I. Company Overview:
Aditya Ispat Limited ('Aditya' or the 'Company') is a public limited company domiciled in India, with its registered
office situated at Hyderabad, Telangana. The Company has been incorporated under the provisions of Indian
Companies Act and its equity shares are listed on the Bombay Stock Exchange in India.
The Company is engaged in the manufacturing of bright steel bars and wires. The manufacturing facility of the
Company is located in Hyderabad.
II. Basis of preparation of financial statements:
a) Statement of compliance:
These financial statements have been prepared in accordance with Indian Accounting Standards (IndAS) as per
the Companies (IndianAccounting Standards) Rules 2015 notified under Section 133 of the CompaniesAct, 2013
('theAct') and other relevant provisions of theAct to the extent applicable.
The Financial Statements for the year ended 31st March, 2025 have been approved by the Board of Directors of
the Company in their meeting held on 30th May, 2025.
b) Basis of Measurement:
The financial statements are prepared on accrual basis under the historical cost convention except for the following
items:
• Certain financial assets and liabilities are measured at Fair value (refer accounting policy on financial
instruments)
• Defined Benefit and other Long term Employee Benefits are measured at Fair value,
c) Functional and presentation currency:
Items included in the financial statements of the Company are measured using the currency of the primary economic
environment in which the Company operates (“the functional currency”). The financial statements are presented
in Indian National Rupee ('INR'), which is the Company's functional and presentation currency. All amounts have
been rounded to two decimal points of lakhs, unless otherwise indicated.
d) Current or Non current classification:
All Assets and Liabilities have been classified as current or non-current as per the Company's normal operating
cycle and other criteria set out in the Schedule III to the CompaniesAct, 2013. Based on the nature of the business
of the Company and its business time cycle from inception of an order and its completion on realization in cash
and cash equivalents, the Company has ascertained the operating cycle as 12 months for the purpose of current
and non-current classification of assets and liabilities.
e) Use of estimates:
The preparation of financial statements in conformity with Ind AS requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on
the date of the financial statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates. Any revision to accounting estimates is recognized
prospectively in the current and future periods.
III. Significant Accounting Policies
a) Property, plant and equipment (PPE):
i) Recognition and measurement:
Property, Plant and Equipment are measured at cost, which includes capitalized borrowing cost. less
accumulated depreciation and accumulated impairment loss, if any. The cost of PPE includes freight, duties,
taxes and other incidental expenses related to the acquisition and construction of those PPE.
Cost of an item of property, plant and equipment comprises its purchase price, including import duties and
non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost
of bringing the item to its working condition for its intended use and estimated costs of dismantling and
removing the item and restoring the site on which it is located.
The cost of a self-constructed item of property, plant and equipment comprises the cost of materials and
direct labor, any other costs directly attributable to bringing the item to working condition for its intended use,
and estimated costs of dismantling and removing the item and restoring the site on which it is located.
Capital work-in-progress includes cost of property, plant and equipment under installation/ under development
as at the balance sheet date. Advances paid towards the acquisition of property, plant and equipment
outstanding at each balance sheet date is classified as capital advances under other noncurrent assets.
If significant parts of an item of property, plant and equipment have different useful lives, then they are
accounted for as separate items (major components) of property, plant and equipment.
ii) Transition to Ind AS:
On transition to Ind AS, the Company has elected to continue with the carrying value of all its property, plant
and equipment recognised as at April 1,2016, measured as per the previous GAAP, and use that carrying
value as the deemed cost of such property, plant and equipment.
iii) Subsequent expenditure:
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with
the expenditure will flow to the Group.
iv) Depreciation
Depreciation on property, plant and equipment is charged on a Straight Line basis over the useful life of
assets as prescribed by Schedule II of Companies Act, 2013.
The estimated useful lives of items of property, plant and equipment for the current and comparative periods
are as follows:
Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if
appropriate. Based on technical evaluation and consequent advice, the management believes that its estimates
of useful lives as given above best represent the period over which management expects to use these assets.
Depreciation on additions (disposals) is provided on a pro-rata basis i.e. from (upto) the date on which asset is
ready for use (disposed of)
b) Impairment
i) Impairment of non-financial assets:
At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than
inventories and deferred tax assets) to determine whether there is any indication on impairment. If any such
indication exists, the Company estimates the recoverable amount of the asset.
