Note 2: Summary of Material Accounting Policies

This note provides a list of the material accounting policies adopted in the preparation of these financial statements. These
accounting policies have been applied to all the years presented by the Company unless otherwise stated.

A. Basis of preparation of financial statements

i. Statement of compliance

These financial statements are prepared in accordance with Indian Accounting Standards (“Ind-AS”) under the
historical cost convention on the accrual basis except for certain financial instruments which are measured at fair
values, the provisions of the Companies Act, 2013 ('Act') (to the extent notified). The Ind-AS are prescribed under
Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies
(Indian Accounting Standards) Amendment Rules, 2016.

Accounting policies have been consistently applied except where a newly issued accounting standard is initially
adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

ii. Basis of preparation

The financial statements have been prepared on historical cost basis except the following:

• certain financial assets and liabilities (including derivative instruments) are measured at fair value;

• assets held for sale- measured at fair value less cost to sell;

• defined benefit plans- plan assets measured at fair value; and

The functional currency of the Company is the Indian Rupee. These financial statements are presented in Indian
Rupees and all values are rounded to the nearest lakhs, except when otherwise stated.

iii. Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current 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.

All other assets are classified as non-current.

A liability is current when It is:

• Expected to be settled in normal operating cycle, it is held primarily for the purpose of trading,

• It is 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.

The Company classifies all other liabilities as non-current.

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 realisation in cash and cash
equivalents. The Company has identified twelve months as its operating cycle.

B. Use of estimates

The preparation of the financial statements in conformity with Ind-AS requires management to make estimates, judgments
and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the
reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the period. Application of accounting policies that
require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these
financial statements have been disclosed in note C below. Accounting estimates could change from period to period. Actual
results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of
changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the
period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

C. Critical accounting estimates

(i) Income taxes

The Company's major tax jurisdiction is India. Significant judgements are involved in determining the provision for
income taxes, including amount expected to be paid/ recovered for uncertain tax positions.

(ii) Property, plant and equipment

Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in
respect of periodic depreciation is derived after determining an estimate of an asset's expected useful life and the
expected residual value at the end of its life. The useful lives and residual values of Company's assets are determined
by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The
lives are based on historical experience with similar assets as well as anticipation of future events, which may impact
their life, such as changes in technology.

(iii) Defined benefit plans

The cost of the defined benefit gratuity plan and other post-employment benefits and the present value of the gratuity
obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that
may differ from actual developments in the future. These include the determination of the discount rate, future salary
increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined
benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting
date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans
operated in India, the management considers the interest rates of government bonds in currencies consistent with the
currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval
in response to demographic changes. Future salary increases and gratuity increases are based on expected future
inflation rates.

Further details about gratuity obligations are given in Note 47.

(iv) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured
based on quoted prices in active markets, their fair value is measured using valuation techniques. The inputs to these
models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is
required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and
volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See
Note 39-41 for further disclosures.

(v) Revenue from contracts with customers

The Company's contracts with customers include promises to provide the goods & services to the customers.
Judgement is required to determine the transaction price for the contract. The transaction price could be either
fixed amount of customer consideration or variable consideration with elements such as schemes, incentives, cash
discounts etc. The estimated amount of variable consideration is adjusted in the transaction price only to the extent
that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur and
is reassessed at the end of each period.

Estimates of rebates and discounts are sensitive to changes in circumstances and the Company's past experience
regarding returns and rebate entitlements may not be representative of customer's actual returns and rebate
entitlements in the future.

Costs to obtain a contract are generally expensed as incurred. The assessment of this criteria requires the application
of judgement, in particular when considering if costs generate or enhance resources to be used to satisfy future
performance obligations and whether costs are expected to be recovered.

D. Property, Plant and Equipment

Land (including Land Developments) is carried at historical cost. All other items of property, plant and equipment are stated
in the balance sheet at historical cost 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. All other repair and maintenance costs are recognised in profit or loss as incurred.

Properties in the course of construction for production, supply or administrative purposes are carried at cost, less any
recognized impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalized in
accordance with the Company's accounting policy. Such properties are classified to the appropriate categories of property,
plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other
property assets, commences when the assets are ready for their intended use.

Subsequent to recognition, property, plant and equipment (excluding freehold land) are measured at cost less accumulated
depreciation and accumulated impairment losses. When significant parts of property, plant and equipment are required to
be replaced in intervals, the Company recognizes such parts as individual assets with specific useful lives and depreciation
respectively. Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the plant and
equipment as a replacement cost only if the recognition criteria are satisfied. All other repair and maintenance costs are
recognized in the Statement of Profit and Loss as incurred.

Depreciation is recognised so as to write off the cost of assets (other than freehold land and land developments) less their
residual values over the useful lives, using the straight- line method (“SLM”). Management believes that the useful lives of
the assets reflect the periods over which these assets are expected to be used, which are as follows:

Depreciation on additions/ deletions to fixed assets is calculated pro-rata from/ up to the date of such additions/ deletions.
Assets individually costing less than Rs. 5,000 are fully depreciated in the year of acquisition.

