2. Material accounting policies

The material accounting policies applied by the
Company in the preparation of its Ind AS financial
statements are listed below. Such accounting policies
have been applied consistently to all the periods
presented in these Ind AS financial statements, unless
otherwise indicated.

2.1.Basis of preparation

The Ind AS financial statements of the Company, have
been prepared in accordance with Indian Accounting
Standards (Ind AS) notified under the 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),
as applicable.

The Ind AS financial statements have been prepared
on a historical cost basis, except for certain financial
assets and liabilities (refer accounting policy
regarding financial instruments) which have been
measured at fair value and amortised cost.

The functional and presentation currency of the
Company is Indian Rupee (“?”) which is the currency
of the primary economic environment in which the
Company operates, and all values are rounded to
the nearest million (INR 000,000), except when
otherwise indicated.

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

2.2.Change in accounting policies and disclosures:

New Standards and amendments :

The Company applied for the first-time certain
standards and amendments, which are effective for
annual periods beginning on or after 1 April 2024.
The Company has not early adopted any standard,
interpretation or amendment that has been issued
but is not yet effective.

(i) Ind AS 117 Insurance Contracts

The Ministry of Corporate Affairs ('MCA') notified
the Ind AS 117, Insurance Contracts, vide notification
dated 12 August 2024, under the Companies (Indian
Accounting Standards) Amendment Rules, 2024,
which is effective from annual reporting periods
beginning on or after 1 April 2024.

Ind AS 117 Insurance Contracts is a comprehensive
new accounting standard for insurance contracts
covering recognition and measurement, presentation
and disclosure. Ind AS 117 replaces Ind AS 104
Insurance Contracts. Ind AS 117 applies to all types of
insurance contracts, regardless of the type of entities
that issue them as well as to certain guarantees and
financial instruments with discretionary participation
features; a few scope exceptions will apply. Ind AS 117
is based on a general model, supplemented by:

• A specific adaptation for contracts with direct
participation features (the variable fee approach).

• A simplified approach (the premium allocation
approach) mainly for short-duration contracts.

The application of Ind AS 117 does not have a
material impact on the Company's Ind AS financial
statements as the Company has not entered any
contracts in the nature of insurance contracts
covered under Ind AS 117.

(ii) Amendment to Ind AS 116 Leases - Lease Liability in
a Sale and Leaseback

The MCA notified the Companies (Indian Accounting
Standards) Second Amendment Rules, 2024, which
amend Ind AS 116, Leases, with respect to Lease
Liability in a Sale and Leaseback.

The amendment specifies the requirements that a
seller-lessee uses in measuring the lease liability
arising in a sale and leaseback transaction, to ensure
the seller-lessee does not recognise any amount
of the gain or loss that relates to the right of use it
retains.

The amendment is effective for annual reporting
periods beginning on or after 1 April 2024 and must
be applied retrospectively to sale and leaseback
transactions entered into after the date of initial
application of Ind AS 116.

The amendment does not have a material impact on
the Company's Ind AS financial statements.

2.3.Summary of material accounting policies

a. Current versus 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 realisation in cash
and cash equivalents. The Company has identified
twelve months as its operating cycle.

b. 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:

a) In the principal market for the asset or
liability, or

b) 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 Ind AS 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
Ind AS 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.

This note summarises accounting policy for fair value.
Other fair value related disclosures are given in the
relevant notes.

> Disclosures for valuation methods, significant esti¬
mates and assumptions

> Quantitative disclosures of fair value measurement
hierarchy

> Investment in unquoted equity shares

> Financial instruments (including those carried at
amortised cost)

c. Revenue from contract with customers

Revenue from contracts with customers is recognized
upon transfer of control of promised goods/
products to customers at an amount that reflects the
consideration to which the Company is entitled for
those goods/ products.

To recognize revenues, the Company applies the
following five-step approach:

• Identify the contract with a customer,

• Identify the performance obligations in the
contract,

• Determine the transaction price,

• Allocate the transaction price to the performance
obligations in the contract, and

• Recognize revenues when a performance
obligation is satisfied.

Sale of goods

Revenue from sale of goods is recognized upon

transfer of control of promised goods to customers,
generally on delivery of the goods. Revenue is
recognized to the extent that it is probable that the
economic benefits will flow to the Company and the
revenue can be reliably measured, regardless of when
the payment is being made.

