2 Material Accounting Policies

2.1 Statement of compliance

These financial statements are prepared in accordance with
Indian Accounting Standard (Ind AS) and the provisions of the
Companies Act, 2013 (‘the Act') (to the extent notified) The Ind
AS are prescribed under Section 133 of the Act read with Rule

3 of the Companies (Indian Accounting Standards) Rules, 2015
and relevant amendment rules issued thereafter.

2.2 Basis of preparation and presentation

The financial statements have been prepared on the historical
cost basis except for certain financial instruments that are
measured at fair values at the end of each reporting period, as
explained in the accounting policies below.

Historical cost is generally based on the fair value of the
consideration given in exchange for goods and services.

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 and Ind AS 19 for gratuity and leave encashment purpose.

In addition, for financial reporting purposes, fair value
measurements are categorised 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.

2.3 Revenue recognition

Revenue from contracts with customers is recognized when the
control of the goods or services is transferred to the customers
on satisfaction of distinct performance obligations at the amount
of transaction price (net of discounts, rebates etc.), excluding
amounts collected on behalf of third parties (for example
taxes and duties collected on behalf of the government).
Amount disclosed as revenue are net of returns and allowances,
trade discounts and rebates.

The Company is generally the principal as it typically controls
the goods or services before transferring them to the customer.

The Company disaggregates revenue from contracts with
customers by nature of goods and service.

Revenue from rendering of services is recognized over time
by measuring the progress toward complete satisfaction of
performance obligations at the reporting period.

The revenue in respect of RoDTEP, duty drawback and similar
other export benefits is recognized in the year of exports based
on eligibility and when there is no uncertainty in receiving the
same.

2.3.1 Dividend Income

Dividend on financial assets is recognised when the Company's
right to receive the dividends is established, it is probable that
the economic benefits associated with the dividend will flow to
the entity, the dividend does not represent a recovery of part
of cost of the investment and the amount of dividend can be
measured reliably.

2.3.2 Interest 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.

2.3.3 Contract balances - Trade receivables

A receivable represents the Company's right to an amount of
consideration that is unconditional. Trade receivables that do
not contain a significant financing component are measured at
transaction price.

2.4 Government grants

Government grants are not recognised until there is reasonable
assurance that the Company will comply with the conditions
attaching to them and that the grants will be received.

Government grants recoverable upto financial year 2017-18
are recognised in profit or 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.

As per the amendment in Ind-AS 20 “Government Grants”
w.e.f April 1, 2018, the Company had opted to present the
grant received/receivable after April 01,2018 related to assets
as deduction from the carrying value of such specific assets.

If the companies, has complied with the conditions attached to
the particulars/scheme then, it rightful becomes entitle to the
incentives attached to the scheme. Accordingly, such incentive
receivable will fall under the definition of financial instruments
and will be acconted as a financial assets as per Ind AS 109.”

2.5 Borrowing costs

Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are assets
that necessarily take a substantial period of time to get ready
for their intended use or sale, are added to the cost of those
assets, until such time as the assets are substantially ready for
their intended use or sale.

Interest income earned on the temporary investment of specific
borrowings pending their expenditure on qualifying assets is
deducted from the borrowing costs eligible for capitalisation.

2.6 Foreign currencies

In preparing the financial statements of the Company,
transactions in currencies other than the entity's functional
currency (foreign currencies) are recognised at the rates of
exchange prevailing at the dates of the transactions. At the end
of each reporting period, monetary items denominated in foreign
currencies are retranslated at the rates prevailing at that date.
Non-monetary items carried at fair value that are denominated in
foreign currencies are retranslated at the rates prevailing at the
date when the fair value was determined. Non-monetary items
that are measured in terms of historical cost in a foreign currency
are not retranslated.

2.7 Employee benefits

2.7.1 Retirement benefit costs and termination
benefits

Payments to defined contribution retirement benefit plans are
recognised as an expense when employees have rendered
service entitling them to the contributions.

