Accounting Policies of Hi-Tech Pipes Ltd. Company

Mar 31, 2023

SIGNIFICANT ACCOUNTING POLICY

INFORMATION

This Note provides a list of the Material Accounting
Policies adopted by the Group in the preparation of
these Financial Statements. These policies have been
consistently applied to all the years presented, unless
otherwise stated.

a) Basis of preparation:

i) Compliance with Ind AS:

The Financial Statements have been prepared,
covered and complied all materiality with
respects to Indian Accounting Standards
(Ind AS) notified under Section 133 of the
Companies Act, 2013 (the Act) [Companies
(Indian Accounting Standards) Rules, 2015]
as amended thereof and other relevant
provisions of the Act.

These Financial Statements have been
prepared under applicable Ind AS-Rules and
Provisions of Companies Act 2013

ii) The consolidated financial statements have

been prepared on accrual basis and historical
cost basis except

a. certain financial assets and liabilities and
contingent considerations measured at
fair value.

b. Assets held for Sale measured at lower of
fair value or cost.

c. Share based payment measured at fair
value

Fair value is the price that would be
receivable to sell an asset or consideration
to transfer a liability in an orderly
transaction between market participants
at the measurement date, irrespective
of that price is directly available or
estimated using another valuation
technique. The Group takes into account
the characteristics of the asset or liability
if market participants would take those
characteristics into account when pricing
the asset or liability at the measurement
date. Fair value for measurement and
/ or disclosure purposes in this financial
statements has determined on such a
basis that may have some similarities to
fair value but actually not fair value, such
as net realizable value in Ind AS 2 or value
in use in Ind AS 36.

iii) principles of consolidation

The Group consolidates all entities which
are controlled by it. The Group establishes
control when; it has power over the entity, is
exposed, or has rights, to variable returns from
its involvement with the entity and has the
ability to affect the entity''s returns by using its
power over relevant activities of the entity.

The consolidated financial statements
pertains to Hi-Tech Pipes Limited, the holding
Company and its subsidiary companies
(hereinafter collectively referred as the Group).
The consolidated financial statements have
been prepared on the following basis:

a. The financial statements of the subsidiary
companies used in the consolidation are
drawn upto the same reporting date as
that of the Company i.e., March 31,2023.

b. The financial statements of the Company
and its subsidiary companies have
been combined on a line-by-line basis
by adding together like line items of
assets, liabilities, income and expenses,
after eliminating intra-group balances,
intra-group transactions and resulting

unrealised profits or losses.

c. The excess of cost to the Group of its
investments in the subsidiary companies
over its share of equity and its premium of
the subsidiary companies, at the dates on
which the investments in the subsidiary
companies were made, is recognised
as ''Goodwill'' being an asset in the
consolidated financial statements. On the
other hand, where the share of equity and
its premium of the subsidiary companies
as on the date of investment is in excess
of cost of investments of the Group, it is
recognised as ''Capital Reserve'' and shown
under the head ''Reserves & Surplus'', in
the consolidated financial statements.
The ''Goodwill'' or ''Capital Reserve” is
determined for each subsidiary Company
separately and such amount are not set
off between different entities.

d. Non-controlling interests, if any in the net
assets of consolidated subsidiaries are
identified separately from the Group''s
equity.

e. Goodwill on consolidation is not amortised
however, tested for impairment.

f. Following subsidiaries have been
considered in the preparation of
consolidated financial statements:

- HTL METAL Private Limited (a wholly
owned subsidiary)

- HTL ISPAT Private Limited (a wholly
owned subsidiary)

- HITECH METALEX Private Limited (a
wholly owned subsidiary)

iii) Accrual basis of accounting

iv) Historical cost and conventional:

b. Business combinations

Business combinations are accounted for using
the acquisition method. The cost of an acquisition
is measured as the aggregate of the consideration
transferred measured at acquisition date fair value
and the amount of any non-controlling interests

in the acquiree. For each business combination,
the Group elects whether to measure the non¬
controlling interests in the acquiree at fair value
or at the proportionate share of the acquiree''s
identifiable net assets. Acquisition-related costs
are expensed as incurred.

At the acquisition date, the identifiable assets
acquired and the liabilities assumed are
recognised at their acquisition date fair values.
For this purpose, the liabilities assumed include
contingent liabilities representing present
obligation and they are measured at their
acquisition fair values irrespective of the fact
that outflow of resources embodying economic
benefits is not probable. However, the following
assets and liabilities acquired in a business
combination are measured at the basis indicated
below:

Deferred tax assets or liabilities, and the assets
or liabilities related to employee benefit
arrangements are recognised and measured in
accordance with Ind AS 12 Income Tax and Ind
AS 19 Employee Benefits respectively.

When the Group acquires a business, it assesses
the financial assets and liabilities assumed for
appropriate classification and designation in
accordance with the contractual terms, economic
circumstances and pertinent conditions as at the
acquisition date. If the business combination is
achieved in stages, any previously held equity
interest is re-measured at its acquisition date fair
value and any resulting gain or loss is recognised
in profit or loss or OCI, as appropriate.

