1. MATERIAL ACCOUNTING POLICIES
1.1. Basis of Preparation of financial statements
1.1.1. Compliance with Ind-AS
These financial statements have been prepared
in accordance with the Indian Accounting
Standards (“Ind AS”) as prescribed by Ministry
of Corporate Affairs pursuant to Section 133 of
the Companies Act, 2013 (“the Act”), read with
the Companies (Indian Accounting Standards)
Rules, 2015 (as amended), other relevant
provisions of the Act and other accounting
principles generally accepted in India.
1.1.2. Basis of Preparation of Financial Statements:
The financial statements have been prepared
on historical cost basis, except for following:
• Financial assets and liabilities (including
derivative instruments) that is
measured at Fair value;
• Defined benefit plans - plan assets
measured at fair value.
1.1.3. Classification of current and non-current
All assets and liabilities have been classified
as current or non-current in accordance with
the Company’s normal operating cycle and
the criteria set out in Ind AS 1 - Presentation of
Financial Statements and Schedule III to the
Companies Act, 2013. Considering the nature of
its products and the time between the acquisition
of assets for processing and their realization
in cash or cash equivalents, the Company has
determined its operating cycle to be 12 months
for the purpose of such classification.
1.1.4. Recent Accounting Pronouncements:
Ministry of Corporate Affairs (“MCA”) notifies
new standards or amendments to the existing
standards under Companies (Indian Accounting
Standards) Rules as issued from time to time.
For the year ended March 31, 2025, MCA has
notified Ind AS - 117 Insurance Contracts and
amendments to Ind AS 116 - Leases, relating to
sale and leaseback transactions, applicable to
the Company w.e.f. April 1, 2024. The Company
has assessed the new pronouncements and
based on its evaluation has determined that
it does not have any significant impact in its
financial statements. On May 9, 2025, MCA
notifies the amendments to Ind AS 21 - Effects
of Changes in Foreign Exchange Rates. These
amendments aim to provide clearer guidance
on assessing currency exchangeability and
estimating exchange rates when currencies are
not readily exchangeable. The amendments are
effective for annual periods beginning on or after
April 1, 2025. The Company is currently assessing
the probable impact of these amendments on
its financial statements.
1.2. 1.2. MATERIAL ACCOUNTING POLICIES
A. Property, Plant and Equipment
Measurement at recognition:
An item of property, plant and equipment that
qualifies as an asset is measured on initial
recognition at cost. Following initial recognition,
items of property, plant and equipment are
carried at its cost less accumulated depreciation
and accumulated impairment losses (if any).
The cost of an item of property, plant and
equipment comprises of its purchase price
including import duties and other non¬
refundable purchase taxes or levies, directly
attributable cost of bringing the asset to its
working condition for its intended use and the
initial estimate of decommissioning, restoration
and similar liabilities, if any. Any trade discounts
and rebates are deducted in arriving at
the purchase price. Cost includes cost of
replacing a part of a plant and equipment if the
recognition criteria are met. Expenses directly
attributable to new manufacturing facility
during its construction period are capitalized if
the recognition criteria are met.
Items such as spare parts, stand-by equipment
and servicing equipment that meet the definition
of property, plant and equipment are capitalized
at cost and depreciated over their useful life.
Costs in nature of repairs and maintenance are
recognized in the Statement of Profit and Loss as
and when incurred.
Depreciation:
Depreciation commences when the assets
are ready for their intended use. Depreciable
amount for assets is the cost of an asset, or
other amount substituted for cost, less its
estimated residual value. Depreciation is
recognized so as to write off the cost of assets
(other than freehold land and properties under
construction) less their residual values over
their useful lives, using straight-line method
as per the useful life prescribed in Schedule II
to the Companies Act, 2013 except in respect
of following categories of assets located in
India, in which case the life of the assets has
been assessed as under based on technical
advice, 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.
The useful lives, residual values of each part
of an item of property, plant and equipment
and the depreciation methods are reviewed at
the end of each financial year. If any of these
expectations differ from previous estimates,
such change is accounted for as a change in
an accounting estimate.
