1B MATERIAL ACCOUNTING POLICIES

This note provides a list of the material accounting policies
adopted in the preparation of these standalone financial
statements. These policies have been consistently applied
to all the years presented

1 Statement of Compliance and basis of
preparation

The standalone financial statements of the Company
have been prepared in accordance with Indian
Accounting Standards (hereinafter referred to as
Ind AS) as notified by Ministry of Corporate Affairs
pursuant to Section 133 of the Companies Act, 2013
('the Act') read with the Companies (Indian Accounting
Standards) Rules, as amended from time to time and
other relevant provisions of the Act.

The standalone financial statements are prepared
under the historical cost convention except
for the following:

• certain financial assets and liabilities
(including derivative instruments) that are
measured at fair value;

• assets held for sale which are measured at lower
of carrying value and fair value less cost to sell;

• defined benefit plans where plan assets are
measured at fair value; and

• share-based payments at fair value as on the
grant date of options given to employees.

Estimates, judgements and assumptions used in the
preparation of the standalone financial statements and
disclosures are based upon management's evaluation
of the relevant facts and circumstances as of the date
of the standalone financial statements, which may
differ from the actual results at a subsequent date. The
critical estimates, judgements and assumptions are
presented in Note no. 1D.

The Company presents assets and liabilities in
the balance sheet based on current / non-current
classification. Deferred tax assets and liabilities are
classified as non-current.

The Company has prepared the standalone financial
statements on the basis that it will continue to operate
as a going concern.

An asset is treated as current when it is:

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

• 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 normal
operating cycle

• 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

All other liabilities are classified as non-current.

The operating cycle is the time between the acquisition
of assets for processing and their realisation in cash
and cash equivalents. The Company has identified
twelve months as its operating cycle.

2 Business combination and goodwill

Business combinations are accounted for using
the acquisition method. The cost of an acquisition
is measured as the aggregate of the consideration
transferred measured at acquisition date fair value
and the amount of any non-controlling interests in the
acquiree. For each business combination, the Company
elects whether to measure the non-controlling interests
in the acquiree at fair value or at the proportionate share
of the acquiree's identifiable net assets. Acquisition-
related costs are expensed as incurred.

At the acquisition date, the identifiable assets acquired,
and the liabilities assumed are recognised at their
acquisition date fair values (including related deferred
tax). For this purpose, the liabilities assumed include
contingent liabilities representing present obligation
and they are measured at their acquisition fair values
irrespective of the fact that outflow of resources
embodying economic benefits is not probable.

Goodwill is initially measured at cost, being the excess
of the aggregate of the consideration transferred and
the amount recognised for non-controlling interests,

and any previous interest held, over the net identifiable
assets acquired and liabilities assumed.

After initial recognition, goodwill is measured at cost
less any accumulated impairment losses. For the
purpose of impairment testing, goodwill acquired in
a business combination is, from the acquisition date,
allocated to each of the Company's cash-generating
units that are expected to benefit from the combination,
irrespective of whether other assets or liabilities of the
acquiree are assigned to those units.

A cash generating unit to which goodwill has been
allocated is tested for impairment annually, or more
frequently when there is an indication that the unit
may be impaired. If the recoverable amount of the
cash generating unit is less than its carrying amount,
the impairment loss is allocated first to reduce the
carrying amount of any goodwill allocated to the unit
and then to the other assets of the unit pro rata based
on the carrying amount of each asset in the unit. Any
impairment loss for goodwill is recognised in profit or
loss. An impairment loss recognised for goodwill is not
reversed in subsequent periods.

If the initial accounting for a business combination
is incomplete by the end of the reporting period in
which the combination occurs, the Company reports
provisional amounts for the items for which the
accounting is incomplete. Those provisional amounts
are adjusted through goodwill during the measurement
period, or additional assets or liabilities are recognised,
to reflect new information obtained about facts and
circumstances that existed at the acquisition date that, if
known, would have affected the amounts recognized at
that date. These adjustments are called as measurement
period adjustments. The measurement period does not
exceed one year from the acquisition date

A change in the ownership interest of a subsidiary,
without a loss of control, is accounted for as an equity
transaction. If the Company loses control over a
subsidiary, it:

• Derecognises the assets (including goodwill)
and liabilities of the subsidiary at their carrying
amounts at the date when control is lost

• Derecognises the carrying amount of any non¬
controlling interests

• Derecognises the cumulative translation
differences recorded in equity

• Recognises the fair value of the consideration
received

• Recognises the fair value of any investment
retained

• Recognises any surplus or deficit in profit or loss

• Recognise that distribution of shares of subsidiary
to Company in Company's capacity as owners

• Reclassifies the parent's share of components
previously recognised in OCI to profit or loss
or transferred directly to retained earnings, if
required by other Ind ASs as would be required
if the Company had directly disposed of the
related assets or liabilities

Policy for demerger transactions

The accounting for demerger transactions are
applicable from the date on which all substantive
approvals are received.

The Company derecognises the carrying value of
assets and liabilities pertaining to the demerged
undertaking, from the carrying value of assets and
liabilities as appearing in its books. The Company
derecognises the carrying amount of investments.
Loans and advances, receivables, payables and
other dues outstanding relating to the demerged
undertaking are cancelled and there are no further
obligation / outstanding in that behalf. The excess/
deficit if any, of the net assets transferred are adjusted
with the retained earnings of the Company.

3 Revenue from contract with customers:

Revenue from contracts with customers is recognized
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.

The recognition criteria for sale of products and
construction contracts is described below

(1) Sale of products

Revenue from sale of products is recognized
at the point in time when control of the asset is
transferred to the customer, generally on dispatch
of the product to the customer's destination.
The Company considers whether there are
other promises in the contract that are separate
performance obligations to which a portion
of the transaction price needs to be allocated
(e.g. customer loyalty points and warranties).
In determining the transaction price for the
sale of product, the Company considers the
effects of variable consideration, the existence
of significant financing components, and
consideration payable to the customer (if any).

The Company provides volume rebates to
certain customers once the quantity of products
purchased during the period exceeds a
threshold specified in the contract. Rebates are
offset against amounts payable by the customer.
To estimate the variable consideration for the
expected future rebates, the Company applies

the most likely amount method. The selected
method that best predicts the amount of variable
consideration is primarily driven by the number
of volume thresholds contained in the contract.

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.

The Company has a loyalty points program, "Retailer
Bonding Program", which allows customers to
accumulate points that can be redeemed for free
products. The loyalty points give rise to a separate
performance obligation as they provide a material
right to the customer. A portion of the transaction
price is allocated to the loyalty points awarded to
customers based on relative stand-alone selling
price and recognized as deferred revenue until
the points are redeemed. Revenue is recognized
upon redemption of products by the customer.
When estimating the stand-alone selling price
of the loyalty points, the Company considers the
likelihood that the customer will redeem the points.
The Company updates its estimates of the points
that will be redeemed on a quarterly basis and any
adjustments to the deferred revenue are charged
against revenue.

The Company provides a warranty beyond fixing
defects that existed at the time of sale. These
service-type warranties are bundled together
with the sale of products. Contracts for bundled
sales of products and a service-type warranty
comprise two performance obligations because
the product and service-type warranty are both
sold on a stand-alone basis and are distinct
within the context of contract. Using the relative
stand-alone selling price method, a portion of
the transaction price is allocated to the service-
type warranty and recognised as deferred
revenue. Revenue for service-type warranties is
recognised over the period in which the service
is provided based on the time elapsed.

(2) Construction contracts

Performance obligation in case of construction
contracts is satisfied over a period of time, as the
Company creates an asset that the customer
control and the Company has an enforceable right
to payment for performance completed to date if
it meets the agreed specifications. Revenue from
construction contracts is recognised based on the
stage of completion determined with reference
to the actual costs incurred up to reporting date
on the construction contract and the estimated
cost to complete the project. Cost estimates

involves judgments including those relating to
cost escalations; assessment of technical, political,
regulatory and other related contract risks and
their financial estimation; scope of deliveries and
services required for fulfilling the contractually
defined obligations and expected delays, if any.
Provision for foreseeable losses/ construction
contingencies on said contracts is made based
on technical assessments of costs to be incurred
and revenue to be accounted for. The Company
has long-term receivables from customers. The
transaction price for such contracts is discounted,
using the rate that would be reflected in a separate
financing transaction between the Company and
its customers at contract inception, to take into
consideration the significant financing component

(3) Contract balances
Contract asset

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.