Any contingent consideration to be transferred
by the acquirer is recognised at fair value at
the acquisition date. Contingent consideration
classified as an asset or liability that is a financial
instrument and within the scope of Ind AS 109
Financial Instruments, is measured at fair value
with changes in fair value recognised in profit
or loss. If the contingent consideration is not
within the scope of Ind AS 109, it is measured
in accordance with the appropriate Ind AS.
Contingent consideration that is classified
as equity is not re-measured at subsequent
reporting dates and subsequent its settlement is
accounted for within equity.

Goodwill is initially measured at cost, being the
excess of the aggregate of the consideration
transferred and the amount recognised for non¬
controlling interests, and any previous interest
held, over the net identifiable assets acquired
and liabilities assumed. If the fair value of the
net assets acquired is in excess of the aggregate
consideration transferred, the Group re-assesses
whether it has correctly identified all of the assets
acquired and all of the liabilities assumed and
reviews the procedures used to measure the
amounts to be recognised at the acquisition
date. If the reassessment still results in an excess
of the fair value of net assets acquired over the
aggregate consideration transferred, then the
gain is recognised in OCI and accumulated in
equity as capital reserve. However, if there is no
clear evidence of bargain purchase, the entity
recognises the gain directly in equity as capital
reserve, without routing the same through OCI.

After initial recognition, goodwill is measured at
cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill
acquired in a business combination is, from
the acquisition date, allocated to each of the
Group''s cash-generating units that are expected
to benefit from the combination, irrespective of
whether other assets or liabilities of the acquiree
are assigned to those units.

A cash generating unit to which goodwill has
been allocated is tested for impairment annually,
or more frequently when there is an indication
that the unit may be impaired. If the recoverable
amount of the cash generating unit is less than
its carrying amount, the impairment loss is
allocated first to reduce the carrying amount of
any goodwill allocated to the unit and then to
the other assets of the unit pro rata based on
the carrying amount of each asset in the unit.
Any impairment loss for goodwill is recognised in
profit or loss. An impairment loss recognised for
goodwill is not reversed in subsequent periods.

Where goodwill has been allocated to a cash
generating unit and part of the operation within
that unit is disposed of, the goodwill associated
with the disposed operation is included in
the carrying amount of the operation when

determining the gain or loss on disposal. Goodwill
disposed in these circumstances is measured
based on the relative values of the disposed
operation and the portion of the cash-generating
unit retained.

If the initial accounting for a business combination
is incomplete by the end of the reporting period
in which the combination occurs, the Group
reports provisional amounts for the items for
which the accounting is incomplete. Those
provisional amounts are adjusted through
goodwill during the measurement period, or
additional assets or liabilities are recognised, to
reflect new information obtained about facts and
circumstances that existed at the acquisition date
that, if known, would have affected the amounts
recognized at that date. These adjustments are
called as measurement period adjustments. The
measurement period does not exceed one year
from the acquisition date.

C. Use of estimates and critical accounting
judgements

In preparation of the financial statements,
the Group makes estimates, judgements, and
assumptions about the carrying values of assets
and liabilities that are not readily apparent from
other sources. The estimates and assumptions are
based on past experience and situation that are
considered to be relevant. Actual results may vary
from these estimates or assumptions

The estimates and the underlying assumptions
are reviewed certain frequent basis. Revisions
to accounting estimates are recognised in the
period in which the estimate is revised and future
periods affected.

Following are some important judgements,
apart from those involving estimations that the
directors have made in the process of applying
the Group''s accounting policies and that have the
most significant effect on the amounts recognised
in the financial statements.

Deferred income tax assets and liabilities

Significant management judgment is required to
determine the amount of deferred tax assets that
can be recognised, based upon the probability of

transaction and event for future taxable profits.

The amount of total deferred tax assets could
change if estimates of projected future taxable
income or if tax regulations undergo a change.

Income Taxes

Deferred tax assets are recognized to the extent
that it is regarded as probable that temporary
differences of deductions can be realized. The
Group estimates deferred tax assets and liabilities
based on temporary differences.

Deferred tax assets are recognised to extent that
it is probable that taxable profit will be available
against which deductible temporary differences
and carry forward of unused tax credits and
unused tax losses can be utilized.

Provision for tax liabilities require judgements on
the interpretation of tax legislation, judgements
in case law and the potential outcomes of tax
audits.

Therefore, the actual results may differ from
estimates and same shall be adjusted to
provisions, the valuation of deferred tax assets,
cash tax settlements and therefore the tax charge
in the Statement of Profit or Loss.

Useful lives of Property, plant and equipment
(''PPE'')

The Group reviews the estimated useful lives
and residual value of PPE at the end of each
reporting period. The factors such as changes in
the expected level of usage, product life-cycle,
may impact the economic useful lives and the
residual values of these assets. Subsequently, the
depreciation charge could be revised and this
would have an impact on the profits of the future
years.

Defined benefit plans

The cost of the defined benefit plans and the
present value of the defined benefit obligation
(''DBO'') are based on actuarial valuation using
the projected unit credit method. An actuarial
valuation involves making various assumptions
that may differ from actual developments in the
future. These include the determination of the

discount rate, future salary increases and mortality
rates. Due to the complexities involved in the
valuation and its long-term nature, a defined
benefit obligation is highly sensitive to changes in
these assumptions. All assumptions are reviewed
at each reporting date.

