2.A. Summary of Significant Accounting Policies

i) Basis of Preparation

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 the standalone financial statements.

The standalone financial statements have been prepared
on a historical cost basis, except for the following assets
and liabilities, which have been measured at fair value:

• Derivative financial instruments,

• Certain financial assets and liabilities measured at
fair value (refer accounting policy regarding
financial instruments), and

• Defined benefit plans - plan assets measured at
fair value.

The standalone financial statements of the Company are
presented in Indian Rupee (INR) and all values are
rounded to the nearest lakhs (INR 00,000), except when
otherwise indicated.

The significant accounting policies adopted for
preparation and presentation of these Ind AS financial
statements have been applied consistently, except for
the changes in accounting policy for amendments to the
standard that were issued effective for the financial year
beginning from on or after April 1, 2024, as stated in
Note 2C.

ii) Basis of classification of Current and Non-Current

Assets and Liabilities in the balance sheet have been
classified as either current or non-current based upon
the requirements of Schedule III notified under the
Companies Act, 2013.

An asset has been classified as current if

a) it is expected to be realized in, or is intended for
sale or consumption in, the Company's normal
operating cycle; or

b) it is held primarily for the purpose of being traded;
or

c) it is expected to be realized within twelve months
after the reporting date; or

d) it is cash or cash equivalent unless it is restricted
from being exchanged or used to settle a liability
for at least twelve months after the reporting date.

All other assets have been classified as non-current.

A liability has been classified as current when

a) it is expected to be settled in the Company's
normal operating cycle; or

b) it is held primarily for the purpose of being traded;
or

c) it is due to be settled within twelve months after
the reporting date; or

d) the Company does not have an unconditional right
to defer settlement of the liability for at least
twelve months after the reporting period.

All other liabilities have been classified as non-current.

Deferred tax assets and liabilities are classified as non¬
current assets and liabilities.

An operating cycle is the time between the acquisition
of assets for processing and their realization in cash or
cash equivalents. The Company has identified twelve
months as its operating cycle.

iii) Foreign Currency Translation

a) Functional and presentation currency

Items included in the standalone financial
statements of the Company are measured using
the currency of the primary economic
environment in which the Company operates ('the
functional currency'). The standalone financial
statements are presented in Indian Rupee (INR),
which is Company's functional and presentation
currency.

b) Initial recognition

Transactions in foreign currencies are initially
recorded by the Company at the functional
currency spot rates at the date the transaction first
qualifies for recognition.

c) Conversion

Foreign currency monetary items are translated
using the functional currency spot rates of
exchange at the reporting date. Non-monetary

items that are measured in terms of historical cost
denominated in a foreign currency are translated
using the exchange rate at the date of the initial
transaction. Non-monetary items measured at fair
value denominated in a foreign currency are,
translated using the exchange rates that existed
when the fair value was determined.

(d) Exchange differences

Exchange differences arising on settlement or
translation of monetary items are recognised in
the statement of profit and loss.

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 other comprehensive income (OCI)
or profit and loss are also recognised in OCI or
profit and loss, respectively.

iv) Derivative financial instruments

Initial recognition and subsequent measurement

The Company uses derivative financial instruments, such
as forward currency contracts, to hedge its foreign
currency risks. Such derivative financial instruments are
initially recognised at fair value on the date on which a
derivative contract is entered into and are subsequently
re-measured at fair value at the end of each reporting
period. Derivatives are carried as financial assets when
the fair value is positive and as financial liabilities when
the fair value is negative.

Any gains or losses arising from changes in the fair value
of derivatives are taken directly to statement of profit
and loss.

v) Fair value measurement

The Company measures financial instruments, such as,
derivatives at fair value at each balance sheet date.

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:

- In the principal market for the asset or liability, or

- 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 a 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
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, maximising 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 standalone financial statements are
categorised 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 markets 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

• 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 recognised in the
standalone financial statements on a recurring basis, the
Company determines whether transfers have occurred
between levels in the hierarchy by re-assessing
categorisation (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's management determines the policies
and procedures for both recurring fair value
measurement, such as derivative instruments and
unquoted financial assets measured at fair value, and
for non-recurring measurement, such as assets held for
sale in discontinued operation.

External valuers are involved for valuation of significant
assets, and significant liabilities, if any.

