2 Material Accounting Policies

This Note provides a list of the material accounting
policies adopted in the preparation of the standalone
financial statements. These policies have been
consistently applied to all the years presented, unless
otherwise stated. These standalone financial statements
are the separate financial statements of the Company.

(a) Basis of Preparation(i) Compliance with Ind AS

These standalone financial statements comply in all
material respect with the Indian Accounting Standards
(Ind AS) notified under Section 133 of the Companies Act,
2013 (the ‘Act) read with Companies (Indian Accounting
Standards) Rules, 2015 as amended from time-to-time
and presentation requirements of Division II of Schedule
III to the Companies Act, 2013, (Ind AS compliant
Schedule III). The standalone financial statements are
presented in Indian Rupee (Rs.), which is the Company’s
functional and presentation currency.

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

(ii) Basis of Measurement

These standalone financial statements have been
prepared on a historical cost basis, except for the
following assets and liabilities which have been
measured at fair value -

- Certain financial assets and liabilities (including
derivative instruments), if any, that is measured at
fair value (refer accounting policy regarding financial
Instruments).

- Defined benefit plans - plan assets measured at fair
value.

(iii) Current and Non-current Classification

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

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

(iv) Rounding off of Amounts

All amounts disclosed in these standalone financial
statements and notes have been rounded off to crores
upto two decimals (Rs. 00,00,000) as per the requirement
of Schedule III, unless otherwise stated.

(v) New and Amended Standards

The Company applied for the first-time certain
standards and amendments, which are effective for
annual periods beginning on or after 1st April, 2025.
The Company has not early adopted any standard,
interpretation or amendment that has been issued but
is not yet effective.

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

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

The amendments are effective for annual reporting
periods beginning on or after 1st April, 2025. When
applying the amendments, an entity cannot restate
comparative information.

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

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

In August 2025, the MCA notified amendments
to paragraphs 69 to 76 of Ind AS 1 to specify the

requirements for classifying liabilities as current or non¬
current. The amendments clarify:

• What is meant by a right to defer settlement

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

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

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

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

If there is a breach of a material covenant of a long-term
loan arrangement on or before the end of the reporting
period, resulting in the liability becoming payable on
demand as at the reporting date, and the lender agrees

- after the reporting period but before the financial
statements are approved for issue - not to demand
repayment for at least 12 months as a consequence of
the breach, this shall be treated as an adjusting event.
Accordingly, the entity is not required to classify the
liability as current.

The amendments are effective for annual reporting
periods beginning on or after 1st April, 2025
retrospectively in accordance with Ind AS 8.

The amendments do not have any material impact on
the Company’s standalone financial statements.

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

In August 2025, the MCA notified amendments to
Ind AS 7 - Statement of Cash Flows and Ind AS 107

- Financial Instruments: Disclosures to clarify the
characteristics of supplier finance arrangements and
require additional disclosure of such arrangements. The
disclosure requirements in the amendments are intended
to assist users of financial statements in understanding
the effects of supplier finance arrangements on an
entity’s liabilities, cash flows and exposure to liquidity
risk.

The amendments do not have any material impact on
the Company’s standalone financial statements.

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

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

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

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

The mandatory temporary exception - the use of which
is required to be disclosed - applies immediately. The
remaining disclosure requirements apply for annual
reporting periods beginning on or after 1st April, 2025,
but not for any interim periods ending on or before
31st March, 2026.

The amendments had no impact on the Company’s
standalone financial statements as the Company is not
in scope of the Pillar Two Model Rules.

(b) Revenue from Contract with Customers

Revenue from contracts with customers is recognised
when control of the goods or services are transferred
to the customers 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 customers.

Revenue towards satisfaction of a performance obligation
is measured at the amount of transaction price (net of
variable consideration) allocated to that performance
obligation. The transaction price of goods sold and
services rendered is net of variable consideration on
account of various discounts and schemes offered by
the Company as part of the contract, excluding amounts
collected on behalf of third parties.

Sale of Products

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. The normal credit term is 0 to 180 days upon
delivery. The revenue is measured on the basis of the
consideration defined in the contract with a customer,
including variable consideration, such as discounts,
volume rebates, or other contractual reductions, if any.
As the period between the date on which the Company
transfers the promised goods to the customer and the
date on which the customer pays for these goods is
generally one year or less, no financing components are
taken into account.

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.

