2.1 Material accounting policies

The accounting policies set out below have been
applied consistently to all periods presented in these
standalone financial statements.

a. Property, plant and equipment

(i) Recognition and Measurement

Items of property, plant and equipment are
measured at cost, which includes capitalized
borrowing costs, less accumulated depreciation
and accumulated impairment losses, if any.

The cost of an item of property, plant and
equipment shall be recognised as an asset if,
and only if it is probable that future economic
benefits associated with the item will flow to
the Company and the cost of the item can be
measured reliably.

Cost of an item of property, plant and equipment
includes its purchase price, import duties and
non-refundable purchase taxes, duties or levies,
after deducting trade discounts and rebates, any
other directly attributable cost of bringing the
asset to its working condition for its intended use
and estimated cost of dismantling and removing
the items and restoring the site on which it is
located. The present value of the expected cost
for the decommissioning of an asset after its use
is included in the cost of the respective asset if
the recognition criteria for a provision are met.
Capital work-in-progress is stated at cost, net
of impairment loss, if any. Refer to note 2 (iv)
regarding significant accounting judgements,
estimates and assumptions.

The cost of a self-constructed item of property,
plant and equipment comprises the cost of
materials and direct labor, 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 de¬
recognised 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 included
in the Standalone Statement of Profit and Loss
when the asset is derecognised.

If significant parts of an item of property, plant
and equipment have different useful lives, then
they are accounted for as separate items (major
components) of property, plant and equipment.

An item of property, plant and equipment
is eliminated from the standalone financial
statements on disposal or when no further
benefit is expected from its use and disposal.
Assets retired from active use and held for
disposal are generally stated at the lower of
their net book value and net realizable value. Any
gain or losses arising disposal of property, plant
and equipment is recognised in the Standalone
Statement of Profit and Loss.

Once classified as held-for-sale, property, plant
and equipment are no longer depreciated.

Any gain or loss arising on de-recognition of
property, plant and equipment are measured
as the difference between the net disposal

proceeds and the carrying amount of the
asset and are recognised in the Standalone
Statement of Profit and Loss when the asset is
derecognised.

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.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only if it
is probable that the future economic benefits
associated with the expenditure will flow to the
Company.

(iii) Depreciation

Depreciation on property, plant and equipment
is calculated on a straight-line method to
allocate their cost, net of their estimated residual
values, over the estimated useful lives and is
recognised in the Standalone Statement of
Profit and Loss. The identified components are
depreciated over their useful life, the remaining
asset is depreciated over the life of the principal
asset. Assets acquired under finance leases
are depreciated over the shorter of the lease
term and their useful lives unless it is reasonably
certain that the Company will obtain ownership
by the end of the lease term. Freehold land is not
depreciated.

Leasehold land is amortised on a straight line
basis over the period of the lease which ranges
between 89-99 years.

The Company has used the following useful life
to provide depreciation which coincides with
useful life indicated in Schedule II of the Act on
its property, plant and equipment, except for
temporary erection, Computers (Servers and
networks) and Non - commercial vehicles.

The management has estimated, supported by
independent assessment by technical experts
and professionals, the useful lives of the following
classes of assets:

• The useful life of temporary erection is estimated
at one year, which is lower than those indicated in
Schedule II of the Act.

• Computers (Servers and networks) are
depreciated over the estimated useful lives of
three years, which is lower than those indicated in
Schedule II of the Act.

• Non commercial vehicles are depreciated over
the estimated useful lives of six years, which is
lower than those indicated in Schedule II of the
Act.

Depreciation methods, useful lives and residual values
are reviewed at each reporting date and adjusted,
if appropriate. Based on technical evaluation and
consequent advice, the management believes
that its estimates of useful lives as given above
best represent the period over which management
expects to use these assets.

Depreciation on additions/ (disposals) is provided on
a pro-rata basis i.e. from/ (upto) the date on the which
asset is ready for use (disposed of).

b. Intangible assets

(i) Recognition and Measurement

Intangible assets acquired separately are
measured on initial recognition at cost. The
cost of an intangible asset comprises its
purchase price, including import duties and
other non-refundable taxes or levies and any
attributable costs of bringing the asset to its
working condition for its intended use. Any trade
discount and rebates are deducted in arriving at
the purchase price. Following initial recognition,
intangible assets are carried at cost less any
accumulated amortisation and accumulated
impairment losses.

