3. Material Accounting Policies
Material accounting policy information has been
identified and disclosed based on the guidance
provided under Ind AS 1. The material accounting
policy information used in preparation of the
standalone financial statements have been disclosed
in the respective notes.
3.1 Key accounting estimates and judgements
The preparation of the Company's Standalone
financial statements requires management to
make judgements, estimates and assumptions
that affect the reported amounts of revenues,
expenses, assets and liabilities, and the
accompanying notes and disclosures, and the
disclosure of contingent liabilities. Estimates
and underlying assumptions are reviewed on
an ongoing basis. Uncertainty about these
assumptions and estimates could result in
outcomes that require a material adjustment
to the carrying amount of assets or liabilities
affected in future periods.
Revisions to accounting estimates are
recognised prospectively. The changes in
the estimates are reflected in the Standalone
financial statements in the period in which
changes are made and, if material, their effects
are disclosed in the notes to the Standalone
financial statements.
Critical accounting estimates and key sources
of estimation uncertainty: Key assumptions
(i) Useful lives of Property, plant and
equipment and Other intangible assets
The Company uses its technical expertise
along with historical and industry trends for
determining the economic life of an asset/
component of an asset. The useful lives are
reviewed by management periodically and
revised, if appropriate. In case of a revision,
the unamortised depreciable amount is
charged over the remaining useful life of
the assets (refer note 4A and 6).
(ii) Fair value measurement of financial
instruments
When the fair values of financial assets
and financial liabilities recorded in the
balance sheet cannot be measured based
on quoted prices in active markets, their
fair value is measured using certain
valuation techniques. The inputs to these
models are taken from observable market
data where possible, but where this is not
feasible, a degree of judgement is required
in establishing fair values. Judgements
include considerations of inputs such as
volatility risk and credit risk (refer note 40).
(iii) Defined benefit plan
The Company provides defined benefit
employee retirement plans. Measurement
of such plans require numerous
assumptions and estimates that can have a
significant impact on the recognized costs
and obligation (refer note 24).
(iv) Recognition of current tax and deferred
tax (including MAT credit entitlements)
The Company uses judgements based
on the relevant rulings in the areas of
allocation of revenue, costs, allowances,
and disallowances which is exercised while
determining the provision for income tax.
Deferred income tax expense is calculated
based on the differences between the
carrying value of assets and liabilities for
financial reporting purposes and their
respective tax basis that are considered
temporary in nature. Valuation of deferred
tax assets is dependent on management's
assessment of future recoverability of the
deferred benefit. Expected recoverability
may result from expected taxable income
in the future, planned transactions
or planned tax optimizing measures.
Economic conditions may change and
lead to a different conclusion regarding
recoverability (refer note 33).
(v) Revenue Recognition
Revenue is recognised upon transfer of
control of promised products or services to
customers at transaction price that reflects
the consideration which the Company
expects to receive in exchange for those
products or services. The Company
exercises judgment in determining whether
the performance obligation is satisfied at
a point in time or over a period of time.
The Company considers the terms of the
contract in determining the transaction
price. For incentives/discounts offered to
customers/dealers, the Company makes
estimates related to customer performance
and sales volume to determine the total
amounts earned and to be recorded as
deductions. No element of significant
financing is deemed present as the sales
are made with a credit term, which is
consistent with market practice.
(vi) Determination of lease liabilities
The Company evaluates if an arrangement
qualifies to be a lease as per the
requirements of Ind AS 116. Identification
of a lease requires significant judgement.
The Company uses significant judgement
in assessing the lease term (including
anticipated renewals) and the applicable
discount rate. The Company determines
the lease term as the non-cancellable
period of a lease, together with both
periods covered by an option to extend
the lease if the Company is reasonably
certain to exercise that option; and periods
covered by an option to terminate the
lease if the Company is reasonably certain
not to exercise that option. In assessing
whether the Company is reasonably
certain to exercise an option to extend
a lease, or not to exercise an option to
terminate a lease, it considers all relevant
facts and circumstances that create an
economic incentive for the Company to
exercise the option to extend the lease,
or not to exercise the option to terminate
the lease. The Company revises the lease
term if there is a change in the non¬
cancellable period of a lease. The discount
rate is generally based on the incremental
borrowing rate specific to the lease being
evaluated or for a portfolio of leases with
similar characteristics [refer note 35(c)].
