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Accounting Policies of Savita Oil Technologies Ltd. Company

Mar 31, 2023

SIGNIFICANT ACCOUNTING POLICIES

This note provides a list of the significant accounting
policies adopted in the preparation and presentation
of these standalone financial statements.

A. Basis of preparation of financial statements

i. Compliance with Ind AS

The standalone financial statements have been
prepared to comply, in all material aspects,
with the Indian Accounting Standards (Ind AS)
notified under Section 133 of the Companies
Act, 2013, read with Companies (Indian
Accounting Standards) Rules, 2015 and the
relevant provisions of the Companies Act, 2013.

ii. Business Combination

Business combinations involving entities that
are controlled by the group (Common Control)
are accounted for using the pooling of interests
method as follows:

• The assets and liabilities of the combining
entities are reflected at their carrying amounts.

• No adjustments are made to reflect fair
values, or recognise any new assets or
liabilities. Adjustments are only made to
harmonise accounting policies. The balance
of the reserves appearing in the financial
statements 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, accumulated
impairment losses. The cost of an asset
comprises of its purchase price, non refundable
/ 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,
for assets that necessarily take a substantial
period of time to get ready for their intended
use, finance costs. 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

I nvestment 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

I ntangible assets acquired separately are measured
on initial recognition at cost. Following initial
recognition, intangible assets are carried at cost
less any accumulated amortisation and accumulated
impairment losses. 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.

Estimated lives of Computer Software is 5 to 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 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) Income 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.


Mar 31, 2018

1 SIGNIFICANT ACCOUNTING POLICIES:

This note provides a list of the significant accounting policies adopted in the preparation and presentation of these standalone financial statements.

(A) Basis of Preparation of Financial Statements:

i. Compliance with Ind AS: The standalone financial statements have been prepared to comply, in all material aspects, with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013, read with Companies (Indian Accounting Standards) Rules, 2015 and the relevant provisions of the Companies Act, 2013.

ii. 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.

iii. 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.

iv. Functional and presentation currency: The Company’s functional and presentation currency is Indian Rupee (INR). All amounts disclosed in the financial statements and notes have been rounded off to the nearest lacs (‘ Lacs), except otherwise indicated.

v. 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

a) in the principal market for the asset or liability or

b) 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 reassessing 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 accumulated impairment losses. The cost of an asset comprises of its purchase price, non refundable / 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 for assets that necessarily take a substantial period of time to get ready for their intended use, finance costs. 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) Lease arrangements for land are identified as finance lease, in case such arrangements result in transfer of the related risks and rewards to the Company. Accordingly, the Company classifies land lease arrangement with a term in excess of 99 years as a finance lease.

(iii) 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.

(iv) 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.

(v) 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.

(vi) In 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.

(vii) 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. The property, plant and equipment acquired under finance lease are depreciated over the period of lease. 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.

(viii) The residual values and useful life 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 accumulated impairment losses. 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.

Estimated lives of Computer Software is 5 to 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.

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.

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 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) Sale of goods: Sales are accounted on passing of significant risks, rewards and control of owenership attached to the goods to customers. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns, applicable discounts and allowances and is inclusive of excise duty wherever applicable.

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 postemployment schemes

a) defined benefit plan - gratuity, and

b) 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 data.

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 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.

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 fulfillment 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

i) Finance lease: Agreements are classified as finance leases, if substantially all the risks and rewards incidental to ownership of the leased asset are transferred to the lessee. Assets held under finance leases are initially recognised as assets of the Company at their fair value at the inception of the lease or, if lower, the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as finance lease obligation. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the Statement of Profit and Loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

ii) Operating lease: Leases, where the lessor effectively retains substantially all the rights and benefits of ownership of the leased assets, are classified as operating leases. Lease payments under operating leases are recognised as an expense in the Statement of Profit and Loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases and is included in revenue in the Statement of Profit and Loss due to its operating nature.

b) As a Lessor

i) Operating lease: 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 the 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) 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 unallocable expenditure.

c) Income which relates to the Company as a whole and not allocable to segments is included in unallocable income.

d) Segment results include margins on intersegment 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.

(R) Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of past events, for which it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. Provisions are measured at the present value of management’s best estimate of the outflow required to settle the present obligation at the end of the reporting period. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Contingent liabilities are disclosed in the case of:

a) a present obligation arising from the past events, when it is not probable that an outflow of resources will be required to settle the obligation;

b) a present obligation arising from the past events, when no reliable estimate is possible;

c) a possible obligation arising from past events, unless the probability of outflow of resources is remote.

Contingent assets are not recognised but disclosed in the financial statements when an inflow of economic benefits is probable.

(S) Financial Instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments.

I. Financial Assets

A. Initial recognition and measurement :

Financial assets are initially measured at fair value. Transaction costs that are directly attributable to the acquisition of the financial asset [other than financial assets at Fair Value Through Profit or Loss (FVTPL)] are added to the fair value of the financial assets. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.Transaction costs of financial assets carried at FVTPL are expensed in the Statement of Profit and Loss.

B. Subsequent measurement:

For purposes of subsequent measurement, financial assets are classified in the following categories:

(i) Debt instruments at amortised cost

A ‘debt instrument’ is measured at the amortised cost if both the following conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

b) 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, such financial assets are subsequently measured at amortised cost using the Effective Interest Rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the Statement of Profit and Loss. The losses arising from impairment are recognised in the Statement of Profit and Loss. This category generally applies to trade and other receivables.

(ii) Debt instruments included within the Fair Value Through Profit or Loss (FVTPL) category are measured at fair value with all changes recognized in the Statement of Profit and Loss.