Sale of Services

Revenue from services rendered is recognised as
the services are rendered and is booked based on
agreements/arrangements with the concerned parties.

Other Operating Revenues

Export entitlements [arising out of Duty Drawback and
Remission of Duties and Taxes on Export Products
(RoDTEP)] are recognised when the right to receive credit
as per the terms of the schemes is established in respect
of the exports made by the Company and where there
is no significant uncertainty regarding the ultimate
collection of the relevant export proceeds.

Royalty Income is recognised on accrual basis as per
terms of the agreement with the concerned party.

(c) Property, Plant and Equipment

Freehold land is carried at historical cost. Property,
plant and equipment and capital work-in-progress is
stated at cost, net of accumulated impairment loss, if
any. All other items of property, plant and equipment
is stated at cost, net of accumulated depreciation and
accumulated impairment losses, if any. Such cost
includes expenditure that is directly attributable to the
acquisition of the items. Such cost also includes the
cost of replacing part of the plant and equipment and
borrowing costs for long-term construction projects if
the recognition criteria are met. When significant parts
of plant and equipment are required to be replaced at
intervals, the Company depreciates them separately
based on their specific useful lives. 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
profit or loss as incurred.

Subsequent costs are included in the asset’s carrying
amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits
associated with the item will flow to the Company and
the cost of the item can be measured reliably. The
carrying amount of any component accounted for as a
separate asset is derecognised when replaced. All other
repairs and maintenance costs are charged to profit
or loss during the reporting period in which they are
incurred.

Depreciation Method, Estimated Useful Lives and
Residual Values

Depreciation is calculated on a pro-rata basis using the
straight-line method to allocate their cost, net of their
estimated residual values, over their estimated useful
lives in accordance with Schedule II to the Act. Each
component of an item of property, plant and equipment

with a cost that is significant in relation to the cost of
that item is depreciated separately if its useful life differs
from the other components of the item. The Company,
based on technical assessment made by technical
expert and management estimate, depreciates certain
items of building, plant and equipment over estimated
useful lives which 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.

The useful lives, residual values and the method of
depreciation of property, plant and equipment are
reviewed, and adjusted if appropriate, at the end of
each reporting period. The Company also considers the
impact of health, safety and environmental legislation
in its assessment of expected useful lives and estimated
residual values.

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

Advances paid towards the acquisition of property,
plant and equipment outstanding at each balance sheet
date are classified as ‘Capital Advances’ under other
non-current assets and the cost of property, plant and
equipment not ready to use are disclosed under ‘Capital
Work-in-progress’.

Non-current Assets Held for Sale:

The Company classifies non-current assets and disposal
companys as held for sale if their carrying amounts
will be recovered principally through a sale rather than
through continuing use.

Non-current assets and disposal companys classified as
held for sale are measured at the lower of their carrying
amount and fair value less costs to sell. Costs to sell are
the incremental costs directly attributable to the disposal
of an asset (disposal company), excluding finance costs
and income tax expense.

For these purposes, sale transactions include exchanges
of non-current assets for other non-current assets when
the exchange has commercial substance. The criteria for
held for sale classification is regarded met only when the
assets or disposal company is available for immediate
sale in its present condition, subject only to terms that
are usual and customary for sales of such assets (or
disposal companys), its sale is highly probable; and it
will genuinely be sold, not abandoned. The Company
treats sale of the asset or disposal company to be highly
probable when:

- The appropriate level of management is committed to a
plan to sell the asset (or disposal company),

- An active programme to locate a buyer and complete
the plan has been initiated (if applicable),

- The asset (or disposal company) is being actively
marketed for sale at a price that is reasonable in relation
to its current fair value,

- The sale is expected to qualify for recognition as
a completed sale within one year from the date of
classification, and

- Actions required to complete the plan indicate that it
is unlikely that significant changes to the plan will be
made or that the plan will be withdrawn.

Property, plant and equipment and intangibles are not
depreciated, or amortised assets once classified as held

l"| sale.

Assets and liabilities classified as held for sale are
presented separately from other items in the Balance
Sheet.

(d) Intangible Assets

Intangible assets (Computer Software) has a finite useful
life and are stated at cost less accumulated amortisation
and accumulated impairment losses, if any.

