2.2.Summary of Material Accounting Policies

a. Revenue Recognition

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.

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, volume rebates offered by the
Company as part of the contract, excluding
amounts collected on behalf of third parties
like outgoing sales taxes including goods and
service tax. Revenue from sale of goods is
recognised at the point in time when control
of the goods is transferred to the customer
and the amount of revenue can be measured
reliably and recovery of the consideration
is probable. Trade receivables that do not
contain a significant financing component are
measured at transaction price.

The Company recognises revenue when the
amount of revenue can be reliably measured,
it is probable that future economic benefits
will flow to the Company regardless of when
the payment is being made.

The specific recognition criteria
described below must also be met before
revenue is recognised.

Sale of Products

Revenue from sale of products is recognized
when the Company transfers the control of
goods to the customer as per the terms of
contract. 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. In determining the transaction
price, the Company considers the effects
of variable consideration, the existence of
significant financing component, non-cash
considerations and consideration payable
to the customer (if any). In case of domestic

sales, the Company believes that the control
gets transferred to the customer on dispatch
of the goods from the factory/depot and
in case of exports, revenue is recognised
on passage of control as per the terms of
contract / incoterms.

Variable consideration
Volume rebates

Variable consideration in the form of volume
rebates is recognised at the time of sale made
to the customers and are offset against the
amounts payable by them. To estimate the
variable consideration for the expected future
rebates, the Company applies the expected
value method or most likely 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. The most likely amount is
used for those contracts with a single volume
threshold, while the expected value method
is used for those with more than one volume
threshold. The Company then applies the
requirements on constraining estimates
of variable consideration and recognises a
liability for the expected future rebates.

Rights of return

A majority of sales contract generally provide
a customer a right to return an item within
a limited period of time for certain reasons.
Revenue is recognized to the extent that it is
highly probable that a significant reversal in
the amount of cumulative revenue recognized
will not occur. Thus, the amount of revenue
recognized is adjusted for expected returns,
which are estimated based on the historical
data for each specific type of customers.
In these circumstances, a refund liability
and a right to receive returned goods (and
corresponding adjustment to cost of sales)
are recognized. The entity measures right to
receive returned goods at the carrying amount
of the inventory sold less any expected
costs to recover goods. The refund liability
is presented under the head "Provisions" on
the Balance Sheet. The Company reviews
its estimate of expected returns at each
reporting date and updates the amounts of
the asset and liability accordingly.

Contract balances
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).

Advance from customer

Advance from customer is the obligation
to transfer goods or services to a customer
for which the Company has received
consideration from the customer. Advance
from customer is recognised as revenue when
the Company performs under the contract.

Provision for rebates and damage return

Provision for rebates and damage return is
the obligation to refund some or all of the
consideration received (or receivable) from
the customer and is measured at the amount
the Company ultimately expects it will have
to return to the customer. The Company
updates its estimates of Provision for rebates
and damage return (and the corresponding
change in the transaction price) at the end of
each reporting period.

b. Property, Plant & Equipment

Capital work in progress, plant and
equipment are stated at acquisition cost, less
accumulated depreciation and accumulated
impairment loss, if any. The cost of Property,
Plant & Equipment comprises of its purchase
price, including import duties and other non¬
refundable taxes or levies and any directly
attributable cost of bringing the asset to
its working condition for its intended use.
Interest and other financial charges on
loans borrowed specifically for acquisition
of qualifying assets are capitalised till it get
ready for its intended use.

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. Likewise, when
a major inspection is performed, its cost is
recognised in the carrying amount of the
plant and equipment as a replacement if the

recognition criteria are satisfied. All other
repair and maintenance costs are recognised
in the Statement of Profit or Loss as incurred.

Depreciation is provided on the straight line
method over the estimated useful lives of
assets and are in line with the requirements
of Part C of Schedule II of the Companies Act,
2013, except certain items of building and plant
& machinery as detailed in next paragraph.
The estimated useful lives are as follows:

Freehold land is not depreciated.

