Provisions and Contingent Assets / Liabilities

Provisions are recognised when the Company has a
present obligation (legal or constructive) as a result
of past events, for which it is probable that an outflow
of resources will be required to settle the obligation
and a reliable estimate of the amount can be made.

Provisions are measured at the present value of
management's best estimate of the outflow required
to settle the present obligation at the end of the
reporting period. If the effect of the time value of
money is material, provisions are discounted using a
current pre-tax rate that reflects, when appropriate,
the risks specific to the liability. When discounting is
used, the increase in the provision due to the passage
of time is recognized as a finance cost.

Contingent liabilities are disclosed in the case of:

• a present obligation arising from the past events,
when it is not probable that an outflow of resources
will be required to settle the obligation;

• a present obligation arising from the past events,
when no reliable estimate is possible;

• a possible obligation arising from past events, unless
the probability of outflow of resources is remote.

Contingent assets are not recognised but disclosed in
the financial statements when an inflow of economic
benefits is probable.

S. Financial instruments

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

I. Financial assets

A. Initial recognition and measurement:

Financial assets are initially measured at fair
value. Transaction costs that are directly
attributable to the acquisition of the financial
asset [other than financial assets at fair value
through profit or loss (FVTPL)] are added to the
fair value of the financial assets. 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. Transaction costs of
financial assets carried at FVTPL are expensed in
the Statement of Profit and Loss. However, trade
receivables that do not contain a significant
financing component are measured at
transaction price.

B. Subsequent measurement:

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

(i) 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
and fees or costs that are an integral
part of the EIR. The EIR amortisation
is included in finance 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.

(ii) Debt instruments included within the
fair value through profit or loss (FVTPL)
category are measured at fair value with
all changes recognized in the Statement of
Profit and Loss.

(iii) Equity instruments

All equity instruments within the scope
of Ind AS 109 are measured at fair value.
Equity instruments which are classified
as held for trading are measured at
FVTPL. For all other equity instruments,
the Company decides to measure the
same either at fair value through other
comprehensive income (FVTOCI) or FVTPL
except investment in subsidiaries which is
valued at cost. The Company makes such
selection on an instrument-by-instrument
basis. The classification is made on initial
recognition and is irrevocable.

For equity instruments measured at
FVTOCI, all fair value changes on the
instrument, excluding dividends, are
recognized in other comprehensive income
(OCI). There is no recycling of the amounts
from OCI to Statement of Profit and Loss on
sale of such instruments.

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

C. De-recognition:

A financial asset (or, where applicable, a

part of a financial asset or part of a group

of similar financial assets) is primarily
derecognised (i.e. removed from the Company's
balance sheet) when:

• the rights to receive cash flows from the asset
have expired, or

• the Company has transferred its rights to
receive cash flows from the asset or has
assumed an obligation to pay the received
cash flows in full without material delay
to a third party under a 'pass-through'
arrangement; and either:

(i) the Company has transferred substantially
all the risks and rewards of the asset, or

(ii) the Company has neither transferred nor
retained substantially all the risks and
rewards of the asset, but has transferred
control of the asset.

D. Impairment of financial assets:

In accordance with Ind AS 109, the Company
applies Expected Credit Loss (ECL) model for
measurement and recognition of impairment
loss on trade receivables and other advances.
The Company follows 'simplified approach' for
recognition of impairment loss on these financial
assets. 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.

II. Financial liabilities

A. Initial recognition and measurement:

Financial liabilities are classified at initial
recognition as:

(i) financial liabilities at fair value through
profit or loss,

(ii) loans and borrowings, payables, net of
directly attributable transaction costs or

(iii) derivatives designated as hedging
instruments in an effective hedge,
as appropriate.

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

B. Subsequent measurement

The measurement of financial liabilities depends

on their classification, as described below:

(i) Borrowings

Borrowings are initially recognised at fair
value, net of transaction costs incurred.
Borrowings are subsequently measured at
amortised cost. Any difference between
the proceeds (net of transaction costs)
and the redemption amount is recognised
in the Statement of Profit and Loss over
the period of the borrowings using the
effective interest method. Fees paid on
the establishment of loan facilities are
recognised as transaction costs of the loan
to the extent that it is probable that some
or all of the facility will be drawn down.
In this case, the fee is deferred until the
draw down occurs.

Borrowings are removed from the Balance
Sheet when the obligation specified in the
contract is discharged, cancelled or expired.
The difference between the carrying
amount of a financial liability that has been
extinguished and the consideration paid is
recognised in the Statement of Profit and
Loss as other gains / (losses).

Borrowings are classified as current
liabilities unless the Company has an
unconditional right to defer settlement
of the liability for at least twelve months
after the reporting period. Where there is a
breach of a material provision of a long-term
loan arrangement on or before the end of
the reporting period with the effect that
the liability becomes payable on demand
on the reporting date, the entity does not
classify the liability as current, if the lender
has agreed, after the reporting period
and before the approval of the financial
statements for issue, not to demand
payment as a consequence of the breach.

(ii) Trade and other payables

These amounts represent liabilities for
goods and services provided to the Company
prior to the end of financial period which

are unpaid. The amounts are unsecured
and are usually paid within twelve months
of recognition. Trade and other payables
are presented as current liabilities unless
payment is not due within twelve months
after the reporting period. They are
recognised initially at their fair value and
subsequently measured at amortised cost
using the effective interest method.

(iii) Derivative financial instruments

The Company uses derivative financial
instruments, such as foreign exchange
forward contracts, currency options and
interest rate swaps to hedge its foreign
currency risks. Such derivative financial
instruments are initially recognised at fair
value on the date on which a derivative
contract isentered 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.

Hedge accounting:

The Company designates certain hedging
instruments which include derivatives,
embedded derivatives and non-derivatives
in respect of foreign currency risk, as
either fair value hedges, cash flow hedges
or hedges of net investments in foreign
operations. At the inception of the hedge
relationship, the Company documents
the relationship between the hedging
instruments and the hedged item, along
with its risk management objectives and
its strategy for undertaking various hedge
transactions. Furthermore, at the inception
of the hedge and on an ongoing basis, the
Company documents whether the hedging
instrument is highly effective in offsetting
changes in fair values or cash flows of the
hedged item attributable to the hedged risk.

C. De-recognition

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.

III. 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.

Significant accounting judgements, estimates and
assumptions

The preparation of the Company's financial
statements requires management to make
judgements, estimates and assumptions that affect
the reported amounts of revenues, expenses, assets
and liabilities, and the accompanying disclosures,
and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates
could result in outcomes that require a material
adjustment to the carrying amount of assets or
liabilities affected in future periods.

Judgements

In the process of applying the Company's accounting
policies, management has made the following

judgements, which have the most significant effect on
the amounts recognised in the financial statements:

(a) Operating lease commitments - Company
as lessor;

(b) Assessment of functional currency;

(c) Evaluation of recoverability of deferred tax assets

Estimates and assumptions

The following are the key assumptions concerning
the future, and other key sources of estimation
uncertainty at the end of the reporting period that
may have a significant risk of causing a material
adjustment to the carrying amounts of assets and
liabilities within the next financial year:

a) Useful lives of property, plant and equipment,
investment property and intangible assets;

b) Fair value measurements of financial
instruments ;

c) Impairment of non-financial assets;

d) Taxes;

e) Defined benefit plans (gratuity benefits);

f) Provisions;

g) Revenue recognition - Khazana Coupon
scheme, etc.

h) Valuation of inventories;

i) Contingencies