2.2 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”.

Current Assets

An asset is treated as current when:

a. It is expected to be realised or intended to be
sold or consumed in normal operating cycle

b. It is held primarily for the purpose of trading

c. It is expected to be realised within twelve
months after the reporting period, or

d. It is 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.
Current Liabilities

A liability is treated as current when:

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

b. It is held primarily for the purpose of trading

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

d. It does not have the right at end of the reporting
period to defer settlement of the liability for at
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 period up to twelve months
as its operating cycle.

b) 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.

All amounts have been rounded off to the
nearest (?) in lakh, unless otherwise indicated.

(ii) Transactions and balances

Transactions in foreign currencies are initially
recorded by the Company at functional
currency spot rates at the date the transaction
first qualifies for recognition. However, for
practical reasons, the Company uses average
rate if the average approximates the actual
rate at the date of the transaction. Monetary
assets and liabilities denominated in foreign
currencies are translated at the functional
currency spot rates of exchange at the
reporting date.

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.

(iii) Exchange differences

Exchange differences arising on settlement of
transactions or translation of monetary items
are recognized as income or expense in the
period 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 recognized in OCI or profit and loss
are also recognized in OCI or profit and loss,
respectively). Foreign exchange differences
arising on foreign currency borrowings to
the extent regarded as borrowing cost are
presented in the standalone statement of profit
and loss, within finance costs. All other foreign
exchange gains and losses are presented in
the standalone statement of profit and loss
on a net basis.

In determining the spot exchange rate to use on
initial recognition of the related asset, expense
or income (or part of it) on the derecognition
of a non-monetary asset or non-monetary

liability relating to advance consideration, the
date of the transaction is the date on which
the Company initially recognises the non¬
monetary asset or non-monetary liability
arising from the advance consideration. If
there are multiple payments or receipts
in advance, the Company determines the
transaction date for each payment or receipt
of advance consideration.

c) Fair value measurement

The Company measures financial instruments 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 ordinary
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:

(i) In the principal market for asset or liability, or

(ii) 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 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 minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is
measured or disclosed in the financial statements
are categorized 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 recognized in
the financial statements on a recurring basis, the
Company determines whether transfers have
occurred between levels in the hierarchy by re¬
assessing categorization (based on the lowest level
input that is significant to 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.

d) Revenue from contract with customers

The Company derives revenue primarily from sale of
polymeric films, resins and other products. Revenue
from contracts with customers is recognised when
control of the goods is transferred to the customer at
an amount that reflects the consideration to which
the Company expects to be entitled in exchange for
those goods. The Company has generally concluded
that it is the principal in its revenue arrangements,
because it typically controls the goods before
transferring them to the customer. A receivable
is recognized when the control of the product is
transferred as the consideration is unconditional
and payment becomes due upon passage of time
as per the terms of contract with customers. The
Company collects GST on behalf of the government
and, therefore, it is not an economic benefit flowing
to the Company. Hence, it is excluded from revenue.

(i) Revenue from sales of products

Revenue from sale of products is recognised
at the point in time when control of the goods
is transferred to the customer, generally
on delivery of the goods and there are
no unfulfilled obligations. The Company
considers whether there are other promises
in the contract in which there 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 product, the Company considers the effects
of variable consideration i.e. volume discounts,
scheme allowances and returns, the existence
of significant financing components, non-cash

consideration, and consideration payable to
the customer, if any.

(ii) Variable consideration

The Company applies 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 as per terms agreed with customers.
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.

The disclosures of significant estimates and
assumptions relating to the estimation of
variable consideration for volume discount
and scheme allowances are provided under
section "significant judgement and estimates".

(iii) Significant Financing Components

In respect of short-term advances from its
customers, using the practical expedient in Ind
AS 115, the Company is not required to adjust
the promised amount of consideration for the
effects of a significant financing component
because 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 within normal operating cycle.
Due to the short nature of credit period given to
customers, there is no financing component in
the contract. Payments from customers for the
goods rendered are normally received within
30 days to 150 days as per terms of the sales.

(iv) Contract liabilities

A contract liability is the obligation to transfer
goods to a customer for which the Company
has received consideration (or an amount
of consideration is due) from the customer
or has raised the invoice in advance. If a
customer pays consideration before the
Company transfers goods or services to the
customer, a 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 (i.e., transfers
control of the related goods or services to the
customer).

