Material Accounting Policies1.03 Revenue Recognition

Revenue is recognised to the extent that it is probable that
the economic benefits will flow to the Company and the
revenue can be reliably measured regardless of when the
payment made.

The specific recognition criteria described below must also
be met before revenue is recognized.

Revenue from Sale of goods and services

The Company derives revenue primarily from sale of Yarn,
Fabric and other textile products.

Revenue from contracts with customers is recognized
when the Company satisfies performance obligation by
transferring promised goods or services to the customer or
to his designated agent. Performance obligation is satisfied

when the Company transfers significant risks and rewards
to the customer and ceases its control over the goods.
Revenue is measured based on the transaction price, which
is the consideration, adjusted for volume discounts, rebates,
scheme allowances, price concessions and incentives, if any,
as specified in the contracts with the customers. Revenue
excludes taxes collected from customers on behalf of the
government. Payments from customers for the goods and
services rendered are normally received within the credit
terms as per the contracts with the customers.

The Company recognizes sales return only when the goods
are actually returned by the customer. Therefore, a refund
liability which is included in current financial liabilities or is
reduced from current financial assets, is recognized for the
goods actually returned.

Revenue from sale of goods is recognized at the point of
time when the significant risks and rewards are transferred
to the customer and the Company ceases to have its control
over the goods.

Revenue from job work charges is recognized at a point
of time when the control is transferred usually when the
material is fully processed and dispatched to customers.

Incentives on exports and other Government incentives
related to operations are recognized in books after due
consideration of certainty of utilization/receipt of such
incentives. For Government Grant refer Para 1.04.

Interest income

Interest income on debt instruments measured at
amortized cost is recorded using the Effective Interest Rate
method (EIR).

EIR is the rate that exactly discounts the estimated future
cash payments or receipts over the expected life of the
financial instrument or a shorter period, where appropriate,
to the gross carrying amount of the financial asset or to the
amortised cost of a financial liability. While calculating the
effective interest rate, the Company estimates the expected
cash flows by considering all the contractual terms of the
financial instrument (for example, prepayment, extension,
call and similar options) but does not consider the expected
credit losses. Interest income is included in other income in
the statement of profit and loss.

Dividend Income

Dividend income is recognized in the statement of profit
and loss when the right to receive payment is established,
which is generally when shareholders approve the dividend
or Board of Directors of the investee company approve the
interim dividend.

Rental Income

Rental income arising from leases on investment properties
is accounted for on a straight-line basis except where the
rentals are structured to change in line with expected
general inflation over the lease terms.

Contract balances

Contract assets: A contract asset is the right to
consideration in exchange for goods or services transferred
to the customer. If the Company performs by transferring
goods or services to a customer before the customer pays
consideration or before payment is due, a contract asset is
recognized for the earned consideration.

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).

Contract liabilities: A contract liability is the obligation
to transfer goods or services to a customer for which the
Company has received consideration from the customer.
If a customer pays consideration before the Company
transfers goods or services to the customer, a contract
liability is recognized when the payment is made. Contract
liabilities are recognized as revenue when the Company
performs under the contract.

Cost to obtain a contract: The cost to obtain a contract is
normally the sales commission which the Company pays
to its selling agents. Since, the amortization period of the
goods for which the Company incurs such cost, is one year
or less than that, the Company expenses it off immediately
and the same is included in selling expenses under the
head, 'Other Expenses'

1.04 Government Grants and Government Assistance

Government grants/subsidies are recognised where there
is reasonable assurance that the grant will be received and
all attached conditions will be complied with. If the grants/
subsidies relate to an expense item, they are recognised
as income on a systematic basis over the periods that the
related costs, for which they are intended to compensate,
are expensed. The grants, whose primary condition requires
the Company to purchase, construct or otherwise acquire
long-term assets, are recognised as deferred income and
they are recognised as income in equal amounts over the
expected useful lives of the related assets. If the grants/
subsidies are related to subvention a particular expense,

deducted from that expense in the year of recognition of
government grants/subsidies.