Fair value measurement of derivative and
other financial instruments

The fair value of financial instruments, is
determined by using valuation techniques. This
involves significant judgements in selection of a
method in making assumptions that are mainly
based on market precedents exists at the Balance
Sheet date.

b) Foreign currency transactions:

i) Functional and presentation currency:

Items included in the Consolidated Financial
Statements of a re measured using the currency
of the primary economic environment
in which the Group operates (''functional
currency''). The Financial Statements of the
Group are presented in Indian currency (Rs),
which is also the functional and presentation
currency of the Group.

ii) Transactions and balances:

Foreign currency transactions are
translated into the functional currency
using the exchange rates at the dates of
the transactions. Foreign exchange gain/
(loss) resulting from the settlement of such
transactions and from the translation of
monetary assets and liabilities denominated
in foreign currencies at year end exchange
rates are generally recognised in profit or
loss except that they are deferred in equity
if they relate to qualifying cash flow hedges.
Foreign exchange differences regarded as an
adjustment to borrowing costs are presented
in the Statement of Profit and Loss, within
finance costs. All other foreign exchange
gain/ (loss) are presented in the Statement
of Profit and Loss on a net basis within other
income/ (expense). Non-monetary items
that are measured at fair value in a foreign
currency are translated using the exchange

rates at the date when the fair value was
determined. Translation differences on assets
and liabilities carried at fair value are reported
as part of the fair value gain/ (loss).

c) Revenue recognition:

Measurement of revenue and recognition:

The Group recognises revenues from sale of
products measured at the amount of transaction
price (net of variable consideration), when it
satisfies its performance obligation at a point in
time which is when products are delivered to a
customer or to a carrier for export sales, which
is when control including risks and rewards and
title of ownership pass to the customer, and when
there are no longer any unfulfilled obligation. The
transaction price of goods sold is net of variable
consideration on account of various discounts
and schemes offered by the Company as part of
the contract.

Revenue from services is recognised in the
accounting period in which the services are
rendered.

Eligible export incentives are recognised in the
year in which the conditions precedents are met
and there is no significant uncertainty about the
collectability.

Discounts given include rebates, price reductions
and other incentives given to customers. The
Company bases its estimates on historical results,
taking into consideration the type of customer,
the type of transaction and the specifics of each
arrangement. No element of financing is deemed
present as sales are made with a credit term
which is consistent with market practice.

d) Income taxes:

The income tax expense or credit for the period
is the tax payable on the taxable income of the
current period based on the applicable income
tax rates adjusted by changes in deferred tax
assets and liabilities attributable to temporary
differences and unused tax losses. The current
income tax charge is calculated on the basis of
the tax laws enacted or substantively enacted at
the end of the reporting period. The Management

periodically evaluates positions taken in tax returns
with respect to situations in which applicable
tax regulation is subject to interpretation. It
establishes provisions where appropriate on the
basis of amounts expected to be paid to the tax
authorities.

Minimum Alternate Tax (''MAT'') under the
provisions of the Income Tax Act, 1961 is
recognised as current tax in the Statement of
Profit and Loss. The credit available under the
Act in respect of MAT paid will be recognised
as an asset only when and to the extent there is
convincing evidence that the Company will pay
normal income tax during the period for which
the MAT credit can be carried forward for set off
against the normal tax liability. Such an asset is
reviewed at each Balance Sheet date.

Deferred income tax is provided in full, using the
liability method, on temporary differences arising
between the tax bases of assets and liabilities
and their carrying amounts. However, deferred
tax liabilities are not recognised if they arise
from the initial recognition of Goodwill. Deferred
income tax is also not accounted for if it arises
from initial recognition of an asset or liability in
a transaction other than a business combination
that at the time of the transaction affects
neither accounting profit nor taxable profit/ (tax
loss). Deferred income tax is determined using
tax rates (and laws) that have been enacted or
substantially enacted by the Balance Sheet date
and are expected to apply when the related
deferred income tax asset is realised or the
deferred income tax liability is settled. Deferred
tax assets are recognised for all deductible
temporary differences and unused tax losses only
if it is probable that future taxable amounts will
be available to utilise those temporary differences
and losses. Deferred tax assets and liabilities are
offset when there is a legally enforceable right to
offset current tax assets and liabilities and when
the deferred tax balances relate to the same
taxation authority. Current tax assets and tax
liabilities are offset where the entity has a legally
enforceable right to offset and intends either to
settle on a net basis, or to realise the asset and
settle the liability simultaneously.

Current and deferred tax is recognised in profit or
loss, except to the extent that it relates to items
recognised in Other Comprehensive Income
or directly in equity. In this case, the tax is also
recognised in Other Comprehensive Income or
directly in equity, respectively.

e) Government grants:

i) Government grants are recognised at their fair
value where there is a reasonable assurance
that the grant will be received and the Group
will comply with all attached conditions.

ii) Government grants relating to the purchase of
property, plant and equipment are included
in non-current liabilities as deferred income
and are credited to profit or loss in proportion
to depreciation over the expected lives of the
related assets and presented within other
income.

iii) Government grants relating to income are
deferred and recognised in the Statement
of Profit and Loss over the period necessary
to match them with the costs that they are
intended to compensate and presented
within other income.

f) Leases:

As a lessee:

Leases in which a significant portion of the risks
and rewards of ownership are not transferred to
the Company as lessee are classified as operating
leases. Payments made under operating leases
(net of any incentives received from the lessor) are
charged to profit or 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 expected
inflationary cost increases for the lessor.

