2. material accounting policies

The material accounting policies applied by the
Company in the preparation of its standalone Ind AS
financial statements are listed below. Such accounting
policies have been applied consistently to all the
periods presented in these standalone Ind AS financial
statements, unless otherwise indicated.

2.1. basis of preparation

The standalone Ind AS financial statements of the
Company, have been prepared in accordance with
Indian Accounting Standards (Ind AS) notified under
the Companies (Indian Accounting Standards) Rules,
2015 (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.

The standalone Ind AS financial statements have been
prepared on a historical cost basis, except for certain
financial assets and liabilities (refer accounting policy
regarding financial instruments) which have been
measured at fair value.

The functional and presentation currency of the Company
is Indian Rupee ("'") which is the currency of the primary
economic environment in which the Company operates
and all values are rounded to the nearest million (INR
000,000), except when otherwise indicated.

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

2.2. change in accounting policies and

DISCLOSURES:

New Standards and amendments:

The Company applied for the first-time certain standards
and amendments, which are effective for annual periods
beginning on or after April 01, 2025. The Company
has not early adopted any standard, interpretation or
amendment that has been issued but is not yet effective.

(i) Amendments to Ind AS 21 - Lack of
exchangeability

The Ministry of Corporate Affairs (MCA) notified
the Companies (Indian Accounting Standards)
Amendment Rules, 2025, which amend Ind AS
21, The Effects of Changes in Foreign Exchange
Rates to specify how an entity should assess
whether a currency is exchangeable and how
it should determine a spot exchange rate when
exchangeability is lacking. The amendments also
require disclosure of information that enables users
of its financial statements to understand how the
currency not being exchangeable into the other
currency affects, or is expected to affect, the
entity's financial performance, financial position and
cash flows.

The amendments are effective for annual reporting
periods beginning on or after April 01, 2025. When
applying the amendments, an entity cannot restate
comparative information.

The amendments do not have a material impact on
the Company's financial statements.

(ii) Amendments to Ind AS 1 - Classification
of Liabilities as Current or Non-current
and Non-current Liabilities with
Covenants

In August 2025, the MCA notified amendments to
paragraphs 69 to 76 of Ind AS 1 to specify the
requirements for classifying liabilities as current or
non-current. The amendments clarify:

• What is meant by a right to defer settlement

• That a right to defer must exist at the end of
the reporting period

• That classification is unaffected by the
likelihood that an entity will exercise its
deferral right

• That only if an embedded derivative in
a convertible liability is itself an equity
instrument would the terms of a liability not
impact its classification

In addition, a requirement has been introduced
to require disclosure when a liability arising from
a loan agreement is classified as non-current and
the entity's right to defer settlement is contingent
on compliance with future covenants within twelve
months.

If there is a breach of a material covenant of a long
term loan arrangement on or before the end of the
reporting period, resulting in the liability becoming
payable on demand as at the reporting date, and
the lender agrees—after the reporting period but
before the financial statements are approved for
issue—not to demand repayment for at least 12
months as a consequence of the breach, this shall
be treated as an adjusting event. Accordingly,
the entity is not required to classify the liability
as current.

The amendments are effective for annual reporting
periods beginning on or after April 01, 2025
retrospectively in accordance with Ind AS 8.

The amendments have resulted in additional
disclosures in note 18 but have not had an impact
on the classification of Company's liabilities.

(iii) Amendments to Ind AS 7 and Ind AS 107
- Supplier Finance Arrangements

In August 2025, the MCA notified amendments to
Ind AS 7 Statement of Cash Flows and Ind AS 107
Financial Instruments: Disclosures to clarify the
characteristics of supplier finance arrangements and
require additional disclosure of such arrangements.
The disclosure requirements in the amendments
are intended to assist users of financial statements
in understanding the effects of supplier finance
arrangements on an entity's liabilities, cash flows
and exposure to liquidity risk.

As a result of implementing the amendments, the
Company has provided additional disclosures about
its supplier finance arrangement. Please refer to
note 21.

