5. MATERIAL ACCOUNTING POLICIES

The financial statements have been prepared

using the material and other accounting policies

and measurement bases summarized below:

a. Revenue Recognition:

♦ Revenue from sale of products is
recognized when control of products
being sold is transferred to customer
and when there are no longer any
unfulfilled obligations. The performance
obligations in contracts are considered
as fulfilled in accordance with the terms
agreed with the respective customers.

Revenue is measured at fair value of the
consideration received or receivable and
is accounted for net of returns, rebates
and trade discount. Sales, as disclosed,
are exclusive of goods and services tax.

The Company considers the terms
of the contract and its customary
business practices to determine the
transaction price. The transaction price
is the amount of consideration to which
the Company expects to be entitled in
exchange for transferring promised
goods to a customer, excluding amounts
collected on behalf of third parties
(for example taxes collected on behalf
of government). The consideration
promised in a contract with a customer
may include fixed consideration, variable
consideration (if reversal is less likely in
future), or both.

The transaction price is allocated by the
Company to each performance obligation
in an amount that depicts the amount of
consideration to which it expects to be
entitled in exchange for transferring the
promised goods to the customer.

For each performance obligation
identified, the Company determines at

contract inception whether it satisfies
the performance obligation over time or
satisfies the performance obligation at a
point in time.

When either party to a contract has
performed its obligation, an entity shall
present the contract in the balance
sheet as a contract asset or a contract
liability, depending on the relationship
between the entity's performance and
the customer's payment.

♦ Income from export incentives such
as duty drawback, premium on sale of
import licenses and lease license fee
are recognized on accrual basis when
no significant uncertainties as to the
amount of consideration that would be
derived and as to its ultimate collection
exist.

♦ Rental income is recognized on a
straight-line basis over the terms of
the lease, except for contingent rental
income which is recognized when it
arises and where scheduled increase
in rent compensates the lessor for
expected inflationary costs.

♦ Interest income is recognized using
effective interest method.

♦ Dividend income is recognized at
the time when the right to receive is
established by the reporting date.

♦ Other incomes have been recognized on
accrual basis in the financial statements,
except when there is uncertainty of
collection.

b. Property, Plant and Equipment:

Property, plant and equipment is stated at
cost, net of accumulated depreciation and
accumulated impairment losses, if any.
These tangible assets are held for use in
production, supply of goods or services or
for administrative purposes.

♦ Cost comprises purchase cost, freight,
duties, taxes and other expenses directly

incidental to acquisition, bringing the
asset to the location and installation
including site restoration up to the time
when the asset is ready for intended
use. Such costs also include borrowing
cost if the recognition criteria are met.

♦ When a major inspection/repair occurs, its
cost is recognized in the carrying amount
of the property, plant and equipment as a
replacement if the recognition criteria are
satisfied. Any remaining carrying amount
of the cost of previous inspection/
repair is derecognized. All other repair
and maintenance are recognized in the
Standalone Statement of Profit and Loss
as incurred.

♦ Depreciation on property, plant and
equipment is provided over the useful
lives of assets as specified in Schedule II
to the Act except where the management
has estimated useful life of an asset
supported by the technical assessment,
external or internal, i.e., higher or lower
from the indicative useful life given under
Schedule II. 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.

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

The residual value and useful life is
reviewed annually and any deviation is
accounted for as a change in estimate.

♦ Components relevant to property, plant
and equipment, where significant, are

separately depreciated on straight line
basis in terms of their life span assessed
by technical evaluation in item specific
context.

♦ For new projects, all direct expenses
and direct overheads (excluding services
of non-exclusive nature provided by
employees in Company's regular payroll)
are capitalized till the assets are ready
for intended use.

♦ During disposal of property, plant and
equipment, any profit earned / loss
sustained towards excess / shortfall
of sale value vis-a-vis carrying cost of
assets is accounted for in Standalone
Statement of Profit and Loss.

♦ Assets taken on lease is represented in
terms of as on date discounted value
of lease rent payable during the lease
period which is accounted for as ROU
being amortisable over the period of
lease.

Besides security deposit paid
against obtention of lease is accounted
for in terms of as on date discounted value
of future realization of security deposit
during the period of lease and the
difference between the value of Security
Deposit and its discounted value is
treated as ROU amortizable over the
period of lease/ security deposit.