De-recognition:
The carrying amount of an item of property,
plant and equipment is derecognized on
disposal or when no future economic benefits
are expected from its use or disposal. The
gain or loss arising from the de- recognition
of an item of property, plant and equipment is
measured as the difference between the net
disposal proceeds and the carrying amount of
the item and is recognized in the Statement of
Profit and Loss when the item is derecognized.
B. Intangible assets
Measurement at recognition:
Intangible assets acquired separately are
measured on initial recognition at cost.
Intangible assets arising on acquisition of
business are measured at fair value as at date
of acquisition. Following initial recognition,
intangible assets are carried at cost less
accumulated amortization and accumulated
impairment loss, if any.
Amortization:
Intangible Assets with finite lives are amortized
on a Straight-Line basis over the estimated
useful economic life. The amortization
expense on intangible assets with finite lives is
recognized in the Statement of Profit and Loss.
The estimated useful life of intangible assets is
mentioned below:
The amortization period and the amortization
method for an intangible asset with finite useful
life is reviewed at the end of each financial year.
If any of these expectations differ from previous
estimates, such change is accounted for as a
change in an accounting estimate.
De-recognition:
The carrying amount of an intangible asset is
derecognized on disposal or when no future
economic benefits are expected from its
use or disposal. The gain or loss arising from
the De-recognition of an intangible asset is
measured as the difference between the net
disposal proceeds and the carrying amount
of the intangible asset and is recognized in the
Statement of Profit and Loss when the asset
is derecognized.
C. Impairment of non-financial assets
Intangible assets that have an indefinite
useful life are not subject to amortisation
and are tested annually for impairment,
or more frequently if events or changes in
circumstances indicate that they might be
impaired. Tangible and other intangible assets
are tested for impairment whenever events or
changes in circumstances indicate that the
carrying amount may not be recoverable. An
impairment loss is recognised for the amount
by which the asset’s carrying amount exceeds
its recoverable amount. The recoverable
amount is the higher of an asset’s fair value
less costs of disposal and value in use. For
the purposes of assessing impairment, assets
are grouped at the lowest levels for which
there are separately identifiable cash inflows
which are largely independent of the cash
inflows from other assets or groups of assets
(cash generating units). Non-financial assets
that suffered an impairment are reviewed for
possible reversal of the impairment at the end
of each reporting period.
An impairment loss recognised in prior periods
for an asset (or a cash generating unit) shall
be reversed if, and only if, there has been a
change in the estimates used to determine
the asset’s recoverable amount since the last
impairment loss was recognised. If this is the
case, the carrying amount of the asset shall,
be increased to its recoverable amount. That
increase is a reversal of an impairment loss.
Where an impairment loss subsequently
reverses, the carrying value of the asset (or
cash generating unit) is increased to the
revised estimate of its recoverable amount,
so that the increased carrying value does not
exceed the carrying value that would have
been determined had no impairment loss been
recognised for the asset (or cash generating
unit) in prior years. A reversal of an impairment
loss is recognised in the Statement of Profit and
Loss immediately.
D. Revenue Recognition
Revenue from contracts with customers is
recognized on transfer of control of promised
goods/services to a customer at an amount
that reflects the consideration to which the
Company is expected to be entitled to in
exchange for those goods/services.
Revenue towards satisfaction of a performance
obligation is measured at the amount of
transaction price (net of variable consideration)
allocated to that performance obligation.
The transaction price of goods/services sold
is net of variable consideration on account
of various discounts and schemes offered
by the Company as part of the contract. This
variable consideration is estimated based on
the expected value of outflow. Revenue (net
of variable consideration) is recognized only
to the extent that it is highly probable that
the amount will not be subject to significant
reversal when uncertainty relating to its
recognition is resolved.
Sale of products: Revenue from sale of
products is recognized when the control on the
goods has been transferred to the customer.