Internally generated intangibles, excluding
capitalized development costs, are not
capitalized and the related expenditure is
reflected in the Standalone Statement of Profit
and Loss in the period in which the expenditure is
incurred.

An intangible asset is derecognised on disposal
or when no future economic benefits are
expected from its use and disposal. Losses
arising from retirement and gains or losses
arising from disposal 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 Standalone
Statement of Profit and Loss.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only
when it increases the future economic benefits
embodied in the specific asset to which it
relates. All other expenditure is recognised in
the Standalone Statement of Profit and Loss as
incurred.

(iii) Amortization

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

Intangible assets with finite lives are amortised
over the useful economic life and assessed
for impairment whenever there is an indication
that the intangible asset may be impaired.
The amortization period and the amortization
method for an intangible asset with a finite useful
life are reviewed 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 amortization period
or method, as appropriate, and are treated
as changes in accounting estimates. The
amortization expense on intangible assets is
recognised in the Standalone 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 assessment of indefinite life is reviewed
annually to determine whether the indefinite life
continues to be supportable. If not, the change
in useful life from indefinite to finite is made on a
prospective basis.

Technical know-how

Amounts paid towards technical know-how fees
for specifically identified projects/products
being development expenditure incurred
towards product design is carried forward based
on assessment of benefits arising from such
expenditure. Such expenditure is amortised
over the period of expected future sales from
the related product, i.e. the estimated period
of 60 to 72 months on straight line basis based
on past trends, commencing from the month of
commencement of commercial production.

Software

Software purchased by the Company is
amortised on a straight line basis i.e. non¬
standard (customized) software in four years
and standard (non-customized) software in five
years.

Goodwill

Goodwill is not amortised but is tested for
impairment annually.

Gains or losses arising from derecognition 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 Standalone Statement of Profit and Loss
when the asset is derecognised.

Amortization method, useful lives and residual
lives are reviewed at the end of each financial
year and adjusted, if appropriate.

c. Investment Property

(i) Recognition and measurement

Investment property includes land and buildings
held either to earn rental income or for capital
appreciation or for both, but not for sale in
the ordinary course of business, use in the
production or supply of goods or services or for
administrative purposes. Upon initial recognition,
an investment property is measured at cost,
including related transaction costs.

Subsequent to initial recognition, investment
property is measured at cost less accumulated
depreciation and accumulated impairment
losses, if any.

Investment property is derecognised either
when it has been disposed of or when it is
permanently withdrawn from use and no future
economic benefit is expected from its disposal.
Any gain or loss on disposal of investment
property (calculated as the difference between
the net proceeds from disposal and the carrying
amount of the item) is recognised in profit or loss.

(ii) Subsequent expenditure

Subsequent expenditure is capitalised only if it
is probable that the future economic benefits
associated with the expenditure will flow to
the Company and the cost of the item can be
measured reliably.

(iii) Depreciation

The Company depreciates investment property
over a period of 30 years on a straight-line basis,
which is the indicative useful life of relevant type
of buildings mentioned in Part C of Schedule II to
the Act.

(iv) Reclassification from / to investment property

Transfers to (or from) investment property
are made only when there is a change in use.
Transfers between investment property and
owner-occupied property do not change the
carrying amount of the property transferred and
they do not change the cost of that property for
measurement or disclosure purposes.

d. Non-Current assets held for sale

The Company classifies non-current assets as
held for sale if their carrying amounts will be
recovered principally through a sale rather than
through continuing use.

Non-current assets classified as held for sale are
measured at the lower of their carrying amount
and fair value less costs to sell. Costs to sell are
the incremental costs directly attributable to the
disposal of an asset, excluding finance costs and
income tax expense.

The criteria for held-for-sale classification are
regarded as met only when the sale is highly
probable, and the asset is available for immediate
sale in its present condition. Actions required to
complete the sale/ distribution should indicate
that it is unlikely that significant changes to the
sale will be made or that the decision to sell will
be withdrawn. Management must be committed
to the sale and the sale expected within one year
from the date of classification.