(iii) All equity instruments within the scope of Ind-AS 109 are measured at fair value. Equity instruments which are classified as held for trading are measured at FVTPL. For all other equity instruments, the Company decides to measure the same either at Fair Value Through Other Comprehensive Income (FVTOCI) or FVTPL. The Company makes such selection on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

For equity instruments measured at FVTOCI, all fair value changes on the instrument, excluding dividends, are recognized in Other Comprehensive Income (OCI). There is no recycling of the amounts from OCI to Statement of Profit and Loss on sale of such instruments.

iv) Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss.

C. De-recognition:

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily de-recognised (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:

(i) the Company has transferred substantially all the risks and rewards of the asset, or

(ii) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

D. Impairment of financial assets:

In accordance with Ind-AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on trade receivables and other advances. The Company follows ‘simplified approach’ for recognition of impairment loss on these financial assets. The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

II. Financial Liabilities

A. Initial recognition and measurement:

Financial liabilities are classified at initial recognition as :

(i) financial liabilities at fair value through profit or loss,

(ii) loans and borrowings, payables, net of directly attributable transaction costs or

(iii) derivatives designated as hedging instruments in an effective hedge, as appropriate.

The Company’s financial liabilities include trade and other payables, loans and borrowings including derivative financial instruments.

B. Subsequent measurement :

The measurement of financial liabilities depends on their classification, as described below:

(i) Borrowings: Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the Statement of Profit and Loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs.

Borrowings are removed from the Balance Sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished and the consideration paid is recognised in the Statement of Profit and Loss as other gains / (losses).

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Where there is a breach of a material provision of a long-term loan arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand on the reporting date, the entity does not classify the liability as current, if the lender has agreed, after the reporting period and before the approval of the financial statements for issue, not to demand payment as a consequence of the breach.

(ii) Trade and other payables: These amounts represent liabilities for goods and services provided to the Company prior to the end of financial period which are unpaid. The amounts are unsecured and are usually paid within twelve months of recognition. Trade and other payables are presented as current liabilities unless payment is not due within twelve months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.

(iii) Derivative financial instruments:

The Company uses derivative financial instruments, such as foreign exchange forward contracts, currency options and interest rate swaps to hedge its foreign currency risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value at the end of each reporting period. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

Hedge accounting :

The Company designates certain hedging instruments which include derivatives, embedded derivatives and non-derivatives in respect of foreign currency risk, as either fair value hedges, cash flow hedges or hedges of net investments in foreign operations. At the inception of the hedge relationship, the Company documents the relationship between the hedging instruments and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Company documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk.

C. De-recognition

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 derecognition 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.

D. 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, to realise the assets and settle the liabilities simultaneously.

Significant Accounting Judgements, Estimates and Assumptions

The preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Judgements

In the process of applying the Company’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements:

(a) Operating lease commitments - Company as lessor;

(b) Assessment of functional currency;

(c) Evaluation of recoverability of deferred tax assets

Estimates and Assumptions

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year :

a) Useful lives of property, plant and equipment, investment property and intangible assets;

b) Fair value measurements of financial instruments

c) Impairment of non-financial assets;

d) Taxes;

e) Defined benefit plans (gratuity benefits);

f) Provisions;

g) Revenue recognition - Khazana Coupon scheme, etc.

h) Valuation of inventories;

i) Contingencies


Mar 31, 2017

1 Corporate Information

Savita Oil Technologies Limited ("the Company") is a Public Limited Company incorporated under the Companies Act, 1956 and domiciled in India. Its equity shares are listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

The Company is principally engaged in two segments, namely, manufacturing of petroleum specialty products and electricity generation through wind power plants.

Authorization of financial statements

The standalone financial statements were authorized for issue in accordance with a resolution of the Board of Directors passed on 27th May, 2017.

2 Significant Accounting Policies:

This note provides a list of the significant accounting policies adopted in the preparation and presentation of these standalone financial statements.

(A) Basis of preparation of Financial Statements:

i. Compliance with Ind AS: The standalone financial statements have been prepared to comply, in all material aspects, with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013, read with Companies (Indian Accounting Standards) Rules, 2015 and the relevant provisions of the Companies Act, 2013.

These financial statements are the first financial statements of the Company under Ind AS. The date of transition to Ind AS is 1st April, 2015. Refer note 39 for an explanation of how the transition from previous Generally Accepted Accounting Principles (GAAP) to lnd AS has affected the Company''s financial position, financial performance and cash flows.

ii 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 realization in cash and cash equivalents.

iii. 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.

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

v. 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

a) in the principal market for the asset or liability or

b) 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.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized 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 recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (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 accumulated impairment losses. The cost of an asset comprises of its purchase price, non refundable / 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 for assets that necessarily take a substantial period of time to get ready for their intended use, finance costs. 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) Lease arrangements for land are identified as finance lease, in case such arrangements result in transfer of the related risks and rewards to the Company. Accordingly, the Company classifies land lease arrangement with a term in excess of 99 years as a finance lease.

(iii) 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.

(iv) 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.

(v) An item of property, plant and equipment and any significant part initially recognized is derecognized 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 derecognized.

(vi) In 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.

(vii) 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.

The property, plant and equipment acquired under finance lease are depreciated over the period of lease. 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 technical assessment.

(viii) 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 derecognized 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 derecognized.

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 assessment.

(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 amortization and accumulated impairment losses. Internally generated intangibles are not capitalized 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 software’s are classified as Intangible Assets collectively termed as Computer Software’s in the financial statements.

Estimated lives of Computer Software is 5 to 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.

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.

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 realizable 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 and finished goods are valued at lower of weighted average cost and net realizable value. Cost includes direct materials, labour, other direct cost and manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty. Excise duty is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods as on the Balance Sheet date.

