3.1 Current and Non-Current

The Company presents assets and liabilities in the balance
sheet based on current/non-current classification. An
asset is treated as current when it is:

• expected to be realised or intended to be sold or
consumed in normal operating cycle

• held primarily for the purpose of trading

• expected to be realised within twelve months after
the reporting period, or

• 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 current when:

• it is expected to be settled in normal operating cycle

• it is held primarily for the purpose of trading

• it is due to be settled within twelve months after the
reporting period, or

• there exists no right at the end of the reporting
period to defer settlement of the liability for at least
twelve months after the reporting period.

The terms of the liability that could, at the option of the
counterparty, result in its settlement by the issue of equity
instruments do not affect its classification.

The Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non¬
current assets and liabilities.

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 twelve months
as its operating cycle.

3.2 Fair value measurement

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. Fair value
for measurement and/or disclosure purposes in these
financial statements is determined on such a basis, except
for share-based payment transactions that are within the
scope of Ind AS 102, leasing transactions that are within
the scope of Ind AS 116, and measurements that have
some similarities to fair value but are not fair value, such
as net realisable value in Ind AS 2 or value in use in Ind AS
36.

In addition, for financial reporting purposes, fair value
measurements are categorized 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:

• Level 1 inputs are quoted prices (unadjusted) in
active markets for identical assets or liabilities that
the entity can access at the measurement date;

• Level 2 inputs are inputs other than quoted prices
included within Level 1, that are observable for the
asset or liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset
or liability.

3.3 Revenue recognition

Revenue from contracts with customers is recognised
when control of the goods or services are transferred to
the customer at an amount that reflects the consideration
to which the Company expects to be entitled in
exchange for those goods or services. The Company has
generally concluded that it is the principal in its revenue
arrangements, because it typically controls the goods or
services before transferring them to the customer.

The disclosures of significant accounting judgements,
estimates and assumptions relating to revenue from
contracts with customers are provided in note 3.25.1.

a) Sale of goods is recognised net of returns and trade
discounts, volume discounts, scheme allowances
and price concessions (as specified in the contracts
with customers) when the control over the goods
is transferred to the customers. Accruals for
discounts/incentives are estimated using the most
likely method based on accumulated experience
and underlying schemes and agreements with
customers. The performance obligation in case

of sale of goods is satisfied at a point in time i.e.,
when the goods are shipped to the customers or on
delivery to the customer, as per applicable terms.

b) For contracts that permit the customer to return
an item, revenue is recognised to the extent that it
is highly probable that a significant reversal in the
amount of cumulative revenue recognised will not
occur. Therefore, the amount of revenue recognised
is adjusted for expected returns, which are estimated
based on the historical data related to sale returns.
In these circumstances, a refund liability and a right
to return assets are recognised. The right to return
assets is measured at the former carrying amount
of the inventory less any expected costs to recover
goods. The refund liability is adjusted against trade
receivables and the right to return assets is included
in inventories. The Company reviews its estimate of
expected returns at each reporting date and updates
the amounts of the asset and liability accordingly.

c) Income from services rendered is recognised
based on the agreements/arrangements with the
concerned parties and when services are rendered
by measuring progress towards satisfaction of
performance obligation for such services over a
period of time.

d) Export benefits and other excise benefits are
accounted for on accrual basis.

e) 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 that is conditional. Trade Receivable
represents the Company's right to an amount of
consideration that is unconditional.

A contract liability is recognised if a payment is
received or a payment is due (whichever is earlier)
from a customer before the Company transfers the
related goods or services. Contract liabilities are
recognised as revenue when the Company performs
under the contract (i.e., transfers control of the
related goods or services to the customer).

3.4 Other operating revenue

Revenue from operations includes "Other Operating
Revenue" which consists of export incentives, interest on
overdue trade receivables, scrap and by-products sales.

Export benefits are accounted for in the year of exports
based on eligibility and when there is no uncertainty in
receiving the same and the Company will comply with the

conditions associated with the relevant scheme. Interest
on overdue trade receivables is accrued on a time basis, by
reference to the outstanding overdue trade receivables.

Interest on overdue trade receivables are accounted
in accordance with contractual terms agreed with
customers.

3.5 Other Income

Interest income from a financial asset is recognised when
it is probable that the economic benefits will flow to the
Company and the amount of income can be measured
reliably. Interest income is accrued on a time basis, by
reference to the principal outstanding and at the effective
interest rate applicable, which is the rate that exactly
discounts estimated future cash receipts through the
expected life of the financial asset to that asset's net
carrying amount on initial recognition.

