2 MATERIAL ACCOUNTING POLICIES

This note provides a list of the material accounting
policies adopted in the preparation of these Indian
Accounting Standards (Ind-AS) financial statements.
These policies have been consistently applied to all the
years except where newly issued accounting standard is
initially adopted.

2.01 Statement of compliance and basis of
preparation of Standalone Financial
Statements

The standalone financial statements of the
Company have been prepared in accordance
with Indian Accounting Standards (Ind AS)
notified under the Companies (Indian Accounting
Standards) Rules, 2015 (as amended from time to
time) and presentation requirements of Division II
of schedule III to the Companies Act, 2013 (Ind

AS compliant schedule III) as applicable to these
standalone financial statements.

These standalone financial statements are
presented in ' and all values are rounded to
the nearest crores (' 0,000,000), except when
otherwise indicated.

The Company has prepared the standalone
financial statements on the basis that it will
continue to operate as going concern. These
policies have been consistently applied to all the
years presented, unless otherwise stated.

The standalone financial statements have been
prepared on a historical cost basis, except for the
following assets and liabilities

(i) Certain financial assets measured at fair value
and amortised cost and financial liabilities
that is measured at fair value and amortised
cost (refer accounting policy on financial
instrument)

(ii) Assets held for sale-measured at fair value
less cost to sell

(iii) Defined benefit obligations and plan assets
measured at fair value

(iv) Share based payments measured at grant
date fair value

(v) Derivative financial instruments

2.02 Current versus non-current classification

The Company segregates assets and liabilities into
current and non-current categories for presentation
in the balance sheet after considering its normal
operating cycle and other criteria set out in Ind AS
1 'Presentation of Financial Statements'. For this
purpose, current assets and liabilities include the
current portion of non-current assets and liabilities
respectively. Deferred tax assets and liabilities are
always classified as non-current.

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.

2.03 Property, plant and equipment

Freehold land is carried at historical cost. All other
items of property, plant and equipment except
capital work in progress are stated at cost, less
accumulated depreciation and accumulated

impairment losses, if any. Capital work in progress
is stated at cost, net of accumulated impairment
loss, if any. The cost comprises of purchase price,
taxes, duties, freight and other incidental expenses
directly attributable and related to acquisition and
installation of the concerned assets and are further
adjusted by the amount of input tax credit availed
wherever applicable.

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. Likewise, when a major
inspection is performed, its cost is recognised in
the carrying amount of the plant and equipment
as a replacement if the recognition criteria are
satisfied. All other repair and maintenance costs
are recognised in the standalone statement of
profit and loss as incurred. 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. The cost of a self-constructed
item of property, plant and equipment comprises
the cost of materials and direct labour, 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 derecognised
upon disposal or when no future economic
benefits are expected from its use or disposal.
Any gain or loss arising on derecognition of the
asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the
asset) is included in the standalone statement of
profit and loss when the asset is derecognised.

Capital work- in- progress includes cost of
property, plant and equipment under installation
/ under development as at the balance sheet date.

The residual values, useful lives and methods of
depreciation of property, plant and equipment
except freehold land are reviewed at each financial
year end and adjusted prospectively, if appropriate.
Changes in the expected useful life or the expected
pattern of consumption of future economic
benefits embodied in the asset is accounted for
by changing the amortisation period or method,
as appropriate, and are treated as changes in
accounting estimates.

Depreciation on property, plant and equipment
is calculated on prorata basis on straight-line
method/written down method as applicable,
using the useful lives as technically assessed by the
management which is as below:

The Company, based on technical assessment,
depreciates certain assets mentioned above over
estimated useful lives which are different from
the useful life prescribed in Schedule II to the
Companies Act, 2013. The management believes
that these estimated useful lives are realistic and
reflect fair approximation of the period over which
the assets are likely to be used.

Lease hold improvements are depreciated on
straight line basis over shorter of the asset's useful
life and their lease term. Leasehold land is amortised
on a straight line basis over the unexpired period
of their respective lease period.

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.

2.04 Investment properties

Investment properties are measured initially at
cost, including transaction costs. Subsequent
to initial recognition, investment properties are
stated at cost less accumulated depreciation and
accumulated impairment loss, if any. 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. The Company depreciates building on a
straight line basis over a period of 30 years from
the date of purchase.

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

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

Transfers are made to (or from) investment
properties only when there is a change in use.
Transfer 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 purpose.

2.05 Intangible assets

Intangible assets acquired separately are measured
on initial recognition at cost. Cost of intangible
assets acquired in business combination is their fair
value at the date of acquisition. Following initial
recognition, intangible assets are carried at cost
less accumulated amortisation and accumulated
impairment losses, if any. Internally generated
intangibles, excluding capitalised development
cost, are not capitalised and the related expenditure
is reflected in the standalone statement of Profit
and Loss in the period in which the expenditure is
incurred. Cost comprises the purchase price and
any attributable cost of bringing the asset to its
working condition for its intended use.