1.05 Inventory Valuation

Inventories including goods-in-transit are measured
at lower of cost and net realizable value. However, raw
material (Including packing material), and other items held
for use in the production of inventories are not written
down below cost if the finished products in which they will
be incorporated are expected to be sold at or above cost.

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

Raw materials (including packing material) stores and
spares and loose tools: cost includes cost of purchase and
other costs incurred in bringing the inventories to their
present location and condition. Cost is determined on
weighted average basis.

Finished goods and work in progress: cost includes
cost of direct materials and labour and a proportion of
manufacturing overheads based on the normal operating
capacity, but excluding borrowing costs. Cost is determined
on weighted average cost basis.

Traded goods: cost includes cost of purchase and other
costs incurred in bringing the inventories to their present
location and condition. Cost is determined on weighted
average basis.

Waste: is valued at net realisable value.

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

1.06 Property, Plant and Equipment
Recognition and measurement

Property, Plant and Equipment acquired are stated
at original cost net of tax/duty credit availed, less
accumulated depreciation and accumulated impairment
losses, if any. Such cost includes the cost of replacing part
of the plant and equipment and borrowing costs for long¬
term construction projects, if the recognition criteria are
met. The cost includes its purchase price, including import
duties and non-refundable purchase taxes, after deducting
trade discounts and rebates. It includes other costs directly
attributable to bringing the Property, Plant and Equipment
to the location and condition necessary for it to be capable
of operating in the manner intended by management.

The present value of the expected cost for the
decommissioning of Property, Plant and Equipment after its
use is included in the cost of the respective Property, Plant and
Equipment if the recognition criteria for a provision are met.

Capital work-in-progress includes cost of Property, Plant and
Equipment under installation/under development as at the
Balance Sheet date. Advances paid towards the acquisition of
Property, Plant and Equipment outstanding at each balance
sheet date is classified as capital advances under other non¬
current assets and the cost of Property, Plant and Equipment
not available for use before such date are disclosed under
'Capital work-in-progress'.

Subsequent expenditure

Subsequent expenditures relating to Property, Plant and
Equipment is capitalized only when it is probable that future
economic benefits associated with these will flow to the
Company and the costs of the item can be measured reliably.
The cost and related accumulated depreciation are eliminated
from the financial statements upon sale or retirement of the
Property, Plant and Equipment and the resultant gain or
losses are recognized in the statement of profit and loss.

Depreciation

Depreciation on Property, Plant and Equipment is
calculated on a straight-line basis over the estimated useful
life of Property, Plant and Equipment which coincide with
Schedule II to the Companies Act, 2013. Estimated useful
life of the assets is given below:

The Company, based on technical assessment/
management estimate, depreciates all items of Property,
Plant and Equipment over estimated useful lives which

may be different from the useful life prescribed in Schedule
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 Property, Plant
and Equipment are likely to be used.

De-recognition

An item of Property, Plant and Equipment and any of
their 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 de-recognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying
amount of the Property, Plant and Equipment) is included
in the statement of profit and loss, when the Property, Plant
and Equipment is derecognised. Depreciation on additions
to or on disposal of Property, Plant and Equipment is
calculated on pro-rata basis i.e. from (up to) the date on
which the Property, Plant and Equipment is available for
use (disposed of ).

The Property, Plant and Equipment's residual values,
useful life and methods of depreciation are reviewed
at each financial year end and adjusted prospectively,
if appropriate. The useful lives and residual values are
determined by the management at the time the Property,
Plant and Equipment is acquired and reviewed periodically,
including at each financial year end. These lives are based
on historical experience with similar Property, Plant and
Equipment as well as anticipation of future events.

1.07 Investment Properties

Investment Property is property held either to earn rental
income or capital appreciation or for both, but not for sale
in the ordinary course of business, use in production or
supply of goods or services or for administration purposes.

Recognition and measurement

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.

