4. Material Accounting Policies:
i) Use of estimates:
The preparation of the financial statements in conformity with Ind AS requires the Management to make estimates,
judgements and assumptions. These estimates, judgements and assumptions affect the application of accounting
policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the
date of the financial statements and reported amounts of revenues and expenses during the period. Application of
accounting policies that require critical accounting estimates involving complex and subjective judgements and
the use of assumptions in financial statements have been specified in Note 4(ii) below. Accounting estimates could
change from period to period. Actual results could differ from estimates. Appropriate changes in estimates are made
as the Management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are
reflected in financial statements in the period in which the changes are made and, if material, their effects are disclosed
in these notes to the individual financial statements.
ii) Critical Accounting Estimates and Judgement used in application of Accounting Policies are specified
here-in-after:
a. Income Taxes
Significant judgements are involved in determining the provision for Income Taxes, including amount expected to
be paid / recovered for uncertain tax positions. (Also refer Note 11, 19 and 31)
b. Property, Plant and Equipment
Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge
in respect of periodic depreciation is derived after determining an estimate of an asset's expected useful life and
the expected residual value at the end of its life. The useful life and residual values of the Company's assets are
determined by the Management at the time the asset is acquired and reviewed periodically, including at each
financial year end. The life is based on historical experience with similar assets as well as anticipation of future
events, which may impact their life such as changes in technology. (Refer Note 5)
c. Impairment of Financial Assets
The impairment provisions for financial assets are based on assumptions about risk of default and expected loss
rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment
calculation based on empirical evidence available without under cost or effort, existing market conditions as well
as forward looking estimates at the end of each reporting period. (Refer Note 10 & 18)
d. Defined Benefit Plan
The cost of the defined benefit plan and other post-employment benefits and the present value of such obligations
is determined using actuarial valuation. An actuarial valuation involves making various assumptions that may
differ from actual developments in the future. These include the determination of the discount rate, future salary
increases, mortality rates and attrition rate. Due to the complexities involved in the valuation and its long-term
nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are
reviewed at each reporting date. (Refer Note 45)
e. Fair Value Measurement of Financial Instruments
When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured
based on quoted prices in active markets, their fair value is measured using valuation techniques including
the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets, where
possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements
include consideration of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these
factors could affect the reported fair values of financial instruments. (Refer Note 48)
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