Note 3: Material accounting policy information

a) Material accounting judgements, estimates and
assumptions

The preparation of standalone financial statements in
conformity with Ind AS requires management to make
judgements, estimates and assumptions that affect the
application of accounting policies and the reported
amount of assets, liabilities, income, expenses and
disclosures of contingent assets and liabilities at the
date of these standalone financial statements and the
reported amount of revenues and expenses for the years
presented. Actual results may differ from the estimates.

Judgements:

In the process of applying the Company's accounting
policies, management has made the foUowingjudgements,

which have the most significant effect on the amounts
recognized in the standalone financial statements:

Useful lives of property, plant and equipment

The Company reviews the useful life of property, plant
and equipment at the end of each reporting period.
This reassessment may result in change in depreciation
expense in future periods.

Estimates and Assumptions:

The key assumptions concerning the future and other
key sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities
within the next financial year, are described below.
The Company based its assumptions and estimates on
parameters available when the standalone financial
statements were prepared. Existing circumstances and
assumptions about future developments, however, may
change due to market changes or circumstances arising
that are beyond the control of the Company. Estimates
and underlying assumptions are reviewed at each balance
sheet date. Such changes are reflected in the assumptions
when they occur.

i) Income taxes

The Company is subject to income tax laws as
applicable in India. Significant judgment is required
in determining provision for income taxes. There
are many transactions and calculations for which
the ultimate tax determination is uncertain during
the ordinary course of business. The Company
recognizes liabilities for anticipated tax issues based
on estimates of whether additional taxes will be
due. Where the final tax outcome of these matters
is different from the amounts that were initially
recorded, such differences will impact the income
tax and deferred tax provisions in the period in which
such determination is made.

ii) Contingencies

Contingent liabilities may arise from the ordinary
course of business in relation to claims against the
Company, including legal and other claims. By virtue
of their nature, contingencies will be resolved only
when one or more uncertain future events occur
or fail to occur. The assessment of the existence,
and potential quantum, of contingencies inherently
involves the exercise of significant judgements
and the use of estimates regarding the outcome
of future events.

iii) Defined benefit plans

The present value of the gratuity and compensated
absences are determined using actuarial valuations.
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 and mortality
rates. 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.

The parameter most subject to change is the discount
rate. In determining the appropriate discount
rate for plans operated in India, the management
considers the interest rates of government bonds
in currencies consistent with the currencies of the
post-employment benefit obligation. The mortality
rate is based on publicly available mortality tables
for the specific countries. Those mortality tables
tend to change only at interval in response to
demographic changes.

iv) Employee stock option plan

Estimating fair value for share-based payment
transactions requires determination of the most
appropriate valuation model, which depends on
the terms and conditions of the grant. This estimate
also requires determination of the most appropriate
inputs to the valuation model including the expected
life of the share option or appreciation right, volatility
and dividend yield and making assumptions about
them. The Company initially measures the cost of
cash-settled transactions with employees using
a Black Scholes model to determine the fair value
of the liability incurred. For cash-settled share-
based payment transactions, the liability needs to
be remeasured at the end of each reporting period
up to the date of settlement, with any changes in
fair value recognised in profit or loss. This requires
a reassessment of the estimates used at the end
of each reporting period. For the measurement of
the fair value of equity-settled transactions with
employees at the grant date, the Company uses a
Black Scholes model. The assumptions and models
used for estimating fair value for share-based
payment transactions are disclosed in Note 44.

v) Provision for expected credit losses (ECL) on trade
receivables

The Company uses a provision matrix to calculate
ECLs for trade receivables. The provision rates are
based on days past due for groupings of various
customer segments that have similar loss patterns
(i.e., by product type and customer type).

The provision matrix is initially based on the
Company's historical observed default rates. The
Company will calibrate the matrix to adjust the
historical credit loss experience with forward-looking
information. For instance, if forecast economic
condition (i.e., gross domestic products) are expected
to deteriorate over the next year which can lead to
an increased number of defaults in the manufacturing
sector, the historical default rates are adjusted. At

each reporting date, the historical observed default
rates are updated and changes in the forward-looking
estimates are analysed.