(vii) Determination of Right of use (ROU)
assets
Certain key assumptions used in
determination of ROU assets and liabilities,
incremental borrowing rate and lease term.
Right of use assets are depreciated on a
straight-line basis over the shorter of the
lease term and the estimated useful lives of
the assets (refer note 5).
(viii) Loss allowance on trade receivables
The Company determines the allowance
for credit losses based on historical loss
experience adjusted to reflect current and
estimated future economic conditions.
The Company considered current and
anticipated future economic conditions
relating to the industries the Company deals
with, and the countries where it operates.
The identification of credit impaired
balances of trade receivable requires use
of judgments and estimates. Where the
expectation is different from the original
estimate, such difference will impact the
carrying value of the trade and other
receivables, and credit impaired expenses
in the period in which such estimate has
been changed (refer note 8, 40 and 41).
Property, plant and equipment held for use in the production or/and supply of goods or services, or for administrative
purposes, are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent
accumulated impairment losses, if any.
The 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.
Where an asset or part of an asset is replaced and it is probable that future economic benefits associated with the
item will be available to the Company, the expenditure is capitalised and the carrying amount of the item replaced
is derecognised. Similarly, overhaul costs associated with major maintenance which can be measured reliably
are capitalised and depreciated over their useful life where it is probable that future economic benefits will be
available and any remaining carrying amounts of the cost of previous overhauls are derecognised. All other costs
are charged to profit and loss during the reporting period in which they are incurred.
In case of self-constructed assets, cost includes the costs of all materials used in construction, direct labour,
allocation of overheads, directly attributable borrowing costs.
Depreciation is calculated on estimated useful life using the written down value method for Property,
plant and equipment situated at Liluah Unit - I (Howrah), Vapi and Vizag, and on property, plant and
equipment situated at other locations are provided on straight line method over the useful life of assets,
at the rates and in the manner specified in Part C of Schedule II of the Act except in respect of certain
categories of assets, where the useful life of the assets has been assessed based on a technical evaluation.
The estimated useful life, depreciation method and residual value are reviewed at the end of each annual reporting
year, with the effect of any changes in estimate being accounted for on a prospective basis. Each component
of an item of property, plant and equipment with a cost that is significant in relation to the cost of that item is
depreciated separately if its useful life differs from the other components of the asset.
Freehold land is not depreciated. Leasehold land (includes development cost) is amortised on a straight-line
basis over the period of respective lease, except land acquired on perpetual lease. Useful life and residual values
are reviewed at each financial year end and adjusted, as appropriate. Leasehold improvements are amortised/
depreciated over the remaining tenure of the contract.
Based on technical assessment done by experts in earlier years and management's estimate:
- Useful life of property, plant and equipment are different than those indicated in Schedule II to the Act,
as stated above.
- Residual value on property, plant and equipment has been estimated at 5% of the cost, specified in
Schedule II of the Act.
The management believes that these estimated useful life and residual values are realistic and reflect fair
approximation of the period over which the assets are likely to be used.
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 off).
(b) As at 31 March 2025, Property, plant and equipment with net carrying amount of J 1,37,733.16 Lakhs (31 March
2024: H 1,38,572.66 Lakhs) are subject to first charge to secure borrowings (refer note 19).
(c) Gross carrying amount includes Research and development assets (Building, Plant and equipment, Furniture
and fixtures and Office equipment) of J 2,830.70 Lakhs (31 March 2024: H 2,488.59 Lakhs) and net carrying
amount of J 1,698.58 Lakhs (31 March 2024: H 1,334.07 Lakhs). Additions to the Research and development
assets during the year 2024-2025 is J 342.11 Lakhs (2023-2024: H 445.29 Lakhs).