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).

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 recognized
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.

4 Leases:

As a lessee:

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. Unless the
Company is reasonably certain to obtain ownership

of the leased asset at the end of the lease term, the
recognised right-of-use assets are depreciated on
a straight-line basis over the shorter of its estimated
useful life and the lease term. Right-of-use assets are
subject to impairment test.

The Company determines the lease term as the non¬
cancellable term of the lease, together with any
periods covered by an option to extend the lease if it
is reasonably certain to be exercised, or any periods
covered by an option to terminate the lease, if it is
reasonably certain not to be exercised.

Leases are capitalised at the commencement of the
lease at the inception date fair value of the leased
property or, if lower, at the present value of the minimum
lease payments. Lease payments are apportioned
between finance charges and reduction of the lease
liability so as to achieve a constant rate of interest on
the remaining balance of the liability. Finance charges
are recognised in finance costs in the statement of
profit and loss, unless they are directly attributable to
qualifying assets, in which case they are capitalized in
accordance with the Company's general policy on the
borrowing costs. Contingent rentals are recognised as
expenses in the periods in which they are incurred.

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. The variable lease
payments that do not depend on an index or a rate
are recognised as expense in the period on which the
event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the
Company uses the incremental borrowing rate at the
lease commencement date if the interest rate implicit
in the lease is not readily determinable.

Short-term leases and leases of low-value assets

The Company applies the short-term lease recognition
exemption to its short-term leases (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 that are considered
of low value (i.e., below H 5,00,000). 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.

5 Other income:

(1) Interest income on financial asset is recognised
using the effective interest rate method. The
effective interest rate is the rate that exactly
discounts estimated future cash receipts through

the expected life of the financial asset to the
gross carrying amount of the financial asset.
When calculating the effective interest rate, the
Company estimates the expected cash flows
by considering all the contractual terms of the
financial instruments.

(2) Others:

The Company recognises other income on
accrual basis. However, where the ultimate
collection of the same is uncertain, revenue
recognition is postponed to the extent of
uncertainty. Rental income arising from operating
leases is accounted for on a straight line basis over
lease terms unless the receipts are structured to
increase in line with expected general inflation
to compensate for the expected inflationary cost
increases and is included in the Statement of
profit or loss due to its operating nature.

6 Property, plant and equipment :

A) Asset class:

i) Freehold land is carried at historical cost
including expenditure that is directly
attributable to the acquisition of the land.

ii) All other items of property, plant and
equipment (including capital work in
progress) are stated at historical cost less
accumulated depreciation and impairment
losses, if any. Historical cost includes
expenditure that is directly attributable to
the acquisition of the items.

iii) Capital goods manufactured by the
Company for its own use are carried at
their cost of production (including duties
and other levies, if any) less accumulated
depreciation and impairment losses if any.

iv) Subsequent costs are included in the
asset's carrying amount or recognised as
a separate asset, as appropriate, only when
it is probable that future economic benefits
associated with the item will flow to the
Company and the cost of the item can be
measured reliably. The carrying amount of
any component accounted for as a separate
asset is derecognised when replaced. All
other repairs and maintenance are charged
to the statement of profit or loss during the
year in which they are incurred.

v) Losses arising from the retirement of, and
gains or losses arising from disposal of
property, plant and equipments which
are carried at cost are recognised in the
statement of profit and loss.

vi) Capital work-in-progress, property, plant
and equipment is stated at cost, net of
accumulated depreciation. Such cost
includes the cost of replacing part of

the property, plant and equipment and
borrowing cost for long-term construction
projects if the recognition criteria are met.
When significant parts of property, plant
and equipment are required to be replaced
at intervals, the Company depreciates them
separately based on their specific useful
lives. Likewise, when a major inspection
is performed, its cost is recognised in
the carrying amount of the property,
plant and equipment as a replacement
if the recognition criteria are satisfied. All
other repairs and maintenance costs are
recognised in profit or loss as incurred.
Capital work-in-progress comprises cost of
property, plant and equipment (including
related expenses), that are not yet ready for
their intended use at the reporting date.