At each reporting date, the management analyses the
movements in the values of assets and liabilities which
are required to be re-measured or re-assessed as per
the Company's accounting policies. For this analysis, the
management verifies the major inputs applied in the
latest valuation by agreeing the information in the
valuation computation to contracts and other relevant
documents.

The management, in conjunction with the Company's
external valuers, also compares the change in the fair
value of each asset and liability with relevant external
sources to determine whether the change is reasonable.

For the purpose of fair value disclosures, the Company
has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the asset
or liability and the level of the fair value hierarchy as
explained above.

This note summarises accounting policy for fair value.
Other fair value related disclosures are given in the
relevant notes.

vi) Non-current assets classified as held for sale

The Company classifies non-current assets classified as
held for sale if their carrying amounts will be recovered
principally through a sale rather than through continuing
use. Actions required to complete the sale should
indicate that it is unlikely that significant changes to the
sale will be made or that the decision to sell will be
withdrawn. Management must be committed to the sale
expected within one year from the date of classification.

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

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

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

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

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

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

Non-current assets held for sale are measured at the
lower of their carrying amount and the fair value less
costs to sell. Cost to sell are the incremental costs directly
attributable to the disposal of an asset, excluding finance
costs and income tax expenses. Assets and liabilities
classified as held for sale are presented separately in the
balance sheet.

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

vii) Property, plant and equipment

On transition to Ind AS i.e. 1 April 2015, the Company
has elected to continue with the carrying value of all of
its property, plant and equipment (PPE) recognised as
at 1 April 2015 measured as per the Indian GAAP and
use that carrying value as the deemed cost of the PPE.

PPE are stated at cost, net of accumulated depreciation
and accumulated impairment losses, if any. The cost
comprises purchase price, including import duties and
non- refundable purchase taxes, borrowing costs if
recognition criteria are met and any directly attributable
cost of bringing the asset to its working condition for
the intended use. Any trade discounts and rebates are
deducted in arriving at the purchase price.

Subsequent expenditure related to an item of PPE is
added to its book value only if it increases the future
benefits from the existing PPE beyond its previously
assessed standard of performance. Such cost includes
the cost of replacing part of the plant and equipment.
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. 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 profit or loss as
incurred.

Items of stores and spares that meet the definition of
PPE are capitalized at cost. Otherwise, such items are
classified as inventories.

Gains or losses arising from derecognition of the assets
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.

viii) Depreciation on property, plant and equipment

Depreciation on property, plant and equipment (other
than specific asset referred under Para (a) to (e) below
is calculated using the straight-line basis using the rates
arrived at, based on the useful lives estimated by the
management. For this purpose, a major portion of the
plant has been considered as continuous process plant.
The identified components are depreciated separately
over their useful lives; the remaining components are
depreciated over the life of principal asset. The Company
has used the following rates to provide depreciation on
its property, plant and equipment which are equal to
the rates specified in Schedule II to Companies Act, 2013.

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

(a) The useful lives of components of certain plant and
equipment are estimated as 5 to 20 years. These
lives are lower than those indicated in Schedule II.

(b) The useful lives of certain plant and equipment
are estimated as 30 to 40 years. These lives are
higher than those indicated in schedule II.

(c) The useful lives of certain buildings are estimated
as 5 to 15 years. These lives are lower than those
indicated in schedule II.

(d) Insurance/ capital/ critical stores and spares are
depreciated over the remaining useful life of
related plant and equipment or useful life of
insurance/capital/ critical spares, whichever is
lower.

(e) Property, plant and equipment whose value is less
than INR 5,000/- are depreciated fully in the year
of purchase.

The residual values, useful lives and method of
depreciation of property, plant and equipment are
reviewed at each financial year and adjusted
prospectively, if any.

ix) Intangible Assets

On transition to Ind AS, the Company has elected to
continue with the carrying value of all of intangible assets
recognised as at 1 April 2015 measured as per the
previous GAAP and use that carrying value as the
deemed cost.

Intangible assets acquired separately are measured on
initial recognition at cost. Following initial recognition,

intangible assets are carried at cost less accumulated
amortization and accumulated impairment losses, if any.
Intangible assets with finite lives are amortised on a
straight line basis over the estimated useful economic
life.

The amortisation period and the amortisation method
for an intangible asset with a finite useful life are
reviewed at least at the end of each reporting period.
Changes in the expected useful life or the expected
pattern of consumption of future economic benefits
embodied in the asset are considered to modify the
amortisation period or method, as appropriate, and are
treated as changes in accounting estimates. The
amortisation expense on intangible assets with finite
lives is recognised in the statement of profit and loss
unless such expenditure forms part of carrying value of
another asset.

