2 MATERIAL ACCOUNTING POLICIES

This note provides a list of the material accounting
policies adopted in the preparation of these Financial
Statements. These policies have been consistently
applied for all years presented.

2.01 Basis of preparation and presentation of
financial statements

i) Compliance with IndAS

The financial statements have been prepared in
accordance with Indian Accounting Standards
(Ind AS) as prescribed under Section 133 of the
Companies Act, 2013 read with Companies (Indian
Accounting Standards) Rules, 2015 and Companies
(Indian Accounting Standards) (Amendment) Rules,
2016 and relevant provisions of the Companies
Act, 2013.

ii) Historical cost convention

The Financial Statements have been prepared on a
historical cost basis, except for the following assets
and liabilities:

(i) Certain financial assets and liabilities that are
measured at fair value

(ii) Defined benefit plans-plan assets measured
at fair value

iii) The Company uses the Indian Rupees (?) as its
reporting currency. All values are rounded off to
the nearest millions ('000,000) upto two decimal
places, except when otherwise indicated.

2.02 Current versus non-current classification

The Company presents assets and liabilities in the balance
sheet based on current/non- current classification.

• Expected to be realised or intended to be sold or consumed
in normal operating cycle

• Held primarily for the purpose of trading

• Expected to be realised within twelve months after the
reporting period, or

• cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least twelve
months after the reporting period.

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in normal operating cycle.

• It is held primarily for the purpose of trading.

• It is due to be settled within twelve months after the
reporting period, or

• There is no unconditional right to defer the settlement
of the liability for at least twelve months after the
reporting period.

All other liabilities are classified as non-current.

Deferred tax assets and deferred tax liabilities are classified
as non- current assets and liabilities.

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

2.03 Property, plant and equipment

Property, Plan t a nd equipment in cluding ca pital
work in progress are stated at cost, less accumulated
depreciation and accumulated impairment losses,
if any. The cost comprises of purchase price, taxes,
duties, freight and other incidental expenses directly
attributable and related to acquisition and installation
of the concerned assets and are further adjusted
by the amount of input tax credit availed wherever
applicable. Subsequent costs are included in asset's
carrying amount or recognised as separate assets,
as appropriate, only when it is probable that future
economic benefit associated with the item will flow to
the Company and the cost of item can be measured
reliably. When significant parts of plant and equipment
are required to be replaced at intervals, the Company
depreciates them separately based on their respective
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. The present value of the expected cost for the
decommissioning of an asset after its use is included in
the cost of the respective asset if the recognition criteria
for a provision are met.

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 income
statement when the asset is derecognised.

Capital work- in- progress includes cost of property,
plant and equipment under installation / under
development as at the balance sheet date.

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.

Depreciation on property, plant and equipment is
provided on pro-rata basis on written-down value
method using the useful lives of the assets estimated by
management and in the manner prescribed in Schedule
II of the Companies Act 2013 along with residual value
5%. The useful life is as follows:
*Based on Internal assessment the management believes that
the useful life given above best represent the period over which
management expects to use these assets

Land is carried at historical cost and is not depreciated.

2.04 Intangible assets

Separately acquired intangible assets

Intangible assets acquired separately are measured on
initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less accumulated
amortisation and accumulated impairment losses,
if any. Internally generated intangibles, excluding
capitalised development cost, are not capitalised and
the related expenditure is reflected in statement of
Profit and Loss in the period in which the expenditure
is incurred. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working
condition for its intended use.

The useful lives of intangible assets are assessed as
either finite or indefinite. Intangible assets with finite
lives are amortised over their useful economic lives
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 is 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 is accounted for by changing 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 in the
expense category consistent with the function of the
intangible assets.

Intangible assets with indefinite useful lives are not
amortised, but are tested for impairment annually,
either individually or at the cash-generating unit level.
The assessment of indefinite life is reviewed annually
to determine whether the indefinite life continues to
be supportable. If not, the change in useful life from
indefinite to finite is made on a prospective basis.

Gains or losses arising from disposal of the intangible
assets 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 assets are disposed off.

Intangible assets with finite useful life are amortised
on a straight-line value basis over the estimated useful
economic life of 6-20 years, which represents the period
over which the Company expects to derive economic
benefits from the use of the assets.