Intangible assets with finite lives are amortised over
the useful economic life and assessed for impairment
whenever there is an indication that the intangible
asset may be impaired. The amortisation period and
the amortisation method for an intangible asset with a
finite useful life are reviewed at least at the end of each
reporting period. Changes in the expected useful life or
the expected pattern of consumption of future economic
benefits embodied in the asset are considered to modify
the amortisation period or method, as appropriate, and
are treated as changes in accounting estimates. The
amortisation expense on intangible assets with finite
lives is recognised in the Statement of Profit and Loss
unless such expenditure forms part of carrying value of
another asset.

Computer Software

Software for internal use, which is primarily acquired
from third-party vendors is capitalised. Subsequent
costs associated with maintaining such software are
recognised as expense as incurred. Cost of software
includes license fees and cost of implementation/system
integration services, where applicable.

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
and Loss when the asset is derecognised.

Amortisation Method and Period

Computer software are amortised on a pro-rata basis
using the straight-line method over their estimated
useful life of 5 years, from the date they are available for
use. Amortisation method and useful lives are reviewed
periodically including at each financial year end.

Research and Development

Research costs are expensed as incurred. Expenditure
on development that do not meet the specified criteria
under Ind AS 38 on ‘Intangible Assets’ are recognised as
an expense as incurred.

(e) 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. Recoverable amount is determined for an
individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other
assets or groups of assets. 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. These calculations
are corroborated by valuation multiples, quoted share
prices for publicly traded companies or other available
fair value indicators.

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

(f) 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.

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, ranging from 30 to 999 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.
Refer to the accounting policies in section 2(e) impairment
of non-financial assets.

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.

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

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).

The Company applies the low-value asset recognition
exemption on a lease-by-lease basis, if the lease
qualifies as leases of low-value assets, based on defined
thresholds. In making this assessment, the Company
also factors below key aspects:

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

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

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

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

Company as a Lessor

Lessor accounting under Ind AS 116 is substantially
unchanged from Ind AS 17. Lessors will continue to
classify leases as either operating or finance leases
using similar principles as in Ind AS 17. Therefore, Ind
AS 116 does not have an impact for leases where the
Company is the lessor. Leases in which the Company
does not transfer substantially all the risks and rewards
incidental to ownership of an asset are classified as
operating leases. Rental income arising is accounted
for on a straight-line basis over the lease terms. Initial
direct costs incurred in negotiating and arranging an

operating lease are added to the carrying amount of the
leased asset i.e., asset given on lease and recognised
over the lease term on the same basis as rental income.
Contingent rents are recognised as revenue in the period
in which they are earned.

(g) Inventories

Inventories are stated at the lower of cost and net
realisable value.

Cost of inventories comprises cost of purchases and all
other costs incurred in bringing the inventories to their
present location and condition and are accounted for as
follows:

Raw 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 basis.

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.

Finished Goods and Work-in-progress:

Cost includes cost of direct materials and labour and
a proportion of manufacturing overheads based on the
normal operating capacity but excluding borrowing
costs. Cost is determined on weighted average basis.

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.

(h) Investments in Subsidiaries and Associates

A subsidiary is an entity that is controlled by another
entity. An associate is an entity over which the Company
has significant influence. Significant influence is the
power to participate in the financial and operating
policy decisions of the investee but is not control or joint
control over those policies.

The Company’s investments in its subsidiaries and
associates are accounted at cost less impairment.

The Company reviews its carrying value of investments
carried at cost annually, or more frequently when there
is indication for impairment. If the recoverable amount
is less than its carrying amount, the impairment loss is
recorded in the Statement of Profit and Loss.

When an impairment loss subsequently reverses, the
carrying amount of the investment is increased to the
revised estimate of its recoverable amount, so that the
increased carrying amount does not exceed the cost of the
investment. A reversal of an impairment loss is recognised
immediately in the Statement of Profit and Loss.

Where, amongst other assessments, the investment
in associate fails to meet the definition of equity from
issuer’s perspective as per Ind AS 32, it is classified as
financial asset and accounted for under Ind AS 109 in
accordance with para (i) below.

(i) Investments [Other than (h) above] and Other
Financial Assets(i) Classification

The Company classifies its financial assets in the
following measurement categories:

- those to be measured subsequently at fair value (either
through other comprehensive income or through profit
or loss), and

- those to be measured at amortised cost.

The classification depends on the Company’s business
model for managing the financial assets and the
contractual terms of the cash flows.

For assets measured at fair value, gains and losses will
either be recorded in profit or loss or other comprehensive
income. For investments in debt instruments, this will
depend on the business model in which the investment
is held. For investments in equity instruments, this
will depend on whether the Company has made an
irrevocable election at the time of initial recognition to
account for the equity investment at fair value through
other comprehensive income.