Depreciation

Depreciation is provided over the estimated useful life of
the investment property lives which may be different from
the useful life prescribed in Schedule II to the Companies
Act, 2013.

De-recognition

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 recognised in the statement of profit and loss in the
period of de-recognition.

Though, the Company measures investment property
using cost based measurement, the fair value of investment
property is disclosed in the notes. Fair values are determined
by independent valuer who holds a recognised and relevant
professional qualification and has recent experience in the
location and category of investment being valued.

1.08 Intangible Assets

Recognition and measurement

An Intangible Assets is recognised when it is probable that
the expected future economic benefits that are attributable
to the asset will flow to the entity and the cost of the asset
can be measured reliably. All other expenditure is expensed
as incurred.

Intangible assets acquired separately are measured on
initial recognition at cost. Subsequent to initial recognition,
intangible assets are carried at cost less any accumulated
amortization and accumulated impairment losses.

The cost of a separately acquired intangible asset comprises
of its purchase price, including import duties and non¬
refundable purchase taxes, after deducting trade discounts
and rebates; and any directly attributable cost of preparing
the asset for its intended use.

Internally generated intangibles, excluding capitalised
development costs, are not capitalised and the related
expenditure is reflected in the statement of profit and loss
in the period in which the expenditure is incurred.

Goodwill acquired and/or arising upon business
combinations, initially recognized at cost and at subsequent
period at cost less accumulated impairment loss, if any.

Amortization

The useful lives of intangible assets are assessed as
either finite or indefinite. The amortisation period and
the amortisation method for an intangible asset with a
finite useful life are reviewed at least at the end of each
reporting period. Changes in the expected useful life or

the expected pattern of consumption of future economic
benefits embodied in the asset are considered to modify
the amortisation period or method, as appropriate, and are
treated as changes in accounting estimates.

Intangible assets with finite lives are amortised over the
useful economic life and assessed for impairment whenever
there is an indication that the intangible asset may be
impaired. The amortisation expense on intangible assets
with finite lives is recognised in the statement of profit and
loss unless such expenditure forms part of carrying value of
another asset.

Intangible assets with indefinite useful lives are not
amortised, but are tested for impairment annually, either
individually or at the cash-generating unit level.

The estimated useful life of the finite intangible assets is
given below:

An intangible asset is derecognised on disposal or when no
future economic benefit is expected from use or disposal.
Gains or losses arising from de-recognition of an intangible
asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset
and are recognised in the statement of profit and loss when
the asset is derecognised.

1.09 Leases

The determination of whether an arrangement is (or
contains) a lease is based on the substance of the
arrangement at the inception of the lease. The arrangement
is (or contains) a lease if fulfilment of the arrangement is
dependent on the use of a specific asset or assets and the
arrangement conveys a right to use the asset or assets, even
if that right is not explicitly specified in an arrangement.

Where the Company is the lessee

Ind AS 116 - Leases provides a single lessee accounting
model, requiring lessees to recognize assets and liabilities
for all leases unless the lease term is 12 months or less or
the underlying assets has a low value.

Under the modified retrospective approach, at inception,
the right-of-use asset is measured at the amount of the
initial measurement of the lease liability adjusted for any
lease payments made at or before the commencement
date less any lease incentives received, plus any initial
direct costs incurred. The right-of-use asset is subsequently
measured at cost less any accumulated depreciation and
accumulated impairment losses, if any.

The lease liability is measured at the present value of the
lease payments that are not paid at the commencement
date of the lease. The lease payments are discounted using
the interest rate implicit in the lease; if that rate can be
readily determined otherwise incremental borrowing rate
is used to discount the lease payments. The lease liability
is subsequently re-measured by increasing the carrying
amount to reflect interest on the lease liability, less lease
payments made.

