2. Material accounting policies
The significant accounting policies applied by the Company in the preparation of its
financial statements are listed below. Such accounting policies have been applied
consistently to all the periods presented in these financial statements, unless otherwise
stated.
2.1 Statement of Compliance
The standalone financial statements have been prepared in accordance with the
provisions of Companies Act, 2013 and the Indian Accounting Standards (“Ind AS”)
notified under the Companies (Indian Accounting Standards) Rules, 2015 and
amendments thereof issued by Ministry of Corporate Affairs in exercise of the powers
conferred by Section 133 of the Companies Act, 2013. In addition, the guidance notes/
announcements issued by the Institute of Chartered Accountants of India (“ICAI”) are
also applied except where compliance with other statutory promulgations require a
different treatment. These standalone financial statements have been approved for
issue by the Board of Directors at its meeting held on 26th May, 2025.
2.2 Basis for accounting
The Company maintains its accounts on accrual basis following historical cost
convention, except certain assets and liabilities that are measured at fair value in
accordance with Ind AS.
Fair value measurements are categorised as below based on the degree to which the
inputs to the fair value measurements are observable and the significance of the inputs
to the fair value measurement in its entirety:
• Level 1 inputs are quoted prices (unadjusted) in active markets for identical
assets or liabilities that the Company can access at the measurement date
• Level 2 inputs are inputs, other than quoted prices included in level 1, that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices), and
• Level 3 inputs are unobservable inputs for the valuation of assets or liabilities.
The above levels of the fair value hierarchy are applied consistently, and generally,
there are no transfers between the levels of the fair value hierarchy unless the
circumstances change warranting such transfer.
2.3 Presentation of standalone financial statements
The Balance Sheet, Statement of Profit and Loss and the Statement of Changes in
Equity are prepared and presented in the format prescribed in Schedule III to the
Companies Act, 2013 (“the Act”). The statement of Cash flows has been prepared and
presented as per the requirement of Ind AS 7 “Statement of Cash Flows”. The
disclosure requirements with respect to items in the Balance Sheet and Statement of
Profit and Loss, as prescribed in schedule III of the Act, are presented by way of notes
forming part of the standalone financial statements along with the other notes required
to be disclosed under notified Accounting Standards and the SEBI (Listing Obligation
and Disclosure Requirements) Regulations 2015, as amended.
Amounts in the standalone financial statements are presented in Indian Rupees in
Lakhs as permitted by Schedule III to the Companies Act, 2013. Per share data are
presented in India Rupees to two decimal places.
2.4 Current and 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
Companies Act, 2013. Based on the nature of products and the time between the
acquisition of assets for processing and their realisation in cash and cash equivalent,
the Company has ascertained its operating cycle as 12 months for the purpose of
current/ non-current classification of assets and liabilities.
An asset is classified as current when it is:
• Expected to be realised or intended to be sold or consumed in normal operating
cycle.
• Held primarily for the purpose of trading.
• Expected to be realised within twelve months after the reporting period, or
• 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:
• It is expected to be settled in normal operating cycle.
• It is held primarily for the purpose of trading.
• It is due to be settled within twelve months after the reporting period, or
• There is no unconditional right to defer the settlement of the liability for at least
twelve months after the reporting period
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
2.5. Use of estimates and critical accounting judgements
The preparation of financial statements in conformity with Ind AS requires that the
management of the Company makes estimates and assumptions that affect the
reported amounts of income and expenses of the period, the reported balances of
assets and liabilities and the disclosures relating to contingent liabilities as of the date
of the financial statements. The estimates and underlying assumptions made by
management are explained under respective policies. Revisions to accounting
estimates include useful lives of property, plant and equipment & intangible assets,
allowance for expected credit loss, future obligations in respect of retirement benefit
plans, fair value/ recoverable amount measurement, etc. Difference, if any, between
the actual results and estimates is recognised in the period in which the results are
known.
