The Company presents its assets and liabilities in
the balance sheet based on current/non-current
classification.

An asset is treated as current when it is:

a) expected to be realized or intended to be sold or
consumed in normal operating cycle;

b) held primarily for the purpose of trading;

c) expected to be realized within twelve months after
the reporting period; or

d) cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for at
least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is treated as current when it is:

a) expected to be settled in normal operating cycle;

b) held primarily for the purpose of trading;

c) due to be settled within twelve months after the
reporting period; or

d) there is no unconditional right to defer the
settlement of the liability for at least twelve
months after the reporting period.

All other liabilities are classified as non-current.

Based on the nature of products and the time between
the acquisition of assets for processing and their
realization in cash and cash equivalents, the Company
has ascertained its operating cycle being a period
within twelve months for the purpose of current and
non-current classification of assets and liabilities.
The statement of cash flows has been prepared under
indirect method.

1.2 Use of judgments, estimates and assumptions

The preparation of the Company’s financial statements
required management to make judgments, estimates
and assumptions that affect the reported amount
of revenues, expenses, assets & liabilities and the
accompanying disclosures and the disclosures
of contingent liabilities. Uncertainty about these
assumptions and estimates could result in outcomes
that require a material adjustment in the future periods
in the carrying amount of assets or liabilities affected.
In accounting policies, management has made
judgments in respect of evaluation of recoverability
of deferred tax assets, which has the most significant
effect on the amounts recognised in the financial
statements.

The following are the key assumptions concerning the
future and other key sources of estimation uncertainty
at the end of the reporting period that may have a
significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within:

a) Useful life of property, plant & equipment and
intangible assets: The Company has estimated
useful life of the property, plant & equipment
as specified in Schedule II to the Companies
Act, 2013 or such other modified useful life as
disclosed in para 1.4. However, the actual useful
life for individual equipments could turn out to
be different, there could be technology changes,
breakdown, and unexpected failure leading to
impairment or complete discard. Alternately, the
equipment may continue to provide useful service
well beyond the useful life assumed.

b) Lease: The Company evaluates if an arrangement
qualifies to be a lease as per the requirement
of Ind AS 116. Identification of a lease requires
significant judgment. The Company uses
significant judgment 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 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
exercising whether the Company is reasonably
certain to exercise an option to extend a lease
or to exercise an option to terminate the lease, it
considers all relevant facts and circumstances
that create economic incentive for the Company
to exercise the option to extend the lease or to
exercise the option to terminate the lease. The
Company revises lease term, if there is change in
non-cancellable period of lease. The discount rate
used is generally based on incremental borrowing
rate.

c) Fair value measurement of financial instruments:

When the fair value of financial assets and
financial liabilities cannot be measured based on
quoted process in active market, the fair value is
measured using valuation techniques including
book value and the Discounted Cash Flow (DCF)

model. The inputs to these models are taken from
observable markets where possible, but where this
is not possible, a degree of judgment is required in
establishing fair values.

d) Taxes: Taxes have been paid/ provided, exemptions
availed, allowances considered etc. are based on
the extant laws and the Company’s interpretation
of the same based on the legal advice received
wherever required. These could differ in the view
taken by the authorities, clarifications issued
subsequently by the government and courts,
amendments to statutes by the government etc.

e) Defined benefit plans: The cost of defined benefit
plans and other post-employment benefit plans
and the present value of such obligations are
determined using actuarial valuations. An actuarial
valuation involves making various assumptions
that may differ from actual developments in the
future.

f) Provisions: The Company makes provisions for
leave encashment and gratuity based on report
received from the independent actuary. These
valuation reports use complex valuation models
using not only the inputs provided by the Company
but also various other economic variables.
Considerable judgment is involved in the process.

g) Contingencies: A provision is recognised when
an enterprise has a present obligation as a result
of past event and it is probable that an outflow of
resources will be required to settle the obligation in
respect of which a reliable estimate can be made.
Provisions are measured at the present value of
management’s best estimate of the expenditure
required to settle the present obligations at the
end of the reporting period. However, the actual
liability could be considerably different.