As a lessor:

Lease income from operating leases where the
Company is a lessor is recognised as income on
a straight-line basis over the lease term unless
the receipts are structured to increase in line
with expected general inflation to compensate
for the expected inflationary cost increases. The
respective leased assets are included in the

Balance Sheet based on their nature.

Leases of property, plant and equipment where the
Company as a lessor has substantially transferred all
the risks and rewards are classified as finance lease.
Finance leases are capitalised at the inception of
the lease at the fair value of the leased property or,
if lower, the present value of the minimum lease
payments. The corresponding rent receivables, net
of interest income, are included in other financial
assets. Each lease receipt is allocated between the
asset and interest income. The interest income
is recognised in 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 asset for each period.

Under combined lease agreements, land and
building are assessed individually. Lease rental
attributable to the operating lease are charged
to Statement of Profit and Loss as lease income
whereas lease income attributable to finance
lease is recognised as finance lease receivable
and recognised on the basis of effective interest
rate.

g) Property, plant and equipment:

Freehold land is carried at historical cost. All
other items of property, plant and equipment
are stated at acquisition cost net of accumulated
depreciation and accumulated impairment
losses, if any.

Historical cost includes expenditure that is
directly attributable to the acquisition of the
items. Acquisition cost may also include transfers
from equity of any gains or losses on qualifying
cash flow hedges of foreign currency purchases
of property, plant and equipment.

Subsequent costs are included in the carrying
amount of asset or recognised as a separate asset,
as appropriate, only when it is probable that
future economic benefits associated with the
item will flow to the Company and the cost of the
item can be measured reliably. All other repairs
and maintenance expenses are charged to the
Statement of Profit and Loss during the period in
which they are incurred. Gains or losses arising on
retirement or disposal of assets are recognised in
the Statement of Profit and Loss.

Spare parts, stand-by equipment and servicing
equipment are recognised as property, plant
and equipment if they are held for use in the
production or supply of goods or services, for
rental to others, or for administrative purposes
and are expected to be used during more than
one period.

Property, plant and equipment which are not
ready for intended use as on the date of Balance
Sheet are disclosed as ''Capital work-in-progress''.

Depreciation methods, estimated useful lives and
residual value: Depreciation is provided on the
Straight Line Method to allocate the cost of assets,
net of their residual values, over their estimated
useful lives:

h) Intangible assets:

Computer software includes enterprise resource
planning project and other cost relating to
such software which provides significant future
economic benefits. These costs comprise of
license fees and cost of system integration
services. Development expenditure qualifying
as an intangible asset, if any, is capitalised, to be
amortised over the economic life of the product/
patent. Computer software cost is amortised over
a period of 5 years using Straight Line Method.

i) Investment properties:

Property that is held for long-term rental yields or
for capital appreciation or both, and that is not in
use by the Company, is classified as investment

property. Land held for a currently undetermined
future use is also classified as an investment
property. Investment property is measured
initially at its acquisition cost, including related
transaction costs and where applicable borrowing
costs.

j) Impairment of assets:

The carrying amount of assets are reviewed
at each Balance Sheet date to assess if there
is any indication of impairment based on
internal/ external factors. An impairment loss on
such assessment will be recognised wherever
the carrying amount of an asset exceeds its
recoverable amount. The recoverable amount
of the assets is net selling price or value in use,
whichever is higher. While assessing value in use,
the estimated future cash flows are discounted to
the present value by using weighted average cost
of capital. A previously recognised impairment
loss is further provided or reversed depending
on changes in the circumstances and to the
extent that carrying amount of the assets does
not exceed the carrying amount that will be
determined if no impairment loss had previously
been recognised.

k) Trade and other payables:

These amounts represent liabilities for goods and
services provided to the Company prior to the
end of financial year which are unpaid. Trade and
other payables are presented as current liabilities
unless payment is not due within 12 months after
the reporting period. They are recognised initially
at their fair value and subsequently measured at
amortised cost using the EIR method.

l) Inventories:

Raw materials, packing materials, purchased
finished goods, work-in-progress; manufactured
finished goods, fuel, stores and spares other than
specific spares for machinery are valued at cost
or net realisable value whichever is lower. Cost
is arrived at on moving weighted average basis.
Cost comprises all costs of purchase, costs of
conversion and other costs incurred in bringing
the inventory to the present location and
condition. Cost includes the reclassification from
equity of any gains or losses on qualifying cash

flow hedges relating to purchases of raw material
but excludes borrowing costs. Due allowances are
made for slow moving and obsolete inventories
based on estimates made by the Company.
Items such as spare parts, stand-by equipment
and servicing equipment which is not plant and
machinery gets classified as inventory.

m) Investments and other financial assets:

Classification:

The Company classifies its financial assets in the
following measurement categories:

Those to be measured subsequently at fair value
(either through Other Comprehensive Income, or
through profit or loss)

Those measured at amortised cost

The classification depends the business model of
the entity for managing financial assets and the
contractual terms of the cash flows.

For assets measured at fair value, gains and
losses will either be recorded in profit or loss or
Other Comprehensive Income. For investments
in debt instruments, this will depend on the
business model in which the investment is held.
For investments in equity instruments, this will
depend on whether the Company has made
an irrevocable selection at the time of initial
recognition to account for the equity investment
at fair value through Other Comprehensive
Income.