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

The following are the acquired intangible assets:
Software

Management of the Company assessed the useful life
of software as finite and cost of software is amortized
over their estimated useful life of three years on straight
line basis.

Research and development costs

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

- The technical feasibility of completing the
intangible asset so that the asset will be available
for use or sale

- Its intention to complete and its ability and
intention to use or sell the asset

- How the asset will generate future economic
benefits

- The availability of resources to complete the asset

- The ability to measure reliably the expenditure
during development

All expenses incurred on research and development
activities are expensed as incurred by the Company since
these do not meet the recognition criteria as listed
above.

x) Investment Property

The Company has elected to continue with the carrying
value for all of its investment property as recognized in
its previous GAAP standalone financial statements as

deemed cost at the transition date, viz., 1 April 2015.

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 recognized in profit or loss as
incurred.

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

xi) 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. Where 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 available, and
if no such transactions can be identified an appropriate
valuation model is used.

The Company bases its impairment calculation on
detailed budgets and forecast calculations which are
prepared separately for each of the Company's CGU's to
which the individual assets are allocated. These budgets
and forecast calculations are generally cover a period of
five years. For longer periods, a long term growth rate is
calculated and applied to project future cash flows after
the fifth year.

Impairment losses of continuing operations, including
impairment on inventories, are recognized in the
statement of profit and loss.

After impairment, depreciation is provided on the
revised carrying amount of the asset over its remaining
useful life. An assessment is made at each reporting date
as to whether there is any indication that previously
recognized impairment losses may no longer exist or may
have decreased. If such indication exists, the Company
estimates the asset's or CGU's recoverable amount. A
previously recognized 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 recognized. 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 recognized for the asset
in prior years. Such reversal is recognized in the
statement of profit or loss.

Goodwill is tested for impairment annually and 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 are not reversed in future periods.

xii) 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.

a) 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 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

b) 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.

The Company's lease liabilities are included in
Interest-bearing loans and borrowings.

c) Short-term leases and leases of low-value assets

The Company applies the short-term lease
recognition exemption to its short-term leases of
machinery and equipment (i.e., those leases that

have a lease term of 12 months or less from the
commencement date and do not contain a
purchase option). It also applies the lease of low-
value assets recognition exemption to leases of
office equipment that are considered to be low
value. 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 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 and is included in revenue in
the statement of profit or loss due to its operating
nature. 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.

Ind AS 116:

Ind AS 116 Leases was notified by MCA on 30 March
2019 and it replaces Ind AS 17 Leases, including
appendices thereto. Ind AS 116 sets out the principles
for the recognition, measurement, presentation and
disclosure of leases and requires lessees to account for
all leases under a single on-balance sheet model similar
to the accounting for finance leases under Ind AS 17.
The standard includes two recognition exemptions for
lessees - leases of 'low-value' assets (e.g., personal
computers) and short-term leases (i.e., leases with a
lease term of 12 months or less). At the commencement
date of a lease, a lessee will recognise a liability to make
lease payments (i.e., the lease liability) and an asset
representing the right to use the underlying asset during
the lease term (i.e., the right-of-use asset). Lessees will
be required to separately recognise the interest expense
on the lease liability and the depreciation expense on
the right-of-use asset.

Lessees will be also required to re-measure the lease
liability upon the occurrence of certain events (e.g., a
change in the lease term, a change in future lease
payments resulting from a change in an index or rate
used to determine those payments). The lessee will
generally recognise the amount of the re-measurement
of the lease liability as an adjustment to the right-of-
use asset.

Lessor accounting under Ind AS 116 is substantially
unchanged from accounting under Ind AS 17. Lessors
will continue to classify all leases using the same
classification principle as in Ind AS 17 and distinguish

between two types of leases: operating and finance
leases.