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

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.

(I) Revenue Recognition

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

a) Sale of goods: 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 is measured at the fair value of the consideration received or receivable, net of returns, applicable discounts and allowances and is inclusive of excise duty.

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 less or’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 recognized as income on passing of significant risks, rewards and control of ownership attached with such incentive.

e) Interest income: Interest income is recognized 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 recognized 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 recognized 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 capitalized 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:

a) defined benefit plan - gratuity, and

b) 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 annually.

The liability or asset recognized 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:

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.

Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized 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 recognized 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 recognized 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 un-availed 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 un-availed 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 recognized 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 fulfillment 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

i) Finance lease: Agreements are classified as finance leases, if substantially all the risks and rewards incidental to ownership of the leased asset is transferred to the lessee. Assets held under finance leases are initially recognized as assets of the Company at their fair value at the inception of the lease or, if lower, the present value of the minimum lease payments. The corresponding liability to the less or is included in the balance sheet as finance lease obligation. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the Statement of Profit and Loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

ii) Operating lease: Leases, where the less or effectively retains substantially all the rights and benefits of ownership of the leased assets, are classified as operating leases. Lease payments under operating leases are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the less or’s expected inflationary cost increases and is included in revenue in the Statement of Profit or Loss due to its operating nature.

b) As a Lesser

i) Operating lease: Rental income from operating leases is generally recognized 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 recognized in Statement of Profit and Loss on a systematic basis over the periods in which the Company recognizes 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 recognized in the Statement of Profit and Loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized 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 recognized using the balance sheet approach. Deferred income tax assets and liabilities are recognized for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount.

Deferred tax liabilities are recognized for all taxable temporary differences.

Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized 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.

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 utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized 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 realized 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 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.

(P) Segment Reporting

The Chairman and Managing Director (CMD) 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 unallowable expenditure.

c) Income 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.

(R) Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of past events, for which it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made.

Provisions are measured at the present value of management''s best estimate of the outflow required to settle the present obligation at the end of the reporting period. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Contingent liabilities are disclosed in the case of:

a) a present obligation arising from the past events, when it is not probable that an outflow of resources will be required to settle the obligation;

b) a present obligation arising from the past events, when no reliable estimate is possible;

c) a possible obligation arising from past events, unless the probability of outflow of resources is remote.

Contingent assets are not recognized but disclosed in the financial statements when an inflow of economic benefits is probable. (S) Financial Instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.

I. Financial Assets

A. Initial recognition and measurement :

Financial assets are initially measured at fair value. Transaction costs that are directly attributable to the acquisition of the financial asset [other than financial assets at fair value through profit or loss (FVTPL)] are added to the fair value of

the financial assets. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date, i.e., the date that the Company commits to purchase or sell the asset. Transaction costs of financial assets carried at FVTPL are expensed in the Statement of Profit and Loss.

B. Subsequent measurement:

For purposes of subsequent measurement, financial assets are classified in the following categories:

(i) Debt instruments at amortized cost

A ''debt instrument'' is measured at the amortized cost if both the following conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

b) 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, such financial assets are subsequently measured at amortized cost using the Effective Interest Rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the Statement of Profit and Loss. The losses arising from impairment are recognized in the Statement of Profit and Loss. This category generally applies to trade and other receivables.

(ii) Debt instruments included within the Fair Value Through Profit or Loss (FVTPL) category are measured at fair value with all changes recognized in the Statement of Profit and Loss.

(iii) Equity instruments: All equity instruments within the scope of Ind-AS 109 are measured at fair value. Equity instruments which are classified as held for trading are measured at FVTPL. For all other equity instruments, the Company decides to measure the same either at Fair Value Through Other Comprehensive Income (FVTOCI) or FVTPL. The Company makes such selection on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

For equity instruments measured at FVTOCI, all fair value changes on the instrument, excluding dividends, are recognized in Other Comprehensive Income (OCI). There is no recycling of the amounts from OCI to Statement of Profit and Loss, even on sale of such instruments.

iv) Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss.

C. De-recognition:

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily de-recognized (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:

(i) the Company has transferred substantially all the risks and rewards of the asset, or

(ii) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

D. Impairment of financial assets:

In accordance with Ind-AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on trade receivables and other advances. The Company follows ''simplified approach'' for recognition ofimpairment loss on these financial assets. The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

II. Financial Liabilities

A. Initial recognition and measurement:

Financial liabilities are classified at initial recognition as :

(i) financial liabilities at fair value through profit or loss,

(ii) loans and borrowings, payables, net of directly attributable transaction costs or

(iii) derivatives designated as hedging instruments in an effective hedge, as appropriate.

The Company''s financial liabilities include trade and other payables, loans and borrowings including derivative financial instruments.

B. Subsequent measurement :

The measurement of financial liabilities depends on their classification, as described below:

(i) Borrowings: Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at Amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in the Statement of Profit and Loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs.

Borrowings are removed from the Balance Sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished and the consideration paid is recognized in the Statement of Profit and Loss as other gains / (losses).

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Where there is a breach of a material provision of a long-term loan arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand on the reporting date, the entity does not classify the liability as current, if the lender has agreed, after the reporting period and before the approval of the financial statements for issue, not to demand payment as a consequence of the breach.

(ii) Trade and other payables: These amounts represent liabilities for goods and services provided to the Company prior to the end of financial period which are unpaid. The amounts are unsecured and are usually paid within twelve months of recognition. Trade and other payables are presented as current liabilities unless payment is not due within twelve months after the reporting period. They are recognized initially at their fair value and subsequently measured at Amortized cost using the effective interest method.

