3. Material Accounting Policies:
The financial statements have been prepared using the material accounting policies and measurement
basis summarized below:-
A. Current and non-current classification
Assets and liabilities are classified as current if expected to realize or settle within twelve months after the
balance sheet date. Deferred tax assets and liabilities are classified as non-current assets and non-current
liabilities, as the case may be.
B. Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs
with two decimals thereof as per the requirement of Schedule III, unless otherwise stated.
C. Use of estimates and judgments
The estimates and judgments used in the preparation of the financial statements are continuously
evaluated by the Company and are based on historical experience and various other assumptions and
factors (including expectations of future events) that the Company believes to be reasonable under the
existing circumstances. Differences between actual results and estimates are recognized in the period in
which the results are known/materialized. The said estimates are based on the facts and events that
existed as at the reporting date, or that occurred after that date but provide additional evidence about
conditions existing as at the reporting date.
D. Property, plant and equipment
All other items of property, plant and equipment are stated at cost less depreciation and impairment if any.
Historical cost includes expenditure that is directly attributable to the acquisition of the items.
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 of the item can be measured reliably. All other repairs and maintenance are
charged to the Statement of Profit and Loss during the reporting period in which they are incurred.
E. Depreciation methods, estimated useful life and residual value
Depreciation is provided on assets to get the initial cost down to the residual value, including on asset
created on lands under lease. Land is not depreciated. Depreciation on property, plant and equipment is
provided on pro-rata basis on Written-Down Value Method using the useful life of the assets estimated by
management and in the manner prescribed in Schedule II of the Companies Act 2013. The useful life is as
follows:
On the basis of technical assessment made by the management, it believes that the useful life as given
above best represent the period over which the assets are expected to be used.
Leasehold land is amortized on a straight line basis over the unexpired period of their respective lease.
The assets residual values and useful life are reviewed, and adjusted if appropriate, at the end of each
reporting period.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are
included in the Statement of Profit and Loss.
F. Intangible assets
Intangible assets with finite useful life that are acquired separately are carried at cost less accumulated
amortization and accumulated impairment losses. Amortization is recognized on a Written-Down Value
basis over their estimated useful life. The estimated useful life and amortization method are reviewed at
the end of each reporting period, with the effect of any changes in estimate being accounted for on a
prospective basis.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are
included in the Statement of Profit and Loss.
G. Cash and Cash Equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash
on hand and operating balances.
H. Inventories:
Inventories of raw materials and stores and spares are valued at weighted average cost net of duties and
finished goods and Stock-in-Process are valued at lower of cost or net realizable value and Scrap is
valued at net realizable value.
I. Investments and other financial assets
(i) Classification
The Company classifies its financial assets in the following measurement categories:
(1) Those to be measured subsequently at fair value (either through other comprehensive income, or
through the Statement of Profit and Loss), and
(2) Those measured at amortized cost.
A financial asset is measured at amortized cost if it is held within a business model whose objective is to
hold the asset 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.
(ii) Measurement
At initial recognition, the Company measures a financial asset at its fair value. Transaction costs of
financial assets carried at fair value through the Profit and Loss are accounted in the Statement of Profit
and Loss.
(iii) Impairment of financial assets
The Company measures the expected credit loss associated with its assets based on historical trend,
industry practices and the business environment in which the entity operates or any other appropriate
basis. The impairment methodology applied depends on whether there has been a significant increase in
credit risk.
J. Impairment of non- financial Assets
The Company assesses, at each reporting date, whether there is an indication that an asset may be
impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company
estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or
cash-generating unit’s (CGU) fair value less costs of disposal and its value in use.
Recoverable amount is determined for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or Company’s assets. Where the carrying
amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is
written down to its recoverable amount.
In determining fair value less costs of disposal, recent market transactions are taken into account, if
available. If no such transactions can be identified, an appropriate valuation model is used. Impairment
losses including impairment on inventories are recognized in the statement of profit and loss. After
impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful
life.
K. Segment Reporting:
Since the Company operates in one segment only, segment reporting as required IND-AS issued by the
Institute of Chartered Accountants of India is not applicable.
L. Exceptional Items:
Exceptional Items are disclosed separately in the financial statements where it is necessary to do so to
provide further understanding of the financial performance of the company. These are material items of
income and expense that have to be shown separately due to their nature or incidence.
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