Accounting Policies of Yasons Chemex Care Ltd. Company

Mar 31, 2025

2 Basis of Preparation of Financial

The principal accounting polices applied in the preparation of these financial statements are set out
below. These policies have been consistently applied to all the years presented.

(i) Compliance with Ind-AS

These financial statements have been prepared in accordance with the Indian Accounting Standards
(hereinafter referred to as the ''Ind AS'') as notified by Ministry of Corporate Affairs pursuant to Section
133 of the Companies Act, 2013 (''Act'') read with Rule 3 of the Companies (Indian Accounting Standards)
Rules, 2015 as amended and other relevant provisions of the Act.

(ii) Basis of Preparation and presentation

The financial statements have been prepared and presented on the going concern basis and at historical
cost basis considering the applicable provisions of Companies Act 2013, except for the following items
that have been measured at fair value as required by relevant 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.

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

(b) Any other item as specifically stated in the accounting policy.

(iii) Functional and Presentation Currency

The financial statements are presented in Indian Rupees, which is the functional currency of the
Company and the currency of the primary economic environment in which the Company operates.

(iv) Classification of Assets and Liabilities as Current and Non-Current

All assets and liabilities are classified as current or non-current as per the Company''s normal operating
cycle, and other criteria set out in Schedule III of the Companies Act, 2013. Based on the nature of
products and the time lag between the acquisition of assets for processing and their realisation in cash
and cash equivalents, 12 months period has been considered by the Company as its normal operating
cycle.

(v) Rounding of amounts

The financial statements are presented in INR and all values are rounded to the nearest Lakh (INR
1,00,000) as per the requirement of Schedule III, unless otherwise stated.

3 Critical accounting estimates, assumptions and judgements

The preparation of financial statements requires management to make judgments, estimates and
assumptions in the application of accounting policies that affect the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates. Continuous evaluation
is done on the estimation and judgments based on historical experience and other factors, including
expectations of future events that are believed to be reasonable.

Estimates and judgements are continually evaluated. They are based on historical experience and other
factors, including expectations of future events that may have a financial impact on the Company and
that are believed to be reasonable under the circumstances.

a) Useful lives of property, plant and equipment

Useful lives and residual values of Property, plant and equipment represent a material portion of the
Company''s asset base. The periodic charge of depreciation is derived after estimating useful life of an
asset and expected residual value at the end of its useful life. The useful lives and residual values of
assets are estimated by the management at the time the asset is acquired and reviewed periodically,
including at each financial year end. The lives are based on various external and internal factors
including historical experience, relative efficiency and operating costs and change in technology

b) Income taxes

The Company''s tax jurisdiction is India. Significant judgments are involved in determining the provision
for income taxes including amounts to be recovered or paid for uncertain tax positions. Management
judgment is required to determine the amount of deferred tax assets that can be recognised, based
upon the likely timing and the level of future taxable profits.

c) Employee benefit obligations

Defined benefit obligations are measured at fair value for financial reporting purposes. Fair value
determined by actuary is based on actuarial assumptions. Management judgement is required to
determine such actuarial assumptions. Such assumptions are reviewed annually using the best
information available with the Management.

d) Provisions and contingent liabilities

In the normal course of business, contingent liabilities may arise from litigation and other claims against
the Company. Potential liabilities that are possible but not probable of crystalising or are very difficult to
quantify reliably are treated as contingent liabilities. Such liabilities are disclosed in the notes but are
not recognised.

4 Summary of Material Accounting Policies (MAP) :-

4.1 Property, Plant and Equipment (PPE)

These tangible assets are held for use in production, supply of goods or services or for administrative
purposes. Property, Plant and Equipment are stated at cost less accumulated depreciation and
accumulated impairment losses except for freehold land which is not depreciated. Cost includes
purchase price after deducting trade discount/rebate, import duties, non-refundable taxes, Net of
Cenvat and VAT credit/GST input credit wherever applicable, cost of replacing the component parts,
borrowing costs and other directly attributable cost of bringing the asset to its working condition in the
manner intended by the management.

If significant parts of an item of PPE have different useful lives, then they are accounted for as separate
items (major components) of PPE.

The cost of an item of PPE is recognised as an asset if, and only if, it is probable that the economic
benefits associated with the item will flow to the Company in future periods and the cost of the item
can be measured reliably. Expenditure incurred after the PPE have been put into operations, such as
repairs and maintenance expenses are charged to the Statement of Profit and Loss during the period in
which they are incurred.

