2 Statement of Material Accounting Policies:2.1 Basis of preparation of Standalone Ind AS Financial Statements:
The Standalone Ind AS financial statements are prepared in accordance with Indian Accounting Standards (Ind
AS) notified under Section 133 of the Companies Act, 2013 (“Act”) read with Companies (Indian Accounting
Standards) Rules, 2015 as amended; and the other relevant provisions of the Act and Rules thereunder.
The Standalone Ind AS financial statements have been prepared under historical cost convention basis, except for
certain assets and liabilities measured at fair value.
2.2 Recent 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 31,2026
MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
2.3 Use of estimates and judgements:
The preparation of the Standalone Ind AS financial statements of the Company in accordance with Indian
Accounting Standards (Ind-AS) requires management to make judgments, estimates and assumptions that affect
the reported amounts of revenues, expenses, assets, liabilities and the accompanying disclosures along with
contingent liabilities at the date of the Standalone Ind AS financial statements. These estimates are based upon
management’s best knowledge of current events and actions; however uncertainty about these assumptions and
estimates could result in outcomes that may require adjustment to the carrying amounts of assets or liabilities
in future periods. Appropriate revisions in estimates are made as management becomes aware of changes in
circumstances surrounding the estimates. Revisions in estimates are recognized prospectively in the Standalone
Ind AS financial statements in the period in which the estimates are revised in any future periods affected.
2.4 Fair Value Measurement:
The Company measures certain financial instruments at fair value at each reporting date.
Certain accounting policies and disclosures require the measurement of fair values, for both financial and non¬
financial asset and liabilities.
Fair value is the price that would be received to sell an asset or paid to settle a liability in an ordinary transaction
between market participants at the measurement date. The fair value of an asset or a liability is measured using
the assumption that market participants would use when pricing an asset or liability acting in their best economic
interest. The Company uses valuation techniques, which are appropriate in circumstances and for which sufficient
data is available considering the expected loss/ profit in case of financial assets or liabilities.
2.5 Revenue Recognition
Revenue is measured at the transaction price that the Company receives or expects to receive as consideration
for goods supplied and services rendered, net of returns and estimates of variable consideration such as discounts
to customers.
Revenue from the sale of goods and services is recognised when the Company performs its obligations to its
customers and the amount of revenue can be measured reliably and recovery of the consideration is probable. The
timing of such recognition in case of sale of goods is when the control over the same is transferred to the customer,
which is mainly upon delivery and in case of services, in the period in which such services are rendered.
Revenue from the sale of goods is net-off returns, taxes or duties collected on behalf of the government and
applicable discounts and rebates.
Interest income is recognized using Effective Interest Rate (EIR) method.
Revenue in respect of export sales is recognized on the basis of dispatch of goods for exports. (i.e. on the date of
Bill of Lading).
Dividend is recognized when right to receive the payment is established, it is probable that the economic benefits
associated with the dividend will flow to the entity and the amount of dividend can be measured reasonably.
Other Income is accounted for on accrual basis, when certainty of receipt is established.
2.6 Inventories
Inventories of Raw Materials, Finished Goods, Semi-Finished Goods, Stores and Spares and Packing Materials,
are valued at cost or net realizable value, whichever is lower. Materials-in-transit are valued at cost-to-date. Cost
comprises of all cost of purchases, cost of conversion and other costs incurred in bringing the inventory to their
present location and conditions. Cost is arrived at on FIFO basis. Due allowance is estimated and made for
defective and obsolete items, wherever necessary, based on the past experience.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and estimated costs necessary to make the sale.
Obsolete, slow moving, surplus and defective stocks are identified at the time of physical verification of stocks and
where necessary, provision is made for such stocks.
2.7 Property, Plant and Equipment (PPE):
Property, plant and equipment are stated at cost, net of accumulated depreciation and accumulated impairment
losses, if any.
The initial cost of an asset comprises its purchase price or construction 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, the initial estimate of any decommissioning obligation, if any, and, borrowing cost for qualifying
assets (i.e. assets that necessarily take a substantial period of time to get ready for their intended use).
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the
expenditure will flow to the Company.
Spare parts which meet the definition of Property, Plant and Equipment are capitalized as Property, Plant and
Equipment. In other cases, the spare part is inventorised on procurement and charged to the Statement of Profit
and Loss on consumption.
An item of property, plant and equipment and any significant part initially recognised separately as part of property,
plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use
or disposal. 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.
The residual values and useful lives of property, plant and equipment are reviewed at regular intervals and changes,
if any, are accounted in line with revisions to accounting estimates.
2.8 Capital Work in Progress
Cost of assets not ready for use at the balance sheet date is disclosed under capital work-in-progress. Expenditure
during construction period is included under Capital Work in Progress & the same is allocated to the respective
PPE on the completion of its construction.
2.9 Intangible Assets
Intangible assets acquired are measured on initial recognition at cost. Following initial recognition, intangible
assets are carried at cost less any accumulated amortisation and accumulated impairment losses, if any.