The useful lives of intangible assets are assessed
as either finite or indefinite. Intangible assets with
finite lives are amortised over their useful economic
lives 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 is 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
is accounted for by changing the amortisation
period or method, as appropriate, and are treated as
changes in accounting estimates. The amortisation
expense on intangible assets with finite lives 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.

An intangible asset is derecognised upon disposal
(i.e., at the date the recipient obtains control) or
when no future economic benefits are expected
from its use or disposal. Gains or losses arising
from derecognition of the intangible assets 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 assets are
disposed off.

Intangible assets are amortised on a straight line
basis over their estimated useful life as under:

Research and development cost

Research costs are expensed as incurred.
Development expenditure incurred on an individual
project is recognised as an intangible asset when
the Company can demonstrate all the following:

i) The technical feasibility of completing the
intangible asset so that it will be available for
use or sale;

ii) Its intention to use or sale the asset;

iii) Its ability to use or sale the asset;

iv) How the asset will generate future economic
benefits;

v) The availability of adequate resources to
complete the development and to use or sale
the asset; and

vi) The ability to measure reliably the expenditure
attributable to the intangible asset during
development.

Following the initial recognition of the
development expenditure as an asset, the cost
model is applied requiring the asset to be carried
at cost less any accumulated amortisation and
accumulated impairment losses. Amortisation of
the asset begins when development is complete
and the asset is available for use. It is amortised
on straight line basis over the estimated useful
life. Amortisation expense is recognised in the
Standalone Statement of Profit and Loss unless
such expenditure forms part of carrying value of
another asset. During the period of development,
the asset is tested for impairment annually.

Trademarks

Trademarks acquired in business combination
are initially recognised at fair value at the date
of acquisition. Following initial recognition,
trademark are carried at the above recognised value
less accumulated amortisation and accumulated
impairment losses, if any.

Customer relationship

Customer relationship acquired in business
combination are initially recognised at fair value
at the date of acquisition. Following initial
recognition, customer relationship is carried at
the above recognised value less accumulated
amortisation and accumulated impairment losses,
if any.

2.06 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. The
recoverable amount is determined for an individual
asset, unless the asset does not generate cash
inflows that are largely independent of those from
other assets or 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.

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.

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 forecast period.
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 or countries in
which the Company operates, or for the market in
which the asset is used.

Impairment losses of continuing operations 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 other
comprehensive income (OCI) up to the amount of
any previous revaluation surplus.

For assets excluding goodwill and intangible assets
having indefinite life, 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
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 as at
March 31 or when circumstances indicate that
the carrying value may be impaired. Impairment
is determined for goodwill by assessing the
recoverable amount of each CGU (or group of
CGUs) to which the goodwill relates. When the
recoverable amount of the CGU is less than its
carrying amount, an impairment loss is recognised.
Impairment losses relating to goodwill cannot be
reversed in future periods.

2.07 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.

(i) Financial assets:

Initial recognition and measurement

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

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

a significant financing component are
measured at the transaction price determined
under Ind AS 115. Refer to the accounting
policies in section "Revenue from contracts
with customers".

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

The Company's business model for managing
financial assets refers to how it manages
its financial assets in order to generate
cash flows. The business model determines
whether cash flows will result from collecting
contractual cash flows, selling the financial
assets, or both.

Financial assets classified and measured at
amortised cost are held within a business
model with the objective to hold financial
assets in order to collect contractual cash
flows while financial assets classified and
measured at fair value through OCI are held
within a business model with the objective of
both holding to collect contractual cash flows
and selling.

Subsequent measurement

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

- Financial assets at amortised cost (debt
instruments)

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

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

- Financial assets at fair value through
profit or loss

Financial assets at amortised cost (debt
instruments)

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

a) Business model test : The objective
is to hold the financial asset to collect
the contractual cash flows (rather
than to sell the instrument prior to its
contractual maturity to realise its fair
value changes) and;

b) Cash flow characteristics test: The

contractual terms of the financial asset
give rise on specific dates to cash flows
that are solely payments of principal
and interest on principal amount
outstanding.

This category is 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 EIR. EIR is the rate that
exactly discounts the estimated future cash
receipts over the expected life of the financial
instrument or a shorter period, where
appropriate, to the gross carrying amount
of the financial asset. When calculating the
effective interest rate, the Company estimates
the expected cash flows by considering all the
contractual terms of the financial instrument
but does not consider the expected credit
losses. The EIR amortisation is included in
other income in the statement of profit and
loss. The losses arising from impairment are
recognised in the statement of profit and
loss. This category generally applies to trade
and other receivables.

Financial assets at fair value through
OCI (FVTOCI)

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

a) Business Model Test : The objective of
financial instrument is achieved by both
collecting contractual cash flows and
selling the financial assets; and

b) Cash flow characteristics test:

The contractual terms of the Debt

instrument give rise on specific dates
to cash flows that are solely payments
of principal and interest on principal
amount outstanding.

