2. Material accounting policies

The material accounting policies applied by the Company
in the preparation of its financial statements are listed
below. Such accounting policies have been applied
consistently to all the periods presented in these financial
statements, unless otherwise indicated.

(a) Statement of compliance

The financial statements have been prepared in
accordance with the Indian Accounting Standards
(referred to as "Ind AS") prescribed under Section 133 of
the Companies Act, 2013 read with Companies (Indian
Accounting Standards) Rules, as amended from time to
time and other relevant provisions of the Act.

(b) Basis of preparation

The financial statements have been prepared under the
historical cost convention with the exception of certain
assets and liabilities that are required to be carried at fair
value by Ind AS.

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.

All assets and liabilities have been classified as current
and non-current as per the Company's normal operating
cycle which is based on the nature of businesses and the
time elapsed between deployment of resources and the
realisation of cash and cash equivalents. The Company
has considered an operating cycle of 12 months.

(c) Use of estimates and critical accounting
judgements

I n the preparation of the financial statements, the
Company makes judgements in the application of
accounting policies; and estimates and assumptions
which affects carrying values of assets and liabilities that
are not readily apparent from other sources.

The estimates and associated assumptions are based
on historical experience and other factors that are
considered to be relevant. Actual results may differ from
these estimates.

Estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised
and future periods affected.

The Company uses the following critical accounting
estimates and judgements in preparation of its financial
statements.

Impairment of financial assets (other than
subsequent measurement at fair value)

Measurement of impairment of financial assets
require use of estimates and judgements, which have
been explained in the note on financial instruments
under impairment of financial assets. (refer note 2(m),
page F36).

Useful lives of property, plant and equipment,
right-of-use assets and intangible assets

The Company reviews the useful life of property, plant
and equipment, right-of-use assets and intangible assets
at the end of each reporting period. This reassessment
may result in change in depreciation and amortisation
expense in future periods. The policy has been detailed
out in note 2(e), page F32, note 2(j), page F34 and note
2(k), page F35.

Provisions and contingent liabilities

A provision is recognised when the Company has a
present obligation, legal or constructive, as result of a past
event and it is probable that the outflow of resources will
be required to settle the obligation, in respect of which
a reliable estimate can be made. They include provisions
on decommissioning, site restoration and environmental
provisions as well which may change where changes in
estimated reserves affect expectations about the timing
or cost of these activities. All provisions are reviewed
at each balance sheet date and adjusted to reflect the
current best estimates.

The Company uses significant judgements to assess
contingent liabilities. Contingent liabilities are disclosed
when there is a possible obligation arising from past
events, the existence of which will be confirmed only
by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control
of the Company or a present obligation that arises from
past event where it is either not probable that an outflow
of resources will be utilised to settle the obligation or
a reliable estimate of the amount cannot be made.
Contingent assets are neither recognised nor disclosed
in the financial statements. Further details are set out in
note 19, page F83 and note 34(A), page F101.

Fair value measurements of financial instruments

When the fair value of financial assets and financial
liabilities recorded in the balance sheet cannot be
measured based on quoted prices in active markets,
their fair value is measured using valuation techniques
including Discounted Cash Flow Model. The inputs
to these models are taken from observable markets
where possible, but where this is not feasible, a degree

of judgement is required in establishing fair values.
Judgements include considerations of inputs such
as liquidity risks, credit risks and volatility. Changes
in assumptions about these factors could affect the
reported fair value of financial instruments. Further
details are set out in note 37, page F110.

Leases

The Company evaluates if an arrangement qualifies to
be a lease as per the requirements of Ind AS 116 "Leases".
Identification of a lease requires significant judgement in
assessing the terms and conditions of the arrangement
including lease term, anticipated renewals and the
applicable discount rate.

The lease payments are discounted using the interest rate
implicit in the lease, if that rate can be readily determined.
If that rate cannot be readily determined, the Company
uses incremental borrowing rate.