3.6 Leases

As a Lessee: The Company, at the inception of a contract,
assesses whether the contract is a lease or not lease. A
contract is, or contains, a lease if the contract conveys the
right to control the use of an identified asset for a time in
exchange for a consideration.

The Company recognises a right-of-use asset and a lease
liability at the lease commencement date. The right-of-
use asset is initially measured at cost, which comprises
the initial amount of the lease liability adjusted for any
lease payments made at or before the commencement
date, plus any initial direct costs incurred and an estimate
of costs to dismantle and remove the underlying asset or
to restore the underlying asset or the site on which it is
located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using
the straight-line basis over the shorter of the lease term
and the estimated useful life of the assets from the
commencement date to the end of the lease term. In
addition, the right-of-use asset is periodically reduced
by impairment losses, if any, and adjusted for certain re¬
measurements of the lease liability.

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 incremental 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 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.

The Company has elected not to recognise right-of-use
assets and lease liabilities for short-term leases 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 over the
lease term.

3.7 Functional and presentation currency

Items included in the financial statements of the
Company are measured using the currency of the primary
economic environment in which the entity operates (i.e.,
the "functional currency"). The financial statements are
presented in Indian Rupee (H), the national currency of
India, which is the functional currency of the Company
and rounded to the nearest Lakhs.

3.8 Foreign currencies

Foreign currency transactions are recorded at exchange
rates prevailing on the date of the transaction or at
rates that closely approximate the rate at the date of
transactions. The date of transaction for the purpose of
determining the exchange rate on initial recognition of
the related asset, expense or income (part of it) is the
date on which the entity initially recognises the non¬
monetary asset or non-monetary liability arising from
payment or receipt of advance consideration. Foreign
currency denominated monetary assets and liabilities
are restated into the functional currency using exchange
rates prevailing on the balance sheet date. Gains and
losses arising on settlement and restatement of foreign
currency denominated monetary assets and liabilities

are recognised in the statement of profit and loss. Non¬
monetary assets and liabilities that are measured in terms
of historical cost in foreign currencies shall be translated
using the exchange rate at the date of the transaction..

3.9 Employee benefits

3.9.1 Defined contribution plans

A defined contribution plan is a post-employment
benefit plan where the Company's legal or constructive
obligation is limited to the amount that it contributes
to a separate legal entity. Contributions in respect of
Employees Provident Fund, Employee's State Insurance
scheme and Pension Fund which are defined contribution
schemes, are made to a fund administered through
Regional Provident Fund Commissioner and are charged
as an expense based on the amount of contribution
required to be made and when services are rendered by
the employees.

3.9.2 Defined benefit plans

The Company's Gratuity scheme for its employees is
a defined benefit retirement plan. Obligation under
the gratuity scheme is covered under a Scheme of Life
Insurance Corporation of India (LIC) and contributions
in respect of such scheme are recognized in the profit or
loss. The liability as at the Balance Sheet date is provided
for using the projected unit credit method, with actuarial
valuations being carried out as at the end of the year.

Defined benefit costs are categorized as follows:

• service cost (including current service cost,
past service cost, as well as gains and losses on
curtailments and settlements);

• net interest expense or income; and

• remeasurement

The Company presents the first two components of
defined benefit costs in profit or loss in the line item
'Employee benefits expense' Curtailment gains and losses
are accounted for as past service costs. Net interest is
calculated by applying the discount rate at the beginning
of the period to the net defined benefit liability or asset.

Remeasurement, comprising actuarial gains and losses,
the effect of the changes to the asset ceiling (if applicable)
and the return on plan assets (excluding net interest), are
reflected immediately in the balance sheet with a charge
or credit recognised in other comprehensive income in the
period in which they occur. Remeasurement recognised
in other comprehensive income is reflected immediately
in retained earnings and is not reclassified to profit
or loss.

3.9.3 Short-term employee benefits

The employees of the Company are entitled to
compensated absences. The employees can carry-forward
a portion of the unutilised accrued compensated absence
and utilise it in future periods or receive cash compensation
at retirement or termination of employment for the
unutilised accrued compensated absence. The Company
records an obligation for compensated absences in
the period in which the employee renders the services
that increase this entitlement. The Company measures
the expected cost of compensated absence based on
actuarial valuation made by an independent actuary as
at the standalone balance sheet date on projected unit
credit method. Compensated absences expected to be
maturing after 12 months from the date of balance sheet
are classified as non-current.