*Block, Dies & Moulds (other than High-End Moulds) are
depreciated @100% on pro rata basis.

The Company, based on assessment made by
technical expert and management estimate,
depreciates certain items of building and plant
and equipment over 20 years and 3 - 10 years
respectively. These estimated useful lives are
different from the useful life prescribed in
Schedule II to the Companies Act, 2013. 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.

Advances paid towards the acquisition of
property, plant and equipment outstanding at
each balance sheet date is classified as 'Capital
Advances' under other 'Non-Current Assets'.

An item of property, plant and equipment
and any significant part initially recognised is
derecognized upon disposal or when no future
economic benefits are expected from its use
or disposal. The cost and related accumulated
depreciation are eliminated from the financial
statements upon derecognition and the
resultant gains or losses are recognized in the
Statement of Profit & Loss.

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.
In particular, the Company considers the
impact of health, safety and environmental
legislation in its assessment of expected
useful lives and estimated residual values.

c. Investment Property

Property that is held for long-term rental yields
or for capital appreciation or both, and that is
not occupied by the Company, is classified as
investment property. Investment property is
measured initially at its cost, including related
transaction costs and are stated at cost less
accumulated depreciation and accumulated
impairment loss, if any. Subsequent expenditure
is capitalised to the asset's carrying amount
only when it is probable that future economic
benefits associated with the expenditure will
flow to the Company and the cost of the item
can be measured reliably.

The cost includes the cost of replacing parts
and borrowing costs for long-term construction
projects ifthe recognition criteria are met. All other
repair and maintenance costs are recognised in
the Statement of Profit & Loss as incurred.

The Company depreciates building component
of investment property on the straight line
method over the estimated useful life of 60
years from the date of original purchase and
are in line with the requirements of Part C of
Schedule II of the Companies Act, 2013.

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 internally
by the Company.

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.

Transfers are made to (or from) investment
properties only when there is a change in
use. Transfer between investment property,
owner-occupied property and inventories
do not change the carrying amount of the
property transferred and they do not change
the cost of that property for measurement or
disclosure purpose.

d. Intangible Assets

Intangible Assets acquired separately are
measured on initial recognition at cost.
Intangible Assets acquired in a business
combination is valued at their fair value at
the date of acquisition. Following initial
recognition, intangible assets are carried
at cost less accumulated amortisation and
accumulated impairment losses, if any.

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 the end
of each reporting period. The amortisation
expense on Intangible Assets with finite
lives is recognised in the Statement of Profit
& Loss. The Company amortises intangible
assets over their estimated useful lives using
the straight line method.

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

Gains or losses arising from derecognition
of an intangible asset are measured as the
difference between the net disposal proceeds
and the carrying amount of the asset and are

recognised in the Statement of Profit & Loss
when the asset is derecognised.

e. Research & Development Cost

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.

During the period of development, the asset is
tested for impairment annually.

f. 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:

i) Raw materials, Packing materials and
Stores & Spares: cost includes cost of
purchase and other costs incurred in
bringing the inventories to their present
location and condition. Cost is determined
on moving weighted average method.

ii) 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. Cost is determined on moving
weighted average method.

iii) Stock in trade: cost includes cost of
purchase and other costs incurred in
bringing the inventories to their present
location and condition. Cost is determined
on moving 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.

g. Impairment of non-financial assets

The Company assesses, at each reporting
date, whether there is an indication that
an asset may be impaired. If any indication
exists, or when annual impairment testing for
an asset is required, the Company estimates
the asset's recoverable amount. An asset's
recoverable amount is the higher of an asset's
or cash-generating unit's (CGU) fair value
less costs of disposal and its value in use.
When the carrying amount of an asset or CGU
exceeds its recoverable amount, the asset is
considered impaired and is written down 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.

Impairment losses of continuing operations,
including impairment on inventories, are
recognised in the Statement of Profit and Loss.

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.