The performance obligation in case of sale of
product is satisfied at a point in time i.e., when
the material is shipped to the customer or on
delivery to the customer, as may be specified
in the contract. No element of financing is
deemed present as the sales are generally
made with a credit term which is consistent
with market practice. The Company does not
have any contracts where the period between
the transfer of the promised goods or services
to the customer and payment by the customer
exceeds one year.
Sale of power:
Revenue from sale of Power is recognized on
the basis of Electrical Units generated net
of transmission loss as applicable when no
significant uncertainty as to measurability &
collectability exists.
Interest and dividends: Interest income is
recognized using effective interest method.
Dividend income is recognized when the right
to receive payments established.
E. Inventories
Raw materials, work-in-progress, finished goods,
stores, spares, components, consumables, and
stock- in trade are carried at the lower of cost
and net realizable value. However, materials
and other items held for use in production of
inventories are not written down below cost if the
finished goods in which they will be incorporated
are expected to be sold at or above cost. The
comparison of cost and net realizable value is
made on an item-by item basis. By-product is
valued at net realizable value.
In determining the cost of raw materials,
stock-in-trade, stores, spares, components,
consumables, and other inventories weighted
average cost method is used. Cost of inventory
comprises all costs of purchase, duties, taxes
(other than those subsequently recoverable
from tax authorities) and all other costs incurred
in bringing the inventory to their present
location and condition.
Cost of finished goods and work-in¬
progress includes the cost of raw materials,
an appropriate share of fixed and variable
production overheads as applicable and other
costs incurred in bringing the inventories to their
present location and condition. Fixed production
overheads are allocated on the basis of normal
capacity of production facilities.
Net realizable value is the estimated selling price
in the ordinary course of business, less estimated
costs of completion and the estimated costs
necessary to make the sale.
F. Financial Instruments
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.
F.1. Financial Assets
• Initial recognition and measurement:
Financial Assets include Investments,
Trade Receivables, Advances, Security
Deposits, Fixed Deposits and Cash and
Cash Equivalents. Such assets are initially
recognized at transaction price when the
Company becomes party to contractual
obligations. The transaction price includes
transaction costs unless the asset is being
fair valued through the Statement of
Profit and Loss.
• Subsequent measurement: For purposes
of subsequent measurement, financial
assets are classified in four categories:
1. Measured at Amortized Cost;
2. Measured at Fair Value Through Other
Comprehensive Income (FVTOCl); and
3. Measured at Fair Value Through Profit
or Loss (FVTPL);
• Financial assets are not reclassified
subsequent to their initial recognition,
except if and in the period the Company
changes its business model for managing
financial assets.
• Financial assets measured at amortized
cost: A financial asset is measured at
the amortized cost if both the following
conditions are met:
• The Company’s business model
objective for managing the financial
asset is to hold financial assets in order
to collect contractual cash flows, and
• The contractual terms of the financial
asset give rise on specified dates to
cash flows that are solely payments of
principal and interest on the principal
amount outstanding.
This category applies to cash and bank
balances, trade receivables, loans and
other financial assets of the Company.
Such financial assets are subsequently
measured at amortized cost using the
effective interest method.
• Financial assets measured at FVTOCI: A
financial asset is measured at FVTOCI if
both of the following conditions are met:
• The Company’s business model
objective for managing the financial
asset is achieved both by collecting
contractual cash flows and selling the
financial assets, and
• The contractual terms of the financial
asset give rise on specified dates to
cash flows that are solely payments of
principal and interest on the principal
amount outstanding.
The Company, through an irrevocable
election at initial recognition, has measured
investments in equity instruments at
FVTOCI. This equity instruments are
neither held for trading nor are contingent
consideration recognized under a
business combination. Pursuant to such
irrevocable election, subsequent changes
in the fair value of such equity instruments
are recognized in OCI. However, the
Company recognizes dividend income
from such instruments in the Statement of
Profit and Loss.
On De-recognition of such financial
assets, cumulative gain or loss previously
recognized in OCI is not reclassified from
the equity to Statement of Profit and Loss.
However, the Company may transfer
such cumulative gain or loss into retained
earnings within equity.
• Financial assets measured at FVTPL:
A financial asset is measured at FVTPL
unless it is measured at amortized cost or
at FVTOCI as explained above.