3.10 Share-based payment arrangements

Equity-settled share-based payments to employees
providing similar services are measured at the fair value
of the equity instruments at the grant date.

The fair value determined at the grant date of the equity-
settled share-based payments is expensed on a straight¬
line basis over the vesting period, based on the Company's
estimate of equity instruments that will eventually vest,
with a corresponding increase in share-based payments
reserve. At the end of each reporting period, the Company
revises its estimate of the number of equity instruments
expected to vest. The impact of the revision of the original
estimates, if any, is recognised in the statement of profit or
loss such that the cumulative expense reflects the revised
estimate, with a corresponding adjustment to the share-
based payments reserve.

Service and non-market performance conditions are not
taken into account when determining the grant date fair
value of awards, but the likelihood of the conditions being
met is assessed as part of the Company's best estimate
of the number of equity instruments that will ultimately
vest. Market performance conditions are reflected within
the grant date fair value. Any other conditions attached to
an award, but without an associated service requirement,
are considered to be non-vesting conditions. Non-vesting
conditions are reflected in the fair value of an award and
lead to an immediate expensing of an award unless there
are also service and/or performance conditions.

3.11 Earnings per share

Basic earnings per share is calculated by dividing the
net profit or loss attributable to equity holders of the
Company by the weighted average number of equity
shares outstanding during the year adjusted for the
effects of rights issue.

For the purpose of calculating diluted earnings per share,
the net profit or loss for the period attributable to equity
shareholders of the Company and the weighted average
number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity
shares and for the effects of rights issue.

3.12 Taxation

Income tax expense represents the sum of the tax
currently payable and deferred tax.

• Current 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
outside profit or loss is recognised outside profit or loss
(either in other comprehensive income or in equity).
Current tax items are recognised in correlation to the
underlying transaction either in OCI or directly in equity.
Management periodically evaluates positions taken in the
tax returns with respect to situations in which applicable
tax regulations are subject to interpretation and considers
whether it is probable that a taxation authority will accept
an uncertain tax treatment. The Company shall reflect
the effect of uncertainty for each uncertain tax treatment
by using either most likely method or expected value
method, depending on which method predicts better
resolution of the treatment.

• Deferred tax

Deferred tax is recognised using balance sheet approach
on temporary differences between the carrying amounts
of assets and liabilities in the financial statements and
the corresponding tax bases used in the computation
of taxable profit. Deferred tax liabilities are recognised
for all taxable temporary differences. Deferred tax assets
are recognised for all deductible temporary differences
to the extent that it is probable that taxable profits will
be available against which those deductible temporary
differences can be utilized. Such deferred tax assets and
liabilities are not recognised if the temporary difference
arises from the initial recognition (other than in a business
combination) of assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit
and does not give rise to equal taxable and deductible
temporary differences

Deferred tax assets are recognised for unused tax losses,
unused tax credits and deductible temporary differences
to the extent that it is probable that future taxable profits
will be available against which they can be used. Future
taxable profits are determined based on the reversal of
relevant taxable temporary differences. If the amount of

taxable temporary differences is insufficient to recognise
a deferred tax asset in full, then future taxable profits,
adjusted for reversals of existing temporary differences, are
considered, based on the business plans of the Company.

The carrying amount of deferred tax assets is reviewed
at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable
profits will be available to allow all or part of the asset to
be recovered.

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 liabilities and assets are measured at the tax
rates that are expected to apply in the period in which the
liability is settled or the asset is realized, based on tax rates
(and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.

3.13 Property, plant and equipment and capital
work-in-progress

The cost of an item of property, plant and equipment
shall be recognised as an asset if, and only if it is probable
that future economic benefits associated with the item
will flow to the Company and the cost of the item can be
measured reliably.

Property, plant and equipment are stated at cost less
accumulated depreciation and accumulated impairment
losses, if any. Cost includes purchase price, attributable
expenditure incurred in bringing the asset to its working
condition for the intended use.

On transition to Ind AS, the Company has elected to
continue with the carrying value of all Property, plant and
equipment measured as per the previous GAAP and use
that carrying value as the deemed cost of Property, plant
and equipment.

