3 Material Accounting Policiesa) 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:

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

ii) Held primarily for the purpose of trading

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

iv) 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:

i) It is expected to be settled in normal operating cycle

ii) It is held primarily for the purpose of trading

iii) It is due to be settled within twelve months after the reporting period, or

iv) There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period

All other liabilities are classified 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. Since, the Company is into Rental operations, the normal operating cycle is not clearly
identifiable, hence it is assumed to be 12 months.

b) Fair value measurement

The Company has applied the fair value measurement wherever necessitated at each reporting period.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place either:

i) In the principal market for the asset or liability;

ii) In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non - financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and the best use or by selling it to another market participant
that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximizing the use of relevant observable inputs and minimising the use of
unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:

Level 1 : Quoted (unadjusted) market prices in active market for identical assets or liabilities;

Level 2 : Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable; and

Level 3 : Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable.

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company
determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization
(based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each
reporting period.

The Company has designated the respective team leads to determine the policies and procedures for both
recurring and non - recurring fair value measurement. External valuers are involved, wherever necessary
with the approval of Company’s board of directors. Selection criteria include market knowledge, reputation,
independence and whether professional standards are maintained.

For the purpose of fair value disclosure, the Company has determined classes of assets and liabilities on the
basis of the nature, characteristics and risk of the asset or liability and the level of the fair value hierarchy as
explained above. The component wise fair value measurement is disclosed in the relevant notes.

c) Revenue Recognition

The Company has applied five step model as per Ind AS 115 ‘Revenue from contracts with customers’ to
recognise revenue in the financial statements. The Company satisfies a performance obligation and recognises
revenue over time, if one of the following criteria is met:

a) The customer simultaneously receives and consumes the benefits provided by the Company’s performance
as the Company performs; or

b) The Company’s performance creates or enhances an asset that the customer controls as the asset is
created or enhanced; or

c) The Company’s performance does not create an asset with an alternative use to the Company and the
entity has an enforceable right to payment for performance completed to date.

For performance obligations where one of the above conditions are not met, revenue is recognised at the point
in time at which the performance obligation is satisfied.

Revenue is recognised either at point of time and over a period of time based on various conditions as included
in the contracts with customers.

Sale of services

Revenue from service contracts are recognised in the accounting period in which the services are rendered.
Where the contracts include multiple performance obligations, the transaction price is allocated to each
performance obligation based on the standalone selling price and revenue is recognised at point in time
on fulfillment of respective performance obligation. In case, the service contracts include one performance
obligation, revenue is recognised based on the actual service provided to the end of the reporting period as
proportion of the total services to be provided. This is determined based on the actual expenditure incurred to
the total estimated cost. Revenue from services rendered is recognised as the services are rendered and is
booked based on agreement / arrangements with the concerned parties.

Interest Income

Interest income is recorded using the effective interest rate (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. When 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.

Rental income

Rental income from operating lease is recognised on a straight line basis over the term of the relevant lease, if
the escalation is not a compensation for increase in cost inflation index.

Dividend income

Dividend income is recognized when the company’s right to receive dividend is established by the reporting
date, which is generally when shareholders approve the dividend.

d) Property, plant and equipment and capital work in progress
Presentation

Property, plant and equipment and capital work in progress are stated at cost, net of accumulated depreciation
and accumulated impairment losses, if any. Such cost includes the cost of replacing part of the plant and
equipment and borrowing costs of a qualifying asset, if the recognition criteria are met. When significant parts of
plant and equipment are required to be replaced at intervals, the Company depreciates them separately based
on their specific useful lives. All other repair and maintenance costs are recognised in profit or loss as incurred.

Advances paid towards the acquisition of tangible assets outstanding at each balance sheet date, are disclosed
as capital advances under long term loans and advances and the cost of the tangible assets not ready for their
intended use before such date, are disclosed as capital work in progress.

Component Cost

All material/ significant components have been identified for our plant and have been accounted separately. The
useful life of such component are analysed independently and wherever components are having different useful
life other than plant they are part of, useful life of components are considered for calculation of depreciation.

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the
item if it is probable that the future economic benefits embodied within the part will flow to the Company and its
cost can be measured reliably. The costs of repairs and maintenance are recognised in the statement of profit
and loss as incurred.

Machinery spares/ insurance spares that can be issued only in connection with an item of fixed assets and their
issue is expected to be irregular are capitalised. Replacement of such spares is charged to revenue. Other
spares are charged as revenue expenditure as and when consumed.

Derecognition

Gains or losses arising from derecognition of property, plant and equipment are measured as the difference
between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement
of profit and loss when the asset is derecognized.

e) Depreciation on property, plant and equipment

Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life. The depreciable
amount for assets is the cost of an asset, or other amount substituted for cost, less 5% being its residual value.

Depreciation is provided on straight line method, over the useful lives specified in Schedule II to the Companies
Act, 2013 except for the following items, where useful life estimated on technical assessment, past trends and
differ from those provided in Schedule II of the Companies Act, 2013.

Depreciation for PPE on additions is calculated on pro-rata basis from the date of such additions. For deletion/
disposals, the depreciation is calculated on pro-rata basis up to the date on which such assets have been
discarded/ sold. Additions to fixed assets, costing 5000 each or less are fully depreciated retaining its residual

value.