Intangible Assets under development includes cost of
intangible assets under development as at the balance
sheet date.

2.05 Impairment of non- financial Assets

Intangible assets that have an indefinite useful life are
not subject to amortisation and are tested annually for
impairment, or more frequently if events or changes
in circumstances indicate that they might be impaired.
Other assets are tested for impairment whenever
events or changes in circumstances indicate the carrying

amount may not be recoverable. An impairment loss
is recognised for the amount by which the asset's
carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset's fair
value less costs of disposal and value in use. For the
purposes of assessing impairment, assets are grouped
at the lowest levels for the which there are separately
identifiable cash inflows which largely independent of
the cash inflows from other assets or group of assets
(cash generating units). Non - financial assets other than
goodwill that suffered an impairment are reviewed for
possible reversal of the impairment at the end of each
reporting period.

2.06Financial 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.

(i) Financial Assets

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)

• Those measured at amortised cost

The classification depends on entity's business
model for managing the financial assets and the
contractual terms of the cash flow.

Initial recognition and measurement

All financial assets (not recorded at fair value
through profit or loss) are recognised initially at fair
value plus transaction costs that are attributable to
the acquisition of the financial asset. Transaction
cost of financial assets carried at fair value through
profit or loss are expensed in profit or loss.

Subsequent measurement

For purposes of subsequent measurement, financial
assets are classified in following categories:

• Debt instruments at fair value through profit
and loss (FVTPL)

• Debt instruments at fair value through other
comprehensive income (FVTOCI)

• Debt instruments at amortised cost

• Equity instruments

Where assets are measured at fair value, gains
and losses are either recognised entirely in
the statement of profit and loss (i.e. fair value
through profit or loss), or recognised in other
comprehensive income (i.e. fair value through

other comprehensive income). For investment in
debt instruments, this will depend on the business
model in which the investment is held. For
investment in equity instruments, this will depend
on whether the Company has made an irrevocable
election at the time of initial recognition to account
for equity instruments at FVTOCI.

Debt instruments at amortised cost

A Debt instrument is measured at amortised cost
if both the following conditions are met:

a) Business Model Test: The objective is to hold
the financial asset to collect the contractual
cash flows (rather than to sell the instrument
prior to its contractual maturity to realise its
fair value changes).

b) Cash flow characteristics test: The contractual
terms of the Debt instrument give rise on
specific dates to cash flows that are solely
payments of principal and interest on
principal amount outstanding.

This category is most relevant to the Company.
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 EIR. EIR
is the rate that exactly discounts the estimated
future cash receipts over the expected life of the
financial instrument or a shorter period, where
appropriate, to the gross carrying amount of the
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. The EIR amortisation
is included in other income in profit or loss. The
losses arising from impairment are recognised in
the profit or loss. This category generally applies
to trade and other receivables.

Debt instruments at fair value through OCI

A Debt instrument is measured at fair value
through other comprehensive income if following
criteria are met:

a) Business Model Test: The objective of
financial instrument is achieved by both
collecting contractual cash flows and for
selling financial assets.

b) Cash flow characteristics test: The

contractual terms of the Debt instrument give
rise on specific dates to cash flows that are
solely payments of principal and interest on
principal amount outstanding.

Debt instrument included within the FVTOCI
category are measured initially as well as at
each reporting date at fair value. Fair value
movements are recognised in the other
comprehensive income (OCI), except for the
recognition of interest income, impairment
gains or losses and foreign exchange gains
or losses which are recognised in statement
of profit and loss. On derecognition of
asset, cumulative gain or loss previously
recognised in OCI is reclassified from the
equity to statement of profit & loss. Interest
earned whilst holding FVTOCI financial asset
is reported as interest income using the
EIR method.

Debt instruments at FVTPL

FVTPL is a residual category for financial
instruments. Any financial instrument, which
does not meet the criteria for amortised cost or
FVTOCI, is classified as at FVTPL. A gain or loss on
a Debt instrument that is subsequently measured
at FVTPL and is not a part of a hedging relationship
is recognised in statement of profit or loss and
presented net in the statement of profit and
loss within other gains or losses in the period in
which it arises. Interest income from these Debt
instruments is included in other income.