The Company assesses where climate risks
could have a significant impact, such as the
introduction of emission-reduction legislation
that may increase manufacturing costs, etc.
These risks in relation to climate-related
matters are included as key assumptions
where they materially impact the measure of
recoverable amount. These assumptions have
been included in the cash-flow forecasts in
assessing value-in-use amounts, as applicable.

h. 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.

Financial assets

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.

Subsequent measurement

Financial instruments at amortised cost

A 'financial instrument' 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 for
collecting contractual cash flows, and

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

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 finance income in the profit or loss.

Equity investments

All equity investments (excluding investments
in subsidiaries and associates) in scope of
Ind AS 109 are measured at fair value. Equity
instruments which are held for trading are
classified as at Fair Value Through Profit and
Loss (FVTPL). For all other equity instruments,
the Company makes an irrevocable election
to present in Other Comprehensive Income
(OCI) 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. These equity shares are
designated as Fair Value Through OCI (FVTOCI)
as they are not held for trading and disclosing
their fair value fluctuation in profit and loss will
not reflect the purpose of holding.

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 Statement of Profit and Loss,
even on sale of investment. However, the
Company may transfer the cumulative gain or
loss within equity.

Equity instruments included within the FVTPL
category are measured at fair value with
all changes recognized in the Statement of
Profit and Loss.

Investments in subsidiaries and associate are
stated at cost less provision for impairment loss,
if any. Investments are tested for impairment
wherever event or changes in circumstances
indicate that the carrying amount may not be
recoverable. An impairment loss is recognised
under the head "Other Expenses" for the amount
by which the carrying amount of investments
exceeds its recoverable amount.

Investment in mutual funds / alternate
investment funds

Investment in mutual funds / alternate
investment funds falls within the FVTPL
category are measured at fair value with
all changes recognized in the Statement of
Profit and Loss.

Derivative Instruments

Derivative Instruments are initially recognised
at fair value on the date a derivative contract
is entered into and are subsequently re¬
measured to their fair value at the end of each
reporting period, with changes included in
'Other Income'/'Other Expenses'.

Derecognition

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

i) The rights to receive cash flows from the
asset have expired, or

ii) The Company has transferred its rights
to receive cash flows from the asset 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, 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.

Income recognition

Interest Income - Interest income from
financial instruments is recognised using
the effective interest rate method (EIR). 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 a financial
asset. 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.

Dividend - Dividend is recognised in profit or
loss only when the right to receive payment is
established, it is probable that the economic
benefits associated with the dividend will
flow to the Company, and the amount of the
dividend can be measured reliably.

Impairment of financial assets

In accordance with Ind AS 109, the Company
applies expected credit loss (ECL) model for
measurement and recognition of impairment
loss on the following financial assets and
credit risk exposure:

i) Financial assets that are financial
instrument, and are measured at amortised
cost e.g., loans, debt securities, deposits,
trade receivables and bank balance

ii) Trade receivables or any contractual right
to receive cash or another financial asset
that result from transactions that are
within the scope of Ind AS 115 (referred
to as 'contractual revenue receivables' in
these financial statements)

The Company follows 'simplified approach' for
recognition of impairment loss allowance on Trade
receivables or contract revenue receivables.

The application of simplified approach does
not require the Company to track changes in
credit risk. Rather, it recognises impairment
loss allowance based on lifetime ECLs at each
reporting date, right from its initial recognition.

ECL is the difference between all contractual
cash flows that are due to the Company in

accordance with the contract and all the cash
flows that the entity expects to receive (i.e.,
all cash shortfalls), discounted at the original
Effective Interest Rate (EIR). Lifetime ECL are
the expected credit losses resulting from all
possible default events over the expected life
of a financial instrument. The 12-month ECL
is a portion of the lifetime ECL which results
from default events that are possible within 12
months after the reporting date.

ECL impairment loss allowance (or reversal)
recognized during the period is recognized as
income/ expense in the Statement of Profit
and Loss. This amount is reflected under the
head 'other expenses' (or 'other income') in the
Statement of Profit and Loss.

