in the
statement of profit and loss.

C) Derecognition

A financial asset (or, where applicable, a part
of a financial asset or part of a group 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 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.

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.

D) 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
FVOCI debt instruments. The impairment
methodology applied depends on whether
there has been a significant increase in credit
risk. For trade receivables only, the Company
applies the simplified approach permitted
by Ind AS 109 Financial Instruments, which
requires expected lifetime losses to be
recognised from initial recognition of the
receivables.

E) Investments in subsidiaries, associates and
joint ventures

The Company has elected to account for
its equity investments in subsidiaries,
associates and joint ventures under IND
AS 27 on Separate Financials Statements,
at cost. At the end of each reporting period
the Company assesses whether there are
indicators of diminution in the value of its
investments and provides for impairment
loss, where necessary.

II. Financial LiabilitiesA) Initial recognition and measurement

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

B) 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
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. This category also includes
derivative financial instruments entered
into by the Company that are not
designated as hedging instruments
in hedge relationships as defined by
Ind AS 109. Separated embedded
derivatives are also classified as held
for trading unless they are designated
as effective hedging instruments. 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
recognised in OCI. These gains/ loss
are not subsequently transferred to
statement of profit and 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.

• Loans and Borrowings

This is the category most relevant to
the Company. 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.

• Financial guarantee contracts

Financial guarantee contracts issued
by the Company are those 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 amount recognised less
cumulative amortisation.

The fair value of financial guarantees is
determined as the present value of the
difference in net cash flows between
the contractual payments under the
debt instrument and the contractual
payments that would be required
without the guarantee, or the estimated
amount that would be payable to a third
party for assuming the obligations.

C) De-recognition

A financial liability is derecognised 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 derecognition
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 or loss.

D) Compound instruments

The component parts of compound
instruments (optionally convertible
preference share) issued by the Company are
classified separately as financial liabilities
and equity in accordance with the substance
of the contractual arrangements and the
definitions of a financial liability and an
equity instrument. A conversion option that
will be settled by the exchange of a fixed
amount of cash or another financial asset for
a fixed number of the Company's own equity
instruments is an equity instrument.

At the date of issue, the fair value of the
liability component is estimated using the
prevailing market interest rate for similar
non-convertible instruments. This amount is
recorded as a liability on an amortised cost
basis using the effective interest method
until extinguished upon conversion or at the
instrument's maturity date.

The conversion option classified as equity
is determined by deducting the amount
of the liability component from the fair
value of the compound instrument as a
whole. This is recognised and included in
equity, net of income tax effects, and is not
subsequently remeasured. In addition, the
conversion option classified as equity will
remain in equity until the conversion option
is exercised, in which case, the balance
recognised in equity will be transferred
to other component of equity. When the

conversion option remains unexercised at the
maturity date of the convertible instrument,
the balance recognised in equity will be
transferred to retained earnings. No gain or
loss is recognised in statement of profit and
loss upon conversion or expiration of the
conversion option.

Transaction costs that relate to the issue of
the convertible instruments are allocated
to the liability and equity components in
proportion to the allocation of the gross
proceeds. Transaction costs relating to the
equity component are recognised directly
in equity. Transaction costs relating to the
liability component are included in the
carrying amount of the liability component
and are amortised over the lives of the
convertible instrument using the effective
interest method.

III. Reclassification of financial assets / liabilities

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.

IV. Offsetting of financial instruments

Financial assets and liabilities are offset and
the net amount is reported in the balance sheet
where there is a legally enforceable right to
offset the recognised amounts and there is an
intention to settle on a net basis or realise the
asset and settle the liability simultaneously. The
legally enforceable right must not be contingent
on future events and must be enforceable in the
normal course of business and in the event of
default, insolvency or bankruptcy of Company or
the counterparty.

V. Derivatives and hedging activities

The Company enters derivatives like forwards
contracts to hedge its foreign currency risks.
Derivatives are initially recognised at fair value
on the date a derivative contract is entered into
and are subsequently marked to market at the
end of each reporting period with profit/loss
being recognised in statement of profit and loss.
Derivative assets/liabilities are classified under
"other financial assets/other financial liabilities”.
Profits and losses arising from cancellation of
contracts are recognised in the statement of profit
and loss.

k) Inventories:

Finished goods are stated at the lower of cost and net
realisable value. Raw material, packing materials and
stores & spares are stated at costs unless the finished
goods in which they will be incorporated are expected
to be sold below cost. Net realisable value represents
the estimated selling price for inventories less all
estimated costs of completion and costs necessary to
make the sale.

Costs incurred in bringing each product to its present
location and condition are accounted for as follows:

• Raw materials, Packing Materials and stores &
spares: Cost includes cost of purchase and other
costs incurred in bringing the inventories to their
present location and condition.

• Finished goods and work in progress: Cost
includes cost of direct materials and labour and
a proportion of manufacturing overheads based
on the normal operating capacity, but excluding
borrowing costs.

Due allowances are made for slow moving and obsolete
inventories based on estimates made by the Company.

l) Impairment of non-financial assets

At the end of each reporting period, the Company reviews
the carrying amounts of its tangible and intangible
assets to determine whether there is any indication
that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of

the asset is estimated in order to determine the extent
of the impairment loss, if any. When it is not possible
to estimate the recoverable amount of an individual
asset, the Company estimates the recoverable amount
of the cash-generating unit to which the asset belongs.
When a reasonable and consistent basis of allocation
can be identified, corporate assets are also allocated
to individual cash-generating units, or otherwise they
are allocated to the smallest group of cash-generating
units for which a reasonable and consistent allocation
basis can be identified.

Intangible assets with indefinite useful lives and
intangible assets not yet available for use are tested for
impairment at least annually, and whenever there is an
indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs
of disposal and value in use. 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 for which the estimates
of future cash flows have not been adjusted.

If the recoverable amount of an asset (or
cash-generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable
amount. An impairment loss is recognised immediately
in statement of profit and loss.

When an impairment loss subsequently reverses, the
carrying amount of the asset (or a cash-generating
unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying
amount does not exceed the carrying amount that
would have been determined had no impairment loss
been recognised for the asset (or cash-generating
unit) in prior years. A reversal of an impairment loss is
recognised immediately in statement of profit and loss.