Note 1A: Material Accounting Policies
This Note provides a list of the Material accounting policies
adopted in the preparation of these standalone financial
statements. These policies have been consistently applied to
all the years presented, unless otherwise stated.
1.1 Basis of Preparation of Standalone Financial
Statements
(i) Compliance with Ind AS
The standalone financial statements have been
prepared in accordance with the accounting
principles generally accepted in India and
comply in all material aspects with Indian
Accounting Standards (IND AS) notified under
Section 133 of the Companies Act, 2013 (the
Act) read with rule 3 of the Companies (Indian
Accounting Standards) Rules, 2015,
presentation requirement of Division II of
Schedule III of the Companies Act, 2013 and
other relevant provisions of the Act as amended
from time to time.
(ii) Historical cost convention
The standalone financial statements have been
prepared on an accrual and going concern basis.
The standalone financial statements have been
prepared on a historical cost basis, except as
stated in subsequent policies for the following
items:
• Certain financial assets and liabilities - Fair
value
• Assets held for sale - Lower of cost or fair
value less cost of sale
• Share based payments-Fairvalue
(iii) New and amended standards adopted by the
Company
The Ministry of Corporate Affairs vide
notification dated 9 September 2024 and 28
September 2024 notified the Companies (Indian
Accounting Standards) Second Amendment
Rules, 2024 and Companies (Indian Accounting
Standards) Third Amendment Rules, 2024,
respectively, which amended/ notified certain
accounting standards (see below), and are
effective for annual reporting periods beginning
on or after 1 April 2024: Insurance contracts -
Ind AS 117; and Lease Liability in Sale and
Leaseback — Amendments to Ind AS 116 These
amendments did not have any material impact
on the amounts recognized in prior periods and
are not expected to significantly affect the
current orfuture periods.
1.2 Foreign currency translation
a) Functional and presentation currency
Items included in the standalone financial
statements of the Company are measured using
the currency of the primary economic
environment in which the Company operates
('the functional currency'). The standalone
financial statements are presented in Indian
Rupees (INR), which is Company's functional
and presentation currency.
b) Transactions and balances
Foreign currency transactions are translated
and recorded into the functional currency using
the exchange rates prevailing on the date of the
transaction. Foreign exchange gains and losses
resulting from the settlement of such
transactions and from the translation of
monetary assets and liabilities denominated in
foreign currencies at year end exchange rates
are generally recognised in profit or loss.
Foreign exchange differences regarded as an
adjustment to borrowing costs are presented in
the standalone statement of profit and loss,
within finance costs. All other foreign exchange
gains and losses are presented in the standalone
statement of profit and loss on a net basis within
other income or other expenses, as applicable.
Non-monetary items that are measured in
terms of historical cost in a foreign currency are
translated using the exchange rates at the dates
of the initial transaction.
Non-monetary items that are measured at fair
value in a foreign currency are translated using
the exchange rates at the date when the fair
value was determined. Translation differences
on assets and liabilities carried at fair value are
reported as part of the fair value gain or loss.
The Company has applied the exemption from
the transition date i. e. April 1,2016 in respect of
accounting policy followed for long term foreign
currency monetary items. Accordingly, foreign
exchange differences, in respect of the long
term foreign currency items till the year ended
March 31, 2017, on account of depreciable
assets are adjusted in the cost of depreciable
assets and depreciated over the balance life of
the assets.
1.3 Revenue recognition
The Company derives revenues primarily from sale of
manufactured goods and related services. The
Company has assessed revenue contracts and
revenue is recognised upon satisfying specific
performance obligations in accordance with
provisions of contract with the customer.
It recognizes revenue when control overthe promised
goods or services are transferred to the customer at
an amount that reflects the consideration to which
the Company expects to be entitled in exchange of
those goods or services.
This is generally determined when documents of
title/goods are delivered/shipped to the customer in
accordance with the agreed terms, following which
the customer has full discretion over responsibility,
manner of distribution and price to sell the goods and
bears the risks of obsolescence and loss in relation to
the goods and there is no unfulfilled obligation that
would affect customer's acceptance of the product.
All the foregoing occurs at a point in time upon
shipment or delivery of the documents of
title/product orgoods.