For recognition of impairment loss on other
financial assets and risk exposure, the
Company determines that whether there has
been a significant increase in the credit risk
since initial recognition. If credit risk has not
increased significantly, 12-month ECL is used
to provide for impairment loss. However, if
credit risk has increased significantly, lifetime
ECL is used. If, in a subsequent period, credit
quality of the instrument improves such that
there is no longer a significant increase in
credit risk since initial recognition, then the
entity reverts to recognising impairment loss
allowance based on 12-month ECL.

Financial liabilities

Initial recognition and measurement

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

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.

Subsequent measurement
Loans and borrowings

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.

Derecognition

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.

i. Fair Value Measurement

The Company measures financial instruments,
such as, equity instruments and 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:

• 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

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 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:

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

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

iii) 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 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.

j. Cash & Cash Equivalents

Cash and Cash Equivalent in the balance
sheet comprise cash at banks and on hand
and short-term deposits with an original
maturity of three months or less, that are
readily convertible to a known amount of
cash and subject to an insignificant risk of
changes in value.

For the purpose of the statement of cash
flows, cash and cash equivalents consist of
cash and short-term deposits, as defined
above, net of outstanding bank overdrafts as
they are considered an integral part of the
Company's cash management.

k. Leases

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, are as follows:

Building 2 to 5 years

Leasehold Land is amortised over the
period of lease ranging from 30 to 99 years.

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

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 re-measured 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.

The company's lease liabilities are
included in Other Financial Liabilities.

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.

l. Borrowing Costs

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. 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.

m. Employee Benefits

Defined Contribution Plan

The Company makes contributions towards
provident fund and superannuation fund
to the regulatory authorities in a defined
contribution retirement benefit plan for
qualifying employees, where the Company has
no further obligations. Both the employees
and the Company make monthly contributions
to the Provident Fund Plan equal to a specified
percentage of the covered employee's salary.

Defined Benefit Plan

i) In respect of certain employees,
provident fund contributions are made
to a Trust administered by the Company.
The Company's liability is actuarially
determined (using the Projected Unit

Credit method) at the end of the year and
any shortfall in the fund size maintained
by the Trust set up by the Company is
additionally provided for.

ii) The Company operates a defined
benefit gratuity plan in India, comprising
of Gratuity fund with Life Insurance
Corporation of India and Other Funds.
The Company's liability is actuarially
determined using the Projected Unit
Credit method at the end of the year in
accordance with the provision of Ind AS
19 - Employee Benefits.

The Company recognizes the net obligation
of a defined benefit plan in its balance sheet
as an asset or liability. Gains and losses
through re-measurements of the net defined
benefit liability/(asset) are recognized in other
comprehensive income and are not reclassified
to profit or loss in subsequent periods. The
effect of any plan amendments are recognized
in the Statement of Profit & Loss.

The Company recognises the changes in the
net defined benefit obligation like service
costs comprising current service costs, past-
service costs, gains and losses on curtailments
and non-routine settlements and net interest
expense or income, as an expense in the
Statement of Profit and Loss.

Other Long Term Employee Benefits

The Company treats accumulated leaves
expected to be carried forward beyond twelve
months, as long term employee benefit for
measurement purposes. Such long-term
compensated absences are provided for based
on the actuarial valuation using the projected
unit credit method at the end of each financial
year. This benefit is not funded except in Vapi,
Dongari and Masat units, where the Leave
Fund is with Life Insurance Corporation of
India. The Company presents the leave as
current liability in the balance sheet, to the
extent it does not have an unconditional right
to defer its settlement beyond 12 months
after the reporting date. Where the Company
has unconditional legal and contractual right
to defer the settlement for the period beyond
12 months, the same is presented as non-

current liability. Actuarial gains/losses are
immediately taken to the Statement of Profit
and Loss and are not deferred.

n. Income Taxes

Current income tax assets and liabilities
are measured at the amount expected to
be recovered from or paid to the taxation
authorities. The tax rates and tax laws used
to compute the amount are those that are
enacted or substantively enacted, at the
reporting date. Management periodically
evaluates positions taken in the tax returns
with respect to situations in which applicable
tax regulations are subject to interpretation
and establishes provisions where appropriate.