(iii) Derivative financial instruments: The Company uses derivative financial instruments, such as foreign exchange forward contracts, currency options and interest rate swaps to hedge its foreign currency risks. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value at the end of each reporting period. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

Hedge accounting :

The Company designates certain hedging instruments which include derivatives, embedded derivatives and nonderivatives in respect of foreign currency risk, as either fair value hedges, cash flow hedges or hedges of net investments in foreign operations. At the inception of the hedge relationship, the Company documents the relationship between the hedging instruments and the hedged item, along with its risk management objectives and its strategy for

undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Company documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk.

C. De-recognition

A financial liability is derecognized 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 derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the Statement of Profit and Loss.

D. 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 recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

First-time adoption-mandatory exceptions, optional exemptions

Overall Principle

The Company has prepared the opening Balance Sheet as per Ind AS as of the transition date which is 1st April, 2015, by

(a) recognizing all assets and liabilities whose recognition is required by Ind AS;

(b) not recognizing items of assets or liabilities which are not permitted by lnd AS;

(c) reclassifying items from previous GAAP to Ind AS as required under Ind AS; and

(d) applying Ind AS in measurement of recognized assets and liabilities.

However, this principle is subject to certain exceptions and certain optional exemptions availed by the Company as detailed below :

1. De-recognition of financial assets and liabilities

The Company has applied the de-recognition requirements of financial assets and liabilities prospectively for transactions occurring on or after 1st April, 2015 (date of transition).

2. Classification of debt instruments

The Company has determined the classification of debt instruments in terms of whether they meet the Amortized cost criteria or the FVTOCI criteria based on the facts and circumstances that existed as of the transaction date.

3. Impairment of financial assets

The Company has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognized in order to compare it with the credit risk at the transition date. Further, the company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind AS, whether there have been significant increases in credit risk since initial recognition, as permitted by Ind AS 101.

4. Deemed cost for property, plant and equipment, investment property and intangible assets

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

5. Equity investments at FVTPL

The Company has designated investment in equity shares as at FVTPL on the basis of facts and circumstances that existed at the transition date.

6. Government Grant

The Company has elected to apply the requirements in Ind AS 109 and Ind AS 20 prospectively to government loans existing at the date of transition to Ind AS.

7. Determining whether an arrangement contains a lease

The Company has applied Appendix C of Ind AS 17 determining whether an arrangement contains a lease to determine whether an arrangement existing at the transition date contains a lease on the basis of facts and circumstances existing at that date


Mar 31, 2015

(a) Basis of Accounting:

These financial statements have been prepared in accordance with the generally accepted accounting principles in India, on the accrual and going concern basis under the historical cost convention except revaluation of certain Fixed Assets. The Company has prepared these financial statements to comply, in all material aspects, with the Accounting Standards notified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013. In accordance with first proviso to section 129(1) of the Companies Act, 2013, the items contained in these financial statements are in accordance with the Accounting Standards as referred to therein.

(b) Basis of preparation of financial statements:

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. For the above purposes, the Company has determined the operating cycle based on the nature of products and the time between the acquisition of inputs for manufacturing and their realisation in cash and cash equivalents.

(c) Use of Estimates:

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognised in the period in which the results are known / materialised.

(d) Fixed Assets, Capital Work-in-progress, Depreciation and Amortisation:

i) Fixed Assets are shown at cost (net of Cenvat and Value Added Tax set off) or at revalued amount less accumulated depreciation. Projects under construction are carried at costs comprising of direct costs, related pre-operational incidental expenses and attributable interest.

ii) a) Leasehold land is amortised over the residual lease period.

b) Depreciation on tangible assets is provided as per written down value method based on useful life prescribed under Schedule II to the Companies Act, 2013.

c) Intangible assets are amortised over the estimated period of future economic benefit of the asset or a period of ten years, whichever is lower.

(e) Borrowing Costs:

Borrowing costs are charged to Statement of Profit and Loss except to the extent attributable to acquisition/construction of qualifying assets.

(f) Impairment of Assets:

At each Balance Sheet date, the Company assesses whether there is any indication that the asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount / value in use, an impairment loss is recognised in the Statement of Profit and Loss to the extent the carrying amount exceeds recoverable amount. In assessing the value in use, the estimated future cash flows are discounted at present value at the weighted average cost of capital.

(g) Investments:

Long-term Investments are stated at cost less provision for diminution other than temporary, if any, in value. Current investments are stated at lower of cost and net realisable value.

(h) Inventories:

Inventories are valued at lower of cost and net realisable value, on weighted average basis. The cost includes cost of conversion and other costs incurred in bringing them to present location and condition.

(i) Recognition of Income and Expenditure:

i) Income and expenditure are accounted on accrual basis. Income in respect of insurance / other claims, interest, commission, etc. is recognised when it is reasonably certain that the ultimate collection will be made.

ii) Domestic sales are accounted on dispatch of goods to customers. Export sales are accounted on the basis of date of bill of lading. Gross Sales include Excise duty but exclude Value Added Tax / Central Sales Tax and are net of trade discounts.

iii) Incentives for renewable energy generation are recognised as income on sale of such incentives.

iv) Purchases are net of Value Added Tax set off and Cenvat wherever applicable, but include inward freight. Import purchases are accounted on the basis of date of bill of lading.

(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. Capital expenditure is accounted as fixed assets.

(k) Foreign Currency Transactions:

i) Foreign currency transactions are accounted at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities are translated at year end rate of exchange. The difference on account of fluctuation in the rate of exchange is dealt within the Statement of Profit and Loss.

ii) In case of forward contracts, the difference between the year end rate of exchage and the spot rate at the inception of these contracts is recognised as income or expenditure in the Statement of Profit and Loss. Net mark to market losses on outstanding option / derivative contracts are recognised in the Statement of Profit and Loss and gains, if any, are ignored. The premium / discounts on these contracts are accounted in the Statement of Profit and Loss over the life of the contracts.

iii) Profit or loss arising on cancellation or renewal of forward / option contracts is accounted as income or expenditure for the period.