This is a residual category applied to
all other investments of the Company.
Such financial assets are subsequently
measured at fair value at each reporting
date. Fair value changes are recognized in
the Statement of Profit and Loss.
• De-recognition: Financial assets are
derecognized when the right to receive
cash flows from the assets has expired, or
has been transferred, and the Company
has transferred substantially all of the risks
and rewards of ownership. Concurrently, if
the asset is one that is measured at:
(a) Amortized cost, the gain or loss
is recognized in the Statement of
Profit and Loss;
(b) Fair Value through other
comprehensive income, the
cumulative Fair Value adjustments
previously taken to reserves are
reclassified to the Statement of
Profit and Loss unless the asset
represents an equity investment in
which case the cumulative Fair Value
adjustments previously taken to
reserves is reclassified within equity.
Where the entity has not transferred
substantially all risks and regards of
ownership of the financial asset, the
financial asset is not derecognised.
Where the entity has neither transferred
a financial asset nor retains substantially
all risks and rewards of ownership of
the financial asset, the financial asset is
derecognised if the Company has not
retained control of the financial asset.
• Impairment of financial assets:
The Company assesses at each date
of balance sheet whether a financial
asset or a group of financial assets is
impaired. Ind AS - 109 requires expected
credit losses to be measured through a
loss allowance. The company recognizes
lifetime expected losses for all contract
assets and/ or all trade receivables that
do not constitute a financing transaction.
For all other financial assets, expected
credit losses are measured at an amount
equal to the 12 month expected credit
losses or at an amount equal to the life
time expected credit losses if the credit
risk on the financial asset has increased
significantly since initial recognition
F.2. Financial liabilities and equity instruments
Classification as debt or equity
Financial liabilities and equity instruments
issued by the Company are classified
according to the substance of the contractual
arrangements entered into and the definitions
of a financial liability and an equity instrument.
F.2.1. Equity instruments
An equity instrument is any contract
that evidences a residual interest in the
assets of the Company after deducting
all of its liabilities. Equity instruments are
recorded at the proceeds received, net of
direct issue costs.
F.2.2. Financial liabilities
Recognition and Initial Measurement:
The Company recognises a financial
liability in its balance sheet when it
becomes party to the contractual
provisions of the instrument. All financial
liabilities are recognised initially at
fair value and, in the case of financial
liabilities at amor sed cost, net of directly
attributable transaction costs. The
Company’s financial liabilities include
trade and other payables, borrowings
including bank overdrafts, lease liabilities
and derivative financial instruments.
Subsequent Measurement:
Financial liabilities are measured
subsequently at amortized cost or FVTPL.
A financial liability is classified as FVTPL
if it is classified as held-for-trading, or it
is a derivative or it is designated as such
on initial recognition. Financial liabilities at
FVTPL are measured at fair value and net
gains and losses, including any interest
expense, are recognized in profit or loss.
Other financial liabilities are subsequently
measured at amortized cost using the
effective interest rate method. Interest
expense and foreign exchange gains and
losses are recognized in profit or loss.
Any gain or loss on derecognition is also
recognized in profit or loss.
De-recognition: A financial liability
is derecognized when the obligation
under the liability is discharged or
cancelled or expires.
G. Offsetting financial instruments
Financial assets and liabilities are offset and
the net amount is reported in the balance sheet
where there is a legally enforceable right to
offset the recognized amounts and there is an
intention to settle on a net basis or realize the
asset and settle the liability simultaneously.
H. Derivatives
The Company enters into certain derivative
contracts to hedge risks which are not
designated as hedges. Such contracts are
accounted for at fair value through profit or loss
and are included in other income/ expenses.
I. Investments in subsidiaries, associates and
joint ventures
Investments in subsidiaries, associates and
joint ventures are carried at cost/deemed cost
less accumulated impairment losses, if any.
Where an indication of impairment exists, the
carrying amount of investment is assessed
and an impairment provision is recognized,
if required immediately to its recoverable
amount. On disposal of such investments,
difference between the net disposal proceeds
and carrying amount is recognized in the
statement of profit and loss.
