2A. MATERIAL ACCOUNTING POLICIES
a. Basis of preparation and compliance with Ind AS
These standalone financial statements of the
Company have been prepared in accordance with
Indian Accounting Standard () and presentation
requirements of Division II of Schedule III to the
Companies Act, 2013, ( compliant Schedule III) under
the historical cost convention on the accrual basis
except for certain financial instruments which are
measured at fair value. The are prescribed under
Section 133 of the Companies Act, 2013 (the 'Act')
read with Rule 3 of the Companies (Indian Accounting
Standards) Rules, 2015 as amended from time to
time and other relevant provisions of the Act. The
accounting policies have been applied consistently over
the periods presented in the financial statements.
These financial statements were approved for issue by
the Board of Directors on 12th May, 2025.
These Financial Statements are prepared in Indian
Rupee which is the Company's functional currency. All
financial information presented in Rupees has been
rounded to the nearest lakhs, except where otherwise
indicated. The Company has prepared the financial
statements on the basis that it will continue to operate
as a going concern.
b. Current versus non-current classification
The Company presents assets and liabilities in the
Balance Sheet based on current / non-current
classification. An asset is treated as current when it is:
• Expected to be realised or intended to be sold or
consumed in normal operating cycle
• Held primarily for the purpose of trading
(All amounts in Rs. lakhs unless stated otherwise)
• Expected to be realised within twelve months after
the reporting period, or
• Cash or cash equivalents unless restricted from
being exchanged or used to settle a liability for at
least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:
• It is expected to be settled in normal
operating cycle
• It is held primarily for the purpose of trading
• It is due to be settled within twelve months after
the reporting period, or
• There is no unconditional right to defer the
settlement of the liability for at least twelve
months after the reporting period.
The Company classifies all other liabilities as non¬
current.
Deferred tax assets and liabilities and advance
income taxes paid are classified as non-current assets
and liabilities.
The operating cycle is the time between the acquisition
of assets for processing and their realisation in cash
and cash equivalents. The Company has identified
twelve months as its operating cycle.
Basis of measurement
Fair value measurement
The Company measures financial instruments, such
as, derivatives at fair value at each balance sheet
date. 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 economic
best interest.
A fair value measurement of a non-financial asset takes
into account a market participant's ability to generate
economic benefits by using the asset in its highest and
best use or by selling it to another market participant
that would use the asset in its highest and best use.
The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximising the use of relevant observable inputs and
minimising the use of unobservable inputs.
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 the purpose of fair value disclosures, the Company
has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the
asset or liability and the level of the fair value hierarchy
as explained above.
c. Revenue from contract with customers
Revenue from contracts with customers is recognised
at a point in time when control of the goods or services
are transferred to the customer at an amount that
reflects the consideration to which the Company
expects to be entitled to in exchange for those goods
or services. The Company has generally concluded that
it is the principal in its revenue arrangements because
it typically controls the goods or services before
transferring them to the customer.
Revenue from sale of goods is recognised at the point
in time when control is transferred to the customer.
Generally, control is transferred upon shipment of
goods to the customer or when the goods are made
available to the customer, provided transfer of title
to the customer occurs and the Company has not
retained any significant risks of ownership or future
obligations with respect to the goods shipped.
Revenue from rendering of services is recognised over
time by measuring the progress towards complete
satisfaction of performance obligations at the
reporting period.
Revenue is measured at the amount of consideration
which the Company expects to be entitled to in
exchange for transferring distinct goods or services
to a customer as specified in the contract, excluding
amounts collected on behalf of third parties (for
example taxes and duties collected on behalf of
the Government). Consideration is generally due
upon satisfaction of performance obligations
and a receivable is recognised when it becomes
unconditional. Generally, the credit period varies
between 30-240 days from the shipment or delivery
of goods or services as the case may be. The Company
provides volume rebates to certain customers once
the quantity of products purchased during the period
exceeds a threshold specified and also accrues
discounts to certain customers based on customary
business practices.