(iv) International Tax Reform-Pillar Two
Model Rules - Amendments to Ind AS 12

In August 2025, the MCA notified amendments to
Ind AS 12 Income Taxes in response to the OECD's
BEPS Pillar Two rules and include:

• A mandatory temporary exception to the recognition
and disclosure of deferred taxes arising from the
jurisdictional implementation of the Pillar Two
model rules; and

• Disclosure requirements for affected entities to help
users of the financial statements better understand
an entity's exposure to Pillar Two income taxes
arising from that legislation, particularly before its
effective date.

The mandatory temporary exception - the use
of which is required to be disclosed - applies
immediately. The remaining disclosure requirements
apply for annual reporting periods beginning on or
after April 01, 2025, but not for any interim periods
ending on or before 31 March 2026.

The amendments had no impact on the Company's
standalone financial statements as the Company is
not in scope of the Pillar Two model rules.

a. Current versus non-current classification

The Company segregates assets and liabilities into
current and non-current categories for presentation
in the balance sheet after considering its normal
operating cycle and other criteria set out in Ind AS
1, "Presentation of Financial Statements". For this
purpose, current assets and liabilities include the
current portion of non-current assets and liabilities
respectively. Deferred tax assets and liabilities are
always classified as non-current.

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

b. Fair value measurement

The Company measures financial instruments,
such as, derivatives at fair value at each balance
sheet date.

Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly
transaction between market participants at the
measurement date. The fair value measurement
is based on the presumption that the transaction
to sell the asset or transfer the liability takes
place either:

a) In the principal market for the asset or
liability, or

b) In the absence of a principal market, in the
most advantageous market for the asset
or liability

The principal or the most advantageous market
must be accessible by the Company.

The fair value of an asset or a liability is measured
using the assumptions that market participants
would use when pricing the asset or liability,
assuming that market participants act in their
economic best interest.

A fair value measurement of a non-financial asset
takes into account a market participant's ability to
generate economic benefits by using the asset in
its highest and best use or by selling it to another
market participant that would use the asset in its
highest and best use.

The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximising the use of relevant observable inputs
and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is
measured or disclosed in the standalone Ind AS
financial statements are categorised within the fair
value hierarchy, described as follows, based on the
lowest level input that is significant to the fair value
measurement as a whole:

Level 1 — Quoted (unadjusted) market prices in
active markets for identical assets or liabilities;

Level 2 — Valuation techniques for which the
lowest level input that is significant to the fair value
measurement is directly or indirectly observable;

Level 3 — Valuation techniques for which the
lowest level input that is significant to the fair value
measurement is unobservable.

For assets and liabilities that are recognised in
the standalone Ind AS financial statements on a
recurring basis, the Company determines whether
transfers have occurred between levels in the
hierarchy by re-assessing categorisation (based on
the lowest level input that is significant to the fair
value measurement as a whole) at the end of each
reporting period.

For the purpose of fair value disclosures, the
Company has determined classes of assets and
liabilities on the basis of the nature, characteristics
and risks of the asset or liability and the level of the
fair value hierarchy as explained above.

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

• Disclosures for valuation methods, significant
estimates and assumptions

• Quantitative disclosures of fair value
measurement hierarchy

• Investment in unquoted equity shares

• Financial instruments (including those carried
at amortised cost)

c. Revenue from contract with customers

Revenue from contracts with customers is
recognised 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 specific recognition criteria described below
must also be met before revenue is recognised.

Sale of products and services
Revenue from sale of products is recognised
at the point in time when control of the asset is
transferred to the customer, generally on delivery
of the products.

Revenues from fixed price contracts are recognized
on the percentage of completion method, in
proportion that the contract costs incurred for
work performed up to the reporting date bear to
the estimated total contract costs. Contract revenue
earned in excess of billing has been reflected
under "Other current assets" and billing in excess
of contract revenue has been reflected under
"Other current liabilities" in the balance sheet. Full
provision is made for any loss in the year in which
it is first foreseen.

Revenue from sale of services is recognized
as the service is performed and there are no
unfulfilled obligations.

