e) Material Accounting Policies

I. Property, Plant and Equipment

Property, plant and equipment are stated at
their cost less accumulated depreciation and
impairment loss.

Freehold land is carried at historical cost.

Expenditure incurred during the period of
construction is carried as capital work-in¬
progress and on completion the costs are
allocated to the respective items of property,
plant and equipment.

Depreciation on property, plant and
equipment is provided on straight-line
method over the estimated useful life which
is in line with that indicated in Part C of

II. Leases
Company as Lessee

The Company's lease asset classes primarily
consist of lease for buildings.

The right-of-use assets are subsequently
measured at cost less any accumulated
depreciation, accumulated impairment
losses, if any and adjusted for any
remeasurement of the lease liability.
The right-of-use assets is depreciated
using the straight-line method from the
commencement date over the shorter of
lease term or useful life of right-of-use asset.

The Company measures the lease liability
at the present value of the lease payments
that are not paid at the commencement
date of the lease. The lease payments are
discounted using the incremental borrowing
rate. For short-term and low value leases, the
Company recognises the lease payments as
an operating expense on a straight-line basis
over the lease term.

Company as Lessor

Rental income from operating leases is
recognised on a straight- line basis over the
term of the relevant lease.

III. Financial Instruments

Initial Recognition and Measurement

Except for trade receivables, all financial
assets (not measured subsequently at fair

value through profit or loss) are recognised
initially at fair value plus transaction costs.

All financial liabilities are recognised initially
at fair value and, in the case of loans and
borrowings and payables, net of incremental
transaction costs.

Financial Assets and Liability at Amortised
Cost

A 'financial asset' is measured at the amortised
cost if both the following conditions are met:

i) the asset is held within a business
model whose objective is to hold
assets/liability for collecting/paying
contractual cash flows, and

ii) Contractual terms of the asset/liability
give rise on specified dates to cash flows
that are solely payments of principal
and interest (SPPI) on the principal
amount outstanding.

Such financial assets and financial liabilities
are subsequently carried at amortised
cost using the effective interest method.
Examples include financial assets and
financial liabilities aggregated in cash and
cash equivalents, trade receivables, trade
payables and other financial assets line
items. Refer Note No 33 for disclosure
on categories of financial assets and
financial liabilities.

Financial Instruments at Fair Value through
Profit or Loss

A financial instrument which is not classified
as at amortised cost are subsequently fair
valued through profit or loss except for
equity investments not held for trading and
not under liquidation on initial recognition.
Such equity investments are measured at fair
value with changes in fair value recognised in
other comprehensive income.

IV. Derivative Financial Instruments and
Hedge Accounting

The Company enters into derivative financial
instruments to manage its foreign exchange
rate risk. Derivatives are initially recognised
at fair value at the date a derivative contract
is entered into and are subsequently re¬
measured to their fair value at the end of each
reporting period. The resulting gain or loss
is recognised in profit or loss immediately
unless the derivative is designated and

effective as a hedging instrument, in which
event the timing of the recognition in profit
or loss depends on the nature of the hedging
relationship and nature of hedged items.

V. Impairment of Assets
Financial Assets

For the purpose of measuring lifetime
expected credit loss allowance for trade
receivables, the Company has used a
practical expedient as permitted under Ind
AS 109. This expected credit loss allowance
is computed based on a provision matrix
which takes into account historical credit
loss experience adjusted for forward¬
looking information.

The Company uses both forward-looking
and historical information to determine
whether a significant increase in credit
risk has occurred.

VI. Inventories

Inventories consist of raw materials, packing
materials, consumables and spares, work-in¬
progress, stock-in-trade, and finished goods.

Raw material, packing material, consumables
and spares are valued at cost. Cost of raw
materials is determined using the weighted
average cost method.

Inventories of finished goods and work-in¬
progress are valued at cost or net realisable
value, whichever is lower. Cost is determined
on the moving weighted average method.

The factors that the Company considers in
determining the allowance for slow moving,
obsolete and other non-saleable inventory
include estimated shelf life, price changes,
ageing of inventory, to the extent each of
these factors impact the Company's business
and markets. The Company considers all these
factors and adjusts the carrying amount of
inventory to reflect its actual experience on
periodic basis.

VII. Investment in Subsidiaries

The Company accounts for its investments
in subsidiaries at cost less accumulated
impairment, if any.

VIII. Revenue Recognition

The Company recognises revenue from the
following major sources:

• Sale of goods

• Sale of services

Revenue is measured at the fair value of
consideration received or receivable.

