Note - 02 Significant Accounting Policies

2.01 Property, Plant and Equipment (PPE)

Land, Buildings, Plant and Equipment, Furniture and Fixtures and Vehicles held for use in the production or supply of goods
or services, or for administrative purposes are stated at cost less accumulated depreciation and accumulated impairment
losses. Freehold land is not depreciated. Cost includes purchase cost of materials, including import duties and non¬
refundable taxes, any directly attributable costs of bringing an asset to the location and condition of its intended use and
borrowing costs capitalised in accordance with the Company's accounting policy.

Properties in the course of construction for production or supply of goods or services or for administrative purposes are
carried at cost, less any recognsed impairment losses

Depreciation is recognised so as to write off the cost of assets (other than freehold land and properties under construction)
less their residual values over the useful lives, using the straight-line method. Depreciation of assets commences when the
assets are ready for their intended use. The estimated useful lives, residual values and depreciation method are reviewed
at the end of each reporting period, with the effect of any changes is accounted as change in estimate on a prospective
basis.

Any item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of
property, plant and equipment is recognised in profit and loss.

The Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as of
April 1, 2016 measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

2.02 Intangible Assets

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and
accumulated impairment (if any) losses. Amortisation is recognised at straight-line basis over their estimated useful lives.
The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of
any changes in estimate being accounted for on a prospective basis.

Estimated useful lives of the assets are as follows:

Brand Value : 10 years

An intangible asset is derecognised upon disposal or when no future economic benefits are expected to arise from the
continued use of the asset. Any gain or loss arising on the disposal or retirement of intangible assets is recognised in profit
and loss.

The Company has elected to continue with the carrying value of all of its intangible assets recognised as of April 1, 2016
measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

2.03 Impairment of tangible and intangible assets other than goodwill

At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets (Other
than goodwill) to determine whether there is any indication that those assets have suffered any impairment loss. If any
such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment
loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the
recoverable amount of the cash generating unit to which the asset belongs.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least
annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs of disposal and value in use. 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 risks specific to the asset for which the estimates of future cash flows have not be adjusted.

If the recoverable amount of an asset or cash generating unit is estimated to be less than the carrying amount, the carrying
amount of the asset or cash generating unit is reduced to its recoverable amount. An impairment loss is recognised
immediately in profit and loss.

When an impairment loss subsequently reverses, the carrying value of the asset or cash generating unit is increased to
the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised for the asset or cash generating unit
in prior years. Any reversal of an impairment loss is recognised immediately in profit and loss.

2.04 Investments in Subsidiaries and Associates

Investments in subsidiaries and associates are carried at cost less accumulated impairment losses, if any. Where an indication
of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable
amount. On disposal of investments in subsidiaries and associates the difference between net disposal proceeds and the
carrying amounts are recognized in the Statement of Profit and Loss.

Upon first-time adoption of Ind AS, the Company has elected to measure its investments in subsidiaries and associates at
the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS i.e., April 01, 2016.

2.05 Inventories

Inventories which comprise raw materials, work-in-progress and finished products are valued at lower of cost and net
realisable value after providing for obsolescence and other losses, where considered necessary. Cost includes purchase
price, non refundable taxes and duties and other directly attributable costs incurred in bringing the goods to the point of
sale. Work-in-progress and finished goods include appropriate proportion of overheads and where applicable.

Stores and spares are valued at cost comprising of purchase price, non refundable taxes and duties and other directly
attributable costs after providing for obsolescence and other losses, where considered necessary.

Value of inventories are generally ascertained on the "FIFO (First in First out)” basis.

2.06 Cash and Cash equivalents

Cash and cash equivalents in the balance sheet comprise cash on hand, bank balances and short-term deposits with an
original maturity of three months or less, which are 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.

2.07 Financial Assets

i) Initial recognition and measurement

Financial assets are recognised when the Company becomes a party to the contractual provisions of the instrument.