The assessment of the correlation among historical
observed default rates, forecast economic conditions
and ECLs is a significant estimate. The amount of
ECLs is sensitive to changes in circumstances and
forecast economic conditions. The Company's
historical credit loss experience and forecast of
economic conditions may also not be representative
of customer's actual default in the future. The
information about the ECLs on the Company's
trade receivables is disclosed in note 10 to the
financial statements.

vi) Valuation of financial instruments

When the fair value of financial assets and financial
liabilities recorded in the Statement of financial
position cannot be derived from active markets,
their fair value is determined using valuation
techniques including the discounted cash flow
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 the fair values. The judgements
include consideration of inputs such as liquidity
risks, credit risks and volatility in market. The
changes in assumptions about these factors
could affect the reported fair value of the financial
instruments.

b) Current versus non-current classification

The Company presents assets and liabilities in the balance

sheet based on a current/ non-current classification.

Assets:

An asset is treated as current when it is:

i) Expected to be realized or intended to be sold or
consumed in normal operating cycle.

ii) Held primarily for the purpose of trading

iii) Expected to be realized within twelve months after
the reporting period, or

iv) 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.

Liabilities:

A liability is current when:

i) It is expected to be settled in normal operating cycle

ii) It is held primarily for the purpose of trading

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

iv) 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 liabilities are classified as non¬
current assets and liabilities.

Operating cycle: The operating cycle is the time
between the acquisition of assets for processing and their
realization in cash and cash equivalents. Based on the
operation, the group has identified twelve months as its
operating cycle.

c) Property, plant and equipment (PPE) and Investment
property

Property, plant and equipment, capital work in progress
are stated at cost less accumulated depreciation and
accumulated impairment losses, if any. Such cost
includes expenditure that is directly attributable to the
acquisition of the asset.

An item of property, plant and equipment and any
significant part initially recognized is de-recognized
upon disposal or when no future economic benefits are
expected from its use. Any gain or loss arising on de¬
recognition 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 within other income or expense (as applicable).

Subsequent Costs: The cost of replacing a part of an item of
property, plant and equipment is recognized in the carrying
amount of the item of property, plant and equipment, if it
is probable that the future economic benefits embodied
within the part will flow to the Company and its cost can be
measured reliably with the carrying amount of the replaced
part getting derecognized. The cost for day-to-day
servicing of property, plant and equipment are recognized
in statement of profit and loss as and when incurred.

Decommissioning Costs : The present value of 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.

Capital work in progress: Capital work in progress
comprises the cost of fixed assets that are not ready for
their intended use at the reporting date.

Depreciation: Depreciation on PPE, except leasehold
improvements, is provided on straight-line method
over the useful lives of assets as per Schedule II to the
Companies Act, 2013. Depreciation for assets purchased
/ sold during a period is proportionately charged to
Statement of Profit and Loss. Leasehold improvements

are amortized over the lease term or the remaining useful
life of the assets whichever is lower.

The estimated useful lives of items of property, plant and
equipment are as follows:

Freehold land is not depreciated.

Investment property
Recognition and measurement

Investment property is property held either to earn
rental income or for capital appreciation or for both,
but not for sale in the ordinary course of business, use
in the production or supply of goods or services or for
administrative purposes. Investment property comprises
freehold land and building.

Investment properties are measured initially at cost,
including transaction costs. Subsequent to initial
recognition, investment properties are stated at cost
less accumulated depreciation and accumulated
impairment loss, if any.

The Company measures investment property using cost
based measurement and the fair value of investment
property is disclosed in the notes. Fair values are
determined based on an annual evaluation performed by
an accredited external independent valuer.