Items such as spare parts, standby equipment and servicing equipment are recognised as PPE when it is
held for use in the production or supply of goods or services, or for administrative purpose, and are
expected to be used for more than one year. Otherwise such items are classified as inventory.

The Company adjusts exchange differences arsing on translation difference/settlement of long term
foreign currency monetary items outstanding and pertaining to the acquisition of a depreciable asset
to the cost of asset and depreciates the same over the remaining life of the asset. The depreciation on
such foreign exchange difference is recognised from first day of its financial year.

De-recognised upon disposal

An item of PPE is derecognised on disposal or when no future economic benefits are expected from use
or disposal. Any gain or loss arising on derecognition of an item of property, plant and equipment is
determined as the difference between the net disposal proceeds and the carrying amount of the asset
and is recognized in Statement of Profit and Loss when asset is derecognised.

Treatment of Expenditure during Construction Period

Expenditure, net of income earned, during construction (including financing cost related to borrowed
funds for construction or acquisition of qualifying PPE) period is included under capital work-in¬
progress, and the same is allocated to the respective PPE on the completion of construction. Advances
given towards acquisition or construction of PPE outstanding at each reporting date are disclosed as
Capital Advances under "Other Non-Current Assets".

Depreciation

The depreciable amount of an asset is determined after deducting its residual value. Where the residual
value of an asset increases to an amount equal to or greater than the asset''s carrying amount, no
depreciation charge is recognized till the asset''s residual value decreases below the asset''s carrying
amount. Depreciation of an asset begins when it is available for use, i.e., when it is in the location and
condition necessary for it to be capable of operating in the intended manner. Depreciation of an asset
ceases at the earlier of the date that the asset is classified as held for sale in accordance with IND AS
105 and the date that the asset is derecognised.

The Company depreciates its property, plant and equipment (PPE) over the useful life in the manner
prescribed in Schedule II to the Act. Management believes that useful life of assets are same as those
prescribed in Schedule II to the Act, except for plant and equipment wherein based on technical
evaluation, useful life has been estimated to be different from that prescribed in Schedule II of the Act.
Useful life considered for calculation of depreciation for various assets class are as follows:-

Depreciation on Property, Plant and Equipment (PPE) added/disposed off during the period is provided
on pro-rata basis with reference to the date of addition/disposal.

The identified component of Property, Plant and Equipment (PPE) are depreciated over the useful lives
and the remaining components are depreciated over the life of the principal assets

4.2 Intangible assets

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated
amortisation and accumulated impairment losses, if any. Amortisation is recognised on a straight-line
basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed
at the end of each reporting period, with the effect of any changes in estimate being accounted for on a
prospective basis.

4.3 Leases

At the inception of a lease, the lease arrangements is classified as either a finance lease or an operating
lease, based on the substance of the lease arrangement.

As a Lessee:

Leases of property, plant and equipment where the Company, as lessee, has substantially all the risks
and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease''s
inception at the fair value of the leased property or, if lower, the present value of minimum lease
payments. The corresponding rental obligations, net of finance charges, are included in borrowing or
other financial liabilities as appropriate.

Each lease payment is allocated between the liability and finance cost. The finance cost is charged to
profit or loss over the lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period.

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the
Company as lessee are classified as operating leases. Payments made under operating leases (net of any
incentives received from lessor) are charged to profit or loss on straight-line basis over the period of the
lease unless the payments are structured to increase in line with expected general inflation to
compensate for the lessor''s expected inflationary cost increases.

As a Lessor:

Lease income from operating leases where the Company is a lessor is recognised in other income on
straight-line basis over the lease term unless the receipts are structured to increase in line with

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expectea general innation to compensate Tor tne expectea inflationary cost increases. ine respective
leased assets are included in the balance sheet based on their nature.

Deposits provided to Lessor:

The Company is generally required to pay refundable security deposits in order to obtain property
leases from various lessors.

Such security deposits are financial assets and are recorded at fair value on initial recognition. The
difference between the initial fair value and the refundable amount of deposit is recognised as lease
prepayments. The initial fair value is estimated as the present value of the refundable amount of
security deposit, discounted using the market interest rates for similar instruments

Subsequent to initial recognition, the security deposit is measured at amortised cost using the effective
interest method with carrying amount increased over the lease period up to the refundable amount.
The amount of increase in the carrying amount of deposit is recognised as interest income. The lease
repayment is amortised on straight-line basis over the lease term as lease rentals expense.