The residual values, estimated useful lives and methods of depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted prospectively, if appropriate.

f) Intangible assetsIntangible assets acquired separately

Intangible assets acquired separately are measured on initial recognition at cost. The cost of a separately
acquired intangible asset comprises (a) its purchase price, including import duties and non-refundable purchase
taxes, after deducting trade discounts and rebates; and (b) any directly attributable cost of preparing the asset
for its intended use.

Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and
accumulated impairment losses.

Useful life and amortisation of intangible assets

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.

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

Intangible assets with indefinite useful life

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually. 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.

Subsequent cost and measurement

Subsequent costs are capitalised only when it increases the future economic benefits embodied in the specific
asset to which it relates. All other expenditures, including expenditure on internally-generated intangibles, are
recognised in the statement of profit and loss as incurred.

Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated
amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

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.

g) Investment property

Investment properties are properties held to earn rentals and/or for capital appreciation (including property
under construction for such purposes).

Investment properties are measured initially at cost, including transaction costs. Subsequent to initial

recognition, investment properties are measured in accordance with Ind AS 16 - Property, plant and equipment’s
requirements for cost model. The cost includes the cost of replacing parts and borrowing costs for long-term
construction projects if the recognition criteria are met. When significant parts of the investment property are
required to be replaced at intervals, the Company depreciates them separately based on their specific useful
lives. All other repair and maintenance costs are recognised in the statement of profit and loss as incurred.

Company depreciates investment property as per the useful life prescribed in Schedule II of the Companies Act,
2013, i.e 60 years [Estimated Useful Lives).

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

An investment property is derecognised upon disposal or when the investment property is permanently
withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising
on derecognition of the property (calculated as the difference between the net disposal proceeds and the
carrying amount of the asset) is included in the statement of profit and loss in the period in which the property is
derecognised.

h) Non Current Assets Held for Sale and Discontinued Operation

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continuing use. This condition is regarded as met
only when the asset (or disposal group) is available for immediate sale in its present condition subject only to
terms that are usual and customary for sales of such asset (or disposal group) and its sale is highly probable.
Management must be committed to the sale, which should be expected to qualify for recognition as a completed
sale within one year from the date of classification.

A Component of an entity that either has been disposed of or is classified as held for sale and represents
a separate major line of business or geographical area of operations, is part of a single co-ordinated plan
to dispose of sepreate major line of business or geographical area of operation or is a subsidary acquired
exclusively with a view to resale

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their carrying
amount and fair value less costs to sell.

i) Inventories

Inventories are carried at the lower of cost and net realisable value. Cost includes cost of purchase and other
costs incurred in bringing the inventories to their present location and condition. Costs are determined on
weighted average basis as follows :

i) Raw materials, packing materials and Store and Spare Parts : At purchase cost including other cost incurred
in bringing materials/consumables to their present location and condition.

ii) Work in progress: At material cost, conversion costs and appropriate share of production overheads

iii) Finished goods and waste : At material cost, conversion costs, appropriate share of production overheads.

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.

j) Financial Instruments

Financial assets and financial liabilities are recognised when an entity becomes a party to the contractual
provisions of the instruments.

Financial assetsInitial 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.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified on the basis of their contractual cash
flow characteristics and the entity’s business model of managing them.

Financial assets are classified into the following categories:

• Financial instruments (other than equity instruments) at amortised cost

• Financial Instruments (other than equity instruments) at Fair value through Other comprehensive income
(FVTOCI)

• Other Financial Instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)

• Equity instruments measured at fair value through other comprehensive income (FVTOCI)

Financial instruments other than equity instruments at amortised cost

The Company classifies a financial instruments (other than equity instruments) at amortised cost, if both the
following conditions are met:

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

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

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 instruments other than equity instruments at FVTOCI

The Company classifies financial instrument (other than equity instrument) at 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 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 profit and loss
statement. On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified
from the equity to profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest
income using the EIR method.

Financial instruments other than equity instruments at FVTPL

The Company classifies all other financial instruments, which do not meet the criteria for categorization as at
amortized cost or as FVTOCI, as at FVTPL.

Financial instruments included within the FVTPL category are measured at fair value with all changes recognized
in the 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 are classified as at FVTPL. Where the Company makes an irrevocable election of equity instruments
at FVTOCI, it recognises all subsequent changes in the fair value in other comprehensive income, without any
recycling of the amounts from OCI to profit and loss, even on sale of such investments.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized
in the profit and loss.

Financial assets are measured at FVTPL except for those financial assets whose contractual terms give rise to
cash flows on specified dates that represents solely payments of principal and interest thereon, are measured
as detailed below depending on the business model:

Derecognition

A financial asset is primarily derecognised 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.

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:

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

b) Financial assets that are debt instruments and are measured at FVTOCI

c) 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 115.

The Company follows ‘simplified approach’ for recognition of impairment loss allowance on:

• Trade receivables or contract revenue receivables; and

• All lease receivables resulting from transactions within the scope of Ind AS 116

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 Expected Credit Loss (ECL) 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 months 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 entity 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 months 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 and Cash flows from the sale of collateral held or other credit enhancements that are integral to the
contractual terms.