(d) The title deeds of leasehold Land are duly registered with appropriate authorities and title deeds of Freehold
land amounting to J 518.86 Lakhs, which were transferred to the Company pursuant to the Scheme of
Amalgamation, are in the process of transfer in the name of the Company.
(e) For contractual commitment with respect to Property, plant and equipment, refer note 35(b).
(f) The Company has not revalued its property, plant and equipment during the year ended 31 March 2025 and
also during previous year ended 31 March 2024
(g) The Company has performed an assessment of its property plant and equipment for possible triggering
events or circumstances for an indication of impairment and has concluded that there were no triggering
events or circumstances that would indicate the property plant and equipment are impaired.
4B. Capital work-in-progress
Accounting Policy
Capital work-in-progress assets in the course of construction for production or/and supply of goods or services
or administrative purposes, or for purposes not yet determined, which are not ready for intended use as on the
date of Balance Sheet are disclosed as Capital work-in-progress and are carried at cost, less any recognised
impairment loss, if any. Temporarily suspended projects do not include those projects where temporary suspension
is a necessary part of the process of getting an asset ready for its intended use.
Directly attributable expenditure (including finance costs relating to borrowed funds/general borrowings for
construction or acquisition of property, plant and equipment) incurred on project under implementation are
treated as Pre-operative expenses pending allocation to the asset and are shown under CWIP.
The Company recognises right of use assets at the commencement date of the lease (i.e., the date the underlying asset is
available for use). Right of use assets are measured at cost, less any accumulated depreciation and impairment losses, and
adjusted for any remeasurement of lease liabilities. The cost of right of use assets includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease payments made at or before the commencement date. Right of use
assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful life of the assets.
If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the
exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
Intangible assets acquired are reported at cost less accumulated amortization and accumulated impairment losses,
if any. The estimated useful life and amortization method are reviewed at the end of each annual reporting period,
with the effect of any changes in estimate being accounted for on a prospective basis.
Intangible assets are amortized over their estimated useful life using straight line method which reflects the pattern
in which the economic benefits are expected to be consumed and have a useful life of 3 to 5 years.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment
annually, and whenever there is an indication that the asset may be impaired.
Intangible assets under development - J Nil
(i) The Company has not revalued its intangible asssets during the year ended 31 March 2025 and also during
previous year ended 31 March 2024.
(ii) The Company has performed an assessment of its Intangible assets for possible triggering events or
circumstances for an indication of impairment and has concluded that there were no triggering events or
circumstances that would indicate the Capital work in progress are impaired.
All financial assets are recognised on trade date when the purchase of a financial asset is under a contract whose
term requires delivery of the financial asset within the timeframe established by the market concerned. Financial
assets are initially measured at fair value, plus transaction costs, except for those financial assets which are
classified at fair value through profit or loss (FVTPL) at inception. All recognised financial assets are subsequently
measured in their entirety at either amortised cost or fair value.
The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset
expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset
to another entity.
Classification of financial assets
Financial assets are classified as 'equity instrument' if it is a non-derivative and meets the definition of 'equity'
for the issuer (under Ind AS 32 Financial Instruments: Presentation). All other non-derivative financial assets are
'debt instruments'.
Initial Recognition and Subsequent Recognition
(i) Amortised Cost
Financial assets are subsequently measured at amortised cost using the effective interest method, if these
financial assets are held within a business whose objective is to hold these assets in order to collect contractual
cash flows and the contractual terms of the financial assets give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
The Company may irrevocably elect at initial recognition to classify a debt instrument that meets the amortised
cost criteria above as at FVTPL if that designation eliminates or significantly reduces an accounting mismatch
had the financial asset been measured at amortised cost.
Financial assets classified at amortised cost comprise trade receivables, loans, government securities etc.
(ii) Fair value through other comprehensive income (FVTOCI)
Financial assets are measured at fair value through other comprehensive income if these financial assets are
held within a business whose objective is achieved by both collecting contractual cash flows on specified
dates that are solely payments of principal and interest on the principal amount outstanding and selling
financial assets.