Investment properties are derecognized either when they
have been disposed of or when they are permanently
withdrawn from use and no future economic benefit is
expected from their disposal. The difference between the
net disposal proceeds and the carrying amount of the
asset is recognized in the Statement of Profit and Loss in
the period of derecognition.

Depreciation

Depreciation on Investment Property (except freehold
land) is provided, under the Straight Line Method, pro rata
to the period of use, based on useful lives specified in
Schedule II to the Companies Act, 2013. Freehold land is
not depreciated. (Refer table above)

d) Borrowing costs

Borrowing costs consists of interest and amortization of
ancillary costs that an entity incurs in connection with the
borrowing of funds. 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 are capitalized as part

of the cost of the asset. AH 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.

Interest income earned on the temporary investment
of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs
eligible for capitalization.

e) Foreign currency transaction

Functional and presentation currency

The Company's standalone financial statements are
presented in Indian Rupees (H) which is also the Company's
functional currency. Functional currency is the currency of
the primary economic environment in which a Company
operates and is normally the currency in which the
Company primarily generates and expends cash. ALL the
financial information presented in H in lakhs except where
otherwise stated.

Initial recognition

Transactions in foreign currencies are translated into the
functional currency of the Company at the exchange
rates at the dates of the transactions or an average rate if
the average rate approximates the actuaL rate at the date
of the transaction.

Measurement at the reporting date

Monetary assets and liabilities denominated in foreign
currencies are transLated into the functionaL currency at
the exchange rate at the reporting date. Non-monetary
assets and LiabiLities that are measured at fair vaLue in
a foreign currency are transLated into the functionaL
currency at the exchange rate when the fair vaLue was
determined. Non-monetary assets and LiabiLities that are
measured in terms of historicaL cost are not retransLated.

f) Revenue recognition

Revenue from contracts with customers is recognized
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. Revenue excludes value
added tax or other saLes taxes and is after deduction of
any trade discounts.

When the consideration in a contract includes a variable
amount, the amount of consideration is estimated to
which the Company will be entitled in exchange for
transferring the goods or services to the customer. The
variabLe consideration is estimated at contract inception
and constrained until it is highly probable that a significant
revenue reversal in the amount of cumulative revenue
recognized will not occur when the associated uncertainty
with the variable consideration is subsequently resolved.

The Company does not expect to have any contracts
where the period between the transfer of the promised
goods or services to the customer and payment by the
customer exceeds one year. As a consequence, it does
not adjust any of the transaction prices for the time
value of money.

The Company recognises revenue to depict the transfer
of promised goods or services to customers in an amount
that reflects the consideration to which the entity expects
to be entitled in exchange for those goods or services. A
5-step approach is used to recognise revenue as below:

Step 1: Identify the contract(s) with a customer

Step 2: Identify the performance obligation in contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance
obligations in the contract

Step 5: Recognise revenue when (or as) the entity satisfies
a performance obligation

The Company recognises contract liabilities for consideration
received in respect of unsatisfied performance obligations
and reports these amounts as other liabilities in its
standalone balance sheet. Similarly, if the Company satisfies a
performance obligation before it receives the consideration,
the Company recognises either a contract asset or a
receivable in its standalone balance sheet, depending on
whether something other than the passage of time is required
before the consideration is due.

(i) Rendering of services

Income from corporate and sourcing support
services rendered to group companies are
recognized as the services are rendered based on a
cost plus mark-up in accordance with the terms of
respective arrangements.

'Unbilled revenue' included in other financial assets
represent revenue in excess of billings as of the
Balance Sheet date. 'Unearned revenues' included
in financial liabilities represent billing in excess of
revenue recognized.

