(b) Material accounting policies

i) Basis of preparation of financial statements

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

The preparation of the financial statements
requires the use of certain critical accounting
judgements, estimates and assumptions. It also
requires the management to exercise judgment
in the process of applying the Company's
accounting policies. The areas involving a
higher degree of judgment or complexity, or
areas where assumptions and estimates are
significant to the financial statements are
disclosed in Note v.

The accounting policies adopted for preparation
and presentation of these financial statements
have been consistently applied except for
changes resulting from amendments to Ind
AS issued by the Ministry of Corporate Affairs,
effective for financial years beginning on or after
April 1, 2024 as disclosed in note iii below.

ii) Basis of measurement

The financial statements have been prepared
on the accrual and going concern basis under
historical cost convention except the following:

• Certain financial assets and liabilities
measured at fair value (refer accounting
policy regarding financial instruments);
and

• Defined benefit plans whereby the plan
assets are measured at fair value.

iii) New and amended Standards

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.

A. 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 allocation short-
duration contracts (the premium mainly for
short term contracts).

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

B. Amendments to Ind AS 116 Leases - Liability
in a Sale and Leaseback Lease

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 April, 1 2024 and
must be applied retrospectively to sale and
leaseback transactions entered into after the
date of initial application of Ind AS 116.

The amendments do not have a material impact
on the Company's financial statements.

C. Standards issued but not yet effective:

The new and amended standards and
interpretations that are issued, but not yet
effective, up to the date of issuance of financial
statements are disclosed below. The Company
will adopt this new and amended standard,
when it became effective.

Lack of exchangeability -Amendments to
Ind AS 21

The Ministry of Corporate Affairs notified
amendments to Ind AS 21 - "The Effects of
Changes in Foreign Exchange Rates" to specify
how an entity should assess whether a currency
is exchangeable and how it should determine
a spot exchange rate when exchangeability is
lacking.

The amendments also require disclosure of
information that enables users of its financial
statements to understand how the currency
not being exchangeable into the other currency
affects, or is expected to affect, the entity's
financial performance, financial position and
cash flows.

The amendments are effective for annual
reporting periods beginning on or after April
01, 2025. When applying the amendments, an
entity cannot restate comparative information.
The amendments are not expected to have a
material impact on the Company's financial
statements

iv) Functional currency and rounding of
amounts

The financial statements are presented in Indian
National currency Rupee (INR) which is the
functional currency of the Company, and all
values are rounded to the nearest Million, except
where otherwise indicated.

v) Use of estimates and judgements

The preparation of the Company's financial
statements requires management to make
estimates and assumptions that affect the
reported amounts of revenues, expenses,
assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent
liabilities. Uncertainty about these assumptions
and estimates could result in outcomes that
require a material adjustment to the carrying
amount of assets or liabilities affected 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
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. Such
changes are reflected in the assumptions when
they occur.

Defined benefit plans (gratuity benefits):

A liability in respect of defined benefit plans
is recognised in the balance sheet, and is
measured as the present value of the defined
benefit obligation at the reporting date less the
fair value of the plan's assets. The present value
of the defined benefit obligation is based on
expected future payments which arise from the
fund at the reporting date, calculated annually by
independent actuaries. Consideration is given
to expected future salary levels, experience of
employee departures and periods of service.

Useful economic lives of Property, plant and
equipment:

Property, plant and equipment as disclosed in
note 2 are depreciated over their useful economic
lives. Management reviews the useful economic
lives at least once a year and any changes could
affect the depreciation rates prospectively and
hence the asset carrying values."

vi) Current vs Non current classification

The Company presents assets and liabilities in
the statement of Assets and Liabilities based on
current/ noncurrent classification.

An asset is treated as current when it is:

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

- Held primarily for the purpose of trading

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

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

A liability is treated as current when it is:

- Expected to be settled in normal operating
cycle

- Held primarily for the purpose of trading

- Due to be settled within twelve months
after the reporting period, or

- There is no unconditional right to defer the
settlement of the liability for at least twelve

months after the reporting period

All other assets and liabilities are classified as
non-current assets and liabilities. Deferred
tax assets and liabilities are classified as non¬
current assets and liabilities.

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

vii) Inventories

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

Cost of raw materials is determined on a specific
identification price basis. 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.

