of the acquiree is aggregated with the
corresponding balance appearing in
the financial statements of the acquiror
or is adjusted against general reserve.

- The identity of the reserves is
preserved and the reserves of the
transferor become the reserves of
the transferee.

- The difference, if any, between
the amounts recorded as share
capital issued plus any additional
consideration in the form of cash or
other assets and the amount of share
capital of the acquiree is transferred
to capital reserve and is presented
separately from other capital reserves.

- The financial information in the
financial statements in respect of prior
periods is restated as if the business
combination had occurred from the
beginning of the preceding period in
the financial statements, irrespective
of the actual date of combination.
However, where the business
combination had occurred after that
date, the prior period information is
restated only from that date.

Business combinations (between entities
not having common control) are accounted
for using the acquisition method.

The consideration is measured at the fair
value of the assets transferred, equity
instruments issued and liabilities incurred
or assumed on the date of acquisition, which
is the date on which control is achieved by
the Company. The cost of acquisition also
includes the fair value of any contingent
consideration. Identifiable assets acquired,
and liabilities and contingent liabilities
assumed in a business combination are
measured initially at their fair value on the
date of acquisition.

Goodwill is measured as the excess of the
sum of the consideration transferred, the

amount of any non-controlling interest
in the acquiree, and the fair value of the
acquiror's previously held equity interest
in the acquiree (if any) over the net
acquisition date amounts of the identifiable
assets acquired and the liabilities assumed.

When a business combination is achieved
in stages, the Company's previously
held equity interest in the acquiree is
remeasured to its acquisition date fair
value and the resulting gain or loss, if any, is
recognised in profit or loss. Amounts arising
from interests in the acquiree prior to the
acquisition date that have previously been
recognised in other comprehensive income
are reclassified to profit or loss where such
treatment would be appropriate if that
interests were disposed off.

iii. Classification of assets and liabilities

All assets and liabilities have been
classified as current or non-current based
on the Company's normal operating
cycle and other criteria set out in the
Schedule III to the Companies Act, 2013.
Deferred tax assets and liabilities are
classified as non-current on net basis.

For the above purposes, the Company has
determined the operating cycle as twelve
months based on the nature of products
and the time between the acquisition
of inputs for manufacturing and their
realisation in cash and cash equivalents.

iv. Historical cost convention

The financial statements have been
prepared on going concern basis under the
historical cost convention except:

(a) certain financial instruments (including
derivative instruments) and

(b) defined benefit plans

which are measured at fair value at the end
of each reporting period, as explained in
the accounting policies below.

v. Functional and presentation currency

The Company's functional and presentation
currency is Indian Rupee (?). All amounts
disclosed in the financial statements and
notes have been rounded off to the nearest
lakhs (? lakhs), except otherwise indicated.

vi. Fair value measurement

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

Fair value is the price that would be
received to sell an asset or paid to transfer
a liability in an orderly transaction between
market participants at the measurement
date. The fair value measurement is based
on the presumption that the transaction
to sell the asset or transfer the liability
takes place either

• 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.

The fair value of an asset or a liability is
measured using the assumptions that
market participants would use when
pricing the asset or liability, assuming
that market participants act in their best
economic interest.

All assets and liabilities for which fair value
is measured or disclosed in the financial
statements are categorised within the fair
value hierarchy, described as follows, based
on the lowest level input that is significant
to the fair value measurement as a whole:

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

Level 2 — Valuation techniques for which
the lowest level input that is significant to

the fair value measurement is directly or
indirectly observable.

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

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

B. Property, plant and equipment

(i) Freehold land is carried at historical cost
and all other property, plant and equipment
are shown at cost (net of adjustable
taxes) less accumulated depreciation and
impairment losses if any. The cost of an
asset comprises of its purchase price, non
refundable / non-adjustable purchase
taxes and 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 the
management, the initial estimate of any
decommissioning obligation, if any, and,
borrowing cost for assets that necessarily
take a substantial period of time to get
ready for their intended use. The purchase
price is the aggregate amount paid and the
fair value of any other consideration given
to acquire the asset. The cost also includes
trial run cost and other operating expenses
such as freight, installation charges etc.
The projects under construction are
carried at costs comprising of costs directly
attributable to bringing the asset to the
location and condition necessary for it
to be capable of operating in the manner
intended by management and attributable
borrowing costs.

