A Summary of Significant Accounting Policies
A.1 Basis of preparation
The standalone financial statements are prepared on the accrual basis of accounting and in accordance with the Indian Accounting
Standards (hereinafter referred to as the Ind AS) as prescribed underSection 133 of the Companies Act, 2013 (the Act) (as amended)
and other relevant provisions of the Act.
The Financial statements have been prepared as a going concern under the historical cost convention.
The Financial statements are presented in Indian Rupees ("INR") and all values are rounded to the nearest lakhs, except otherwise
stated as per the requirement of Schedule III.
A.2 Classification of Current and Non-Current
The Company presents assets and liabilities in the Balance Sheet based on Current/ Non-Current classification.
An asset is treated as current when it is:
i) Expected to be realized or intended to be sold or consumed in normal operating cycle,
ii) Held primarily for the purpose of trading,
iii) Expected to be realized within twelve months after the reporting period, or
iv) Cash or Cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the
reporting period.
All other assets are classified as non-current.
A liability is current when:
i) It is expected to be settled in normal operating cycle,
ii) It is held primarily for the purpose of trading,
iii) It is due to be settled within twelve months after the reporting period, or
iv) There is no unconditional right to determine the settlement of the liability for at least twelve months after the reporting period.
A.3 Property, plant and equipment.
Property, plant and equipment are stated at cost of acquisition or construction less accumulated depreciation/ amortization and
impairment losses, if any. The cost comprises of the purchase price (net of GST credit wherever applicable) and any attributable cost
of bringing the property, plant and equipment to its working condition for its intended use.
Subsequent expenditure related to an item of property, plant and equipment are added to its gross book value only if it increases the
future benefits from the existing asset beyond its previously assessed standard of performance.
The Company identifies and determines separate useful life for each major component of property, plant and equipment, if they
have useful life that is materially different from that of the remaining asset.
Items such as Machinery spares is recognized in accordance with Ind AS 16 "Property, Plant and Equipment" when they meet the
definition of property, plant and equipment. Otherwise, such items are classified as inventories.
Property, plant and equipment not ready for the intended use on the date of Balance Sheet are disclosed as "Capital work-in¬
progress". Capital Work-In-Progress includes expenditure during construction period incurred on projects under implementation
treated as pre-operative expenses pending allocation to the assets. These expenses are apportioned to the respective fixed assets on
their completion / commencement of commercial production.
Losses arising from the retirement of, and gains and losses arising from disposal of property, plant and equipment are measured as
the difference between the net disposal proceeds and the carrying amount of the property, plant and equipment and are recognized
in the statement of profit and loss when the property, plant and equipment is derecognized
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year
end and adjusted prospectively, if appropriate.
A.4 Depreciation on Property, plant and equipment
Depreciation on property, plant and equipment is provided pro-rata for the period of use , using thewritten down value method
based on the respective estimate of useful life given below.
A.5 Inventories
Inventories held in form of traded goods, consumables and spares have been valued at cost or net realizable value whichever is
lower. The cost of traded goods, stores and spares is ascertained on FIFO basis. Cost comprises all cost of purchase, non creditable
taxes and other costs incurred in bringing the inventories to their present location and condition. Net realizable value is estimated
selling price in the ordinary course of business less estimated cost necessary to make the sale.
A.6 Cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash on hand, short-term deposits with an
original maturity of three months or less, othershort term, highly liquid investments with original maturities of three months or less
that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
A.7 Retirement and other employee benefits
Provident fund
The Company makes contribution to statutory provident fund in accordance with Employees' Provident Fund and Miscellaneous
Provisions Act, 1952. The plan is a defined contribution plan and contribution paid or payable is recognized as an expense in the
period in which services are rendered by the employee.
Defined benefit plans
The Company operates a defined benefit gratuity plan in India. The cost of providing benefits under the defined benefit plan is
determined on the basis of actuarial valuation using the projected unit credit method. Gratuity fund is administered through Life
Insurance Corporation of India.
Remeasurements, comprising of actuarial gains and losses, excluding amounts included in net interest on the net defined benefit
liability are recognized immediately in the balance sheet. Remeasurements are not reclassified to profit or loss in subsequent
Other short term benefits
Expense in respect of other short-term benefits including Leave encahsment is recognized on the basis of amount paid or payable for
the period during which services are rendered by the employees.
A.8 Foreign Currencies Transactions and Translation
The Company's financial statements are presented in INR, which is also the Company's Functional Currency.
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange
at the reporting date.
A.9 Taxes on Income
Income Tax
Income tax expense represents the sum of current tax and deferred tax and includes any adjustments related to past periods in
current and /or deferred tax adjustments that may become necessary due to certain developments or reviews during the relevant
year. Current income tax is based on the taxable income and calculated using the applicable tax rates.
Deferred Tax
Deferred tax is provided using the Balance sheet method on temporary differences between the tax bases of assets and liabilities and
their carrying amounts for the financial reporting purposes at the reporting date. The carrying amount of deferred tax assets is
reviewed at the end of reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred tax asset to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or
the liability is settled, based on tax rates and tax laws that have been enacted orsubstantively enacted at the reporting date. Current
and deferred tax is recognised in Statement of profit or loss except to the extent that it relates to items recognised in other
Comprehensive income or directly in Equity. In this case the tax is also recognised in other Comprehensive income or directly in
Deferred tax assets and liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax
liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
A.10 Revenue Recognition.
Revenue from contracts with customers are recognised as per Ind AS 115 when control of the goods or services are transferred to the
customers at the fair value of consideration received or receivable. The Company recognizes revenue when the same can be reliably
measured, it is probable that future economic benefits will flow to the Company and specific criteria have been met for each of the
Company's activities as described below. Revenue is measured at the value of the consideration received or receivable, taking into
account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.
Amounts disclosed as revenue are exclusive of GST and net of returns, trade allowances, rebates, discounts, and amounts collected
on behalf of third parties.
i) Income from Sale of goods
Sales and other Income are accounted on accrual basis and are taken to be excluding Goods and Service Tax(GST). Export
incentive/benefits are accounted on accrual basis. Custom duty benefits in the form of Advance license entitlements arerecognized
on the export of goods and set off from material cost. Dividend Income on investments is accounted for when the right to receive the
ii) Interest I ncome
Interest income is recognised on time proportion basis taking into account the amount invested and rate of interest. For all financial
instruments measured at amortised cost, interest income is recorded using the Effective interest rate method to the net carrying
amount of the financial assets
A.11 Leases.
The Company recognizes a right-of-use asset ("ROU") and a corresponding lease liability for all lease arrangements in which it is a
lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low
value leases, the Group recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
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