II. Material Accounting Policies for the year ended 31st March,2025.
(i) Revenue Recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can
be reliably measured. The specific recognition criteria described below also be met before revenue is recognised.
Sale of goods
Revenue from the sale of goods is recognised, when control of goods being sold is transferred to customer and where there are
no longer any unfulfilled obligations. The performance obligations in contracts are considered as fulfilled in accordance with the
terms agreed with the respective customers.
Revenue from the sale of goods is measured on transaction price excluding estimates of variable consideration that is allocated
to performance obligations. Sales as disclosed, are exclusive of Goods and Services Tax.
The company considers the terms of the contract and its customary business practices to determine the transaction price. The
transaction price is the amount of consideration to which the company expects to be entitled in exchange for transferring
promised goods to a customer, excluding amount collected on behalf of third parties (for example taxes collected on behalf of
government). The consideration promised in a contract with a customer may include fixed consideration, variable consideration
(if reversal is less likely in future), or both.
The transaction price is allocated by the company to each performance obligation in an amount that depicts the amount of
consideration to which it expects to be entitled in exchange for transferring the promised goods to the customer.
Export Incentives
Income from export incentives and duty drawbacks is recognised on accrual basis when no significant uncertainties as to the
amount of consideration that would be derived and as to its ultimate collection exist.
Interest income
Interest income is recognized on time proportion basis using the effective interest method.
Dividend Income
Dividend income is recognized when the right to receive payment is established by the reporting date, which is generally when
shareholders approve the same.
Renewal Energy Certificate
Renewable Energy Certificate (REC) benefits are recognized in Statement of Profit & Loss on sale of REC's.
(ii) Inventory Valuation
Inventories such as Raw Materials, Work-in-Progress, Finished Goods, Stock in Trade, Stores & Spares and Renewable Energy
Certificates are valued at the lower of cost or net realisable value (except scrap/waste which are value at net realisable value).
The cost is computed on weighted average basis. Finished Goods and Process Stock include cost of conversion and other costs
incurred in bringing the inventories to their present location and condition.
(iii) Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand, cash at bank and demand deposits with banks with an original maturity of
three months or less which are subject to an insignificant risk of change in value.
(iv) Property Plant and Equipment
On transition to IND AS, the company had adopted optional exception under IND AS 101 to measure Property, Plant and
Equipment (PPE) at fair value. Consequently the fair value had been assumed to be deemed cost of PPE on the date of transition.
Subsequently PPE were carried at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes
expenditure that is directly attributable to the acquisition of the items.
PPE acquired are stated at cost net of tax/duty credit availed, less accumulated depreciation and accumulated impairment
losses, if any. Cost includes expenses directly attributable to bringing the asset to the location and condition necessary for it to
be capable of operating in the manner intended by management
Capital work-in-progress includes cost of PPE under installation / under development as at the balance sheet date. Advances
paid towards the acquisition of PPE outstanding at each balance sheet date is classified as capital advances under other non¬
current assets.
Subsequent expenditures relating to PPE is capitalized only when it is probable that future economic benefits associated
with these will flow to the Company and the costs to the item can be measured reliably. Repairs and maintenance costs are
recognized in net profit in the statement of profit and loss when incurred. The cost and related accumulated depreciation are
eliminated from the financial statements upon sale or retirement of the asset and the resultant gain or losses are recognized in
the statement of profit and loss.
Depreciation on Buildings, Plant & Machinery, Railway Siding and Other Assets of all Units is provided as per straight line method
over their useful lives as prescribed under Schedule II of Companies Act, 2013. However, in respect of certain property, plant
and equipment, depreciation is provided as per their useful lives as assessed by the management supported by technical advice
ranging from 10 to 40 years for plant and machinery and 8 to 60 years for buildings.
Depreciation on additions due to exchange rate fluctuation is provided on the basis of residual life of the assets. Depreciation on
assets costing up to Rs.5000/- and on Temporary Sheds is provided in full during the year of additions.
Depreciation will be charged from the date the asset is available for use, i.e., when it is in the location and condition necessary
for it to be capable of operating in the manner intended by management. The residual values, useful lives and methods of
depreciation of PPE are reviewed at each financial year end and adjusted prospectively, if appropriate.