(l) Employee benefits:

i) 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 cost.

ii) Long-term employee benefits (benefits which are payable after the end of twelve months, after the end of the period in which employees render service) and 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 annually.

iii) Contributions to Provident Fund, a defined contribution plan, are made in accordance with the statute, and are recognised as an expense when employees have rendered service entitling them to the contributions.

iv) The eligible employees can accumulate un-availed 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 un-availed leave is measured using the Projected Unit Credit Method, with actuarial valuations being carried out at each Balance Sheet date.

v) The cost of providing gratuity, a defined benefit plan, is determined using the Projected Unit Credit Method, on the basis of actuarial valuation at each Balance Sheet date. The gratuity benefit obligation recognised in Balance Sheet represents the present value of the obligation as reduced by the fair value of plan assets. Actuarial gains and losses are recognised in the Statement of Profit and Loss.

(m) Leases:

Leases, where the lessor effectively retains substantially all the rights and benefits of ownership of the leased assets, are classified as operating leases. Lease payments under operating leases are recognised as an expense in the Statement of Profit and Loss.

(n) Taxation:

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

ii) Deferred tax is recognised on timing difference between accounting income and the taxable income for the year and quantified using tax rates and laws enacted or substantively enacted as at the Balance Sheet date. Deferred tax assets are recognised subject to consideration of prudence.

(o) Segment Reporting:

The Company prepares segment information in conformity with its accounting policies. Segment revenue and expenditure directly identifiable with / allocable to respective segments are considered for determining segment results. Income and expenditure not allocable to segments is reported under 'Other unallocated revenue / expenditure'. Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable assets and liabilities are included under 'Unallocated capital employed'.

(p) 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.

(q) Provisions:

Provisions are recognised when the Company has a present obligation as a result of past events, for which it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. Contingent liability is disclosed when the Company has a possible or a present obligation where it is not probable that an outflow of resources will be required to settle it. Contingent assets are neither recognised nor disclosed.


Mar 31, 2013

(a) Basis of Accounting:

The accounts are prepared under historical cost convention on an accrual basis except revaluation of certain Fixed Assets and are in conformity with the requirements of Accounting Standards prescribed by the Companies (Accounting Standards) Rules, 2006 and the provisions of the Companies Act, 1956.

(b) Basis of preparation of fnancial statements:

All assets and liabilities have been classifed as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule VI to the Companies Act, 1956. For the above purposes, the Company has determined the operating cycle based on the nature of products and the time between the acquisition of inputs for manufacturing and their realisation in cash and cash equivalents.

(c) Use of Estimates:

The preparation of fnancial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the fnancial statements and the reported amount of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognised in the period in which the results are known/materialised.

(d) Fixed Assets, Capital Work-in-progress, Depreciation and Amortisation: (Refer Note 10)

i) Fixed Assets are shown at cost (net of Cenvat and Value Added Tax set off) or at revalued amount less accumulated depreciation. Projects under construction are carried at costs comprising of direct costs, related pre-operational incidental expenses and attributable interest.

ii) a) Leasehold land is amortised over the residual lease period.

b) Depreciation on tangible assets is provided as per written down value method at the rates prescribed under Schedule XIV to the Companies Act, 1956.

c) Intangible assets are amortised over the estimated period of future economic beneft of the asset or a period of ten years, whichever is lower.

(e) Borrowing Costs: (Refer Note 26)

Borrowing costs are charged to Statement of Proft and Loss except to the extent attributable to acquisition/construction of qualifying assets.

(f) Impairment of Assets:

At each Balance Sheet date, the Company assesses whether there is any indication that the asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount / value in use, an impairment loss is recognised in the Statement of Proft and Loss to the extent the carrying amount exceeds recoverable amount. In assessing the value in use, the estimated future cash fows are discounted at present value at the weighted average cost of capital.

(g) Investments: (Refer Note 11 and 15)

Long-term Investments are stated at cost less provision for diminution other than temporary, if any, in value. Current investments are stated at lower of cost and net realisable value.

(h) Inventories: (Refer Note 16 and 22)

Inventories are valued at lower of cost and net realisable value, on weighted average basis. The cost includes cost of conversion and other costs incurred in bringing them to present location and condition.

(i) Recognition of Income and Expenditure:

i) Income and expenditure are accounted on accrual basis. Income in respect of insurance / other claims, interest, commission, etc. is recognised when it is reasonably certain that the ultimate collection will be made.

ii) Domestic sales are accounted on dispatch of goods to customers. Export sales are accounted on the basis of date of bill of lading. Gross Sales include Excise duty but exclude Value Added Tax/ Central Sales Tax and are net of trade discounts.

iii) Incentives for renewable energy generation are recognised as income on sale of such incentives.

iv) Purchases are net of Value Added Tax set off and Cenvat wherever applicable, but include inward freight. Import purchases are accounted on the basis of date of bill of lading.

(j) Expenditure on Research and Development:

Revenue expenditure on Research and Development is charged to Statement of Proft and Loss under the appropriate heads of expenses. Capital expenditure is accounted as fxed assets.

(k) Foreign Currency Transactions:

i) Foreign currency transactions are accounted at the exchange rate prevailing on the date of transaction.

ii) Monetary assets and liabilities are translated at year end rate of exchange.

iii) In case of forward and option contracts, premium is accounted in the Statement of Proft and Loss over the life of the contracts.

iv) Proft or loss arising on cancellation or renewal of forward / option exchange contracts is accounted as income or expenditure for the period

v) The difference on account of fuctuation in the rate of exchange is dealt within the Statement of Proft and Loss.