ECL allowance (or reversal) recognized during the period is recognized as income/ expense in the statement of
profit and loss, net of lien available on securities held against the receivables. This amount is reflected under the
head ‘exceptional items’ in the profit and loss. 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, which reduces the net carrying amount. Until the asset meets write-off
criteria, the Company does not reduce impairment allowance from the gross carrying amount.

• 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.

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is
no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does
not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to
the write-off. However, financial assets that are written off could still be subject to enforcement activities under
the Company’s recovery procedures, taking into account legal advice where appropriate. Any recoveries made
are recognised in profit or loss.

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.

For impairment purposes, significant financial assets are tested on individual basis at each reporting date. Other
financial assets are assessed collectively in groups that share similar credit risk characteristics. Accordingly, the
impairment testing is done retrospectively on the following basis:

Financial liabilitiesInitial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL and as at amortised cost.

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.

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

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

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

Financial liabilities at FVTPL

Financial liabilities at FVTPL 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.

For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are
recognized in OCI. These gains/ loss are not subsequently transferred to 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.

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 derecognised as
well as through the EIR amortisation process.

Derecognition of financial liabilities

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

Reclassification of financial assets

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.

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.

k) Foreign currency transactions and translations
Transactions and balances

Transactions in currencies other than the entity’s functional currency (foreign currencies) are recognised at the
rates of exchange prevailing at the dates of the transactions. However, for practical reasons, the Company uses
an average rate, if the average approximates the actual rate at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot
rates of exchange at the reporting date. Exchange differences arising on settlement or translation of monetary
items are recognised in profit or 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 profit or loss are also recognised in OCI or profit or loss, respectively).

l) Borrowing Costs

Borrowing cost include interest computed using Effective Interest Rate method, amortisation of ancillary costs
incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as
an adjustment to the interest cost.

Borrowing costs that are directly attributable to the acquisition, construction, production of a qualifying asset are
capitalised as part of the cost of that asset which takes substantial period of time to get ready for its intended
use. The Company determines the amount of borrowing cost eligible for capitalisation by applying capitalisation
rate to the expenditure incurred on such cost. The capitalisation rate is determined based on the weighted
average rate of borrowing cost applicable to the borrowings of the Company which are outstanding during
the period, other than borrowings made specifically towards purchase of the qualifying asset. The amount of

borrowing cost that the Company capitalises during the period does not exceed the amount of borrowing cost
incurred during that period. All other borrowings costs are expensed in the period in which they occur.

Interest income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are
recognised in the statement of profit and loss in the period in which they are incurred.

m) TaxesCurrent income tax

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 in the countries where the Company operates and generates
taxable income.

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.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in
the form of adjustment to future tax liability, is recognised as an asset viz. MAT Credit Entitlement, to the extent
there is convincing evidence that the Company will pay normal Income tax and it is highly probable that future
economic benefits associated with it will flow to the Company during the specified period. The Company reviews
the “MAT Credit Entitlement” at each Balance Sheet date and writes down the carrying amount of the same
to the extent there is no longer convincing evidence to the effect that the Company will pay normal Income tax
during the specified period.

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.

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.

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 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 the deferred taxes relate to the same taxable entity and the same
taxation authority.

n) Retirement and other employee benefits
Short-term employee benefits

A liability is recognised for short-term employee benefit in the period the related service is rendered at the
undiscounted amount of the benefits expected to be paid in exchange for that service.

Defined contribution plans

Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no
obligation, other than the contribution payable to the provident fund. The Company recognizes contribution
payable to the provident fund scheme as an expense, when an employee renders the related service. If the
contribution payable to the scheme for service received before the balance sheet date exceeds the contribution
already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already
paid. If the contribution already paid exceeds the contribution due for services received before the balance
sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a
reduction in future payment or a cash refund.

Defined benefit plans

The Company operates a defined benefit gratuity plan in India, which requires contributions to be made to a
separately administered fund. The cost of providing benefits under the defined benefit plan is determined using
the projected unit credit method.

Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts
included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts
included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet
with a corresponding debit or credit to retained earnings through OCI in the period in which they occur.
Remeasurements are not reclassified to profit or loss in subsequent periods.

Compensated absences

The Company has a policy on compensated absences which are non-accumulating in nature. Expense on non¬
accumulating compensated absences is recognized in the period in which the absences occur.

Other long term employee benefits

Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the
estimated future cash outflows expected to be made by the Company in respect of services provided by the
employees up to the reporting date.

o) 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

The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116.

Identification of a lease requires significant judgment. The Company uses significant judgement in assessing
the lease term and the applicable discount rate.

Company as a lessor

Lease income from operating leases where the company is a lessor is recognised in income on a straightline
basis over the lease term unless the receipts are structured to increase in line with expected general inflation to
compensate for the expected inflationary cost increases.

p) Impairment of non financial assets

The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired.
If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the
asset’s recoverable amount. An asset’s recoverable amount is the higher of an 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 groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset
is considered impaired and is written down to its recoverable amount.