(a) Basis of preparation of Financial Statements
(i) Compliance with Ind AS
These financial statements have been prepared in accordance with the Indian Accounting Standards
(hereinafter referred to as the 'Ind AS') as notified by Ministry of Corporate Affairs pursuant to
section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting standards)
Rules,2015 and other relevant provisions of the Act.
(ii) Historical cost convention
The financial statements have been prepared on a historical cost basis, except for the following:
1) certain financial assets and liabilities that is measured at fair value;
2) defined benefit plans - plan assets measured at fair value;
(iii) Current non-current classification
All assets and liabilities have been classified as current or non-current as per the Company's normal
operating cycle (twelve months)and other criteria set out in the Schedule III to the Companies Act,
2013.
(b) Use of estimates and judgments
The estimates and judgments used in the preparation of the financial statements are continuously
evaluated by the Company and are based on historical experience and various other assumptions and
factors (including expectations of future events) that the Company believes to be reasonable under
the existing circumstances. Differences between actual results and estimates are recognised in the
period in which the results are known/materialised. Any revision to accounting estimates is recognised
prospectively in current and future periods.
The said estimates are based on the facts and events, that existed as at the reporting date, or that
occurred after that date but provide additional evidence about conditions existing as at the reporting
date.
The estimates and judgments that have significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year, are included in the following notes:
i. Provisions and contingent liabilities - refer note (k)
ii. Measurement of defined benefit obligations - refer note (m)
iii. Impaiment of goodwill on amalgamation - refer note (w)
(c) Property, plant and equipment
Freehold land is carried at cost. All other items of property, plant and equipment are stated at cost
less depreciation and impairment, if any. Cost includes expenditure that is directly attributable to the
acquisition of the items.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as
appropriate, only when 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. The carrying amount of any component
accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are
charged to the Statement of Profit and Loss during the reporting period in which they are incurred.
Capital Work-in-progress
Property, Plant and Equipment which are not ready for intended use on the date of balance sheet are
disclosed as capital work-in-progress. It is carried at cost, less any recognised impairment loss. Such
properties are classified and capitalised to the appropriate categories of Property, Plant and Equipment
when completed and ready for intended use. Depreciation of these assets, on the same basis as other
property assets, commences when the assets are ready for intended use.
Expenditure incurred during developmental and preliminary stages of the Company's new projects,
are carried forward. However, if any project is abandoned, the expenditure relevant to such project is
written off through the natural heads of expenses in the year in which it is so abandoned.
Depreciation methods, estimated useful lives and residual value
Depreciation on property, plant and equipment has been provided on the straight-line method as per
the useful life prescribed in Schedule II to the Companies Act, 2013. In respect of certain categories of
assets, the useful lives have been determined based on technical advice, considering factors such as
the nature of the asset, estimated usage, operating conditions, past replacement history, anticipated
technological changes, manufacturer warranties and maintenance support. Leasehold land is amortised
over of period lease. Leasehold improvements are amortised over the period of lease or estimated
useful lives which ever is lower
Depreciation is provided on the straight-line method applying the useful lives as prescribed in part
C of Schedule II to the Companies Act, 2013. The range of estimated useful lives of Property, Plant &
Equipment's are as under:
The useful lives mentioned above have been technically evaluated which represents the period over
which the management expects to use these assets. The Company reviews the useful lives and residual
value at each reporting date.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying
amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined
by comparing proceeds with carrying amount. These are included in the Statement of Profit and Loss.
(d) Intangible assets
Intangible assets are stated at cost, less accumulated amortisation and impairments, if any.
Amortisation method
The group amortizes Intangible assets with a useful life using the straight-line method over the period
of 3 to 5 years from the date of acquisition.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are
included in the Statement of Profit and Loss.