The Company considers terms of the contract in
determining the revenue. It is measured at the price
that reflects the consideration the Company expects
to be entitled to in exchange for satisfaction of the
performance obligation. The Company considers
freight, insurance and handling activities as costs to
fulfil the promise to transfer products and related
services and the customer payments for such
activities are recorded as a component of revenue.
In certain customer contracts where freight is
arranged by the Company and recovered from the
customers, the same is treated as a distinct separate
performance obligation and revenue is recognised
when such freight services are rendered. The related
shipping and handling costs incurred are included in
freight expenses when the Company is acting as
principal in the shipping and handling arrangement.
For volume discounts and pricing incentives /
concessions offered to the customers, the Company
makes estimates and provide for, based on customer
performance and sales volume, which is recorded as
deductions from revenue.
Revenue from sale of by-products are included in
revenue. Revenue from services is recognised when
the services are completed. Revenue excludes any
taxes and duties collected on behalf of the
government.
When there is uncertainty as to measurement or
ultimate collectability, revenue recognition is
postponed until such uncertainty is resolved.
The Company does not have any contracts where in
the period between the transfer of the promised
goods or services to the customer and payment by the
customer exceeds one year. As a consequence, the
Company does not adjust any of the transaction prices
for the time value of money.
A receivable is recognised when the goods are
delivered and to the extent it has an unconditional
right to consideration (i.e. only the passage of time is
required before the payment of consideration is due).
Consideration received before a related performance
obligation is satisfied or before the Company transfer
goods or services to the customer are recognised as
contract liabilities. Contract liabilities are recognised
as revenue when the Company completes its
performance obligation under the contract.
Export Incentives
Export incentives and subsidies are recognised when
there is reasonable assurance that the Company will
comply with the conditions and the incentive will be
received.
Export benefits arising from duty drawback scheme,
remission of duties and taxes on export products and
merchandise export incentive scheme are recognised
on shipment for export at the rate at which they
accrue and is included in other operating income.
1.4 IncomeTax
The income tax expense or credit for the year is the tax
payable on the current year's taxable income based
on the applicable income tax rate adjusted by changes
in deferred income tax assets and liabilities
attributable to temporary differences and
unabsorbed tax losses.
a) Current income tax
Current income tax charge is based on taxable
profit for the year. The tax rates and tax laws
used to compute the amount are those that are
enacted or substantively enacted, at the
reporting date where the Company operates
and generates taxable income. Management
periodically evaluates positions taken in tax
returns with respect to situations in which
applicable tax regulation is subject to
interpretation and considers whether it is
probable that a taxation authority will accept an
uncertain tax treatment. It establishes
provisions where appropriate on the basis of
amounts expected to be paid to the tax
authorities.
Current tax assets and liabilities are offset when
there is a legally enforceable right to set off
current tax assets against current tax liabilities
and Company intends either to settle on a net
basis, or to realize the asset and settle the
liability simultaneously.
b) Deferred income tax
Deferred income tax is provided in full using the
liability method on temporary differences
between the tax bases of assets and liabilities
and their carrying amounts for financial
reporting purposes at the reporting date.
Deferred income tax assets are recognised to
the extent that it is probable that future taxable
income will be available against which the
deductible temporary differences, unused tax
losses, depreciation carry-forwards and unused
tax credits could be utilised.
Deferred income tax is not accounted for if it
arises from initial recognition of an asset or
liability in a transaction other than a business
combination that at the time of the transaction
affects neither accounting profit nor taxable
profit (tax loss).
Deferred tax assets and liabilities are
determined using tax rates and laws that have
been enacted or substantially enacted by the
end of the reporting period and are expected to
apply when the related deferred income tax
asset is realised or the deferred income tax
liability is settled.
The carrying amount of deferred income tax
assets is reviewed at each reporting date and
adjusted to reflect changes in probability that
sufficient taxable profits will be available to
allow all or part of the asset to be recovered.
Deferred tax assets are recognised for all
deductible temporary differences and unused
tax losses only if it is probable that future
taxable amounts will be available to utilize those
temporary differences and losses.