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances
indicate that the carrying value may not be recoverable. The residual values, useful life and depreciation method are
reviewed at each financial year-end to ensure that the amount, method and period of depreciation are consistent with
previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of
property, plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected
to arise from the continued use of the asset. Any gain or loss arising on disposal or retirement of an item of property,
plant and equipment is determined as the difference between sale proceeds and the carrying amount of the asset and is
recognised in profit or loss.

E. Investment properties

Investment properties are properties that is held for long-term rentals yields or for capital appreciation (including property
under construction for such purposes) or both, and that is not occupied by the Company, is classified as investment
property.

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

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 based on an annual evaluation performed by an accredited external
independent valuer.

Investment properties are de-recognised either when they have been disposed of or when they are permanently withdrawn
from use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds
and the carrying amount of the asset is recognised in profit or loss in the period of derecognition.

F. Intangible Assets

Intangible asset including intangible assets under development are stated at cost, net of accumulated amortisation and
accumulated impairment losses, if any. Intangible assets acquired separately are measured on initial recognition at cost.

Intangible assets in case of computer software are amortised on straight-line basis over a period of 3 years, based on
management estimate. The amortization period and the amortisation method are reviewed at the end of each financial year.

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 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. The amortisation expense on intangible assets with infinite lives is
recognised in the statement of profit and loss unless such expenditure forms part of carrying value of another asset.

G. Impairment of Non-Financial Assets

Assessment is done at each Balance Sheet date as to whether there is any indication that an asset (tangible and intangible)
may be impaired. For the purpose of assessing impairment, the smallest identifiable group of assets that generates cash
inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets, is
considered as a cash generating unit. If any such indication exists, an estimate of the recoverable amount of the asset/
cash generating unit is made. Assets whose carrying value exceeds their recoverable amount are written down to the
recoverable amount. An impairment loss is recognized in the profit or loss. Recoverable amount is higher of an asset's or
cash generating unit's net selling price and its value in use. Value in use is the present value of estimated future cash flows

expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Assessment is also
done at each Balance Sheet date as to whether there is any indication that an impairment loss recognised for an asset
in prior accounting periods may no longer exist or may have decreased. A reversal of an impairment loss is recognised
immediately in profit or loss.

H. 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 Instruments are further divided in two parts viz. Financial Assets and Financial
Liabilities.

Part I - Financial Assets

a) Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value
through profit or 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 asset.

b) Subsequent measurement

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

Financial Assets at amortised cost:

A Financial Assets is measured at the amortised cost if both the following conditions are met:

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

• 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.

Financial Assets at FVTOCI (Fair Value through Other Comprehensive Income)

A Financial Assets is classified as at the FVTOCI if following criteria are met:

• The objective of the business model is achieved both by collecting contractual cash flows (i.e. SPPI) and selling
the financial assets

Financial 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 the statement of profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported
as interest income using the EIR method.

Financial Assets at FVTPL (Fair Value through Profit or Loss)

FVTPL is a residual category for financial instruments. Any financial instrument, which does not meet the criteria for
categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.

In addition, the Company may elect to designate a financial instrument, which otherwise meets amortized cost or
FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement
or recognition inconsistency (referred to as 'accounting mismatch'). The Company has not designated any financial
instrument as at FVTPL.

Financial instruments included within the FVTPL category are measured at fair value with all changes recognized in
the Statement of Profit and Loss.

Equity investments

All equity investments in scope of Ind-AS 109 are measured at fair value. Equity instruments which are held for
trading and contingent consideration recognised by an acquirer in a business combination to which Ind-AS 103
applies are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election
to present in other comprehensive income subsequent changes in the fair value. The Company makes such election
on an instrument by instrument basis. The classification is made on initial recognition and is irrevocable. If the
Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument,
excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale
of investment. However, the Company may transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the
Statement of Profit and Loss.

Investment in subsidiaries is carried at cost in the financial statements.

c) De-recognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is
primarily de-recognised (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.

d) Impairment of financial assets

In accordance with Ind-AS 109, the Company applies expected credit loss (ECL) model for measurement and
recognition of impairment loss on the following financial assets and credit risk exposure:

• Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, deposits, trade
receivables and bank balance;

• Financial assets that are debt instruments and are measured as at FVTOCI

• Lease receivables under Ind-AS 116

• Trade receivables or any contractual right to receive cash or another financial asset that result from transactions
that are within the scope of Ind-AS 18 (referred to as 'contractual revenue receivables' in these financial
statements)

• Loan commitments which are not measured as at FVTPL

• Financial guarantee contracts which are not measured as at FVTPL

The Company follows 'simplified approach' for recognition of impairment loss allowance on trade receivables or
contract revenue receivables.

The application of simplified approach does not require the Company to track changes in credit risk. Rather, it
recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

For recognition of impairment loss on other financial assets and risk exposure, the Company determines that
whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased
significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly,
lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer
a significant increase in credit risk since initial recognition, then the Company reverts to recognising impairment loss
allowance based on 12-month ECL. Lifetime ECL are the expected credit losses resulting from all possible default
events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results
from default events that are possible within 12 months after the reporting date.

ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract
and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. When
estimating the cash flows, the Company considers:

• All contractual terms of the financial instrument (including prepayment, extension, call and similar options)
over the expected life of the financial instrument. However, in rare cases when the expected life of the financial
instrument cannot be estimated reliably, then the Company uses the remaining contractual term of the financial
instrument; and

• Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms

As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio
of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life
of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed
default rates are updated and changes in the forward-looking estimates are analysed. On that basis, the Company
estimates the following provision matrix at the reporting date:

ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the
statement of profit and loss. This amount is grouped under the head 'other expenses'. The balance sheet presentation
for various financial instruments is described below:

• Financial assets measured as at amortised cost, contractual revenue receivables and lease receivables: ECL
is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet.
The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the Company does not
reduce impairment allowance from the gross carrying amount.

• Loan commitments and financial guarantee contracts: ECL is presented as a provision in the balance sheet, i.e.
as a liability.

• Debt instruments measured at FVTOCI: Since financial assets are already reflected at fair value, impairment
allowance is not further reduced from its value. Rather, ECL amount is presented as 'accumulated impairment
amount' in the OCI.

For assessing increase in credit risk and impairment loss, the Company combines financial instruments on the basis
of shared credit risk characteristics with the objective of facilitating an analysis that is designed to enable significant
increases in credit risk to be identified on a timely basis.

The Company does not have any purchased or originated credit-impaired (POCI) financial assets, i.e., financial assets
which are credit impaired on purchase/ origination.

Part II - Financial Liabilities

a) Initial recognition and measurement

The Company's financial liabilities include trade and other payables, loans and borrowings including bank overdrafts,
financial guarantee contracts and derivative financial instruments.

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.

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.

b) Subsequent measurement

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

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. This category also includes derivative
financial instruments entered into by the Company that are not designated as hedging instruments in hedge
relationships as defined by Ind-AS 109. Separated embedded derivatives are also classified as held for trading unless
they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognised in the profit or loss.

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 risks are recognized in OCI. These gains/ losses are not
subsequently transferred to statement of profit and loss. However, the Company may transfer the cumulative gain or
loss within equity. All other changes in fair value of such liability are recognised in the statement of profit or loss. The
Company has not designated any financial liability as at fair value through profit and loss.

Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent
consideration recognized in a business combination which is subsequently measured at fair value through profit and
loss. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts
approximate fair value due to the short maturity of these instruments.

Loans and borrowings

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 de-recognised 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.

Preference shares, which are mandatorily redeemable on a specific date, are classified as liabilities under borrowings.
The dividends on these preference shares, if any are recognised in the profit or loss as finance cost.

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 it incurs because the specified debtor fails to make a payment when due in accordance

with the terms of a debt instrument. 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 amortisation.

c) De-recognition

A financial liability is de-recognised 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 de-recognition
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 or loss.

d) 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.

I. Derivative financial instruments and hedge accounting
Initial recognition and subsequent measurement:

The Company uses derivative financial instruments, such as forward currency contracts and interest rate swaps to hedge
its foreign currency risks and interest rate risks, respectively.

Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is
entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value
is positive and as financial liabilities when the fair value is negative.

The purchase contracts that meet the definition of a derivative under Ind-AS 109 are recognised in the statement of profit
and loss. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss.

J. Inventories

Inventories are valued at lower of cost on First-In-First-Out (FIFO) or net realizable value after providing for obsolescence
and other losses, where considered necessary. Cost of inventories comprises all costs of purchase and other costs incurred
in bringing the inventories to their present location and condition. Cost of purchased inventory is determined after deducting
rebates and discounts. 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.

K. Revenue from contracts with customers

The Company derives revenues primarily from manufacturing and trading of Chemicals, Dyes and Dyes Intermediate and
other allied products.

Ind AS 115 “Revenue from Contracts with Customers” provides a control- based revenue recognition model and provides a
five-step application approach to be followed for revenue recognition.

• Identify the contract(s) with a customer;

• Identify the performance obligations;

• Determine the transaction price;

• Allocate the transaction price to the performance obligations;

• Recognize revenue when or as an entity satisfies performance obligations

Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer,
at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or
services. Revenue is recognized when no significant uncertainty exists as to its realization or collection.

The amount recognized as revenue in its Statement of Profit and Loss is exclusive of Goods and Service Tax and is net of
discounts.

Contract balances

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 in section (h)
Financial Instruments.

Contract liabilities

A contract liability is the obligation to perform the services as agreed with the customer for which the Company has received
consideration (or an amount of consideration is due) from the customer. A contract liability is recognized when the payment
is made or the payment is due (whichever is earlier). Contract liabilities are recognized as revenue when the Company
performs under the contract.

Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the
same.

L. Other Income

Dividend income from investments is recognised when the shareholder's right to receive payment has been established
(provided that it is probable that the economic benefits will flow to the company and the amount of income can be measured
reliably).

Interest income from financial assets is recognized when it is probable that economic benefits will flow to the company and
the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial assets to that asset's net carrying amount on initial recognition.