B) Depreciation:

i) Depreciation is calculated using the straight¬
line method to allocate their cost, net of
their residual values, over their estimated
useful lives. Premium of Leasehold land and
leasehold improvements cost are amortised
over the primary period of lease.

ii) 100% depreciation is provided in the month
of addition for temporary structure cost
at project site

iii) Where a significant component (in terms
of cost) of an asset has an economic useful
life different than that of it's corresponding
asset, the component is depreciated over
it's estimated useful life.

iv) The Company, based on internal technical
assessments and management estimates,
depreciates certain items of property, plant
& equipment over the estimated useful
lives and considering residual value which
are different from the one prescribed in
Schedule II of the Companies Act, 2013. The
management believes that these estimated
useful lives and residual values are realistic
and reflect fair approximation of the period
over which the assets are likely to be used.

v) Useful life of asset is as given below:

vi) The residual values, useful lives and methods

of depreciation of property, plant and
equipment are reviewed at each financial year
and adjusted prospectively, if appropriate.

7 Intangible assets:

An intangible asset shall be recognised if, and only if:

(a) it is probable that the expected future economic
benefits that are attributable to the asset will flow
to the Company; and

(b) the cost of the asset can be measured reliably.

Intangible assets are stated at cost less accumulated
amortization and impairment. Intangible assets are
amortized over their respective individual estimated
useful lives on a straight-line basis, from the date that
they are available for use.

Intangible assets and amortisation

Computer software / licenses are carried at historical
cost. They have an expected finite useful life of 3 years
and are carried at cost less accumulated amortisation
and impairment losses. Computer licenses which are
purchased on annual subscription basis are expensed
off in the year of purchase.

Trademarks are carried at historical cost. They have
an registered finite useful life of 10 years and are
carried at cost less accumulated amortisation and
impairment losses.

Intangible assets with finite lives 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.

Research and development costs

Research costs are expensed as incurred. Development
expenditures on an individual project are recognised as
an intangible asset when the Company can demonstrate:

• The technical feasibility of completing the
intangible asset so that the asset will be available
for use or sale

• Its intention to complete and its ability and
intention to use or sell the asset

• How the asset will generate future economic
benefits

• The availability of resources to complete the asset

• The ability to measure reliably the expenditure
during development

Following initial recognition of the development
expenditure as an asset, the asset is carried at cost
less any accumulated amortisation and accumulated
impairment losses. Amortisation of the asset begins
when development is complete, and the asset is
available for use. It is amortised over the period of
expected future benefit. Amortisation expense is
recognised in the statement of profit and loss unless
such expenditure forms part of carrying value of
another asset. During the period of development, the
asset is tested for impairment annually.

8 Investment properties:

Investment properties that are not intended to be
occupied substantially for use by, or in the operations
of the Company have been considered as investment
properties. 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 Company does not charge depreciation
to investment property land which is held for future
undetermined use. Though the Company measures
investment property using cost-based measurement, the
fair value of investment property is disclosed in the notes.
Fair values are determined based on an annual evaluation
performed by an accredited external independent valuer
applying a valuation model.

Investment properties are derecognised either
when they have been disposed of or when they
are permanently withdrawn from use and no future
economic benefit is expected from their disposal. The
difference between the net disposal proceeds and the
carrying amount of the asset is recognised in profit or
loss in the period of derecognition. In determining the
amount of consideration from the derecognition of
investment property the Company considers the effects
of variable consideration, existence of a significant
financing component, non-cash consideration, and
consideration payable to the buyer (if any).

Transfers are made to (or from) investment property
only when there is a change in use.

The Company depreciates its investment properties
over the useful life which is similar to that of property,
plant and equipment.

9 Impairment of non-financial assets:

The carrying amounts of assets are reviewed at
each balance sheet date if there is any indication of
impairment based on internal/external factors. An asset
is impaired when the carrying amount of the asset
exceeds the recoverable amount. The recoverable
amount is the higher of an asset's fair value less
costs of disposal and value in use. For the purposes
of assessing impairment, assets are grouped at the
lowest levels for which there are separately identifiable
cash inflows which are largely independent of the cash
inflows from other assets or Group of assets (cash¬
generating units). Impairment loss is charged to the
Statement of Profit & Loss Account in the year in which
an asset is identified as impaired. An impairment loss
recognized in the prior accounting periods is reversed
if there has been change in the estimates used to
determine the assets recoverable amount since the
last impairment loss was recognised

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.