For defined benefit retirement benefit plans, the cost of providing
benefits is determined using the projected unit credit method,
with actuarial valuations being carried out at the end of each
annual reporting period. Re-measurement, 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), is reflected immediately in the balance sheet with a
charge or credit recognised in other comprehensive income in
the period in which they occur. Re-measurement recognised in
other comprehensive income is reflected immediately in retained
earnings and is not reclassified to profit or loss. Past service cost
is recognised in profit or loss in the period of a plan amendment.
Net interest is calculated by applying the discount rate at the
beginning of the period to the net defined benefit liability or
asset. Defined benefit costs are categorised as follows:

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

b. net interest expense or income; and

c. re-measurement

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.

The retirement benefit obligation recognised in the balance
sheet represents the actual deficit or surplus in the Company's

defined benefit plans. Any surplus resulting from this calculation
is limited to the present value of any economic benefits available
in the form of refunds from the plans or reductions in future
contributions to the plans.

A liability for a termination benefit is recognised at the earlier
of when the entity can no longer withdraw the offer of the
termination benefit and when the entity recognises any related
restructuring costs.

2.7.2 Short-term and other long-term employee
benefits

A liability is recognised for benefits accruing to employees in
respect of wages and salaries, and annual leave in the period
the related service is rendered at the undiscounted amount of
the benefits expected to be paid in exchange for that service.

Liabilities recognised in respect of short-term employee benefits
are measured at the undiscounted amount of the benefits
expected to be paid in exchange for the related service.

Liabilities recognised in respect of other long-term employee
benefits are measured at the present value of the estimated
future cash outflows expected to be made by the Company in
respect of services provided by employees up to the reporting
date.

2.8 Share-based payment arrangements
Share-based payment transactions of the Company

Equity-settled share-based payments to employees and others
providing similar services are measured at the fair value of the
equity instruments at the grant date. Details regarding the
determination of the fair value of equity-settled share-based
transactions are set out in note no. 45.

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 equity. 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 profit or loss such that
the cumulative expense reflects the revised estimate, with a
corresponding adjustment to the equity-settled employee option
outstanding account.

2.9 Taxation

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

2.9.1 Current tax

The tax currently payable is based on taxable profit for the year.
Taxable profit differs from ‘profit before tax' as reported in the
statement of profit and loss because of items of income or
expense that are taxable or deductible in other years and items
that are never taxable or deductible. The Company's current
tax is calculated using tax rates that have been enacted or
substantively enacted by the end of the reporting period.

Current income tax assets/liabilities for current year is recognized
at the amount expected to be paid to and/or recoverable from
the tax authorities.

2.9.2 Deferred tax

Deferred tax is recognised 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 generally
recognised for all taxable temporary differences. Deferred tax
assets are generally 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 utilised. 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.

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.

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 realised, based on tax rates (and tax laws)
that have been enacted or substantively enacted by the end of
the reporting period.

The measurement of deferred tax liabilities and assets reflects
the tax consequences that would follow from the manner in
which the Company expects, at the end of the reporting
period, to recover or settle the carrying amount of its assets
and liabilities.

2.9.3 Current and deferred tax for the year

Current and deferred tax are recognised in profit or 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.

2.9.4 Appendix C to Ind AS 12 Uncertainty over
Income Tax Treatment

The appendix addresses the accounting for income taxes when
tax treatments involve uncertainty that affects the application of
Ind AS 12 Income Taxes. It does not apply to taxes or levies
outside the scope of Ind AS 12, nor does it specifically include
requirements relating to interest and penalties associated with
uncertain tax treatments. The Appendix specifically addresses
the following:

• Whether an entity considers uncertain tax treatments
separately

• The assumptions an entity makes about the examination of
tax treatments by taxation authorities

• How an entity determines taxable profit (tax loss), tax bases,
unused tax losses, unused tax credits and tax rates

• How an entity considers changes in facts and circumstances

The Company determines whether to consider each uncertain
tax treatment separately or together with one or more other
uncertain tax treatments and uses the approach that better
predicts the resolution of the uncertainty.