4.4 Inventories

Inventories consisting of stores and spares, raw materials, work in progress, stock in trade, goods in
transit and finished goods are valued at lower of cost and net realisable value. However, materials held
for use in production of inventories are not written down below cost, if the finished products are
expected to be sold at or above cost.

The cost is computed on FIFO basis and is net of credits under GST.

Traded goods includes cost of purchase and other costs incurred in bringing the inventories to their
present location and condition.

Goods and materials in transit include materials, duties and taxes (other than those subsequently
recoverable from tax authorities) labour cost and other related overheads incurred in bringing the
inventories to their present location and condition.

4.5 Borrowing Cost

Borrowing cost includes interest expense, amortisation of discounts, ancillary costs incurred in
connection with borrowing of funds and exchange difference, arising from foreign currency borrowings,
to the extent they are regarded as an adjustment to the interest cost.

Borrowing costs that are attributable to the acquisition or construction or production of a qualifying
asset are capitalised as part of the cost of such asset till such time the asset is ready for its intended use.
A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its
intended use. All other borrowing costs are recognised as an expense in the period in which they are
incurred.

Investment income earned on the temporary investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All
other borrowing cost are recognised in the Statement of Profit and Loss in the period in which they are
incurred.

4.6 Impairment of Non Financial Assets

At the end of each reporting period, the Company reviews the carrying amounts of its PPE and other
intangible assets to determine whether there is any indication that these assets have suffered an
impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss. Where it is not possible to estimate the recoverable
amount of an individual asset, the Company estimates the recoverable amount of the cash-generating
unit (CGU) to which the asset belongs. When the carrying amount of an asset or CGU exceeds its
recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
The resulting impairment loss is recognised in the Statement of Profit and Loss Recoverable amount is
the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset.

In determining fair value less costs of disposal, recent market transactions are taken into account. If no
such transactions can be identified, an appropriate valuation model is used.

Where an impairment loss subsequently reverses, the carrying amount of the asset or CGU is increased
to the revised estimate of its recoverable amount, but so that the increased carrying amount does not
exceed the carrying amount that would have been determined had no impairment loss been recognised
for the asset or CGU in prior years. A reversal of an impairment loss is recognised in the Statement of
Profit and Loss.

4.7 Cash Flow Statement

Cash flows are reported using indirect method whereby profit for the period is adjusted for the effects
of the transactions of non-cash nature, any deferrals or accruals of past or future operating cash
receipts and payments and items of income or expenses associated with investing and financing cash
flows. The cash flows from operating, investing and financing activities of the Company are segregated.

4.8 Taxes

Income tax expense represents the sum of tax currently payable and deferred tax. Tax is recognized in
the Statement of Profit and Loss, except to the extent that it relates to items recognized directly in
equity or in other comprehensive income.

a) Current Tax

Current tax includes provision for Income Tax computed under Special provision of Income Tax Act. Tax
on Income for the current period is determined on the basis on estimated taxable income and tax
credits computed in accordance with the provisions of the relevant tax laws and based on the expected
outcome of assessments/appeals

b) Deferred Tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and
liabilities in the balance sheet and the corresponding tax bases used in the computation of taxable
profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.

Deferred tax assets are generally recognised for all deductible temporary differences, unabsorbed
losses and unabsorbed depreciation to the extent that it is probable that future taxable profits will be
available against which those deductible temporary differences, unabsorbed losses and unabsorbed
depreciation can be utilised.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of
the asset to be recovered

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period
in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been
enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities
and assets reflects the tax consequences that would follow from the manner in which the Company
expects, at the reporting date, to recover or settle the carrying amount of its assets and
liabilities.Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off
current tax assets against current tax liabilities and when they relate to income taxes levied by the same
taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

4.9 Employee Benefits

a) Employee Benefits

All employee benefits payable wholly within twelve months of rendering services are classified as short
term employee benefits. Benefits such as salaries, wages, short-term compensated absences,
performance incentives etc., are recognized during the period in which the employee renders related
services and are measured at undiscounted amount expected to be paid when the liabilities are settled

b) Post-employment obligations

i) Defined benefit plans-Gratuity obligations

The liability or assets recognized in the balance sheet in respect of defined benefit gratuity plans is the
present value of the defined benefit obligations at the end of the reporting period less the fair value of
plan assets.