2.6. Property, Plant and Equipment (PPE)
PPE is recognized when it is probable that future economic benefits associated with
the item will flow to the Company and the cost of the item can be measured reliably.
PPE is stated at the original cost net of tax/ duty credits availed, if any, less
accumulated depreciation and cumulative impairment, if any. All directly attributable
costs related to the acquisition of PPE and borrowing costs in case of qualifying assets
are capitalised in accordance with the Company’s accounting policy.
Subsequent costs are included in the asset’s carrying amount or recognized as a
separate asset, as appropriate, only when it is probable that future economic benefits
associated with the item will flow to the Company and the cost can be measured
reliably.
PPE not ready for the intended use on the date of the Balance Sheet is disclosed as
“capital work-in-progress”.
PPE is derecognized upon disposal or when no future economic benefits are expected
from its use or disposal. Any gain or loss arising on derecognition is recognized in the
statement of profit and loss in the same period.
2.7. Intangible Assets
Intangible assets are recognised when it is probable that the future economic benefits
that are attributable to the asset will flow to the Company and the cost of the asset can
be measured reliably. Intangible assets are stated at original cost net of tax/ duty
credits availed, if any, less accumulated amortisation and cumulative impairment. All
directly attributable costs and other administrative and other general overhead
expenses that are specifically attributable to acquisition of intangible assets are
allocated and capitalised as a part of the cost of the intangible assets.
Intangible assets are stated at original cost of acquisition net of tax/duty credits
availed, less accumulated amortization and accumulated impairment losses, if any.
Intangible assets not ready for the intended use on the date of the Balance Sheet are
disclosed as “intangible assets under development”.
2.8. Research and Development Costs
Expenditure on research activities is recognised as an expense in the year in which it
is incurred.
Development expenditure on new products is capitalized as intangible asset, if all of
the following can be demonstrated:
• The technical feasibility of completing the intangible asset so that the asset will be
available for use or sale;
• The Company has the intention to complete the intangible asset and use or sell it;
• The Company has the ability to use or sell the asset;
• The manner in which the probable future economic benefits will be generated,
including the existence of a market for the output of the intangible asset or
intangible asset itself or, if it is to be used internally, the usefulness of intangible
assets;
• The availability of adequate technical, financial and other resources to complete
the development and to use or sell the intangible asset; and
• The Company has the ability to reliably measure the expenditure attributable to the
intangible asset during its development;
Development expenditure that does not meet the above criteria is expensed in the
period in which it is incurred.
2.9. Depreciation and amortization of PPE and intangible assets
Depreciation/amortization is recognized using straight-line method so as to write off the
cost of property plant and equipment and intangible assets (other than freehold land,
capital work-in-progress and intangibles under development) to their residual values
over their useful lives. The depreciation/amortization is charged from the dates the
assets are available for their intended use and are spread over their estimated useful
lives or, in the case of leased assets, over the lease period, if shorter. The estimated
useful lives for main categories of property plant and equipment and intangible assets
are;
The depreciation/ amortization charge for impaired assets is adjusted in future periods
in such a manner that the revised carrying amount of the asset is allocated over its
remaining useful life.
The depreciation/ amortization method is reviewed at each financial year end to reflect
the expected pattern of consumption of the future economic benefits embodies in the
asset. The estimated useful life and residual values are also reviewed at each financial
year-end, and the effect of any change in the estimates of useful life/ residual value is
accounted for on a prospective basis.
Where the cost of a part of the assets (“asset components”) is significant to the total
cost of the asset and the useful life of that part is different from the useful life of the
remaining asset, the useful life of that significant part is determined separately, and
such asset components is depreciated over its separate useful life.
*Note: For this class of assets, based on internal assessment and independent
technical evaluation carried out by chartered engineers, the Company believes that
useful lives, as given above, represent the period over which the Company expects to
use these assets. Hence, the useful lives for these assets are different from the useful
lives prescribed under Schedule II.