On initial recognition, the Company has an irrevocable option to present changes in the fair value of equity
investments not held for trading in OCI. This option is made on an investment-by-investment basis.
Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses
arising from changes in fair value recognised in other comprehensive income and accumulated in other
Equity. Where the asset is disposed of, the cumulative gain or loss previously accumulated in the other Equity
is directly reclassified to retained earnings.
(iii) Fair value through profit and loss (FVTPL)
Financial assets are measured at fair value through profit or loss unless they are measured at amortised
cost or at fair value through other comprehensive income on initial recognition. The transaction costs
directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are
immediately recognised in statement of profit and loss.
Disclosure related to Fair value measurement of financial instruments (refer note 40).
(iv) Investments in subsidiaries are carried at cost and tested for impairment in accordance with Ind AS 36
'Impairment of Assets'.
De-recognition of Financial Assets:
The Company derecognises financial assets on trade date only when the contractual rights to the cash flows from
the asset expire, or when it transfers the financial assets and substantially all the risks and rewards of ownership
to another entity or when it retains contractual rights to retain contractual cash flows from asset, but assumes a
contractual obligation to pay the cash flows to one or more recipient.
Impairment of Financial Assets
At each reporting date, the Company assesses whether the credit risk on a financial instrument has increased
significantly since initial recognition. When making the assessment, the Company compares the risk of a default
occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial
instrument as at the date of initial recognition and consider reasonable and supportable information, that is available
without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition. The
amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date is
recognised as an impairment loss or gain in the statement of profit and loss.
The Company had made investments in equity shares and given loans and advances to its wholly owned subsidiary,
AAT Global Limited ('AAT'), Hongkong. AAT, in turn, invested in equity shares and had given loans and advances to
its subsidiary, Shandong Dawn Himadri Chemical Industry Limited ('SDHCIL'), China. There had been shortfall in the
business performance of both AAT and SDHCIL as compared with budgets and further changes in the technology,
market, economic environment have had adverse impact on the value of the investments and recoverability of
loans and advances given. Due to the on-going size of operations and cost-benefit trend, both AAT and SDHCIL
had been incurring losses and their net worth are fully eroded. Accordingly, the Company's investments in equity
shares of AAT, amounting to H 5,244.64 Lakhs, had been fully impaired and loans and advances given to AAT,
amounting to H 7,554.01 Lakhs, had been fully provided during the year ended 31 March 2020.
(a) Non-cumulative optionally convertible Preference shares (OCPS) of Modern HI-Rise Private Limited
(MHPL) are convertible/ redeemable at any time before the expiry of 20 years from the date of allotment
(i.e. 1 March 2019) at the option of the Issuer. Each OCPS, if not opted for conversion shall be redeemable
at value equal to fair market value (post considering the market value of underlying assets) of the
proportionate equity shares of the Issuer (if it were converted) as on 1 June 2018 (i.e. amalgamation
appointed dated). The outstanding OCPS, if not redeemed, would be converted into equity shares at any
time at the option of the Issuer, but not later than 20 years from the date of allotment at the option of the
Issuer in a manner that the Company would obtain same proportion of equity shareholding (ownership)
of the Issuer as on 1 June 2018 i.e. 7.7% of the total outstanding as on 1 June 2018 and would be subject
to any dilution thereof pursuant to fresh allotment by MHPL. In case conversion is made by the Issuer, the
OCPS will be converted into 6,253 equity shares (i.e. fixed number of equity shares) whenever converted.
(b) Optionally Convertible Debentures (OCDs) issued by Birla Tyres Limited (Issuer) are Convertible into
equal number of equity shares at the option of the Debenture Holder any time within 5 years from the
date of allotment. OCDs shall be redeemed upon expiry of 5 years from the date of allotment, if not
converted by Debenture Holder, at a premium as may be fixed by the Issuer at the time of redemption.