The Company reclassifies debt investments when and
only when its business model for managing those assets
changes.

(ii) Measurement

At initial recognition, the Company measures a financial
asset at its fair value plus, in the case of a financial
asset not at fair value through profit or loss, transaction
costs that are directly attributable to the acquisition of
the financial asset. Transaction costs of financial assets
carried at fair value through profit or loss are expensed
in profit or loss. However, trade receivables that do not
contain a significant financing component are measured
at transaction price.

Financial assets with embedded derivatives are
considered in their entirety when determining whether
their cash flows are solely payment of principal and
interest.

Debt Instruments

Subsequent measurement of debt instruments depends
on the Company’s business model for managing the asset
and the cash flow characteristics of the asset. There are
three measurement categories into which the Company
classifies its debt instruments:

• Amortised Cost:

Assets that are held for collection of contractual cash
flows where those cash flows represent solely payments
of principal and interest are measured at amortised cost.
This assessment is referred to as the Solely Payments of
Principal and Interest (SPPI) test and is performed at an
instrument level. Financial assets with cash flows that
are not SPPI are classified and measured at fair value
through profit or loss, irrespective of the business model.
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 Effective Interest
Rate (EIR). The EIR amortisation is included in ‘Other
Income’ in the profit or loss. A gain or loss on a debt
instrument that is subsequently measured at amortised
cost is recognised in profit or loss when the asset is
derecognised or impaired.

• Fair Value through Other Comprehensive Income
(FVOCI):

Assets that are held for collection of contractual cash flows
and for selling the financial assets, where the assets’ cash
flows represent solely payments of principal and interest,
are measured at fair value through other comprehensive
income (FVOCI). This assessment is referred to as
the SPPI test and is performed at an instrument level.
Financial assets with cash flows that are not SPPI are
classified and measured at fair value through profit or
loss, irrespective of the business model. Movements in
the carrying amount are taken through OCI, except for
the recognition of impairment gains or losses, interest
income and foreign exchange gains and losses which are
recognised in the profit or loss. When the financial asset
is derecognised, the cumulative gain or loss previously
recognised in OCI is reclassified from equity to profit or
loss and recognised in ‘Other Income’.

• Fair Value through Profit or Loss (FVTPL):

Assets that do not meet the criteria for amortised cost
or FVOCI are measured at fair value through profit or
loss (FVTPL). A gain or loss on a debt investment that
is subsequently measured at fair value through profit or
loss is recognised in profit or loss and presented net in
the Statement of Profit and Loss within ‘Other Income’ in
the period in which it arises.

Equity Instruments

The Company subsequently measures all equity
investments at fair value. Where the Company’s
management has elected to present fair value gains and
losses on equity investments in other comprehensive
income, there is no subsequent reclassification of fair
value gains and losses to profit or loss. Changes in the
fair value of financial assets at fair value through profit
or loss are recognised in ‘Other Income’ in the Statement
of Profit and Loss.

In case the terms and conditions of investment in
associate has certain clauses (including buybacks /
redemptions / certain protective clauses), the Company
analyses the above instruments in its entirety, since Ind
AS 109 does not separate embedded derivatives from
financial assets. In case, the contractual cash flows of
the instruments are not Solely Payments of Principal and
Interest (SPPI), such investment is measured at fair value
through profit or loss.

(iii) Impairment of Financial Assets

The Company assesses on a forward looking basis the
expected credit losses associated with its assets which
are not fair valued through profit or loss. The impairment
methodology applied depends on whether there has
been a significant increase in credit risk. Note 40 details
how the Company determines whether there has been a
significant increase in credit risk.

For trade receivables only, the Company applies the
simplified approach permitted by Ind AS 109 - ‘Financial
Instruments’, which requires expected lifetime losses to
be recognised from initial recognition of the receivables.

(iv) Derecognition of Financial Assets

A financial asset is derecognised only when

- the Company has transferred the rights to receive cash
flows from the financial asset or

- retains the contractual rights to receive the cash flows of
the financial asset, but assumes a contractual obligation
to pay the cash flows to one or more recipients.

Where the Company has transferred an asset, the
Company evaluates whether it has transferred
substantially all risks and rewards of ownership of the
financial asset. In such cases, the financial asset is
derecognised. Where the Company has not transferred
substantially all risks and rewards of ownership of the
financial asset, the financial asset is not derecognised.