Deferred tax assets and liabilities are offset
where there is a legally enforceable right to
offset current tax assets and liabilities and
where the deferred tax balances relate to the
same taxation authority. Current tax assets and
tax liabilities are offset where the entity has a
legally enforceable right to offset and intends
either to settle on a net basis, or to realise the
asset and settle the liability simultaneously.
Current and Deferred Tax is recognised in 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 equity respectively.
Minimum Alternate Tax ('MAT') credit
entitlement is recognised as a deferred tax asset
by crediting the standalone Statement of profit
and loss only when and to the extent there is
convincing evidence that MAT credit will
reverse in the foreseeable future and the
Company will be able to utilize the said credit
against normal tax payable during the specified
period.
1.5 Leases
As a lessee
Leases are recognised as a right-of-use (ROU) asset
and a corresponding liability at the date at which the
leased asset is available for use by the Company for all
leases except short-term leases. Contracts may
contain both lease and non-lease components. The
Company allocates the consideration in the contract
to the lease and non-lease components based on
their relative stand-alone prices. However, for leases
of real estate for which the Company is a lessee, it has
elected not to separate lease and non-lease
components and instead accounts for these as a single
lease component.
Assets and liabilities arising from a lease are initially
measured on a present value basis. Lease liabilities
are recognised based on the net present value of the
following lease payments:
• fixed payments (including in-substance fixed
payments), less any lease incentives receivable
• variable lease payment that are based on an
index or a rate, initially measured using the
index or rate as at the commencement date
• amounts expected to be payable by the
Company under residual value guarantees
• the exercise price of a purchase option if the
Company is reasonably certain to exercise that
option, and
• payments of penalties for terminating the lease,
if the lease term reflects the Company
exercising that option.
Lease payments to be made under reasonably certain
extension options are also included in the
measurement of the liability. The lease payments are
discounted using the interest rate implicit in the lease.
If that rate cannot be readily determined, which is
generally the case for leases in the Company, the
lessee's incremental borrowing rate at the date of
initial application is used, being the rate that the
individual lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value to
the right-of-use asset in a similar economic
environment with similar terms, security and
conditions.
To determine the incremental borrowing rate, the
Company:
• where possible, uses recent third-party
financing received by the individual lessee as a
starting point, adjusted to reflect changes in
financing conditions since third party financing
was received
• uses a build-up approach that starts with a risk¬
free interest rate adjusted for credit risk for
leases held by Company, which does not have
recentthird party financing, and
• makes adjustments specific to the lease, e.g.
term, country, currency and security.
If a readily observable amortising loan rate is available
to the individual lessee (through recent financing or
market data) which has a similar payment profile to
the lease, then the Company use that rate as a starting
point to determine the incremental borrowing rate.
The Company is exposed to potential future increases
in variable lease payments based on an index or rate,
which are not included in the lease liability until they
take effect. When adjustments to lease payments
based on an index or rate take effect, the lease liability
is reassessed and adjusted against the right-of-use
asset.
Lease payments are allocated between principal 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 foreach period.
The ROU assets are measured at cost comprising the
following:
• initial amount of lease liability
• any lease payments made at or before the
commencement date less any lease incentives
received
• any initial direct costs, and
• restoration costs.
They are subsequently measured at cost less
accumulated depreciation. ROU assets are
depreciated from the commencement date over the
shorter of the asset's useful life and the lease term on
a straight-line basis. If the company is reasonably
certain to exercise a purchase option, the right-of-use
asset is depreciated over the underlying asset's useful
life. Lease liability and ROU assets have been
separately disclosed in the Balance Sheet and lease
payments have been classified as financing cash
flows. Payments associated with short-term leases
are recognised as an expense in profit or loss. Short¬
term leases are leases with a lease term of 12 months
orless.
1.6 Property, plant and equipment
Freehold land is carried at historical cost. All other
items of property, plant and equipment are stated at
historical cost less accumulated depreciation and
impairment losses, if any.
Historical cost includes expenditure that is directly
attributable on making the asset ready for its
intended use and location, relevant borrowing cost
for qualifying assets and present value of any
obligatory cost of decommissioning.