The recoverable amount of an asset is the greater of its value in use or fair value less costs to sell. Value in
use is based on the estimated future cash flows, 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.
An impairment loss is recognised if the carrying amount of an asset exceeds its estimated recoverable amount.
Impairment losses are recognised in Statement of Profit and Loss.
In respect of assets for which impairment loss has been recognised in prior periods, the Company reviews at
each reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment
loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a
reversal is made only to the extent that the assets carrying amount does not exceed the carrying amount that
would have been determined net of depreciation or amortisation, if no impairment loss had been recognised.
After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful
life.
c) Financial Instruments
A financial instrument is any contract that gives rise to a financial Asset of one entity and a financial liability or
equity instrument of another entity.
i. Initial recognition and measurement
The Company recognises financial assets and financial liabilities when it becomes a party to the contractual
provisions of the instrument.All financial assets and liabilities are recognised at fair value on initial recognition,
except for trade receivables which are initially measured at transaction price. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair
value through profit or loss, are added to the fair value on initial recognition. Regular way purchase and sale
of financial assets are accounted for at trade date.
ii. Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
- Debt instruments at amortized cost
- Debt instruments at fair value through other comprehensive income (FVTOCI)
- Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)
- Equity instruments measured at fair value through other comprehensive income (FVTOCI)
iii. Debt instruments at amortized cost
A 'debt instrument' is measured at the amortized cost if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual
cash flows, and
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective
interest rate (EIR) method. Amortized cost is calculated by considering any discount or premium on acquisition
and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the
profit or loss. The losses arising from impairment are recognized in the profit or loss. This category generally
applies to trade and other receivables.
iv. Debt instrument at FVTOCI
A 'debt instrument' is classified as at the FVTOCI if both of the following criteria are met:
a) The objective of the business model is achieved both by collecting contractual cash flows and selling
the financial assets, and
b) The asset's contractual cash flows represent SPPI.
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting
date at fair value. Fair value movements are recognized in the other comprehensive income (OCI).
However, the company recognizes interest income, impairment losses & reversals and foreign exchange
gain or loss in the P&L. On derecognition of the asset, cumulative gain or loss previously recognized in
OCI is reclassified from the equity to P&L. Interest earned whilst holding FVTOCI debt instrument is
reported as interest income using the EIR method.
v. Debt instrument at FVTPL
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for
categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. The company has not designated
any debt instrument as at FVTPL.
Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in
the P&L.
vi. Equity investments
All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for
trading are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable
election to present in other comprehensive income subsequent changes in fair value. The Company makes such
election on instrument to instrument basis. The classification is made on initial recognision and is irrevocable.
Equity Instruments included within the FVTPL Category are measured at fair value with all changes recognised in
the Statement of Profit and Loss.
vii. Financial Assets
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a company of similar financial assets)
is primarily derecognized when:
- The rights to receive cash flows from the asset have expired, or
- The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation
to pay the received cash flows in full without material delay to a third party under a 'pass-through' arrangement-
and either(a) the company has transferred substantially all the risks and rewards of the asset, or (b) the
company has neither transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.
Impairment of financial assets
In accordance with Ind AS 109, the company applies expected credit loss (ECL) model for measurement and
recognition of impairment loss.
The company follows 'simplified approach' for recognition of impairment loss allowance on:
- Trade receivables or contract revenue receivables; and
- All lease receivables resulting from transactions within the scope of IndAS 17
The application of simplified approach does not require the company to track changes in credit risk. Rather, it
recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
Financial assets measured as at amortized cost, contractual revenue receivables and lease receivables:
ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance
sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the company does
not reduce impairment allowance from the gross carrying amount.
viii. Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans
and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables,
net of directly attributable transaction costs.
The company financial liabilities include trade and other payables
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities
designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held
for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held
for trading are recognized in the profit or loss.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
d) Inventories:
Raw Materials, Stores and Spares are valued at Cost and finished goods are valued at lower of Cost or Net
Realizable Value, Cost of raw materials, stores & spares parts are ascertained on FIFO basis. Trading Goods are
valued at lower of cost or Net realizable value.
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