Initial recognition and measurement of
Financial Assets:

Financial assets are recognised when the
Company becomes a party to the contractual
provisions of the instrument. Financial assets
are recognised initially at fair value plus, in the
case of financial assets not recorded at fair value
through profit or loss, transaction costs that are
attributable to the acquisition of the financial
asset. Transaction costs of financial assets carried
at fair value through profit or loss are expensed
in the Statement of Profit and Loss. However,
trade receivables that do not contain a significant
financing component are measured at transaction
price.

Subsequent measurement:

After initial recognition, financial assets are
measured at:

i) Fair value {either through Other
Comprehensive Income (FVOCI) or through
profit or loss (FVPL)} or,

ii) Amortised cost

Debt instruments:

Subsequent measurement of debt instruments
depends on the business model of the
Company for managing the asset and the cash
flow characteristics of the asset. There are 3
measurement categories into which the Company
classifies its debt instruments:

Measured at amortised cost:

Financial assets that are held within a business
model whose objective is to hold financial assets
in order to collect contractual cash flows that
are solely payments of principal and interest,
are subsequently measured at amortised cost
using the EIR method less impairment, if any,
the amortisation of EIR and loss arising from
impairment, if any is recognised in the Statement
of Profit and Loss.

Measured at fair value through Other
Comprehensive Income (OCI):

Financial assets that are held within a business
model whose objective is achieved by both, selling
financial assets and collecting contractual cash
flows that are solely payments of principal and
interest, are subsequently measured at fair value
through Other Comprehensive Income. Fair value
movements are recognised in the OCI. Interest
income measured using the EIR method and
impairment losses, if any are recognised in the
Statement of Profit and Loss. On de-recognition,
cumulative gain | (loss) previously recognised in
OCI is reclassified from the equity to other income
in the Statement of Profit and Loss.

Measured at fair value through profit or loss:

A financial asset not classified as either amortised
cost or FVOCI, is classified as FVPL. Such financial
assets are measured at fair value with all changes

in fair value, including interest income and
dividend income if any, recognised as other
income in the Statement of Profit and Loss.

Equity instruments:

The Company subsequently measures all
investments in equity instruments other than
subsidiary companies, associate company
and joint venture Company at fair value. The
Management of the Company has selected to
present fair value gains and losses on such equity
investments in Other Comprehensive Income, and
there is no subsequent reclassification of these
fair value gains and losses to the Statement of
Profit and Loss. Dividends from such investments
continue to be recognised in profit or loss as
other income when the right to receive payment
is established.

Changes in the fair value of financial assets at fair
value through profit or loss are recognised in the
Statement of Profit and Loss. Impairment losses
(and reversal of impairment losses) on equity
investments measured at FVOCI are not reported
separately from other changes in fair value.

Investments in subsidiary companies, associate
company and joint venture company:

Investments in subsidiary companies, associate
company and Joint Venture Company are carried
at cost less accumulated impairment losses, if
any. Where an indication of impairment exists,
the carrying amount of the investment is assessed
and written down immediately to its recoverable
amount. On disposal of investments in subsidiary
companies, associate company and Joint Venture
Company, the difference between net disposal
proceeds and the carrying amounts are recognised
in the Statement of Profit and Loss.

Impairment of financial assets:

The Company assesses on a forward looking
basis the expected credit losses associated with
its assets carried at amortised cost and FVOCI
debt instruments. The impairment methodology
applied depends on whether there has been a
significant increase in credit risk. Note 36 details
how the Company determines whether there has
been a significant increase in credit risk.

For trade receivables only, the Company applies
the simplified approach permitted by Ind AS 109
Financial Instruments, which requires expected
lifetime losses to be recognised from initial
recognition of the receivables.

Expected credit loss are measured through a loss
allowance at an amount equal to the following:

(a) the 12-months expected credit losses
(expected credit losses that result from
default events on financial instrument that
are possible within 12 months after reporting
date); or

(b) Full lifetime expected credit losses (expected
credit losses that result from those default
events on the financial instrument).

The Company follows ''simplified approach'' for
recognition of impairment loss allowance on
trade receivable. Under the simplified approach,
the Company does not track changes in credit risk.
Rather, it recognizes impairment loss allowance
based on lifetime ECLs at each reporting date,
right from initial recognition.

The Company uses a provision matrix to
determine impairment loss allowance on the
portfolio of trade receivables. The provision matrix
is based on its historically observed default rates
over the expected life of the trade receivable and
is adjusted for forward looking estimates. At every
reporting date, the historical observed default
rates are updated and changes in the forward¬
looking estimates are analysed.

¦ Individual receivables which are known to be
uncollectible are written off by reducing the
carrying

¦ amount of trade receivable and the amount
of the loss is recognised in the Statement of
Profit and Loss within other expenses.

¦ Subsequent recoveries of amounts previously
written off are credited to other income.

De-recognition:

A financial asset is de-recognised only when the
Company

i) has transferred the rights to receive cash flows

from the financial asset or

ii) retains the contractual rights to receive the
cash flows of the financial asset, but assumes
a contractual obligation to pay the cash flows
to one or more recipients.