Where the Company is the lessor

Leases in which the Company does not transfer
substantially all the risks and rewards of ownership of an
asset are classified as operating leases. Rental income from
operating leases is recognised on a straight-line basis over
the term of the relevant lease. 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.
Contingent rents are recognised 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 are transferred
from the Company to the lessee. Amounts due from lessees
under finance leases are recorded as receivables at the
Company's net investment in the leases. Finance lease
income is allocated to accounting periods so as to reflect
a constant periodic rate of return on the net investment
outstanding in respect of the lease.

1.10 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

All financial assets are recognized (except trade receivable
that does not contain significant financing component)

initially at fair value plus, in the case of financial assets
not recorded at fair value through the statement of profit
and loss, transaction costs that are attributable to the
acquisition of the financial asset. Purchases or sales of
financial assets that require delivery of assets within a time
frame established by regulation or convention in the market
place (regular way trades) are recognised on the trade date,
i.e., the date that the Company commits to purchase or sell
the assets.

Subsequent measurement

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

• Financial assets carried at amortised cost-debt

• Financial assets at fair value through other

comprehensive income -equity

• Financial assets at fair value through other

comprehensive income -debt

• Financial assets at fair value through the statement of
profit and loss

(i) Financial assets carried at amortised cost-debt

A financial asset is subsequently measured at amortised
cost, if it is held within a business model whose objective is
to hold the asset in order to collect contractual cash flows
and the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.

(ii) Financial assets at fair value through other
comprehensive income -equity

The Company measures all its equity investments except
for investment in subsidiaries and associates, at fair
value. Where the Company's management has opted to
present fair value gain and losses on equity investments
in Other Comprehensive Income, there is no subsequent
reclassification of fair value gains and losses to the
statement of profit and loss. Dividend income from such
investments is recognized in the statement of profit and
loss as other income when the Company's right to receive
payments is established.

(iii) Financial assets at fair value through other
comprehensive income -debt

A 'debt instrument' 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. Fair value movements are recognized in the Other
Comprehensive Income (OCI). However, the Company
recognizes interest income, impairment losses and reversals
and foreign exchange gain or loss in the statement of profit
and loss. On de-recognition of the asset, cumulative gain
or loss previously recognised in OCI is reclassified from the
equity to statement of profit and loss. Interest earned while
holding FVTOCI debt instrument is reported as interest
income using the EIR method.

iv) Financial assets at fair value through the statement of
profit and loss

A financial asset which is not classified in any of the above
categories, are subsequently fair valued through the
statement of profit and loss.

Trade Receivable

A Receivable is classified as a 'trade receivable', if it is in
respect to the amount due from customers on account
of goods sold or services rendered in the ordinary course
of business. Trade receivables are recognised initially at
transaction price unless it creates a significant financing
component in accordance with Ind AS 115 for pricing
adjustments embedded in the contract. For some trade
receivables, the Company may obtain security in the form
of guarantee, security deposit or letter of credit which can
be called upon if the counterparty is in default under the
terms of the agreement. Subsequent recoveries of amounts
previously written off are credited to other Income.

De-recognition

The Company derecognizes a financial asset when the
contractual rights to receive the cash flows from the
financial asset expire or it transfers the financial asset and
the transfer qualifies for de-recognition under Ind AS 109.

Impairment of Financial Assets

The Company recognizes loss allowances using the
expected credit loss (ECL) model for the financial assets
which are not fair valued through the statement of profit
and loss. Loss allowance for trade receivables with no
significant financing component is measured at an amount
equal to lifetime ECL. For all other financial assets, expected
credit losses are measured at an amount equal to the
12-month ECL, unless there has been a significant increase
in credit risk from initial recognition in which case those
are measured at lifetime ECL. The amount of expected
credit losses (or reversal) that is required to adjust the
loss allowance at the reporting date to the amount that is
required to be recognized, is recognized as an impairment
gain or loss in the statement of profit and loss.

Financial liabilities

Initial recognition and measurement

All financial liabilities are recognized 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
and derivative financial instruments.

Subsequent Measurement

The measurement of financial liabilities depends on their
classification, as described below:

(a) Loans and borrowings

After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortized
cost using the EIR method. Gains and losses are
recognized in the statement of profit and loss when the
liabilities are derecognized as well as through the EIR
amortization process.