The Company adopted Ind AS 116 using the modified
retrospective method of adoption with the date of initial
application of 1 April 2019. Under this method, the
standard is applied retrospectively with the cumulative
effect of initially applying the standard recognised at the
date of initial application. Accordingly, comparatives for
the period ended 31 March 2019 have not be
retrospectively adjusted. The Company elected to apply
the standard to contracts that were previously identified
as leases applying Ind AS 17. The Company also elected
to use the exemptions proposed by the standard on lease
contracts for which the lease terms ends within 12
months as of the date of initial application, and lease
contracts for which the underlying asset is of low value.

a. Nature of the effect of adoption of Ind AS 116

The Company has lease contracts for various guest
house, retail outlets and land. Before the adoption
of Ind AS 116, the Company classified each of its
leases (as lessee) at the inception date as either a
finance lease or an operating lease. A lease was
classified as a finance lease if it transferred
substantially all of the risks and rewards incidental
to ownership of the leased asset to the Company;
otherwise it was classified as an operating lease.
Finance leases were capitalised at the
commencement of the lease at the inception date
fair value of the leased property or, if lower, at the
present value of the minimum lease payments.
Lease payments were apportioned between
interest (recognised as finance costs) and
reduction of the lease liability. In an operating
lease, the leased property was not capitalised and
the lease payments were recognised as rent
expense in the statement of profit or loss on a
straight-line basis over the lease term. Any prepaid
rent and accrued rent were recognised under
Prepayments and Trade and other payables,
respectively.

Upon adoption of Ind AS 116, the Company applied
a single recognition and measurement approach
for all leases that it is the lessee, except for short¬
term leases and leases of low-value assets. The
standard provides specific transition requirements
and practical expedients, which has been applied
by the Company.

Leases previously classified as finance leases

The Company did not change the initial carrying
amounts of recognised assets and liabilities at the
date of initial application for leases previously
classified as finance leases (i.e., the right-of-use
assets and lease liabilities equal the lease assets

and liabilities recognised under Ind AS 17). The
requirements of Ind AS 116 was applied to these
leases from 1 April 2019.

Leases previously accounted for as operating
leases

The Company recognised right-of-use assets and
lease liabilities for those leases previously classified
as operating leases, except for short-term leases
and leases of low-value assets. The right-of-use
assets for most leases were recognised based on
the carrying amount as if the standard had always
been applied, apart from the use of incremental
borrowing rate at the date of initial application. In
some leases, the right-of-use assets were
recognised based on the amount equal to the lease
liabilities, adjusted for any related prepaid and
accrued lease payments previously recognised.
Lease liabilities were recognised based on the
present value of the remaining lease payments,
discounted using the incremental borrowing rate
at the date of initial application.

The Company also applied the available practical
expedients wherein it:

• Used a single discount rate to a portfolio of
leases with reasonably similar characteristics

• Relied on its assessment of whether leases
are onerous immediately before the date of
initial application

• Applied the short-term leases exemptions to
leases with lease term that ends within 12
months at the date of initial application

• Excluded the initial direct costs from the
measurement of the right-of-use asset at the
date of initial application

• Used hindsight in determining the lease term
where the contract contains options to
extend or terminate the lease

xiii) 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.

a) Financial assets

Initial recognition and measurement

All financial assets are recognised initially at fair
value plus, in the case of financial assets not
recorded at fair value through profit or loss,
transaction costs that are attributable to the
acquisition of the financial asset. Transaction costs
of financial assets carried at fair value through
profit or loss are expensed in profit or loss.

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
Debt Instruments-

Subsequent measurement of debt instruments
depends on the Company's business model for
managing the asset and the cash flow
characteristics of the asset. For the purposes of
subsequent measurement, debt instruments are
classified in three categories:

- Debt instruments at amortised cost;

- Debt instruments at fair value through other
comprehensive income (FVTOCI);

- Debt instruments at fair value through profit
or loss (FVTPL).

Debt instruments at amortised cost

A debt instrument' is measured at the 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.

After initial measurement, such financial assets are
subsequently measured at amortised cost using
the effective interest rate (EIR) method. Amortised
cost is calculated by taking into account any
discount or premium on acquisition and fees or
costs that are an integral part of the EIR. The EIR
amortisation is included in finance income in the
profit or loss. The losses arising from impairment
are recognised in the profit or loss.

Debt instrument at FVTOCI

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

(a) The objective of the business model is
achieved both by collecting contractual cash
flows and selling the financial assets, and

(b) The asset's contractual cash flows represent
sole payments of principal and interest
(SPPI).