Cost of finished goods and work in progress
includes direct materials and labour and a
proportion of manufacturing overheads based
on normal operating capacity, material cost is
valued at moving weighted average cost.

Cost of spares and consumables is determined
on a moving weighted average cost basis.

Scrap is valued at estimated realisable value.

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.

viii) Cash and cash equivalents

Cash and cash equivalent in the balance sheet
comprise cash at banks and on hand and short¬
term deposits with an original maturity of three
months or less, that are readily convertible
to a known amount of cash and subject to an
insignificant risk of changes in value.

For the purpose of the Statement of cash flows, cash
and cash equivalents consist of cash and short-term

deposits, as defined above, net of outstanding bank
overdrafts as they are considered an integral part of
the Company's cash management.

ix) Property, Plant and Equipment

Property, plant and equipment are stated at
actual costs, net of accumulated depreciation
and accumulated impairment losses, if any. The
cost comprises purchase price, borrowing costs if
capitalization criteria are met, directly attributable cost
of bringing the asset to its working condition for the
intended use and initial estimate of decommissioning,
restoring and similar liabilities.

Any trade discounts and rebates are deducted in
arriving at the purchase price. Such cost includes the
cost of replacing part of the plant and equipment.
When significant parts of property, 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.

Items of stores and spares that meet the definition
of property, plant and equipment are capitalized at
cost and depreciated over their useful life. Otherwise,
such items are classified as a part of inventories.

Properties in course of construction for production,
supply or administrative purposes are carried at cost,
less recognised impairment losses. All the direct
expenditures related to the implementation including
incidental expenditure incurred during the period of
implementation of a project, till it is commissioned
is accounted as Capital Work in progress (CWIP)
and such properties are classified as appropriate
categories of Property, plant and equipment when
completed and ready for the intended use.

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.

x) Depreciation on Property, Plant and Equipment

Depreciation on property, plant and equipment is
calculated on a written down value basis using the
rates arrived at, based on the useful lives estimated
by the management. The management, on the basis
of internal technical assessment of usage pattern,
believes that the useful lives as mentioned below
best represents the period over which management
expects to use these assets. Hence, the useful lives in
respect of certain assets are different from the useful
lives as prescribed under Part C of Schedule II of the
Companies Act, 2013.

The estimated useful lives and residual values of the
property, plant and equipment are reviewed at the
end of each reporting year, with the effect of any
changes in estimate accounted for on a prospective
basis.

Depreciation on items of property, plant and
equipment acquired / disposed off during the year is
provided on pro-rata basis with reference to the date
of addition / disposal.

xi) 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 Lessee -

Company's leased assets comprises of lands.
The company applies a single recognition and
measurement approach for all leases, except for

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.

xii) Intangible assets

Intangible assets acquired separately includes
software's are measured on initial recognition
at cost. Following initial recognition, intangible
assets are carried at cost less accumulated
amortization and accumulated impairment
losses, if any.

Intangible assets are amortized on a straight¬
line basis over the estimated useful economic
life of 5 years. The amortization period and the
amortization method are reviewed at least at
each financial year end. If the expected useful
life of the asset is significantly different from
previous estimates, the amortization

xiii) Impairment of assets

a) Impairment of financial instruments/
financial assets-

The Company recognises loss allowances
for expected credit losses on Financial
assets measured at Amortised costs.

For trade receivables and contract assets,
the company applies a simplified approach
in calculating ECLs. Therefore, the company
does not track changes in credit risk, but
instead recognises a loss allowance based
on lifetime ECLs at each reporting date.

The company has established a provision
matrix that is based on its historical credit
loss experience, adjusted for forward¬
looking factors specific to the debtors and
the economic environment."

b) Impairment on 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
units (CGU) net selling price 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 company's of assets.
Where 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 net
selling price, recent market transactions
are taken into account, if available. If no
such transactions can be identified, an
appropriate valuation model is used.

After impairment, depreciation is provided
on the revised carrying amount of the
asset over its remaining useful life.

xiv) Financial Instruments

A financial instrument is any contract that gives

rise to a financial asset of one entity and a

financial liability or equity instrument of another

entity.

