B. Material Accounting Policies:
I. Statement of Compliance
The financial statements have been prepared in accordance with the accounting principles generally
accepted in India including Indian Accounting Standards (Ind AS) prescribed under the section 133 of
the Companies Act, 2013 read with rule 3 of the Companies (Indian Accounting Standards) Rules, 2015
(as amended from time to time) and presentation and disclosures requirement of Division II of revised
Schedule Ill of the Companies Act 2013, (Ind AS Compliant Schedule Ill), as applicable to financial
statement.
Accordingly, the Company has prepared these financial statements which comprise the Balance Sheet
as at 31 March, 2025, the Statement of Profit and Loss, the Statement of Cash Flows and the Statement
of Changes in Equity for the year ended 31 March, 2025 and accounting policies and other explanatory
information (together hereinafter referred to as "financial statements").
These financial statements are approved for issue by Board of Directors on April 17, 2025.
II. Basis of Preparation and Presentation
The financial statements of the Company have been prepared in accordance with the historical cost basis
except for certain assets and liabilities (financial instruments and share based payment) are measured at
fair valued, as explained in the accounting policies below.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date, regardless of whether that price is
directly observable or estimated using another valuation technique. In estimating the fair value of an asset
or a liability, the Company takes into account the characteristics of the asset or liability if market
participants would take those characteristics into account when pricing the asset or liability at the
measurement date.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2, or
3 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, which are described as follows:
a) Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities;
b) Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable
c) Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable
The Company's financial statements are reported in Indian Rupees (?), which is also the Company's
functional currency, and all values are rounded to the nearest lakhs (INR 00,000), except when otherwise
indicated.
Current and Non-Current Classification
The Company presents assets and liabilities in the balance sheet based on current / non-current
classification.
An asset is classified as current when it satisfies any of the following criteria:
a) it is expected to be realised in, or is intended for sale or consumption in, the Company's normal
operating cycle.
b) it is held primarily for the purpose of being traded;
c) it is expected to be realised within 12 months after the reporting date; or
d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a
liability for at least 12 months after the reporting date.
All other assets are classified as non-current.
A liability is classified as current when it satisfies any of the following criteria:
a) it is expected to be settled in the Company's normal operating cycle;
b) it is held primarily for the purpose of being traded;
c) it is due to be settled within 12 months after the reporting date; or the Company does not have
an unconditional right to defer settlement of the liability for at least 12 months after the reporting
date. Terms of a liability that could, at the option of the counterparty, result in its settlement by
the issue of equity instruments do not affect its classification.
All other liabilities are classified as non-current.
The operating cycle is the time between the acquisition of assets for processing and their realisation in
cash and cash equivalents. The Company has identified its operating cycle as 12 months.
Deferred tax assets and liabilities are classified as non-current only.
III. Revenue Recognition
A. Sale of Goods
The Company recognises revenue when control over the promised goods or services is transferred to the
customer at transaction price that reflects the consideration to which the Company expects to receive in
exchange for those goods or services. The Company has generally concluded that it is the principal in its
revenue arrangements as it typically controls the goods or services before transferring them to the
customer.
Revenue is generally adjusted for variable consideration such as discounts, rebates, refunds, credits,
price concessions, incentives, liquidated damages or other similar deductions in a contract except when
it is highly probable it will not be provided. The amount of revenue excludes any amount collected on
behalf of third parties.
The Company recognises revenue generally at the point in time when the products are delivered to
customer or when it is delivered to a carrier for export sale, which is when the control over product is
transferred to the customer. In contracts where freight is arranged by the Company and recovered from
the customers, the same is treated as a separate performance obligation and revenue is recognised when
such freight services are rendered.
In revenue arrangements with multiple performance obligations, the Company accounts for individual
products and services separately if they are distinct - i.e. if a product or service is separately identifiable
from other items in the arrangement and if a customer can benefit from it. The consideration is allocated
between separate products and services in the arrangement based on their stand-alone selling prices.
Revenue from sale of by-products are included in revenue.
There is no significant financing component in revenue recognition. In case of any such financing
component is there in revenue arrangements, the Company adjusts the transaction price for financing
component, if any and the adjustment is accounted in finance cost.
B. Contract balances
(i) Contract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer.
If the Company performs by transferring goods or services to a customer before the customer pays
consideration or before payment is due, a contract asset is recognised for the earned consideration.