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 if any.
In determining the transaction price for the sale
of goods, the Company considers the effects of
variable consideration, the existence of significant
financing components, noncash consideration, and
consideration payable to the customer (if any).

Revenue towards satisfaction of a performance
obligation is measured at the amount of transaction
price (net of variable consideration) allocated to that
performance obligation. The transaction price of
goods sold and services rendered is net of variable
consideration on account of various discounts and
schemes offered by the Company as part of the
contract. This variable consideration is estimated
based on the expected value of outflow. Revenue
(net of variable consideration) is recognized only to
the extent that it is highly probable that the amount
will not be subject to significant reversal when
uncertainty relating to its recognition is resolved.

Scrip Sales

Export entitlements in the form of Merchandise
Export from India (MEIS) are recognized in the
standalone Ind AS statement of profit and loss
when the right to receive credit as per the terms
of the scheme is established in respect of exports
made and when there is no significant uncertainty
regarding the ultimate collection of the relevant
export proceeds.

Interest income

For all financial instruments measured either
at amortised cost or at fair value through other
comprehensive income, interest income is recorded
using the effective interest rate (EIR). EIR is the
rate that exactly discounts the estimated future
cash payments or receipts over the expected life of
the financial instrument or a shorter period, where
appropriate, to the gross carrying amount of the
financial asset or to the amortised cost of a financial
liability. When calculating the effective interest rate,
the Company estimates the expected cash flows by
considering all the contractual terms of the financial
instrument but does not consider the expected
credit losses. Interest income is included in finance
income in the statement of profit and loss.

Commission income

Commission income is recognised at the time when
services are rendered in accordance with the rates
as per the agreements entered into with the parties.

Contract balances
Contract assets

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. Contract assets are
transferred to receivables when the rights become
unconditional and contract liabilities are recognized
as and when the performance obligation is satisfied.

Contract assets are subject to impairment
assessment. Refer to accounting policies on
impairment of financial assets in section (o)
Financial instruments below.

Trade receivables

A receivable is recognised if an amount of
consideration that is unconditional (i.e., only the
passage of time is required before payment of
the consideration is due). Refer to accounting
policies of financial assets in section (o) Financial
instruments below.

Capitalised contract costs
Incremental costs of obtaining a contract are
capitalised if these costs are recoverable. Costs to
fulfil a contract are capitalised if the costs relate
directly to the contract, generate or enhance
resources used in satisfying the contract and are
expected to be recovered. Other contract costs are
expensed as incurred.

Capitalised contract costs are subsequently
amortised on a systematic basis as the Company
recognises the related revenue. An impairment loss
is recognised in profit or loss to the extent that the
carrying amount of the capitalised contract costs
exceeds the remaining amount of consideration
that the Company expects to receive in exchange

for the goods or services to which the contract
costs relates less the costs that relate directly
to providing the goods and that have not been
recognised as expenses.

Contract liabilities

A contract liability is recognised if a payment is
received or a payment is due (whichever is earlier)
from a customer before the Company transfers the
related goods or services. Contract liabilities are
recognised as revenue when the Company performs
under the contract (i.e., transfers control of the
related goods or services to the customer).

d. Government grants

Government grants are recognised where there is
reasonable assurance that the grant will be received
and all attached conditions will be complied with.
When the grant relates to an expense item, it is
recognised as income on a systematic basis over
the periods that the related costs, for which it is
intended to compensate, are expensed. When the
grant relates to an asset, it is recognised as income
in equal amounts over the expected useful life of
the related asset.

e. Taxes on income

Current income tax

Tax expense for the year comprises current and
deferred tax. The tax currently payable is based
on taxable profit for the year. Taxable profit differs
from net profit as reported in the statement of
profit and loss because it excludes items of income
or expense that are taxable or deductible in other
years and it further excludes items that are never
taxable or deductible. Current income tax assets
and liabilities are measured at the amount expected
to be recovered from or paid to the taxation
authorities. The Company's liability for current tax
is calculated using the tax rates and tax laws that
have been enacted or substantively enacted by the
end of the reporting period.

