2.2 Summary of material accounting policies

a) Revenue recognition

Revenue arises mainly from the sale of manufactured
and traded goods, after-sales maintenance and
extended warranty services.

To determine whether to recognise revenue, the
Company follows a 5-step process:

1. Identifying the contract with a customer

2. Identifying the performance obligations

3. Determining the transaction price

4. Allocating the transaction price to the
performance obligations

5. Recognising revenue when/as performance
obligation(s) are satisfied.

Revenue is measured at transaction price received
or receivable, excluding the estimates of variable
consideration allocable to the performance
obligation, after deduction of any trade discounts,
volume rebates and any taxes or duties collected
on behalf of the government which are levied on
sales such as goods and services tax (GST). In
case of multi-element revenue arrangements,
which involve delivery or performance of multiple
products, services, evaluation will be done of
all deliverables in an arrangement to determine
whether they represent separate units of accounting

at the inception of arrangement. Total arrangement
consideration related to the bundled contract is
allocated among the different elements based on
their relative fair values (i.e., ratio of the fair value
of each element to the aggregated fair value of the
bundled deliverables). In case the relative fair value
of different components cannot be determined
on a reasonable basis, the total consideration is
allocated to the different components based on
residual value method.

Revenue is recognised either at a point in time
or over time, when (or as) the Company satisfies
performance obligations by transferring the
promised goods or services to its customers.

The Company recognises contract liabilities for
consideration received in respect of unsatisfied
performance obligations and reports these
amounts as other liabilities in the statement of
financial position (see note 20). Similarly, if the
Company satisfies a performance obligation
before it receives the consideration, the Company
recognises either a contract asset or a receivable
in its statement of financial position, depending on
whether something other than the passage of time
is required before the consideration is due.

Sale of goods

Revenue from sale of goods is recognised when
the control of goods is transferred to the buyer as
per the terms of the contract, in an amount that
reflects the consideration the Company expects to
be entitled to in exchange for those goods. Control
of goods refers to the ability to direct the use of and
obtain substantially all the remaining benefits from
goods.

The Company provides 1 to 5 years' product
warranty on its goods sold to the buyer. Under the
terms of this warranty customers can return the
product for repair or replacement if it fails to perform
in accordance with published specifications. These
warranties are accounted for under Ind AS 37.

After-sale services

The Company enters fixed price maintenance and
extended warranty contracts with its customers
for terms between one and two years in length.

Customers are required to pay in advance for the
services along with the contractual amount paid for
the purchase of goods.

• Maintenance contracts - The Company
enters into agreements with its customers
to perform regularly scheduled maintenance
services on goods purchased from the
Company. Revenue is recognised over time
based on the ratio between the number
of services provided/lapsed in the current
period and the total number of such services
expected to be provided under each contract.
This method best depicts the transfer of
services to the customer because details
of the services to be provided are specified
by management in advance as part of its
published maintenance programme.

• Extended warranty programme - The

Company enters into agreements with its
customers to perform necessary repairs
falling outside the Company's standard
warranty period. As this service involves an
indeterminate number of acts, the Company
is required to ‘stand ready' to perform
whenever a request falling within the scope
of the programme is made by a customer.
Revenue is recognised on a straight-line basis
over the term of the contract and matched
to related costs. This method best depicts
the transfer of services to the customer
as (a) the Company's historical experience
demonstrates no statistically significant
variation in the quantum of services provided
in each year of a multi-year contract, and (b)
no reliable prediction can be made as to when
any individual customer will require service.

Other income

Income from export incentives is recognised on
accrual basis.

Interest Income

I nterest income is recognised on time proportion
basis considering the amount outstanding and
rate applicable. For all financial assets measured
at amortised cost (refer ‘h' below), interest income

is recorded using the effective interest rate (EIR)
i.e. the rate that exactly discounts estimated future
cash receipts through the expected life of the
financial asset to the net carrying amount of the
financial assets. The future cash flows include all
other transaction costs paid or received, premiums
or discounts if any, etc.

Dividend income

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

b) Foreign currency translation
Functional and presentation currency

The financial statements are presented in Indian
Rupee (T) and are rounded to two decimal
places of crores, which is also the functional and
presentation currency of the Company.

Transactions and balances

Foreign currency transactions are recorded in the
functional currency, by applying to the exchange
rate between the functional currency and the
foreign currency at the date of the transaction.