Where the entity has transferred an asset, the
Company evaluates whether it has transferred
substantially all risks and rewards of ownership
of the financial asset. In such cases, the financial
asset is de-recognised. Where the entity has not
transferred substantially all risks and rewards of
ownership of the financial asset, the financial
asset is not de-recognised.

Where the entity has neither transferred a financial
asset nor retains substantially all risks and rewards
of ownership of the financial asset, the financial
asset is de-recognised if the Company has not
retained control of the financial asset. Where the
Company retains control of the financial asset, the
asset is continued to be recognised to the extent
of continuing involvement in the financial asset.

Income recognition:

Interest income from debt instruments 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.

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

n) Financial liabilities:

i) Classification as debt or equity

Financial liabilities and equity instruments
issued by the Company are classified

according to the substance of the contractual
arrangements entered into and the
definitions of a financial liability and an equity
instrument.

ii) Initial recognition and measurement

Financial liabilities are recognised when the
Company becomes a party to the contractual
provisions of the instrument. Financial
liabilities are initially measured at the fair
value.

iii) Subsequent measurement

Financial liabilities are subsequently measured
at amortised cost using the effective interest
rate method. Financial liabilities carried at
fair value through profit or loss are measured
at fair value with all changes in fair value
recognised in the Statement of Profit and
Loss.

iv) De-recognition

A financial liability is de-recognised when
the obligation specified in the contract is
discharged, cancelled or expires.

o) Offsetting financial instruments:

Financial assets and liabilities are offset and the
net amount is reported in the Balance Sheet
where there is a legally enforceable right to
offset the recognised amounts and there is an
intention to settle on a net basis or realise the
asset and settle the liability simultaneously. The
legally enforceable right must not be contingent
on future events and must be enforceable in the
normal course of business and in the event of
default, insolvency or bankruptcy of the Company
or the counterparty.

p) 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 profit or 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 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 or transferred
to another party and the consideration paid,
including any non-cash assets transferred or
liabilities assumed, is recognised in profit or loss
as other income/(expense).

Borrowings are classified as current liabilities
if the loan is payable on demand or within 12
months after the reporting period and in all other
cases its classified as Non-current liabilities.

q) Borrowing costs:

General and specific borrowing costs that
are directly attributable to the acquisition,
construction or production of a qualifying asset
are capitalised during the period of time that is
required to complete and prepare the asset for
its intended use or sale. Qualifying assets are
assets that necessarily take a substantial period
of time to get ready for their intended use or sale.
Investment income earned on the temporary
investment of specific borrowings pending their
expenditure on qualifying assets is deducted from
the borrowing costs eligible for capitalisation.
Other borrowing costs are expensed in the period
in which they are incurred.

---

Mar 31, 2018

Notes to the Standalone Financial Statements

Background

Hi-Tech Pipes Limited is a public company limited by shares, incorporated and domiciled in India. Its registered office is located at 505, Pearl Towers, New Delhi - 110005, India and principal place of business is located at 505, Pearls OmaxeTower, Netaji Subhash Place, Pitampura, New Delhi -110034, India.

The Company is in the business of manufacturing of ERW Steel Round & Section Pipes, cold Rolled Strips & Engineering products and distribution of the same across India

Note 1 Significant Accounting Policies

This Note provides a list of the significant Accounting Policies adopted by the Company in the preparation of these Financial Statements. These policies have been consistently applied to all the years presented, unless otherwise stated.

A) Basis of preparation:

i) Compliance with Ind AS:

The Financial Statements comply in all material respects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act.

The Financial Statements up to the year ended March 31, 2017 were prepared in accordance with the Accounting Standards notified under Companies (Accounting Standard) Rules, 2006 (as amended) and other relevant provisions of the Companies Act, 2013.

These Financial Statements are the first Financial Statements of the Company under Ind AS. Refer Note 39 for an explanation of how the transition from previously applicable Indian GAAP (hereinafter referred to as ''IGAAP7) to Ind AS has affected the financial position, financial performance and cash flows of the Company.

ii) Accrual basis of accounting iii) Historical cost convention:

The Financial Statements have been prepared on a historical cost basis except for certain financial assets and liabilities that are measured at fair value

B) Foreign currency transactions:

i) Functional and presentation currency:

Items included in the Financial Statements of the Company are measured using the currency of the primary economic environment in which the Company operates (''functional currency''). The Financial Statements of the Company are presented in Indian currency (Rs), which is also the functional and presentation currency of the Company.

ii) Transactions and balances:

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gain | (loss) resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in profit or loss except that they are deferred in equity if they relate to qualifying cash flow hedges. Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the Statement of Profit and Loss, within finance costs. All other foreign exchange gain | (loss) are presented in the Statement of Profit and Loss on a net basis within other income | (expense). Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain | (loss).

Revenue recognition:

i) Timing of recognition:

Revenue from sale of goods is recognised when all the significant risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract, there is no continuing managerial involvement with the goods, the amount of revenue can be measured reliably and it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the activities of the Company.

This generally happens upon dispatch of the goods to customers, except for export sales which are recognised when significant risk and rewards are transferred to the buyer as per the terms of contract.

Revenue from services is recognised in the accounting period in which the services are rendered.

Eligible export incentives are recognised in the year in which the conditions precedent are met and there is no significant uncertainty about the collectability.

ii) Measurement of revenue:

Revenue is measured at the fair value of the consideration received or receivable, after the deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the Government which are levied on sales such as sales tax, value added tax, GST (Goods & Service Tax) etc.

