3. Significant accounting policies

Accounting policies have been consistently applied except
where a newly issued accounting standard is initially
adopted or a revision to an existing accounting standard
requires a change in the accounting policy hitherto in use.
The material accounting policy used in the preparation of
the standalone financials statements have been
discussed in below notes.

a) Property, plant and equipment

Property, plant and equipment are stated at cost of
acquisition, including any attributable cost for bringing the
asset to its working condition for its intended use, less
accumulated depreciation/amortization and impairment
loss.

Losses arising from retirement and gains or losses arising
from disposal of property, plant and equipment's are
measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are
recognized in the Statement of Profit and Loss.

Property, plant and equipment not ready for the intended
use on the date of Balance Sheet are disclosed as
“Capital work-in-progress”.

Depreciation is provided on straight line method over the
estimated useful life as determined by management
which is in line with that prescribed under Schedule Il of
the Act. Depreciation is provided on a pro-rata basis i.e.
from the month on which asset is ready for use. The useful
lives are reviewed by the management at each financial
year-end and revised, if appropriate. In case of a revision,
the unamortized depreciable amount is charged over the
revised remaining useful life.

Property, plant and equipment and Furniture and fixtures,
costing individually up to < 5,000 or less, are depreciated
fully in the year of purchase. if the aggregate of such
items constitutes more than 10 percent of the total actual
cost, the depreciation rates applicable to such items are

applied.

Depreciation/amortization for the year is recognized in
the Statement of Profit and Loss.

A fixed asset is eliminated from the financial statements
on disposal or when no further benefit is expected from
its use and disposal. Depreciation on fixed assets added/
disposed off/ discarded during the year is provided on
pro-rata basis with reference to month of addition/
disposal/ discarding.

Losses arising from retirement or gains or losses arising
from disposal of fixed assets which are carried at cost are
recognised in the Statement of Profit and Loss.
Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable
that the future economic benefits associated with the
expenditure will flow to the Company.

b) Impairment

Property, plant and equipment and intangible assets are
reviewed at each reporting date to determine if there is
any indication of Impairment. For assets in respect of
which any such indication exists and for intangible assets
mandatorily tested annually or at period end for
impairment, the asset's recoverable amount is estimated.
An impairment loss is recognised if the carrying amount
of an asset exceeds its recoverable amount.

For the purpose of impairment testing, assets are
grouped together into the smallest group of assets (cash
generating unit or “CGU”) that generates cash inflows
from continuing use that are largely independent of the
cash inflows of other assets or CGUs.

The recoverable amount of an asset or CGU is the greater
of its value in use and its net selling price. 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 or CGU.
Impairment losses are recognised in the Statement of
Profit and Loss. Impairment loss recognised in respect of
a CGU is allocated first to reduce the carrying amount of
any goodwill allocated to the CGU and then to reduce the
carrying amounts of the other assets in the CGU on a pro
rata basis.

If at the Balance Sheet date there is an indication that a
previously assessed impairment loss no longer exists or

has decreased, the assets or CGU's recoverable amount
is estimated. For assets other than goodwill, the
impairment loss is reversed to the extent that the asset's
carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised.
Such a reversal is recognised in the Statement of Profit
and Loss; however, in the case of revalued assets, the
reversal is credited directly revaluation Surplus except to
the extent that an on loss on the same revalued asset
was previously recognised as an expense in the
Statement Profit and Loss. Impairment loss recognised
for goodwill is not reversed in a subsequent period unless
the impairment loss was caused by a specific external
event of an exceptional nature that is not expected recur
and subsequent external events have occurred that
reverse the effect of that event

c) Leases

Company as Lessee

The Company's lease asset classes primarily consist of
lease for buildings. The right-of-use assets are
subsequently measured at cost less any accumulated
depreciation, accumulated impairment losses, if any and
adjusted for any remeasurement of the lease liability. The
right-of-use assets is depreciated using the straight-line
method from the commencement date over the shorter
of lease term or useful life of right-of-use asset. The
Company measures the lease liability at the present value
of the lease payments that are not paid at the
commencement date of the lease. The lease payments
are discounted using the incremental borrowing rate. For
short-term and low value leases, the Company recognises
the lease payments as an operating expense on a
straight-line basis over the lease term.

Company as Lessor

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

d) Financial Instruments

Initial Recognition and Measurement

Except for trade receivables, all financial assets (not
measured subsequently at fair value through profit or
loss) are recognised initially at fair value plus transaction
costs.

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

Financial Assets and Liability at Amortised Cost

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

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

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

Such financial assets and financial liabilities are
subsequently carried at amortised cost using the effective
interest method. Examples include financial assets and
financial liabilities aggregated in cash and cash
equivalents, trade receivables, trade payables and other
financial assets line items.

Financial Instruments at Fair Value through Profit or
Loss

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

e) Derivative Financial Instruments and Hedge
Accounting

The Company enters into derivative financial instruments
to manage its foreign exchange rate risk. Derivatives are
initially recognised at fair value at the date a derivative
contract is entered into and are subsequently
re-measured to their fair value at the end of each
reporting period. The resulting gain or loss is recognised in
profit or loss immediately unless the derivative is
designated and effective as a hedging instrument, in
which event the timing of the recognition in profit or loss
depends on the nature of the hedging relationship and
nature of hedged items.

f) Inventories

Inventories which comprise of raw materials, work-in
progress, finished goods, stock-in-trade, stores and
Spares, and packing materials are carried at the lower of
cost and net realizable value.

Cost of inventories comprises all costs of purchase cost of
conversion and other costs incurred in bringing the
inventories to their present location and condition.

In determining the cost, first in first out method is used. In
the case of manufactured inventories and work in
progress, fixed production overheads are allocated on the
basis of normal capacity of production facilities.