Debt instrument included within the FVTOCI
category are measured initially as well as at
each reporting date at fair value. Fair value
movements are recognised in the other
comprehensive income (OCI), except for the
recognition of interest income, impairment
gains or losses and foreign exchange gains
or losses which are recognised in statement
of profit and loss and computed in the same
manner as for financial assets measured at
amortised cost. The remaining fair value
changes are recognised in OCI. Upon
derecognition, the cumulative fair value
changes recognised in OCI is reclassified from
the equity to the statement of profit and loss.

The Company's debt instruments at fair value
through OCI includes investments in quoted
debt instruments included under other non¬
current financial assets.

Financial assets at fair value through
profit or loss (FVTPL)

Financial assets in this category are those
that are held for trading and have been
either designated by management upon
initial recognition or are mandatorily required
to be measured at fair value under Ind AS
109 i.e. they do not meet the criteria for
classification as measured at amortised cost
or FVOCI. Management only designates an
instrument at FVTPL upon initial recognition,
if the designation eliminates, or significantly
reduces, the inconsistent treatment that
would otherwise arise from measuring the
assets or liabilities or recognising gains or
losses on them on a different basis. Such
designation is determined on an instrument-
by-instrument basis. For the Group, this
category includes derivative instruments and
listed equity investments which the Group
had not irrevocably elected to classify at
fair value through OCI. The Group has not
designated any financial assets at FVTPL.
Financial assets at fair value through profit
or loss are carried in the balance sheet at
fair value with net changes in fair value
recognised in the statement of profit and loss.

Interest earned on instruments designated
at FVTPL is accrued in interest income, using
the EIR, taking into account any discount/
premium and qualifying transaction costs
being an integral part of instrument. Interest
earned on assets mandatorily required to
be measured at FVTPL is recorded using the
contractual interest rate. Dividend income
on listed equity investments are recognised
in the statement of profit and loss as other
income when the right of payment has been
established.

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

Upon initial recognition, the Company
can elect to classify irrevocably its equity
investments as equity instruments designated
at fair value through OCI when they meet the
definition of equity under Ind AS 32 Financial
Instruments: Presentation and are not held
for trading. The classification is determined
on an instrument-by-instrument basis. Equity
instruments which are held for trading and
contingent consideration recognised by an
acquirer in a business combination to which
Ind AS 103 applies are classified as at FVTPL.

Gains and losses on these financial assets are
never recycled to the statement of profit and
loss. Dividends are recognised as other income
in the statement of profit and loss when
the right of payment has been established,
except when the Company benefits from
such proceeds as a recovery of part of the
cost of the financial asset, in which case, such
gains are recorded in OCI. Equity instruments
designated at fair value through OCI are not
subject to impairment assessment.

Derecognition

A financial asset (or,where applicable, a part
of a financial asset or part of a Company
of similar financial assets) is primarily
derecognised (i.e. removed from the
Company's statement of financial position)
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 ECL model for measurement and
recognition of impairment loss on the
following financial asset and credit risk
exposure

- Financial assets measured at amortised
cost;

- Financial assets measured at fair
value through other comprehensive
income(FVTOCI);

- 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 recognised allowance for
expected credit loss (ECL) for all debt
instrument not held at fair value through
profit and loss account. ECL are based on the
difference between the contractual cash flows
due in accordance with the contract and all
the cash flows that the Company expects
to receive, discounted at an approximation
of the original effective interest rate. The
expected cash flows will include cash flows
from the sale of collateral held or other
credit enhancements that are integral to the
contractual terms.

ECLs are recognised in two stages. For
recognition of impairment loss on financial
assets other than mentioned below 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.
For those credit exposures for which there
has been a significant increase in credit risk
since initial recognition, a loss allowance is
required for credit losses expected over the
remaining life of the exposure, irrespective of
the timing of the default (a lifetime ECL).

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

ECL impairment loss allowance (or reversal)
recognised during the period is recognised
as income/ expense in the statement of profit
and loss. The balance sheet presentation for
various financial instruments is described
below:

(a) 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.

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

(c) Debt instruments measured at

FVTOCI: For debt instruments at fair
value through OCI, the Company
applies the low credit risk simplification.
At every reporting date, the Company
evaluates whether the debt instrument
is considered to have low credit risk
using all reasonable and supportable
information that is available without
undue cost or effort. In making that
evaluation, the Company reassesses
the internal credit rating of the debt
instrument. In addition, the Company
considers that there has been a
significant increase in credit risk when
contractual payments are more than 30
days past due.

(ii) Financial liabilities:

Initial recognition and measurement

Financial liabilities are classified at initial
recognition as financial liabilities at fair
value through profit or loss, loans and
borrowings, or as derivatives designated as
hedging instruments in an effective hedge, as
appropriate payables. 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
loans and borrowings, trade payables, trade
deposits, retention money, liabilities towards
services, sales incentive and other payables.