♦ Discounting in both above cases are
done as per fair rate of interest

c. Investment Property:

Properties held to earn rentals or / and
for capital appreciation or both but not
for sale in the ordinary course of business,
use in the production or supply of goods
or services or for administrative purposes,
are categorized as investment properties.
These are measured initially at cost of
acquisition, including transaction costs and
other direct costs attributable to bringing
asset to its working condition for intended
use. Subsequent to initial recognition,
investment properties are stated at

cost less accumulated depreciation and
accumulated impairment loss, if any. The
cost shall also include borrowing cost
if the recognition criteria are met. Said
assets are depreciated on straight line
basis based on expected life span of assets
which is in accordance with Schedule II of
the Act.

Significant parts of the property are
depreciated separately based on their
specific useful lives as follows:

Any gain or loss on disposal of investment
properties is recognized in Standalone
Statement of Profit and Loss.

Fair value of investments properties under
each category are disclosed under note
6C to the standalone financial statements.
Fair values are determined based on the
evaluation performed by an accredited
external independent valuer applying a
recognized and accepted valuation model
or estimation based on available sources of
information from market.

Transfers to or from the investment
property is made only when there is a
change in use and the same is made at the
carrying amount of investment property.

d. Intangible Assets:

♦ Intangible assets acquired separately
are measured on initial recognition at
cost of acquisition. The cost comprises
of purchase price and directly
attributable costs of bringing the assets
to its working condition for intended use.
Intangible assets arising on acquisition
of business are measured at fair value
as at date of acquisition. In case of
internally generated assets, measured at
development cost subject to satisfaction
of recognition criteria (identifiability,
control and future economic benefit) in
accordance with Ind AS 38 'Intangible
Assets'.

♦ Following initial recognition,
intangible assets are carried at cost
less accumulated amortization and
accumulated impairment loss, if any.

♦ Intangible assets with finite lives are
amortized on a straight-line basis over
the estimated useful economic life. The
amortization expense on intangible
assets with finite lives is recognized in
the Standalone Statement of Profit and
Loss.

♦ Amortization of intangible assets such
as software is computed on a straight¬
line basis, at the rates representing
estimated useful life of up to 5 years.
The brands, trademarks and distribution
network acquired as part of business
combinations normally have an
estimated useful life of up to 10 years.

e. Government Subsidy / Grants:

Government grant is recognized only
when there is a reasonable assurance that
the entity will comply with the conditions
attached to them and the grants will be
received.

♦ Subsidy related to assets is recognized
as deferred income which is recognized
in the Standalone Statement of Profit
and Loss on a systematic basis over the
useful life of the assets.

♦ Purchase of assets and receipts of
related grants are separately disclosed
in Standalone Statement of Cash Flow.

♦ Grants related to income are treated as
other operating income in Standalone
Statement of Profit and Loss subject
to due disclosure about the nature of
grant.

f. Impairment of Financial Assets:

In accordance with Ind AS 109 'Financial
Instruments', the Company applies Expected
Credit Loss ('ECL') model for measurement
and recognition of impairment loss for
financial assets. ECL is the weighted-average

of difference between all contractual cash
flows that are due to the Company in
accordance with the contract and all the
cash flows that the Company expects to
receive, discounted at the original effective
interest rate, with the respective risks of
default occurring as the weights. When
estimating the cash flows, the Company is
required to consider:

♦ All contractual terms of the financial
assets (including prepayment and
extension) over the expected life of the
assets;

♦ Cash flows from the sale of collateral
held or other credit enhancements that
are integral to the contractual terms.

♦ Trade Receivables:

In respect of trade receivables, the
Company appliesthe simplified approach
of Ind AS 109 'Financial Instruments',
which requires measurement of loss
allowance at an amount equal to
lifetime expected credit losses. Lifetime
expected credit losses are the expected
credit losses that result from all possible
default events over the expected life of
a financial instrument.

♦ Other Financial Assets:

In respect of its other financial assets,
the Company assesses if the credit risk
on those financial assets has increased
significantly since initial recognition. If the
credit risk has not increased significantly
since initial recognition, the Company
measures the loss allowance at an
amount equal to 12-month expected
credit losses, else at an amount equal to
the lifetime expected credit losses.