Leased Assets
Leasehold lands are amortized over the period of lease, Buildings constructed on leasehold land are depreciated based on the
useful life specified in Schedule II to the Companies Act, 2013, where the lease period of land is beyond the life of the building.
Intangible Assets
Intangible Assets are recognised, if the future economic benefits attributable to the assets are expected to flow to the company
and cost of the asset can be measured reliably. All other expenditure is expensed as incurred. The same are amortised over the
expected duration of benefits. Such intangible assets are measured at cost less any accumulated amortisation and impairment
losses, if any and are amortised over their respective individual estimated useful life on straight line method.
The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the
end of each reporting period and adjusted prospectively, if appropriate.
Intangible assets with indefinite useful lives like goodwill acquired in business combination are not amortised but are tested for
impairment annually. The assessment of indefinite useful life is reviewed annually to determine whether indefinite life continues
to be supportable. The change in useful life from indefinite to finite life if any, is made on prospective basis.
(v) Research and Development Costs
Expenditure on research is recognized as an expense when it is incurred. Expenditure on development which does not meet the
criteria for recognition as an intangible asset is recognized as an expense when it is incurred.
Items of Property, Plant and equipment and acquired intangible assets utilised for research and development are capitalised and
depreciated / amortized in accordance with the policies stated for Property, Plant and Equipment and Intangible Assets.
(vi) 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.
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.
The Company had adopted Ind AS 116"Leases"effective April 1,2019(Transition date) using the simplified approach (Retrospective
cumulative was effective from 1st April 2019)
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 re-measurement 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. Right-of-use assets are depreciated on a straight-line basis from the commencement date over the shorter of the lease
term and the estimated useful lives 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.
Lease liabilities
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. The lease payments include fixed payments (including in-substance fixed payments)
less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be
paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain
to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company
exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses
(unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Company uses its existing borrowing rate at the lease commencement
date because the interest rate implicit in the lease is not readily determinable. 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 re-measured 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.
Lease liabilities and Right-of-use assets have been presented as a separate line in Note 2 of Property, Plant and Equipment (PPE)
and Note 18 of Non-current Financial Liabilities -Borrowings. Lease payments have been classified as cash used in financing
activities.
Short-term leases and leases of low-value assets
The Company has elected not to recognise right-of-use assets and lease liabilities for short term leases of all assets that have
a lease term of 12 months or less and leases of low-value assets. The Company recognises the lease payments associated with
these leases as an expense on a straight-line basis over the lease.
(vii) Impairment
The carrying amount of PPEs, Intangible assets, Goodwill and Investment property are reviewed at each Balance Sheet date to
assess impairment if any, based on internal / external factors. An asset is treated as impaired, when the carrying cost of asset
exceeds its recoverable value, being higher of value in use and net selling price. An impairment loss is recognised as an expense
in the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior
accounting period is reversed, if there has been an improvement in recoverable amount.
(viii) Financial Assets & Liabilities
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.
At initial recognition, all financial assets are measured at fair value. Such financial assets are subsequently classified under
following three categories according to the purpose for which they are held. The classification is reviewed at the end of each
reporting period.
(a) Financial Assets at Amortised Cost
At the date of initial recognition, Financial assets are held to collect contractual cash flows of principal and interest on
principal amount outstanding on specified dates. These financial assets are intended to be held until maturity. Therefore,
they are subsequently measured at amortised cost by applying the Effective Interest Rate (EIR) method to the gross carrying
amount of the financial asset. The EIR amortisation is included as interest income in the profit or loss. The losses arising from
impairment are recognised in the profit or loss.
(b) Financial Assets at Fair value through Other Comprehensive Income
At the date of initial recognition, Financial asset are held to collect contractual cash flows of principal and interest on
principal amount outstanding on specified dates, as well as held for selling. Therefore, they are subsequently measured at
each reporting date at fair value, with all fair value movements recognised in Other Comprehensive Income (OCI). Interest
income calculated using the effective interest rate (EIR) method, impairment gain or loss and foreign exchange gain or
loss are recognised in the Statement of Profit and Loss. On derecognition of the asset, cumulative gain or loss previously
recognised in Other Comprehensive Income is reclassified from the OCI to Statement of Profit and Loss.