2.10. Impairment of assets
As at the end of each accounting year, carrying amounts of PPE, intangible assets and
investments in subsidiary companies are reviewed to determine whether there is any
indication that those assets have suffered an impairment loss. If such indication exists,
PPE, intangible assets and investments are tested for impairment so as to determine
the impairment loss, if any.
Impairment loss is recognized when the carrying amount of an asset exceeds its
recoverable amount. The recoverable amount is determined:
(i) in the case of an individual asset, at the higher of the fair value less costs to sell
and the value in use; and
(ii) in the case of a cash-generating unit (smallest identifiable group of assets that
generates independent cash flows), at the higher of the cash-generating unit’s fair
value less costs to sell and the value in use.
The amount of value in use is determined as the present value of estimated future
cash flows from the continuing use of an asset and from its disposal at the end of its
useful life. For this purpose, the discount rate (pre-tax) is determined based on the
weighted average cost of capital of the company suitably adjusted for risks specified to
the estimated cash flows of the asset.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less
than it’s carrying amount, such deficit is recognized immediately in the statement of
profit and loss. As impairment loss and the carrying amount of the asset (or cash¬
generating unit) is reduced to its recoverable amount.
When an impairment loss subsequently reverses, the carrying value of the asset (or
cash-generating unit) is increased to the revised estimate of its recoverable amount,
such that the increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss is recognised for the asset (or
cash-generating unit) in prior years. A reversal of an impairment loss is recognised
immediately in the Statement of Profit and Loss.
2.11. Discontinued operations and non-current assets held for sale
A discontinued operation is a component of the entity that has been disposed of or is
classified as held for sale and that represents a separate major line of business or
geographical area of operation, is part of a single coordinated plan to dispose of such a
line of business or area of operations, or is a subsidiary acquired exclusively with a
view to resale. The results of discontinued operations are presented separately in the
statement of profit or loss.
Non-current assets and disposal groups are classified as held for sale if their carrying
amount is intended to be recovered principally through a sale (rather than through
continuing use) when the asset (or disposal group) is available for immediate sale in its
present condition subject only to terms that are usual and customary for sale of such
asset (or disposal group) and the sale is highly probable and is expected to qualify for
recognition as a completed sale within one year from the date of classification.
Non-current assets and disposal groups classified as held for sale are measured at
lower of their carrying amount and fair value less costs to sell.
Non-current assets (including that are part of disposal group) are not depreciated or
amortised while they are classified as held for sale. Non-current assets classified as
held for sale and the assets of a disposal group as held for sale are presented
separately from the other assets in the balance sheet. The liabilities of disposal group
classified as held for sale are presented separately from other liabilities in the Balance
Sheet.
2.12. Leases
Leases are accounted as per Ind AS 116 which has become mandatory from April 1,
2019.
Assets taken on lease are accounted as right of use assets, and the corresponding
lease liability is recognized at the lease commencement date.
Initially, the right of use asset is measured at cost, which comprises the initial amount
of the lease liability adjusted for any lease payments made at or before the
commencement date, plus any initial direct costs incurred and an estimate of costs to
dismantle and remove the underlying asset or to restore the underlying asset or the
site on which it is located, as reduced by any lease incentives received.
The lease liability is initially measured at the present value of the lease payments,
discounted using the Company’s incremental borrowing rate. It is remeasured when
there is a change in future lease payments arising from a change in an index or a rate,
or a change in the estimate of the guaranteed residual value, or a change in the
assessment of purchase, extension or termination option. When the lease liability is
remeasured in this way, a corresponding adjustment is made to the carrying amount of
the right of use asset or is recorded in the Statement of Profit and Loss if the carrying
amount of the right of use asset has been reduced to zero.
The right of use asset is measured by applying the cost model i.e. right of use asset at
cost less accumulated depreciation and cumulative impairment, if any. The right of use
asset is depreciated using the straight-line method from the commencement date to
the end of the lease term or useful life of the underlying asset, whichever is earlier. The
carrying amount of lease liability is increased by interest on the lease liability and
reduced by lease payments made.