Subsequent measurement

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

(i) Financial liabilities at fair value through
profit or loss

(ii) Financial liabilities at amortised cost
(loans and borrowings)

Financial liabilities at fair value through
profit or loss

Financial liabilities at fair value through profit
or loss include financial liabilities held for

trading and financial liabilities designated
upon initial recognition as at fair value
through profit or loss. Financial liabilities
are classified as held for trading if they are
incurred for the purpose of repurchasing in
the near term. This category also includes
derivative financial instruments entered into
by the Company that are not designated as
hedging instruments in hedge relationship
as defined by Ind AS 109. The separated
embedded derivate 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 statement of profit and
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 risk are recognised in
OCI. These gains/ loss are not subsequently
transferred to the 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 and
loss. the Company has not designated any
financial liability as at fair value through profit
and loss.

Financial liabilities at amortised cost
(Loans and borrowings)

After initial recognition, interest-bearing
borrowings are subsequently measured at
amortised cost using the Effective interest
rate method. Gains and losses are recognised
in the statement of profit and loss when the
liabilities are derecognised as well as through
the Effective interest rate 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 Effective interest rate. The
Effective interest rate amortisation is included
as finance costs in the statement of profit and
loss.

Trade payables

These amounts represents liabilities for
goods and services provided to the Company
prior to the end of financial year which are
unpaid. The amounts are unsecured and
are usually payable basis varying trade term.
Trade and other payables are presented as
current liabilities unless payment is not due
within 12 months after the reporting period.
They are recognised initially at fair value and
subsequently measured at amortised cost
using Effective interest rate method.

Financial Guarantee Contracts

Financial guarantee contracts are those
contracts that require a payment to be made
to reimburse the holder for a loss it incurs
because the specified party fails to make
a payment when due in accordance with
the terms of a debt instrument. Financial
guarantee contracts are recognised as a
financial liability at the time the guarantee is
issued 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 expected loss allowance
determined as per impairment requirements
of Ind AS 109 and the amount recognised
less cumulative amortisation.

Derecognition

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

Offsetting of financial instruments

Financials 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.

2.08 Derivative financial instruments

Initial recognition and subsequent
measurement

The Company uses forward currency contracts to
hedge its foreign currency risks. These financial
instruments are initially recognised at fair value on
the date on which a contract is entered into and
are subsequently re-measured at fair value. These
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
statement of profit and loss. These contracts are
not designated in hedge relationships and are
measured at fair value through profit and loss.

2.09 Investment in Subsidiaries, associates and
joint venture

A subsidiary is an entity that is controlled by
another entity.

An associate is an entity over which the Company
has significant influence. Significant influence
is the power to participate in the financial and
operating policy decisions of the investee but is not
control or joint control over those policies.

A joint venture is a type of joint arrangement
whereby the parties that have joint control of the
arrangement have rights to the net assets of the
joint venture. Joint control is the contractually
agreed sharing of control of an arrangement,
which exists only when decisions about the relevant
activities require unanimous consent of the parties
sharing control.

The Company's investments in its subsidiaries,
associates and joint ventures are accounted at cost
less impairment.

Impairment of investment

The Company reviews its carrying value of
investments carried at cost annually, or more
frequently when there is indication for impairment.
If the recoverable amount is less than its carrying
amount, the impairment loss is recorded in the
Statement of Profit and Loss.

When an impairment loss subsequently reverses,
the carrying amount of the Investment is increased

to the revised estimate of its recoverable amount,
so that the increased carrying amount does not
exceed the cost of the Investment. A reversal of
an impairment loss is recognised immediately in
Statement of profit and loss.

Investments are accounted in accordance with IND
AS 105 when they are classified as held for sale.
On disposal of investment, the difference between
its carrying amount and net disposal proceeds is
charged or credited to the statement of profit and
loss.

2.10 Inventories

a) Basis of valuation:

i) Inventories other than scrap materials
are valued at lower of cost and net
realisable value after providing cost of
obsolescence, if any. The comparison of
cost and net realisable value is made on
an item-by-item basis.

b) Method of Valuation:

Costs incurred in bringing each product to its

present location and condition are accounted

for as follows:

i) Cost of raw materials, stores and spares
and loose tools has been determined
by using moving weighted average
cost method and comprises all costs
of purchase, duties, taxes (other than
those subsequently recoverable from tax
authorities) and all other costs incurred
in bringing the inventories to their
present location and condition.

ii) Cost of finished goods and work-in¬
progress includes direct labour and an
appropriate share of fixed and variable
production overheads. Fixed production
overheads are allocated on the basis of
normal capacity of production facilities.
Cost is determined on moving weighted
average basis

iii) Cost of traded goods has been
determined by using moving weighted
average cost method and comprises all
costs of purchase, duties, taxes (other
than those subsequently recoverable
from tax authorities) and all other costs
incurred in bringing the inventories to
their present location and condition.

iv) Net realisable 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. The net
realisable value of work-in-progress is
determined with reference to the selling
prices of related finished products. Raw
materials and other supplies held for use
in the production of finished products
are not written down below cost except
in cases where material prices have
declined and it is estimated that the cost
of the finished products will exceed their
net realisable value.

v) Appropriate adjustments are made to
the carrying value of damaged, slow
moving and obsolete inventories based
on management's current best estimate.