(v) Cost to obtain a contract:

The Company pays sales commission to its
selling agents for contract that they obtain
for the Company. The Company has elected
to apply the optional practical expedient
for costs to obtain a contract which allows
the Company to immediately expense sales
commissions (included in advertisement
and sales promotion expense under other
expenses) because the amortization period of
the asset that the Company otherwise would
have used is one year or less.

(vi) Trade Receivables

A trade receivable is recognised if an amount
of consideration 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 (Financial instruments - initial
recognition and subsequent measurement).

e) Other operating revenues

Revenue from export benefits arising from duty
drawback scheme, merchandise export incentive
scheme, rodtep incentive scheme are recognized on
export of goods in accordance with their respective
underlying scheme at fair value of consideration
received or receivable. Incentives on exports are
recognised in books after due consideration of
certainty of utilisation/ receipt of such incentives.

f) Other income

(i) Dividend income

Dividend income is recognised when the right
to receive payment is established, which
is generally when shareholders approve
the dividend.

(ii) Interest Income

I nterest 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 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.

(iii) Rental income

The Company’s policy for recognition of
revenue from operating leases in described in
note 2(m) below.

g) 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 recognized
by deducting the grant from the value of assets in
arriving at carrying value of the assets from the
current year.

When the Company receives grants of non-monetary
assets, the asset and the grant are recorded at fair
value amounts and released to profit or loss over
the expected useful life in a pattern of consumption
of the benefit of the underlying asset i.e. by equal
annual instalments.

h) Income taxes

The income tax expense or credit for the year
is the tax payable on the current year's taxable
income based on the applicable income tax
rate for each jurisdiction adjusted by changes in
deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.
Tax expense for the year comprises of current tax
and deferred tax.

(i) Current income tax

Current income tax assets and liabilities are
measured at the amount expected to be paid
to or recovered from the taxation authorities
in accordance with the Income Tax Act, 1961
and the Income Computation and Disclosure
Standards (ICDS) enacted in India by using tax
rates and the tax laws that are or substantively
enacted at the reporting date.

The current income tax charge is calculated
on the basis of the tax laws enacted or
substantively enacted at the end of the
reporting period in the country where
Company is generating taxable income.
Management periodically evaluates positions
taken in tax returns with respect to situations
in which applicable tax regulation is subject
to interpretation and considers whether it is
probable that a taxation authority will accept
an uncertain tax treatment. The Company
measures its tax balances either based on
the most likely amount or the expected value,

depending on which method provides a better
prediction of the resolution of the uncertainty.

Current income tax relating to item recognized
outside the standalone statement of profit
and loss is recognized outside profit and
loss (either in other comprehensive income
or equity). Current tax items are recognized
in correlation to the underlying transactions
either in OCI or directly in equity.

(ii) Deferred Tax

Deferred tax is provided in full using the
balance sheet approach on temporary
differences arising between the tax bases
of assets and liabilities and their carrying
amounts for financial reporting purposes at
the reporting date.

Deferred tax liabilities are recognised for all
taxable temporary differences, except:

a) When the deferred tax liability arises from
the initial recognition of goodwill or an
asset or liability in a transaction that is not
a business combination and, at the time
of the transaction, affects neither the
accounting profit nor taxable profit or loss
and does not give rise to equal taxable
and deductible temporary differences;

b) In respect of taxable temporary
differences associated with investments
in subsidiaries when the timing of the
reversal of the temporary differences can
be controlled and it is probable that the
temporary differences will not reverse in
the foreseeable future

Deferred tax assets are recognised for all
deductible temporary differences, the carry
forward of unused tax credits and any unused
tax losses. Deferred 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, except:

a) When the deferred tax asset relating to
the deductible temporary difference
arises from the initial recognition of an
asset or liability in a transaction that is not
a business combination and, at the time
of the transaction, affects neither the
accounting profit nor taxable profit or loss
and does not give rise to equal taxable
and deductible temporary differences;

b) In respect of deductible temporary
differences associated with investments
in subsidiaries, deferred tax assets are
recognised only to the extent that it is
probable that the temporary differences
will reverse in the foreseeable future and
taxable profit will be available against
which the temporary differences 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 utilized. Unrecognized deferred tax assets
are re-assessed at each reporting date and are
recognized 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 reporting date.