Goods and service tax (GST) is not received by the
Company on its own account. Rather, it is tax collected
on value added to the commodity by the seller on
behalf of the Government. Accordingly, it is excluded
from revenue.
Sale of Power
Revenue from sale of power is recognised over time
for each unit of electricity delivered to the customer
based at the contracted rate which is as per the
approved tariff rates established by the respective
regulatory authorities.
Interest income
Interest income is included in other income in
the Statement of Profit and Loss. For all financial
instruments, interest income is recorded using the
effective interest rate (EIR). EIR is the rate that exactly
discounts the estimated future cash payments
or receipts over the expected life of the financial
instrument or a shorter period, where appropriate,
to the gross carrying amount of the financial asset
or to the amortised cost of a financial liability. When
calculating the effective interest rate, the Company
estimates the expected cash flows by considering all
the contractual terms of the financial instrument but
does not consider the expected credit losses.
Insurance Claims
A receivable for insurance recovery is recognised
where it is virtually certain that it will be received if the
Company settles the obligation. An insurance recovery
is considered as virtually certain if it has been accepted
by the insurance company and it is determined that
the Company has a valid insurance policy that includes
cover for the incident and that a claim will be settled
by the insurer.
The specific recognition criteria described above must
also be met before revenue is recognised:
Dividends
Dividends are recognised when the Company's right to
receive the payment is established which is generally
when shareholders approve the dividend.
Contract balances
Contract assets
A contract asset is the right to consideration in
exchange for goods or services transferred to the
customer. If the Company performs by transferring
goods or services to a customer before the
customer pays consideration or before payment is
due, a contract asset is recognised for the earned
consideration that is conditional. Contract assets are
subject to impairment assessment.
Trade receivables
A receivable represents the Company's right to an
amount of consideration that is unconditional (i.e., only
the passage of time is required before payment of the
consideration is due).
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 transfers goods
or 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 (i.e., transfers control of the related
goods or services to the customer).
d. Property, plant and equipment
Property, plant and equipment (PP&E) is stated
at cost, net of accumulated depreciation and
accumulated impairment losses, if any. The initial
cost of PP&E comprises its purchase price, including
import duties and non-refundable purchase taxes,
attributable borrowing cost and any other directly
attributable costs of bringing an asset to working
condition and location for its intended use.
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 entity and the cost can be measured reliably.
PP&E which are significant to the total cost of that
item of PP&E and having different useful life are
accounted separately.
Other indirect expenses incurred relating to project,
net of income earned during the project development
stage prior to its intended use, are considered as
pre-operative expenses and disclosed under Capital
work-in-progress.
Expenditure incurred after the PP&E have been put
into operation, such as repairs and maintenance, are
normally charged to the Statements of Profit and Loss
in the period in which the costs are incurred. Major
inspection and overhaul expenditure is capitalized if
the recognition criteria are met.
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. Likewise, when a major inspection is
performed, its cost is recognised in the carrying
amount of the plant and equipment as a replacement
if the recognition criteria are satisfied. All other
repair and maintenance costs are recognised in the
Standalone Statement of Profit and Loss as incurred.
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) is included in
the Statement of Profit and Loss, when the asset
is derecognised.
The residual values, useful lives and methods of
depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted
prospectively, if appropriate.
(i) Capital work-in-progress
Capital work-in-progress is stated at cost, net of
accumulated impairment losses, if any. Assets in
the course of construction are capitalized in capital
work-in-progress account. At the point when an asset
is capable of operating in the manner intended by
management, the cost of construction is transferred
to the appropriate category of property, plant
and equipment.
(ii) Depreciation
Assets in the course of development or construction
and freehold land are not depreciated.
Other property, plant and equipment are stated at
cost less accumulated depreciation and any provision
for impairment. Depreciation commences when the
assets are ready for their intended use.
Depreciation is calculated on the depreciable amount,
which is the cost of an asset less its residual value.