Equity investments of other entities

All equity investments in scope of IND AS 109
are measured at fair value. For all other equity
instruments, the Company may make an irrevocable
election to present in other comprehensive income
all 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.

If the Company decides to classify an equity
instrument as at FVTOCI, then all fair value
changes on the instrument, excluding dividends,
are recognised in the OCI. There is no recycling
of the amounts from OCI to 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 recognised in the Profit and loss.

Derecognition

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

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

• the Company has transferred its rights to receive
cash flows from the asset or has assumed an
obligation to pay the received cash flows in full
without material delay to a third party under a
"pass through" arrangement and either;

(a) the Company has transferred the rights
to receive cash flows from the financial
assets or

(b) the Company has retained the
contractual right 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 the risks and rewards of the
ownership of the financial assets. In such cases, the
financial asset is derecognised. Where the entity
has not transferred substantially all the risks and
rewards of the ownership of the financial assets,
the financial asset is not derecognised.

Where the Company has neither transferred a
financial asset nor retains substantially all risks
and rewards of ownership of the financial asset,
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.

Impairment of financial assets

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

• Financial assets measured at amortised cost;

• Financial assets measured at fair value through
other comprehensive income (FVTOCI);

The Company follows "simplified approach" for
recognition of impairment loss allowance on:

• Trade receivables or contract revenue receivables;

Under the simplified approach, the Company
does not track changes in credit risk. Rather, it
recognises impairment loss allowance based on
lifetime ECLs at each reporting date, right from its
initial recognition. The Company uses a provision
matrix to determine impairment loss allowance on
the portfolio of trade receivables. The provision
matrix is based on its historically observed default
rates over the expected life of trade receivable and
is adjusted for forward looking estimates. At every
reporting date, the historical observed default
rates are updated and changes in the forward¬
looking estimates are analysed.

For recognition of impairment loss on other
financial assets and risk exposure, the Company
determines 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 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 Company reverts to
recognising impairment loss allowance based on
12- months ECL.

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 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 EIR. When estimating the
cash flows, an entity is required to consider:

subsequently measured at amortised cost using
the Effective interest rate method. Gains and losses
are recognised in profit or loss when the liabilities
are derecognised as well as through the Effective
interest rate 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 Effective interest rate. The
Effective interest rate amortisation is included as
finance costs in the statement of profit and loss.

Borrowing are classified as current liabilities unless
the Company has an unconditional right to defer
settlement of the liability for at least 12 months
after the reporting period.

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 medication 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.

Offsetting of financial instruments:

Financials 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.

Reclassification of financial assets/
financial liabilities

The Company determines classification of financial
assets and liabilities on initial recognition. After
initial recognition, no reclassification is made for
financial assets which are equity instruments
and financial liabilities. For financial assets
which are debt instruments, a reclassification
is made only if there is a change in the business
model for managing those assets. Changes to the
business model are expected to be infrequent.
The Company's senior management determines
change in the business model as a result of external
or internal changes which are significant to the
Company's operations. Such changes are evident
to external parties. A change in the business model
occurs when the Company either begins or ceases

to perform an activity that is significant to its
operations. If the Company reclassifies financial
assets, it applies the reclassification prospectively
from the reclassification date which is the first day
of the immediately next reporting period following
the change in business model. The Company does
not restate any previously recognised gains, losses
(including impairment gains or losses) or interest.

2.07 Inventories

(a) Basis of Valuation:

Inventories are valued at lower of cost and
net realisable value after providing cost of
obsolescence, if any. However, materials and other
items held for use in the production of inventories
are not written down below cost if the finished
products in which they will be incorporated
are expected to be sold at or above cost. The
comparison of cost and net realisable value is
made on an item-by-item basis.

(b) Method of Valuation:

(i) Cost of raw materials and components has

been determined by using FIFO method and
comprises all costs of purchase, duties, taxes
(other than those subsequently recoverable
from tax authorities) and all other costs
incurred in bringing the inventories to their
present location and condition.

(ii) Cost of finished goods and work-in-progress

includes cost of direct materials and labour
and a proportion of manufacturing overheads
based on the normal operating capacity but
excluding borrowing costs.

(iii) Net realisable value is the estimated selling
price in the ordinary course of business, less
estimated costs of completion and estimated
costs necessary to make the sale.