(ii) Stores and spares which meet the

definition of property, plant and equipment
and satisfy the recognition criteria of

Ind AS 16 are capitalized as property,
plant and equipment.

(iii) When significant parts of plant and

equipment are required to be replaced
at intervals, the Company depreciates
them separately based on their

specific useful lives.

(iv) An item of property, plant and equipment
and any significant part initially recognised
is derecognised upon disposal or when no
future economic benefits are expected from
its use or disposal. Any gain or loss arising
on derecognition of the asset (calculated
as the difference between the net disposal
proceeds and the carrying amount of the
asset or significant part) is included in the
Statement of Profit and Loss when the
asset is derecognised.

(v) I n line with the provisions of Schedule II
to the Companies Act, 2013, the Company
depreciates significant components of the
main asset (which have different useful lives
as compared to the main asset) based on the
individual useful life of those components.
Useful life for such components of property,
plant and equipment has been assessed
based on the historical experience and
internal technical inputs.

(vi) Depreciation on property, plant and
equipment is provided as per written
down value method based on useful
life prescribed under Schedule II to the
Companies Act, 2013.The Company has
assessed the estimated useful lives of its
property, plant and equipment and has
adopted the useful lives and residual value
as prescribed in Schedule II.

Depreciation on stores and spares specific
to an item of property, plant and equipment

is based on life of the related property,
plant and equipment. In other cases, the
stores and spares are depreciated over
their estimated useful life based on the
internal technical inputs.

(vii) The residual values and useful lives of
property, plant and equipment are reviewed
at each financial year end, and changes, if
any, are accounted prospectively.

C. Investment property

Investment properties are properties held to
earn rentals and / or for capital appreciation
(including property under construction for such
purpose). Investment properties are measured
initially at cost, including transaction costs.
Subsequent to initial recognition, investment
properties are measured in accordance with the
requirements of Ind AS 16 for cost model.

An investment property is derecognised upon
disposal or when the investment property
is permanently withdrawn from use and no
future economic benefits are expected from
the disposal. Any gain or loss arising on
derecognition of the property is included in the
Statement of Profit and Loss in the period in
which the property is derecognised.

Depreciation on investment property is provided
as per written down value method based on
estimated useful life which is considered at 60
years based on internal technical inputs.

D. Intangible assets

Intangible assets acquired separately are
measured on initial recognition at cost.
Following initial recognition, intangible assets
are carried at cost less any accumulated
amortisation and impairment losses if any.
Internally generated intangibles are not
capitalised and the related expenditure is
reflected in the Statement of Profit and Loss in
the period in which the expenditure is incurred.

Licences and application softwares are classified
as Intangible Assets collectively termed as
Computer Softwares in the financial statements.

Intangible asset are amortised on a straight-line
basis over their useful life.

Estimated life of Computer Softwares is
considered as 7 years.

E. Borrowing costs

Borrowing costs are charged to Statement of
Profit and Loss except to the extent attributable
to acquisition / construction of an asset that
necessarily takes a substantial period of time to
get ready for its intended use or sale.

Borrowing costs consist of interest and other
costs that an entity incurs in connection with the
borrowing of funds. Borrowing cost also includes
exchange differences to the extent regarded as
an adjustment to the borrowing costs.

F. Impairment of non-financial assets

At each balance sheet date, an assessment
is made of whether there is any indication
of impairment.

If any indication exists, or when annual
impairment testing for an asset is required,
the Company estimates the asset's recoverable
amount. An asset's recoverable amount is the
higher of an asset's or cash-generating unit's
(CGU) fair value less costs of disposal and its
value in use. Recoverable amount is determined
for an individual asset, unless the asset does
not generate cash inflows that are largely
independent of those from other assets or
groups of assets.

When the carrying amount of an asset or CGU
exceeds its recoverable amount, the asset is
considered impaired and is written down to its
recoverable amount.

I n assessing value in use, the estimated future
cash flows are discounted to their present value
using a pre-tax discount rate that reflects current
market assessments of the time value of money
and the risks specific to the asset. In determining
fair value less costs of disposal, recent market
transactions are taken into account. If no such

transactions can be identified, an appropriate
valuation model is used.