Subsequent costs of replacement and major
maintenance or repair (overhaul costs) are included in
an asset's carrying amount or recognised as a
separate asset, as appropriate, only when it is
probable that future economic benefits will flow to
the Company and the cost can be measured reliably.
The carrying amount of any asset or component of an
asset replaced is derecognised when replaced.
Overhaul costs associated with major maintenance
are capitalised and depreciated overtheir useful lives.
All other repairs and maintenance are charged to
profit or loss during the reporting period in which they
are incurred.
Capital work-in-progress comprises cost and related
expenses, of property, plant and equipment that are
not yet ready for their intended use at the reporting
date.
Depreciation methods, estimated useful lives and
residual value
Freehold land is not depreciated. Leasehold
improvements are amortised over the shorter of
estimated useful life or the related lease term, unless
the entity expects to use the assets beyond the lease
term. Depreciation is calculated usingthe straight-line
method to allocate the costs, net of residual values,
over the estimated useful lives as follows:
#Useful lives determined based on technical
evaluation by the expert is equal to or lower than
those specified inthe Schedule II.
The useful lives have been determined based on
Schedule 11 of the Companies Act, 2013. The residual
values are not more than 5% of the original cost of the
assets. The assets' residual values and useful lives are
reviewed, and adjusted if appropriate, at the end of
each reporting period. Each component of an item of
property, plant and equipment with a cost that is
significant in relation to the total cost of that item is
depreciated separately, if its useful life differs from
that of other components of the asset.
Estimated useful lives, residual values and
depreciation methods are reviewed annually, taking
into account commercial and technological
obsolescence as well as normal wear and tear and
adjusted prospectively, if appropriate.
An item of property, plant and equipment is
derecognised upon disposal or when no future
economic benefits are expected to arise from
continued use of the asset. Gains and losses on
disposal or retirement are determined as the
difference between net proceeds and the carrying
amount. These are recognised in standalone
statement of profit and loss within other expenses or
other income, as applicable.
1.7 Intangible assets
a) Intangible assets with finite useful lives:
Intangible assets with finite useful lives acquired
by the Company are measured at cost less
accumulated amortization and accumulated
impairment losses, if any. Amortization is
charged on a straight-line basis over the
estimated useful lives. The estimated useful life
and amortization method are reviewed at the
end of each annual reporting period, with the
effect of any changes in the estimate being
accounted for on a prospective basis.
b) Research and Development
Research expenditure and development
expenditure that do not meet the criteria in
Note 1.7(a) above are recognised as an expense
as incurred. Development costs previously
recognised as an expense are not recognised as
an asset in subsequent period.
c) Amortization method and period
Intangible assets comprise of computer
software and licenses which are amortised on a
straight-line basis over the expected useful life
over a period of five years.
1.8 Inventories
Raw materials and stores, goods-in-process and
finished goods
Raw materials, stores, goods-in-process and finished
goods are stated at the lower of cost and net realizable
value. Cost of raw materials comprises cost of
purchases. Cost of work-in progress and finished
goods comprises direct materials, direct labor and an
appropriate proportion of variable and fixed overhead
expenditure, the latter being allocated based on
normal operating capacity. Cost of inventories also
include all other costs incurred in bringing the
inventories to their present location and condition.
Costs are assigned to individual items of inventory on
moving weighted average basis. Costs of purchased
inventory are determined after deducting rebates and
discounts. Net realizable value is the estimated selling
price in the ordinary course of business less the
estimated costs of completion and the estimated
costs necessary to makethe sale.
1.9 Borrowing costs
General and specific borrowing costs that are directly
attributable to the acquisition, construction or
production of a qualifying asset are capitalised during
the period that is required to complete and prepare
the asset for its intended use or sale. Qualifying assets
are assets that necessarily take a substantial period of
timetoget ready fortheirintended useorsale.
Borrowing cost includes exchange differences arising
from foreign currency borrowings to the extent they
are regarded as an adjustment to the finance cost.
Investment income earned on the temporary
investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the
borrowing costs eligibleforcapitalization.
Other borrowing costs are expensed in the period in
which they are incurred.