Retirement benefit obligations and assets

The Company's retirement benefit obligations and
assets are subject to a number of assumptions including
discount/interest rates as applicable, inflation, salary
growth and mortality rate. Significant assumptions are
required when setting these criteria and a change in
these assumptions would have a significant impact on
the amount recorded in the Company's balance sheet
and the statement of profit and loss. The Company
sets these assumptions based on previous experience
and third party actuarial advice. The assumptions are
reviewed annually and adjusted following actuarial and
experience changes. Further details on the Company's
retirement benefit obligations and assets, including key
assumptions are set out in note 33, page F94.

(d) Business combination under common control

Business combinations involving entities or businesses
under common control are accounted for using the
pooling of interest method. Under pooling of interest
method, the assets and liabilities of the combining entities
or businesses are reflected at their carrying amounts
after making adjustments necessary to harmonise
the accounting policies. The financial information in
the financial statements in respect of prior periods is
restated as if the business combination had occurred
from the beginning of the preceding period in the

financial statements, irrespective of the actual date of the
combination. The identity of the reserves is preserved in
the same form in which they appeared in the financial
statements of the transferor and the difference, if any,
between the amount recorded as share capital issued
plus any additional consideration in the form of cash
or other assets and the amount of share capital of the
transferor is transferred to capital reserve.

(e) Property, plant and equipment

Property, plant and equipment is stated at cost or deemed
cost applied on transition to Ind AS, less accumulated
depreciation and impairment. Cost includes all direct
costs and expenditures incurred to bring the asset to its
working condition and location for its intended use. Trial
run expenses are capitalised. Borrowing costs incurred
during the period of construction is capitalised as part of
cost of qualifying asset.

Depreciation is provided so as to write off, on a straight
line basis, the cost/deemed cost of property, plant and
equipment to their residual value. These charges are
commenced from the dates the assets are available for
their intended use and are spread over their estimated
useful lives. The estimated useful lives of assets, residual
values and depreciation method are reviewed regularly
and revised when necessary.

Depreciation on assets under construction commences
only when the assets are ready for their intended use.

The estimated useful lives for the main categories of
property, plant and equipment are:

Property, plant and equipment are evaluated for
recoverability wherever there is any indication that
their carrying value may not be recoverable. If any such
indication exists, the recoverable amount being the
higher of fair value less costs to sell and value in use is
determined on an individual asset basis. In cases where
the asset does not generate cash flows that are largely
independent from other assets, the recoverable amount
is determined for the cash generating unit (CGU) to which
the asset belongs. In assessing value in use, the estimated
future cash flows are discounted to their present value
using a tax free discount rate that reflects current market
assessment of the time value of money and the risk
specific to the asset for which the estimates of future cash
flows have not been adjusted.

If the recoverable value of an asset (CGU) is estimated to
be less than its carrying amount, the carrying amount of
the asset (CGU) is reduced to its recoverable value. An
impairment loss is recognised in the statement of profit
and loss.

Major furnace relining expenses are depreciated over a
period of 10 years (average expected life).

Freehold land is not depreciated.

* For these class of assets, based on internal assessment
and independent technical evaluation carried out by
chartered engineers, the Company believes that the useful
lives as given above best represent the period over which
the Company expects to use these assets. Hence the useful
lives for these assets are different from the useful lives as
prescribed under Part C of Schedule II of the Companies
Act, 2013.

(f) Exploration for and evaluation of mineral
resources

Expenditures associated with search for specific mineral
resources are recognised as exploration and evaluation
assets. The following expenditure comprises cost of
exploration and evaluation assets:

> obtaining of the rights to explore and evaluate mineral
reserves and resources including costs directly related
to this acquisition

> researching and analysing existing exploration data

> conducting geological studies, exploratory drilling
and sampling

> examining and testing extraction and treatment
methods

> compiling pre-feasibility and feasibility studies

> activities in relation to evaluating the technical
feasibility and commercial viability of extracting a
mineral resource.