The financial asset is derecognised if the Company has
not retained control of the financial asset. Where the
Company retains control of the financial asset, the asset
is continued to be recognised to the extent of continuing
involvement in the financial asset.

(v) Income Recognition
Interest Income

Interest income from debt instruments is recognised
using the Effective Interest Rate (EIR) method. 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. Interest Income on financial assets are measured
at amortised cost and fair value through profit or loss
and is included in ‘Other Income’ in the Statement of
Profit and Loss.

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, which is generally when
shareholders approve the dividend.

(vi) Fair Value of Financial Instruments

In determining the fair value of financial instruments,
the Company uses a variety of methods and assumptions
that are based on market conditions and risks existing
at each reporting date. The methods used to determine
fair value include discounted cash flow analysis, option
pricing method, underlying asset analysis, comparable
companies multiple method, comparable transaction
method and available quoted market prices.

(j) Derivative Instruments

The Company enters into certain derivative contracts
to hedge risks which are not designated as hedges.
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’. Derivatives are carried
as financial assets when the fair value is positive and as
financial liabilities when the fair value is negative.

(k) Offsetting Financial Instruments

Financial assets and liabilities are offset and the net
amount is reported in the Balance Sheet where there is a
legally enforceable right to offset the recognised amounts
and there is an intention to settle on a net basis or
realise the asset and settle the 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.

(l) Cash and Cash Equivalents

For the purpose of presentation in the Cash Flow
Statement, cash and cash equivalents includes cash
on hand, other short-term highly liquid investments
with original maturities of three months or less that
are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in

(m) Financial Liabilities

Initial Recognition, Measurement and Presentation

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

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.

The Company’s financial liabilities include trade and
other payables, loans and borrowings including bank
overdrafts and financial guarantee contracts.

Subsequent Measurement

The measurement of financial liabilities depends on their
classification, as described below:

Trade Payables

Trade payables represent liabilities for goods and services
provided to the Company prior to the end of financial
year which are unpaid. Trade and other payables are
presented as current liabilities unless payment is not due
within 12 months after the reporting period.

Loans and Borrowings

Borrowings are initially recognised at fair value, net of
transaction costs incurred. Borrowings are subsequently
measured at amortised cost using effective interest
method. Any difference between the proceeds (net
of transaction costs) and the redemption amount
is recognised in profit or loss over the period of the
borrowings using the effective interest method. Fees paid
on the establishment of loan facilities are recognised
as transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn
down. In this case, the fee is deferred until the draw
down occurs. To the extent there is no evidence that it
is probable that some or all of the facility will be drawn
down, the fee is capitalised as a prepayment for liquidity
services and amortised over the period of the facility to
which it relates.

Borrowings are derecognised from the Balance Sheet
when the obligation specified in the contract is
discharged, cancelled or expired.

Borrowings are classified as current and non-current
liabilities based on repayment schedule agreed with
banks.

Financial Guarantee Contracts

Financial guarantee contracts issued by the Company
are those contracts that require a payment to be made
to reimburse the holder for a loss it incurs because
the specified debtor fails to make a payment when due
in accordance with the terms of a debt instrument.
Financial guarantee contracts are recognised initially as

a liability 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 loss allowance determined
as per impairment requirements of Ind AS 109 and the
amount recognised less cumulative amortisation.
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 and Loss.

(n) Borrowing Costs

General and specific borrowing costs that are directly
attributable to the acquisition, construction or production
of a qualifying asset are capitalised during the period of
time that is required to complete and prepare the asset
for its intended use or sale (qualifying asset). Qualifying
assets are assets that necessarily take a substantial
period of time to get ready for their intended use or sale.
Other borrowing costs are expensed in the period in
which they are incurred.

(o) Forward Currency Contracts

The Company uses forward currency contracts to
hedge its foreign currency risks. Such forward currency
contracts are initially measured at fair value on the date
on which a forward currency contract is entered into and
are subsequently re-measured at fair value. Forward
currency contracts are carried as financial assets when
the fair value is positive and as financial liabilities when
the fair value is negative. Changes in the fair value of
forward contracts are recognized in the Statement of
Profit and Loss as they arise.