The Company applies significant judgement in identifying
uncertainties over income tax treatments.

2.10 Property, plant and equipment (PPE)

Land and buildings held for use in the production or supply of
goods or services, or for administrative purposes, are stated
in the balance sheet at cost less accumulated depreciation
and accumulated impairment losses. Freehold land is not
depreciated.

The cost of an item of Property, plant and equipment comprises:

a. its purchase price including import duties and non-refundable
purchase taxes after deducting trade discounts and rebates

b. any attributable expenditure directly attributable for bringing
an asset to the location and the working condition for its
intended use and

c. the initial estimate of the costs of dismantling and removing
the item and restoring the site on which it is located, the
obligation for which an entity incurs either when the item
is acquired or as a consequence of having used the item
during a particular period for purposes other than to produce
inventories during that period.

The Company has elected to continue with the carrying value
of all its PPE recognised as on April 1,2015 measured as per
the previous GAAP and use that carrying value as its deemed
cost as on transition date.

Depreciation is provided on Straight Line Method on the basis
of useful lives of such assets specified in Schedule II to the
Companies Act, 2013 except the assets costing H5000/- or
below on which depreciation is charged @ 100%. Depreciation is
calculated on pro-rata basis.

The estimated useful life of the assets have been assessed based
on technical advice, taking into account the nature of the asset,
the estimated usage of the asset, the operating conditions of
the asset, past history of replacement, anticipated technological
changes, manufacturers warranties and maintenance support
etc and are as under:

Buildings 3 - 60 years

Plant and Equipment 5 - 40 years

Furniture and Fixtures & Office Equipment 3- 10 years
Vehicles 8 - 10 years

Advances paid towards the acquisition of property, plant and
equipment outstanding at each balance sheet date is classified
as capital advances under other non-current assets and the
cost of assets not put to use before such date are disclosed
under ‘Capital work-in-progress'. Subsequent expenditures
relating to property, plant and equipment is capitalized only
when it is probable that future economic benefits associated
with these will flow to the Company and the cost of the item
can be measured reliably. Repairs and maintenance costs are
recognized in net profit in the statement of profit and loss when
incurred. The cost and related accumulated depreciation are
eliminated from the financial statements upon sale or retirement
of the asset and the resultant gains or losses are recognized in
the statement of profit and loss. Assets to be disposed off are
reported at the lower of the carrying value or the fair value less
cost to sell.

Depreciation is recognised so as to write off the cost of assets
(other than freehold land and properties under construction) less
their residual values over their useful lives, using the straight-line
method. 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.

2.11 Intangible assets

2.11.1 Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired
separately are carried at cost less accumulated amortisation and
accumulated impairment losses. Amortisation is recognised on a
straight-line basis over their estimated useful lives. The estimated
useful life and amortisation method are reviewed at the end of
each reporting period, with the effect of any changes in estimate
being accounted for on a prospective basis. Intangible assets
with indefinite useful lives that are acquired separately are
carried at cost less accumulated impairment losses.

The Company has elected to continue with the carrying value of
all its intangible assets recognised as on April 1,2015 measured
as per the previous GAAP and use that carrying value as its
deemed cost as on transition date.

2.11.2 De-recognition of intangible assets

An intangible asset is derecognised 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 recognised in profit
or loss when the asset is derecognised.