2.11 Income taxes

The income tax expense or credit for the period
is the tax payable on the current period's taxable
income based on the applicable income tax rate
adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences
and to unused tax losses. Tax expense for the year
comprises of current tax and deferred tax.

a) Current income tax

Current income tax assets and liabilities are
measured at the amount expected to be paid
to or recovered from the taxation authorities
in accordance with the Income Tax Act, 1961
and the Income Computation and Disclosure
Standards (ICDS) enacted in India by using tax
rates and the tax laws that are enacted at the
reporting date.

The current income tax charge is calculated
on the basis of the tax laws enacted or
substantively enacted at the end of the
reporting period in the countries where the
Company or its branches operate and generate
taxable income. Management periodically
evaluates positions taken in tax returns with
respect to situations in which applicable
tax regulation is subject to interpretation
and considers whether it is probable that a
taxation authority will accept an uncertain
tax treatment. The Company measures its
tax balances either based on the most likely
amount or the expected value, depending on

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the resolution of the uncertainty.

Current income tax relating to item
recognised outside the statement of profit
and loss is recognised outside profit or loss
(either in other comprehensive income or
equity).Current tax items are recognised in
correlation to the underlying transactions
either in OCI or directly in equity.

b) Deferred Tax

Deferred tax is provided in full using the
balance sheet approach on temporary
differences arising between the tax bases
of assets and liabilities and their carrying
amounts for financial reporting purposes at
the reporting date.

Deferred tax liabilities are recognised for all
taxable temporary differences, except:

i) When the deferred tax liability arises
from the initial recognition of goodwill
or an asset or liability in a transaction
that is not a business combination and,
at the time of the transaction, affects
neither the accounting profit nor taxable
profit or loss and does not give rise to
equal taxable and deductible temporary
differences

ii) In respect of taxable temporary
differences associated with investments
in subsidiaries, associates and interests
in joint ventures, when the timing of the
reversal of the temporary differences can
be controlled and it is probable that the
temporary differences will not reverse in
the foreseeable future.

Deferred tax assets are recognised for all
deductible temporary differences, the carry
forward of unused tax credits and any unused
tax losses. Deferred tax assets are recognised
to the extent that it is probable that taxable
profit will be available against which the
deductible temporary differences, and the
carry forward of unused tax credits and
unused tax losses can be utilised, except:

i) When the deferred tax asset relating
to the deductible temporary difference
arises from the initial recognition of an
asset or liability in a transaction that is
not a business combination and, at the

time of the transaction, affects neither
the accounting profit nor taxable profit
or loss and does not give rise to equal
taxable and deductible temporary
differences.

ii) In respect of deductible temporary
differences associated with investments
in subsidiaries, associates and interests
in joint ventures, deferred tax assets are
recognised only to the extent that it is
probable that the temporary differences
will reverse in the foreseeable future and
taxable profit will be available against
which the temporary differences can be
utilised.

The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced
to the extent that it is no longer probable
that sufficient taxable profit will be available
to allow all or part of the deferred tax asset to
be utilised. Unrecognised deferred tax assets
are re-assessed at each reporting date and are
recognised to the extent that it has become
probable that future taxable profits will allow
the deferred tax asset to be recovered.

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

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

Tax benefits acquired as part of a business
combination, but not satisfying the criteria
for separate recognition at that date, are
recognised subsequently if new information
about facts and circumstances change.
Acquired deferred tax benefits recognised
within the measurement period reduce
goodwill related to that acquisition if they
result from new information obtained about
facts and circumstances existing at the
acquisition date. If the carrying amount of
goodwill is zero, any remaining deferred tax

benefits are recognised in OCI/ capital reserve
depending on the principle explained for
bargain purchase gains. All other acquired
tax benefits realised are recognised in the
statement of profit and loss.

The Company offsets deferred tax assets and
deferred tax liabilities if and only if it has a
legally enforceable right to set off current
tax assets and current tax liabilities and the
deferred tax assets and deferred tax liabilities
relate to income taxes levied by the same
taxation authority on either the same taxable
entity which intends either to settle current
tax liabilities and assets on a net basis, or
to realise the assets and settle the liabilities
simultaneously, in each future period in
which significant amounts of deferred tax
liabilities or assets are expected to be settled
or recovered.

2.12 Revenue from contract with customers

The Company manufactures and trades variety
of auto components products. Revenue from
contracts with customers is recognised when
control of the goods or services are transferred
to the customer at an amount that reflects the
consideration to which the Company expects to be
entitled in exchange for those goods or services.
The Company has generally concluded that it is
the principal in its revenue arrangements, because
it typically controls the goods or services before
transferring them to the customer. A receivable
is recognised when the control of the product is
transferred as the consideration is unconditional
and payment becomes due upon passage of time
as per the terms of contract with customers. The
Company collects GST on behalf of the government
and, therefore, it is not an economic benefit
flowing to the Company, hence it is excluded from
revenue.