(c) Financial Assets at Fair value through Profit or Loss
At the date of initial recognition, Financial assets are held for trading, or which are measured neither at Amortised Cost nor
at Fair Value through OCI. Therefore, they are subsequently measured at each reporting date at fair value, with all fair value
movements recognised in the Statement of Profit and Loss.
Trade Receivables.
With the exception of trade receivables that do not contain a significant financing component, the Company initially
measures financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, net of
transaction costs. Trade receivables do not contain a significant financing component and are measured at the transaction
price determined under Ind AS 115. Refer to the accounting policies in section (i) Revenue recognition.
In respect of trade receivables, the company applies the simplified approach of IND AS 109 "Financial Instruments", which
requires measurement of loss allowance at an amount equal to lifetime expected credit losses. Lifetime expected credit losses
are the expected credit losses that result from all possible default events over the expected life of a financial instrument.
Investment in Equity Shares.
Investment in equity instruments which are held for trading are classified as at fair value through profit or loss ('FVTPL').
For all other equity instruments, the company makes an irrevocable choice upon initial recognition, on an instrument by
instrument basis, to classify the same as fair value through other comprehensive income ('FVTOCI') or fair value through
profit or loss ('FVTPL'). Amount presented in other comprehensive income are not subsequently transferred to profit or loss.
Investment in Joint Ventures and Subsidiaries.
The Company has accounted for its investment in subsidiaries and joint venture at cost less diminution in value of Investment.
Investments in Mutual Funds
Investments in Mutual Funds are accounted for at fair value through profit and loss. Any subsequent fair value gain or loss
is recognized through Profit or Loss Account.
Derecognition.
Financial Asset is primarily derecognised when:
(i) The right to receive cash flows from asset has expired, or.
(ii) The Company has transferred its right 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 a " pass-through" arrangement and either:
a) The Company has transferred substantially all the risks and rewards of the asset, or
b) The Company has neither transferred nor 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 of the risks and rewards of the asset, nor transferred control of the asset, the
Company continues to recognise the transferred asset to the extent of the Company's continuing involvement. In that case,
the Company also recognises an associated liability. The transferred asset and the 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 and the maximum amount of consideration that the Company could be required to repay.
Financial Liabilities.
Initial Recognition and Measurement.
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs. The Company's financial liabilities include trade and other payables, loans and
borrowings including bank overdrafts, and derivative financial instruments.
Subsequent Measurement.
The measurement of financial liabilities depends on their classification, as described below :
a) Financial Liabilities at Fair Value through Profit or Loss.
Financial liabilities at fair value through profit or loss include financial liabilities held for trading. The Company has not
designated any financial liabilities upon initial measurement recognition at fair value through profit or loss. Financial
liabilities at fair value through profit or loss are at each reporting date with all the changes recognized in the Statement
of Profit and Loss.
b) Financial Liabilities measured at Amortised Cost.
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using
the effective interest rate method ("EIR") except for those designated in an effective hedging relationship. The carrying
value of borrowings that are designated as hedged items in fair value hedges that would otherwise be carried at
amortised cost are adjusted to record changes in fair values attributable to the risks that are hedged in effective
hedging relationship.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an
integral part of the EIR. The EIR amortisation is included in finance costs in the Statement of Profit and Loss.
c) Loans and Borrowings.
After initial recognition, interest-bearing borrowings are subsequently measured at amortised cost using the effective
interest rate method. Any difference between the proceeds (net of transaction costs) and the redemption amount is
recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the
establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some
or all of the facility will be drawn down.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the
liability for at least twelve months after the reporting period.
d) Trade and Other Payables.
A payable is classified as 'trade payable' if it is in respect of the amount due on account of goods purchased or services
received in the normal course of business. These amounts represent liabilities for goods and services provided to
the Company prior to the end of financial year which are unpaid. Trade and other payables are presented as current
liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their
fair value and subsequently measured at amortised cost using the effective interest method.
De-recognition of Financial Liability.