(ii) Trade receivables
A receivable is recognised at transaction price when the performance obligations are satisfied and to the
extent that it has an unconditional contractual right to receive cash or other financial assets (i.e., only the
passage of time is required before payment of the consideration is due).
(iii) Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Company has
received consideration (or an amount of consideration is due) from the customer. If a customer pays
consideration before the Company transfers goods or services to the customer, a contract liability is
recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are
recognised as revenue when the Company performs under the contract including Advance received from
Customer.
A refund liability is the obligation to refund some or all of the consideration received (or receivable) from
the customer and is measured at the amount the Company ultimately expects it will have to return to the
customer including volume rebates and discounts. The Company updates its estimates of refund liabilities
at the end of each reporting period.
IV. Property, Plant and Equipment
The cost of property, plant and equipment comprises its purchase price net of any trade discounts and
rebates, any import duties and other taxes (other than those subsequently recoverable from the tax
authorities), costs relating to trial run, any directly attributable expenditure on making the asset ready for
its intended use, including relevant borrowing costs for qualifying assets if recognition criteria are met and
any expected costs of decommissioning. Expenditure incurred after the property, plant and equipment
have been put into operation, such as repairs and maintenance, are charged to the Statement of Profit
and Loss in the year in which the costs are incurred. Major shut-down and overhaul expenditure is
capitalised if recognition criterias are satisfied.
An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal
or retirement of an item of property, plant and equipment is determined as the difference between the
sales proceeds and the carrying amount of the asset and is recognised in Statement of Profit and Loss.
Assets in the course of construction are capitalised in the assets under Capital work in progress net of
accumulated impairment loss if any. At the point when an asset is operating at management's intended
use, the cost of construction is transferred to the appropriate category of property, plant and equipment
and depreciation commences. Costs associated with the commissioning of an asset and present value of
any obligatory decommissioning costs are capitalised in the asset when recognition criteria for provision
are satisfied. Revenue (net of cost) generated from production during the trial period is capitalised.
Property, plant and equipment except freehold land held for use in the production, supply or administrative
purposes, are stated in the financial statements at cost less accumulated depreciation and accumulated
impairment losses, if any.
The Company has elected to continue with the carrying value for all of its property, plant and equipment
as recognised in the financial statements on transition to Ind AS measured as per the previous GAAP and
use that as its deemed cost as at the date of transition.
Depreciable amount for assets is the cost of an asset, or other amount substituted for cost. Depreciation
is recognised so as to write off the cost of assets (other than freehold land and properties under
construction over their useful lives, using straight-line method as per the useful life prescribed in Schedule
II to the Companies Act, 2013.
In case of certain class of assets, the Company uses different useful lives than those prescribed in
Schedule II of Companies Act, 2013. The useful live has been assessed based on technical assessment,
taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of
the asset, past history of replacement, anticipated technological changes, manufacturers warranties and
maintenance support, etc.
When significant parts of plant and equipment are required to be replaced at intervals, the Company
depreciates them separately based on their specific useful lives. Freehold land and leasehold land where
the lease is convertible to freehold land under lease agreements at future dates at no additional cost, are
not depreciated.
Major overhaul costs are depreciated over the estimated life of the economic benefit derived from the
overhaul. The carrying amount of the remaining previous overhaul cost is charged to the Statement of
Profit and Loss if the next overhaul is undertaken earlier than the previously estimated life of the economic
benefit.
The Company reviews useful lives and depreciation method annually and, if expectations differ from
previous estimates, the change is accounted for as a change in accounting estimate on a prospective
basis.
V. Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. Following the initial
recognition, intangible assets are carried at cost less accumulated amortisation and accumulated
impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives.
Internally generated intangibles, excluding capitalised development costs, are not capitalised and the
related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.
The Company has elected to continue with carrying value of all its intangible assets recognised as on
transition date, measured as per the previous GAAP and use that carrying value as its deemed cost as
of transition date.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment
whenever there is an indication that the intangible asset may be impaired.
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually,
either individually or at the cash-generating unit level.
VI. Inventories
Inventories are stated at the lower of cost and net realisable value.
a) Cost of raw materials include cost of purchase and other costs incurred in bringing the inventories to
their present location and condition. Cost is determined on weighted average basis.
b) Cost of finished goods and work in progress include cost of direct materials and labour and a
proportion of manufacturing overheads based on the normal operating capacity but excluding
borrowing costs. Cost is determined on weighted average basis.
c) Cost of traded goods include purchase cost and inward freight. Costs is determined on weighted
average basis.