2.08 Taxes

I ncome tax expense comprises current tax expense
and the net change in the deferred tax asset or
liability during the year. Current and deferred tax
are recognised in the Statement of Profit and Loss,
except when they relate to items that are recognised
in Other Comprehensive Income or directly in equity,
in which case, the current and deferred tax are also
recognised in Other Comprehensive Income or directly
in equity, respectively.

Current tax:

Current tax expenses are accounted in the same period
to which the revenue and expenses relate. Provision for
current income tax is made for the tax liability payable
on taxable income after considering tax allowances,
deductions and exemptions determined in accordance
with the applicable tax rates and the prevailing tax laws.

The Company's 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.

Current tax assets and current tax liabilities are offset
when there is a legally enforceable right to set off the
recognised amounts and there is an intention to settle
the asset and the liability on a net basis.

Deferred tax:

Deferred income tax is recognised using the
balance sheet approach. Deferred tax assets and
liabilities are recognised for d edu ctible a n d ta xa ble
temporary differences arising between the tax base
of assets and liabilities and their carrying amount in
financial statements.

Deferred income 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.

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.

Deferred tax liabilities and assets are measured at the
tax rates that are expected to apply in the period in
which the liability is settled or the asset realised, based
on tax rates (and tax laws) that have been enacted or
substantially enacted by the end of the reporting period.

Deferred tax assets and liabilities are offset when there
is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to
income taxes levied by the same taxation authority and
the Company intends to settle its current tax assets and
liabilities on a net basis.

2.09 i) Revenue from contracts 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 collects Goods and Service Tax on behalf of
government, and therefore, these are not consideration
to which the Company is entitled, hence, these are
excluded from revenue. 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.

a) Revenue from sale of goods

Revenue from the sale of goods is recognised at
the point in time when control of the assets is
transferred to the customer, generally on delivery
of the goods.

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 for the sale
of goods, the Company considers the effects of
variable consideration, the existence of significant
financing components, non-cash consideration,
and consideration payable to the customer (if any).

b) Revenue from sale of services

Revenue from sale of services is recognised
over a period of time because the customer
simultaneously receives and consumes the
benefits provided by the Company and accounted
revenue as and when services are rendered and
there are no unfulfilled obligation.

c) Consideration of significant financing
component in a contract

The Company receives short-term advances
from its customers. Using the practical expedient
in Ind AS 115, the Company does not adjust the
promised amount of consideration for the effects
of a significant financing component if it expects,
at contract inception, that the period between the
transfer of the promised good or service to the
customer and when the customer pays for that
good or service will be one year or less.

d) Trade Receivables

Trade receivables are amounts due from
customers for goods sold or services performed
in the ordinary course of business. They are

generally due Tor settlement within one year and
therefore are all classified as current. Where the
settlement is due after one year, they are classified
as non-current. Trade receivables are recognised
initially at the amount of consideration that is
unconditional unless they contain significant
financing components, when they are recognised
at fair value. The Company holds the trade
receivables with the objective to collect the
contractual cash flows and therefore measures
them subsequently at amortised cost using the
effective interest method.

e) Contract Assets

A contract asset is the entity's right to consideration
in exchange for goods or services that the entity
has transferred to the customer. A contract asset
becomes a receivable when the entity's right
to consideration is unconditional, which is the
case when only the passage of time is required
before payment of the consideration is due.
The impairment of contract assets is measured,
presented and disclosed on the same basis as
trade receivables.

f) Contract Liabilities

A contract liability is the obligation to transfer
goods or services to a customer for which the
Company has received consideration (or an amount
of consideration is due) from the customer. If a
customer pays consideration before the Company
transfers goods or services to the customer,
contract liability is recognised when the payment is
made or the payment is due (whichever is earlier).
Contract liabilities are recognised as revenue when
the Company performs under the contract.

g) Impairment

An impairment is recognised to the extent that the
carrying amount of receivable or asset relating to
contracts with customers (a) the remaining amount
of consideration that the Company expects to
receive in exchange for the goods or services to
which such asset relates; less (b) the costs that
relate directly to providing those goods or services
and that have not been recognised as expenses.

ii) Other Income
Interest Income

Interest income from a financial asset is recognised
when it is probable that the economic benefits will
flow to the Company and the amount of income can
be measured reliably. Interest income is accrued on
a time proportion basis by reference to the principal

outstanding and effective interest rate (EIR). EIR is
the rate that exactly discounts the estimated future
cash receipts over the expected life of the financial
instrument or a shorter period, where appropriate, to
the gross carrying amount of the financial asset. Interest
income is included in other income in the statement of
profit and loss.