Net realizable value is the estimated selling price in the
ordinary course of business, less the estimated costs of
completion and the estimated costs make the sale
The net realizable value of work-in-progress is
determined with reference to the selling prices of related
finished products. Raw materials and other Supplies held
for use in the production of finish products are not written
down below cost except in cases where material prices
have declined it is estimated that the cost of the finished
products will exceed their net realizable value
The comparison of cost and net realizable value is made
on an item-by-item basis.

g) Investment in Subsidiaries

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

h) Revenue Recognition

Revenue from sale of goods in the course of ordinary is

recognised when property in the goods or all significant
risks and rewards of their ownership are transferred to
the customer and no significant uncertainty exists
regarding the amount of the consideration that will be
derived from the sale of the goods and regarding its
collection. The amount recognised as revenue is exclusive
of goods and services tax (GST), and is net off returns,
trade discount and quantity discounts.

Revenue from shared services is recognised as and when
services are rendered and related costs are incurred, in
accordance with the terms of the contractual agreement.
Interest income is recognised on time proportion basis
after taking into account the amount outstanding and the
interest rate applicable.

Export Incentives

Export benefits availed as per prevalent schemes are
accrued each year in which the goods are exported and
when no significant uncertainty exist regarding their
ultimate collection.

i) Borrowing Cost

Borrowing costs that are attributable to the acquisition,
construction or production of a qualifying asset are
capitalized as part of cost of such asset till such time as
the asset is ready for its intended use. A qualifying asset is
an asset that necessarily requires a substantial period of
time to get ready for its intended use. Borrowing costs
consists of interest and other costs that an entity incurs in
connection with the borrowing of funds. Borrowing cost
incurred on qualifying assets are capitalised and added to
the cost of qualifying asset under work-in-progress. All
other borrowing costs are recognised as an expense in
the statement of profit and loss in the period in which
they are incurred.

j) Product expiry claims

Significant judgments are involved in determining the
estimated stock lying in the market with product shelf life
and estimates of likely claims on account of expiry of such
unsold goods lying with stockists.

k) Foreign Currency Transactions and Balances

1) Functional and Presentation currency

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

2) Foreign currency transaction and balances

Transactions denominated in foreign currency are
recorded at the exchange rates prevailing on the date of
transactions. Exchange differences arising on foreign
exchange transactions settled during the year are
recognised in the Statement of Profit and Loss for the
year.

Monetary assets and liabilities denominated in Foreign
Currencies as at the balance sheet date are translated
into Indian rupees at the closing exchange rates on that
date, the resultant exchange differences are recognised in
the Statement of Profit and Loss.

1) Taxes on Income

Income tax expense comprises current and deferred tax.

It is recognised in Statement of Profit and Loss except to
the extent that it relates items recognised directly in
equity or in Other Comprehensive Income.

1. Current Tax

Tax expense for the year, comprising current tax and
deferred tax, are included in the determination of the net
profit or loss for the year. Current tax is measured at the
amount expected to be paid to the tax authorities in
accordance with the taxation laws prevailing in the
respective jurisdictions.

Current tax assets and current tax liabilities are offset
only if there is a legally enforceable right to set off the
recognised amounts, and it is intended to realize the asset
and set off the liability on a net basis or simultaneously.

2. Deferred Tax

Deferred tax is recognised in respect of temporary
differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the
amounts used for taxation purposes

Deferred tax assets are recognised to the extent that it is
probable that Future taxable profits will be available
against which they can be used.

Unrecognized deferred tax assets are reassessed at each
reporting date and recognised to the extent that it has
become probable that future taxable profits will be
available against which they can be used, Deferred tax
measured at the tax rates that are expected to be
applied to deferred tax assets when they are realized or
deferred tax liabilities when they are settled, using tax
rates enacted substantively enacted at the reporting
date.

Deferred tax assets and liabilities are offset if there is a
legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the
same tax authority on the same taxable entity, or on
different tax entities but they intend to settle current tax
liabilities and assets on a net basis or their tax assets and
liabilities will be realized simultaneously

m) Offsetting financial instruments

Financial assets and liabilities are offset and the net
amount is reported in the balance sheet where there is
legally enforceable right to offset the recongnised
amounts and there is an intention to settle on a net basis
or realise the asset and settle liability simultaneously. The
legally enforceable right must not be contingent on future
events and must be enforceable in the normal course of
business and in the event of default, insolvency or
bankruptcy of the company or the counterparty.

n) Fair value measurement

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 in the principal or, in its absence, the
most advantageous market to which the Company has
access at that date. The fair value of a liability reflects its
non-performance risk.

A number of the Company's accounting policies and
disclosures require the measurement of Fair values, for
both financial and non-financial assets and liabilities.
When one is available, the Company measures the fair
value of an instrument using the quoted price in an active

market for that instrument. A market is regarded as
active if transactions for the asset or liability take place
with sufficient frequency and volume to provide pricing
information on an ongoing basis. If there is no quoted
price in an active market, then the Company uses
valuation techniques that maximize the use of relevant
observable inputs and minimize the use of unobservable
inputs. The chosen valuation technique incorporates all of
the factors that market participants would take into
account in pricing a transaction.

The best evidence of the fair value of a financial
instrument on initial recognition is normally the
transaction price - ie. the fair value of the consideration
given or received.

O) Segment Reporting

Operating segments are reported in a manner consistent
with the internal reporting provided to the chief operating
decision maker (CODM}. The CODM assesses the financial
performance and position of the company, and makes
strategic decisions.

p) Provisions and Contingent Liabilities

The Company recognises a provision when there is a
present obligation as a result of a past event, it is
probable that an outflow of resources will be required to
settle the obligation and in respect of which reliable
estimate can be made.