(c) Optionally Convertible Debentures (OCDs) issued by Himadri Birla Tyre Manufacturer Private Limited
(Issuer) are Convertible into equal number of equity shares at the option of the Debenture Holder any
time within 5 years from the date of allotment. OCDs shall be redeemed upon expiry of 5 years from the
date of allotment, if not converted by Debenture Holder, at a premium as may be fixed by the Issuer at
the time of redemption.
(d) Redeemable Non-Convertible Debentures (NCDs) issued by Dalmia Bharat Refractories Limited (Issuer)
are redeemable on expiry of 5 years from the date of Allotment unless mutually extended by the Issuer
and Debenture Holder. However, both parties may mutually agree for part redemption of debentures.
NCDs shall be subject to such other terms and conditions (including redemption premium, if any) as may
be agreed between the Issuer and Debenture Holder.
(e) The Company on 17 May 2024, has acquired 40% paid-up equity share capital of Invati Creations
Private Limited (“Target Company”), for a total purchase consideration of H 4,516.13 Lakhs. The purchase
consideration has been discharged in the following manner -
i. H 1,999.36 Lakhs has been paid in cash against fresh issue of 2,152 equity shares of H 10.00 each
constituting 17.71% stake, of the Target Company; and
ii. H 2,516.77 Lakhs payable for acquiring 2,709 equity shares of H 10.00 each, constituting 22.29% stake,
of the Target Company from the existing shareholders of the Target Company for consideration
other than cash has been settled by way of issue and allotment of 7,96,446 equity shares of the
Company having face value of H 1 each, at a price of H 316.00 per equity share (including a premium
of H 315.00 per equity share) to the existing shareholders of the Target Company.
This voting right does not qualify ICPL as a subsidiary under Section 2(87) of the Companies Act, 2013.
However based on contractual rights (including potential voting right combined with 40% voting right),
the Company has the power to make decisions concerning relevant activities and thus has control over
ICPL as per IND AS 110: ""Consolidated Financial Statements."" Consequently, the management of the
Company has decided to consider the investment in ICPL as investment in subsidiary Company.
(f) The Compulsorily Convertible Notes (CCNs) issued by Sicona Battery Technologies Pty Ltd (Issuer) are
convertible into Ordinary Shares as per the specific terms prescribed under the Compulsorily Convertible
Note Agreement entered into the Company and the Issuer as on September 2024. The CCNs shall
be converted into Ordinary Shares of the Issuer as per the time frame outlined under Compulsorily
Convertible Note Agreement but not later than 20th June 2026.
(g) 8% redeemable preferance share of Dalmia Bharat Refractories Limited was issued and allotted against
discharge of purchase consideration for demerger of tyre undertaking of Birla Tyres Limited, in accordance
with the approved resolution plan(as defined in schedule 8 scheme of demerger therein) and NCLT order
dated 19 October 2023, w.e.f 6 May 2022.
These redemable preference shares are redeemable at the option of redeemable preference shareholder
anytime within 5 years at par. These redemable preference shares carry dividend @8% p.a. on its face
value of non-cumulative basis.
Information about the Company's fair value measurement and exposure to credit and market risks are
disclosed in note 40 and 41.
15. Inventories
Accounting Policy
(Valued at the lower of cost and net realisable value)
Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the
first-in first-out (FIFO) cost basis. Cost of raw material and traded goods comprises of Cost of purchases and also
include all other costs incurred in bringing the inventories to their present location and condition and are net of
rebates and discounts. The cost of finished goods and work in progress includes raw materials, direct labour, other
direct costs and related production overheads. The comparison of cost and net realisable value is made on an
item-by-item basis.
Raw materials and supplies held for use in the production of finished products are not written down below cost
except in cases where material prices have declined and it is estimated that the cost of the finished products will
exceed their net realisable value.