(ii) Sale of goods

Revenue is recognised when a customer obtains
control of the goods which is ordinarily upon
shipment or delivery at the customer premises
and on completion of performance obligation.
Revenue is recognised at a transaction price
allocated to the extent of performance obligation
satisfied after deduction of any trade discounts,
volume rebates and any taxes or duties collected
on behalf of the government which are levied on
sales such as goods and services tax, etc. For certain
contracts that permit the customer to return an
item, revenue is recognised to the extent that it is

probable that a significant reversal in the amount of
cumulative revenue recognised will not occur. As
a consequence, for those contracts for which the
Company is unable to make a reasonable estimate
of return, revenue is recognised when the return
period lapses or a reasonable estimate can be made.

g) Other income

Rental income

Rental income is recognized when services are rendered
and same becomes chargeable. Service Income
comprises amounts billed for leasing out the property and
other support services rendered to entities in accordance
with terms of agreements entered into with them.

Other income

i) Interest income from a financial asset is recognized
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 basis, by reference to the principal outstanding
and at the effective interest rate applicable, which
is the rate that exactly discounts estimated future
cash receipts through the expected life of the
financial asset to that asset's net carrying amount on
initial recognition.

ii) Dividend income is recognized when the right to
receive payment is established.

iii) Any other income is recognized on an accrual basis.

h) Leases

The Company assesses at contract inception whether a
contract is, or contains, a lease. A contract is, or contains,
a lease 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
recognizes lease liabilities to make lease payments and
right-of-use assets representing the right to use the
underlying assets.

(a) Right-of-use assets

Right-of-use assets are recognized at the commencement
date of the lease (that is the date the underlying asset is
available for use). Right-of-use assets are measured at cost,
less any accumulated depreciation and any impairment
losses, and adjusted for any remeasurement of lease
liabilities. The cost of right-of-use assets includes the amount
of lease liabilities recognized, 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
lease terms and the estimated useful lives of the assets.

If ownership of the leased asset transfers to the Company
by 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.

(b) Lease liabilities

Lease liabilities are recognized at the commencement
date of the lease 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 termination of a lease,
if the lease term reflects the Company exercising the
option to terminate. The variable lease payments that
do not depend on an index or a rate are recognized
as an expense 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 lease payments (e.g., a
change to future lease payments resulting from a
change in an index or rate) or a change in assessment
of an option to purchase the underlying asset.

(c) Short term leases

The Company applies the short-term lease recognition
exemption to its short-term leases of machinery and
equipment (that is 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
recognition exemption for leases of low-value assets to
leases of office equipment and laptop computers that
are considered to be of low value.

Lease payments on short-term leases and leases of
low-value assets are recognized as an expense on a
straight-line basis over the lease term.

Company as a lessor

When the Company acts as a lessor, it classifies at
lease inception (or when there is a lease modification)
each of its leases as either an operating lease or
a finance lease.

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. When a contract contains lease and non¬
lease components, the Company allocates the
consideration in the contract to each component
on a relative stand-alone selling price basis. Rental
income is accounted for on a straight-line basis
over the lease terms and is included in revenue in
the statement of profit or loss due to its operating
nature. Initial direct costs incurred in negotiating
and arranging an operating lease are added to the
carrying amount of the leased asset and recognized
over the lease term on the same basis as rental
income. Contingent rents are recognized as revenue
in the period in which they are earned.

Leases are classified as finance leases when substantially
all of the risks and rewards of ownership transfer from
the Company to the lessee. At the inception of a finance
lease, the cost of the leased asset is capitalized at the
present value of the minimum lease payments and
recorded together with the obligation, excluding the
interest element, to reflect the purchase and financing.
Assets held under capitalized finance leases, including
prepaid land lease payments under finance leases,
are included in property, plant and equipment, and
depreciated over the shorter of the lease terms and the
estimated useful lives of the assets. The finance costs of
such leases are charged to the statement of profit or loss
so as to provide a constant periodic rate of charge over
the lease terms.

i) Employee's benefits

Short term employee benefits: All employee benefits
expected to be settled wholly within twelve months
of rendering the service are classified as short-term
employee benefits. When an employee has rendered
service to the Company during an accounting period, the
Company recognizes the undiscounted amount of short¬
term employee benefits expected to be paid in exchange
for that service as an expense unless another Ind AS
requires or permits the inclusion of the benefits in the
cost of an asset. Benefits such as salaries, wages, bonus
and ex-gratia etc. are recognized in Statement of profit
and loss in the period in which the employee renders the
related service.