(l) Employee benefts:

i) Short-term employee benefts (benefts which are payable within twelve months after the end of the period in which employees render service) are measured at cost.

ii) Long-term employee benefts (benefts which are payable after the end of twelve months in which employees render service) and post employment benefts (benefts 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 annually.

iii) Contributions to Provident Fund, a defned contribution plan, are made in accordance with the statute, and are recognised as an expense when employees have rendered service entitling them to the contributions.

iv) The eligible employees can accumulate un-availed 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 un-availed leave is measured using the Projected Unit Cost Method, with actuarial valuations being carried out at each Balance Sheet date.

v) The cost of providing gratuity, a defned beneft plan, is determined using the Projected Unit Credit Method, on the basis of actuarial valuation at each Balance Sheet date. The gratuity beneft obligation recognised in Balance Sheet represents the present value of the obligation as reduced by the fair value of plan assets. Actuarial gains and losses are recognised in the Statement of Proft and Loss.

(m) Leases:

Leases where the lessor effectively retains substantially all the rights and benefts of ownership of the leased assets are classifed as operating leases. Lease payments under operating leases are recognised as an expense in the Statement of Proft and Loss.

(n) Taxation:

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

ii) Deferred tax is recognised on timing difference between accounting income and the taxable income for the year and quantifed using tax rates and laws enacted or substantively enacted as at the Balance Sheet date. Deferred tax assets are recognised subject to consideration of prudence.

(o) Segment Reporting:

The Company prepares segment information in conformity with its accounting policies. Segment revenue and expenditure directly identifable with / allocable to respective segments are considered for determining segment results. Income and expenditure not allocable to segments is reported under ''Other unallocated revenue / expenditure''. Segment assets and liabilities include those directly identifable with the respective segments. Unallocable assets and liabilities are included under ''Unallocated capital employed''.

(p) Earnings Per Share:

Basic earnings per share is calculated by dividing the net proft 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 outstandings 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 proft 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.

(q) Provisions:

Provisions are recognised when the Company has a present obligation as a result of past events, for which it is probable that an outfow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. Contingent liability is disclosed when a Company has a possible or a present obligation where it is not probable that an outfow of resources will be required to settle it. Contingent assets are neither recognised nor disclosed.


Mar 31, 2012

(a) Basis of Accounting:

The accounts are prepared under historical cost convention on an accrual basis except revaluation of certain Fixed Assets and are in conformity with the requirements of Accounting Standards prescribed by the Companies (Accounting Standards) Rules, 2006 and the provisions of the Companies Act, 1956.

(b) Basis of preparation of financial statements:

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule VI to the Companies Act, 1956. For the above purposes, the Company has determined the operating cycle based on the nature of products and the time between the acquisition of inputs for manufacturing and their realisation in cash and cash equivalents.

(c) Use of Estimates:

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognised in the period in which the results are known/materialised.

(d) Fixed Assets, Depreciation and Amortisation: (Refer Note 10)

i) Fixed Assets are shown at cost (net of Cenvat and Value Added Tax set off) or at revalued amount less accumulated depreciation.

ii) a) Leasehold land is amortised over the residual lease period.

b) Intangible assets are amortised over the estimated period of future economic benefit of the asset or a period of ten years, whichever is lower.

c) Depreciation on assets other than stated at a) and b) above, is provided as per written down value method at the rates prescribed under Schedule XIV to the Companies Act, 1956.

(e) Borrowing Costs: (Refer Note 26)

Borrowing costs are charged to Statement of Profit and Loss except to the extent attributable to acquisition/construction of qualifying assets.

(f) Impairment of Assets:

At each Balance Sheet date, the Company assesses whether there is any indication that the asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount / value in use, an impairment loss is recognised in the Statement of Profit and Loss to the extent the carrying amount exceeds recoverable amount. In assessing the value in use, the estimated future cash flows are discounted at present value at the weighted average cost of capital.

(g) Investments: (Refer Note 11 and 15)

Long - term Investments are stated at cost less provision for diminution other than temporary, if any, in value. Current investments are stated at lower of cost and net realisable value.

(h) Inventories: (Refer Note 16 and 22)

Inventories are valued at lower of cost and net realisable value, on weighted average basis. The cost includes cost of conversion and other costs incurred in bringing them to present location and condition.

(i) Recognition of Income and Expenditure:

i) Income and expenditure are accounted on accrual basis. Income in respect of insurance / other claims, interest, commission, etc. is recognised when it is reasonably certain that the ultimate collection will be made.

ii) Domestic sales are accounted on dispatch of goods to customers. Export sales are accounted on the basis of date of bill of lading. Gross Sales include excise duty but exclude Value Added Tax/ Central Sales Tax and are net of trade discounts.

iii) Incentives for renewable energy generation are recognised as income on sale of such incentives.

iv) Purchases are net of Value Added Tax set off and cenvat wherever applicable, but include inward freight. Import purchases are accounted on the basis of date of bill of lading.

(j) Expenditure on Research and Development:

Revenue expenditure on Research and Development is charged to revenue under the appropriate heads of expenses.

Capital expenditure is accounted as fixed assets.

(k) Foreign Currency Transactions:

i) Foreign currency transactions are accounted at the exchange rate prevailing on the date of transaction.

ii) Monetary assets and liabilities are translated at year end rate of exchange.

iii) In case of forward contracts, the difference between the rate at which the transactions are accounted and the contracted rate is spread over the life of the contract.

iv) The difference on account of fluctuation in the rate of exchange is dealt with in the Statement of Profit and Loss.