Foreign currency monetary items are converted to
functional currency using the closing rate.
Non-monetary items denominated in a foreign
currency which are carried at historical cost are
reported using the exchange rate at the date of the
transactions.

Exchange differences arising on monetary items on
settlement, or restatement as at reporting date, at
rates different from those at which they were initially
recorded, are recognised in the statement of profit
and loss in the year in which they arise.

c) Borrowing costs

Borrowing costs directly attributable to the
acquisition, construction or production of a
qualifying asset are capitalised during the period of
time that is necessary to complete and prepare the
asset for its intended use or sale. A qualifying asset
is one that necessarily takes substantial period of
time to get ready for its intended use. Capitalisation

of borrowing costs is suspended in the period
during which the active development is delayed
due to, other than temporary interruption. All other
borrowing costs are charged to the statement of
profit and loss as incurred.

d) Property, plant and equipment

Recognition and initial measurement

Property, plant and equipment are stated at their
cost of acquisition. The cost comprises purchase
price, borrowing cost if capitalisation criteria are
met and directly attributable cost of bringing the
asset to its working condition for the intended use.
Any trade discount and rebates are deducted in
arriving at the purchase price. Subsequent costs
are included in the asset's carrying amount or
recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits
attributable to such subsequent cost associated
with the item will flow to the Company. All other
repair and maintenance costs are recognised in
statement of profit and loss as incurred.

I n case an item of property, plant and equipment
is acquired on deferred payment basis, interest
expenses included in deferred payment is
recognised as interest expense and not included in
cost of asset.

Subsequent measurement (depreciation and
useful lives)

Property, plant and equipment are stated at their
cost of acquisition, net of accumulated depreciation
and accumulated impairment losses, if any.

Depreciation on property, plant and equipment is
provided on the straight-line method, computed on
the basis of useful lives mentioned below:

*Based on technical evaluation, the management
believes that the useful lives as given above best
represent the period over which management
expects to use these assets. Hence, the useful
lives for certain items within these classes of assets
is different from the useful lives as prescribed under
Part C of Schedule II to the Companies Act 2013.

The residual values, useful lives and method of
depreciation are reviewed at each financial year
end and adjusted prospectively, if appropriate.

Where, during any financial year, any addition has
been made to any asset, or where any asset has
been sold, discarded, demolished or destroyed, or
significant components replaced; depreciation on
such assets is calculated on a pro rata basis as
individual assets with specific useful life from the
month of such addition or, as the case may be, up
to the month on which such asset has been sold,
discarded, demolished or destroyed or replaced.

De-recognition

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 de-recognition of the
asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the
asset) is included in the income statement when
the asset is derecognised.

Investment properties

Recognition and initial measurement

Investment properties are properties including
right-of-use in properties held to earn rentals
or for capital appreciation, or both. Investment
properties are measured initially at their cost of
acquisition. The cost comprises purchase price,

borrowing cost if capitalisation criteria are met and
directly attributable cost of bringing the asset to its
working condition for the intended use. Any trade
discount and rebates are deducted in arriving at
the purchase price.

Subsequent costs are included in the asset's
carrying amount or recognised as a separate
asset, as appropriate, only when it is probable
that future economic benefits associated with the
item will flow to the Company. All other repair and
maintenance costs are recognised in statement of
profit and loss as incurred.

Though the Company measures investment
property using cost based measurement, the fair
value of investment property is disclosed in the
notes to the financial statements.

Subsequent measurement (depreciation and
useful lives)

Depreciation on investment properties other
than right-of-use in properties is provided on the
straight-line method, computed on the basis of
useful lives prescribed under Part C of Schedule II
to the Companies Act, 2013.

The residual values, useful lives and method of
depreciation are reviewed at each financial year
end and adjusted prospectively, if appropriate.

Where during any financial year, any addition has
been made to any asset, or where any asset has
been sold, discarded, demolished or destroyed, or
significant components replaced; depreciation on
such assets is calculated on a pro rata basis as
individual assets with specific useful life from the
month of such addition or, as the case may be, up
to the month on which such asset has been sold,
discarded, demolished or destroyed or replaced.

De-recognition

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 profit or loss in the period of de-recognition.

f) Intangible assets

Recognition and initial measurement

Purchased intangible assets are stated at cost.

Internally developed intangible assets

Expenditure on the research phase of projects is
recognised as an expense as incurred.