Foreign Currency Transactions and Translation

(i) Functional and Presentation Currency

Items included in the standalone financial statements
of the Company are measured using the currency
of the primary economic environment in which the
Company operates (‘the functional currency⁷). The
standalone financial statements are presented in Indian
Rupees (Rs.), which is the Company's functional and
presentation currency.

(ii) Transactions and Balances

Foreign currency transactions are initially recorded at
functional currency spot rates at the date the transaction
first qualifies for recognition.

Foreign currency monetary items are translated using the
functional currency spot rates prevailing at the reporting
date. Non-monetary items, which are measured in terms
of historical cost denominated in a foreign currency,
are reported using the exchange rate at the date of
transaction. Non-monetary items, which are measured
at fair value or other similar valuation denominated in a
foreign currency, are translated using the exchange rate
at the date when such value was determined.

Exchange differences arising on settlement or translation
of monetary items are recognised in the Statement of
Profit and Loss in the period in which they arise.

(p) Employee Benefits(i) Short-term Employee Benefits

Liabilities for short-term employee 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 recognised in respect of employees'
services up to the end of the reporting period and are
measured at the amounts expected to be paid when
the liabilities are settled. The liabilities are presented
as ‘Employee Benefits Payable' within ‘Other Financial
Liabilities' in the Balance Sheet.

(ii) Post-employment BenefitsI. Defined Benefit Plans

a) Gratuity

Retirement gratuity for employees, is funded
through Company's Gratuity Scheme with Life
Insurance Corporation of India (LICI). The costs of
providing benefits under this plan are determined
on the basis of actuarial valuation using the
projected unit credit method at each year-end.
Actuarial gains/losses are immediately recognised
in retained earnings through ‘Other Comprehensive
Income' in the period in which they occur. Re¬
measurements are not re-classified to profit or
loss in subsequent periods. The excess/shortfall in
the fair value of the plan assets over the present
value of the obligation calculated as per actuarial
methods as at Balance Sheet dates is recognised as
a gain/loss in the Statement of Profit and Loss. Any
asset arising out of this calculation is limited to the
past service cost plus the present value of available
refunds and reduction in future contributions.

b) Provident Fund

In respect of certain employees, contributions
to the Company's Employees Provident Fund
(administered by the Company as per the provisions
of Employees' Provident Fund and Miscellaneous
Provisions Act, 1952) are made in accordance with
the fund rules. The interest rate payable to the
beneficiaries every year is being notified by the
Government.

In the case of contribution to the Fund, the Company
has an obligation to make good the shortfall, if any,
between the return from the investments of the
Fund and the notified interest rate and recognises
such obligation, if any, determined based on an
actuarial valuation as at the Balance Sheet date, as
an expense.

II. Defined Contribution Plansa) Superannuation

Contribution made to Superannuation Fund for
certain employees are recognised in the Statement of
Profit and Loss as and when services are rendered
by employees. The Company has no liability for
future Superannuation Fund benefits other than its
contribution.

b) Provident Fund

Contributions in respect of employees who are not
covered by Company’s Employees Provident Fund
[in I(b) above] are made to the Fund administered
by the Regional Provident Fund Commissioner as
per the provisions of Employees’ Provident Fund
and Miscellaneous Provisions Act, 1952 and are
charged to the Statement of Profit and Loss as
and when services are rendered by employees.
The Company has no obligation other than the
contribution payable to the Regional Provident
Fund.

(iii) Other Long-term Employee Benefits

The liabilities for leave are not expected to be settled wholly
within 12 months after the end of the period in which the
employees render the related service. They are, therefore,
measured annually by actuaries as the present value of
expected future benefits in respect of services provided by
employees up to the end of the reporting period using the
projected unit credit method. The benefits are discounted
using the market yields at the end of the reporting period
that have terms approximating to the terms of the related
obligation. Remeasurements as a result of experience
adjustments and changes in actuarial assumptions are
recognised in profit or loss. Actuarial gains/losses are
immediately recognised in retained earnings through the
Statement of Profit and Loss in the period in which they
occur.

The obligations are presented under ‘Provisions’ (Current)
in the Balance Sheet if the Company does not have an
unconditional right to defer settlement for at least twelve
months after the reporting period, regardless of when the
actual settlement is expected to occur.

(q) Income Tax

Tax expense comprises current tax expense and deferred
tax.

Current income tax assets and liabilities are measured at
the amount expected to be recovered from or paid to the
taxation authorities.

The current income tax charge is calculated on the basis
of the tax laws and tax rates enacted or substantively
enacted at the end of the reporting period.