G. Aggregate number of shares issued for consideration other than cash during the period of five years
immediately preceding the reporting date
Pursuant to the approval of the Board at its meeting held on 20 March 2024 and approval of the Members
of the Company obtained via special resolution passed through Postal Ballot on 19 April 2024, the Company,
on 17 May 2024 had allotted 7,96,446 equity shares of the Company having face value of H 1 each, at a price
of H 316.00 per equity share (including a premium of H 315.00) per equity share on a preferential basis for
consideration other than cash towards payment of H 2,516.77 Lakhs ("Purchase Consideration"), payable by
the Company to the Allottees, as consideration for acquisition of 2,709 equity shares of H 10 each of Invati
Creations Private Limited (“Target Company”) (CIN: U74999WB2016PTC217564), representing 22.29% paid-
up equity capital of the Target Company held by the Allottees.
17. Equity share capital (Contd.)
H. Equity Shares issued on conversion of warrants
During the year, the Company had issued and allotted 1,08,17,000 warrants, each convertible into one equity
share of H 1 each, on Preferential allotment basis at an issue price of H 316.00 per warrant, to the Promoters
and certain other identified persons, upon receipt of 25% of the issue price (i.e. H 79.00 per warrant) as
warrant subscription money. Balance 75% of the issue price (i.e. H 237.00 per warrant) shall be payable within
18 months from the date of allotment i.e.14 May 2024, at the time of exercising the option to apply for fully
paid-up equity share of H 1 each of the Company, against each warrant held by the warrant holder.
Subsequently the Company upon receipt of balance 75% of the issue price (i.e., H 237.00 per warrant) for
1,60,000 warrants, has allotted equal no. of fully paid-up equity shares against conversion of said warrants
exercised by the warrant holder. As a result of such allotment, the paid-up equity share capital of the Company
had increased by 1,60,000 equity shares of face value of H 1 each.
For the remaining 1,06,57,000 warrants, the respective allottees have not yet exercised their option for
conversion of the warrants into equity shares and accordingly, balance 75% money towards such remaining
warrants is yet to be received.
19. Financial Liabilities
Accounting Policy
Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the
instrument. Financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to
the acquisition of financial liabilities (other than financial liabilities at fair value through profit or loss) are deducted
from the fair value measured on initial recognition of financial liability. They are measured at amortised cost using
the effective interest method.
Financial liabilities are measured at fair value through profit and loss (FVTPL) when it is either held for trading or
it is designated as at FVTPL.
The Company derecognises financial liabilities when, and only when, the Company's obligations are discharged,
cancelled, or have expired.
(ii) Loans against vehicles and equipments are for a period of three to seven years and repayable by way of
equated monthly instalments.
B. Details of security
(i) Rupee term loans are secured by way of pari passu first charge on the movable fixed assets and equitable
mortgage of the Mahistikry Unit of the Company situated in West Bengal. However the entire loan has
been repaid during the year.
(ii) Loans against vehicles and equipments are secured by way of hypothecation of the respective underlying
asset financed.
(iii) Rupee loan from Axis Bank Ltd amounting to J Nil (31 March 2024: H 19,240.00 Lakhs) is secured by way of
pari passu first charge on the movable fixed assets, both present and future, of the Company, and current
borrowings from other banks aggregating to J 30,493.53 Lakhs (31 March 2024: H 37,330.19 Lakhs) are
secured by hypothecation of currents assets of the Company both present and future on pari passu basis.
20. Trade payables
Accounting Policy
Trade payables represent liabilities for goods and services provided to the Company and are unpaid at the reporting
period. The amounts are unsecured and usually paid within time limits as contracted. Trade and other payables are
presented as current liabilities unless the payment is not due within 12 months after the reporting period.
21. Derivatives
Accounting Policy
Derivative financial instruments and hedge accounting
The Company holds derivative financial instruments, such as foreign currency forward contracts, interest rate
swaps, cross currency swap and option contracts to hedge its foreign currency and interest rate risk exposures.
Embedded derivatives are separated from the host contract and accounted for separately, if the host contract is
not a financial asset and certain criteria are met.
Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair
value, and changes therein are recognised in Standalone Statement of Profit and Loss. Derivatives are carried as
financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
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