Revenue includes excise duty as it is paid on production and is a liability of the manufacturer, irrespective of whether the goods are sold or not.

Discounts given include rebates, price reductions and other incentives given to customers. No element of financing is deemed present as sales are made with a credit term which is consistent with market practice.

D) Income taxes:

The income tax expense or credit for the period is the tax payable on the taxable income of the current period based on the applicable income tax rates adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and unused tax losses. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period. The Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Minimum Alternate Tax (''MAT7) under the provisions of the Income Tax Act, 1961 is recognised as current tax in the Statement of Profit and Loss. The credit available under the Act in respect of MAT paid will be recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the period for which the MAT credit can be carried forward for set off against the normal tax liability. Such an asset is reviewed at each Balance Sheet date.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts. However, deferred tax liabilities are not recognised if they arise from the initial recognition of Goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit | (tax loss). Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the Balance Sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in Other Comprehensive Income or directly in equity. In this case, the tax is also recognised in Other Comprehensive Income or directly in equity, respectively.

E) Government grants:

i) Government grants are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions.

ii) Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to profit or loss in proportion to depreciation over the expected lives of the related assets and presented within other income.

iii) Government grants relating to income are deferred and recognised in the Statement of Profit and Loss over the period necessary to match them with the costs that they are intended to compensate and presented within other income.

F) Leases:

As a lessee:

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or 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 expected inflationary cost increases for the lessor.

As a lessor:

Lease income from operating leases where the Company is a lessor is recognised as income on a straight-line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases. The respective leased assets are included in the Balance Sheet based on their nature.

Leases of property, plant and equipment where the Company as a lessor has substantially transferred all the risks and rewards are classified as finance lease. Finance leases are capitalised at the inception of the lease at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rent receivables, net of interest income, are included in other financial assets. Each lease receipt is allocated between the asset and interest income. The interest income is recognised in 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 asset for each period.

Under combined lease agreements, land and building are assessed individually. Lease rental attributable to the operating lease are charged to Statement of Profit and Loss as lease income whereas lease income attributable to finance lease is recognised as finance lease receivable and recognised on the basis of effective interest rate.

G) Property, plant and equipment:

Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at acquisition cost net of accumulated depreciation and accumulated impairment losses, if any.

Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the carrying amount of asset or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance expenses are charged to the Statement of Profit and Loss during the period in which they are incurred. Gains or losses arising on retirement or disposal of assets are recognised in the Statement of Profit and Loss.

Spare parts, stand-by equipment and servicing equipment are recognised as property, plant and equipment if they are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes and are expected to be used during more than one period.

Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as'' Capital work-in-progress''.

Depreciation methods, estimated useful lives and residual value: Depreciation is provided on the basis of Straight Line Method to allocate the cost of assets, net of their residual values, over their estimated useful lives:

Asset category

Factory Buildings Plantand equipment Vehicles

Furniture & Fittings Computers

Estimated useful life

30 years 5 to 25 years 8 to 10 years

10 years 3 years

Land accounted under finance lease is amortized on a straight-line basis over the period of lease.

The carrying amount of an asset is written down immediately to its recoverable amount if the carrying amount of the asset is greater than its estimated recoverable amount.

Transition to Ind AS:

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as at April 01, 2016 measured under IGAAP as the deemed cost of the property, plant and equipment.

H) Intangible assets:

Computer software includes enterprise resource planning project and other cost relating to such software which provides significant future economic benefits. These costs comprise of license fees and cost of system integration services. Development expenditure qualifying as an

intangible asset, if any, is capitalised, to be amortised over the economic life of the product | patent. Computer software cost is amortised over a period of 5 years using Straight Line Method.

Transition to Ind AS:

On transition to Ind AS, the Company has elected to continue with the carrying value of intangible assets recognised as at April 01, 2016 measured under IGAAP as the deemed cost of intangible assets.

I) Investment properties:

Property that is held for long-term rental yields or for capital appreciation or both, and that is not in use by the Company, is classified as investment property. Land held for a currently undetermined future use is also classified as an investment property. Investment property is measured initially at its acquisition cost, including related transaction costs and where applicable borrowing costs.

J) Impairment of assets:

The carrying amount of assets are reviewed at each Balance Sheet date to assess if there is any indication of impairment based on internal | external factors. An impairment loss on such assessment will be recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount of the assets is net selling price or value in use, whichever is higher. While assessing value in use, the estimated future cash flows are discounted to the present value by using weighted average cost of capital. A previously recognised impairment loss is further provided or reversed depending on changes in the circumstances and to the extent that carrying amount of the assets does not exceed the carrying amount that will be determined if no impairment loss had previously been recognised.

K) Cash and cash equivalents:

Cash and cash equivalents include cash in hand, demand deposits with bank and other short-term (3 months or less from the date of acquisition), highly liquid investments that are readily convertible into cash and which are subject to an insignificant risk of changes in value.

L) Trade receivables:

Trade receivables are initially recognised at fair value. Subsequently, these assets are held at amortised cost, using the effective interest rate (EIR) method, less provision for impairment.

M) Trade and other payables:

These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the EIR method.