When making this assessment, the
Company uses the change in the risk of
a default occurring over the expected
life of the financial asset. To make that
assessment, the Company compares the
risk of a default occurring on the financial
asset as at the balance sheet date with
the risk of a default occurring on the

financial asset as at the date of initial
recognition and considers reasonable
and supportable information, that is
available without undue cost or effort,
that is indicative of significant increases
in credit risk since initial recognition. The
Company assumes that the credit risk
on a financial asset has not increased
significantly since initial recognition if the
financial asset is determined to have a
low credit risk at the balance sheet date.

g. Taxation:

Tax expense recognized in Standalone
Statement of Profit and Loss comprises
the sum of deferred tax and current tax
except the ones recognized in other
comprehensive income or directly in equity.

Current tax is determined as the tax
payable in respect of taxable income for the
year and is computed in accordance with
relevant tax regulations. Current income
tax relating to items recognized outside
profit or loss is recognized outside profit or
loss (either in other comprehensive income
or in equity).

Current Tax for the period includes
Minimum Alternate Tax ('MAT') paid, credit
entitlement against which is recognised as
Deferred Tax Asset based on convincing
evidence of applicability of normal income
tax in near future. Deferred tax so created
is reviewed at each year end for necessary
adjustment.

Deferred tax is recognized on temporary
differences between the carrying amounts
of assets and liabilities in the financial
statements and the corresponding tax
bases used in the computation of taxable
profit under Income-tax Act, 1961.

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 reporting date.
Deferred tax relating to items recognized

outside Standalone Statement of Profit
and Loss is recognized outside Standalone
Statement of Profit and Loss (either in other
comprehensive income or in equity).

h. Share based payments - Employee Stock
Option Scheme ('ESOP'):

A section of employees of the Company
and its subsidiaries are entitled to equity-
based compensation of the nature of Equity
Settled Share Based Payment transaction.

The fair value of options granted under
Employee Stock Option Plan is recognized
as an employee benefits expense (net
of recoveries from subsidiaries) with a
corresponding increase in equity. The total
amount to be expensed is determined by
reference to the fair value of the options
determined under Black-Scholes model.
The total expense is recognized over the
vesting period, which is the period over
which all of the specified vesting conditions
are to be satisfied. At the end of each
period, the entity revises its estimates of
the number of options that are expected
to vest based on the non-market vesting
and service conditions. It recognizes the
impact of the revision to original estimates,
if any, in profit or loss, with a corresponding
adjustment to equity. Upon exercise of
share options, the proceeds received are
allocated to share capital up to the par
value of the shares issued with any excess
being recorded as share premium. If the
options are forfeited or not exercised after
vesting date, related expenses already
recognized in statement of profit and loss
are not reversed but transferred to other
component within equity.

5B. OTHER ACCOUNTING POLICIES

The financial statements have been prepared

using the material and other accounting policies

and measurement bases summarized below:

a. Current / Non-current Classification:

All assets and liabilities have been classified
as current or non-current as per the

Company's normal operating cycle and
other criteria set-out in the Act. Deferred tax
assets and liabilities are classified as non¬
current assets and non-current liabilities, as
the case may be. The operating cycle is the
time between the acquisition of assets for
processing and their realisation in cash and
cash equivalents.

b. Capital Work-in-progress and Intangible
Assets under Development:

Capital work-in-progress and intangible
assets under development represents
expenditure incurred in respect of
capital projects / intangible assets under
development and are carried at cost. Cost
comprises purchase cost, related acquisition
expenses, development / construction
costs, borrowing costs and other direct
expenditure.

c. Impairment of Non-financial Assets

At each reporting date, the Company
assesses whether there is any indication
based on internal / external factors, that
an asset may be impaired. If any such
indication exists, the recoverable amount of
the asset or the cash generating unit ('CGU')
is estimated. If such recoverable amount of
the asset or CGU to which the asset belongs
is less than its carrying amount, the carrying
amount is reduced to its recoverable
amount and the reduction is treated as an
impairment loss and is recognized in the
Standalone Statement of Profit and Loss.