For these purposes, sale transactions include
exchanges of non-current assets for other
non-current assets when the exchange has
commercial substance. The criteria for held-for-
sale classification are regarded as met only when
the asset is available for immediate sale in its
present condition, subject to terms that are usual
and customary for sales of such assets, its sale
is highly probable, and it will genuinely be sold,
not abandoned. The Company treats sale of the
asset to be highly probable when:

- The appropriate level of management is
committed to a plan to sell the asset,

- An active programme to locate a buyer and
complete the plan has been initiated (if
applicable),

- The asset is being actively marketed for sale
at a price that is reasonable in relation to its
current fair value,

- The sale is expected to qualify for recognition
as a completed sale within one year from the
date of classification, and

- Actions required to complete the plan
indicate that it is unlikely that significant
changes to the plan will be made or that the
plan will be withdrawn.

Property, plant and equipment and intangible
assets are not depreciated, or amortised once
classified as held for sale.

Assets and liabilities classified as held for sale
are presented separately from other items in the
balance sheet.

e. Capital work-in-progress

Cost of property, plant and equipment not ready
for use as at the reporting date are disclosed as
capital work-in-progress.

f. Capital advances

Advances paid towards the acquisition of
property, plant and equipment, outstanding at
each balance sheet date are classified as capital
advances under "other non-current assets”.

g. Leases

A contract is, or contains, a lease if the contract
conveys the right to control the use of an
identified asset for a period of time in exchange
for consideration.

Company as a lessee

The Company as a lessee applies a single
recognition and measurement approach for all
leases, except for short-term leases.

The Company recognises lease liabilities to
make lease payments and right-of-use assets
representing the right to use the underlying
assets.

(i) Right-of-use assets

The Company recognises right-of-use
assets at the commencement date of the
lease (i.e., the date the underlying asset is
available for use). Right-of-use assets are
measured at cost, less any accumulated
amortization and impairment losses, and
adjusted for any re-measurement of lease
liabilities.

The cost of right-of-use assets includes
the amount of lease liabilities recognised,
initial direct costs incurred, lease payments
made on or before the commencement
date, an estimate of costs to dismantle and
remove the underlying asset or to restore
the underlying asset or the site on which it is
located less any lease incentives received.
Right-of-use assets are amortised on a
straight-line basis from the commencement
date over the shorter of the lease term and
the estimated useful lives of the assets.

If ownership of the leased asset transfers to
the Company at the end of the lease term or
the cost reflects the exercise of a purchase
option, depreciation is calculated using the
estimated useful life of the asset.

The right-of-use assets are also subject to
impairment. Refer note 2.1 (i) for Impairment
of non- financial assets.

(ii) Lease liabilities

At the commencement date of the lease,
the Company recognises lease liabilities
measured at the present value of lease
payments to be made over the lease term.
The lease payments include fixed payments
(including in-substance fixed payments)
less any lease incentives receivable, variable
lease payments that depend on an index or
a rate, and amounts expected to be paid
under residual value guarantees. The lease
payments also include the exercise price of
a purchase option reasonably certain to be
exercised by the Company and payments
of penalties for terminating the lease, if the
lease term reflects the Company exercising
the option to terminate. Variable lease
payments that do not depend on an index
or a rate are recognised as expenses (unless
they are incurred to produce inventories) in
the period in which the event or condition
that triggers the payment occurs.

In calculating the present value of lease
payments, the Company uses its incremental
borrowing rate at the lease commencement
date because the interest rate implicit in the
lease is not readily determinable. After the
commencement date, the amount of lease
liabilities is increased to reflect the accretion
of interest and reduced for the lease
payments made. In addition, the carrying
amount of lease liabilities is re-measured 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. Lease liabilities and Right-
of-use assets have been presented as a
separate line in the balance sheet. Lease
payments have been classified as cash used
in financing activities.

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

The Company has elected not to recognise
right-of-use assets and lease liabilities for
leases of low-value assets and short-term
leases. The Company recognised the lease
payments associated with these leases as
an expense in profit or loss on a straight-line
basis over the lease term.