Other Operating Revenue

Incentive and subsidies are recognised when there is
reasonable assurance that the Company will comply
with the conditions and the incentive will be received.

2.10 Employee benefits

(i) Short-term obligations

Liabilities for wages and salaries, including non
monetary benefits that are expected to be settled
wholly within twelve months after the end of the
year in which the employees render the related
service are recognised in respect of employee
service upto the end of the reporting period and
are measured at the amount expected to be paid
when the liabilities are settled. Corresponding
liabilities are presented as current employee
benefit obligations in the balance sheet.

Accumulated leaves, which are expected to be
utilised within the next twelve months, is treated
as short-term employee benefits. The company
measured the expected cost of such absences as the
additional amount that it expects to pay as a result
of the unused entitlement that has accumulated
at the reporting date. The company recognises
the expected cost of short-term employee benefit
as an expense, when an employee renders the
related services.

The Company presents the leave encashment
as a current liability in the balance sheet to the
extent it does not have an unconditional right to
defer its settlement for twelve months after the
reporting date.

(ii) Defined Contribution Plan

The Company makes defined contribution to
Employees Provident Fund Organisation (EPFO),
Pension Fund and Employees State Insurance (ESI),
which are accounted on accrual basis as expenses
in the statement of Profit and Loss in the period
during which the related services are rendered
by employees.

Prepaid contribution are recognised as an assets to
the extent that a cash refund or reduction in future
payments is available.

(iii) Defined Benefit Plan

Retirement benefit in the form of Gratuity is
considered as defined benefit plan. The liability
recognised in the balance sheet in respect of
gratuity is the present value of the defined benefit
obligation at the balance sheet date, together with
adjustments for unrecognised actuarial gains or
losses and past service costs. The defined benefit
obligation is determined by actuarial valuation as
on the balance sheet date, using the projected unit
credit method.

Remeasurements, comprising of actuarial gains
and losses, the effect of the asset ceiling, excluding
amounts included in net interest on the net defined
benefit liability (excluding amounts included in net
interest on the net defined benefit liability), are
recognised immediately in the balance sheet with a
corresponding debit or credit to retained earnings
through OCI in the period in which they occur.
Remeasurements are not reclassified to profit or
loss in subsequent periods.

Past service costs are recognised in profit or loss
on the earlier of:

(i) The date of the plan amendment or
curtailment, and

(ii) The date that the Company recognises related
restructuring costs.

Net interest is calculated by applying the discount
rate to the net defined benefit liability.

The Company recognises the following changes in
the net defined benefit obligation as an expense in
the statement of profit and loss:

(i) Service costs comprising current service
costs, past-service costs, gains and losses on
curtailments and nonroutine settlements; and

(ii) Net interest expense or income

2.11 Share-based payment arrangements

Employees (including senior executives) of the Company
receive remuneration in the form of share based payment
transactions, whereby employees render services as
consideration for equity instruments (equity-settled
transactions). The cost of equity-settled transactions is
determined by the fair value at the date when the grant
is made using an appropriate valuation model. That cost
is recognised, together with a corresponding increase
in share Options outstanding reserves in equity, over
the period in which the performance and/or service
conditions are fulfilled in employee benefits expense."

The cumulative expense recognised for equity-settled
transactions at each reporting date until the vesting
date reflects the extent to which the vesting period
has expired and the Company's best estimate of the
number of equity instruments that will ultimately vest.
The statement of profit and loss expense or credit for a
period represents the movement in cumulative expense
recognised as at the beginning and end of that period
and is recognised in employee benefits expense.

When the terms of an equity-settled award are modified,
the minimum expense recognised is the expense had
the terms had not been modified, if the original terms of
the award are met. An additional expense is recognised
for any modification that increases the total fair value
of the share based payment transaction or is otherwise
beneficial to the employee as measured at the date of
modification. Where an award is cancelled by the entity
or by the counter party, any remaining element of the
fair value of the award is expensed immediately through
profit or loss.