Depreciation is provided at rates calculated to write
off the cost, less estimated residual value, of each
asset on a straight line method basis over its expected
useful life (determined by the management based on
technical estimates), as follows:
*Roads included under buildings are depreciated considering
useful life of 3-10 years
** Stores and spares, having useful life of more than one year,
included under plant and equipment are depreciated considering
useful life of 2-9 years
The Company, based on technical assessment made
by technical expert and management estimate,
depreciates certain items of building, plant and
equipment, electrical installation and water treatment
and supply over estimated useful lives which are
different from the useful life prescribed in Schedule II
to the Companies Act, 2013.
The management believes that these estimated useful
lives are realistic and reflect fair approximation of the
period over which the assets are likely to be used.
Major inspection and overhaul costs are depreciated
over the estimated life of the economic benefit
derived from such cost. The carrying amount of the
remaining previous overhaul cost is charged to the
Standalone Statement of Profit and Loss if the next
overhaul is undertaken earlier than the previously
estimated life of the economic benefit.
When significant spare 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.
e. Intangible assets
Intangible assets acquired separately are measured
on initial recognition at cost net of recoverable
taxes, trade discount and rebates. Such cost
includes purchase price, borrowing costs, and any
cost directly attributable to bringing the asset
to its working condition for the intended use
attributable to the intangible assets. Following initial
recognition, intangible assets are carried at cost less
any accumulated amortisation and accumulated
impairment losses, if any.
The Company has intangible assets with finite
useful lives.
Computer softwares are amortised on straight-line
method at the rates determined based on estimated
useful lives which vary from 3 years to 6 years.
Intangible assets with finite lives are assessed for
impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation
period and the amortisation method for an intangible
asset with a finite useful life are reviewed at least at
the end of each reporting period. The amortisation
expense on intangible assets with finite lives is
recognised in the Statement of Profit and Loss unless
such expenditure forms part of carrying value of
another asset.
An intangible asset is derecognised upon disposal
(i.e., at the date the recipient obtains control) or
when no future economic benefits are expected
from its use or disposal. Gains or losses arising from
derecognition of an intangible asset are measured as
the difference between the net disposal proceeds and
the carrying amount of the asset and are recognised
in the Statement of Profit and Loss when the asset
is derecognised.
Research and development costs
Research costs are expensed to the Statement of
Profit and Loss as incurred. Development expenditure
on an individual project is recognised as an intangible
asset when the Company can demonstrate:
(i) The technical feasibility of completing the
intangible asset so that the asset will be available
for use or sale
(ii) Its intention to complete and its ability and
intention to use or sell the asset
(iii) How the asset will generate future
economic benefits
(iv) The availability of resources to complete the asset
(v) The ability to measure reliably the expenditure
during development
Following initial recognition of the development
expenditure as an asset, the asset is carried at cost
less any accumulated amortisation and accumulated
impairment losses. Amortisation of the asset begins
when development is complete and the asset is
available for use. It is amortised over the period
of expected future benefit and the expense is
recognised in the Statement of Profit and Loss unless
such expenditure forms part of carrying value of
another asset.
During the period of development, the asset is tested
for impairment annually.
f. Non-current assets held for sale
The Company classifies non-current assets as held
for sale if their carrying amounts will be recovered
principally through a sale rather than through
continuing use. Non-current assets and disposal
groups classified as held for sale are measured at
the lower of their carrying amount and fair value
less costs to sell. Costs to sell are the incremental
costs directly attributable to the disposal of an asset
(disposal group), excluding finance costs and income
tax expense.
The criteria for held for sale classification is regarded
to be met only when the assets are available for
immediate sale in its present condition, subject only
to terms that are usual and customary for sale of such
assets, its sale is highly probable; and it will genuinely
be sold, not abandoned. The Company treats sale of
the asset to be highly probable when:
• The appropriate level of management is committed
to a plan to sell the asset,
• An active programme to locate a buyer and
complete the plan has been initiated (if applicable),
• The asset is being actively marketed for sale at a
price that is reasonable in relation to its current fair
value,
• The sale is expected to qualify for recognition as
a completed sale within one year from the date of
classification , and
Actions required to complete the plan indicate that it
is unlikely that significant changes to the plan will be
made or that the plan will be withdrawn.