Company as a lessor

When the Company acts as a lessor, it determines

at lease inception whether each lease is a finance

lease or an operating lease.

To classify each lease, the Company makes

an overall assessment of whether the lease

transfers substantially all of the risks and rewards
incidental to ownership of the underlying asset. If
this is the case, then the lease is a finance lease;
if not, then it is an operating lease. As part of this
assessment, the Company considers certain
indicators such as whether the lease is for the
major part of the economic life of the asset.

When the Company is an intermediate lessor, it
accounts for its interests in the head lease and
the sublease separately. It assesses the lease
classification of a sub-lease with reference to
the right-of-use asset arising from the head
lease, not with reference to the underlying asset.
If a head lease is a short- term lease to which
the Company applies the exemption described
above, then it classifies the sub-lease as an
operating lease.

The Company applies the derecognition and
impairment requirements in Ind AS 109 to the net
investment in the lease. The Company further
regularly reviews estimated unguaranteed
residual values used in calculating the gross
investment in the lease.

The Company recognises lease payments
received under operating leases as income on a
straight-line basis over the lease term as part of
'other income’.

h. Borrowing costs

Borrowing costs include interest and other costs
(including exchange differences relating to
foreign currency borrowings to the extent that
they are regarded as an adjustment to interest
costs), amortization of ancillary costs incurred in
connection with the arrangement of borrowings
and exchange differences arising from foreign
currency borrowings to the extent they are
regarded as an adjustment to the interest 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 are
capitalized as part of the cost of the respective
asset. All other borrowing costs are expensed in
the period they are incurred.

i. 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.

For impairment testing, assets that do not
generate independent cash inflows are grouped
together into cash-generating units (CGUs).
Each CGU represents the smallest group of
assets that generates cash inflows that are

largely independent of the cash inflows of other
assets or CGUs.

An asset’s recoverable amount is the higher of
an individual asset’s or cash-generating unit’s
(CGU) fair value less costs of disposal and its
value in use. 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 group
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.

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

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 five
years. For longer periods, a long-term growth
rate is calculated and applied to project future
cash flows after the fifth year. 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(ies) in which
the entity operates, or for the market in which the
asset is used.

The Company’s corporate assets do not
generate independent cash inflows. To
determine impairment of a corporate asset,
recoverable amount is determined for the CGUs
to which the corporate asset belongs.

An impairment loss is recognised if the carrying
amount of an asset or CGU exceeds its estimated
recoverable amount. Impairment losses, if any,
are recognised in the Standalone Statement of
Profit and Loss. Impairment losses of continuing
operations, including impairment on inventories,
are recognised in the 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.

In regard to assets for which impairment loss has
been recognised in a prior period, the Company
reviews at each reporting date whether there is
any indication that the loss has decreased or no
longer exists. An impairment loss is reversed if
there has been a change in the estimates used
to determine the recoverable amount. Such a
reversal is made only to the extent that the asset’s
carrying amount does not exceed the carrying
amount that would have been determined, net
of depreciation or amortization, if no impairment
loss had been recognised.

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 asset’s
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 unless the asset is
carried at a revalued amount, in which case, the
reversal is treated as a revaluation increase.

Goodwill is tested for impairment annually
at the CGU level, as appropriate, and when
circumstances indicate that the carrying value
may be impaired.

j. Government grant

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 other
income on a systematic basis over the periods
that the related costs, for which it is intended
to compensate, are expensed. When the grant
relates to an asset, it is recognised as income in
equal amounts over the expected useful life of
the related asset.

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 installments.

k. Inventories

Inventories, which include raw materials,
components, stores, work in progress, finished
goods and spares are valued at the lower of cost
and net realizable value.

However, raw materials, components 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 or in cases
where material prices have declined and it is
estimated that the cost of the finished products
will exceed their net realisable value.

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

• Raw materials and components: Cost
includes cost of purchase and other costs
incurred in bringing the inventories to their
present location and condition. Cost of raw
material, components, stores and spares is
determined on first in, first out 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. Cost is determined on first in, first
out basis.