Net realisable value represents the estimated selling price for inventories less all estimated costs of
completion and costs necessary to make the sale.
VII. Leases
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
The Company as a lessee
The Company applies a single recognition and measurement approach for all leases, except for short¬
term leases and leases of low-value assets. The Company recognises lease liabilities to make lease
payments and right-of use assets representing the right to use the underlying assets.
Right-of-use assets
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 less any lease incentives received.
The right-of-use assets are subject to impairment. The recognised right-of-use assets are depreciated on
a straight-line basis over the shorter of its estimated useful life and the lease term is as follows:
At the commencement date of the lease, the Company recognises lease liabilities measured at the
present value of lease payments to be made over the lease term.
In calculating the present value of lease payments, the Company uses the incremental borrowing rate at
the lease commencement date if the interest rate implicit in the lease is not readily determinable. The
lease payments includes fixed payments (including in substance fixed payments less any incentives
receivable variable lease payments and amount payable under residual value guarantees). After the
commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and
reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured
if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to
future payments resulting from a change in an index or rate used to determine such lease payments) or
a change in the assessment of an option to purchase the underlying asset.
Short-term leases and lease of low value assets
The Company applies the short-term lease recognition exemption to its short-term leases (i.e., those
leases that have a lease term of 12 months or less from the commencement date and do not contain a
purchase option) and lease of low value assets.
VIII. Employee Benefit Expenses
a) Short term employee benefits:
A liability is recognised for benefits accruing to employees in respect of wages, salaries and annual leaves
in the period the related service is rendered at the undiscounted amount of the benefits expected to be
paid in exchange for that service. Liabilities recognised in respect of short-term employee benefits are
measured at the undiscounted amount of the benefits expected to be paid in exchange for the related
service.
b) Long term employee benefits:
Liabilities recognised in respect of long term employee benefits are measured at the present value of the
estimated future cash outflows expected to be made by the Company in respect of services provided by
employees up to the reporting date.
The Company operates a defined benefit gratuity plan in India. The cost of providing benefits under the
defined benefit plan is determined using the projected unit credit method.
Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding
amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding
amounts included in net interest on the net defined benefit liability), are recognised immediately in the
balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which
they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
Past service costs are recognised in profit or loss on the earlier of:
(i) The date of the plan amendment or curtailment, and
(ii) The date that the Company recognises related restructuring costs
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The
Company recognises the following changes in the net defined benefit obligation as an expense in the
statement of profit and loss:
(i) Service costs comprising current service costs, past-service costs, gains and losses on
curtailments and non-routine settlements; and
(ii) Net interest expense or income
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 profit or loss. The obligations are presented as current liabilities in the balance sheet if
the entity does not have an unconditional right to defer the settlement for at least twelve months after the
reporting date.
c) Termination benefits:
A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw
the offer of the termination benefit and when the entity recognises any related restructuring costs.
d) Defined contribution plans:
Payments to defined contribution retirement benefit plans are recognised as an expense when employees
have rendered service entitling them to the contributions. Payments made to state managed retirement
benefit plans are accounted for as payments to defined contribution plans where the Company's
obligations under the plans are equivalent to those arising in a defined contribution retirement benefit
plan.
e) Defined benefit plans:
For defined benefit retirement benefit plans, the cost of providing benefits is determined using the
Projected Unit Credit Method, with actuarial valuations being carried out at the end of each annual
reporting period. Remeasurements comprising actuarial gains and losses, the effect of the asset ceiling
(if applicable) and the return on plan assets (excluding interest) are recognised immediately in the balance
sheet with a charge or credit to other comprehensive income in the period in which they occur.
Remeasurements recognised in other comprehensive income are not reclassified. Actuarial valuations
are being carried out at the end of each annual reporting period for defined benefit plans.
The retirement benefit obligation recognised in the financial statements represents the deficit or surplus
in the Company's defined benefit plans. Any surplus resulting from this calculation is limited to the present
value of any economic benefits available in the form of refunds from the plans or reductions in future
contributions to the plans.
The Company pays gratuity to the employees whoever has completed five years of service with the
Company at the time of resignation/ superannuation. The gratuity is paid @ 15 days salary for each
completed year of service as per the Payment of Gratuity Act, 1972.