Administration and other overhead costs are charged
to the cost of exploration and evaluation assets only if
directly related to an exploration and evaluation project.

I f a project does not prove viable, all irrecoverable
exploration and evaluation expenditure associated with
the project net of any related impairment allowances is
written off to the statement of profit and loss.

The Company measures its exploration and evaluation
assets at cost and classifies as property, plant and
equipment or intangible assets according to the nature
of the assets acquired and applies the classification
consistently. To the extent that a tangible asset is
consumed in developing an intangible asset, the amount
reflecting that consumption is capitalised as a part of the
cost of the intangible asset.

As the capitalised exploration asset is not available for
use, it is not depreciated. All exploration and evaluation
assets are monitored for indications of impairment. An
exploration and evaluation asset is no longer classified
as such when the technical feasibility and commercial
viability of extracting a mineral resource are demonstrable
and the development of the deposit is sanctioned by the
management. The carrying value of such exploration and
evaluation asset is reclassified to mining assets.

(g) Development expenditure for mineral reserves

Development is the establishment of access to mineral
reserves and other preparations for commercial
production. Development activities often continue
during production and include:

> sinking shafts and underground drifts (often called
mine development)

> making permanent excavations

> developing passageways and rooms or galleries

> building roads and tunnels and

> advance removal of overburden and waste rock.

Development (or construction) also includes the
installation of infrastructure (e.g., roads, utilities and

housing), machinery, equipment and facilities.

Development expenditure is capitalised and presented as
part of mining assets. No depreciation is charged on the
development expenditure before the start of commercial
production.

(h) Provision for restoration and environmental
costs

The Company has liabilities related to restoration of soil
and other related works, which are due upon the closure
of certain of its mining sites.

Such liabilities are estimated case-by-case based on
available information, considering applicable local
legal requirements. The estimation is made using
existing technology, at current prices, and discounted
using an appropriate discount rate where the effect of
time value of money is material. Future restoration and
environmental costs, discounted to net present value,
are capitalised and the corresponding restoration liability
is raised as soon as the obligation to incur such costs
arises. Future restoration and environmental costs are
capitalised in property, plant and equipment or mining
assets as appropriate and are depreciated over the life
of the related asset. The effect of time value of money
on the restoration and environmental costs liability is
recognised in the statement of profit and loss.

(i) Stripping Costs

The Company separates two different types of stripping
costs that are incurred in surface mining activity:

> developmental stripping costs and

> production stripping costs

Developmental stripping costs which are incurred in
order to obtain access to quantities of mineral reserves
that will be mined in future periods are capitalised as part
of mining assets.

Capitalisation of developmental stripping costs ends
when the commercial production of the mineral reserves
begins. A mine can operate several open pits that are
regarded as separate operations for the purpose of mine
planning and production. In this case, stripping costs
are accounted for separately, by reference to the ore
extracted from each separate pit. If, however, the pits are
highly integrated for the purpose of mine planning and
production, stripping costs are aggregated too.

The determination of whether multiple pit mines are
considered separate or integrated operations depends
on each mine's specific circumstances. The following
factors normally point towards the stripping costs for the
individual pits being accounted for separately:

> mining of the second and subsequent pits is
conducted consecutively with that of the first pit,
rather than concurrently

> separate investment decisions are made to develop
each pit, rather than a single investment decision
being made at the outset

> the pits are operated as separate units in terms of mine
planning and the sequencing of overburden and ore
mining, rather than as an integrated unit

> expenditures for additional infrastructure to support
the second and subsequent pits are relatively large

> the pits extract ore from separate and distinct ore
bodies, rather than from a single ore body.

The relative importance of each factor is considered by
the management to determine whether, the stripping
costs should be attributed to the individual pit or to the
combined output from the several pits.

Production stripping costs are incurred to extract the ore
in the form of inventories and/or to improve access to an
additional component of an ore body or deeper levels
of material. Production stripping costs are accounted for
as inventories to the extent the benefit from production
stripping activity is realised in the form of inventories.