Net realisable value is the estimated selling price
in the ordinary course of business, less estimated
costs of completion and the estimated costs
necessary to make the sale. The net realisable
value of work-in-progress is determined with
reference to the selling prices of related finished
products.

The comparison of cost and net realizable value is
made on an item-by-item basis.

Provision for obsolescence and slow-moving
inventory is made based on management’s
best estimates of net realisable value of such
inventories. Obsolete and slow moving items are
valued at cost or estimated net realisable value,
whichever is lower.

l. Foreign currency transactions

Transactions in foreign currencies are initially
recorded by the Company at functional currency
spot rates at the date the transaction first
qualifies for recognition or an average rate if the
average rate 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. Exchange
differences arising on settlement or translation of
monetary items are recognised in the Standalone
Statement of Profit and Loss.

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. 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).

m. Revenue from contract with customers

Revenue is measured based on the consideration
specified in a contract with a customer. The
Company recognises revenue when it transfers
control over a good or service to a customer.

Sale of products

Revenue from sale of products is recognised
when control of the products being sold is
transferred to customers and there are no longer
any unfulfilled obligations. The performance
obligations in contract with customers are
fulfilled at the time of dispatch, delivery or upon
formal customer acceptance depending on
delivery terms. Revenue towards satisfaction
of a performance obligation is measured at the
amount of transaction price (net of discount)
allocated to that performance obligation.
Revenue excludes taxes or duties collected on
behalf of the government.

For contracts that permit the customer to return
an item, revenue is recognised to the extent that
it is highly probable that a significant reversal in
the amount of cumulative revenue recognised
will not occur. Therefore, the amount of revenue
recognised is adjusted for expected returns,
which are estimated based on the historical
data. In these circumstances, a refund liability
and a right to recover returned goods asset are
recognised.

The Company recognised revenue when (or as) a
performance obligation was satisfied, i.e. when
'control’ of the goods underlying the particular
performance obligation was transferred to the
customer.

Revenue is measured based on the transaction
price, which is the consideration, adjusted
for volume discounts, service level credits,
performance bonuses, price concessions and
incentives, if any, as specified in the contract
with the customer. Revenue also excludes
taxes collected from customers. The Company
accounts for consideration payable to the
customer as a reduction of the transaction price
and, therefore, revenue unless the payment to
the customer is in exchange for a distinct good
or service that the customer transfers to the
Company.

The Company enters into arrangements
with customers whereby certain materials
are supplied by the customers for use in the
manufacture of finished goods.

In accordance with Ind AS 115, Revenue from
Contracts with Customers, the Company
assesses whether control of such materials
is transferred to the Company. Where it is
determined that control of the customer-
supplied materials does not pass to the
Company, such materials are not recognised as
inventory.

Amounts paid or payable to customers in
respect of such materials are accounted for
as consideration payable to a customer and
recognised as a reduction of the transaction
price in accordance with Ind AS 115. Accordingly,
such amounts are presented as a deduction from
revenue. Further, since the Company does not
obtain control over these materials, the related
costs are not recognised within purchases or
consumption of materials.

Contract assets are recognised when there
is excess of revenue earned over billings on
contracts. Contract assets are classified as
unbilled receivables (only act of invoicing is
pending) when there is unconditional right
to receive cash, and only passage of time is
required, as per contractual terms.

Unearned or deferred revenue is recognised
when there are billings in excess of revenues.

Contracts are subject to modification to
account for changes in contract specifications
and requirements. The Company reviews
modifications to contract in conjunction with
the original contract, on the basis which the
transaction price could be allocated to a new
performance obligation, or transaction price of
an existing obligation could undergo a change.
In the event the transaction price is revised for
an existing obligation, a cumulative adjustment is
accounted for.

Rendering of services

Revenue from services rendered is recognised
in profit or loss in proportion to the stage of
completion of the transaction at the reporting
date. The stage of completion is assessed by
reference to surveys of work performed.