Revenue is recognised when the Company
satisfies a performance obligation by
transferring a promised good or service to
the customer, which is when the customer
obtains control of the good or service. A
performance obligation may be satisfied
at a point in time. The amount of revenue
recognised is the amount allocated to the
satisfied performance obligation.

Revenue is recognised only when it can
be reliably measured, and it is probable
that future economic benefits will flow
to the company.

Revenue from operations includes sales
of goods, services, commission, export
incentives. Revenue excludes Goods and
Service Tax amount collected on behalf
of third parties.

1. Sale of Goods

Revenue from sale of manufactured
and traded goods is recognised when
a promise in a customer contract
(performance obligation) has been
satisfied by transferring control over the
promised goods to the customer. The
control of goods is usually transferred
to the customer depending upon the
incoterms or as agreed with customer
upon shipment, delivery to the customer,
in accordance with the delivery and
acceptance terms agreed with the
customers. Control over a promised
good refers to the ability to direct the
use of, and obtain substantially all of the
remaining benefits from, those goods.

Revenue is measured based on
transaction price, which is the fair
value of the consideration received
or receivable, stated net of rebates,
discounts, returns, indirect taxes or any
other similar allowances. Transaction
price is recognised based on the price
specified in the contract, net of the
sales discounts.

Incentives are accounted based on the
assessment of whether the beneficiary
(of the incentive) is acting as a principal
or an agent. Where the beneficiary is
a principal, the incentive is regarded
as consideration paid to the customer
and is reduced from revenue. However,
where the beneficiary is an agent,
the incentive payment is recognised
as an expense as the same is in the
nature of commission.

Advance received from customer
before transfer of control of goods
to the customer is recognised as
contract liability.

2. Sale of Services

Revenue from services is recognised
in accordance with the terms of the
contract with customers when the related
performance obligation is completed.

The company recognises revenue at the
point of time on the basis of completion
of milestones i.e., when the underlying
services are performed as per the terms
of the contract and when the control is
transferred to the customer.

Upfront non-refundable payments
received under these arrangements are
deferred and recognised as revenue
over the expected period over which
the related services are expected
to be performed.

3. Profit Sharing Revenues

The Company from time to time
enters into arrangements with certain
business partners for the sale of its
products in certain markets. Under such
arrangements, the Company sells its
products to the business partners at a
base purchase price agreed upon in the
arrangement and is also entitled to a
profit share which is over and above the
base purchase price. The profit share is
typically dependent on the ultimate net
sale proceeds or net profits, subject to
any reductions or adjustments that are
required by the terms of the arrangement.
Revenue in an amount equal to the base
purchase price is recognised in these
transactions upon delivery of products

to the business partners. An additional
amount representing the profit share
component is recognised as revenue
only to the extent that it is highly
probable that a significant reversal
will not occur.

Performance Obligation and Transaction
Price (Fixed and Variable)

At inception of the contract, Company
assesses the goods or services promised
in a contract with a customer and
identifies each promise to transfer to the
customer as a performance obligation
which is either:

(a) a good or service (or a bundle of
goods or services) that is distinct; or

(b) a series of distinct goods or services
that are substantially the same
and that have the same pattern of
transfer to the customer.

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 excluded amount collected
on behalf of third parties such as taxes.

For allocating the transaction price,
the Company has measured the

revenue in respect of each performance
obligation of a contract at its relative
standalone selling price. The price that
is regularly charged for an item when
sold separately is the best evidence of
its standalone selling price.

IX. Government Grants

Export entitlement under the Duty Drawback
scheme, Rodtep scheme, Merchandise

Exports Incentive Scheme ("MEIS") is grant
related to income. The Company presents the
grant income from export entitlements and
related expenses on gross basis.

X. Employee Benefits

a) Short Term Employee Benefits

1. Benefits such as salaries and wages,
etc. and the expected cost of the
bonus/ ex-gratia are recognised in

the period in which the employee
renders the related service.

2. Liability for Leave Travel Allowance
which are in the nature of short¬
term benefits is provided for as per
Company policies based on the
undiscounted amount of benefits
expected to be paid in exchange of
services rendered.

3. Compensated absences which are
not expected to occur within twelve
months after the end of the period
in which the employee renders the
related services are recognized
as a liability at the present value
of the defined benefit obligation
at the balance sheet date. The
discount rate used for determining
the present value of the obligation
under long term employee benefits,
are based on the market yields on
Government securities as at the
balance sheet date.

b) Defined Contribution Plans

The Company has Defined Contribution
Plans for post-employment benefits
charged to the statement of profit and
loss on accrual basis, in the form of

- Provident fund for all employees
which is administered by Regional
Provident Fund Commissioner.

- State Defined Contribution Plans:
Employer's Contribution to
Employees' State Insurance.