Lease payments associated with the following leases are recognised as expenses on
straight-line basis:
(i) Low value leases; and
(ii) Leases which are short-term.
Assets given on lease are classified either as operating lease or as finance lease. A
lease is classified as a finance lease if it transfers substantially all the risks and
rewards incidental to ownership of an underlying asset. Asset under a finance lease is
initially recognised in the balance sheet and presented as receivable at an amount
equal to the net investment in the lease. Finance income is recognised over the lease
term based on a pattern reflecting a constant periodic rate of return on Company’s net
investment in the lease. A lease which is not classified as a finance lease is an
operating lease.
The Company recognises lease payments in case of assets given on operating leases
as income on a straight-line basis. The Company presents underlying assets subject to
operating lease in its balance sheet under the respective class of asset.
2.13. Investment in subsidiaries, joint ventures and associates
Investments in subsidiaries, associates and joint ventures are carried at cost less
accumulated impairment losses, if any. Where an indication of impairment exists, the
carrying amount of investment is assessed and an impairment loss is recognised
immediately in the statement of profit and loss. On disposal of such investments,
difference between the net disposal proceeds and carrying amount is recognised in the
statement of profit and loss.
2.14. 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. Financial assets and
financial liabilities are recognized when the company becomes a party to a contract
embodying the related financial instruments.
Initial recognition and measurement
Financial assets and financial liabilities are initially measured at fair value. Transaction
costs that are directly attributable to the acquisition or issue of financial assets and
financial liabilities (other than financial assets and financial liabilities at fair value
through profit or loss) are added to and deducted from the fair value measured on the
initial recognition of the financial asset or financial liability. Transaction costs directly
attributable to the acquisition of financial assets or financial liabilities at fair value
through profit or loss are recognised immediately in the Statement of the Profit and
Loss.
Effective interest method
The effective interest method is a method of calculating the amortized cost of a
financial instrument of allocating interest income or expense over the relevant period.
The effective interest rate is a rate that exactly discounts the future cash receipts or
payments through the expected life of the instrument, or where appropriate, a shorter
period.
Subsequent measurement
For purposes of subsequent measurement financial assets are classified in two broad
categories:
• Financial assets at amortised cost
• Financial assets at fair value
2.14.1. Financial assets
> Financial assets at amortized cost
Financial assets are subsequently measured at amortized cost if these
financial assets are held within a business model whose objective is to hold
these assets in order to collect contractual cash flows and the contractual
terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
> Financial assets at fair value
Financial assets are measured at fair value through other comprehensive
income if such financial assets are held within a business model whose
objective is to hold these assets in order to collect contractual cash flows or
to sell such financial assets and the contractual terms of the financial asset
give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
The Company in respect of equity investments (other than in subsidiaries,
associates and joint ventures) which are not held for trading has made an
irrevocable election to present in other comprehensive income subsequent
changes in the value of such equity instruments. Such an election as made
by the company on an instrument-by-instrument basis at the time of initial
recognition of equity instruments. These investments are held for medium- or
long-term strategic purpose.
The Company has chosen to designate these investments in equity
instruments as fair value through other comprehensive income as the
management believe this provides a more meaningful presentation for
medium- or long-term strategic investments, than reflecting changes in fair
value immediately in the statement of profit and loss.
Financial asset not measured at amortised cost or fair value through other
comprehensive income is carried at fair value through the statement of profit
and loss.
The Company recognises impairment loss on trade receivables and certain
other financial assets using expected credit loss (ECL) model, which
involves use of a provision matrix constructed on the basis of historical credit
loss experience as permitted by Ind AS 109.
Other financial assets measured at amortized cost and financial assets
measured at fair value through OCI are tested for impairment based on
evidence or information that is available without undue cost or effort.
Expected credit loss on such assets is assessed and allowance recognized if
the credit quality of the financial asset has deteriorated significantly since
initial recognition.