Depreciation is provided on straight-line method as per
the useful life prescribed in Schedule II to the 2013 Act.
Depreciation on additions/(disposals) is provided on a
pro-rata basis i.e. from/ (upto) the date on which asset is
ready for use/(disposed off).

The estimated useful lives, residual values and depreciation
method are reviewed at the end of each reporting period,
with the effect of any changes in estimate accounted for
on a prospective basis. Freehold land is not depreciated.

An item of property, plant and equipment is derecognized
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 profit or
loss.

Capital work-in-progress is stated at cost, net of
accumulated impairment loss, if any.

3.14 I ntangible assets and Intangible assets under
development

Intangible assets are carried at cost, net of accumulated
amortization and accumulated impairment losses, if any.
Cost of an intangible asset comprises of purchase price
and attributable expenditure on making the asset ready
for its intended use.

Intangible assets are amortized over individual estimated
useful lives using straight-line method. The estimated
useful life of an identifiable intangible asset is as under:

The estimated useful lives, residual values and amortisation
method are reviewed at the end of each reporting period,
with the effect of any changes in estimate accounted for
on a prospective basis.

An intangible asset is derecognized on disposal, or when
no future economic benefits are expected from use or
disposal. Gains or losses arising from derecognition of
an intangible asset, measured as the difference between
the net disposal proceeds and the carrying amount of the
asset, are recognized in profit or loss when the asset is
derecognized.

Intangible assets under development are carried at cost, net
of accumulated impairment loss, if any, comprising direct
cost and related incidental expenses. Intangible assets
under development are capitalised only when technical
and commercial feasibility of the project is demonstrated,
future economic benefits are probable, the Company has
an intention and ability to complete and use the asset and
the costs can be measured reliably. The amount capitalised
comprises expenditure that can be directly attributed
or allocated on a reasonable and consistent basis for
preparing the asset for its intended use.

Subsequent expenditure is capitalised only when it
increases the future economic benefits embodied in
the specific asset to which it relates and these future
economic benefits associated with the expenditure will
flow to the Company and the cost of the item can be
measured reliably. All other expenditure is recognised in
profit or loss as incurred.

3.15 Impairment

• Property, Plant and Equipment, CWIP and Intangible
assets

The Company assesses at each reporting date whether
there is an indication that an asset/cash generating unit
may be impaired. If any indication exists the Company
estimates the recoverable amount of such assets
and if the carrying amount exceeds the recoverable
amount, impairment is recognized in profit or loss. The
recoverable amount is the higher of Fair value less costs
of disposal and its value in use. In assessing value in use,
the estimated future cash flows are discounted to their
present value using an appropriate discount factor. When
there is indication that previously recognized impairment
loss no longer exists or may have decreased such reversal
of impairment loss is recognized in the profit or loss.

Intangible assets under development are tested annually
for impairment.

• Impairment of Investments

The Company reviews its carrying value of investments
carried at cost (net of impairment, if any) annually, or
more frequently when there is indication for impairment.
If the recoverable amount is less than its carrying amount,
the impairment loss is accounted for in the statement
of profit and loss. The recoverable amount is the higher
of Fair value less costs of disposal and its value in use. In
assessing value in use, the estimated future cash flows are
discounted to their present value using an appropriate
discount factor.

3.16 Inventories

Inventories consist of raw materials, stores and spares,
work-in-progress, traded goods & packing materials and
finished goods and are valued at the lower of cost and
net realisable value. Net realisable value represents the
estimated selling price of inventories less all estimated
costs of completion and costs necessary to make the sale.

Costs incurred in bringing each product to its present
location and condition are accounted for as follows:

1. Raw material, stores and spares and packing
materials: Cost includes cost of purchase and other
costs incurred in bringing the inventories to their
present location and condition. Cost is determined
on moving weighted average cost.

2. Finished goods and work-in-process: Cost includes
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 moving weighted average
cost of production.

3. Traded Goods: Cost includes cost of purchase and
other costs incurred in bringing the inventories
to their present location and condition. Cost is
determined on moving weighted average cost.

3.17 Cash and Cash equivalents

Cash comprises cash on hand, in bank and demand
deposits with banks and with financial institutions. The
Company considers all highly liquid financial instruments,
which are readily convertible into cash and have original
maturities of three months or less from the date of
purchase, to be cash equivalents. Such cash equivalents
are subject to insignificant risk of changes in value.