Deferred tax relating to items recognized
outside the standalone statement of profit
and loss is recognized outside the standalone
statement of profit and loss (either in other
comprehensive income or in equity). Deferred
tax items are recognized in correlation to the
underlying transaction either in OCI or direct
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 which intends 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) paid on
acquisition of assets or on incurring expenses.
Then expenses and assets are recognised net
of the amount of GST, 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

i) Property, plant and equipment

Recognition and initial measurement

The Company has applied Ind AS-16 with
retrospective effect for all of its Property, plant
and equipment as on the transition date i.e. April
01, 2016.

Freehold land is carried at historical cost. All
other items of property, plant and equipment are
stated at cost, less accumulated depreciation and
accumulated impairment losses, if any. Capital work
in progress is stated at cost, net of accumulated
impairment loss, 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.

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. 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 cost of a self-constructed item of property,
plant and equipment comprises the cost of
materials and direct labour, any other costs
directly attributable to bringing the item to working
condition for its intended use, and estimated costs
of dismantling and removing the item and restoring
the site on which it is located. 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 is stated at cost, net of
accumulated impairment loss, if any. 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.
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.

Subsequent measurement (depreciation and
useful lives)

Property, plant and equipment are subsequently
measured at cost less accumulated depreciation.
Depreciation on property, plant and equipment
located at Corporate Office in Noida, Uttar Pradesh
is provided on Straight Line Method (SLM) at the life
prescribed in Schedule II to the Companies Act,
2013. Freehold land is not depreciated.

The estimated useful life of the assets have been
assessed based on technical advice, taking into
account the nature of the asset, the estimated
usage of the asset, the operating conditions of the
asset, past history of replacement, anticipated
technological changes, manufacturers warranties
and maintenance support, etc. and are as under:

II to the Companies Act, 2013. The management
believes that these estimated useful lives are
realistic and reflect fair approximation of the period
over which the assets are likely to be used.

De-recognition

An item of property, plant and equipment 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 de¬
recognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying
amount of the asset) is recognised in statement of
profit and loss when the asset is derecognised.

j) Investment Properties

Recognition and initial measurement

The Company has elected to continue with the
carrying value of Investment Property recognised
as on April 01, 2016 measured as per the previous
GAAP and use that carrying value as its deemed
cost as of transition date.

Investment properties represent a building
constructed on leasehold land situated in Noida.
It is held for long-term rental yields or for capital
appreciation or both, is classified as investment
properties. 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 cost includes the cost of replacing parts
and borrowing costs for long-term construction
projects if the recognition criteria are met. When
significant parts of the investment property 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 and loss as incurred. The
Company depreciates building on a straight-line
basis over a period of 30 years from the date
of purchase.

Though the Company measures investment
property using cost-based measurement, the
fair value of investment property is disclosed in
notes. Fair values are determined based on an
annual evaluation performed by an accredited
external independent valuer applying a valuation
model recommended by the company and used by
the valuer.

De-recognition

Investment properties are derecognised 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 recognised
in profit and loss in the period of derecognition.

k) Intangible assets

Recognition and initial measurement

The Company has elected to continue with the
carrying value of all of its intangible’s assets
recognised as on April 01, 2016 measured as per
the previous GAAP and use that carrying value as
its deemed cost as of transition date.

Intangible assets are carried at cost less
accumulated amortization and accumulated
impairment losses, if any. Cost comprises the
purchase price and any attributable cost of
bringing the asset to its working condition for its
intended use.

Intangible assets are amortized over their useful
economic lives and assessed for impairment
whenever there is an indication that the intangible
asset may be impaired. The amortization period and
the amortization method for an intangible asset 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 amortization period or method, as appropriate,
and are treated as changes in accounting estimates.
The amortization expense on intangible assets is
recognized in the standalone statement of profit
and loss unless such expenditure forms part of
carrying value of another asset.

Intangible assets are amortized on a straight-line
basis over their estimated useful life as 2-3 years.
De-recognition

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. Gains or losses arising from
derecognition of the intangible assets are measured
as the difference between the net disposal
proceeds and the carrying amount of the asset and
are recognized in the standalone statement of profit
and loss when the assets are disposed off.

l) Borrowing Costs

Borrowing costs includes interest and other costs
incurred in connection with the borrowing of funds
and charged to standalone statement of profit and
loss on the basis of effective interest rate (EIR)
method. Borrowing cost also includes exchange
differences to the extent regarded as an adjustment
to the 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 (i.e.
qualifying assets) are capitalized as part of the cost
of the respective asset. All other borrowing costs
are recognized as expense in the period in which
they occur.

m) 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 is the lessor

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. Leases in which the Company
does not transfer substantially all the risks and
rewards of ownership of an asset are classified
as operating leases. The respective leased assets
are included in the balance sheet based on their
nature. Rental income is recognized on straight
line basis over the lease term and is included in
revenue in the Statement of profit and 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 recognised over the lease term on the same
basis as rental income.