1.3 Property, plant and equipment

Freehold land is carried at historical cost. All other
property, plant and equipment are stated at cost, net
of recoverable taxes, trade discounts and rebates less
accumulated depreciation and impairment loss, if any.
The cost of tangible assets comprises its purchase
price, borrowing cost, any costs directly attributable
to bringing the asset into the location and condition
necessary for it to be capable of operating in the
manner intended by management, initial estimation of
any decommissioning obligations and finance cost.

On transition to Ind AS, the fair value as on 1^st April, 2016
in respect of class of asset comprising land & building
and plant & machinery has been taken as carrying
cost and subsequently the Company follows fair value
in respect of land, building and plant and machinery
and cost model in respect of other property, plant and
equipment. When significant parts of the property,
plant and equipment are required to be replaced at
intervals, the Company derecognises the replaced part
and recognises the new part with its own associated
useful life and depreciated accordingly. Likewise, when
a major inspection is performed, its cost is recognised
in the carrying amount of the plant and equipment as a
replacement if the recognition criteria are satisfied. All
other repair and maintenance costs are recognised in
the statement of profit and loss as incurred.

Cost of software directly identified with hardware is
recognised along with the cost of hardware.

Stores and spares which meet the definition of
property, plant and equipment and satisfy recognition
criteria of Ind AS 16 are capitalized as property, plant
and equipment.

An item of property, plant and equipment and any
significant part initially recognised is derecognised
upon disposal or when no future economic benefits are
expected from its use. Any gain or loss arising on de¬
recognition of the asset is included in the statement of
profit and loss when the asset is derecognised.

Capital work-in-progress includes cost of property,
plant and equipment which are not ready for their
intended use.

The residual values and useful lives of property, plant
and equipment are reviewed at each financial year end
and changes, if any, are accounted prospectively.
Depreciation on the property, plant and equipment is
provided over the useful life of assets as specified in
Schedule II to the Companies Act, 2013 using straight
line method other than in case of rolling mill, where
useful life based on management estimate has been
taken twenty years. Property, plant and equipment which
are added/disposed of during the year, depreciation is
provided on pro rata basis with reference to the month
of addition/deletion.

1.4 Impairment of non-financial assets

At each balance sheet date, the Company assesses
whether there is an indication that an asset may

be impaired and also whether there is an indication
of reversal of impairment loss recognised in the
previous periods. If any indication exists or when
annual impairment testing for an asset is required,
the Company determines the recoverable amount
and impairment loss is recognised when the carrying
amount of an asset exceeds its recoverable amount.

An asset’s recoverable amount is the higher of an
asset or Cash-Generating Unit’s (CGU) fair value less
costs of disposal and its value in use. Recoverable
amount is determined for an individual asset unless the
asset does not generate cash inflows that are largely
independent of those from other assets or groups of
assets.

When the carrying amount of an asset or CGU exceeds
its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount.
In assessing the value in use, the estimated future
cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks
specific to the asset. In determining fair value less
costs of disposal, recent market transactions are taken
into account. If no such transactions can be identified,
an appropriate valuation model is used.

1.5 Investment in equity instruments

All investment in equity instrument classified under
financial assets are initially measured at fair value. The
Company may on initial application irrevocably elect to
measure the same either at Fair Value through Other
Comprehensive Income (FVTOCI) or Fair Value through
Profit and Loss (FVTPL).

The Company makes such election on an instrument
by instrument basis. Fair value change on an equity
instrument is recognised as 'other income’ in statement
of profit & Loss unless the Company has elected to
measure such instrument at FVOCI. Fair value changes
excluding dividend on an equity instrument measured
at FVOCI are recognised in OCI. Amount recognised
in Other Comprehensive Income (OCI) are not
subsequently reclassified to statement of Profit & loss.
Dividend income on investment in equity instrument
are recognised as 'Other Income’ in statement of profit
and loss.

1.6 Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise
cash at banks and on hand and short-term deposits
with an original maturity of three months or less, which
are subject to insignificant risk of changes in value.