Debt instruments included within the FVTOCI
category are measured initially as well as at each
reporting date at fair value. Fair value movements

are recognized in the other comprehensive income
(OCI). However, the Company recognizes interest
income, impairment losses & reversals and foreign
exchange gain or loss in the profit and loss. On
derecognition of the asset, cumulative gain or loss
previously recognised in OCI is reclassified from
the equity to the statement of profit and loss.
Interest earned whilst holding FVTOCI debt
instrument is reported as interest income using
the EIR method.

Debt instrument at FVTPL

FVTPL is a residual category for debt instruments.
Any debt instrument, which does not meet the
criteria for categorisation as at amortised cost or
as FVTOCI, is classified as at FVTPL. In addition,
the Company may elect to designate a debt
instrument, which otherwise meets amortized cost
or FVTOCI criteria, as at FVTPL. However, such
election is allowed only if doing so reduces or
eliminates a measurement or recognition
inconsistency (referred to as 'accounting
mismatch'). Debt instruments included within the
FVTPL category are measured at fair value with all
changes recognized in the statement of profit and
loss.

Equity Instruments-

Investments in subsidiaries are subsequently
measured at cost.

For the purposes of subsequent measurement of
other equity instruments classification is made into
below two categories:

- Equity instruments at fair value through
profit or loss (FVTPL)

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

Equity investments other than investments in
subsidiaries are measured at fair value. The
Company may make an irrevocable election to
present in other comprehensive income
subsequent changes in the fair value. The
Company makes such election on an instrument -
by-instrument basis. The classification is made on
initial recognition and is irrevocable. Equity
instruments included within the FVTPL category
are measured at fair value with all changes
recognized in the statement of profit and loss.

If the Company decides to classify an equity
instrument as at FVTOCI, then all fair value changes
on the instrument, excluding dividends, are
recognized in the OCI. There is no recycling of the
amounts from OCI to statement of profit and loss,

even on sale of investment. However, the
Company may transfer the cumulative gain or loss
within equity.

Derecognition

A financial asset (or, where applicable, a part of a
financial asset or part of a group of similar financial
assets) 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'
arrangements 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.

Impairment of financial assets

The Company assesses on a forward looking basis
the expected credit losses (ECL) associated with
its assets carried at amortised cost and FVTOCI
debt instruments. The impairment methodology
applied depends on whether there has been a
significant increase in credit risk since initial
recognition.

For trade receivables only, the Company applies
the simplified approach permitted by Ind AS 109
'Financial Instruments', which requires expected
lifetime losses to be recognised from initial
recognition of the receivables.

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

For recognition of impairment loss on other
financial assets and risk exposure, the Company
categorizes them into Stage 1, Stage 2 and Stage
3, as described below:

Stage 1: When financial assets are first recognized,
the Company recognizes an allowance based on
12 months ECLs. Stage 1 financial assets also
include facilities where the credit risk has improved
and the financial assets has been reclassified from
Stage 2.

Stage 2: When a financial assets has shown a
significant increase in credit risk since origination,

the Company records an allowance for the LTECLs.
Stage 2 loans also include facilities, where the
credit risk has improved and the financial assets
has been reclassified from Stage 3.

Stage 3: Financial assets considered credit-
impaired. The Company records an allowance for
the LTECLs.

b) 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,
payables, or as derivatives. 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
derivative financial instruments.

Subsequent measurement

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

Financial liabilities at fair value through profit or
loss

Financial liabilities at fair value through profit or
loss (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.

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

Financial guarantee contracts

Financial guarantee contracts are recognised as a
financial liability at the time the guarantee is
issued. The liability is initially measured at fair
value and subsequently at the higher of the
amount determined in accordance with Ind AS 109

Financial instruments and the amount initially
recognised less cumulative amortisation, where
appropriate. The fair value of financial guarantees
is determined as the present value of the
difference in net cash flows between the
contractual payments under the debt instrument
and the payments that would be required without
the guarantee, or the estimated amount that
would be payable to a third party for assuming the
obligations.

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 or loss.

c) Offsetting of financial instruments

Financial assets and financial liabilities are offset
and the net amount is reported in the balance
sheet if there is a currently enforceable legal right
to offset the recognised amounts and there is an
intention to settle on a net basis, to realise the
assets and settle the liabilities simultaneously.

xiv) Cash and Cash equivalents

Cash and cash equivalents in the balance sheet comprise
cash at banks and on hand and short-term deposits with
an original maturity of three months or less, which are
subject to an insignificant risk of changes in value.