Assets and liabilities classified as held for sale are
presented separately in the Balance Sheet.
Property, plant and equipment and intangible
once classified as held for sale are not depreciated
or amortised.
g. Foreign currencies
In the financial statements of the Company,
transactions in currencies other than the functional
currency are translated into the functional currency
at the exchange rates prevailing at the date of
the transaction.
Monetary assets and liabilities denominated in other
currencies are translated at the functional currency
spot rates of exchange at the reporting date. Exchange
differences arising on settlement or translation of
monetary items are recognised in the Statement of
Profit and Loss. Non-monetary assets and liabilities
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. Non¬
monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the
date when the fair value is determined. The gain or loss
arising on translation of non-monetary items measured
at fair value is treated in line with the recognition of
the gain or loss on the change in fair value of the item
(i.e., translation differences on items whose fair value
gain or loss is recognised in Other Comprehensive
Income (OCI) or Statement of Profit and Loss are also
recognised in OCI or Statement of Profit and Loss,
respectively).
In case of an asset, expense or income where a
non-monetary advance is paid/received, the date
of transaction is the date on which the advance was
initially recognised. If there were multiple payments
or receipts in advance, multiple dates of transactions
are determined for each payment or receipt of
advance consideration.
h. Taxes
Current income tax
Current income tax assets and liabilities are measured
at the amount expected to be recovered from or
paid to the taxation authorities. The tax rates and
tax laws used to compute the amount are those
that are enacted or substantively enacted, at the
reporting date.
Current income tax relating to items recognised
outside profit and loss is recognised either in Other
Comprehensive Income (OCI) or in equity.
Current tax items are recognised in correlation to
the underlying transaction either in OCI or directly
in equity. Management periodically evaluates
positions taken in the tax returns with respect to
situations in which applicable tax regulations are
subject to interpretation and establishes provisions
where appropriate.
Deferred tax
Deferred tax is provided using the liability 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, except when it is probable
that the temporary differences will not reverse in the
foreseeable future.
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 utilized.
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 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 relating to items recognised outside
profit and loss is recognised either in OCI or in equity.
Deferred tax assets and deferred tax liabilities are
offset 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.
GST paid on acquisition of assets or on incurring
expenses
Expenses and assets are recognised net of the amount
of GST paid, except:
• When the tax incurred on a purchase of assets
or services is not recoverable from the taxation
authority, in which case, the tax paid is recognised
as part of the cost of acquisition of the asset or as
part of the expense item, as applicable.
• When receivables and payables are stated with the
amount of tax included.
i. Borrowing costs
Borrowing costs directly attributable to the
acquisition, construction or production of an asset
that necessarily takes a substantial period of time to
get ready for its intended use or sale are capitalised as
part of the cost of the asset. Where the funds used to
finance an acquisition, construction or production of
an asset, form part of general borrowings, the amount
capitalised is calculated using a weighted average of
rates applicable to relevant general borrowings of the
Company during the year. All other borrowing costs are
expensed in the period in which they occur. Borrowing
costs consist of interest and other costs that an entity
incurs in connection with the borrowing of funds.
j. Leases
The Company assesses at contract inception
whether a contract is, or contains, a lease. That is, if
the contract conveys the right to control the use of
an identified asset for a period of time in exchange
for consideration.
Company as a lessee
The Company applies a single recognition and
measurement approach for all leases, except for
short-term leases and leases of low-value assets. The
Company recognises lease liabilities to make lease
payments and right-of-use assets representing the
right to use the underlying assets.
i) Right-of-use assets
The Company recognises right-of-use assets
at the commencement date of the lease (i.e.,
the date the underlying asset is available for
use). 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. Right-of-use assets
are measured at cost, less any accumulated
depreciation and impairment losses and adjusted
for any remeasurement of lease liabilities. The
cost of right-of-use assets includes the amount
of lease liabilities recognised, initial direct costs
incurred and lease payments made at or before
the commencement date less any lease incentives
received. Right-of-use assets are depreciated on
a straight-line basis over the lease term (30-99
years).