The defined benefit obligation is calculated annually by actuaries using the projected unit credit
method. The present value of the defined benefit obligation denominated in INR 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 benefits which are denominated in currency other than INR, the cash flows are
discounted using market yields determined by reference to high quality corporate bonds that are
denominated in the currency in which the benefits will be paid, and 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 benefit expense in
the statement of profit and loss.

Remeasurement gains and losses arising from experience adjustments and change in actuarial
assumptions are recognized in the period in which they occur, directly in other comprehensive income.
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

ii) Defined contribution plans

The Company pays provident fund contributions to publicly administered funds as per local regulations.
The Company has no further payment obligations once the contributions have been paid. The
contributions are accounted for as defined contribution plans and the contributions are recognized as
employee benefit expense when they are due.

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Mar 31, 2024

4 Summary of Accounting Policies

4.1 Property, Plant and Equipment (PPE)

These tangible assets are held for use in production, supply of goods or services or for administrative purposes. Property, Plant and Equipment are stated at cost less accumulated depreciation and accumulated impairment losses except for freehold land which is not depreciated. Cost includes purchase price after deducting trade discount/rebate, import duties, non-refundable taxes, Net of Cenvat and VAT credit/GST input credit wherever applicable, cost of replacing the component parts, borrowing costs and other directly attributable cost of bringing the asset to its working condition in the manner intended by the management.

If significant parts of an item of PPE have different useful lives, then they are accounted for as separate items (major components) of PPE.

The cost of an item of PPE is recognised as an asset if, and only if, it is probable that the economic benefits associated with the item will flow to the Company in future periods and the cost of the item can be measured reliably. Expenditure incurred after the PPE have been put into operations, such as repairs and maintenance expenses are charged to the Statement of Profit and Loss during the period in which they are incurred.

Items such as spare parts, standby equipment and servicing equipment are recognised as PPE when it is held for use in the production or supply of goods or services, or for administrative purpose, and are expected to be used for more than one year. Otherwise such items are classified as inventory.

The Company adjusts exchange differences arsing on translation difference/settlement of long term foreign currency monetary items outstanding and pertaining to the acquisition of a depreciable asset to the cost of asset and depreciates the same over the remaining life of the asset. The depreciation on such foreign exchange difference is recognised from first day of its financial year.

De-recognised upon disposal

An item of PPE is derecognised on disposal or when no future economic benefits are expected from use or disposal. Any gain or loss arising on derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds and the carrying amount of the asset and is recognized in Statement of Profit and Loss when asset is derecognised.

Treatment of Expenditure during Construction Period

Expenditure, net of income earned, during construction (including financing cost related to borrowed funds for construction or acquisition of qualifying PPE) period is included under capital work-inprogress, and the same is allocated to the respective PPE on the completion of construction. Advances given towards acquisition or construction of PPE outstanding at each reporting date are disclosed as Capital Advances under "Other Non-Current Assets".

Depreciation

The depreciable amount of an asset is determined after deducting its residual value. Where the residual value of an asset increases to an amount equal to or greater than the asset''s carrying amount, no depreciation charge is recognized till the asset''s residual value decreases below the asset''s carrying amount. Depreciation of an asset begins when it is available for use, i.e., when it is in the location and condition necessary for it to be capable of operating in the intended manner. Depreciation of an asset ceases at the earlier of the date that the asset is classified as held for sale in accordance with IND AS 105 and the date that the asset is derecognised.

The Company depreciates its property, plant and equipment (PPE) over the useful life in the manner prescribed in Schedule II to the Act. Management believes that useful life of assets are same as those prescribed in Schedule II to the Act, except for plant and equipment wherein based on technical evaluation, useful life has been estimated to be different from that prescribed in Schedule II of the Act. Useful life considered for calculation of depreciation for various assets class are as follows:-

Asset Class Useful Life

Non-Factory Building 60 years

Furniture & Fixtures 10 years

Office Equipment 5 years

Vehicles 8 & 10 years

Computers 3 years

Depreciation on Property, Plant and Equipment (PPE) added/disposed off during the period is provided on pro-rata basis with reference to the date of addition/disposal.

The identified component of Property, Plant and Equipment (PPE) are depreciated over the useful lives and the remaining components are depreciated over the life of the principal assets

4.2 Intangible assets

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses, if any. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

4.3 Leases

At the inception of a lease, the lease arrangements is classified as either a finance lease or an operating lease, based on the substance of the lease arrangement.

As a Lessee:

Leases of property, plant and equipment where the Company, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease''s inception at the fair value of the leased property or, if lower, the present value of minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowing or other financial liabilities as appropriate.

Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from lessor) are charged to profit or loss on straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessor''s expected inflationary cost increases.

As a Lessor:

Lease income from operating leases where the Company is a lessor is recognised in other income on straight-line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases. The respective leased assets are included in the balance sheet based on their nature.

Deposits provided to Lessor:

The Company is generally required to pay refundable security deposits in order to obtain property leases from various lessors.

Such security deposits are financial assets and are recorded at fair value on initial recognition. The difference between the initial fair value and the refundable amount of deposit is recognised as lease prepayments. The initial fair value is estimated as the present value of the refundable amount of security deposit, discounted using the market interest rates for similar instruments

Subsequent to initial recognition, the security deposit is measured at amortised cost using the effective interest method with carrying amount increased over the lease period up to the refundable amount. The amount of increase in the carrying amount of deposit is recognised as interest income. The lease repayment is amortised on straight-line basis over the lease term as lease rentals expense.

4.4 Inventories

Inventories consisting of stores and spares, raw materials, work in progress, stock in trade, goods in transit and finished goods are valued at lower of cost and net realisable value. However, materials held for use in production of inventories are not written down below cost, if the finished products are expected to be sold at or above cost.

The cost is computed on FIFO basis and is net of credits under GST.

Traded goods includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition.

Goods and materials in transit include materials, duties and taxes (other than those subsequently recoverable from tax authorities) labour cost and other related overheads incurred in bringing the inventories to their present location and condition.

4.5 Borrowing Cost

Borrowing cost includes interest expense, amortisation of discounts, ancillary costs incurred in connection with borrowing of funds and exchange difference, arising from foreign currency borrowings, to the extent they are regarded as an adjustment to the interest cost.

Borrowing costs that are attributable to the acquisition or construction or production of a qualifying asset are capitalised as part of the cost of such asset till such time the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are recognised as an expense in the period in which they are incurred.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing cost are recognised in the Statement of Profit and Loss in the period in which they are incurred.

4.6 Impairment of Assets

At the end of each reporting period, the Company reviews the carrying amounts of its PPE and other intangible assets to determine whether there is any indication that these assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit (CGU) to which the asset belongs. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. The resulting impairment loss is recognised in the Statement of Profit and Loss Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.

Where an impairment loss subsequently reverses, the carrying amount of the asset or CGU is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset or CGU in prior years. A reversal of an impairment loss is recognised in the Statement of Profit and Loss.

4.6 Government Grants

Government grants are recognized when there is reasonable assurance that the Company will comply with the conditions attached to them and that the grants will be received. When the grant relates to an expense item, it is recognised in the Statement of Profit and Loss by way of a deduction to the related expense 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 recognized as income on a systematic basis over the expected useful life of the related asset.

4.7 Taxes

Income tax expense represents the sum of tax currently payable and deferred tax. Tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized directly in equity or in other comprehensive income.

a) Current Tax

Current tax includes provision for Income Tax computed under Special provision of Income Tax Act. Tax on Income for the current period is determined on the basis on estimated taxable income and tax credits computed in accordance with the provisions of the relevant tax laws and based on the expected outcome of assessments/appeals

b) Deferred Tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the balance sheet and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.

Deferred tax assets are generally recognised for all deductible temporary differences, unabsorbed losses and unabsorbed depreciation to the extent that it is probable that future taxable profits will be available against which those deductible temporary differences, unabsorbed losses and unabsorbed depreciation can be utilised.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

4.8 Employee Benefits

a) Employee Benefits

All employee benefits payable wholly within twelve months of rendering services are classified as short term employee benefits. Benefits such as salaries, wages, short-term compensated absences, performance incentives etc., are recognized during the period in which the employee renders related services and are measured at undiscounted amount expected to be paid when the liabilities are settled

b) Post-employment obligations

i) Defined benefit plans-Gratuity obligations

The liability or assets recognized in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligations at the end of the reporting period less the fair value of plan assets.

The defined benefit obligation is calculated annually by actuaries using the projected unit credit method. The present value of the defined benefit obligation denominated in INR 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 benefits which are denominated in currency other than INR, the cash flows are discounted using market yields determined by reference to high quality corporate bonds that are denominated in the currency in which the benefits will be paid, and 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 benefit expense in the statement of profit and loss.

Remeasurement gains and losses arising from experience adjustments and change in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.

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ii) Defined contribution plans

The Company pays provident fund contributions to publicly administered funds as per local regulations. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognized as employee benefit expense when they are due.