The dilutive effect of outstanding options is reflected as
additional share dilution in the computation of diluted
earnings per share.

2.12 Leases- Company as a lessee

Lea ses a re a ccou nted for u sing th e prin ciples
of recognition, measurement, presentation and
disclosures as set out in Ind AS 116 Leases.

On inception of a contract, the Company assesses
whether it contains a lease. A contract contains a
lease when it conveys the right to control the use of
an identified asset for a period of time in exchange
for consideration. The right to use the asset and the
obligation under the lease to make payments are
recognised in the Company's financial statements as a
right-of-use asset and a lease liability.

Lease contracts may contain both lease and non-lease
components. The Company allocates payments in the
contract to the lease and non-lease components based
on their relative stand-alone prices and applies the
lease accounting model only to lease components.

The right-of-use asset recognised at lease
commencement includes the amount of lease liabilities
on initial measurement, 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 to a residual value over the
rights-of-use assets estimated useful life or the lease
term, whichever is lower. Right-of-use assets are also
adjusted for any re-measurement of lease liabilities
and are subject to impairment testing. Residual value
is reassessed at each reporting date.

The lease liability is initially measured at the present
value of the lease payments to be made over the lease
term. The lease payments include fixed payments
(including 'in-substance fixed' payments) and variable
lease payments that depend on an index or a rate, less
any lease incentives receivable. 'In-substance fixed'
payments are payments that may, in form, contain
variability but that, in substance, are unavoidable. In
calculating the present value of lease payments, the
Company uses its incremental borrowing rate at the
lease commencement date if the interest rate implicit
in the lease is not readily determinable.

The lease term includes periods subject to extension
options which the Company is reasonably certain to
exercise and excludes the effect of early termination
options where the Company is not reasonably certain
that it will exercise the option. Minimum lease payments
include the cost of a purchase option if the Company is
reasonably certain it will purchase the underlying asset
after the lease term.

After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of interest
on lease liability and reduced for lease payments made.
In addition, the carrying amount of lease liabilities is
re-measured if there is a modification e.g. a change in
the lease term, a change in the 'in-substance fixed' lease
payments or as a result of a rent review or change in the
relevant index or rate.

Variable lease payments that do not depend on an
index or a rate are recognised as an expense in the
period over which the event or condition that triggers
the payment occurs. In respect of variable leases which
guarantee a minimum amount of rent over the lease
term, the guaranteed amount is considered to be an

'in-substance fixed' lease payment and included in
the initial calculation of the lease liability. Payments
which are 'in-substance fixed' are charged against the
lease liability.

The Company has opted not to apply the lease
accounting model to intangible assets, leases of low-
value assets or leases which have a term of less than
12 months. Costs associated with these leases are
recognised as an expense on a straight-line basis over
the lease term.

Lease payments are presented as follows in the
Company's statement of cash flows:

i. short-term lease payments, payments for leases
of low-value assets and variable lease payments
that are not included in the measurement of the
lease liabilities are presented within cash flows
from operating activities;

ii. payments for the interest element of recognised
lease liabilities are presented within cash flows
from financing activities; and

iii. payments for the principal element of recognised
lease liabilities are presented within cash flows
from financing activities.

2.13 Cash and Cash Equivalents

For the purpose of presentation in the statement of
cash flows, cash and cash equivalents includes cash
on hand, deposit held at call with financial institutions,
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 value,
and bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities in the balance sheet.

2.14 Foreign currencies

(i) Functional and presentation currency

Items included in the financial statements are
measured using the currency of the primary
economic environment in which the entity operates
('the functional currency'). The Company's financial
statements are presented in Indian rupee (?)
which is also the Company's functional and
presentation currency.

(ii) Transactions and balances

Foreign currency transactions are translated
into the functional currency using the exchange
rate prevailing at the date of the transactions.

Foreign exchange gains and losses resulting from
the settlement of such transaction and from the
translation of monetary assets and liabilities
denominated in foreign currencies at year end
exchange rate are generally recognised in the
statement of profit and 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.

Exchange differences

Exchange differences arising on settlement or
translation of monetary items are recognised as
income or expense in the year in which they arise
with the exception of exchange differences on gain
or loss arising on translation of non-monetary
items measured at fair value which 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).