Amortized 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 amortization
is included as finance costs in the statement of profit
and loss.

(b) Trade and other payables.

A payable is classified as 'trade payable' if it is in
respect of the amount due on account of goods
purchased or services received in the normal course
of business. These amounts represent liabilities for
goods and services provided to the Company prior
to the end of financial year which are unpaid. Trade
and other payables are presented as current liabilities
unless payment is not due within 12 months after the
reporting period. They are recognised initially at their
fair value and subsequently measured at amortised
cost using the effective interest method.

(c) Financial guarantee contracts

Financial guarantee contracts issued by the Company,
are those contracts that require a payment to be made
to reimburse the holder for a loss if incurs because the
specified debtor fails to make a payment when due
in accordance with the terms of a debt instrument. If

material, financial guarantee contracts are recognised
initially as a liability at fair value, adjusted for transaction
costs that are directly attributable to the issuance of the
guarantee. Subsequently, the liability is measured at
the higher of the amount of loss allowance determined
as per impairment requirements of Ind-AS 109 and the
amount recognised less cumulative amortization.

De-recognition

A Financial Liability is de-recognized when the obligation
under the liability is discharged or cancelled or expired.
The difference between the carrying amount of a financial
liability that has been extinguished or transferred to another
party and the consideration paid, including any non-cash
assets transferred or liabilities assumed, is recognised
in the statement of profit and loss as other income or
finance costs.

Embedded derivative

An embedded derivative is a component of a hybrid
(combined) instrument that also includes a non-derivative
host contract - with the effect that some of the cash flows
of the combined instrument vary in a way similar to a stand¬
alone derivative. An embedded derivative causes some
or all of the cash flows that otherwise would be required
by the contract to be modified according to a specified
interest rate, financial instrument price, commodity price,
foreign exchange rate, index of prices or rates, credit rating
or credit index, or other variable, provided in the case of a
non-financial variable that the variable is not specific to a
party to the contract.

If the hybrid contract contains a host that is a financial asset
within the scope Ind-AS 109, the Company does not separate
embedded derivatives. Rather, it applies the classification
requirements contained in Ind-AS 109 to the entire hybrid
contract. Derivatives embedded in all other host contracts
are accounted for as separate derivatives and recorded at
fair value if their economic characteristics and risks are not
closely related to those of the host contracts and the host
contracts are not held for trading or designated at fair value
though the statement of profit and loss. These embedded
derivatives are measured at fair value with changes in fair
value recognized in the statement of profit and loss, unless
designated as effective hedging instruments.

Reclassification of financial assets and financial
liabilities

The Company determines classification of financial assets
and liabilities on initial recognition. After initial recognition,
no reclassification is made for financial assets which are

equity instruments and financial liabilities. For financial
assets which are debt instruments, a reclassification is
made only if there is a change in the business model for
managing those assets. Changes to the business model
are expected to be infrequent. The Company's senior
management determines change in the business model as
a result of external or internal changes which are significant
to the Company's operations. Such changes are evident to
external parties. A change in the business model occurs
when the Company either begins or ceases to perform an
activity that is significant to its operations. If the Company
reclassifies financial assets, it applies the reclassification
prospectively from the reclassification date which is the
first day of the immediately next reporting period following
the change in business model. The Company does not
restate any previously recognised gains, losses (including
impairment gains or losses) or interest.

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
realize the assets and settle the liabilities simultaneously.