Defined contribution plan

A defined contribution plan is a post-employment benefit
plan under which an entity pays fixed contributions to a
statutory authority and will have no legal or constructive
obligation to pay further amounts. Provident Fund and
Employee State Insurance Schemes are defined contribution
plans and contributions paid / payable are recognized as an
expense in the Statement of Profit and Loss during the year
in which the employee renders the related service.

Defined benefit plan

A defined benefit plan is a post-employment benefit plan
other than a defined contribution plan.

The Company has an obligation towards gratuity, a defined
benefit retirement plan covering eligible employees. The
plan provides for a lump sum payment to vested employees
at retirement, death while in employment or on termination
of employment of an amount based on the respective
employee's salary and the tenure of employment. The
Company accounts for the liability for gratuity benefits
payable in future based on an independent actuarial
valuation report using the projected unit credit method as
at the year end.

The obligations are measured at the present value of the
estimated future cash flows. The discount rate is generally
based upon the market yields available on Government
bonds at the reporting date with a term that matches that
of the liabilities.

Re-measurements, comprising actuarial gains and
losses including, the effect of the changes to the asset
ceiling (if applicable), is reflected immediately in Other
Comprehensive Income in the Statement of Profit
and Loss. All other expenses related to defined benefit
plans are recognized in Statement of Profit and Loss
as employee benefit expenses. Gains or losses on the
curtailment or settlement of any defined benefit plan are
recognized when the curtailment or settlement occurs.

Other long term benefits

Long term compensated absences are provided for on
the basis of actuarial valuation, using the projected unit
credit method, at the end of each financial year. Actuarial
gains/ losses, if any, are recognized immediately in the
Statement of Profit and Loss.

j) Share based payment/Cash-settled share-based
payments

The Company has equity-settled share-based remuneration
plans for its employees. Where employees are rewarded
using share-based payments, the fair value of employees'
services is determined indirectly by reference to the fair
value of the equity instruments granted. This fair value
is appraised at the grant date and excludes the impact of
non-market vesting conditions (for example profitability and
sales growth targets and performance conditions).

All share-based remuneration is ultimately recognised as
an expense in profit or loss with a corresponding credit
to equity. If vesting periods or other vesting conditions
apply, the expense is allocated over the vesting period,
based on the best available estimate of the number of
share options expected to vest.

Upon exercise of share options, the proceeds received,
net of any directly attributable transaction costs, are

allocated to share capital up to the nominal (or par) value
of the shares issued with any excess being recorded
as share premium.

For cash-settled share-based payments, the fair value
of the amount payable to employees is recognised
as employee benefits expense with a corresponding
increase in liabilities, over the vesting period. The liability is
remeasured at each reporting period up to, and including
the settlement date, with changes in fair value recognised
in employee benefits expense.

The Company has created an Employee Benefit Trust
for providing share-based payment to its employees.
The Company uses the Trust as a vehicle for distributing
shares to employees under the employee remuneration
schemes. The Trust buys shares of the Company from the
market, for giving shares to employees. The Company
treats Trust as its extension and shared held by the Trust
are treated as treasury stock.

Own equity instruments that are reacquired (treasury
stock) are recognised at cost and deducted from Equity.
No gain or loss is recognised in profit and loss on the
purchase, sale, issue or cancellation of the Group's own
equity instruments. Any difference between the carrying
amount and the consideration, if reissued, is recognised
in capital reserve. Share options exercised during the
reporting year are satisfied with treasury shares.

Where stock options are issued to employees of
subsidiaries/ step down subsidiaries, and such subsidiary/
step down subsidiary does not have an obligation to
settle the transaction, the transaction is treated as a
parent's equity contribution to the subsidiary/ step down
subsidiary and presented as 'deemed investment' under
investment in subsidiaries.