Revenue from the sale of goods is measured at the
transaction price of the consideration received or
receivable, net of returns and allowances, trade
discounts and volume rebates/ incentives.

The Company has concluded that it is the principal in
all of its revenue arrangements since it is the primary
obligor in all the revenue arrangements as it has
pricing latitude and is also exposed to inventory and
credit risks.

Goods and Services Tax (GST) is not received by
the Company in its own account. Rather, it is tax
collected on behalf of the government. Accordingly,
it is excluded from revenue.

Contracts for the sale of goods provide customers
with a right of return the goods. The Company also
provides retrospective volume rebates to certain
customers once the quantity of goods purchased
during the period exceeds the threshold specified in
the contract. The rights of return and volume rebates
give rise to variable consideration.

Liabilities arising from rights to return

The Company uses the expected value method to
estimate the variable consideration given the large
number of contracts that have similar characteristics.
A refund liability is the obligation to refund some, or all
of the consideration received from the customer. The
Company has therefore recognized refund liabilities
in respect of customer's right to return. The Company
updates its estimate of refund liabilities (i.e., accrual
for sales returns) at the end of each reporting period.

Volume rebates

The Company applies the most likely amount method
or the expected value method to estimate the
variable consideration in the contract. The selected
method that best predicts the amount of variable

consideration is primarily driven by the number
of volume thresholds contained in the contract.
The most likely amount is used for those contracts
with a single volume threshold, while the expected
value method is used for those with more than one
volume threshold. The Company then applies the
requirements on constraining estimates in order
to determine the amount of variable consideration
that can be included in the transaction price and
recognised as revenue. A refund liability (i.e., accrual
for dealers incentive) is recognised for the expected
future rebates (i.e., the amount not included in the
transaction price)

The disclosures of significant estimates and
assumptions relating to the estimation of variable
consideration for returns and volume rebates are
provided in note 43.

Sale of scrap and other materials

Revenue from sale of scrap and other materials is
recognized upon transfer of control of goods to
customers.

Duty drawback

Duty drawback is accounted for in the year of exports
based on eligibility and when there is no uncertainty
in receiving the same.

Interest income

For all financial instruments measured at amortized
cost, interest income is recorded using the effective
interest rate (EIR). EIR is the rate that exactly discounts
the estimated future cash payments or receipts over
the expected life of the financial instrument or a
shorter period, where appropriate, to the net carrying
amount of the financial asset. Interest income is
included in other income in the statement of profit
and loss.

Contract balances

Contract assets

A contract asset is the right to consideration in
exchange for goods or services transferred to the
customer. If the Company performs by transferring
goods or services to a customer before the

customer pays consideration or before payment is
due, a contract asset is recognised for the earned
consideration that is conditional. Contract assets are
transferred to receivables when the rights become
unconditional.

Contract assets are subject to impairment assessment.
Refer to accounting policies on impairment of
financial assets in section (o) Financial instruments
below.

Trade receivables

A receivable is recognised if an amount of cosideration
that is unconditional (i.e., only the passage of time
is required before payment of the consideration is
due). Refer to accounting policies of financial assets
in section (o) Financial instruments below.

Contract liabilities

A contract liability is recognised if a payment is
received or a payment is due (whichever is earlier)
from a customer before the Company transfers the
related goods or services. Contract liabilities are
recognised as revenue when the Company performs
under the contract (i.e., transfers control of the
related goods or services to the customer).

d. Government grants

Government grants are recognised where there is
reasonable assurance that the grant will be received
and all attached conditions will be complied with.
When the grant relates to an expense item, it is
recognised as income on a systematic basis over the
periods that the related costs, for which it is intended
to compensate, are expensed. When the grant relates
to an asset, it is recognised as income in equal
amounts over the expected useful life of the related
asset.

e. Taxes on income

Current income tax

Tax expense for the year comprises current and
deferred tax. The tax currently payable is based
on taxable profit for the year. Taxable profit differs
from net profit as reported in the statement of
profit and loss because it excludes items of income

or expense that are taxable or deductible in other
years and it further excludes items that are never
taxable or deductible. Current income tax assets and
liabilities are measured at the amount expected to be
recovered from or paid to the taxation authorities. The
Company's liability for current tax is calculated using
the tax rates and tax laws that have been enacted
or substantively enacted by 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 the tax returns with respect to situations
in which applicable tax regulations are subject to
interpretation and considers whether it is probable
that a taxation authority will accept an uncertain
tax treatment. The Company shall reflect 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.