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. For these
short-term and low value leases, the Company
recognizes the lease payments as an operating
expense on a straight-line basis over the term of the
lease. Lease liabilities and right of use assets have
been separately presented in the Balance Sheet
and lease payments have been classified as part of
financing activity in statement of cash flow.

(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 underlying assets. Right-of-use assets are
depreciated on a straight-line basis over the
lease term of 13-90 years.

If ownership of the leased asset transfers to
the Company at the end of the lease term or
the cost reflects the exercise of a purchase
option, depreciation is calculated using the
estimated useful life of the asset. The right
of use assets are also subject to impairment.
Refer to the accounting policies in section
'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.

n) Inventories

Basis of valuation: Inventories other than scrap
materials are valued at lower of cost and net
realizable value after providing cost of obsolescence,
if any. The comparison of cost and net realizable
value is made on an item-by-item basis.

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

(i) Cost of raw materials and stores and spares
has been determined by using weighted
average cost 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 direct labour and an appropriate
share of fixed and variable production
overheads. Fixed production overheads are
allocated on the basis of normal capacity of
production facilities. Cost is determined on
weighted average basis.

(iii) Net realizable 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. The net
realisable value of work-in-progress is
determined with reference to the selling prices
of related finished products. Raw materials and
other supplies held for use in the production of
finished products are not written down below
cost except in cases where material prices
have declined, and it is estimated that the cost
of the finished products will exceed their net
realisable value.

(iv) Appropriate adjustments are made to the
carrying value of damaged, slow moving and
obsolete inventories based on management’s
current best estimate and are recognised in
standalone statement of profit and loss and
when reasons for such write downs ceases to
exist, such write downs are reversed through
standalone statement of profit or loss.

o) Impairment of non- financial assets

The Company assesses at each reporting date,
whether there is an indication that an asset may
be impaired. If any indication exists, or when
annual impairment testing for an asset is required,
the Company estimates the asset’s recoverable
amount. An asset’s recoverable amount is the higher
of an assets or cash-generating unit’s (CGU) fair
value less costs of disposal and its value in use. The
recoverable amount is determined for an individual
asset, unless the asset does not generate cash
inflows that are largely independent of those from
other assets or groups of assets. When the carrying
amount of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and is
written down to its recoverable amount.

In assessing value in use, the estimated future cash
flows are discounted to their present value using a
pre-tax discount rate that reflects current market

assessments of the time value of money and the
risks specific to the asset. In determining fair value
less costs of disposal, recent market transactions
are taken into account. If no such transactions
can be identified, an appropriate valuation model
is used. These calculations are corroborated
by valuation multiples, quoted share prices for
publicly traded companies or other available fair
value indicators.

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.
These budgets and forecast calculations generally
cover a period of four to five years. For longer
periods, a long-term growth rate is calculated
and applied to project future cash flows after the
forecast period. 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
or countries in which the Company operates, or for
the market in which the asset is used.

Impairment losses of continuing operations are
recognised in the standalone statement of profit
and loss, except for properties previously revalued
with the revaluation surplus taken to OCI. For such
properties, the impairment is recognised in OCI up
to the amount of any previous revaluation surplus.

For assets excluding goodwill and intangible
assets, an assessment is made at each reporting
date to determine whether there is an indication
that previously recognised impairment losses no
longer exist or have decreased. If such indication
exists, the Company estimates the assets or CGU’s
recoverable amount. A previously recognised
impairment loss is reversed only if there has been
a change in the assumptions used to determine
the asset’s recoverable amount since the last
impairment loss was recognised. The reversal is
limited so that the carrying amount of the asset
does not exceed its recoverable amount, nor
exceed the carrying amount that would have been
determined, net of depreciation, had no impairment
loss been recognised for the asset in prior years.
Such reversal is recognised in the standalone
statement of profit and loss.