IX. Government Grant
Government grants are not recognised until there is reasonable assurance that the Company will comply
with the conditions attached to them and that the grants will be received.
Government grants are recognised in the statement of profit and loss on a systematic basis over the years
in which the Company recognises as expenses the related costs for which the grants are intended to
compensate or when performance obligations are met.
Government grants and subsidies whose primary condition is that the Company should purchase,
construct or otherwise acquire non-current assets are recognised as deferred revenue in the balance
sheet which is disclosed as deferred government grant receivable and transferred to the Statement of
profit and loss on a systematic basis over the expected useful life of the related assets. Government
grants and subsidies related to the income are deferred which is disclosed as deferred revenue arising
from government grant in the balance sheet and recognized in the statement of profit and loss as an
income in the period in which related obligations are met.
X. Financial Instruments
Financial assets and financial liabilities are recognised when an entity becomes a party to the contractual
provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value except trade receivables which
are recognised at transaction price. 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 Statement of Profit and Loss (FVTPL)) are added to or deducted from the fair value of the
financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly
attributable to the acquisition of financial assets or financial liabilities at fair value through profit and loss
are recognised immediately in the statement of profit and loss.
1. Financial assets
a) Recognition and initial measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair
value through other comprehensive income (OCI), and fair value through profit or loss. Purchases or sales
of financial assets that require delivery of assets within a time frame established by regulation or
convention in the marketplace (regular way trades) are recognised on the trade date, i.e., the date that
the Company commits to purchase or sell the asset.
b) Classification and measurement of financial assets
Financial assets are classified, at initial recognition and subsequently measured at amortised cost, fair
value through other comprehensive income (OCI) and fair value through profit and loss.
A financial asset is measured at amortised cost if it meets both of the following conditions and is not
designated at FVTPL:
i. The asset is held within a business model whose objective is to hold assets to collect contractual
cash flows; and
ii. 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.
A debt instrument is classified as FVTOCI only if it meets both of the following conditions and is not
recognised at FVTPL;
iii. The asset is held within a business model whose objective is achieved by both collecting contractual
cash flows and selling financial assets; and
iv. 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.
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting
date at fair value. Fair value movements are recognised in the Other Comprehensive Income (OCI).
However, the Company recognises interest income, impairment losses and reversals and foreign
exchange gain or loss in the Statement of Profit and Loss. On derecognition of the asset, cumulative gain
or loss previously recognised in OCI is reclassified from the equity to Statement of Profit and Loss. Interest
earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.
All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are
held for trading and contingent consideration recognised by an acquirer in a business combination to
which Ind AS 103 applies are classified as at FVTPL. For all other equity instruments, the Company may
make an irrevocable election to present in other comprehensive income subsequent changes in the fair
value. The Company makes such election on an instrument-by-instrument basis. The classification is
made on initial recognition and is irrevocable.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognised in the OCI. There is no recycling of the amounts from
OCI to Statement of Profit and Loss, even on sale of investment. However, the Company may transfer
the cumulative gain or loss within equity.
Equity instruments included within the FVTPL category are measured at fair value with all changes
recognised in the Statement of Profit and Loss.
All other financial assets are classified as measured at FVTPL.
In addition, on initial recognition, the Company may irrevocably designate a financial asset that otherwise
meets the requirements to be measured at amortised cost or at FVTOCI as at FVTPL if doing so
eliminates or significantly reduces and accounting mismatch that would otherwise arise.
Financial assets at FVTPL are measured at fair value at the end of each reporting year, with any gains
and losses arising on remeasurement recognised in statement of profit and loss. The net gain or loss
recognised in statement of profit and loss incorporates any dividend or interest earned on the financial
asset and is included in the other income' line item. Dividend on financial assets at FVTPL is recognised
when:
i. The Company's right to receive the dividends is established,
ii. It is probable that the economic benefits associated with the dividends will flow to the entity,
iii. The dividend does not represent a recovery of part of cost of the investment and the amount of
dividend can be measured reliably.
c) Derecognition of financial assets
The Company derecognises a financial asset 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 party.
d) Impairment
The Company applies the expected credit loss model for recognising impairment loss on financial assets
measured at amortised cost, debt instruments at FVTOCI, lease receivables, trade receivables, and other
contractual rights to receive cash or other financial asset, and financial guarantees not designated as at
FVTPL.