Financial assets

Initial recognition and measurement

Financial assets are classified, at initial
recognition, as subsequently measured at
amortised cost, fair value through other
comprehensive income (OCI), and fair value
through profit or loss.

The classification of financial assets at initial
recognition depends on the financial asset's
contractual cash flow characteristics and the
company's business model for managing them.
With the exception of trade receivables that do
not contain a significant financing component or
for which the company has applied the practical
expedient, the company initially measures a
financial asset at its fair value plus, in the case of
a financial asset not at fair value through profit or
loss, transaction costs. Trade receivables that do
not contain a significant financing component or
for which the company has applied the practical
expedient are measured at the transaction price
determined under Ind AS 115.

In order for a financial asset to be classified and
measured at amortised cost or fair value through
OCI, it needs to give rise to cash flows that are
'solely payments of principal and interest (SPPI)'
on the principal amount outstanding. This
assessment is referred to as the SPPI test and
is performed at an instrument level. Financial
assets with cash flows that are not SPPI are
classified and measured at fair value through
profit or loss, irrespective of the business model.

The company's business model for managing
financial assets refers to how it manages its
financial assets in order to generate cash flows.
The business model determines whether cash
flows will result from collecting contractual
cash flows, selling the financial assets, or both.
Financial assets classified and measured at
amortised cost are held within a business
model with the objective to hold financial assets
in order to collect contractual cash flows while
financial assets classified and measured at fair
value through OCI are held within a business

model with the objective of both holding to
collect contractual cash flows and selling.

Subsequent measurement

For purposes of subsequent measurement,

financial assets are classified in four categories:

? Financial assets at amortised cost (debt
instruments)

? Financial assets at fair value through other
comprehensive income (FVTOCI) with
recycling of cumulative gains and losses
(debt instruments)

? Financial assets designated at fair
value through OCI with no recycling
of cumulative gains and losses upon
derecognition (equity instruments)

? Financial assets at fair value through profit
or loss"

Financial assets at amortised cost (debt
instruments)

A 'financial asset' is measured at the amortised
cost if both the following conditions are met:

a) The asset is held within a business model
whose objective is to hold assets for
collecting contractual cash flows, and

b) Contractual terms of the asset give rise on
specified dates to cash flows that are solely
payments of principal and interest (SPPI)
on the principal amount outstanding.

This category is the most relevant to the
company. After initial measurement, such
financial assets are subsequently measured at
amortised cost using the effective interest rate
(EIR) method. Amortised cost is calculated by
taking into account any discount or premium on
acquisition and fees or costs that are an integral
part of the EIR. The EIR amortisation is included
in finance income in the profit or loss. The losses
arising from impairment are recognised in the
profit or loss at last.

Financial assets at fair value through OCI
(FVTOCI) (debt instruments)

A 'financial asset' is classified as at the FVTOCI
if both of the following criteria are met:

a) The objective of the business model is
achieved both by collecting contractual
cash flows and selling the financial assets,
and

b) The asset's contractual cash flows
represent SPPI.

Debt instruments included within the FVTOCI
category are measured initially as well as at each
reporting date at fair value. For debt instruments,
at fair value through OCI, interest income,
foreign exchange revaluation and impairment
losses or reversals are recognised in the profit
or loss and computed in the same manner as
for financial assets measured at amortised cost.
The remaining fair value changes are recognised
in OCI. Upon derecognition, the cumulative fair
value changes recognised in OCI is reclassified
from the equity to profit or loss.

Financial assets designated at fair value
through OCI (equity instruments)

Upon initial recognition, the company can elect
to classify irrevocably its equity investments
as equity instruments designated at fair value
through OCI when they meet the definition of
equity under Ind AS 32 Financial Instruments:
Presentation and are not held for trading. The
classification is determined on an instrument-
by-instrument basis. Equity instruments
which are held for trading and contingent
consideration recognised by an acquirer in
a business combination to which Ind AS103
applies are classified as at FVTPL.

Gains and losses on these financial assets are
never recycled to profit or loss. Dividends are
recognised as other income in the statement of
profit and loss when the right of payment has
been established, except when the company
benefits from such proceeds as a recovery of

part of the cost of the financial asset, in which
case, such gains are recorded in OCI. Equity
instruments designated at fair value through
OCI are not subject to impairment assessment.