Revenue from sales of products

Revenue from sale of products is recognised
at the point in time when control of the goods
is transferred to the customer, generally on
delivery of the goods and there are no unfulfilled
obligations. The Company considers, whether
there are other promises in the contract in which
their are separate performance obligations, to
which a portion of the transaction price needs to
be allocated. In determining the transaction price
for the sale of product, the Company considers

the effects of variable consideration, the existence
of significant financing components, non-cash
consideration, and consideration payable to the
customer, if any.

Variable consideration

If the consideration in a contract includes a
variable amount, the Company estimates the
amount of consideration to which it will be
entitled in exchange for transferring the goods
to the customer. The variable consideration is
estimated at contract inception and constrained
until it is highly probable that a significant revenue
reversal in the amount of cumulative revenue
recognised will not occur when the associated
uncertainty with the variable consideration is
subsequently resolved. Some contracts for the
sale of product provide customers with a right
of return the goods within a specified period.
The Company also provides retrospective volume
rebates to certain customers once the quantity
of product purchased during the period exceeds
the threshold specified in the contract. Various
rebates give rise to variable consideration.

Volume rebate

The Company applies the expected value method
to estimate the variable consideration in the
contract. The selected method that best predicts
the amount of variable consideration is primarily
driven by the number of volume thresholds as per
terms agreed with customers. The expected value
method is used for those with more than one
volume threshold. The Company then applies the
requirements on constraining estimates in order
to determine the amount of variable consideration
that can be included in the transaction price
and recognised as revenue. The disclosures of
significant estimates and assumptions relating
to the estimation of variable consideration are
provided under section "significant judgement
and estimates".

Warranty obligations

The Company generally provides for warranties
for general repair of defects that existed at the
time of sale. These warranties are assurance-type
warranties under Ind AS 115, which are accounted
for under Ind AS 37 (Provisions, Contingent
Liabilities and Contingent Assets).

Significant Financing Components

In respect of short-term advances from its
customers, using the practical expedient in Ind AS

115, the Company is not required to adjust the
promised amount of consideration for the effects
of a significant financing component because
it expects, at contract inception, that the period
between the transfer of the promised good or
service to the customer and when the customer
pays for that good or service will be within normal
operating cycle.

Sale of service

The Company recognises revenue from sales of
services over period of time, because the customer
simultaneously receives and consumes the benefits
provided by the Company. Revenue from services
related activities is recognised as and when services
are rendered and on the basis of contractual terms
with the parties

Contract balances

- Contract assets

Contract assets is right to consideration in
exchange for goods or services transferred to the
customer and performance obligation satisfied. If
the Company performs by transferring goods or
services to a customer before the customer pays
consideration or before payment is due, a contract
asset is recognised for the earned consideration that
is conditional. Upon completion of the attached
condition and acceptance by the customer, the
amounts recognised as contract assets is reclassified
to trade receivables upon invoicing. A receivables
represents the Company's right to an amount
of consideration that is unconditional. Contract
assets are subject to impairment assessment. Refer
to accounting policies on impairment of financial
assets in section (Financial instruments - initial
recognition and subsequent measurement).

- Contract liabilities

A contract liability is the obligation to transfer
goods or services to a customer for which the
Company has received consideration (or an
amount of consideration is due) from the customer
or has raised the invoice in advance. If a customer
pays consideration before the Company transfers
goods or services to the customer, a contract
liability is recognised when the payment is made
or the payment is due (whichever is earlier).
Contract liabilities are recognised as revenue when
the Company performs under the contract (i.e.,
transfers control of the related goods or services to
the customer).

Trade receivables

A trade receivable is recognised if 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 (Financial
instruments - initial recognition and subsequent
measurement).

2.13 Other Operating Revenues
Export incentives

Revenue from export benefits arising from Duty
entitlement pass book (DEPB scheme), duty
drawback scheme, remission of duties and taxes
on exported product scheme and export incentive
capital goods scheme are recognised on export
of goods in accordance with their respective
underlying scheme at fair value of consideration
received or receivable.

Government grants

Grants from the government are recognised
at their fair value where there is a reasonable
assurance that the grant will be received and the
Company will comply with all attached conditions.
When the grant relates to an expense item, it is
recognised as income on a systematic basis over
the period that the related costs for which it is
intended to compensate are expensed. When the
grant related the assets, the Company presents
the grant in the balance sheet as deferred income,
which is recognised in the statement of profit and
loss on a systematic and rational basis.

Royalty income

Royalty income is recognised in other operating
income on an accrual basis in accordance with the
substance of the relevant agreements

2.14 Other Income
Interest Income

For all debt instruments measured at amortised
cost, 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. Interest income is included
in other income in the statement of profit and loss.

Dividend income

Dividend income is recognised when the right to
receive payment is established, which is generally
when shareholders approve the dividend.

Share of profit from partnerships firms

Share of profit from partnership firms are
recognised on accrual basis.