The Company recognises a stripping activity asset in the
production phase if, and only if, all of the following are met:

> it is probable that the future economic benefit
(improved access to the ore body) associated with the
stripping activity will flow to the Company

> the Company can identify the component of the ore
body for which access has been improved and

> the costs relating to the improved access to that
component can be measured reliably.

Such costs are presented within mining assets. After
initial recognition, stripping activity assets are carried at
cost/deemed cost, less accumulated amortisation and
impairment. The expected useful life of the identified
component of the ore body is used to depreciate or
amortise the stripping asset.

(j) Intangible assets

Software costs and other intangible assets are included in
the balance sheet as intangible assets when it is probable
that associated future economic benefits would flow to
the Company. In this case they are measured initially at
purchase cost and then amortised on a straight-line basis
over their estimated useful lives.

Subsequent to initial recognition, intangible assets with
definite useful lives are reported at cost or deemed
cost applied on transition to Ind AS, less accumulated
amortisation and accumulated impairment losses.

Intangible assets are evaluated for recoverability wherever
there is any indication that their carrying value may not be
recoverable. If any such indication exists, the recoverable
amount being the higher of fair value less costs to sell and
value in use is determined on an individual asset basis. In
cases, where the asset does not generate cash flows that
are largely independent from other assets, the recoverable
amount is determined for the cash generating unit (CGU)
to which the asset belongs.

If the recoverable value of an asset (CGU) is estimated to
be less than its carrying amount, the carrying amount of
the asset (CGU) is reduced to its recoverable value. An
impairment loss is recognised in the statement of profit
and loss.

Mining assets are amortised over the useful life of the
mine or lease period whichever is lower. For certain
mining assets, where unit of production is considered to
be more reflective of the pattern of use, amortisation is
done based on unit of production method.

(k) Leases

The Company determines whether an arrangement
contains a lease by assessing whether the fulfilment of a
transaction is dependent on the use of a specific asset and
whether the transaction conveys the right to control the
use of that asset to the Company in return for payment.

The Company as lessee

The Company accounts for each lease component within
the contract separately from non-lease components
and allocates the consideration in the contract to each
lease component on the basis of the relative stand-alone
price of the lease component and the aggregate stand¬
alone price of the non-lease components. The Company
recognises right-of-use asset representing its right to
use the underlying asset for the lease term at the lease
commencement date. The cost of the right-of-use asset
measured at inception comprises of the amount of initial
measurement of the lease liability adjusted for any lease
payments made at or before the commencement date.

Certain lease arrangements include options to extend
or terminate the lease before the end of the lease term.
The right-of-use assets and lease liabilities include these
options when it is reasonably certain that such options
would be exercised.

The right-of-use assets are subsequently measured at
cost less any accumulated depreciation, accumulated
impairment losses, if any, and adjusted for any re¬
measurement of the lease liability. The right-of-use assets
are depreciated using the straight-line method from the
commencement date over the shorter of lease term or
useful life of right-of-use asset.

Right-of-use assets are tested for impairment whenever
there is any indication that their carrying amounts may
not be recoverable. Impairment loss, if any, is recognised
in the statement of profit and loss.

Lease liability is measured at the present value of the
lease payments that are not paid at the commencement

date of the lease. The lease payments are discounted
using the interest rate implicit in the lease, if that rate
can be readily determined. If that rate cannot be readily
determined, the Company uses incremental borrowing
rate. The lease liability is subsequently remeasured
by increasing the carrying amount to reflect interest
on the lease liability, reducing the carrying amount to
reflect the lease payments made and remeasuring the
carrying amount to reflect any reassessment or lease
modifications. The Company recognises the amount of
the re-measurement of lease liability as an adjustment to
the right-of-use asset. Where the carrying amount of the
right-of-use asset is reduced to zero and there is a further
reduction in the measurement of the lease liability, the
Company recognises any remaining amount of the re¬
measurement in the statement of profit and loss.