(l) Employee benefits:

i) 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 cost.

ii) Long-term employee benefits (benefits which are payable after the end of twelve months in which employees render service) and 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 annually.

iii) Contributions to Provident Fund, a defined contribution plan, are made in accordance with the statute, and are recognised as an expense when employees have rendered service entitling them to the contributions.

iv) The eligible employees can accumulate un-availed 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 un-availed leave is measured using the Projected Unit Cost Method, with actuarial valuations being carried out at each Balance Sheet date.

v) The cost of providing gratuity, a defined benefit plan, is determined using the Projected Unit Credit Method, on the basis of actuarial valuation at each Balance Sheet date. The gratuity benefit obligation recognised in Balance Sheet represents the present value of the obligation as reduced by the fair value of plan assets. Actuarial gains and losses are recognised in the Statement of Profit and Loss.

(m) Leases:

Leases where the lessor effectively retains substantially all the rights and benefits of ownership of the leased assets are classified as operating leases. Lease payments under operating leases are recognised as an expense in the Statement of Profit and Loss.

(n) Taxation:

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

ii) Deferred tax is recognised on timing difference between accounting income and the taxable income for the year and quantified using tax rates and laws enacted or substantively enacted as at the Balance Sheet date. Deferred tax assets are recognised subject to consideration of prudence.

(o) Segment Reporting:

The Company prepares segment information in conformity with its accounting policies. Segment revenue and expenditure directly identifiable with / allocable to respective segments are considered for determining segment results. Income and expenditure not allocable to segments is reported under 'Other unallocated revenue / expenditure'. Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable assets and liabilities are included under 'Unallocated capital employed'.

(p) 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 outstandings 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.

(q) Provisions:

Provisions are recognised when the Company has a present obligation as a result of past events, for which it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. Contingent liability is disclosed when a company has a possible or a present obligation where it is not probable that an outflow of resources will be required to settle it. Contingent assets are neither recognised nor disclosed.


Mar 31, 2011

(a) Basis of Accounting:

The accounts are prepared under historical cost convention on an accrual basis except revaluation of certain Fixed Assets and are in conformity with the requirements of Accounting Standards prescribed by the Companies (Accounting Standards) Rules, 2006 and the provisions of the Companies Act, 1956.

(b) Use of Estimates:

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognised in the period in which the results are known/materialised.

(c) Fixed Assets and Depreciation:

i) Fixed Assets are shown at cost (net of Cenvat and Value Added Tax set off) or at revalued amount less accumulated depreciation.

ii) a) Leasehold land is amortised over the residual lease period from the financial year 2000-2001.

b) Intangible assets are amortised over the estimated period of future economic benefit of the asset or a period of ten years, whichever is lower.

c) Depreciation on assets other than stated at a) and b) above, is provided as per written down value method at the rates prescribed under Schedule XIV to the Companies Act, 1956.

(d) Borrowing Costs:

Borrowing costs are charged to Profit and Loss Account except to the extent attributable to acquisition/construction of qualifying assets.

(e) Impairment of Assets:

At each Balance Sheet date, the Company assesses whether there is any indication that the asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount / value in use, an impairment loss is recognised in the Profit and Loss Account to the extent the carrying amount exceeds recoverable amount. In assessing the value in use, the estimated future cash flows are discounted at present value at the weighted average cost of capital.

(f) Investments:

Long term Investments are stated at cost less provision for permanent diminution, if any, in value. Current investments are stated at lower of cost or net realisable value.

(g) Inventories:

Inventories are valued at lower of cost and net realisable value, on weighted average basis. The cost includes cost of conversion and other costs incurred in bringing them to present location and condition.

(h) Recognition of Income and Expenditure:

i) Income and expenditure are accounted on accrual basis. Income in respect of insurance / other claims, interest, commission etc. is recognised when it is reasonably certain that the ultimate collection will be made.

ii) Domestic sales are accounted on dispatch of goods to customers. Export sales are accounted on the basis of date of bill of lading. Gross Sales include excise duty and exchange differences arising out of sales transactions but exclude Value Added Tax/ Central Sales Tax and are net of trade discounts.

iii) Carbon Credit i.e. Certified Carbon Emission Reductions (CERs) is certified and issued by the ultimate certifying authority viz. United Nations Framework Convention on Climate Change (UNFCCC) and recognised as income on delivery and sale of CERs.

iv) Purchases are net of Value Added Tax set off and cenvat wherever applicable, but include inward freight and exchange differences arising out of purchase transactions. Import purchases are accounted on the basis of date of bill of lading.

(i) Expenditure on Research and Development:

Revenue expenditure on Research and Development is charged to revenue under the appropriate heads of expenses. Capital expenditure is accounted as fixed assets.

(j) Foreign Currency Transactions:

i) Foreign currency transactions are accounted at the exchange rate prevailing on the date of transaction.

ii) The difference between the rate at which the transactions are accounted as stated above and the contracted rate is spread over the life of the contract. The difference on account of fluctuation in the rate of exchange is dealt with in the Profit and Loss Account.

iii) Year end monetary assets and liabilities are translated at year end rate of exchange.

(k) Employee benefits:

i) 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 cost.

ii) Long term employee benefits (benefits which are payable after the end of twelve months in which employees render service) and 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, annually.

iii) Contributions to Provident Fund, a defined contribution plan, are made in accordance with the statute, and are recognised as an expense when employees have rendered service entitling them to the contributions.

iv) The eligible employees can accumulate un-availed 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 un-availed leave is measured using the Projected Unit Cost Method, with actuarial valuations being carried out at each Balance Sheet date.

v) The cost of providing gratuity, a defined benefit plan, is determined using the Projected Unit Credit Method, on the basis of actuarial valuation at each Balance Sheet date. The gratuity benefit obligation recognised in Balance Sheet represents the present value of the obligation as reduced by the fair value of plan assets. Actuarial gains and losses are recognised in the Profit and Loss Account.