Current income tax relating to items recognised
outside profit or loss is recognised outside profit
or loss (either in other comprehensive income or
in equity). Current tax items are recognised in

correlation to the underlying transaction either in
OCI or directly in equity. Management periodically
evaluates positions taken in the tax returns with
respect to situations in which applicable tax
regulations are subject to interpretation and
considers whether it is probable that a taxation
authority will accept an uncertain tax treatment.
The Company shall reflect the effect of uncertainty
for each uncertain tax treatment by using either
most likely method or expected value method,
depending on which method predicts better
resolution of the treatment.

Deferred tax

Deferred tax is the tax expected to be payable or
recoverable on differences between the carrying
values of assets and liabilities in the financial
statements and the corresponding tax bases
used in the computation of the taxable profit and
is accounted for using the balance sheet liability
model. Deferred tax liabilities are generally
recognised for all the taxable temporary differences.
In contrast, deferred tax assets are only recognised
to the extent that is probable that future taxable
profits will be available against which the temporary
differences can be utilised.

Deferred tax assets are recognized for all deductible
temporary differences, carry forward of unused tax
credits and unused tax losses, to the extent that it is
probable that taxable profit will be available against
which the deductible temporary differences, and
the carry forward of unused tax credits and unused
tax losses can be utilized.

The carrying amount of deferred tax assets is
reviewed at each balance sheet date and reduced
to the extent that it is no longer probable that
sufficient taxable profit will be available to allow
all or part of the deferred tax asset to be utilized.
Unrecognised deferred tax assets are re-assessed
at each reporting date and are recognised to the
extent that it has become probable that future
taxable profits will allow the deferred tax asset to
be recovered.

Deferred tax assets and liabilities are measured at
the tax rates that are expected to apply in the year
when the asset is realized or the liability is settled,

based on tax rates (and tax laws) that have been
enacted or substantively enacted at the balance
sheet date.

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.

Deferred tax assets and deferred tax liabilities are
offset if a legally enforceable right exists to set off
current tax assets against current tax liabilities and
the deferred taxes relate to the same taxable entity
and the same taxation authority.

Goods and Services Tax (GST) / value
added taxes 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.

f. Property, plant and equipment ('PPE')
and Capital Work in Progress ('CWIP')

On transition to Ind AS, the Company has elected
to continue with the carrying value of all of its
property, plant and equipment recognised as at
March 31, 2016 measured as per the previous
GAAP and use that carrying value as the deemed
cost of the property, plant and equipment as on
April 01, 2016.

Capital work in progress includes cost of property,
plant and equipment under installation / under
development, net of accumulated impairment loss,
if any, as at the balance sheet date. Plant and
equipment are stated at cost, net of accumulated
depreciation and accumulated impairment losses,
if any. Such cost includes the cost of replacing part
of the plant and equipment and borrowing costs for
long-term construction projects if the recognition
criteria are met. When significant parts of plant and
equipment are required to be replaced at intervals,
the Company depreciates them separately based
on their specific useful lives. All other repair and
maintenance costs are recognised in profit or loss
as incurred.

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 assets are
derecognised when replaced. All other repairs and
maintenance are charged to profit and loss during
the reporting period in which they are incurred.

The Company identifies and determines cost of
each component/ part of the asset separately, if
the component/ part has a cost which is significant
to the total cost of the asset having useful life that
is materially different from that of the remaining
asset. These components are depreciated over their
useful lives; the remaining asset is depreciated over
the life of the principal asset.

Depreciation is calculated on a straight-line basis
over the estimated useful lives of the assets
as follows:

Land is carried at historical cost and is not
depreciated. Leasehold improvements are
depreciated over the period of lease or estimated
useful life, whichever is lower, on straight line basis

The management believes that these estimated
useful lives are realistic and reflect fair approximation
of the period over which the assets are likely to
be used.

The residual values, useful lives and methods of
depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted
prospectively, if appropriate.