If, at the reporting date, there is an indication
that a previously assessed impairment loss
no longer exists or decline, the recoverable
amount is reassessed, and the asset is
reflected at the carrying amount that would
have been determined (net of amortization
or depreciation) had no impairment loss
been recognized for the assets in prior
years or with reduced impairment provision.
Impairment losses previously recognized
are accordingly reversed in the Standalone
Statement of Profit and Loss. An asset is
deemed impairable when the recoverable
value is less than its carrying cost and the

difference between the two represents
provisioning exigency.

d. Financial Instruments:

Initial recognition and measurement

Financial assets and financial liabilities are
recognized when the Company becomes
a party to the contractual provisions
of the financial instrument and are
measured initially at fair value adjusted
for transaction costs, except for those
carried at fair value through profit or loss
which are measured initially at fair value.
Subsequent measurement of financial
assets and financial liabilities is described
below:

Non-derivative Financial Assets

Subsequent measurement

♦ Financial Assets carried at Amortized
Cost

A financial asset is measured at the
amortized cost, if both the following
conditions are met:

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

b. 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.

After initial measurement, such financial
assets are subsequently measured
at amortized cost using the effective
interest rate ('EIR') method.

♦ Investments in Equity Instruments of
Subsidiaries and Joint Ventures

Investments in equity instruments of
subsidiaries and joint ventures are
accounted for at cost in accordance
with Ind AS 27 'Separate Financial
Statements'.

♦ Investments in Other Equity
Instruments

Investments in equity instruments
which are held for trading are classified
as at fair value through profit or loss
('FVTPL'). For all other equity instruments,
the Company makes an irrevocable
choice upon initial recognition, on an
instrument by instrument basis, to
classify the same either as at fair value
through other comprehensive income
('FVTOCI') or FVTPL. Amounts presented
in other comprehensive income are not
subsequently transferred to profit or
loss. However, the Company transfers
the cumulative gain or loss within equity.
Dividends on such investments are
recognized in profit or loss unless the
dividend clearly represents a recovery of
part of the cost of the investment.

♦ Debt Instruments

Debt instruments are initially measured
at amortized cost, fair value through
other comprehensive income ('FVTOCI')
or fair value through profit or loss ('FVTPL')
till de-recognition on the basis of:

i. the entity's business model for
managing the financial assets; and

ii. the contractual cash flow
characteristics of the financial asset.

a. Measured at Amortized Cost

Financial assets that are held within a
business model whose objective is to
hold financial assets in order to collect
contractual cash flows that are solely
payments of principal and interest, are
subsequently measured at amortized
cost using the EIR method less
impairment, if any. The amortization of
EIR and loss arising from impairment,
if any, is recognized in the Standalone
Statement of Profit and Loss.

b. Measured at Fair Value through
Other Comprehensive Income

Financial assets that are held within
a business model whose objective

is achieved by both, selling financial
assets and collecting contractual
cash flows that are solely payments
of principal and interest, are
subsequently measured at FVTOCI.
Fair value movements are recognized
in the other comprehensive income
('OCI'). Interest income measured
using the EIR method and impairment
losses, if any are recognized in the
Standalone Statement of Profit and
Loss. On de-recognition, cumulative
gain or loss previously recognized
in OCI is reclassified from the equity
to 'other income' in the Standalone
Statement of Profit and Loss.

c. Measured at Fair Value through
Profit or Loss

A financial asset not classified as
either amortized cost or FVTOCI, is
classified as FVTPL. Such financial
assets are measured at fair value
with all changes in fair value, including
interest income and dividend income,
if any, recognized as 'other income' in
the Standalone Statement of Profit
and Loss.

♦ Investments in Mutual Funds

Investments in mutual funds are
measured at FVTPL.

♦ Investments in Target Maturity Funds

Measured amortized cost quoted routed
through statement of Profit and Loss.

De-recognition of financial assets

A financial asset is primarily de-recognized
when the contractual rights to receive
cash flows from the asset have expired or
the Company has transferred its rights to
receive cash flows from the asset.

Non-derivative financial liabilities

Subsequent measurement

Subsequent to initial recognition, all
non-derivative financial liabilities are

measured at amortised cost using the
effective interest method.

De-recognition of financial liabilities

A financial liability is de-recognized
when the obligation under the liability
is discharged or cancelled or expired.
When an existing financial liability is
replaced by another from the same
lender on substantially different terms
or the terms of an existing liability
are substantially modified, such an
exchange or modification is treated as
the de-recognition of the original liability
and the recognition of a new liability.
The difference in the respective carrying
amounts is recognized in the Standalone
Statement of Profit and Loss.

Derivative Financial Instruments

The Company holds derivative financial
instruments in the form of future
contracts to mitigate the risk of changes
in exchange rates on foreign currency
exposure. The counterparty for these
contracts are scheduled commercial
banks / regulated brokerage firms.