For the purpose of the statement of cash flows, cash
and cash equivalents consist of cash and short-term
deposits.

xv) Dividend to equity holders of the Company

The Company recognises a liability to make dividend
distributions to equity holders of the Company when
the distribution is authorised and the distribution is no
longer at the discretion of the Company. As per the
corporate laws in India, a distribution is authorised when
it is approved by the shareholders. A corresponding
amount is recognised directly in equity.

xvi) Inventories

Inventories are valued at the lower of Cost and Net
Realisable Value.

The Cost is determined as follows:

a) Raw materials and Store and Spares: cost includes

cost of purchase and other costs incurred in
bringing the inventories to their present location
and condition. Cost is determined on Moving
weighted average method.

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

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

Materials and other items held for use in the production
of inventories are not written down below cost if the
finished products in which they will be incorporated are
expected to be sold at or above cost.

Cost includes the necessary cost incurred in bringing
inventory to its present location and condition necessary
for use.

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.

xvii) Borrowing Costs

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 are capitalized as part of the cost of the
respective asset. All other borrowing costs are expensed
in the period they occur.

Borrowing costs include interest and amortization of
ancillary costs incurred in connection with the
arrangement of borrowing. Borrowing cost also includes
exchange differences to the extent regarded as an
adjustment to the borrowing costs.

xviii) Revenue from contract with customer

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.

The disclosures of significant accounting judgements,
estimates and assumptions relating to revenue from
contracts with customers are provided in paragraph 2.B.

Sale of goods

Revenue from sale of product is recognised at the point
in time when control of the asset is transferred to the
customer, generally on delivery of the product. The
normal credit term is 15 to 120 days upon delivery.

Revenue from sale of goods, including concession in
respect of Urea, DAP, MOP and Complex Fertilizers
receivable from the Government of India under the New
Pricing Scheme/Concession Scheme, is recognized when
the significant risk and rewards of ownership of the
goods have passed to the customers, recovery of the
consideration is probable, the associated costs and
possible return of goods can be estimated reliably, there
is no continuing management involvement with the
goods, and the amount of revenue can be measured
reliably.

Concessions in respect of Urea as notified under the New
Pricing Scheme is recognized with adjustments for
escalation/ de-escalation in the prices of inputs and
other adjustments as estimated by the management in
accordance with the known policy parameters in this
regard.

Subsidy for Phosphatic and Potassic (P&K) fertilisers are
recognized as per rates notified by the Government of
India in accordance with Nutrient Based Subsidy Policy
from time to time.

Uniform freight subsidy on Urea, Complex fertilisers,
Imported DAP and MOP has been accounted for in
accordance with the parameters and notified rates.

In determining the transaction price for the sale of
goods, the Company considers the effects of variable
consideration, the existence of significant financing
components, and consideration payable to the customer
(if any).

i) 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 goods
provide customers with a right of return and
volume rebates. The rights of return and volume
rebates give rise to variable consideration.

(a) Rights of return

Certain contracts provide a customer with a
right to return the goods within a specified

period. The Company uses the expected
value method to estimate the goods that will
not be returned because this method best
predicts the amount of variable
consideration to which the Company will be
entitled. The requirements in Ind AS 115 on
constraining estimates of variable
consideration are also applied in order to
determine the amount of variable
consideration that can be included in the
transaction price. For goods that are
expected to be returned, instead of revenue,
the Company recognises a refund liability. A
right of return asset (and corresponding
adjustment to change in inventory is also
recognised for the right to recover products
from a customer.

(b) Volume rebates

The Company provides volume rebates to
certain customers once the quantity of
goods purchased during the period exceeds
a threshold specified in the contract. Rebates
are offset against amounts payable by the
customer. To estimate the variable
consideration for the expected future
rebates, the Company applies the most likely
amount method for contracts with a single¬
volume threshold and the expected value
method for contracts with more than one
volume threshold. The selected method that
best predicts the amount of variable
consideration is primarily driven by the
number of volume thresholds contained in
the contract. The Company then applies the
requirements on constraining estimates of
variable consideration and recognises a
refund liability for the expected future
rebates.

ii) Significant financing component

Occasionally, the Company receives short-term
advances from its customers. Using the practical
expedient in Ind AS 115, the Company does not
adjust the promised amount of consideration for
the effects of a significant financing component if
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 one year or
less.