An item of property, plant and equipment and any
significant part initially recognised is derecognised
upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or
loss arising on derecognition of the asset (calculated
as the difference between the net disposal proceeds
and the carrying amount of the asset) is included
in the statement of profit and loss when the asset
is derecognised.

Machinery spares are depreciated on a systematic
basis over the period of the remaining useful life of
the fixed assets for which they are utilised.

g. Intangible assets

On transition to Ind AS, the Company has elected
to continue with the carrying value of all of its
intangible assets as at March 31, 2016, measured
as per the previous GAAP and use that carrying
value as the deemed cost of the intangible assets
as on April 01, 2016. Intangible assets acquired
separately are measured on initial recognition at
cost. The cost of intangible assets acquired in a
business combination is their fair value at the date of

acquisition. Following initial recognition, intangible
assets are carried at cost less any accumulated
amortisation and accumulated impairment losses,
if any. Internally generated intangibles, excluding
capitalised development costs, are not capitalised
and the related expenditure is reflected in profit
or loss in the period in which the expenditure
is incurred.

The useful lives of intangible assets are assessed
as either finite or indefinite.

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 with the affect
of any change in the estimate being accounted for
on a prospective basis. 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.

Intangible assets with indefinite useful lives are not
amortised, but are tested for impairment annually,
either individually or at the cash-generating unit
level. 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.

An intangible asset is derecognised upon disposal
(i.e., at the date the recipient obtains control) or
when no future economic benefits are expected
from its use or disposal. Any gain or loss arising
upon derecognition of the asset (calculated as the
difference between the net disposal proceeds and
the carrying amount of the asset) is included in
the statement of profit and loss when the asset
is derecognised.

h. Borrowing cost

Borrowing costs directly attributable to the
acquisition, construction or production of an asset
that necessarily takes a substantial period of time to
get ready for its intended use or sale are capitalised
as part of the cost of the asset until such time as
the assets are substantially ready for the intended
use or sale. All other borrowing costs are expensed
in the period in which they occur. Borrowing costs
consist of interest and other costs that an entity
incurs in connection with the borrowing of funds.
Borrowing cost also includes exchange differences
to the extent regarded as an adjustment to the
borrowing costs.

i. Leases

The Company has lease contracts for office spaces,
various items of plant and machinery and other
equipment. The Company assesses at contract
inception whether a contract is, or contains, a lease.
That is, if the contract conveys the right to control
the use of an identified asset for a period of time
in exchange for consideration.

Company as a lessee

The Company applies a single recognition and
measurement approach for all leases, except for
short-term leases and leases of low-value assets.
The Company recognises lease liabilities to make
lease payments and right-of-use assets representing
the right to use the underlying assets.

i) 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. Right-of-use assets are depreciated
on a straight-line basis over the shorter of the
lease term and the estimated useful lives of
the assets.

If ownership of the leased asset transfers to
the Company at the end of the lease term or
the cost reflects the exercise of a purchase
option, depreciation is calculated using the
estimated useful life of the asset.

The right-of-use assets are also subject to
impairment. Refer to the accounting policies in
section (l) Impairment of non-financial assets.

ii) 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 lease payments also
include the exercise price of a purchase
option reasonably certain to be exercised
by the Company and payments of penalties
for terminating the lease, if the lease term
reflects the Company exercising the option to
terminate. Variable lease payments that do not
depend on an index or a rate are recognised as
expenses (unless they are incurred to produce
inventories) in the period in which the event
or condition that triggers the payment occurs.

In calculating the present value of lease
payments, the Company uses its incremental
borrowing rate at the lease commencement
date because the interest rate implicit in the

lease is not readily determinable. After the
commencement date, the amount of lease
liabilities is increased to reflect the accretion
of interest and reduced for the lease payments
made. In addition, the carrying amount of
lease liabilities is remeasured if there is a
modification, a change in the lease term, a
change in the lease payments (e.g., changes
to future payments resulting from a change in
an index or rate used to determine such lease
payments) or a change in the assessment of
an option to purchase the underlying asset.

iii) Short-term leases and leases of low-value
assets

The Company applies the short-term lease
recognition exemption to its short-term leases
of machinery and equipment (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 of office equipment
that are considered to be low value. 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.