Current income tax relating to items recognised outside
profit or loss is recognised outside profit or loss (either
in ‘Other Comprehensive Income’ or in ‘Equity’). Current
tax items are recognised in correlation to the underlying
transaction either in OCI or directly in equity.

Management periodically evaluates positions taken in
tax returns with respect to situations in which applicable
tax regulation is subject to interpretation and considers
whether it is probable that a taxation authority will
accept an uncertain tax treatment. The Company reflects
the effect of uncertainty for each uncertain tax treatment
by using either most likely method or expected value
method, depending on, which method predicts better
resolution of the treatment. It establishes provisions
where appropriate on the basis of amounts expected to
be paid to the tax authorities.

Deferred tax is provided using the Balance Sheet
approach, on temporary differences arising between
the tax base of assets and liabilities and their carrying
amounts in the standalone financial statements.
However, deferred tax liabilities are not recognised if they
arise from the initial recognition of goodwill. Deferred
income tax is determined using tax rates (and laws) that
have been enacted or substantially enacted by the end of
the reporting period and are expected to apply when the
related deferred tax asset is realised or the deferred tax
liability is settled.

Deferred tax assets are recognised for all deductible
temporary differences, carry forward of unused tax
credits and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those
temporary differences, tax credits and losses.

Deferred tax assets are not recognised for temporary
differences between the carrying amount and tax bases
—""of investments in subsidiaries where it is not probable
that the differences will reverse in the foreseeable future
and taxable profit will not be available against which the
temporary difference can be utilised.

The carrying amount of deferred tax assets is reviewed at
each Balance Sheet date and reduced to the extent that
it is no longer probable that sufficient taxable profits will
be available to allow all or part of the asset to be utilised.

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 respective scenarios.

Current and deferred tax are recognised in profit or loss,
except to the extent that it relates to items recognised
in ‘Other Comprehensive Income’ or directly in ‘Equity’,
if any. In this case, the tax is also recognised in ‘Other
Comprehensive Income’ or directly in ‘Equity’, respectively.

(r) Government Grants

Grants and subsidies from the government are recognized
when there is reasonable assurance that the Company
will comply with the conditions attached to them and the
grant/subsidy will be received.

When the grant or subsidy relates to revenue, it is
recognized as income on a systematic basis in the
Statement of Profit and Loss over the periods necessary
to match them with the related costs, which they are
intended to compensate. Where the grant relates to an
asset, it is deducted while calculating carrying amount
of the asset. The grant is recognised in the Statement of
Profit and Loss over the life of the depreciable asset as a
reduced depreciation expense.

When the Company receives grants of non-monetary
assets, the asset and the grant are recorded at fair value
amounts and released to the Statement of Profit and Loss
over the expected useful life in a pattern of consumption
of the benefit of the underlying asset i.e., by equal
annual instalments. When loans or similar assistance
are provided by governments or related institutions, with
an interest rate below the current applicable market
rate, the effect of this favourable interest is regarded
as a government grant. The loan or assistance is
initially recognised and measured at fair value and the
government grant is measured as the difference between
the initial carrying value of the loan and the proceeds
received. The loan is subsequently measured as per the
accounting policy applicable to financial liabilities in
respect of loans/assistances received subsequent to the
date of transition.

(s) Fair Value Measurement

The Company measures financial instruments, such as,
derivatives at fair value at each Balance Sheet date.

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

? 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 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:

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

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

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

For assets and liabilities that are recognised in the
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.

Dividend Distribution to Equity-holders

The Company recognises a liability to make cash
distributions to equity-holders when the distribution
is authorised and the distribution is no longer at the
discretion of the Company. As per the corporate laws in
India, a distribution is authorised when it is approved by
the shareholders. A corresponding amount is recognised
directly in equity.

Earnings per Share

Basic earnings per share is calculated by dividing the
net profit or loss attributable to equity-holders of the
Company by the weighted average number of equity
shares outstanding during the year. The weighted
average number of equity shares outstanding during
the year is adjusted for events such as bonus issue,
bonus element in a rights issue, share split and reverse
share split (consolidation of shares) that have changed
the number of equity shares outstanding, without a
corresponding change in resources.

For the purpose of calculating diluted earnings per
share, the net profit or loss for the period attributable
to equity-holders of the Company and the weighted
average number of shares outstanding during the year
are adjusted for the effects of all dilutive potential equity
shares