2.10 Borrowing costs
Borrowing costs consist of interest and other costs incurred in connection with the borrowing of funds. Borrowing
cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
Borrowing costs that are attributable to the acquisition or construction of qualifying assets (i.e. an asset that
necessarily takes a substantial period of time to get ready for its intended use) are capitalized as a part of the cost
of such assets. All other borrowing costs are charged to the Statement of Profit and Loss.
2.11 Depreciation
Depreciation on Plant, Property and Equipment has been provided on the Straight - Line basis, over the estimated
useful lives of assets. The Company provides pro-rata depreciation from the date of addition / up to the date
of deletion made during the reporting period. Intangible assets are amortized on a straight line basis over the
estimated useful economic life.
Depreciation methods, useful lives and residual values are reviewed at each reporting date.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate
items (major components) of property, plant and equipment. The cost and related accumulated depreciation are
eliminated from the Standalone Ind AS financial statements upon sale or disposal of the asset and the resultant
gains or losses are recognized in the statement of Profit and Loss.
The useful lives determined are in line with the useful lives as prescribed in the Schedule II of the Act, except in case
of Plant & Machinery which are depreciated over a useful lives of 20 years based on the technical assessment.
2.12 Impairment of Non - financial Assets:
Non - financial assets are reviewed at each balance sheet date to determine whether there is any indication of
impairment. If any such indication exists or when annual impairment testing for an asset is required, the Company
estimates the asset’s recoverable amount. The recoverable amount is the higher of the assets or Cash Generating
Units (CGU) fair value less cost of disposal and it 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
group 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.
2.13 Government Subsidy
Grants and subsidies from the Government are recognized if the following conditions are satisfied,
- There is reasonable assurance that the Company will comply with the conditions attached to it.
- Such benefits are earned and reasonable certainty exists of the collection.
Government grants related to revenue are recognized on a systematic basis in net profit in the statement of
Profit and Loss over the periods necessary to match them with the related costs which they are intended to
compensate.
2.14 Taxes on Income
a) Current Tax
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, by the end of reporting period.
Current Tax items are recognised in correlation to the underlying transaction either in the Statement of Profit
and Loss, other comprehensive income or directly in equity.
b) Deferred tax
Deferred tax is provided using the Balance Sheet method on temporary differences between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences, and the carry forward of
unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset
to be utilised. 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 asset and liability are measured at the tax rates that are expected to apply in the year when the
asset is realized or liability is settled based on rates and tax laws that have been enacted or substantively
enacted at the reporting date.
Deferred Tax items are recognised in correlation to the underlying transaction either in the Statement of Profit
and Loss, other comprehensive income or directly in equity.
Minimum Alternate Tax credit is recognised as deferred tax asset only when and to the extent there is
convincing evidence that the Company will pay normal income tax during the specified period. Such asset is
reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the
extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax
during the specified period.
2.15 Financial Assets
a) Initial recognition and measurement
All financial assets (not measured subsequently at fair value through profit or loss) are recognised initially at
fair value plus transaction costs that are attributable to the acquisition of the financial asset.
b) Subsequent measurement
Subsequent measurement is determined with reference to the classification of the respective financial assets.
The Company classifies financial assets as subsequently measured at amortised cost, fair value through other
comprehensive income or fair value through profit or loss on the basis of its business model for managing the
financial assets and the contractual cash flow characteristics of the financial asset.
- Debt instruments at Fair value through Other Comprehensive Income (FVTOCI)
A 'debt instrument' is measured at the fair value through other comprehensive income if both the following
conditions are met:
• The asset is held within a business model whose objective is achieved by both collecting contractual
cash flows and selling financial assets
• Contractual terms of the asset give rise on specified dates to cash flows that are solely payments
of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, these assets are subsequently measured at fair value. Interest income under
effective interest method, foreign exchange gains and losses and impairment are recognised in the
Statement of Profit and Loss. Other net gains and losses are recognised in other comprehensive Income.
- Debt instruments at Fair value through profit or loss (FVTPL)
Fair value through profit or loss is a residual category for debt instruments. Any debt instrument, which
does not meet the criteria for categorisation as at amortised cost or as FVTOCI, is classified as at
FVTPL.
- Equity investments
All equity investments in scope of Ind-AS 109 are measured at fair value. Equity instruments which are
held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to
classify the same either as at FVTOCI or FVTPL. The Company makes such election on an instrument-
by-instrument basis. The classification is made on initial recognition and is irrevocable.
For equity instruments classified as FVTOCI, all fair value changes on the instrument, excluding
dividends, are recognized in other comprehensive income (OCI).
Equity instruments included within the FVTPL category are measured at fair value with all changes
recognized in the Statement of Profit and Loss.
c) Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets)
is primarily derecognised (i.e. removed from the Company's Balance Sheet) when.
The rights to receive cash flows from the asset have expired, or
The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to
pay the received cash flows in full without material delay to a third party under a 'pass-through' arrangement;
and either:
• The Company has transferred substantially all the risks and rewards of the asset, or
• The Company has neither transferred nor retained substantially all the risks and rewards of the asset,
but has transferred control of the asset.