Expected credit losses are the weighted average of credit losses with the respective risks of default
occurring as the weights. Credit loss is the difference between all contractual cash flows that are due to
the Company in accordance with the contract and all the cash flows that the Company expects to receive
(i.e. all cash shortfalls), discounted at the original effective interest rate (or credit-adjusted effective
interest rate for purchased or originated credit-impaired financial assets). The Company estimates cash
flows by considering all contractual terms of the financial instrument (for example, prepayment, extension,
call and similar as) through the expected life of that financial instrument.
The Company measures the loss allowance for a financial instrument at an amount equal to the lifetime
expected credit losses if the credit risk on that financial instrument has increased significantly since initial
recognition. If the credit risk on a financial instrument has not increased significantly since initial
recognition, the Company measures the loss allowance for that financial instrument at an amount equal
to 12 month expected credit losses. 12 month expected credit losses are portion of the life-time expected
credit losses and represent the lifetime cash shortfalls that will result if default occurs within the 12 months
after the reporting date and thus, are not cash shortfalls that are predicted over the next 12 months.
If the Company measured loss allowance for a financial instrument at lifetime expected credit loss model
in the previous year, but determines at the end of a reporting year that the credit risk has not increased
significantly since initial recognition due to improvement in credit quality as compared to the previous
year, the Company again measures the loss allowance based on 12 month expected credit losses.
When making the assessment of whether there has been a significant increase in credit risk since initial
recognition, the Company uses the change in the risk of a default occurring over the expected life of the
financial instrument instead of the change in the amount of expected credit losses. To make that
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 considers reasonable and supportable information, that is available without undue cost
or effort, that is indicative of significant increases in credit risk since initial recognition. For trade
receivables or any contractual right to receive cash or another financial asset that result from transactions
that are within the scope of Ind AS 115, the Company always measures the loss allowance at an amount
equal to lifetime expected credit losses.
Further, for the purpose of measuring lifetime expected credit loss allowance for trade receivables, the
Company has used a practical expedient as permitted under Ind AS 109. This expected credit loss
allowance is computed based on a provision matrix which takes into account historical credit loss
experience and adjusted for forward-looking information.
The impairment requirements for the recognition and measurement of a loss allowance are equally
applied to debt instruments at FVTOCI except that the loss allowance is recognised in other
comprehensive income and is not reduced from the carrying amount in the balance sheet. The Company
has performed sensitivity analysis on the assumptions used and based on current indicators of future
economic conditions, the Company expects to recover the carrying amount of these assets.
e) Effective interest method
The effective interest method is a method of calculating the amortised cost of a debt instrument and of
allocating interest income over the relevant year. The effective interest rate (EIR) is the rate that exactly
discounts estimated future cash receipts (including all fees and points paid or received that form an
integral part of the effective interest rate, transaction costs and other premiums or discounts) through the
expected life of the debt instrument, or, where appropriate, a shorter year, to the net carrying amount on
initial recognition.
Income is recognised on an effective interest basis for debt instruments other than those financial assets
classified as at FVTPL. Interest income is recognised in the statement of profit and loss and is included
in the ‘Other income' line item.
2. Financial liabilities and equity instruments
a) Classification as debt or equity debt and equity
Instruments issued by the Company are classified as either financial liabilities or as equity in accordance
with the substance of the contractual arrangements and the definitions of a financial liability and an equity
instrument.
b) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds
received, net of direct issue costs. Repurchase of the Company's own equity instruments is recognised
and deducted directly in equity. No gain or loss is recognised in Statement of Profit and Loss on the
purchase, sale, issue or cancellation of the Company's own equity instruments.
c) Financial liabilities
Financial liabilities are classified as either financial liabilities ‘at FVTPL' or ‘other financial liabilities'.
Financial liabilities at FVTPL:
Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is
designated as at FVTPL.
A financial liability is classified as held for trading if:
i. It has been incurred principally for the purpose of repurchasing it in the near term; or
ii. on initial recognition it is part of a portfolio of identified financial instruments that the Company
manages together and has a recent actual pattern of short-term profit-taking; or
iii. it is a derivative that is not designated and effective as a hedging instrument.