> De-recognition
The Company de-recognises a financial asset (or, where applicable, a part
of financial asset or a part of a group of similar financial assets) when;
• The rights to receive cash flows from the assets 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 ‘pass through’
arrangement and either the company has;
a) transferred all the risks and rewards of the asset to another entity
or,
b) not retained substantially all the risks and rewards of the asset but
has transferred control of the asset.
When the company has transferred its right to receive cash flows from an
asset or has entered into a pass-through arrangement, it evaluates if and to
what extent it has retained the risks and rewards of ownership. When it has
neither transferred nor retained substantially all the risks and rewards of the
asset, nor transferred control of the asset the company continues to
recognize the transferred asset to the extent of company’s continuing
involvement. In that case, the company also recognizes an associated
liability. The transferred asset and associated liability are measured on a
basis that reflects the rights and obligations that the company has retained.
Continuing involvement that takes the form of a guarantee over the
transferred asset is measured at the lower of the original carrying amount of
the asset the maximum amount of consideration that the company could be
required to repay.
On derecognition of a financial asset in its entirety, the difference between
the carrying amount measured at the date of derecognition and the
consideration received is recognised in Profit or Loss.
> Classification as debt or equity
Financial liabilities and equity instruments issued by the Company are
classified according to the substance of the contractual arrangements
entered into and the definitions of a financial liability and an equity
instrument.
> Equity instruments
An equity instrument is any contract that evidences a residual interest in the
assets of the Company after deducting all of its liabilities. Equity instruments
are recorded at the proceeds received, net of direct issue costs.
> Financial liabilities
The Company’s financial liabilities include trade and other payables, loans
and borrowings including bank overdrafts, and derivative financial
instruments.
Trade and other payables are initially measured at fair value, net of
transaction costs, and are subsequently measured at amortised cost, using
the effective interest rate method where the time value of money is
significant.
Interest bearing bank loans, overdrafts and issued debt are initially
measured at fair value and subsequently measured at amortised cost using
the effective interest rate method. Any difference between the proceeds (net
of transaction costs) and the settlement and redemption of borrowings is
recognised over the term of the borrowings in the statement of profit and
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 and loss.
Financial liabilities are classified as held for trading if they are incurred for
the purpose of repurchasing in the near term. This category also includes
derivative financial instruments entered into by the Company that are not
designated as hedging instruments in hedge relationships as defined by Ind
AS 109. Separated embedded derivatives are also classified as held for
trading unless they are designated as effective hedging instruments.
Gains/ losses on liabilities held for trading are recognised in the statement of
profit and loss.
Financial liabilities designated upon initial recognition at fair value through
profit or loss are designated at the initial date of recognition, and only if the
criteria in Ind AS 109 are satisfied.
The Company de-recognises financial liabilities when, and only when, the
Company’s obligation is discharged, cancelled or they expire.
When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange and modification is treated as the
de-recognition of the original liability and the recognition of the new liability.
The difference in the respective carrying amounts is recognised in the
statement of profit and loss.
2.14.3. Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is
reported in the Balance Sheet if there is a currently enforceable legal right to
offset the recognised amounts and there is an intention to settle on a net
basis, to realize the assets and settle the liabilities simultaneously.
2.14.4. Compound financial instruments
The liability component of a compound financial instrument is recognised
initially at fair value of a similar liability that does not have an equity
component. The equity component is recognised initially at the difference
between the fair value of the compound financial instrument as a whole and
the fair value of the liability component. Any directly attributable transaction
costs are allocated to the liability and the equity components, if material, in
proportion to their initial carrying amounts.
Subsequent to the initial recognition, the liability component of a compound
financial instrument is measured at amortised cost using the effective
interest method.
The equity component of a compound financial instrument is not re¬
measured subsequent to initial recognition except on conversion or expiry.