On de-recognition, any gains or losses on all equity instruments (measured at FVTPL) are recognised
in the Statement of Profit and Loss. Accumulated gains or losses on equity instruments measured at
FVTOCI are never reclassified to the Statement of Profit and Loss.
d) Impairment of financial assets
The Company assesses impairment based on expected credit losses (ECL) model to the following:
• Financial asset measured at amortised cost
• Financial asset measured at fair value through other comprehensive income
Expected credit losses are measured through a loss allowance at an amount equal to:
• 12 months expected credit losses (expected credit losses that result from those default events on the
financial instrument that are possible within 12 months after the reporting date); or
• Full lifetime expected credit losses (expected credit losses that result from all possible default events
over the life of the financial instrument)
For financial assets other than trade receivables, as per Ind AS 109, 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.
The Company follows ‘simplified approach’ for recognition of impairment loss allowance on trade receivables,
considering historical trend, industry practices and the business environment in which the Company operates
or any other appropriate basis.
The Company’s trade receivables do not contain significant financing component and loss allowance on trade
receivables is measured at an amount equal to life time expected losses i.e. expected cash shortfall.
The impairment losses and reversals are recognised in Statement of Profit and Loss.
2.16 Financial Liabilities
a) Initial recognition and measurement
All financial liabilities are recognised initially at fair value net of transaction costs that are attributable to the
respective liabilities.
b) Subsequent measurement
Subsequent measurement is determined with reference to the classification of the respective financial
liabilities. The Company classifies all financial liabilities as subsequently measured at amortised cost, except
for financial liabilities at fair value through profit or loss.
(i) Financial Liabilities at fair value through profit or loss (FVTPL)
A financial liability is classified as at fair value through profit or loss if it is classified as held-for-trading or
is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and
changes therein, including any interest expense, are recognised in Statement of Profit and Loss.
(ii) Financial Liabilities measured at amortised cost
After initial recognition, financial liabilities other than those which are classified as fair value through
profit or loss are subsequently measured at amortised cost using the effective interest rate method
(“EIR”).
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the
Statement of Profit and Loss.
c) Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled 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.
2.17 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,
or to realise the assets and settle the liabilities simultaneously.
2.18 Employee Benefits
a) Short-term employee benefit
Short term employee benefits are recognized as an expense at an undiscounted amount in the Statement of
Profit and Loss of the year in which the related services are rendered.
b) Post-employment obligations
The Company operates the following post - employment schemes:
1. Defined benefit plans such as gratuity, and
2. Defined contribution plans such as provident fund.
Gratuity Obligation:
Provision for Gratuity is recorded on the basis of actuarial valuation certificate provided by the actuary using
Projected Unit Credit Method.
The Company’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating
the amount of future benefit that employees have earned in the current and prior periods, discounting that amount
and deducting the fair value of any plan assets.
The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit
credit method. When the calculation results in a potential asset for the Company, the recognised asset is limited
to the present value of economic benefits available in the form of any future refunds from the plan or reductions in
future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any
applicable minimum funding requirements.
Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses and the return
on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised
immediately in Other Comprehensive Income (OCI). Net interest expense (income) on the net defined liability
(assets) is computed by applying the discount rate, used to measure the net defined liability (asset). Net interest
expense and other expenses related to defined benefit plans are recognised in the Statement of Profit and Loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to
past service or the gain or loss on curtailment is recognised immediately in the Statement of Profit and Loss. The
Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.
Defined Contribution Plans
Defined Contribution Plans such as Provident Fund, etc. are charged to the Statement of Profit and Loss as
incurred.
2.19 Foreign Currency Transactions:
a) Functional and Presentation Currency:
The Standalone Ind AS financial statements are presented in Indian rupees which is the functional currency
for the Company. All amounts have been rounded off to the nearest millions, unless otherwise indicated.
b) Monetary items:
Transactions in foreign currencies are initially recorded at their respective exchange rates at the date the
transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at exchange rates prevailing
on the reporting date.
Exchange differences arising on settlement or translation of monetary items (except for long term monetary
items taken prior to April 1,2016) are recognised in Statement of Profit and Loss either as Profit or Loss on
foreign currency transaction and translation or as borrowing costs to the extent regarded as an adjustment to
borrowing costs.
The Company has elected to continue the policy adopted under previous GAAP for accounting the foreign
exchange differences arising on settlement or translation of long-term foreign currency monetary items
outstanding as on 31st March, 2016 i.e. foreign exchange differences arising on settlement or translation
of long-term foreign currency monetary items relating to acquisition of depreciable assets are adjusted to
the carrying cost of the assets and depreciated over the balance life of the asset and in other cases, if any,
accumulated in “Foreign Currency Monetary Item Translation Difference Account” and amortised over the
balance period of the asset or liability.
c) Non - Monetary items:
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using
the exchange rates at the dates of the initial transactions.
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