2.15 Retirement and other employee benefits
Short-term obligations

Liabilities for wages and salaries, including non
monetary benefits that are expected to be settled
wholly within twelve months after the end of the
period in which the employees render the related
service are recognised in respect of employee
service upto the end of the reporting period and
are measured at the amount expected to be paid
at undiscounted value when the liabilities are
settled. The liabilities are presented as current
employee benefit obligations in the standalone
balance sheet.

Defined benefit plan - Gratuity

The Employee's Gratuity Fund Scheme, which is
defined benefit plan, is managed by Trust with
its investments maintained with Life insurance
Corporation of India. The liabilities with respect
to Gratuity Plan are determined by actuarial
valuation on projected unit credit method on
the balance sheet date, based upon which the
Company contributes to the Gratuity Scheme. The
difference, if any, between the actuarial valuation
of the gratuity of employees at the year end and
the balance of funds is provided for as assets/
(liability) in the books. Net interest is calculated
by applying the discount rate to the net defined
benefit liability or asset. The Company recognises
the following changes in the net defined benefit
obligation under Employee benefit expense in
statement of profit or loss:

a) Service costs comprising current service
costs, past-service costs, gains and losses on
curtailments and non-routine settlements

b) Net interest expense or income

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
other comprehensive income in the period in
which they occur. Remeasurements are not
reclassified to profit or loss in subsequent
periods.

Defined contribution plan - Provident fund,
Employee state insurance, Labour welfare
and Superannuation fund

Retirement benefit in the form of provident fund,
employee state insurance, Labour welfare and
Superannuation fund is a defined contribution
scheme. the Company has no obligation, other
than the contribution payable to these funds.
The Company recognises contribution payable
through provident fund scheme as an expense,
when an employee renders the related services.
If the contribution payable to scheme for service
received before the balance sheet date exceeds the
contribution already paid, the deficit payable to
the scheme is recognised as 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 excesses recognised as an asset to the extent
that the prepayment will lead to, for example, a
reduction in future payment.

Other employee benefit - Compensated
absence

Liability in respect of compensated absences
becoming due or expected to be availed after the
balance sheet date is estimated on the basis of an
actuarial valuation performed by an independent
actuary using the projected unit credit method.
Actuarial gains and losses arising from past
experience and changes in actuarial assumptions
are charged to statement of profit and loss in the
year in which such gains or losses are determined.
The Company presents the entire leave as a current
liability in the balance sheet, since it does not have
an unconditional right to defer its settlement for
12 months after the reporting date.

Share based payments

Some eligible employees of the Company
receive remuneration in the form of share-based

payments, whereby employees render services as
consideration for equity instruments. The cost of
equity-settled transactions is determined by the
fair value at the date when the grant is made using
an Monte Carlo Simulation valuation model. That
cost is recognised, together with a corresponding
increase in employee stock option reserves in
equity, over the period in which the performance
and/or service conditions are fulfilled in employee
benefits expense in the statement of profit and loss
account. The cumulative expense recognised for
equity-settled transactions at each reporting date
until the vesting date reflects the extent to which
the vesting period has expired and the Company's
best estimate of the number of equity instruments
that will ultimately vest. The expense or credit in the
statement of profit and loss for a period represents
the movement in cumulative expense recognised
as at the beginning and end of that period and is
recognised in employee benefits expense.

When the terms of an equity-settled award are
modified, the minimum expense recognised is the
grant date fair value of the unmodified award,
provided the original vesting terms of the award
are met. An additional expense, measured as at
the date of modification, is recognised for any
modification that increases the total fair value of the
share-based payment transaction, or is otherwise
beneficial to the employee. Where an award is
cancelled by the entity or by the counterparty, any
remaining element of the fair value of the award is
expensed immediately through profit or loss. The
dilutive effect of outstanding options is reflected
as additional share dilution in the computation
of diluted earnings per share. Further details are
given in notes to account.

2.16 Leases

The Company assesses at contract inception
whether a contract is, or contains, a lease. That
is, if the contract conveys the right to control the
use of an identified asset for a period of time in
exchange for consideration.

Company as a lessee

The Company applies a single recognition and
measurement approach for all leases, except
for short-term leases and leases of low-value
assets. The Company recognises lease liabilities
to make lease payments and right-of-use assets
representing the right to use the underlying assets.
For these short-term and low value leases, the

Company recognises the lease payments as an

operating expense on a straight-line basis over the

term of the lease.

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 depreciation
and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost
of right-of-use assets includes the amount of
lease liabilities recognised, initial direct costs
incurred, and lease payments made at or
before the commencement date less any lease
incentives received. Right-of-use assets are
depreciated on a straight-line basis over the
shorter of the lease term and the estimated
useful lives of the underlying 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 to the accounting policies in section
'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 remeasured if there is a
modification, a change in the lease term, a
change in the lease payments (e.g., changes
to future payments resulting from a change in
an index or rate used to determine such lease
payments) or a change in the assessment of
an option to purchase the underlying asset.