The Company bases its impairment calculation
on detailed budgets and forecast calculations,
which are prepared separately for each of
the Company's CGUs to which the individual
assets are allocated.

G. Non-current assets held for sale

Non-current assets classified as held for sale are
measured at the lower of carrying amount and
fair value less costs to sell.

Non-current assets are classified as held for
sale if their carrying amounts will be recovered
through a sale transaction rather than through
continuing use. This condition is regarded as
met only when the sale is highly probable and
the asset is available for immediate sale in its
present condition subject only to terms that are
usual and customary for sale of such assets.

Property, plant and equipment and intangible
assets are not depreciated or amortized once
classified as held for sale.

H. Inventories

Raw and packing materials, fuels, stores and
spares are valued at lower of weighted average
cost and net realisable value. However, materials
and other items held for use in the production
of finished goods are not written down below
cost if the finished products in which they will
be incorporated are expected to be sold at or
above cost. Cost of raw materials and stores
and spares which do not meet the recognition
criteria under property, plant and equipment is
determined on a weighted average basis.

Work-in-progress is valued at weighted average
cost and finished goods are valued at lower of
weighted average cost and net realisable value.
Cost includes direct materials, labour, other
direct cost and manufacturing overheads based
on normal operating capacity.

Traded Goods are valued at lower of weighted
average cost and net realisable value.

Net realisable 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.

I. Revenue recognition

The Company recognises revenue when the
amount of revenue can be reliably measured and
it is probable that future economic benefits will
flow to the entity.

a) Revenue from contracts with customer

Sales are accounted on passing of
significant risks, rewards, and control
of ownership attached to the goods to
customers. Revenue from the sale of goods
(performance obligation) is measured at
the amount of transaction price (net of
variable consideration) allocated to that
performance obligation. The transaction
price of goods sold is net of returns,
applicable discounts and allowances offered
by the Company as a part of the contract.

Revenue from contracts with customers
is recognised when the Company satisfies
performance obligation by transferring
promised goods and services (assets) to
the customers. Performance obligations
are satisfied when the customer obtains
control of the goods. Any amount of
income accrued but not billed to customers
in respect of any contracts is recorded as
a contract asset. Such contract assets are
transferred to trade receivables on actual
billing to customers. 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.
Such contract liabilities are recognised
as revenue when the Company performs
under the contract.

Revenue is measured based on transaction
price of the consideration received or
receivable, stated net of discounts, returns,
and taxes. Transaction price is recognised
based on the price specified in the contract.

Accumulated experience is used to estimate
and provide for the discounts / right of
return, using the expected value method.

b) Processing income

Revenue from services is recognized as
and when the services are rendered on
proportionate completion method.

c) Rental income

Rental income arising from operating leases
of investment properties is accounted
for on a straight-line basis over the lease
unless the payments are structured to
increase in line with the expected general
inflation to compensate for the lessor's
expected inflationary cost increases and is
included in other income in the Statement
of Profit and Loss.

d) Incentives based on renewable energy
generation

Incentives for renewable energy generation
are recognised as income on passing of
significant risks, rewards and control of
ownership attached with such incentive.

e) Interest income

Interest income is recognised using the
effective interest rate method. The effective
interest rate is the rate that exactly discounts
estimated future cash receipts through the
expected life of the financial asset to the
gross carrying amount of a financial asset.
When calculating the effective interest rate,
the Company estimates the expected cash
flows by considering all the contractual
terms of the financial instrument (for
example, prepayment, extension, call and
similar options) but does not consider the
expected credit losses.

f) Dividend income

Dividends are recognised in the Statement
of Profit and Loss only when the right
to receive payment is established, the
economic benefits associated with the
dividend will flow to the Company and
the amount of the dividend can be
measured reliably.

g) Others

Income in respect of export incentives,
insurance / other claims, etc. is recognised
when it is reasonably certain that the
ultimate collection will be made.

J. Expenditure on research and development

Revenue expenditure on Research and
Development is charged to Statement of
Profit and Loss under the appropriate heads
of expenses. Expenditure relating to property,
plant and equipment are capitalised under
respective heads.