Costs that are directly attributable to a project's
development phase are recognised as intangible
assets, provided the Company can demonstrate
the following:

• the technical feasibility of completing the
intangible asset so that it will be available for
use.

• i ts intention to complete the intangible asset
and use or sell it

• its ability to use or sell the intangible asset

• how the intangible asset will generate
probable future economic benefits

• the availability of adequate technical,
financial and other resources to complete the
development and to use or sell the intangible
asset.

• i ts ability to measure reliably the expenditure
attributable to the intangible asset during its
development

Development costs not meeting these criteria for
capitalisation are expensed as incurred.

Directly attributable costs include employee costs
incurred on development of prototypes along with
an appropriate portion of relevant overheads and
borrowing costs.

Subsequent measurement (amortisation)

Purchased intangible assets are stated at cost less
accumulated amortisation and impairment, if any.

All finite-lived intangible assets, including internally
developed intangible assets, are accounted for
using the cost model whereby capitalised costs
are amortised on a straight-line basis over their
estimated useful lives. The estimated useful life of
an identifiable intangible asset is based on a number
of factors including the effects of obsolescence,

demand, competition, and other economic
factors (such as the stability of the industry, and
known technological advances), and the level of
maintenance expenditures required to obtain the
expected future cash flows from the asset.

Residual values and useful lives are reviewed at
each reporting date. The following useful lives are
applied:

g) Leases

The Company as a lessee

The Company's lease asset classes primarily
consist of leases for land and buildings. The
Company assesses whether a contract contains a
lease, at inception of a contract. A contract is, or
contains, a lease if the contract conveys the right
to control the use of an identified asset for a period
of time in exchange for consideration. To assess
whether a contract conveys the right to control the
use of an identified asset, the Company assesses
whether: (i) the contract involves the use of an
identified asset (ii) the Company has substantially
all of the economic benefits from use of the asset
through the period of the lease and (iii) the Company
has the right to direct the use of the asset.

At the date of commencement of the lease, the
Company recognises a right-of-use asset (“ROU”)
and a corresponding lease liability for all lease
arrangements in which it is a lessee, except for
leases with a term of twelve months or less (short¬
term leases) and low value leases. 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.

Certain lease arrangements include the options
to extend or terminate the lease before the end
of the lease term. ROU assets and lease liabilities
includes these options when it is reasonably certain
that they will be exercised.

The right-of-use assets are initially recognised at
cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or
prior to the commencement date of the lease plus
any initial direct costs less any lease incentives.
They are subsequently measured at cost less
accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the
commencement date on a straight-line basis over
the shorter of the lease term and useful life of the
underlying asset.

The lease liability is initially measured at amortised
cost at the present value of the future lease
payments. The lease payments are discounted
using the interest rate implicit in the lease or, if
not readily determinable, using the incremental
borrowing rates in the country of domicile of these
leases. Lease liabilities are remeasured with a
corresponding adjustment to the related right of
use asset if the Company changes its assessment
whether it will exercise an extension or a termination
option.

The Company as a lessor

Leases for which the Company is a lessor is
classified as a finance or operating lease. Whenever
the terms of the lease transfer substantially all the
risks and rewards of ownership to the lessee, the
contract is classified as a finance lease. All other
leases are classified as operating leases.

When the Company is an intermediate lessor, it
accounts for its interests in the head lease and the
sublease separately. The sublease is classified as a
finance or operating lease by reference to the right-
of-use asset arising from the head lease.

For operating leases, rental income is recognised
on a straight-line basis over the term of the relevant
lease.

h) Financial instruments

Financial instruments are recognised when the
Company becomes a party to the contractual
provisions of the instrument and are measured
initially at fair value adjusted for transaction costs,
except for those carried at fair value through profit
or loss which are measured initially at fair value or

trade receivables which are recognised at their
transaction price, where the trade receivable does
not contain a significant financing component.

I f the Company determines that the fair value at
initial recognition differs from the transaction price,
the Company accounts for that instrument at that
date as follows:

a) at the measurement basis mentioned above
if that fair value is evidenced by a quoted
price in an active market for an identical
asset or liability (i.e. a Level 1 input) or based
on a valuation technique that uses only data
from observable markets. The Company
recognises the difference between the fair
value at initial recognition and the transaction
price as a gain or loss.

b) i n all other cases, at the measurement basis
mentioned above, adjusted to defer the
difference between the fair value at initial
recognition and the transaction price. After
initial recognition, the Company recognises
that deferred difference as a gain or loss only
to the extent that it arises from a change in a
factor (including time) that market participants
would take into account when pricing the
asset or liability.