Variable lease payments not included in the measurement
of the lease liabilities are expensed to the statement
of profit and loss in the period in which the events or
conditions which trigger those payments occur.

Payment made towards leases for which non-cancellable
term is 12 months or lesser (short-term leases) and low
value leases are recognised in the statement of Profit and
Loss as rental expenses over the tenure of such leases.

The Company as lessor

(i) Operating lease - Rental income from operating
leases is recognised in the statement of profit and
loss on a straight-line basis over the term of the
relevant lease unless another systematic basis is more
representative of the time pattern in which economic
benefits from the leased asset is diminished. Initial
direct costs incurred in negotiating and arranging an
operating lease are added to the carrying value of the
leased asset and recognised on a straight-line basis
over the lease term.

(ii) Finance lease - When assets are leased out under
a finance lease, the present value of minimum
lease payments is recognised as a receivable. The
difference between the gross receivable and the
present value of receivable is recognised as unearned
finance income. Lease income is recognised over the
term of the lease using the net investment method
before tax, which reflects a constant periodic rate of
return. Such rate is the interest rate which is implicit
in the lease contract.

(l) Investments in subsidiaries, associates and joint
ventures

The Company measures its equity investments in
subsidiaries in the standalone financial statements at fair
value through other comprehensive income as per Ind
AS 109 "Financial instruments" with changes in fair value
of such investments being recognised through "Other
Comprehensive Income (OCI)" as on each reporting date.

Investments in associates and joint ventures are carried
at cost/deemed cost applied on transition to Ind AS,
less accumulated impairment losses, if any. Where an
indication of impairment exists, the carrying amount of
investment is assessed and an impairment provision is
recognised, if required, immediately to its recoverable
amount, being the higher of value in use or fair value less
costs to sell. On disposal of such investments, difference
between the net disposal proceeds and carrying amount
is recognised in the statement of profit and loss.

(m) Financial instruments

Financial assets and financial liabilities are recognised
when the Company becomes a party to the contractual
provisions of the instrument. Financial assets and
liabilities are initially measured at fair value. Transaction
costs that are directly attributable to the acquisition or
issue of financial assets and financial liabilities (other
than financial assets and financial liabilities at fair value
through profit and loss) are added to or deducted from
the fair value measured on initial recognition of financial
asset or financial liability. The transaction costs directly
attributable to the acquisition of financial assets and
financial liabilities at fair value through profit and loss are
immediately recognised in the statement of profit and
loss. Trade receivables that do not contain a significant
financing component are measured at transaction price.

(I) Financial assets

Cash and bank balances

Cash and bank balances consist of:

(i) Cash and cash equivalents - which includes
cash in hand, deposits held at call with banks
and other short-term deposits which are readily

convertible into known amounts of cash, are
subject to an insignificant risk of change in
value and have original maturities of less than
three months. These balances with banks are
unrestricted for withdrawal and usage.

(ii) Other balances with banks - which also
include balances and deposits with banks that
are restricted for withdrawal and usage.

Financial assets at amortised cost

Financial assets are subsequently measured at
amortised cost if these financial assets are held
within a business model whose objective is to hold
these assets in order to collect contractual cash flows
and the contractual terms of the financial asset give
rise on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.

Financial assets measured at fair value

Financial assets are measured at fair value through
other comprehensive income if such financial assets
are held within a business model whose objective is
to hold these assets in order to collect contractual
cash flows and to sell such financial assets and the
contractual terms of the financial asset give rise
on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.

The Company in respect of certain equity investments
(other than in associates and joint ventures) which
are not held for trading has made an irrevocable
election to present in other comprehensive income
subsequent changes in the fair value of such equity
instruments. Such an election is made by the Company
on an instrument-by-instrument basis at the time
of initial recognition of such equity investments.
These investments are held for medium or long¬
term strategic purpose. The Company has chosen to
designate these investments in equity instruments
as fair value through other comprehensive income
as the management believes this provides a more
meaningful presentation for medium or long-term
strategic investments, than reflecting changes in fair
value immediately in the statement of profit and loss.