Impairment losses are recognised in the statement
of profit and loss, except for properties previously
revalued with the revaluation surplus taken to OCI.

For assets, 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.

10 Financial instruments:

A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity.

I. Financial Assets

A) Initial recognition and measurement

All financial assets are recognised initially at
fair value plus, in the case of financial assets
not recorded at fair value through profit or
loss, transaction costs that are attributable
to the acquisition of the financial asset.

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 selling 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 recognized 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 FVT OCI 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 categorization
as at amortized cost or as FVTOCI, is
classified as at FVTPL.

In addition, the Company may elect
to designate a debt instrument, which
otherwise meets amortized 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 recognized 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 recognized in the OCI. There
is no recycling of the amounts from OCI to
P&L, 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 recognized in the P&L.

C) Derecognition

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

• 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.

II. Financial Liabilities

A) 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
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.

• 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.

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.

The company designates certain hedging
instruments, which includes derivatives,
embedded derivatives and non-derivatives in
respect of foreign currency and commodity
risk, as either cash flow hedge, fair value
hedge or hedges or net investment in foreign
operations. Hedges of foreign currency risk
on firm commitments are accounted for
cash flow hedges.

For the purpose of hedge accounting, hedges
are classified as:

• fair value hedge is when hedging the
exposure to change in fair value of
a recognised asset or liability or an
unrecognised song commitment

• cash flow hedges when hedging the
exposure to variability in cash flows
that is either attributable to particular
risk associated with a recognised asset
or liability or highly probable forecast
transaction or the foreign currency risk in
an unrecognised firm commitment.

At the inception of hedge relationship, the
Company formally designates and keeps the
hedge relationship to which the Company wishes
to apply hedge accounting and risk management
objective and strategy for undertaking the hedge.
The documentation includes the company's
risk management objective and strategy for
undertaking hedge, the hedging/economic
relationship, the hedged item or transaction, the
nature of the risk by hedged, hedge ratio and how
the entity will assess the effectiveness of changes
in the hedging instrument's fair value in offsetting
exposure to changes in the hedge item fair value
or cash flow attributable to the hedge risk. Such
hedges are expected to be highly effective in
achieving offsetting changes in fair value or
cashflows and are assessed on an ongoing basis
to determine that they actually have been highly
effective throughout the financial reporting

periods for which they were designated. Hedge
that meet the strict criteria for hedge accounting
accounted for as described below

Cash flow hedges

The effective portion of the gain or loss on the
hedging instrument is recognised in OCI in the
Effective portion of cash flow hedges, while any
ineffective portion is recognised immediately in
the statement of profit and loss. The Effective
portion of cash flow hedges is adjusted to the
lower of the cumulative gain or loss on the
hedging instrument and the cumulative change
in fair value of the hedged item.

The Company uses forward currency contracts
as hedges of its exposure to foreign currency risk
in forecast transactions and firm commitments,
as well as forward commodity contracts for its
exposure to volatility in the commodity prices.
The ineffective portion relating to foreign
currency contracts is recognised in finance
costs and the ineffective portion relating to
commodity contracts is recognised in other
income or expenses.

The Company designates only the spot element
of a forward contract as a hedging instrument.
The forward element is recognised in OCI.

The amounts accumulated in OCI are accounted
for, depending on the nature of the underlying
hedged transaction. If the hedged transaction
subsequently results in the recognition of a
non-financial item, the amount accumulated in
equity is removed from the separate component
of equity and included in the initial cost or other
carrying amount of the hedged asset or liability.
This is not a reclassification adjustment and will
not be recognised in OCI for the period. This also
applies where the hedged forecast transaction
of a non-financial asset or non-financial liability
subsequently becomes a firm commitment for
which fair value hedge accounting is applied.

For any other cash flow hedges, the amount
accumulated in OCI is reclassified to profit or loss
as reclassification adjustment in the same period
or periods during which the hedged cash flows
affect profit or loss.