Subsequent measurement of financial assets
and financial liabilities is described below.

Financial assets

Classification and subsequent measurement

For the purpose of subsequent measurement,
financial assets are classified into the following
categories upon initial recognition:

i. Financial assets at amortised cost

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

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

• Contractual terms of the asset give rise
on specified dates to cash flows that

are solely payments of principal and
interest (SPPI) on the principal amount
outstanding.

After initial measurement, such financial assets
are subsequently measured at amortised cost
using the effective interest method.

ii. Financial assets at fair value

Investments in equity instruments (other
than subsidiaries/ associates/ joint
ventures) - All equity investments in scope
of Ind AS 109 are measured at fair value.
Equity instruments which are held for trading
are generally classified at fair value through
profit and loss (FVTPL). For all other equity
instruments, the Company decides to classify
the same either at fair value through other
comprehensive income (FVOCI) or fair value
through profit and loss (FVTPL). The Company
makes such election on an instrument-by¬
instrument basis. The classification is made
on initial recognition and is irrevocable.

If the Company decides to classify an
equity instrument as at FVOCI, then all fair
value changes on the instrument, excluding
dividends, are recognised in the other
comprehensive income (OCI). There is no
recycling of the amounts from OCI to P&L,
even on sale of investment. However, the
Company may transfer the cumulative gain
or loss within equity. Dividends on such
investments are recognised in profit or loss
unless the dividend clearly represents a
recovery of part of the cost of the investment.

Equity instruments included within the FVTPL
category are measured at fair value with all
changes recognised in the P&L.

Mutual funds - All mutual funds in scope of
Ind-AS 109 are measured at fair value through
profit and loss (FVTPL), except investment in
certain fixed maturity plans (FMPs) and target
maturity funds (TMFs).

Fixed maturity plans (FMP), purchased by
the Company on or after April 01, 2021, are
measured at amortised cost, if the Company

using effective interest method. Amortised
cost is calculated after considering any
discount or premium on acquisition and fees
or costs that are an integral part of the EIR.
The effect of EIR amortisation is included as
finance costs in the statement of profit and
loss.

De-recognition of financial liabilities

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

Derivative financial instruments

Initial and subsequent measurement

Derivatives are initially recognised at fair value
on the date a derivative contract is entered
into and are subsequently re-measured to
their fair value at the end of each reporting
period.

Offsetting of financial instruments

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

i) Impairment of financial assets

All financial assets except for those at FVTPL are
subject to review for impairment at least at each
reporting date to identify whether there is any
objective evidence that a financial asset or a group
of financial assets is impaired. Different criteria
to determine impairment are applied for each
category of financial assets.

In accordance with Ind-AS 109, the Company
applies expected credit loss (ECL) model for
measurement and recognition of impairment loss
for financial assets carried at amortised cost.

ECL is the weighted average of difference between
all contractual cash flows that are due to the
Company in accordance with the contract and
all the cash flows that the Company expects to
receive, discounted at the original effective interest
rate, with the respective risks of default occurring
as the weights. When estimating the cash flows,
the Company is required to consider -

• All contractual terms of the financial assets
(including prepayment and extension) over
the expected life of the assets.

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

Trade receivables

The Company applies approach permitted by
Ind AS 109 Financial Instruments, which requires
lifetime expected credit losses to be recognised
upon initial recognition of receivables. Lifetime ECL
are the expected credit losses resulting from all
possible default events over the expected life of a
financial instrument.

The Company uses the expected credit loss model
to assess any required allowances and uses a
provision matrix to compute the expected credit loss
allowance for trade receivables. Lifetime expected
credit losses are assessed and accounted based
on company's historical collection experience
for customers and forecast of macro-economic
factors for each identified segment.

The Company defines default as an event when
the financial asset is past due for more than 365
days. This definition is based on management’s
expectation of the time period beyond which if a
receivable is outstanding, it is an objective evidence
of impairment.

Other financial assets

For recognition of impairment loss on other
financial assets and risk exposure, the Company

determines whether there has been a significant
increase in the credit risk since initial recognition. If
the credit risk has not increased significantly since
initial recognition, the Company measures the
loss allowance at an amount equal to 12-month
expected credit losses, else at an amount equal to
the lifetime expected credit losses.