Development expenditure incurred on an
individual project is recognized as an intangible
asset when the Company can demonstrate
the following :

a) the technical feasibility of completing the
intangible asset so that it will be available
for use or sale;

b) its intention to complete the asset;

c) its ability to use or sell the asset;

d) how the asset will generate future
economic benefits;

e) the availability of adequate resources to
complete the development and use or
sell the asset and

f) the ability to measure reliably the
expenditure attributable to the intangible
asset during development.

K. Foreign currency transactions

Foreign currency transactions are translated
into the functional currency using exchange
rate prevailing on the date of transaction.
Monetary assets and liabilities are translated
at rate of exchange prevailing at the reporting
date. The difference arising on settlement or
translation on account of fluctuation in the rate

of exchange is dealt within the Statement of
Profit and Loss.

Foreign exchange differences regarded as an
adjustment to borrowing costs are presented in
the Statement of Profit and Loss, as finance costs.
All other foreign exchange gains and losses are
presented in the Statement of Profit and Loss on
a net basis within other gains / (losses).

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.

L. Employee benefits

Short-term obligations

Short-term employee benefits (benefits which
are payable within twelve months after the end
of the period in which employees render service)
are measured at an undiscounted amount in the
Statement of Profit and Loss for the year in
which the related services are rendered.

Post-employment obligations

The Company operates the following
post-employment schemes

• defined benefit plan - gratuity, and

• defined contribution plan provident fund.

Defined benefit plan - Gratuity obligation

Post-employment benefits (benefits which are
payable on completion of employment) are
measured on a discounted basis by the Projected
Unit Credit Method on the basis of actuarial
valuation carried out at each reporting date.

The liability or asset recognised in the Balance
Sheet in respect of defined benefit gratuity
plan is the present value of the defined benefit
obligation at the end of the reporting period less
fair value of plan assets.

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

• re-measurement.

Changes in the present value of the defined
benefit obligation resulting from plan
amendments or curtailments are recognised
immediately in the Statement of Profit and Loss
as past service cost.

The net interest expense or income is included
in employee benefit expense in the Statement of
Profit and Loss.

Re-measurement gains and losses arising
from experience adjustments and changes in
actuarial assumptions are recognised in the
period in which they occur, directly in Other
Comprehensive Income. They are included in
retained earnings in the Statement of Changes
in Equity and in the Balance Sheet.

Defined contribution plan

Contributions to Provident Fund are made in
accordance with the statute and are recognised
as an employee benefit expense when
employees have rendered service entitling them
to the contributions.

Other long-term employee benefit obligations

The eligible employees can accumulate
unavailed privilege leave and are entitled to
encash the same either while in employment,
on termination or on retirement in accordance
with the Company's policy. The present value
of such unavailed leave is measured using the
Projected Unit Credit Method, with actuarial
valuations being carried out at each reporting
date. The benefits are discounted using the
market yields at the end of the reporting period
that have terms approximating to the terms of
the related obligation. Re-measurements as a
result of experience adjustments and changes

in actuarial assumptions are recognised in the
Statement of Profit and Loss.

The obligations are presented as current
liabilities in the Balance Sheet if the entity
does not have an unconditional right to defer
settlement for at least twelve months after the
reporting period, regardless of when the actual
settlement is expected to occur.

M. Leases

The determination of whether an arrangement
is, or contains, a lease is based on the substance
of the arrangement at the inception date,
whether fulfilment of the arrangement is
dependent on the use of a specific asset(s) or
the arrangement conveys a right to use the
asset, even if that right is not explicitly specified
in an arrangement.

a) As a lessee

The Company, as a lessee, recognises a
right-of-use asset and a corresponding
lease liability for its leasing arrangements,
if the contract conveys the right to control
the use of an identified asset.

The contract conveys the right to control
the use of an identified asset, if it involves
the use of an identified asset and the
Company has substantially all of the
economic benefits from use of the asset
and has right to direct the use of the
identified asset.