A Financial Liability is derecognised when the obligation under the liability is discharged or cancelled or expires. The
difference between the carrying amount of a financial liability that has been extinguished or transferred to another
party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit
or loss as other income or finance costs.
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
realise the assets and settle the liabilities simultaneously.
Derivative Financial Instruments.
The Company uses derivative financial instruments, such as forward currency contracts and interest rate swaps to
hedge its foreign currency risks and interest rate risks. Derivative financial instruments are initially recognised at fair
value on the date a derivative contract is entered into and are subsequently re-measured at their fair value at the end
of each period. The method of recognizing the resulting gain or loss depends on whether the derivative is designated
as a hedging instrument, and if so, on the nature of the item being hedged. Any gains or losses arising from changes in
the fair value of derivatives are taken directly to profit or loss.
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 as 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 rate method. The equity component of a compound financial instrument is
not re-measured subsequent to initial recognition except on conversion or expiry.
(ix) Foreign Exchange Transactions / Translations / Hedge Accounting
Financial statements are presented in Indian Rupee, which is Company's functional currency. Monetary assets and liabilities
denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Financial
instruments designated as Hedge Instruments are mark to market using the valuation given by the bank on the reporting
date. Exchange differences arising on settlement of monetary items on actual payments / realisations and year end translations
including on forward contracts are dealt with in Profit and Loss Statement except exchange differences on borrowings taken for
qualifying assets are treated as borrowing cost and adjusted with qualifying assets. Non Monetary Foreign Currency items are
stated at cost.
The Company has continued capitalisation of foreign currency fluctuation on long term foreign currency liabilities outstanding
on Ind AS transition date.
(x) Employee Benefits
a) Defined Contribution Plan:
The Company makes defined contribution to Superannuation Funds, which are accounted on accrual basis as expenses in
the statement of Profit and Loss
b) Defined Benefit Plan:
The Company's Liabilities on account of Gratuity and Earned Leave on retirement of employees are determined at the end
of each financial year on the basis of actuarial valuation certificates obtained from Registered Actuary in accordance with
the measurement procedure as per Indian Accounting Standard (INDAS)-19., 'Employee Benefits'. Liability against Gratuity
are funded on year-to-year basis by contribution to respective fund. The costs of providing benefits under these plans are
also determined on the basis of actuarial valuation at each year end. Actuarial gains and losses for defined benefit plans
are recognized through OCI in the period in which they occur. Re-measurements are not reclassified to profit or loss in
subsequent periods.
The Provident Fund Contribution other than contribution to Employees' Regional Provident Fund, is made to trust
administered by the trustees. The interest rate to the members of the trust shall not be lower than the statutory rate declared
by the Central Government under Employees' Provident Fund and Miscellaneous Provision Act, 1952. The Employer shall
make good deficiency, if any.
The Defined Benefit Plan can be short term or Long terms which are defined below:
i) Short-term Employee Benefit.
All employees' benefits payable wholly within twelve months rendering services are classified as short term employee
benefits. Benefits such as salaries, wages, short-term compensated absences, performance incentives etc., and the
expected cost of bonus, ex-gratia are recognized during the period in which the employee renders related service.
ii) Long-term employee Benefits
Compensated absences which are not expected to occur within 12 months after the end of the period in which the
employee renders the related services are recognized as a liability at the present value of the defined benefit obligation
at the balance sheet date.
c) Termination benefits
Termination benefits are recognized as an expense in the period in which they are incurred. The Company shall recognise a
liability and expense for termination benefits at the earlier of the following dates:
(a) When the entity can no longer withdraw the offer of those benefits; and
(b) When the entity recognises costs for a restructuring that is within the scope of Ind AS 37 and involves the payment of
termination benefits.
(xi) Earnings per Share (EPS)
Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the
weighted average number of equity shares outstanding during the period.
Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by
the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted
average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive
potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e.
the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as of the
beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each
period presented.
The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any
share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board
of Directors.
(xii) Income Tax
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the
reporting date.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit and
loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between the tax
bases of assets and liabilities and their carrying amounts for financial reporting purpose at reporting date. Deferred income tax
assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance
sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be
recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or
expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized
to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences
and tax losses can be utilized. The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable
right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the
liability simultaneously.
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