1.11 Impairment of Non-Financial Assets

Intangible assets, property, plant and equipment and
associate measured at cost and other non-financial assets
are evaluated for recoverability whenever events or changes
in circumstances indicate that their carrying amounts may
not be recoverable. For the purpose of impairment testing,
the recoverable amount (i.e. the higher of the fair value
less cost to sell and the value-in-use) is determined on an
individual asset basis unless the asset does not generate
cash flows that are largely independent of those from other
assets. In such cases, the recoverable amount is determined
for the Cash Generating Unit (CGU) to which the asset
belongs. If such assets are considered to be impaired, the
impairment to be recognized in the statement of profit and
loss is measured by the amount by which the carrying value
of the assets exceeds the estimated recoverable amount of
the asset. An impairment loss is reversed in the statement
of profit and loss if there has been a change in the estimates
used to determine the recoverable amount. The carrying
amount of the asset is increased to its revised recoverable
amount, provided that this amount does not exceed
the carrying amount that would have been determined
(net of any accumulated amortization or depreciation)
had no impairment loss been recognized for the asset in
prior years.

1.12 Foreign Exchange Transactions/Translations

The Company's financial statements are presented in Indian
Rupees which is the Company's functional currency.

Transactions and balances

Foreign currency transactions are recorded, on initial
recognition in the functional currency, by applying to the
foreign currency amount the spot exchange rate between
the functional currency and the foreign currency at the
date of the transaction.

Monetary assets and liabilities denominated in foreign
currencies (except financial instruments designated
as Hedge Instruments) are translated at the functional
currency spot rates of exchange at the reporting date.

Exchange differences arising on settlement or translation of
monetary items are recognised in the statement of profit
and loss with the exception of the following:

Monetary items that are designated as part of the cash flow
hedge instrument are recognised in OCI.

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. The
gain or loss arising on translation of non-monetary items
measured at fair value is treated in line with the recognition
of the gain or loss on the change in fair value of the item
(i.e., translation differences on items whose fair value gain
or loss is recognised in OCI or the statement of profit and
loss are also recognised in OCI or the statement of profit
and loss, respectively).

Derivative Financial Instruments and Hedge Accounting

The Company uses derivative instruments i.e. Forward
contracts to hedge its foreign currency risks. The Company
designates these forward contracts as cash flow hedges to
mitigate the risk of foreign exchange exposure on highly
probable forecast cash transactions. The Company has
designated forward instruments on spot to spot basis. The
Company recognises the forward points in the statement of
profit and loss accounts.

When a derivative is designated as a cash flow hedging
instrument, the effective portion of changes in the fair value
of the derivative is recognized in other comprehensive
income and accumulated in the cash flow hedging reserve.
Any ineffective portion of changes in the fair value of the
derivative is recognized immediately in the statement of
profit and loss. If the hedging instrument no longer meets
the criteria for hedge accounting, then hedge accounting

is discontinued prospectively. If the hedging instrument
expires or is sold, terminated or exercised, the cumulative
gain or loss on the hedging instrument recognized in cash
flow hedging reserve till the period the hedge was effective
remains in cash flow hedging reserve until the forecasted
transaction occurs. The cumulative gain or loss previously
recognized in the cash flow hedging reserve is transferred
in the statement of profit and loss upon the occurrence
of the related forecasted transaction. If the forecasted
transaction is no longer expected to occur, then the amount
accumulated in cash flow hedging reserve is reclassified in
the statement of profit and loss.

1.13 Employee Benefits

(a) Short Term Employee Benefit

Short-term employee benefit obligations are measured
on undiscounted basis and are expensed as the related
service is provided. A liability is recognised for the
amount expected to be paid if the Company has a
present legal or constructive obligation to pay this
amount as a result of past service provided by the
employee and the obligation can be estimated reliably.

(b) Defined Contribution Plan

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

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

(c) Defined Benefit Plan

The Company's net obligation in respect of defined
benefit plans is calculated separately for each plan
by estimating the amount of future benefit that
employees have earned in the current and prior
periods, discounting that amount and deducting the
fair value of any plan assets.

The calculation of defined benefit obligations is
performed annually by a qualified actuary using the
projected unit credit method. When the calculation
results in a potential asset for the Company, the
recognised asset is limited to the present value
of economic benefits available in the form of any
future refunds from the plan or reductions in future

contributions to the plan. In order to calculate the
present value of economic benefits, consideration is
given to any applicable minimum funding requirements.