Although these derivatives constitute
hedges from an economic perspective,
they do not qualify for hedge accounting
under Ind AS 109 'Financial Instruments'
and consequently are categorized as
financial assets or financial liabilities at
FVTPL. The resulting exchange gain or loss
is included in other income / expenses
and attributable transaction costs are
recognized in the Standalone Statement
of Profit and Loss when incurred.

♦ Financial Guarantee Contracts

Financial guarantee contracts are those
contracts that require a payment to
be made to reimburse the holder for
a loss it incurs because the specified
party fails to make a payment when
due in accordance with the terms of a
debt instrument. Financial guarantee
contracts are recognized as a financial
liability at the time the guarantee

is issued 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 expected loss allowance determined
as per impairment requirements of Ind
AS 109 'Financial Instruments' and the
amount recognized less cumulative
amortization.

♦ Offsetting of financial instruments

Financial assets and financial liabilities
are offset and the net amount is reported
in the Standalone Balance Sheet if there
is a currently enforceable legal right
to offset the recognized amounts and
there is an intention to settle on a net
basis, to realize the assets and settle the
liabilities simultaneously.

e. Fair value measurement:

The Company measures financial
instruments, such as, derivatives at fair value
at each Standalone 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:

♦ In the principal market for the asset or
liability; or

♦ 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 is available to
measure fair value, maximizing the use of
relevant observable inputs and minimizing
the use of unobservable inputs.

All assets and liabilities for which fair value
is measured or disclosed in the financial
statements are categorized 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 recognized
in the financial statements on a recurring
basis, the Company determines whether
transfers have occurred between levels in
the hierarchy by re-assessing categorization
(based on the lowest level input that is
significant to the fair value measurement
as a whole) at the end of each reporting
period.

The Company's management determines
the policies and procedures for both
recurring fair value measurement, such
as derivative instruments and unquoted
financial assets measured at fair value, and
for non-recurring measurement, such as
assets held for distribution in discontinued
operations.

f. Leases:

Where the Company is the lessee

Right of use assets and lease liabilities

A lease is defined as 'a contract, or part of
a contract, that conveys the right to use an
asset (the underlying asset) for a period of
time in exchange for consideration'. The
Company enters into leasing arrangements
for various assets. To assess whether a
contract conveys the right to control the use
of an identified asset, the Company assesses
whether: (i) the contract involves the use of
an identified asset (ii) the Company obtains
substantially all of the economic benefits
from use of the asset through the period of
the lease and (iii) the Company has the right
to direct the use of the asset.

Recognition and initial measurement

At lease commencement date, the Company
recognizes a right-of-use asset and a lease
liability on the balance sheet. The right-
of-use asset is measured at cost, which
is made up of the initial measurement of
the lease liability, any initial direct costs
incurred by the Company, an estimate of
any costs to dismantle and remove the
asset at the end of the lease (if any), and
any lease payments made in advance of
the lease commencement date (net of any
incentives received).

Subsequent measurement

The Company depreciates the right-of-use
assets on a straight-line basis from the
lease commencement date to the earlier
of the end of the useful life of the right-of-
use asset or the end of the lease term. The
Company also assesses the right-of-use
asset for impairment when such indicators
exist.

At lease commencement date, the Company
measures the lease liability at the present
value of the lease payments unpaid at that
date, discounted using the interest rate
implicit in the lease if that rate is readily
available or the Company's incremental

borrowing rate. Lease payments included
in the measurement of the lease liability
are made up of fixed payments (including
in substance fixed payments) and variable
payments based on an index or rate.
Subsequent to initial measurement, the
liability will be reduced for payments
made and increased for interest. It is re¬
measured to reflect any reassessment or
modification, or if there are changes in in¬
substance fixed payments. When the lease
liability is re-measured, the corresponding
adjustment is reflected in the right-of-use
asset.

The Company has elected to account for
short-term leases and leases of low-value
assets using the practical expedients.
Instead of recognizing a right-of-use asset
and lease liability, the payments in relation
to these are recognized as an expense in
standalone statement of profit and loss on
a straight-line basis over the lease term.

Where the Company is the lessor

Leases in which the Company does not
transfer substantially all the risks and
rewards of ownership of an asset are
classified as operating leases. Rental income
from operating lease is recognized on a
straight-line basis or another systematic
basis as per the terms of the relevant lease.
Initial direct costs incurred in negotiating
and arranging an operating lease are added
to the carrying amount of the leased asset
and recognized over the lease term on the
same basis as rental income. Contingent
rents are recognized as revenue in the
period in which they are earned.