If ownership of the leased asset transfers to the
Company at the end of the lease term or the cost
reflects the exercise of a purchase option, depreciation
is calculated using the estimated useful life of
the asset.
The right-of-use assets are also subject to impairment.
ii) Lease liabilities
At the commencement date of the lease, the
Company recognises lease liabilities measured at
the present value of lease payments to be made
over the lease term. The lease payments include
fixed payments (including in substance fixed
payments) less any lease incentives receivable,
variable lease payments that depend on an index
or a rate and amounts expected to be paid under
residual value guarantees. The lease payments
also include the exercise price of a purchase
option reasonably certain to be exercised by
the Company and payments of penalties for
terminating the lease, if the lease term reflects
the Company exercising the option to terminate.
Variable lease payments that do not depend on
an index or a rate are recognised as expenses
(unless they are incurred to produce inventories)
in the period in which the event or condition that
triggers the payment occurs.
In calculating the present value of lease
payments, the Company uses its incremental
borrowing rate at the lease commencement
date because the interest rate implicit in the
lease is not readily determinable. After the
commencement date, the amount of lease
liabilities is increased to reflect the accretion
of interest and reduced for the lease payments
made. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification,
a change in the lease term, a change in the lease
payments (e.g., changes to future payments
resulting from a change in an index or rate used
to determine such lease payments) or a change
in the assessment of an option to purchase the
underlying asset.
iii) Short-term leases and leases of low-value assets
The Company applies the short-term lease
recognition exemption to its short-term leases
of machinery and equipment (i.e., those leases
that have a lease term of 12 months or less from
the commencement date and do not contain
a purchase option). It also applies the lease of
low-value assets recognition exemption to leases
of office equipment that are considered to be
low value. Lease payments on short-term leases
and leases of low-value assets are recognised as
expense on a straight-line basis over the lease
term.”
k. Inventories
Inventories are valued at the lower of cost and net
realisable value.
Costs incurred in bringing each product to its present
location and condition are accounted for as follows:
• Raw materials and packing materials, Stores and
spares parts and loose tools, Stock-in-trade: Cost
includes cost of purchase and other costs incurred
in bringing the inventories to their present location
and condition. Cost is determined on weighted
average basis.
• Work-in-progress and finished goods: Cost includes
cost of direct materials and cost of conversion and
a proportion of manufacturing overheads based
on the normal operating capacity but excluding
borrowing costs. Cost is determined on weighted
average basis.
• Stock-in-trade: Cost includes cost of purchase and
other costs incurred in bringing the inventories
to their present location and condition. Cost is
determined on weighted average basis.
• Scrap / by products are valued at net
realisable value.
Net realisable value is the estimated selling price in
the ordinary course of business, less estimated costs
of completion and the estimated costs necessary to
make the sale.
Obsolete inventories are identified and written down
to net realisable value. Slow moving and defective
inventories are identified and provided to net
realisable value.
l. Impairment of non-financial assets
The Company assesses, at each reporting date,
whether there is an indication that an asset may be
impaired. 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. The 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.
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. 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. These
calculations are corroborated by valuation multiples,
quoted share prices for publicly traded companies or
other available fair value indicators.
The Company bases its impairment calculation on
forecast calculations, which are prepared separately
for the Company's CGUs to which the individual assets
are allocated.
Impairment losses, including impairment on
inventories, are recognised in the Statement of Profit
and Loss.
For assets, an assessment is made at each reporting
date to determine whether there is an indication that
previously recognised impairment losses no longer
exist or have decreased. If such indication exists, the
Company estimates the asset's or CGU's recoverable
amount. A previously recognised impairment
loss is reversed only if there has been a change in
the assumptions used to determine the asset's
recoverable amount since the last impairment loss was
recognised. The reversal is limited so that the carrying
amount of the asset does not exceed its recoverable
amount, nor exceed the carrying amount that would
have been determined, net of depreciation, had no
impairment loss been recognised for the asset in prior
years. Such reversal is recognised in the Statement of
Profit and Loss.
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