If cash flow hedge accounting is discontinued,
the amount that has been accumulated in OCI
must remain in accumulated OCI if the hedged
future cash flows are still expected to occur.
Otherwise, the amount will be immediately
reclassified to profit or loss as a reclassification
adjustment. After discontinuation, once the
hedged cash flow occurs, any amount remaining
in accumulated OCI must be accounted for
depending on the nature of the underlying
transaction as described above.

This note summarises accounting policy for fair value.
Other fair value related disclosures are given in the
relevant notes.

12 Cash and cash equivalents:

Cash and cash equivalents in the balance sheet
and for the purpose of the statement of cash flows,
include cash on hand, other short-term, highly liquid
investments with original maturities of three months or
less that are readily convertible to known amounts of
cash and which are subject to an insignificant risk of
changes in value.

13 Inventories:

Inventories are valued at the lower of cost and net
realisable value. Costs incurred in bringing each
product to its present location and condition are
accounted for as follows:

Raw materials: cost 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.

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.
Cost is determined on first in, first out basis.

Traded goods: cost includes cost of purchase and
other costs incurred in bringing the inventories to their
present location and condition. Cost is determined on
weighted average basis.

Initial cost of inventories includes the transfer of gains and
losses on qualifying cash flow hedges, recognised in OCI,
in respect of the purchases of raw materials. Net realisable
value is the estimated selling price in the ordinary course
of business, less estimated costs of completion and the
estimated costs necessary to make the sale.

14 Foreign currency transactions:

Items included in the standalone financial statements
are measured using the currency of the primary
economic environment in which the Company
operates ('the functional currency'). The standalone
financial statements are presented in Indian Rupee
(INR), which is the Company's functional and
presentation currency.

a) On initial recognition, all foreign currency
transactions are recorded at the functional
currency spot rate at the date the transaction first
qualifies for recognition.

b) Monetary assets and liabilities in foreign currency
outstanding at the close of reporting date are
translated at the functional currency spot rates of
exchange at the reporting date.

c) Exchange differences arising on settlement of
translation of monetary items are recognised in
the Statement of Profit and Loss.

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)

15 Income tax

The income tax expense or credit for the year is the tax
payable on the current year's taxable income based
on the applicable income tax rate for the jurisdiction
adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences, unused
tax losses and unabsorbed depreciation.

Current and deferred tax is recognized in the Statement
of Profit and Loss except to the extent it relates to items
recognized directly in equity or other comprehensive
income, in which case it is recognized in equity or
other comprehensive income.

A. Current income tax

The current income tax charge is calculated on
the basis of the tax laws enacted or substantively
enacted at the end of the reporting period. The
Company establishes provisions, wherever
appropriate, on the basis of amounts expected to
be paid to the tax authorities.

Current tax assets and liabilities are offset when
there is a legally enforceable right to set off
current tax assets against current tax liabilities.

B. Deferred tax

Deferred tax is provided using the liability method,
on temporary differences arising between the tax
bases of assets and liabilities and their carrying
amounts in the financial statements. Deferred
tax is determined using tax rates (and laws) that
have been enacted or substantially enacted by
the end of the reporting period and are expected
to apply when the related deferred income
tax asset is realised or the deferred income tax
liability is settled.

The carrying amount of deferred tax assets is
reviewed at each reporting date and adjusted
to reflect changes in probability that sufficient
taxable profits will be available to allow all or part
of the asset to be recovered.

Deferred tax assets are recognised for all
deductible temporary differences and unused
tax losses only if it is probable that future
taxable amounts will be available to utilise those
temporary differences and losses.

Deferred tax assets and liabilities are offset when
there is a legally enforceable right to offset current
tax assets and liabilities and when the deferred tax
balances relate to the same taxation authority.

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.

16 Borrowing costs

General and specific borrowing costs that are directly
attributable to the acquisition, construction or
production of a qualifying asset are capitalised during
the period of time that is required to complete and
prepare the asset for its intended use or sale. Qualifying
assets are assets that necessarily take a substantial
period of time to get ready for their intended use or
sale. Borrowing costs also include exchange difference
arising from foreign currency borrowings to the extent
they are regarded as an adjustment to interest costs.
Investment income earned on the temporary investment
of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs
eligible for capitalisation. Other borrowing costs are
expensed in the period in which they are incurred.