2.11.3 Useful lives of intangible assets

Estimated useful lives of the intangible assets are as follows:
Computer softwares 6 years

Contribution to CETP 5 years

Right to use power lines 5 Years

2.12 Impairment of tangible and intangible assets
other than goodwill

At the end of each reporting period, the Company reviews
the carrying amounts of its tangible and intangible assets to
determine whether there is any indication that those assets
have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss (if any). When it is
not possible to estimate the recoverable amount of an individual
asset, the Company estimates the recoverable amount of the
cash-generating unit to which the asset belongs. When a
reasonable and consistent basis of allocation can be identified,
corporate assets are also allocated to individual cash-generating
units, or otherwise they are allocated to the smallest Company
of cash-generating units for which a reasonable and consistent
allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible
assets not yet available for use are tested for impairment at
least annually, and whenever there is an indication that the asset
may be impaired.

Recoverable amount is the higher of fair value less costs of
disposal and value in use. In 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 for which the estimates of future cash flows have
not been adjusted.

If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to
its recoverable amount. An impairment loss is recognised
immediately in profit or loss.

When an impairment loss subsequently reverses, the carrying
amount of the asset (or a cash-generating unit) is increased
to the revised estimate of its recoverable amount, but so that
the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment
loss been recognised for the asset (or cash-generating unit)
in prior years. A reversal of an impairment loss is recognised
immediately in profit or loss.

2.13 Leases

The Company as Lessee

The Company's lease asset classes primarily consist of leases
for land and buildings. The Company assesses whether a
contract 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
recognizes 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 low value leases. For these short-term and low
value leases, the Company recognizes the lease payments as
an operating expense on a straight-line basis over the term of
the lease.

Certain lease arrangements includes the options to extend or
terminate the lease before the end of the lease term. ROU assets
and lease liabilities includes these options when it is reasonably
certain that they will be exercised.

The right-of-use assets are initially recognized 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 and an estimate of costs to be incurred by the lessee
in dismantling and removing the underlying asset or restoring
the underlying asset or site on which it is located. They are
subsequently measured at cost less accumulated depreciation
and impairment losses.

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. Right of use assets are
evaluated for recoverability whenever events or changes in
circumstances indicate that their carrying amounts may not
be recoverable. For the purpose of impairment testing, the
recoverable amount (i.e. the higher of the fair value less cost to
sell and the value-in-use) is determined on an individual asset
basis unless the asset does not generate cash flows that are
largely independent of those from other assets. In such cases,
the recoverable amount is determined for the Cash Generating
Unit (CGU) to which the asset belongs.

The lease liability is initially measured at amortized cost 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
in the country of domicile of these leases. Lease liabilities are
remeasured with a corresponding adjustment to the related right
of use asset if the Company changes its assessment if whether
it will exercise an extension or a termination option.

Lease liability and ROU asset have been separately presented
in the Balance Sheet and lease payments have been classified
as financing cash flows.

The Company as a lessor

Leases for which the Company is a lessor is classified as a
finance or operating lease. Whenever the terms of the lease
transfer substantially all the risks and rewards of ownership to
the lessee, the contract is classified as a finance lease. All other
leases are classified as operating leases.

When the Company is an intermediate lessor, it accounts for
its interests in the head lease and the sublease separately.

The sublease is classified as a finance or operating lease by
reference to the right-of-use asset arising from the head lease.

For operating leases, rental income is recognized on a straight
line basis over the term of the relevant lease.

2.14 Inventories

Inventories are valued at cost or net realizable value, whichever
is lower. The cost in respect of the various items of inventory is
computed as under:

In case of raw materials at weighted average cost plus direct
expenses. The cost includes cost of purchase and other costs
incurred in bringing the inventories to their present location and
condition.

In case of stores and spares at weighted average cost plus
direct expenses. The cost includes cost of purchase and other
costs incurred in bringing the inventories to their present location
and condition.

In case of work in progress at raw material cost plus conversion
costs depending upon the stage of completion.

In case of finished goods at raw material cost plus conversion
costs, packing cost, non recoverable indirect taxes (if applicable)
and other overheads incurred to bring the goods to their present
location and condition.

In case of by-products at estimated realizable value.

Net realizable value is the estimated selling price in ordinary
course of business, less estimated costs of completion and the
estimated costs necessary to make the sale.