When making this assessment, the Company uses
the change in the risk of a default occurring over
the expected life of the financial asset. To make
that assessment, the Company compares the risk
of a default occurring on the financial asset as at
the balance sheet date with the risk of a default
occurring on the financial asset as at the date of
initial recognition and considers reasonable and
supportable information, that is available without
undue cost or effort, that is indicative of significant
increases in credit risk since initial recognition.
The Company assumes that the credit risk on
a financial asset has not increased significantly
since initial recognition if the financial asset is
determined to have low credit risk at the balance
sheet date.

j) Impairment of non-financial assets

For impairment assessment purposes, assets are
grouped at the lowest levels for which there are
largely independent cash inflows (cash generating
units). As a result, some assets are tested
individually for impairment and some are tested at
cash-generating unit level.

At each reporting date, the Company assesses
whether there is any indication based on internal/
external factors, that an asset may be impaired.
If any such indication exists, the Company
estimates the recoverable amount of the asset.
If such recoverable amount of the asset or the
recoverable amount of the cash generating unit to
which the asset belongs is less than its carrying
amount, the carrying amount is reduced to its
recoverable amount and the reduction is treated
as an impairment loss and is recognised in the
statement of profit and loss. If, at the reporting date
there is an indication that a previously assessed
impairment loss no longer exists, the recoverable
amount is reassessed which is the higher of fair

value less costs of disposal and value-in-use and
the asset is reflected at the recoverable amount
subject to a maximum of depreciated historical
cost. Impairment losses previously recognised are
accordingly reversed in the statement of profit and
loss.

To determine value-in-use, management estimates
expected future cash flows from each cash¬
generating unit and determines a suitable discount
rate in order to calculate the present value of those
cash flows. The data used for impairment testing
procedures are directly linked to the Company's
latest approved budget, adjusted as necessary
to exclude the effects of future re-organisations
and asset enhancements. Discount factors are
determined individually for each cash-generating
unit and reflect current market assessment of the
time value of money and asset-specific risk factors.

k) Fair value measurement

The Company measures certain financial
instruments, such as, investments 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

• I n 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.

Refer Note 35 for fair value hierarchy.

l) Inventories

I nventories are stated at the lower of cost and net
realisable value. The cost of inventories comprises
of all costs of purchase, costs of conversion and
other costs incurred in bringing the inventories
to their present location and condition. Costs of
inventories are computed using weighted average
cost formula. Net realisable value is the estimated
selling price in the ordinary course of business
less any applicable selling expenses. Provision for
obsolescence and slow moving inventory is made
based on management's best estimates of net
realisable value of such inventories.

m) Income taxes

Tax expense recognised in profit or loss comprises
the sum of deferred tax and current tax not
recognised in other comprehensive income or
directly in equity.

Current income tax is measured at the amount
expected to be paid to the tax authorities in
accordance with the Income-tax Act, 1961.
Current tax items are recognised in correlation
to the underlying transaction either in other
comprehensive income or directly in equity.

Deferred tax liabilities are generally recognised in
full for all taxable temporary differences. Deferred
tax assets are recognised to the extent that it is
probable that the underlying tax loss, unused tax
credits (Minimum alternate tax credit entitlement)
or deductible temporary difference will be utilised
against future taxable income. This is assessed
based on the Company's forecast of future
operating results, adjusted for significant non¬
taxable income and expenses and specific limits
on the use of any unused tax loss or credit.
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 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 items are recognised
in correlation to the underlying transaction either in
other comprehensive income or directly in equity.

Current tax assets and current tax liabilities are
offset when there is a legally enforceable right to
set off the recognised amounts and there is an
intention to settle the asset and liability on a net
basis. Deferred tax assets and deferred tax liabilities
are offset when there is a legally enforceable right
to set off current tax assets against current tax
liabilities; and the deferred tax assets and the
deferred tax liabilities relate to income taxes levied
by the same taxation authority.

n) Investment in subsidiaries, joint ventures and
associates

In accordance with Ind AS 27 - Separate
Financial Statements, investments in equity
instruments of subsidiaries, joint ventures and
associates can be measured at cost or at fair value
in accordance with Ind AS 109. The Company has
opted to measure such investments at cost at initial
recognition.