(e) Lease
As a lessee
The Company's leased asset primarily consist of leases for Land and Buildings. The Company assesses
whether a contract is or contains a lease, at inception of a contract. A contract is, or contains, a lease if
the contract conveys the right to control the use of an identified asset for a period of time in exchange
for consideration. To assess whether a contract conveys the right to control the use of an identified
asset, the Company assesses whether:
(i) the contract involves the use of an identified asset
(ii) the Company has substantially all of the economic benefits from use of the asset through the
period of the lease and
(iii) the Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognises a right-of-use asset ("ROU”) and
a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a
term of twelve months or less (short term leases) and leases of low value assets. For these short term
and leases of low value assets, the Company recognises the lease payments as an operating expense
on a straight line basis over the term of the lease.
The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or prior to the commencement date of the lease
plus any initial direct costs less any lease incentives. They are subsequently measured at cost less
accumulated depreciation and impairment losses, if any. Right-of-use assets are depreciated from the
commencement date on a straight-line basis over the shorter of the lease term and useful life of the
underlying asset.
The lease liability is initially measured at the present value of the future lease payments. The lease
payments are discounted using the interest rate implicit in the lease or, if not readily determinable,
using the incremental borrowing rates. The lease liability is subsequently remeasured by increasing
the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect
the lease payments made. A lease liability is remeasured upon the occurrence of certain events such
as a change in the lease term or a change in an index or rate used to determine lease payments. The
remeasurement normally also adjusts the leased assets.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments
have been classified as financing cash flows.
(f) Cash and Cash Equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash
on hand, deposits held at call with financial institutions, other short-term highly liquid investments with
original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value and bank overdrafts.
(g) Contract balances:
Trade receivables
A receivable represents the Company's right to an amount of consideration that is unconditional (i.e.
only a passage of time is required to before payment of the consideration is due). Trade receivables are
recognised at the value of sales less allowance for bad and doubtful debts and expected credit loss.
Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Company
has received consideration (or an amount of consideration is due) from the customer. If a customer pays
consideration before the Company transfer goods and services to the customer, a contract liability is
recognised when the payment is made or the payment is due, whichever is earlier Contract liabilities
are recognised as revenue when the Company performs under the contract.
(h) Inventories
Inventories include Raw Material, Work-in-Progress, stock in trade, finished goods, Stores & spares and
Packing Materials are valued at lower of cost and net realisable value.
Raw Materials - Cost include cost of purchases and other costs incurred in bringing the inventories to
their present location and condition. Cost is determined using Moving Weighted Average basis.
Finished Goods/Work-in-progress - cost includes cost of direct material, labour, other direct cost and
a proportion of fixed manufacturing overheads allocated based on the normal operating capacity but
excluding borrowing costs. Cost is determined on quarterly weighted average cost basis.
Stock in Trade - cost is determined on Moving Weighted Average basis. As per Updated Excel File.
Stores, Spare Parts and Packing Materials - cost is determined on Moving Weighted Average basis.
(i) Investments and other financial assets
(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 the Statement of Profit and Loss), and
* those measured at amortised cost.
The classification depends on the Company'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 the Statement of Profit
and Loss or other comprehensive income. For investments in debt instruments, this will depend on
the business model in which the investment is held. For investments in equity instruments, this will
depend on whether the Company has made an irrevocable election at the time of initial recognition
to account for the equity investment at fair value through other comprehensive income.
(ii) Measurement
At initial recognition, the Company measures a financial asset at its fair value . Transaction costs of
financial assets carried at fair value through the Statement of Profit and Loss are expensed in the
Statement of Profit and Loss.
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:
* Amortised cost: 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.
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 fair value through other
comprehensive income (FVOCI). Movements in the carrying amount are taken through OCI,
except for the recognition of impairment losses, interest revenue which are recognised in the
Statement of Profit and Loss. When the financial asset is derecognised, the cumulative gain
or loss previously recognised in OCI is reclassified from equity to the Statement of Profit and
Loss and recognised in other income/expense. Interest income from these financial assets is
included in other income using the effective interest rate method.