J. Measurement of Fair Values
The Company measures financial instruments
at fair value in accordance with the accounting
policies mentioned above. 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:
• In the principal market for the asset
or liability, or
• In the absence of a principal market, in
the most advantageous market for the
asset or liability.
All assets and liabilities for which fair value
is measured or disclosed in the financial
statements are categorized within the fair value
hierarchy that categorizes into three levels,
described as follows, the inputs to valuation
techniques used to measure value. The fair
value hierarchy gives the highest priority to
quoted prices in active markets for identical
assets or liabilities (Level 1 inputs) and the lowest
priority to unobservable inputs (Level 3 inputs).
• Level 1 - quoted (unadjusted) market
prices in active markets for identical
assets or liabilities
• Level 2 - inputs other than quoted
prices included within Level 1 that are
observable for the asset or liability, either
directly or indirectly
• Level 3 - inputs that are unobservable for
the asset or liability
For assets and liabilities that are recognized
in the financial statements at fair value on
a recurring basis, the Company determines
whether transfers have occurred between
levels in the hierarchy by re- assessing
categorization at the end of each reporting
period and discloses the same.
K. Foreign Currency Translation
Initial Recognition: On initial recognition,
transactions in foreign currencies entered into
by the Company are recorded in the functional
currency (i.e. Indian Rupees), by applying to the
foreign currency amount, the spot exchange
rate between the functional currency and the
foreign currency at the date of the transaction.
Exchange differences arising on foreign
exchange transactions settled during the year
are recognized in the Statement of Profit and
Loss except for exchange differences relating
to foreign currency borrowings or borrowings
in functional currency converted into foreign
currency borrowings when they are regarded
as an adjustment to interest costs on those
foreign currency borrowings, the balance is
presented in the Statement of Profit and Loss
within finance costs.
Measurement of foreign currency items at
reporting date: Foreign currency monetary
items of the Company are translated at the
closing exchange rates. Non-monetary items
that are measured at historical cost in a foreign
currency are translated using the exchange
rate at the date of the transaction. Non¬
monetary items that are measured at fair value
in a foreign currency are translated using the
exchange rates at the date when the fair value
is measured. Exchange differences arising out
of these translations are recognized in the
Statement of Profit and Loss.
L. Income Taxes
Taxes on income comprise of current taxes and
deferred taxes. Current tax in the Statement of
Profit and Loss is provided as the amount of tax
payable in respect of taxable income for the
period using tax rates and tax laws enacted
during the period, together with any adjustment
to tax payable in respect of previous years.
Deferred tax is recognized on temporary
differences between the carrying amounts of
assets and liabilities and the amounts used for
taxation purposes (tax base), at the tax rates
and tax laws enacted or substantively enacted
by the end of the reporting period. Deferred
tax assets are recognized for the future tax
consequences to the extent it is probable
that future taxable profits will be available
against which such unused tax losses can be
utilized. Income tax, in so far as it relates to
items disclosed under other comprehensive
income or equity, are disclosed separately
under other comprehensive income or equity,
as applicable. Deferred tax assets and liabilities
are offset when there is legally enforceable
right to offset current tax assets and liabilities
and when the deferred tax balances relate to
the same taxation authority. Current tax assets
and tax liabilities are offset where the entity has
a legally enforceable right to offset and intends
either to settle on net basis, or to realize the
asset and settle the liability simultaneously.
Current and deferred tax are recognized as
income or an expense in the Statement of Profit
and Loss, except when they relate to items
that are recognized in Other Comprehensive
Income, in which case, the current and deferred
tax income/expense are recognized in Other
Comprehensive Income.
Minimum Alternative Tax (mat) Tax Credit is
recognized in respect of Minimum Alternate
Tax (MAT) as per the provisions of Section
115JAA/115JB of the Income Tax Act, 1961 based
on convincing evidence that the Company
will recover the same against normal income
tax within the statutory time frame which is
reviewed at each Balance Sheet Date. Also
refer note no. 30.
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