Remeasurement of the net defined benefit liability,
which comprise actuarial gains and losses, the return
on plan assets (excluding interest) and the effect of the
asset ceiling (if any, excluding interest), are recognised
immediately in Other Comprehensive Income. Net
interest expense (income) on the net defined liability
(assets) is computed by applying the discount rate,
used to measure the net defined liability (asset), to the
net defined liability (asset) at the start of the financial
year after taking into account any changes as a result of
contribution and benefit payments during the year. Net
interest expense and other expenses related to defined
benefit plans are recognised in the statement of profit
and loss.

When the benefits of a plan are changed or when a
plan is curtailed, the resulting change in benefit that
relates to past service or the gain or loss on curtailment
is recognised immediately in the statement of profit
and loss. The Company recognises gains and losses
on the settlement of a defined benefit plan when the
settlement occurs.

In the case of one location, the Company has set up
a trust for Contributions to provident fund, a defined
benefit plan, in which the Company contributes as
specified under the law. The Company is liable for
future provident fund benefits to the extent of its
annual contribution and any shortfall in fund assets
based on government specified minimum rates of
return relating to current period service and recognises
such contributions and shortfall, if any, as an expense in
the year of recognition.

(d) Other long-term employee benefits

The Company's net obligation in respect of long¬
term employee benefits is the amount of future
benefit that employees have earned in return for their
service in the current and prior periods. That benefit
is discounted to determine its present value and fair
value of any related assets is deducted. The liability
for other long term employee benefits are provided
based on actuarial valuation as at the Balance Sheet
date, based on Projected Unit Credit Method, carried
out by an independent actuary. Re-measurements are
recognised in the statement of profit and loss in the
period in which they arise.

(e) Termination benefits

Termination benefits are recognized as an expense in
the period in which they are incurred. The Company
recognises a liability and expense for termination
benefits at the earlier of the following dates:

(a) When the entity can no longer withdraw the offer
of those benefits; and

(b) When the entity recognises costs for a restructuring
that is within the scope of Ind AS 37 and involves
the payment of termination benefits.

If the benefits are not expected to be settled wholly
within twelve months of the reporting date, then they
are discounted to present value.

1.14 Taxes on Income
Current income tax

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 and tax laws prevailing in the
respective tax jurisdictions where the Company operates.
The tax rates and tax laws used to compute the amount
are those that are enacted or substantively enacted, at the
reporting date.

Current income tax relating to items recognised outside
the statement of profit and loss is recognised outside the
statement of profit and loss (either in other comprehensive
income or in equity). Current tax items are recognised
in correlation to the underlying transaction either in
OCI or directly in equity. Management periodically
evaluates positions taken in the tax returns with respect
to situations in which applicable tax regulations are
subject to interpretation and establishes provisions where
appropriate.

Deferred tax

Deferred tax is provided using the liability method on
temporary differences 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:

- 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.

- In respect of taxable temporary differences associated
with investments in associates, 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:

- 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.

- In respect of deductible temporary differences
associated with investments in associates, 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
utilised. Unrecognised deferred tax assets are re-assessed
at each reporting date and are recognised to the extent
that it has become probable that future taxable profits will
allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply in the year when the asset
is realised 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 recognised outside the
statement of profit and loss is recognised outside the
statement of profit and loss (either in other comprehensive
income or in equity). Deferred tax items are recognised in
correlation to the underlying transaction either in OCI or
directly in equity.

Deferred tax assets and deferred tax liabilities are offset if a
legally enforceable right exists to set off current tax assets

against current tax liabilities and the deferred taxes relate
to the same taxable entity and the same taxation authority.

Deferred tax assets include Minimum Alternative Tax (MAT)
paid in accordance with the tax laws in India, which is likely
to give future economic benefits in the form of availability
of set off against future income tax liability. Accordingly,
MAT is recognised as deferred tax asset in the statement
of financial position when the asset can be measured
reliably and it is probable that the future economic benefit
associated with the asset will be realised.