* Fair value through profit and loss: Assets that do not meet the criteria for amortised cost or
FVOCI are measured at fair value through Statement of Profit and Loss. Interest income from
these financial assets is included in other income.
Equity instruments:
The Company subsequently measures all equity investments at fair value. Where the Company's
management has elected to present fair value gains and losses on equity investments in other
comprehensive income, there is no subsequent reclassification of fair value gains and losses to the
Statement of Profit and Loss. Dividends from such investments are recognised in the Statement of
Profit and Loss as other income when the Company's right to receive payments is established.
(iii) Impairment of financial assets
The Company recognises a loss allowance for Expected Credit Losses (ECL) on financial assets that
are measured at amortised cost and at FVOCI. The credit loss is difference between all contractual
cash flows that are due to an entity in accordance with the contract and all the cash flows that the
entity expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate.
This is assessed on an individual or collective basis after considering all reasonable and supportable
including that which is forward-looking.
The Company's trade receivables or contract revenue receivables do not contain significant
financing Branch and loss allowance on trade receivables is measured at an amount equal to life
time expected losses i.e. expected cash shortfall, being simplified approach for recognition of
impairment loss allowance.
Under simplified approach, the Company does not track changes in credit risk. Rather it recognizes
impairment loss allowance based on the lifetime ECL at each reporting date right from its initial
recognition. The Company uses a provision matrix to determine impairment loss allowance on the
portfolio of trade receivables.
The provision matrix is based on its historically observed default rates over the expected life of
the trade receivable and is adjusted for forward looking estimates. At every reporting date, the
historical observed default rates are updated and changes in the forwardlooking estimates are
analysed. For financial assets other than trade receivables, the Company recognises 12-month
expected credit losses for all originated or acquired financial assets if at the reporting date the
credit risk of the financial asset has not increased significantly since its initial recognition.
The expected credit losses are measured as lifetime expected credit losses if the credit risk on
financial asset increases significantly since its initial recognition. If, in a subsequent period, credit
quality of the instrument improves such that there is no longer significant increase in credit risks
since initial recognition, then the Company reverts to recognizing impairment loss allowance based
on 12 months ECL. Impairment loss allowance including ECL or reversal recognized during the
period is recognized as income/ expense in the Statement of Profit and Loss.
This amount is reflected under the head 'other expenses' in the Statement of Profit and Loss. The
impairment loss is presented as an allowance in the balance sheet as a reduction from the net
carrying amount of the trade- receivable, loan, deposits and lease receivable respectively.
(iv) De-recognition
The Company derecognises a financial asset when the contractual rights to the cash flows from the
financial asset expire, or it transfers rights to receive cash flows from an asset, 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.
Financial Liabilities
Initial Recognition and measurement
Financial liabilities are recognised when the Company becomes a party to the contractual provisions
of the instruments. Financial liabilities are initially recognised at fair value net of transaction costs
for all financial liabilities not carried at fair value through profit or loss.
The Company's financial liabilities includes trade and other payables, loans and borrowings including
bank overdrafts and derivative instruments.
Subsequent measurement
Financial liabilities measured at amortised cost are subsequently measured at using EIR method.
Financial liabilities carried at fair value through profit or loss are measured at fair value with all
changes in fair value recognised in the Statement of Profit and Loss.
Derivative financial instruments
Derivative financial instruments such as forward currency contracts, option contract and cross
currency swap, to hedge its foreign currency risks are initially recognised at fair value on the date
a derivative contract is entered into and are subsequently re-measured at their fair value with
changes in fair value recognised in the Statement of Profit and Loss in the period when they arise.
Borrowings
Borrowings are initially recognised at net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and
the redemption amount is recognised in the Statement of Profit and Loss over the period of the
borrowings using the effective interest method.
(j) Borrowing costs
Interest and other borrowing costs attributable to qualifying assets are capitalised. Other interest
and borrowing costs are charged to revenue.
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