Financial assets not measured at amortised cost or
at fair value through other comprehensive income
are carried at fair value through profit and loss.

Interest income

Interest income is accrued on a time proportion
basis, by reference to the principal outstanding and
effective interest rate applicable and is recognised
in the statement of profit and loss.

Dividend income

Dividend income from investments is recognised
in the statement of profit or loss when the right to

receive payment has been established.

Impairment of financial assets

Loss allowance for expected credit losses is
recognised for financial assets measured at
amortised cost and fair value through other
comprehensive income.

The Company recognises lifetime expected credit
losses for all trade receivables that do not constitute
a financing transaction.

For financial assets (apart from trade receivables that
do not constitute of financing transaction) whose
credit risk has not significantly increased since initial
recognition, loss allowance equal to twelve months
expected credit losses is recognised. Loss allowance
equal to the lifetime expected credit losses is
recognised if the credit risk of the financial asset has
significantly increased since initial recognition.

De-recognition of financial assets

The Company de-recognises a financial asset only
when the contractual rights to the cash flows from
the asset expire, or it transfers the financial asset and
substantially all risks and rewards of ownership of
the asset to another entity. If the Company neither
transfers nor retains substantially all the risks and
rewards of ownership and continues to control
the transferred asset, the Company recognises its
retained interest in the assets and an associated
liability for amounts it may have to pay.

If the Company retains substantially all the risks
and rewards of ownership of a transferred financial
asset, the Company continues to recognise the
financial asset and also recognises a borrowing for
the proceeds received.

(II) Financial liabilities and equity instruments
Classification as debt or equity

Financial liabilities and equity instruments issued
by the Company are classified according to the
substance of the contractual arrangements entered
into and the definitions of a financial liability and an
equity instrument.

Equity instruments

An equity instrument is any contract that evidences
a residual interest in the assets of the Company after
deducting all of its liabilities. Equity instruments are
recorded at the proceeds received, net of direct
issue costs.

Financial liabilities

Trade and other payables are initially measured
at fair value, net of transaction costs, and are
subsequently measured at amortised cost, using
the effective interest rate method where the time
value of money is significant.

Interest bearing bank loans, overdrafts and issued
debt are initially measured at fair value and are
subsequently measured at amortised cost using
the effective interest rate method. Any difference
between the proceeds (net of transaction costs)
and the settlement or redemption of borrowings is
recognised over the term of the borrowings in the
statement of profit and loss.

De-recognition of financial liabilities

The Company de-recognises financial liabilities
when, and only when, the Company's obligations
are discharged, cancelled or they expire.

Derivative financial instruments and hedge
accounting

In the ordinary course of business, the Company
uses certain derivative financial instruments to
reduce business risks which arise from its exposure

to foreign exchange, base metal prices and interest
rate fluctuations. The instruments are confined
principally to forward foreign exchange contracts,
forward rate agreements, cross currency swaps,
interest rate swaps and collars. The instruments are
employed as hedges of transactions included in the
financial statements or for highly probable forecast
transactions/firm contractual commitments. These
derivatives contracts do not generally extend
beyond six months, except for certain currency
swaps and interest rate derivatives.

Derivatives are initially accounted for and measured
at fair value on the date the derivative contract is
entered into and are subsequently remeasured to
their fair value at the end of each reporting period.

The Company adopts hedge accounting for forward
foreign exchange, interest rate and commodity
contracts wherever possible. At the inception
of each hedge, there is a formal, documented
designation of the hedging relationship. This
documentation includes, inter alia, items such as
identification of the hedged item and transaction
and nature of the risk being hedged. At inception
each hedge is expected to be highly effective
in achieving an offset of changes in fair value or
cash flows attributable to the hedged risk. The
effectiveness of hedge instruments to reduce the
risk associated with the exposure being hedged is
assessed and measured at the inception and on an
ongoing basis. The ineffective portion of designated
hedges is recognised immediately in the statement
of profit and loss.