Job work and development charges are
recognised upon full completion of the job work
and development services and when all the
significant risks and rewards of ownership of the

goods have been passed to the buyer, on delivery
of the goods and no significant uncertainty exists
regarding the collection of the consideration.

n. Income tax

Income tax expense comprises current tax and
deferred tax. It is recognised in the Standalone
Statement of Profit and Loss except to the extent
that it relates to a business combination or to
an item recognised directly in equity or in other
comprehensive income.

Current tax

Current tax comprises the expected tax payable
or receivable on the taxable income or loss for
the year and any adjustment to the tax payable
or receivable in respect of previous years. The
amount of current tax reflects the best estimate
of the tax amount expected to be paid or
received after considering the uncertainty, if any,
related to income taxes.

Current income tax assets and liabilities
are measured at the amount expected to
be recovered from or paid to the taxation
authorities. 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 profit or loss is recognised outside
profit or loss (either in other comprehensive
income or in equity). Current tax items are
recognised in correlation to the underlying
transaction either in OCI or directly in equity.
Management periodically evaluates positions
taken in the tax returns with respect to situations
in which applicable tax regulations are subject to
interpretation and establishes provisions where
appropriate.

Current tax assets and current tax liabilities are
offset only if there is a legally enforceable right to
set off the recognised amounts, and it is intended
to realise the asset and settle the liability on a net
basis or simultaneously.

Deferred tax

Deferred tax is provided using the Balance sheet
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.

In the situations where the Company is entitled
to a tax holiday under the Income Tax Act, 1961
enacted in India or tax laws prevailing in the
respective tax jurisdictions where it operates,
no deferred tax asset is recognised in respect of
timing differences which are reversed during the

tax holiday period, to the extent the Company’s
gross total income is subject to the deduction
during the tax holiday period. Deferred tax in
respect of timing differences which reverse
after the tax holiday period is recognised in the
year in which the timing differences originate.
However, the Company restricts recognition
of deferred tax assets to the extent that it has
become reasonably certain that sufficient
future taxable income will be available against
which such deferred tax assets can be realized.
For recognition of deferred taxes, the timing
differences which originate first are considered
to reverse first.

Deferred tax assets are recognised on carry
forward of unused tax credits and any unused tax
losses.

Deferred tax assets are recognised to the extent
that it is probable that future taxable profits will
be available against which they can be used. The
existence of unused tax losses is strong evidence
that future taxable profit may not be available.
Therefore, in case of a history of recent losses, the
Company recognizes a deferred tax asset only to
the extent that it has sufficient taxable temporary
differences or there is convincing other evidence
that sufficient taxable profit will be available
against which such deferred tax asset can be
realized. Deferred tax assets - unrecognised or
recognised, are reviewed at each reporting date
and are recognised/ reduced to the extent that
it is probable/ no longer probable respectively
that the related tax benefit will be realized.

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.

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

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

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 they relate to income taxes levied
by the same tax authority on the same taxable
entity, or on different tax entities, but they intend
to settle current tax liabilities and assets on a
net basis or their tax assets and liabilities will be
realized simultaneously.

o. Operating segments
Basis for segmentation

An operating segment is a component of the
Company that engages in business activities
from which it may earn revenues and incur
expenses, including revenues and expenses that
relate to transactions with any of the Company’s
other components, and for which discrete
financial information is available. The Company
is primarily engaged in the manufacturing and
assembling of components for the automotive
industry. All operating segments’ operating
results are reviewed regularly by the Company’s
Chief Operating Decision Maker ("CODM”) to
make decisions about resources to be allocated
to the segments and assess their performance.
CODM believes that these are governed by same
set of risks and returns; hence, the CODM reviews
them as one balance sheet component.

p. Earnings per share (EPS)

Basic earnings / (loss) per share are calculated by
dividing the profit or loss for the year attributable
to the shareholders of the Company by the
weighted average number of equity shares
outstanding at the end of the reporting period.
The weighted average number of equity shares
outstanding during the year is adjusted for events
of bonus issue, if any, that have changed the
number of equity shares outstanding, without a
corresponding change in resources.

For the purpose of calculating diluted earnings
per share, the profit or loss for the year
attributable to equity shareholders and the
weighted average number of shares outstanding
during the period are adjusted for the effects of
all dilutive potential equity shares except where
the results will be anti-dilutive.