The Company applies the low-value asset
recognition exemption on a lease-by-lease
basis, if the lease qualifies as leases of low-
value assets, with a value when new of up to
' 0.18 million. In making this assessment, the
Company also factors below key aspects:

• The assessment is conducted on an
absolute basis and is independent of
the size, nature, or circumstances of
the lessee.

• The assessment is based on the value of
the asset when new, regardless of the
asset's age at the time of the lease.

• The lessee can benefit from the use of
the underlying asset either independently
or in combination with other readily
available resources, and the asset is not

highly dependent on or interrelated with
other assets.

• If the asset is subleased or expected to
be subleased, the head lease does not
qualify as a lease of a low-value asset.

Based on the above criteria, the Company has
classified leases of IT equipment for individual
employees as leases of low value assets.

j. Inventories

Inventories are valued at lower of cost and net
realisable value. However, materials and other items
held for use in the production of inventories are not
written down below cost if the finished products in
which they will be incorporated are expected to be
sold at or above cost.

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

a) Raw materials and stores and spares: cost
includes cost of purchase and other costs
incurred in bringing the inventories to their
present location and condition.

b) 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 of raw materials, stores and spares, work-in¬
progress and finished goods is determined on a
weighted average basis.

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.

k. Impairment of non-financial assets
and investments in subsidiaries and
associates

As at the end of each accounting year, the Company
reviews the carrying amounts of its PPE, intangible
assets, including goodwill and investments in

subsidiary and associates to determine whether
there is any indication that those assets have
suffered an impairment loss. If such indication
exists, the said assets are tested for impairment
so as to determine the impairment loss, if any.
Goodwill and the intangible assets with indefinite
life are tested for impairment each year.

Impairment loss is recognised when the carrying
amount of an asset exceeds its recoverable amount.
Recoverable amount is determined:

(i) in the case of an individual asset, at the higher
of the fair value less costs of disposal and the
value in use; and

(ii) in the case of a cash generating unit (a
group of assets that generates identified,
independent cash flows), at the higher of the
cash generating unit's net fair value less costs
of disposal and the value in use.

(The amount of value in use is determined as the
present value of estimated future cash flows from
the continuing use of an asset and from its disposal
at the end of its useful life. For this purpose, the
discount rate (pre-tax) is determined based on the
weighted average cost of capital of the company
suitably adjusted for risks specified to the estimated
cash flows of the asset).

For this purpose, a cash generating unit is
ascertained as the smallest identifiable group of
assets that generates cash inflows that are largely
independent of the cash inflows from other assets
or groups of assets.

If recoverable amount of an asset (or cash
generating unit) is estimated to be less than
its carrying amount, such deficit is recognised
immediately in the Statement of Profit and Loss
as impairment loss and the carrying amount of the
asset (or cash generating unit) is reduced to its
recoverable amount.

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. If no such transactions can be
identified, an appropriate valuation model is used.
These calculations are corroborated by valuation
multiples, quoted share prices for publicly traded
companies or other available fair value indicators.

The Company bases its impairment calculation on
detailed budgets and forecast calculations, which
are prepared separately for each of the Company's
CGUs to which the individual assets are allocated.
To estimate cash flow projections beyond periods
covered by the most recent budgets/forecasts, the
Company extrapolates cash flow projections in the
budget using a steady or declining growth rate for
subsequent years, unless an increasing rate can
be justified. In any case, this growth rate does
not exceed the long-term average growth rate for
the products, industries, or country in which the
Company operates, or for the market in which the
asset is used.

Impairment losses of continuing operations,
including impairment on inventories, are recognised
in the statement of profit and loss.

When an impairment loss subsequently reverses,
the carrying amount of the asset (or 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 is recognised for the asset (or cash
generating unit) in prior years. A reversal of an
impairment loss is recognised immediately in the
statement of profit and loss.