Financial assets at fair value through profit
or loss

Financial assets at fair value through profit or
loss are carried in the balance sheet at fair value
with net changes in fair value recognised in the
statement of profit and loss.

This category includes investments which
the company had not irrevocably elected to
classify at fair value through OCI. Dividends on
listed equity investments are recognised in the
statement of profit and loss when the right of
payment has been established.

Derecognition

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

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

? The company has transferred its rights
to receive cash flows from the asset or
has assumed an obligation to pay the
received cash flows in full without material
delay to a third party under a 'pass¬
through' arrangement and either (a) the
company has transferred substantially
all the risks and rewards of the asset, or
(b) the company has neither transferred
nor retained substantially all the risks and
rewards of the asset, but has transferred
control of the asset.

When the company has transferred its rights to
receive cash flows from an asset or has entered
into a pass-through arrangement, it evaluates
if and to what extent it has retained the risks
and rewards of ownership. When it has neither
transferred nor retained substantially all of the

risks and rewards of the asset, nor transferred
control of the asset, the company continues to
recognise the transferred asset to the extent
of the company's continuing involvement. In
that case, the company also recognises an
associated liability. The transferred asset and
the associated liability are measured on a basis
that reflects the rights and obligations that the
company has retained.

Continuing involvement that takes the form
of a guarantee over the transferred asset is
measured at the lower of the original carrying
amount of the asset and the maximum amount
of consideration that the company could be
required to repay'!

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial
recognition, as financial liabilities at fair value
through profit or loss, loans and borrowings,
payables, or as derivatives designated as
hedging instruments in an effective hedge, as
appropriate.

All financial liabilities are recognised initially
at fair value and, in the case of loans and
borrowings and payables, net of directly
attributable transaction costs.

The company's financial liabilities include trade
and other payables, loans and borrowings
including bank overdrafts, employee dues and
interest accrued on borrowings, other interest
payable.

Subsequent measurement

For purposes of subsequent measurement,
financial liabilities are classified in two
categories:

• Financial liabilities at fair value through
profit or loss

• Financial liabilities at amortised cost (loans
and borrowings)

Financial liabilities at fair value through
profit or loss

Financial liabilities at fair value through profit or
loss include financial liabilities held for trading
and financial liabilities designated upon initial
recognition as at fair value through profit or loss.

Financial liabilities are classified as held for
trading if they are incurred for the purpose of
repurchasing in the near term.

Financial liabilities designated upon initial
recognition at fair value through profit or loss
are designated as such at the initial date of
recognition, and only if the criteria in Ind AS 109
are satisfied. For liabilities designated as FVTPL,
fair value gains/ losses attributable to changes
in own credit risk are recognized in OCI. These
gains/ losses are not subsequently transferred
to P&L'

Financial liabilities at amortised cost (Loans
and borrowings)

This is the category most relevant to the Company.
After initial recognition, interest-bearing loans
and borrowings are subsequently measured at
amortised cost using the EIR method. Gains and
losses are recognised in profit or loss when the
liabilities are derecognised as well as through
the EIR amortisation process.

Amortised cost is calculated by taking into
account any discount or premium on acquisition
and fees or costs that are an integral part of the
EIR. The EIR amortisation is included as finance
costs in the statement of profit and loss.

This category generally applies to borrowings.
For more information refer Note 18. Moreover,
as assessed by management that the
transaction costs incurred on long term loans
are insignificant to the value of loans and
prepayment penalty does not exists.

Derecognition

A financial liability is derecognised when the
obligation under the liability is discharged or

cancelled or expires. When an existing financial
liability is replaced by another from the same
lender on substantially different terms, or the
terms of an existing liability are substantially
modified, such an exchange or modification
is treated as the derecognition of the original
liability and the recognition of a new liability. The
difference in the respective carrying amounts is
recognised in the statement of profit and loss'

Offsetting of financial instruments

Financial assets and financial liabilities are
offset and the net amount is reported in the
balance sheet if there is a currently enforceable
legal right to offset the recognised amounts and
there is an intention to settle on a net basis,
to realise the assets and settle the liabilities
simultaneously'.

xv) Revenue from contract with customer

Revenue from contract with customer is
recognised when control of the goods or services
are transferred to the customer at an amount
that reflects the consideration to which the
Company expects to be entitled in exchange for
those goods or services. Revenue is measured
at the fair value of the consideration received
or receivable, taking into account contractually
defined terms of payment and excluding taxes
or duties collected on behalf of the government.