The cost of the right-of-use asset shall
comprise of the amount of the initial
measurement of the lease liability adjusted
for any lease payments made at or before
the commencement date plus any initial
direct costs incurred. The right-of-use
assets are subsequently measured at
cost less any accumulated depreciation,
accumulated impairment losses, if any
and adjusted for any remeasurement of
the lease liability. The right-of-use assets
are depreciated using the straight-line
method from the commencement date over

the shorter of lease term or useful life of
right-of-use asset.

The Company measures the lease liability
at the present value of the lease payments
that are not paid at the commencement
date of the lease. The lease payments are
discounted using the interest rate implicit
in the lease, if that rate can be readily
determined. If that rate cannot be readily
determined, the Company uses incremental
borrowing rate.

For short-term and low value leases, the
Company recognises the lease payments
as an operating expense on a straight-line
basis over the lease term.

b) As a Lessor

Rental income from operating leases is
generally recognised on a straight-line
basis over the period of the lease unless
the rentals are structured to increase in
line with expected general inflation to
compensate for the Company's expected
inflationary cost increases and is included
in revenue in the Statement of Profit and
Loss due to its operating nature.

N. Government grants

Government grants are recognized when there
is reasonable assurance that the grant will
be received and all attached conditions will
be complied with.

The benefit of a government loan at a below
market rate of interest is treated as a government
grant, measured as the difference between
proceeds received and the initial fair value of
loan based on prevailing market interest rates.

Government grants are recognised in Statement
of Profit and Loss on a systematic basis over
the periods in which the Company recognises as
expenses the related costs for which the grants
are intended to compensate.

O. Taxation

Income tax expense comprises of current tax
expense and the net change in the deferred tax
asset or liability during the year. Current and
deferred tax are recognised in the Statement of
Profit and Loss, except when they relate to items
that are recognised in other comprehensive
income or directly in equity, in which case, the
current and deferred tax are also recognised
in other comprehensive income or directly in
equity, respectively.

(a) Current Tax

Current tax expense is determined as the
amount of tax payable in respect of taxable
income for the year.

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
time of reporting.

(b) Deferred Tax

Deferred income tax is recognised using the
balance sheet approach. Deferred income
tax assets and liabilities are recognised
for deductible and taxable temporary
differences arising between the tax
base of assets and liabilities and their
carrying amount.

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 assets and liabilities are
measured at the tax rates that are expected
to apply in the year when the asset is
realised or the liability is settled, based
on tax rates (and tax laws) that have been
enacted or substantively enacted at the
reporting date.

Deferred tax assets and deferred tax
liabilities are off set if a legally enforceable
right exists to set off current tax assets
against current tax liabilities and the
deferred taxes relate to the same taxable
entity and the same taxation authority.

P. Segment reporting

The Chairman and Managing Director (CMD) of
the Company is the Chief Operating Decision
Maker (CODM). The CODM monitors the operating
results of its business segments separately for
the purpose of making decisions about resources
allocation and performance assessment.
Segment performance is evaluated based on
profit or loss and is measured consistently with
profit or loss in the financial statements.

The operating segments have been identified on
the basis of nature of products / service.

a) Segment revenue includes sales and other
income directly attributable / allocable to
segments including inter-segment revenue.

b) Expenses directly identifiable with /
allocable to segments are considered

for determining the segment results.
Expenses which relate to the Company as
a whole and not allocable to segments are
included under un-allocable expenditure.

c) I ncome which relates to the Company as
a whole and not allocable to segments is
included in un-allocable income.

d) Segment results include margins on
inter-segment sales which are reduced
in arriving at the profit before tax
of the company.

e) Segment assets and liabilities include those
directly identifiable with the respective
segments. Un-allocable assets and
liabilities represent the assets and liabilities
that relate to the Company as a whole and
not allocable to any segment.

Q. Earnings per share

Basic earnings per share is calculated by
dividing the net profit or loss for the year after
tax attributable to equity shareholders by the
weighted average number of equity shares
outstanding during the year. The weighted
average number of equity shares outstanding
during the year is adjusted for events, if any,
such as bonus issue, bonus elements in a rights
issue to existing shareholders, shares split and
reverse shares split (consolidation of shares).
For the purpose of calculating diluted earnings
per share, the net profit or loss for the year after
tax attributable to equity shareholders and
the weighted average number of equity shares
outstanding during the year are adjusted for the
effects of all dilutive potential equity shares.