For the purpose of statement of cash flows, cash
and cash equivalents consist of cash and short-term
deposits as defined above, net of outstanding bank
overdrafts as they are considered as an integral part of
the Company’s cash management.

Bank balances other than above

Deposits with banks maturity for more than 3 months
but less than 12 months and Deposits with banks as
a margin money for guarantees issued by the banks,
deposits kept as security deposits for statutory
authorities are accounted as bank balances other than
cash and cash equivalents.

Cash flow statement

Cash flows are reported using the indirect method,
whereby profit for the period is adjusted for the effects
of transactions of a non-cash nature, any deferrals or
accruals of past or future operating cash receipts or
payments and item of income or expenses associated
with investing or financing cash flows. The cash flows
from operating, investing and financing activities of the
Company are segregated.

1.7 Inventories

Inventories are valued as under:

Raw materials, packing materials, stores and spares
are valued at lower of cost (on a weighted average
basis) and net realizable value.

Stock in process is valued at lower of cost (on a
weighted average basis) and net realizable value.
Finished goods (including in transit) are valued at cost
(on a weighted average basis) or net realizable value
whichever is lower. Cost for this purpose includes direct
materials, direct labor, utilities, other variable direct cost
and manufacturing overheads, based on the normal
operating capacity and depreciation.

1.8 Financial instruments

A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instruments of another entity.

(i) Classification

The Company classifies its financial assets in the
following measurement categories:

• those to be measured subsequently at fair
value (either through Other Comprehensive
Income or through profit or loss)

and

• those measured at amortised cost.

The classification depends on the entity’s
business model for managing the financial assets
and the contractual terms of the cash flows.

For assets measured at fair value, gains and
losses will either be recorded in profit or loss or
Other Comprehensive Income. For investments
in debt instruments, this will depend on the
business model in which the investment is held.
The Company has designated certain long-term
unquoted equity investments at fair value through
other comprehensive income (FVOCI), using the
irrevocable option available under Ind AS 109 at
initial recognition. This option, once exercised,
cannot be changed later. Subsequent gains or
losses are recognised in OCI and not reclassified
to profit or loss on disposal.

The Company reclassifies debt investments when
and only when its business model for managing
those assets changes.

(ii) Measurement

At initial recognition, the Company measures
financial assets at its fair value plus, in the case
of a financial assets not at fair value through
profit or loss, transaction costs that are directly
attributable to the acquisition of the financial
assets. Transaction costs of financial assets
carried at fair value through profit or loss are
expensed in Statement of Profit and Loss.
However, trade receivables that do not contain a
significant financing component are measured at
transaction price.

Debt instruments

Subsequent measurement of debt instruments
depends on the Company’s business model
for managing the asset and the cash flow
characteristics of the asset. There are three
measurement categories into which the Company
classifies its debt instruments:

Assets that are held for collection of contractual
cash flows where those cash flows represent
solely payments of principal and interest are
measured at amortised cost. A gain or loss on a
debt investment that is subsequently measured at
amortised cost is recognised in profit or loss when
the asset is derecognised or impaired. Interest
income from these financial assets is included
in other income using the effective interest rate
method.

Fair value through Other Comprehensive Income
(FVOCI)

Assets that are held for collection of contractual
cash flows and for selling the financial assets,
where the assets’ cash flows represent solely
payments of principal and interest, are measured
at FVOCI except for the recognition of impairment
gains or losses, interest revenue and foreign
exchange gains and losses which are recognised
in profit and loss. When the financial asset
is derecognised, the cumulative gain or loss
previously recognised in OCI is reclassified from
equity to profit or loss and recognised in other
gains/ (losses). Interest income from these
financial assets is included in other income using
the effective interest rate method.

Fair Value through Profit or Loss (FVTPL)

Assets that do not meet the criteria for amortised
cost or FVOCI are measured at FVTPL. A gain or
loss on a debt investment that is subsequently
measured at fair value through profit or loss is
recognised in Statement of Profit and Loss in the
period in which it arises. Interest income from
these financial assets is included in other income.