Lease payments are allocated between
principal and finance cost. The finance cost
is charged to the statement of profit and
loss over the lease period so as to produce
a constant periodic rate of interest on the
remaining balance of the liability for each
period. The Companies' lease liabilities are
included in other current and non-current
financial liabilities.

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

The Company applies the short-term lease
recognition exemption to its short-term
leases (i.e., those leases that have a lease
term of twelve months or less from the
commencement date and do not contain a
purchase option).

The Company applies the low-value asset
recognition exemption on a lease-by-lease
basis, on leases with monthly lease payment
upto ' 0.05 crore per month. In making this
assessment, the Company also factors below
key aspects:

The assessment is conducted on an absolute
basis and is independent of the size, nature,
or circumstances of the lessee.

The assessment is based on the value of the
asset when new, regardless of the asset's age
at the time of the lease.

The lessee can benefit from the use of the
underlying asset either independently or in
combination with other readily available
resources, and the asset is not highly

dependent on or interrelated with other
assets.

If the asset is subleased or expected to be
subleased, the head lease does not qualify as
a lease of a low-value asset.

Based on the above criteria, the Company has
classified certain leases as leases of low value
assets.

Lease payments on short-term leases and
leases of low-value assets are recognised as
expense on a straight-line basis over the lease
term.

Company as a lessor

Leases for which the Company is a lessor is
classified as finance or operating lease. Leases in
which the Company does not transfer substantially
all the risks and rewards incidental to ownership of
an asset are classified as operating leases. Rental
income arising is accounted for on a straight¬
line basis over the lease terms. Initial direct costs
incurred in negotiating and arranging an operating
lease are added to the carrying amount of the
leased asset and recognised over the lease term on
the same basis as rental income. Contingent rents
are recognised as revenue in the period in which
they are earned.

2.17 Earnings Per Share

Basic earnings per share are calculated by dividing
the net profit or loss for the period attributable
to equity shareholders by the weighted average
number of equity shares outstanding during the
period. The weighted average number of equity
shares outstanding during the period is adjusted
for events such as bonus issue, bonus element in
a rights issue, share split, and reverse share split
(consolidation of shares) 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 net profit or loss for the period
attributable to equity shareholders and the
weighted average number of shares outstanding
during the period are adjusted for the effect of all
potentially dilutive equity shares.

2.18 Borrowing Costs

Borrowing cost includes interest and other costs
incurred in connection with the borrowing of funds
and charged to the statement of profit and loss

on the basis of effective interest rate (EIR) method.
Borrowing cost also includes exchange differences
to the extent regarded as an adjustment to the
borrowing 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 (i.e.
qualifying assets) are capitalised as part of the cost
of the respective asset. All other borrowing costs
are recognised as expense in the period in which
they occur.

2.19 Exceptional items

Exceptional items are transactions which due to
their size or incidence are separately disclosed
to enable a full understanding of the Company's
financial performance. Items which may be
considered exceptional are significant restructuring
charges, gains or losses on disposal of investments
in subsidiaries, associates and joint venture and
impairment losses/ write down or reversal in value
of investment in subsidiaries, associates and joint
venture and significant disposal of property, plant
and equipment etc.

2.20 Cash and cash equivalents

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

For the purpose of presentation in the statement
of cash flows, cash and cash equivalents includes
cash on hand, deposit held at call with financial
institutions, other short - term, highly liquid
investments with original maturities of three
months or less that are readily convertible to
known amounts of cash and which are subject to
an insignificant risk of changes in value, and bank
overdrafts.

2.21 Foreign currency translation

(i) Functional and presentation currency

Items included in the standalone financial
statements are measured using the currency
of the primary economic environment in
which the entity operates ('the functional
currency'). The Company's standalone
financial statements are presented in Indian

rupee (?) which is also the Company's
functional and presentation currency.

(ii) Transactions and balances

Foreign currency transactions are translated
into the functional currency using the
exchange rate prevailing at the date of the
transaction. However, for practical reason,
the Company uses average rate if the average
approximates than actual rate at the date of
transaction. Monetary assets and liabilities
denominated in foreign currencies are
translated at the functional currency spot
rates of exchange at the reporting date.

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.

(iii) Exchange differences

Exchange differences arising on settlement
of transactions or translation of monetary
items are recognised as income or expense
in the period in which they arise with the
exception of exchange differences on gain or
loss arising on translation of non-monetary
items measured at fair value which 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). Foreign
exchange differences arising on foreign
currency borrowings to the extent regarded
as borrowing cost are presented in the
statement of profit and loss, within finance
costs. All other foreign exchange gains and
losses are presented in the statement of profit
and loss on a net basis.

In determining the spot exchange rate to use
on initial recognition of the related asset,
expense or income (or part of it) on the
derecognition of a non-monetary asset or
non-monetary liability relating to advance
consideration, the date of the transaction
is the date on which the Company initially

recognises the non-monetary asset or non¬
monetary liability arising from the advance
consideration. If there are multiple payments
or receipts in advance, the Company
determines the transaction date for each
payment or receipt of advance consideration.