On initial recognition, a financial asset is recognised at fair value, in case of Financial assets which are recognised at
fair value through profit and loss (FVTPL), its transaction cost is recognised in the statement of profit and loss. In other
cases, the transaction cost is attributed to the acquisition value of the financial asset.

ii) Subsequent Measurement

Financial assets are subsequently / classified and measured at:

• amortised cost

• fair value through profit and loss (FVTPL)

• fair value through other comprehensive income (FVOCI)

• Financial assets are not reclassified subsequent to their recognition, except if and in the period the Company
changes its business model for managing financial assets.

iii) Trade Receivables and Loans

Trade receivables are initially recognised at fair value. Subsequently, these assets are held at amortised cost, using
the effective interest rate (EIR) method net of any expected credit losses. The EIR is the rate that discounts estimated
future cash income through the expected life of financial instrument.

iv) Debt Instruments

(a) Debt instruments are initially measured at amortised cost, fair value through other comprehensive income
('FVOCI') or fair value through profit or loss ('FVTPL') till derecognition on the basis of (i) the Company's business
model for managing the financial assets and (ii) the contractual cash flow characteristics of the financial asset.

(b) Measured at amortised 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 amortised cost using the effective interest rate ('EIR') method less impairment, if any.
The amortisation of EIR and loss arising from impairment, if any is recognised in the Statement of Profit and Loss.

(c) Financial assets at fair value through other comprehensive income (FVTOCI): A financial asset is measured at
FVTOCI if it is held within a business model whose objective is achieved by both collecting contractual cash
flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest on the principal amount outstanding.

(d) Measured at fair value through profit or loss: A financial asset not classified as either amortised cost or FVOCI, 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, recognised as 'Other Income' in the Statement of Profit and Loss.

v) Equity Instruments

All investments in equity instruments classified under financial assets are initially measured at fair value, the Company
may, on initial recognition, irrevocably elect to measure the same either at FVOCI or FVTPL.

The Company makes such election on an instrument-by-instrument basis.Fair value changes on an equity instrument
is recognised as other income in the Statement of Profit and Loss unless the Company has elected to measure
such instrument at FVOCI. Fair value changes excluding dividends, on an equity instrument measured at FVOCI are
recognized in OCI. Amounts recognised in OCI are not subsequently reclassified to the Statement of Profit and Loss.
Dividend income on the investments in equity instruments are recognised as 'other income' in the Statement of Profit
and Loss.

vi) Derecognition

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset
expire, or it transfers the contractual rights to receive the cash flows from the asset.

vii) Impairment of Financial asset

Expected credit losses are recognized for all financial assets subsequent to initial recognition other than financials
assets in FVTPL category.

For financial assets other than trade receivables, as per Ind AS 109, the Company recognises 12 month expected credit
losses for all originated or acquired financial assets if at the reporting date the credit risk of the financial asset has
not increased significantly since its initial recognition. The expected credit losses are measured as lifetime expected
credit losses if the credit risk on financial asset increases significantly since its initial recognition. The Company's trade
receivables do not contain significant financing component and loss allowance on trade receivables is measured at
an amount equal to life time expected losses i.e. expected cash shortfall.

The impairment losses and reversals are recognised in Statement of Profit and Loss.

2.08 Financial Liabilities

i) Initial recognition and measurement

Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument.
Financial liabilities are initially measured at the amortised cost unless at initial recognition, they are classified as fair
value through profit and loss. In case of trade payables, they are initially recognised at fair value and subsequently,
these liabilities are held at amortised cost, using the effective interest method.

ii) Subsequent Measurement

Financial liabilities are subsequently measured at amortised cost using the EIR method. Financial liabilities carried at
fair value through profit or loss are measured at fair value with all changes in fair value recognised in the Statement
of Profit and Loss.

iii) Derecognition

A financial liability is derecognised when the obligation specified in the contract is discharged, cancelled or expires.

2.09 Off-seting of Financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently
enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the
assets and settle the liabilities simultaneously.

2.10 Derivative financial instruments

The Company uses derivative financial instruments, such as forward currency contracts and interest rate swaps, to hedge
its foreign currency risks and interest rate risks respectively. Such derivative financial instruments are initially recognised
at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value
at the end of each reporting period. The accounting for subsequent changes in fair value depends on whether the
derivative is designated as a hedging instrument, and if so, the nature of item being hedged and the type of hedge
relationship designated.

Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value
is negative.