Deferred tax

Deferred tax is the tax expected to be payable or
recoverable on differences between the carrying
values of assets and liabilities in the Ind AS financial
statements and the corresponding tax bases used
in the computation of the taxable profit and is
accounted for using the balance sheet approach.
Deferred tax liabilities are generally recognised for
all the taxable temporary differences. In contrast,
deferred tax assets are only recognised to the extent
that is probable that future taxable profits will be
available against which the temporary differences
can be utilised.

Deferred tax assets are recognized for all deductible
temporary differences, carry forward of unused tax
credits and unused tax losses, 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 utilized.

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 profit will be available to allow all or part of
the deferred tax asset to be utilized. 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 assets and liabilities are measured at the
tax rates that are expected to apply in the year when
the asset is realized or the liability is settled, based
on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance sheet date.

Deferred tax relating to items recognised outside
profit or loss is recognised outside profit or loss
(either in other comprehensive income or in equity).
Deferred tax items are recognised in correlation to
the underlying transaction either in OCI or directly in
equity.

The Company offsets deferred tax assets and
deferred tax liabilities if and only if it has a legally
enforceable right to set off current tax assets and
current tax liabilities and the deferred tax assets and
deferred tax liabilities relate to income taxes levied
by the same taxation authority on either the same
taxable entity or different taxable entities which
intend either to settle current tax liabilities and assets
on a net basis, or to realise the assets and settle the
liabilities simultaneously, in each future period in
which significant amounts of deferred tax liabilities
or assets are expected to be settled or recovered.

Goods and Services Tax (GST) / value added taxes paid
on acquisition of assets or on incurring expenses

Expenses and assets are recognised net of the amount
of GST/ value added taxes paid, except:

• When the tax incurred on a purchase of assets
or services is not recoverable from the taxation
authority, in which case, the tax paid is recognised
as part of the cost of acquisition of the asset or as
part of the expense item, as applicable;

• When receivables and payables are stated with
the amount of tax included

The net amount of tax recoverable from, or payable
to, the taxation authority is included as part of other
current/ non-current assets/ liabilities in the balance
sheet.

f. Property, plant and equipment (‘PPE’) and capital
work in progress (‘CWIP’)

On transition to Ind AS, the Company has elected to
continue with the carrying value of all of its property,
plant and equipment recognised as at March 31, 2016
measured as per the previous GAAP and use that
carrying value as the deemed cost of the property,
plant and equipment as on April 1, 2016.

Items of property, plant and equipment, except items
stated below, are stated at cost, net of accumulated
depreciation and accumulated impairment losses,
if any. Such cost 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. All other repair and
maintenance costs are recognised in profit or loss as
incurred. Capital work in progress includes cost of
property, plant and equipment under installation /
under development, net of accumulated impairment
loss, if any, as at the balance sheet date.

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 assets are
derecognised when replaced.

The Company identifies and determines cost of
each component/ part of the asset separately, if the
component/ part has a cost which is significant to
the total cost of the asset having useful life that is
materially different from that of the remaining asset.

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.

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.

g. Intangible assets

On transition to Ind AS, the Company has elected to
continue with the carrying value of all of its intangible
assets recognised as at March 31, 2016 measured as
per the previous GAAP and use that carrying value as
the deemed cost of the property, plant and equipment
as on April 1, 2016.

Intangible assets acquired separately are measured
on initial recognition at cost. The cost of intangible
assets acquired in a business combination is their
fair value at the date of acquisition. Following initial
recognition, intangible assets are carried at cost less
any accumulated amortisation and accumulated
impairment losses, if any. Internally generated
intangibles, excluding capitalised development costs,

are not capitalised and the related expenditure is
reflected in profit or loss in the period in which the
expenditure is incurred.

The useful lives of intangible assets are assessed as
either finite or indefinite.