2.15. Cash and bank balances
Cash and bank balances consist of:
i) Cash and cash equivalents
Cash and cash equivalents which includes cash in hand, deposits held at call
with banks, and other short-term deposits which are readily convertible into
known amounts of cash, subject to an insignificant risk of changes in value and
have maturities of less three months from the reporting date are held for the
purpose of meeting short-term cash commitments.
The balances with banks are unrestricted for withdrawal and usage.
For the purpose of the statement of cash flows, cash and cash equivalents
consist of cash and short-term deposits, as defined above.
ii) Other Bank balances
Other bank balances include (a) deposits with banks having maturing of more
than 3 months and (b) balances and deposits with banks that are restricted for
withdrawal and usage.
2.16. Employee benefits
(i) Short term employee benefits
Employee benefits such as salaries, wages, bonus, short-term compensated
absences, performance incentives, etc., falling due wholly within the twelve months
of rendering service are classified as short-term employee benefits and are
expensed in the period in which the employee renders the related service.
(ii) Post employment benefits:
A. Defined contribution plans
The Company’s contributions to defined contribution plans i.e., superannuation
scheme, provident fund and pension scheme, are recognized in statement of
profit or loss in the period to which the employee provides the related service.
B. Defined benefit plans
The Company’s obligation towards gratuity is a defined benefit plan. The
present value of the obligation under such defined benefit plan is determined
based on actuarial valuation, done by a qualified actuary, using the Projected
Unit Credit Method.
The obligation towards defined benefit plans is measured at the present value
of the estimated future cash flows using a discount rate based on the market
yield on Government securities of a maturity period equivalent to the weighted
average maturity profile of the defined benefit obligation at the Balance Sheet
date.
Re-measurements, comprising actuarial gains and losses, the return on plan
assets (excluding net interest on the net defined benefit liability or asset) and
any change in the effect of asset ceiling (if applicable) are recognized in other
comprehensive income and are reflected in retained earnings and the same is
not eligible to be reclassified to profit or loss.
Defined benefit costs comprising current service cost, past service cost and
gains or loss on settlements are recognized in the statement of profit or loss as
employee benefits expense. Interest cost implicit in defined benefit cost is
recognized in the statement of profit or loss under finance cost. Gains or
losses on settlement of any defined benefit plan are recognized when the
settlement occurs. Past service cost is recognized as an expense at the earlier
of the plan amendment or curtailment and when the Company recognizes
related restructuring costs or termination benefits.
(iii) Long term employee benefits
The obligation recognized in respect of long-term employee benefits such as
long-term compensated absences is measured at present value of estimated
future cash flows expected to be made by the Company and is measured in a
similar manner as in the case of a defined benefit plan as above.
Long-term employee benefit costs comprising current service cost and gains or
losses on curtailments and settlements, re-measurements including actuarial
gains and losses are recognized in the statement of profit or loss as employee
benefits expense. Interest cost implicit in long-term employee benefit cost is
recognized in the statement of profit or loss under finance cost.
(iv) Termination benefits
Termination benefits are recognized as expenses in the period in which they
are incurred.
2.17. Inventories
Inventories are valued after providing for obsolescence, as under:
Inventories comprise Raw Materials, Stores & Spares, Chemicals, Work in progress
and finished goods.
(i) Raw materials, stores and spares, chemicals and packing materials at lower of
weighted average cost and net realisable value. However, these items are
considered to be realisable at cost if the finished products in which they will be
used are expected to be sold at or above cost.
(ii) Work-in-progress at lower of weighted average cost including related overheads
and net realisable value.
(iii) Finished goods at lower of weighted average cost and net realisable value. Cost
includes costs of purchases, costs of conversion and other costs incurred in
bringing the inventories to their present location.
Assessment of net realisable value is made at each reporting period end, and when
the circumstances that previously caused inventories to be written down below cost
no longer exist or when there is clear evidence of an increase in net realisable value
because of changed economic circumstances, the write-down, if any, in the past
period is reversed to the extent of the original amount written-down so that the
resultant carrying amount is the lower of the cost and the revised net realisable value.
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