(l) Leases:

Leases where the lessor effectively retains substantially all the rights and benefits of ownership of the leased assets are classified as operating leases. Lease payments under operating leases are recognised as an expense in the Profit and Loss Account.

(m) Taxation:

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

ii) Deferred tax is recognised on timing difference between accounting income and the taxable income for the year and quantified using tax rates and laws enacted or substantively enacted as at the Balance Sheet date. Deferred tax assets are recognised subject to consideration of prudence.

(n) Provisions:

Provisions are recognised when the Company has a present obligation as a result of past events, for which it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made.


Mar 31, 2010

(a) Basis of Accounting:

The accounts are prepared under historical cost convention on an accrual basis except revaluation of certain Fixed Assets and are in conformity with the requirements of Accounting Standards prescribed by the Companies (Accounting Standards) Rules, 2006 and the provisions of the Companies Act, 1956.

(b) Use of Estimates:

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognised in the period in which the results are known/materialised.

(c) Fixed Assets and Depreciation:

i) Fixed Assets are shown at cost (net of Cenvat and Value Added Tax set off) or at revalued amount less accumulated depreciation.

ii) a) Leasehold land is amortised over the residual lease period from the financial year 2000-2001.

b) Intangible assets are amortised over the estimated period of future economic benefit of the asset or a period of ten years, whichever is lower.

c) Depreciation on assets other than stated at a) and b) above, is provided as per written down value method at the rates prescribed under Schedule XIV to the Companies Act, 1956.

(d) Borrowing Costs:

Borrowing costs are charged to Profit and Loss Account except to the extent attributable to acquisition/construction of qualifying assets.

(e) Impairment of Assets:

At each Balance Sheet date, the Company assesses whether there is any indication that the asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount / value in use, an impairment loss is recognised in the Profit and Loss Account to the extent the carrying amount exceeds recoverable amount. In assessing the value in use, the estimated future cash flows are discounted at present value at the weighted average cost of capital.

(f) Investments:

Long term Investments are stated at cost less provision for permanent diminution, if any, in value. Current investments are stated at lower of cost or net realisable value. Investments in foreign currency are reported using the exchange rate at the date of transaction.

(g) Inventories:

Inventories are valued at lower of cost or net realisable value, on weighted average basis. The cost includes cost of conversion and other costs incurred in bringing them to present location and condition.

(h) Recognition of Income and Expenditure:

i) Income and expenditure are accounted on accrual basis. Income in respect of insurance / other claims, interest, commission, etc. is recognised when it is reasonably certain that the ultimate collection will be made.

ii) Domestic sales are accounted on dispatch of goods to customers. Export sales are accounted on the basis of date of bill of lading. Gross Sales include excise duty and exchange differences arising out of sales transactions but exclude Value Added Tax/ Central Sales Tax and are net of trade discounts.

iii) Carbon Credit i.e. Certified Carbon Emission Reductions (CERs) is recognised as entitlement upon certification and issue of CERs by the ultimate certifying authority viz. United Nations Framework Convention on Climate Change (UNFCCC) and recognised as income on delivery and sale of CERs.

iv) Purchases are net of Value Added Tax set off and cenvat wherever applicable, but include inward freight and exchange differences arising out of purchase transactions. Import purchases are accounted on the basis of date of bill of lading.

(i) Expenditure on Research and Development:

Revenue expenditure on Research and Development is charged to revenue under the respective heads of expenses. Capital expenditure is accounted as fixed assets.

(j) Foreign Currency Transactions:

i) Foreign currency transactions are accounted at the exchange rate prevailing on the date of transaction.

ii) The difference between the rate at which the transactions are accounted as stated above and the contracted rate is spread over the life of the contract. The difference on account of fluctuation in the rate of exchange is dealt with in the Profit and Loss Account.

iii) Year end monetary assets and liabilities are translated at year end rate of exchange.

(k) Employee benefits:

i) Short term employee benefits (benefits which are payable within twelve months after the end of the period in which the employee renders service) are measured at cost.

ii) Long term employee benefits (benefits which are payable after the end of twelve months in which the employee renders service) and 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, annually.

iii) Contributions to Provident Fund, a defined contribution plan, are made in accordance with the statute, and are recognised as an expense when employees have rendered service entitling them to the contributions.

iv) The eligible employees can accumulate un-availed privilege leave and are entitled to encash the same either while in employment, on termination or on retirement in accordance with the Companys policy. The present value of such un-availed leave is measured using the Projected Unit Cost Method, with actuarial valuations being carried out at each Balance Sheet date.

v) The cost of providing gratuity, a defined benefit plan, is determined using the Projected Unit Credit Method, on the basis of actuarial valuation at each Balance Sheet date. The gratuity benefit obligation recognised in Balance Sheet represents the present value of the obligation as reduced by the fair value of plan assets. Actuarial gains and losses are recognised in the Profit and Loss Account.

(I) Leases:

Leases where the lessor effectively retains substantially all the rights and benefits of ownership of the leased assets are classified as operating leases. Lease payments under operating leases are recognised as an expense in the profit and loss account.

(m) Taxation:

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

ii) Deferred tax is recognised on timing difference between accounting income and the taxable income for the year and quantified using tax rates and laws enacted or substantively enacted as at the Balance Sheet date. Deferred tax assets are recognised subject to consideration of prudence.

(n) Provisions:

Provisions are recognised when the Company has a present obligation as a result of past events, for which it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made.

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