Leases are classified as finance leases when
substantially all of the risks and rewards of
ownership transfer from the Company to
the lessee. Amounts due from lessees under
finance leases are recorded as receivables
at the Company's net investment in the
leases. Finance lease income is allocated
to accounting periods so as to reflect a
constant periodic rate of return on the net
investment outstanding in respect of the
lease.

g. Inventories:

Inventories are valued at the lower of
cost or net realizable value. Cost includes
purchase price, duties, transport, handing
costs and other costs directly attributable to
the acquisition and bringing the inventories
to their present location and condition.
Net realisable value is the estimated selling
price in the ordinary course of business less
the estimated costs of completion and the
estimated costs necessary to make the sale.

The basis of determination of cost is as
follows:

♦ Raw material, packing material and stock-
in-trade valued on moving weighted
average basis;

♦ Stores and spares valued on weighted
average basis;

♦ Work-in-progress valued at cost of input
valued at moving weighted average
basis plus overheads up till the stage of
completion; and

♦ Finished goods valued at cost of input
valued at moving weighted average
basis plus appropriate overheads.

h. Employee Benefits:

Liabilities in respect of employee benefits to
employees are provided for as follows:

♦ Current Employee Benefits

a. Liabilities for wages and salaries,
including non-monetary benefits that
are expected to be settled wholly
within 12 months after the end of the
period in which the employees render
the related service are recognized in
respect of employees' services up to
the end of the reporting period and are
measured at the amounts expected
to be incurred when the liabilities are
settled. The liabilities are presented as
current employee dues payable in the
Standalone Balance Sheet.

b. Employees' State Insurance ('ESI') is
provided on the basis of actual liability
accrued and paid to authorities.

c. The Company has adopted a policy on
compensated absences which are both
accumulating and non-accumulating
in nature. The expected cost of
accumulating compensated absences
is determined by actuarial valuation
performed by an independent actuary
at each balance sheet date using
projected unit credit method on the
additional amount expected to be
paid / availed as a result of the unused
entitlement that has accumulated
at the balance sheet date. Expense
on non-accumulating compensated
absences is recognized in the period in
which the absences occur.

d. Expense in respect of other short¬
term benefits is recognized on the
basis of the amount paid or payable
for the period during which services
are rendered by the employee.

♦ Post Separation Employee Benefit
Plan

a. Defined Benefit Plan

Ý Post separation benefits of
Directors are accounted for on the
basis of actuarial valuation as per
Ind AS 19 'Employee Benefits'.

Ý Gratuity liability accounted for on the
basis of actuarial valuation as per Ind
AS 19 'Employee Benefits'. Liability
recognized in the Standalone
Balance Sheet in respect of gratuity
is the present value of the defined
benefit obligation at the end of each
reporting period less the fair value
of plan assets. The defined benefit
obligation is calculated annually by
an independent actuary using the
projected unit credit method. The
present value of defined benefit
is determined by discounting the
estimated future cash outflows by
reference to market yield at the
end of each reporting period on
government bonds that have terms
approximate to the terms of the
related obligation. The net interest

cost is calculated by applying the
discount rate to the net balance
of the defined benefit obligation
and the fair value of plan assets.
This cost is included in employee
benefit expense in the Standalone
Statement of Profit and Loss.

Ý The Company contributes its share of
contribution to Employees' Provident
Fund Scheme administered by a
separate trust with its obligation
to make good the shortfall, if any,
in trust fund arising on account of
difference between the return on
investments of the trust and the
interest rate on provident fund dues
notified periodically by the Central
Government and any expected loss
in investment. Liability recognized
in the Standalone Balance Sheet in
respect of Dabur India E.P.F trust
is the present value of the defined
benefit obligation at the end of each
reporting period less the fair value of
plan assets on the basis of actuarial
valuation using the projected unit
credit method.

Ý Actuarial gain / loss pertaining to
gratuity, post separation benefits and
PF trust are accounted for as OCI.
All remaining components of costs
are accounted for in Standalone
Statement of Profit and Loss.

b. Defined Contribution Plans

Liability for superannuation fund is
provided on the basis of the premium
paid to insurance company in
respect of employees covered under
Superannuation Fund Policy.