Sale of goods -

Revenue from sale of goods is recognised at
the point in time when control of the goods
is transferred to the customer, generally on
dispatch/ delivery of the goods or terms as
agreed with the customer. The company
considers whether there are other promises
in the contract that are separate performance
obligations to which a portion of the transaction
price needs to be allocated. In determining
the transaction price for the sale of goods,
the company considers the effects of variable
consideration, the existence of significant
financing components, non-cash consideration,
and consideration payable to the customer (if
any).

Variable consideration -

If the consideration in a contract includes a
variable amount, the Company estimates the
amount of consideration to which it will be
entitled in exchange for transferring the goods
to the customer. The variable consideration
is estimated at the time of completion of
performance obligation and constrained until
it is highly probable that a significant revenue
reversal in the amount of cumulative revenue
recognised will not occur when the associated
uncertainty with the variable consideration is
subsequently resolved.

Contract assets -

A contract asset is the right to consideration in
exchange for goods transferred to the customer.
If the Company performs its obligation by
transferring goods to a customer before the
customer pays consideration or before payment
is due, a contract asset is recognised for the
earned consideration that is unconditional.

a) Trade receivables: A receivable represents
the Company's right to 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 i.e.
Financial instruments - initial recognition
and subsequent measurement.

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).

Export incentives

Export incentives under various schemes
notified by government are accounted for in the
year of exports based on eligibility and when

there is no uncertainty in receiving the same
and is included in revenue in the statement of
profit and loss due to its operating nature'!

Interest Income

Interest income from financial assets is
recognised when it is probable that the
economic benefit will flow to the Company and
the amount of income can be measured reliably.
Interest income is recorded using the effective
interest rate (EIR). Interest income is accrued
on a time basis, by reference to the principal
outstanding and the 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.

Rental Income

Rental income arising from operating leases is
accounted on the basis of lease terms and is
included in other income in the statement of
profit and loss.

xvi) Employee benefits

Defined Contribution Plan-

The company's contribution to provident fund
is considered as a defined contribution scheme
and are charged as expense based on the
amount of contribution required to be made
and when the services are rendered by the
employees.

Defined Benefit Plan -

The company operates a defined benefit plan
for its employees, viz., gratuity liability. The
costs of providing benefits under this plan are
determined on the basis of actuarial valuation
at each year-end. Actuarial valuation is carried
out for the plan using the projected unit credit
method. Remeasurements comprising of
actuarial gains and losses, the effect of changes
to the return on plan assets (excluding net
interest) is reflected immediately in the balance
sheet with a charge or credit recognised in OCI
in the period in which they occur.

xviii) Borrowing costs

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 capitalised as part of the cost of the asset.
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.

xix) Income taxes

Tax expense comprises current and deferred tax.
Current tax -

The tax currently payable is based on the
taxable profits for the years. Current income-tax
is measured at the amount expected to be paid
to the tax authorities in accordance with the
Income-tax Act, 1961 enacted in India.

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.

The tax rates and tax laws used to compute
the amount are those that are enacted or
substantively enacted, at the reporting date.

Deferred tax -

Deferred tax is recognised on temporary
differences between the carrying amounts of
assets and liabilities in the financial statements
and the corresponding tax base used in the
computation of taxable profit. Deferred tax
liabilities are generally recognised for all taxable
temporary differences.

Deferred tax assets are generally recognised
for all deductible temporary differences to the
extent that it is probable that taxable profits will
be available against which those deductible
temporary differences can be utilised. Such
deferred tax assets and liabilities are not
recognised if the temporary difference arises
from the initial recognition of assets and
liabilities in a transaction that affects neither the
taxable profit nor the accounting profit.

The carrying amount of deferred tax assets is
reviewed at the end of each reporting period
and reduced to the extent that it is no longer
probable that sufficient taxable profits will be
available to allow all or part of the asset to be
recovered.

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

The measurement of deferred tax liabilities and
assets reflects the tax consequences that would
follow from the manner in which the Company
expects, at the end of the reporting period, to
recover or settle the carrying amount of its
assets and liabilities.