Deferred tax is provided using the liability
method on temporary differences between
the tax bases of assets and liabilities and
their carrying amounts for financial reporting
purposes at the reporting date.

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

• When the deferred tax liability arises from
the initial recognition of goodwill or an
asset or liability in a transaction that is
not a business combination and, at the
time of the transaction, affects neither
the accounting profit nor taxable profit or
loss and does not give rise to equal taxable
and deductible temporary differences.

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

Deferred tax assets are recognised for all
deductible temporary differences, the carry
forward of unused tax credits and any unused
tax losses. Deferred tax assets are recognised
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 utilised, except:

• When the deferred tax asset relating
to the deductible temporary difference
arises from the initial recognition of an
asset or liability in a transaction that is
not a business combination and, at the
time of the transaction, affects neither
the accounting profit nor taxable profit or
loss and does not give rise to equal taxable
and deductible temporary differences;

• In respect of deductible temporary
differences associated with investments
in subsidiaries, associates and interests
in joint ventures, deferred tax assets are
recognised only to the extent that it is
probable that the temporary differences
will reverse in the foreseeable future
and taxable profit will be available
against which the temporary differences
can be utilised.

The carrying amount of deferred tax assets is
reviewed at each reporting 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
utilised. 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.

In assessing the recoverability of deferred
tax assets, the Company relies on the same
forecast assumptions used elsewhere
in the financial statements and in other
management reports, which, among other
things, reflect the potential impact of climate-
related development on the business, such
as increased cost of production as a result of
measures to reduce carbon emission, etc., as
applicable in the respective scenarios.

Deferred tax assets and liabilities are
measured at the tax rates that are expected
to apply in the year when the asset is realised
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 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.

Current and Deferred tax relating to items
recognised outside profit or loss is recognised
outside profit or loss (either in other
comprehensive income or in equity). Current
and Deferred tax items are recognised in
correlation to the underlying transaction
either in OCI or directly in equity.

Minimum alternate tax (MAT) paid in a year is
charged to the Statement of Profit and Loss
as current tax for the year. The deferred tax
asset is recognised for MAT credit available
only to the extent that it is probable that the
concerned company will pay normal income
tax during the specified period, i.e., the period
for which MAT credit is allowed to be carried
forward. In the year in which the company
recognizes MAT credit as an asset, it is created
by way of credit to the Statement of Profit
and Loss and shown as part of deferred tax
asset. The company reviews the "MAT credit
entitlement" asset at each reporting date and
writes down the asset to the extent that it is
no longer probable that it will pay normal tax
during the specified period.

One unit of the Company is entitled to tax
holiday under the Income-tax Act, 1961 enacted
in India. Accordingly, no deferred tax (asset or
liability) relating to such units is recognized
in respect of temporary differences which
reverse during the tax holiday period. Deferred
tax in respect of temporary differences
which reverse after the tax holiday period is
recognized in the year in which the temporary
differences originate. However, the Company
restricts recognition of deferred tax assets to
the extent it is probable that sufficient future
taxable income will be available against which
such deferred tax assets can be realized.

o. Foreign Currency Transactions &
Translations

Functional and presentation currency

The standalone financial statements are
presented in INR, the functional currency of
the Company. Items included in the financial
statements of the Company are recorded
using the currency of the primary economic
environment in which the Company operates
(the 'functional currency').

Transaction and balances

Transactions in foreign currencies are initially
recorded by the Company at their respective
functional currency spot rates at the date the
transaction first qualifies for recognition.

Monetary assets and liabilities denominated
in foreign currencies are translated at the
functional currency spot rates of exchange at
the reporting date.

Exchange differences arising on settlement or
translation of monetary items are recognised
in profit or 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).