A financial liability other than a financial liability held for trading may be designated as at FVTPL upon
initial recognition if:
i. such designation eliminates or significantly reduces a measurement or recognition inconsistency
that would otherwise arise;
ii. the financial liability forms part of a group of financial assets or financial liabilities or both, which is
managed and its performance is evaluated on a fair value basis, in accordance with the Company's
documented risk management or investment strategy, and information about the Company is
provided internally on that basis; or
iii. it forms part of a contract containing one or more embedded derivatives, and Ind AS 109 permits the
entire combined contract to be designated as at FVTPL in accordance with Ind AS 109.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement
recognised in Statement of Profit and Loss. The net gain or loss recognised in Statement of Profit and
Loss incorporates any interest paid on the financial liability and is included in the Statement of Profit and
Loss. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit
risk are recognised in OCI.
The Company derecognises financial liabilities when, and only when, the Company's obligations are
discharged, cancelled or they expire. The difference between the carrying amount of the financial liability
derecognised and the consideration paid and payable is recognised in the Statement of Profit and Loss.
Financial liabilities at amortised cost (Loans, Borrowings and Trade and Other payables) After initial
recognition, interest-bearing loans and borrowings and trade and other payables are subsequently
measured at amortised cost using the EIR method. The EIR amortisation is included as finance costs in
the consolidated statement of profit and loss.
d) Other financial liabilities
The Company enters into arrangements whereby banks and financial institutions make direct payments
to suppliers for raw materials and project materials. The banks and financial institutions are subsequently
repaid by the Company at a later date providing working capital timing benefits. These are normally settled
within twelve months. The economic substance of the transaction is determined to be operating in nature
and these are recognised as supplier's credit / letter of credit - acceptances and disclosed on the face of
the balance sheet. Interest expense on these are recognised in the finance cost. Payments made by
banks and financial institutions to the operating vendors are treated as a non cash item and settlement of
due to supplier's credit / letter of credit - acceptances by the Company is treated as an operating cash
outflow reflecting the substance of the payment.
e) Derecognition of financial liabilities:
The Company derecognises financial liabilities when, and only when, the Company's obligations are
discharged, cancelled or have expired. An exchange between with a lender of debt instruments
with substantially different terms is accounted for as an extinguishment of the original financial liability
and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an
existing financial liability (whether or not attributable to the financial difficulty of the debtor) is
accounted for as an extinguishment of the original financial liability and the recognition of a new financial
liability. The difference between the carrying amount of the financial liability derecognised and the
consideration paid and payable is recognised in the statement of profit and loss.
XI. Impairment of Non-Financial Asset
At the end of each reporting year, the Company reviews the carrying amounts of its tangible assets and
intangible assets to determine whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable
amount of an individual asset, the Company estimates the recoverable amount of the cash-generating
unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified,
corporate assets are also allocated to individual cash generating units, or otherwise they are allocated to
the smallest group of cash-generating units for which a reasonable and consistent allocation basis can
be identified.
XII. Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker.
The Board of directors of the Company has been identified as the Chief Operating Decision Maker which
reviews and assesses the financial performance and makes the strategic decisions.
XIII. Taxes
Income tax expense represents the sum of the tax currently payable and deferred tax.
a) Current tax
Current tax is the amount of expected tax payable based on the taxable profit for the year as determined
in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961.
b) Deferred tax
Deferred tax liabilities are recognised for all taxable temporary differences, except:
(i) When the deferred tax liability arises from the initial recognition of goodwill
(ii) In respect of taxable temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, when the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary differences will not reverse in
the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused
tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable
that taxable profit will be available against which the deductible temporary differences, and the carry
forward of unused tax credits and unused tax losses can be utilised, except
(i) When the deferred tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are
recognised to the extent that it has become probable that future taxable profits will allow the deferred tax
asset to be recovered Deferred tax assets and liabilities are measured at the tax rates that are expected
to apply in the year when the asset is realised, or the liability is settled, based on tax rates (and tax laws)
that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either
in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the
underlying transaction either in OCI or directly in equity.
c) Current and deferred tax for the year
Current and deferred tax are recognised in profit and loss, except when they are relating to items that are
recognised in other comprehensive income or directly in equity, in which case, the current and deferred
tax are also recognised in other comprehensive income or directly in equity respectively. Where current
tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included
in the accounting for the business combination.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation
authority and the relevant entity intends to settle its current tax assets and liabilities on a net basis.
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