Contract balances

Contract assets

A contract asset is the right to consideration in
exchange for goods or services transferred to the

customer. If the Company performs by transferring
goods or services to a customer before the
customer pays consideration or before payment
is due, a contract asset is recognised for the earned
consideration that is conditional.

Trade receivables

A receivable represents the Company's right to an
amount of consideration that is unconditional (i.e.,
only the passage of time is required before
payment of the consideration is due). Refer to
accounting policies of financial assets in paragraph
xiii) 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. 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.

Assets and liabilities arising from rights of return

Right of return assets

Right of return asset represents the Company's
right to recover the goods expected to be returned
by customers. The asset is measured at the former
carrying amount of the inventory, less any
expected costs to recover the goods, including any
potential decreases in the value of the returned
goods. The Company updates the measurement
of the asset recorded for any revisions to its
expected level of returns, as well as any additional
decreases in the value of the returned products.

Refund liabilities

A refund liability is the obligation to refund some
or all of the consideration received (or receivable)
from the customer and is measured at the amount
the Company ultimately expects it will have to
return to the customer. The Company updates its
estimates of refund liabilities (and the
corresponding change in the transaction price) at
the end of each reporting period. Refer to above
accounting policy on variable consideration.

As per Ind AS 115 and the Educational Material of
Ind AS 115, From 1 July 2017, the GST regime has
been introduced, revenue is being recognised net
of GST.

Insurance claims

Insurance claims and receivable on account of
interest from dealers on delayed payment are
accounted for to the extent the Company is
reasonably certain of their ultimate collection.

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 finance income in
the statement of profit and loss.

Interest income is recognized on a time proportion
basis taking into account the amount outstanding
and the rate applicable.

Dividend

Dividend is recognized when the shareholders'
right to receive payment is established by the
balance sheet date.

xix) Retirement and other employee benefits
i) Provident Fund

Retirement benefit in the form of Provident Fund
is a defined benefit contribution scheme. The
Company has no obligation other than the
contribution payable to the Provident Fund. The
Company recognizes the contribution payable to
the Provident Fund scheme as an expenditure,
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.

Till surrender of its exemption to hold contribution
in Employees' Provident Fund Trust of the
Company (Zuari Industries Limited Employee
Provident Fund Trust - ZIL EPF Trust) to Employees'
Provident Fund Organisation (EPFO) based on the
statutory obligation as at January 31, 2025
Retirement benefits in the form of Provident Fund,
is defined benefit obligation and is provided on
the basis of actuarial valuation of projected unit

credit method made at the end of each financial
year. The difference between the actuarial
valuation of the provident fund of employees at
the year end and the balance of own managed
fund is provided for as liability in the books in
terms of the provisions under the Employee
Provident Fund and Miscellaneous Provisions Act,
1952. Any excess of plan assets over projected
benefit obligation is ignored as such surplus is
distributed to the beneficiaries of the trust.

ii) Superannuation and Contributory Pension Fund

Retirement benefit in the form of Superannuation
Fund and Contributory Pension Fund are defined
contribution scheme. The Company has no
obligation, other than the contribution payable to
the Superannuation Fund and Contributory
Pension Fund to Life Insurance Corporation of India
(LIC) against the insurance policy taken with them.
The Company recognizes contribution payable to
the Superannuation Fund and Contributory
Pension Fund scheme as expenditure, 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.

iii) Gratuity

Retirement benefit in the form of gratuity is
defined benefit obligation and is provided on the
basis of an actuarial valuation on projected unit
credit method made at the end of each financial
year.

The Company has taken insurance policy under the
Group Gratuity Scheme with the Life Insurance
Corporation of India (LIC) to cover the gratuity
liability of the employees.

Re-measurement gains and losses arising from
experience adjustments and changes in actuarial
assumptions are recognised in the period in which
they occur, directly in other comprehensive
income and such re-measurement gain / (loss) are
not reclassified to the statement of profit and loss
in the subsequent periods. They are included in
retained earnings in the statement of changes in
equity and in the balance sheet.

Changes in the present value of the defined benefit
obligation resulting from plan amendments or
curtailments are recognised immediately in profit
or loss as past service cost.

iv) Post-Retirement Medical Benefit

Post-retirement medical benefit is a defined
benefit obligation which is provided for based on
actuarial valuation on projected unit credit method
made at the end of each financial year. Re¬
measurement, comprising of actuarial gains and
losses, are recognised in the period in which they
occur, directly in statement of profit & loss.

v) Leave Encashment

Accumulated leave, which is expected to be
utilized within the next 12 months, is treated as
short term employee benefit. The Company
measures the expected cost of such absences as
the additional amount that it expects to pay as a
result of the unused entitlement that has
accumulated at the reporting date. Re¬
measurement, comprising of actuarial gains and
losses, are recognised in the period in which they
occur, directly in statement of profit and loss.