Subsequently, such investments in subsidiaries,
joint ventures and associates are carried at cost
less accumulated impairment losses, if any. Where
an indication of impairment exists, the carrying
amount of the investment is assessed and written
down immediately to its recoverable amount.
On disposal of these investments, the difference
between net disposal proceeds and the carrying
amounts are recognised in the statement of profit
and loss.

o) Government grants

Government grants are recognised where there is
reasonable assurance that the grant will be received
and all attached conditions will be complied with.
When the grant relates to an expense item, it is
recognised as income on a systematic basis over
the periods that the related costs, for which it is
intended to compensate, are expensed. When the
grant relates to an asset, it is initially recognised as
deferred income at fair value and subsequently is
recognised in statement of profit and loss as other
income on a systematic basis over the expected
useful life of the related asset.

When the Company receives grants for non¬
monetary assets, the asset and the grant are
recorded at fair value amounts and released to profit
or loss over the expected useful life in a pattern of
consumption of the benefit of the underlying asset
i.e. by equal annual instalments.

p) Cash and cash equivalents

Cash and cash equivalents comprise cash in
hand, demand deposits with banks/corporations
and short-term highly liquid investments (original
maturity less than 3 months) that are readily
convertible into known amount of cash and are
subject to an insignificant risk of change in value.

q) Post-employment, long term and short-term
employee benefits

The Company provides post-employment benefits
through various defined contribution and defined
benefit plans.

Defined contribution plans

A defined contribution plan is a plan under which
the Company pays fixed contributions into an
independent fund administered by the government.
The Company has no legal or constructive
obligations to pay further contributions after its
payment of the fixed contribution, which are
recognised as an expense in the year in which the
related employee services are received.

Defined benefit plans

The defined benefit plans sponsored by the
Company define the amount of the benefit that an
employee will receive on completion of services by
reference to length of service and last drawn salary.
The legal obligation for any benefits remains with
the Company.

Gratuity and pension are post-employment
benefits and are in the nature of a defined benefit
plan. The liability recognised in the financial
statements in respect of gratuity and pension is
the present value of the defined benefit obligation
at the reporting date, together with adjustments
for unrecognised actuarial gains or losses and
past service costs. The defined benefit obligation
is calculated at or near the reporting date by an

independent actuary using the projected unit
credit method.

Actuarial gains and losses arising from past
experience and changes in actuarial assumptions
are credited or charged to the statement of OCI
in the year in which such gains or losses are
determined.

Other long-term employee benefits

Liability in respect of compensated absences
becoming due or expected to be availed more than
one year 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.

Short-term employee benefits

Expense in respect of other short-term benefits
is recognised on the basis of the amount paid or
payable for the period during which services are
rendered by the employee.

r) Non-current assets held for sale and discontinued

operations

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

Non-current assets classified as held for sale are
presented separately and measured at the lower
of their carrying amounts immediately prior to their
classification as held for sale and their fair value
less costs to sell. However, some held for sale
assets such as financial assets, assets arising

from employee benefits and deferred tax assets,
continue to be measured in accordance with the
Company's relevant accounting policy for those
assets. Once classified as held for sale, the assets
are not subject to depreciation or amortisation.

A discontinued operation is a component of the
Company that either has been disposed of, or
is classified as held for sale. Profit or loss from
discontinued operations comprise the post¬
tax profit or loss of discontinued operations
and the post-tax gain or loss resulting from the
measurement and disposal of assets classified as
held for sale. Any profit or loss arising from the sale
or re-measurement of discontinued operations is
presented as part of a single line item, profit or loss
from discontinued operations.

s) Share based payments

The Company has equity-settled share-based
remuneration plans for its employees. None of the
Company's plans are cash-settled.

Where employees are rewarded using share-based
payments, the fair value of employees' services
is determined indirectly by reference to the fair
value of the equity instruments granted. This fair
value is appraised at the grant date and excludes
the impact of non-market vesting conditions (for
example profitability and sales growth targets and
performance conditions).

All share-based remuneration is ultimately
recognised as an expense in profit or loss with a
corresponding credit to equity. If vesting periods
or other vesting conditions apply, the expense is
allocated over the vesting period, based on the
best available estimate of the number of share
options expected to vest.

Upon exercise of share options, the proceeds
received, net of any directly attributable transaction
costs, are allocated to share capital up to the
nominal (or par) value of the shares issued with any
excess being recorded as share premium.