Any gain or loss recognised in other comprehensive income and accumulated in equity at that time remains in equity
and is recognised when the forecast transaction is ultimately recognised in Statement of Profit and Loss. When a
forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised immediately in
profit or loss.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it
no longer qualifies for hedge accounting.

B.10 INVENTORIES

The Group determines the cost for items that are not interchangeable or that have been segregated for specific
contracts on an individual-item basis as per Ind AS 2, ‘Inventories’. The cost of other inventory items used is assigned
by using weighted average cost formula.

The Group uses the same cost formula for all inventories of similar nature and use. The cost formula used is applied on
aconsistent basis from period to period.

Inventories are initially recognized at the lower of cost and net realisable value (NRV). Cost of inventories includes
import duties, non-refundable taxes, transport and handling costs and any other directly attributable costs, less trade
discounts, rebates and similar items. NRV is the estimated selling price in the ordinary course of business, less the
estimated costs of completion and estimated selling expenses.

i) Raw materials, components, stores and spares of inventory are measured at weighted average cost.
Materials and other items held for use in the production of inventories are not written down below cost if the finished
products in which they will be incorporated are expected to be sold at or above cost. Work in progress and finished
goods are valued at cost or Net Realizable Value whichever is lower. Cost includes direct materials, labor and a
portion of manufacturing overheads. Saleable scrap is valued at the lowest of the net realizable value in the last two
months.

ii) Tools are valued at cost till they are issued for usage in production process. In respect of issued tools which
can be refurbished, the Group depending upon its useful life amortizes on a straight line basis over its useful life.
Useful life determined for certain classes of tools is 2- 3 years. Tools which are not refurbish-able are charged off to
Statement of Profit and Loss upon issue from stores to usage. The “tools in use” are carried at Cost less accumulated
amortization.

B.11 PROVISIONS

The Group recognizes a provision when there is a present obligation to transfer economic benefits as a result of past
events, it is probable (more likely than not) that such a transfer will be required to settle the obligation, and a reliable
estimate of the amount of the obligation can be made.

The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the
obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying
amount is the present value of those cash flows (when the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third
party, a receivable is recognised as an asset if it is certain that reimbursements will be received and the amount of the
receivable can be measured reliably.

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.
Contingent assets are disclosed in the Restated Consolidated Financial Information by way of notes to accounts when
an inflow of economic benefits is probable.

Acontingent liability is

(a) a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or
non-occurrence of one or more uncertain future events not wholly within the control of the entity; or

(b) a present obligation that arises from past events but is not recognised because:

(i) it is not probable that an outflow of resources embodying economic benefits will be required to settle the
obligation; or

(ii) the amount of the obligation cannot be measured with sufficient reliability.

244