The Company treats accumulated leave expected
to be carried forward beyond twelve months as
long term employee benefit for measurement
purpose. Such long term compensated absences
are provided for based on actuarial valuation using
the projected unit credit method at the year end.
The Company presents the leave as a current
liability in the balance sheet; to the extent it does
not have an unconditional right to defer its
settlement for 12 months after the reporting date.
Where Company has the unconditional legal and
contractual right to defer the settlement for a
period beyond 12 months, the same is presented
as non-current liability.

vi) Pension Fund

Retirement benefit in the form of family pension fund
and National Pension Scheme are defined
contribution scheme. The Company has no
obligation, other than the contribution payable to
the pension fund. The Company recognizes
contribution payable to the pension fund scheme as
expenditure, 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.

The present value of the defined benefit obligation
is determined by discounting the estimated future
cash outflows by reference to market yields at the
end of the reporting period on government bonds
that have terms approximating to the terms of the
related obligation.

The net interest cost is calculated by applying the
discount rate to the net balance of the defined
benefit obligation and the fair value of plan assets.
This cost is included in employee benefits expense
in the statement of profit and loss.

vii) Voluntary Retirement Scheme

Compensation to employees under the voluntary
retirement scheme of the Company is computed
on the basis of number of employees exercising
the retirement option under the scheme.

viii) Short term employee benefits

All employee benefits payable/ available within
twelve months of rendering of service are
classified as short term employee benefits.
Benefits such as salaries, wages and bonus etc.,
are recognised in the statement of profit and loss
in the period in which the employee renders the
related service.

xx) Taxes

Current Income Tax and Deferred Tax

Tax expense comprises current income tax and deferred
tax. Current income-tax expense is measured at the
amount expected to be paid to the taxation authorities
in accordance with the Income-tax Act, 1961. The tax
rates and tax laws used to compute the amount are
those that are enacted or substantively enacted, at the
reporting date.

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

Management periodically evaluates positions taken in
the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation
and establishes provisions where appropriate.

Deferred tax is provided using the liability method on
temporary differences between the tax bases of assets
and liabilities and their carrying amounts for financial
reporting purposes at the reporting date. Deferred tax
liabilities are recognised for all taxable temporary
differences, except:

- When the deferred tax liability arises from an asset
or liability in a transaction that is not a business
combination and, at the time of the transaction,
affects neither the accounting profit nor taxable
profit or loss;

- In respect of taxable temporary differences
associated with investments in subsidiaries 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
utilized, except:

- When the deferred tax asset relating to the
deductible temporary difference arises from the
initial recognition of an asset or liability in a
transaction that is not a business combination and,
at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss.

- In respect of deductible temporary differences
associated with investments in 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 utilized.

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.

Goods and Service Tax (GST) / Sales/value added taxes
paid on acquisition of assets or on incurring expenses

When GST amount incurred on purchase of assets or
services is not recoverable from the taxation authority,
the GST paid is recognized as part of the cost of
acquisition of the asset or as part of the expense item,
as applicable. Otherwise, expenses and assets are
recognized net of the amount of GST paid. The net
amount of GST recoverable from, or payable to, the
taxation authority is included as part of receivables or
payables in the balance sheet.

xxi) Earnings per share

Basic earnings per share are calculated by dividing the
net profit or loss for the year attributable to equity
shareholders of the Company by the weighted average
number of the equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share,
net profit or loss for the year attributable to equity
shareholders of the Company and the weighted average
number of shares outstanding during the year are
adjusted for the effect of all dilutive potential equity
shares.

xxii) Government grants and subsidies

Grants and subsidies from the government are
recognized when there is reasonable assurance that the
grant/subsidy will be received and all attaching
conditions will be complied with.

When the grant or subsidy relates to an expenses item,
it is recognized as income over the periods necessary to
match them on a systematic basis to the costs, which it
is intended to compensate.

Where the grant or subsidy relates to an asset, it is
recognised as income in equal amounts over the
expected useful life of the related asset.