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 with the effect of any change in the
estimate being accounted for on a prospective basis.
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.

An intangible asset is derecognised upon disposal (i.e.,
at the date the recipient obtains control) or when no
future economic benefits are expected from its use or
disposal. Any gain or loss arising upon 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.

A summary of the policies applied to the Company's intangible assets is, as follows:

h. Borrowing cost

Borrowing costs directly attributable to the
acquisition, construction or production of an asset
that necessarily takes a substantial period of time
to get ready for its intended use or sale (qualifying
asset) are capitalised as part of the cost of the asset
until such time as the assets are substantially ready
for the intended use or sale. All other borrowing
costs are expensed in the period in which they occur.
Borrowing costs consist of interest and other costs

that an entity incurs in connection with the borrowing
of funds. Borrowing cost also includes exchange
differences to the extent regarded as an adjustment
to the borrowing costs.

i. 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.

i) 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.

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 (l)
Impairment of non-financial assets.

ii) 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. The lease
payments also include the exercise price of a purchase
option reasonably certain to be exercised by the
Company and payments of penalties for terminating
the lease, if the lease term reflects the Company
exercising the option to terminate. Variable lease
payments that do not depend on an index or a rate are
recognised as expenses (unless they are incurred to
produce inventories) in the period in which the event
or condition that triggers the payment occurs.

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.

iii) Short-term leases and leases of low-value assets

The Company applies the short-term lease recognition
exemption to its short-term leases (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). It also applies the lease of low-value assets
recognition exemption to leases that are considered
to be low value. Lease payments on short-term leases
and leases of low-value assets are recognised as
expense on a straight-line basis over the lease term.

j. Inventories

Inventories are valued at lower of cost and net
realisable value. 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.

Costs incurred in bringing each product to its present
location and condition are accounted for as follows:

a) Raw materials, consumables, stores, spares and
packing materials: cost includes cost of purchase
and other costs incurred in bringing the inventories
to their present location and condition.

b) 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.

c) Traded goods: cost includes cost of purchase and
other costs incurred in bringing the inventories to
their present location and condition.

Cost of raw materials, stores and spares, work-in¬
progress and finished goods is determined on a
weighted average basis.

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

k. Impairment of non-financial assets

As at the end of each accounting year, the Company
reviews the carrying amounts of its PPE, CWIP and
intangible assets to determine whether there is
any indication that those assets have suffered an
impairment loss. If such indication exists, the said
assets are tested for impairment so as to determine
the impairment loss, if any.

Impairment loss is recognised when the carrying
amount of an asset exceeds its recoverable amount.
Recoverable amount is determined:

(i) in the case of an individual asset, at the higher of
the fair value less costs of disposal and the value
in use; and

(ii) in the case of a cash generating unit (a group of
assets that generates identified, independent cash
flows), at the higher of the cash generating unit's
net fair value less costs of disposal and the value
in use.

(The amount of value in use is determined as the
present value of estimated future cash flows from the
continuing use of an asset and from its disposal at the
end of its useful life. For this purpose, the discount
rate (pre-tax) is determined based on the weighted
average cost of capital of the Company suitably
adjusted for risks specified to the estimated cash
flows of the asset).

For this purpose, a cash generating unit is ascertained
as the smallest identifiable group of assets that
generates cash inflows that are largely independent of
the cash inflows from other assets or groups of assets.

If recoverable amount of an asset (or cash generating
unit) is estimated to be less than its carrying amount,

such deficit is recognised immediately in the
Statement of Profit and Loss as impairment loss and
the carrying amount of the asset (or cash generating
unit) is reduced 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.

The Company bases its impairment calculation on
detailed budgets and forecast calculations, which
are prepared separately for each of the Company's
CGUs to which the individual assets are allocated.
To estimate cash flow projections beyond periods
covered by the most recent budgets/forecasts, the
Company extrapolates cash flow projections in the
budget using a steady or declining growth rate for
subsequent years, unless an increasing rate can be
justified. In any case, this growth rate does not exceed
the long-term average growth rate for the products,
industries, or country in which the Company operates,
or for the market in which the asset is used.

Impairment losses of continuing operations, including
impairment on inventories, are recognised in the
statement of profit and loss.

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