When hedge accounting is applied:

> for fair value hedges of recognised assets and
liabilities, changes in fair value of the hedged
assets and liabilities attributable to the risk
being hedged, are recognised in the statement of
profit and loss and compensate for the effective
portion of symmetrical changes in the fair value
of the derivatives.

> for cash flow hedges, the effective portion of
the change in the fair value of the derivative is

recognised directly in other comprehensive
income and the ineffective portion is recognised
in the statement of profit and loss. If the cash
flow hedge of a firm commitment or forecasted
transaction results in the recognition of a non¬
financial asset or liability, then, at the time the
asset or liability is recognised, the associated
gains or losses on the derivative that had
previously been recognised in equity are
included in the initial measurement of the asset
or liability. For hedges that do not result in the
recognition of a non-financial asset or a liability,
amounts deferred in equity are recognised in the
statement of profit and loss in the same period in
which the hedged item affects the statement of
profit and loss.

In cases where hedge accounting is not applied,
changes in the fair value of derivatives are
recognised in the statement of profit and loss as and
when they arise.

Hedge accounting is discontinued when the
hedging instrument expires or is sold, terminated,
or exercised, or no longer qualifies for hedge
accounting. At that time, any cumulative gain or loss
on the hedging instrument recognised in equity is
retained in equity until the forecasted transaction
occurs. If a hedged transaction is no longer expected
to occur, the net cumulative gain or loss recognised
in equity is transferred to the statement of profit
and loss.

Further details on the Company's financial
instruments are set out in note 37, page F110.

(n) Employee benefits

Defined contribution plans

Contributions under defined contribution plans are
recognised as expense for the period in which the
employee has rendered service. Payments made to state
managed retirement benefit schemes are dealt with as
payments to defined contribution schemes where the
Company's obligations under the schemes are equivalent
to those arising in a defined contribution retirement
benefit scheme.

Defined benefit plans

For defined benefit retirement schemes, the cost of
providing benefits is determined using the Projected Unit
Credit Method, with actuarial valuation being carried out
at each year-end balance sheet date. Re-measurement
gains and losses of the net defined benefit l iability/(asset)
are recognised immediately in other comprehensive
income. The service cost and net interest on the net
defined benefit liability/(asset) are recognised as an
expense within employee costs.

Past service cost is recognised as an expense when the
plan amendment or curtailment occurs or when any
related restructuring costs or termination benefits are

recognised, whichever is earlier.

The retirement benefit obligations recognised in the
balance sheet represents the present value of the
defined benefit obligations as reduced by the fair value of
plan assets.

Compensated absences

Liabilities recognised in respect of other long-term
employee benefits such as annual leave and sick leave
are measured at the present value of the estimated future
cash outflows expected to be made by the Company in
respect of services provided by employees up to the
reporting date using the projected unit credit method
with actuarial valuation being carried out at each year-
end balance sheet date. Actuarial gains and losses arising
from experience adjustments and changes in actuarial
assumptions are charged or credited to the statement of
profit and loss in the period in which they arise.

Compensated absences which are not expected to
occur within twelve months after the end of the period
in which the employee renders the related service are
recognised based on actuarial valuation.

[o) Inventories

Inventories comprise the followings:

a) Raw materials,

b) Work-in-progess,

c) Finished and semi-finished goods,

d) Stock-in-trade, and

e) Stores and spares.

Inventories are recorded at the lower of cost and net
realisable value. Cost is ascertained on a weighted
average basis. Costs comprise direct materials and, where
applicable, direct labour costs and those overheads that
have been incurred in bringing the inventories to their
present location and condition. Net realisable value is
the price at which the inventories can be realised in the
normal course of business after allowing for the cost of
conversion from their existing state to a finished condition
and for the cost of marketing, selling and distribution.

Provisions are made to cover slow moving and obsolete
items based on historical experience of utilisation on
a product category basis, which involves individual
businesses considering their product lines and market
conditions.