A. Impairment of financial assets

In accordance with Ind-AS 109, the Company applies
Expected Credit Loss (ECL) model for measurement
and recognition of impairment loss.

The Company follows 'simplified approach’ for
recognition of impairment loss allowance on trade
receivables. The application of simplified approach
does not require the Company to track changes in credit
risk. Rather, it recognises impairment loss allowance
based on lifetime ECLs at each reporting date, on the
basis of provisional matrix.

(i) Classification:

The Company classifies all financial liabilities as
subsequently measured at amortised cost, except
for financial liabilities at FVTPL. Such liabilities,
including derivatives that are liabilities, shall be
subsequently measured at fair value.

(ii) Initial recognition and measurement:

All financial liabilities are recognised initially at
fair value, in the case of loans, borrowings and
payables, net of directly attributable transaction
costs. Financial liabilities include trade and other
payables, loans and borrowings including bank
overdrafts and derivative financial instruments.

(iii) Subsequent measurement:

All financial liabilities are re-measured at FVTPL
include financial liabilities held for trading
and financial liabilities designated upon initial
recognition as at fair value through statement of
profit and loss. Financial liabilities are classified as
held for trading if they are incurred for the purpose
of repurchasing in the near term.

(iv) Loans and borrowings:

Interest bearing loans and borrowings are
subsequently measured at amortised cost using
EIR method. Gains and losses are recognised in
statement of profit and loss when the liabilities are
derecognised as well as through EIR amortization
process. The EIR amortization is included as
finance cost in the statement of profit and loss.

(v) De-recognition of financial liabilities:

A financial liability is derecognised when the
obligation under the liability is discharged or
canceled or expires. When an existing financial
liability is replaced by another from the same
lender on substantially different terms, or the terms
of an existing liability are substantially modified,
such an exchange or modification is treated as
the de-recognition of the original liability and the
recognition of a new liability. The difference in the
respective carrying amounts is recognised in the
statement of profit and loss.

(vi) Derivative financial instruments:

The Company uses derivative financial instruments
such as forward currency contracts and options

to hedge its foreign currency risks. Such derivative
financial instruments are initially recognised at fair
value on the date on which a derivative contract is
entered into and are subsequently re-measured at
fair value. The gain or loss in the fair values is taken
to statement of profit and loss at the end of every
period. Profit or loss on cancellations/renewals of
forward contracts and options are recognised as
income or expense during the period.

C. Offsetting of financial instruments

Financial assets and financial liabilities are offset
and the net amount is reported in the balance sheet
if there is a currently enforceable legal right to offset
the recognised amounts and there is an intention to
settle on a net basis to realize the assets and settle the
liabilities simultaneously.

1.9 Fair value measurement

The Company measures certain financial assets and
financial liabilities including derivatives and defined
benefit plans at fair value.

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. The fair value measurement is
based on the presumption that the transaction to sell
the asset or transfer the liability takes place either:

a) In the principal market for the asset or liability; or

b) In the absence of a principal market, in the most
advantageous market for the asset or liability

The fair value of an asset or a liability is measured
using the assumptions that market participants would
use when pricing the asset or liability, assuming that
market participants act in their best economic interest.
All assets and liabilities for which fair value is measured
or disclosed in the financial statements are categorized
within the fair value hierarchy, described as follows,
based on the lowest level input that is significant to the
fair value measurement as a whole:

Level 1- Quoted (unadjusted) market prices in active
markets for identical assets or liabilities.

Level 2- Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
directly or indirectly observable.

Level 3- Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
unobservable.

For assets and liabilities that are recognised in the
financial statements on a recurring basis, the Company
determines whether transfers have occurred between
levels in the hierarchy by re-assessing categorization
(based on the lowest level input that is significant to the
fair value measurement as a whole) at the end of each
reporting period.

External valuers are involved for valuation of long term
unquoted investments in equity instrument other than
subsidiary. The management decides, after discussions
with the Company external valuers, which valuation
techniques and inputs to use.