1.10 Employee benefits
Short-term obligations
Liabilities for wages and salaries, including non¬
monetary benefits that are expected to be settled
wholly within 12 months afterthe end of the period in
which the employees render the related service are
recognised in respect of employees' services up to the
end of the reporting period and are rendered at the
undiscounted amount of benefits expected to be paid
when the liabilities are settled. The liabilities are
presented as current employee benefit obligations in
the balance sheet.
Other long-term employee benefit obligations
The liabilities for earned leave are not expected to be
settled wholly within 12 months after the end of the
period in which the employees render the related
service. They are therefore measured as the present
value of expected future payments to be made in
respect of services provided by employees up to the
end of the reporting period using the projected unit
credit method. The benefits are discounted using the
market yields at the end of the reporting period that
have terms approximating to the terms of the related
obligation.
Remeasurements as a result of experience
adjustments and changes in actuarial assumptions are
recognised in other comprehensive income.
The obligations are presented as current liabilities in
the balance sheet if the entity does not have an
unconditional right to defer settlement for at least
twelve months afterthe reporting period, regardless
of when the actual settlement is expected to occur.
Post-employment obligations
The Company operates the following post¬
employment schemes:
• Defined benefit plans such as gratuity, and
• Defined contribution plans such as provident
fund and superannuation fund.
a) Defined Benefit Plans
(i) Gratuity obligations
The liability or asset recognised in the
balance sheet in respect of defined
benefit gratuity plans is the present value
of the defined benefit obligation at the
end of the annual reporting period less
the fair value of plan assets. The defined
benefit cost is calculated annually by
actuaries using the projected unit credit
method.
The present value of the defined benefit
obligation denominated in IN R 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 service cost include
current service cost, past service cost,
gains and losses on curtailments and
settlements. Changes in the present value
of the defined benefit obligation resulting
from plan amendments or curtailments
are recognised immediately in profit or
loss as past service cost.
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 standalone statement of profit and
loss.
Remeasurement gains and losses arising
from experience adjustments and
changes in actuarial assumptions are
recognised in the period in which they
occur, directly in other comprehensive
income. They are included in retained
earnings in the standalone statement of
changes in equity and in the balance
sheet.
Remeasurements are not reclassified to
profit and loss in the subsequent periods.
b) Defined contribution plans
(i) Provident Fund, Employee State
Insurance Corporation (ESIC) and Labour
Welfare Fund (LWF).
The Contribution towards provident fund,
ESIC, LWF for certain employees is made
to the regulatory authorities where the
Company has no further obligations. Such
benefits are classified as Defined
Contribution Schemes as the Company
does not carry any further obligations
apart from the contributions made on a
monthly basis.
(ii) Superannuation Fund
Contribution towards superannuation
fund for certain employees is made to
defined contribution scheme
administered by insurance Company
where the Company has no further
obligations. Such benefits are classified as
Defined Contribution Schemes as the
Company does not carry any further
obligations, apart from contributions
made on monthly basis.
Payment to defined contribution
retirement benefit plans are recognised
as an expense when employees have
rendered service entitling them to the
contributions.
c) Shared based payments
Employee options
The fair value of options under the AYM Syntex
Limited Employee Option scheme is recognised
as an employee benefits expense at the grant
date with a corresponding increase in equity.
The total amount to be expensed is determined
by reference to the fair value of the options
granted:
• including any market performance
conditions (e.g., the entity's share price)
• excluding the impact of any service and
non-market performance vesting
conditions (e.g. profitability, sales growth
targets and remaining an employee of the
entity over a specified time period), and
• including the impact of any non-vesting
conditions (e.g. the requirement for
employees to save or holdings shares for a
specific period).
The total expense is recognised over the vesting
period, which is the period over which all the
specified vesting conditions are to be satisfied.
At the end of each period, the entity reviews its
estimates of the number of options that are
expected to vest based on the non-market
vesting and service conditions. It recognizes the
impact of the revision to original estimates, if
any, in profit or loss such that the cumulative
expense reflects the revised estimate with a
corresponding adjustment to equity-settled
employee benefits reserve.
Bonus Plan
The Company recognizes a liability and an
expense for bonus where contractually obliged
or where there is a past practice that has
created a constructive obligation.
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