N) Inventories:

Raw materials, packing materials, purchased finished goods.

work-in-progress, manufactured finished goods,fuel, stores and spares other than specific spares for machinery are valued at cost or net realisable value whichever is lower. Cost is arrived at on moving weighted average basis. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventory to the present location and condition. Due allowances are made for slow moving and obsolete inventories based on estimates made by the Company. Items such as spare parts, stand-by equipmentand servicing equipment which is not plantand machinery gets classified as inventory.

O) Investments and other financial assets:

Classification:

The Company classifies its financial assets in the following measurement categories:

i) Those to be measured subsequently at fair value (either through Other Comprehensive Income, or through profit or loss)

ii) Those measured at amortised cost

The classification depends on the business model of the entity for managing financial assets and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in profit or loss or Other Comprehensive Income. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through Other Comprehensive Income.

Initial recognition and measurement:

Financial assets are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in the Statement of Profit and Loss.

Subsequent measurement:

After initial recognition, financial assets are measured at:

i) Fair value {either through Other Comprehensive Income (FVOCI) or through profit or loss (FVPL)} or,

ii) Amortised cost

Debt instruments:

Subsequent measurement of debt instruments depends on the business model of the Company for managing the asset and the cash flow characteristics of the asset. There are 3 measurement categories into which the Company classifies its debt instruments:

Measured at amortised cost:

Financial assets that are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows that are solely payments of principal and interest, are subsequently measured at amortised cost using the EIR method less impairment, if any, the amortisation of EIR and loss arising from impairment, if any is recognised in the Statement of Profit and Loss.

Measured at fair value through Other Comprehensive Income (OCI):

Financial assets that are held within a business model whose objective is achieved by both, selling financial assets and collecting contractual cash flows that are solely payments of principal and interest, are subsequently measured at fair value through Other Comprehensive Income. Fair value movements are recognised in the OCI. Interest income measured using the EIR method and impairment losses, if any are recognised in the Statement of Profit and Loss. On de-recognition, cumulative gain | (loss) previously recognised in OCI is reclassified from the equity to other income in the Statement of Profit and Loss.

Measured at fair value through profit or loss:

A financial asset not classified as either amortised cost or FVOCI, is classified as FVPL. Such financial assets are measured at fair value with all changes in fair value, including interest income and dividend income if any, recognised as other income in the Statement of Profit and Loss.

Equity instruments:

The Company subsequently measures all investments in equity instruments other than subsidiary company at fair value. The Management of the Company has elected to present fair value gains and losses on such equity investments in Other Comprehensive Income, and there is no subsequent reclassification of these fair value gains and losses to the Statement of Profit and Loss. Dividends from such investments continue to be recognised in profit or loss as other income when the right to receive payment is established.

Changes in the fair value of financial assets at fair value through profit or loss are recognised in the Statement of Profit and Loss. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.

Investments in subsidiary company

Investments in subsidiary company are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately

to its recoverable amount. On disposal of investments in subsidiary company, the difference between net disposal proceeds and the carrying amounts are recognised in the Statement of Profit and Loss.

De-recognition:

A financial asset is de-recognised only when the Company

i) has transferred the rights to receive cash flows from the financial asset or

ii) retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.

Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is de-recognised. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not de-recognised.

Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is de-recognised if the Company has not retained control of the financial asset. Where the Company retains control of the financial asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset.

Financial liabilities:

i) Classification as debt or equity

Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

ii) Initial recognition and measurement

Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at the fair value.

iii) Subsequent measurement

Financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognised in the Statement of Profit and Loss.

iv) De-recognition

A financial liability is de-recognised when the obligation specified in the contract is discharged, cancelled or expires.

P) Offsetting financial instruments:

Financial assets and liabilities are offset and the net amount is reported in the Balance Sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.

Q) 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 profit or 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 or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income | (expense).

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

R) Borrowing costs:

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. Other borrowing costs are expensed in the period in which they are incurred.

S) Provisions and contingent liabilities:

Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. These are reviewed at each year end and reflect the best current estimate. Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured atthe present value of best estimate of the Management of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.

T) Employee benefits:

Short-term employee benefits:

All employee benefits payable within 12 months of service such as salaries, wages, bonus, ex-gratia, medical benefits etc. are recognised in the year in which the employees render the related service and are presented as current employee benefit obligations within the Balance Sheet. Termination benefits are recognised as an expense as and when incurred.

Short-term leave encashment is provided at undiscounted amount during the accounting period based on service rendered by employees. Compensation payable under Voluntary Retirement Scheme is being charged to Statement of Profit and Loss in the year of settlement.

Other long-term employee benefits:

The liabilities for earned leave and sick leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. 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. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in profit or 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 12 months after the reporting period, regardless of when the actual settlement is expected to occur.

Defined contribution plan:

Contributions to defined contribution schemes such as contribution to Provident Fund and Employees'' State Insurance Corporation are charged as an expense to the Statement of Profit and Loss based on the amount of contribution required to be made as and when services are rendered by the employees. The above benefits are classified as Defined Contribution Schemes as the Company has no further defined obligations beyond the monthly contributions.

Defined benefit plan:

Gratuity:

Gratuity liability is a defined benefit obligation and is computed on the basis of an actuarial valuation by an actuary appointed for the purpose as per projected unit credit method atthe end of each financial year. The liability or asset recognised in the Balance Sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets.

The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on Government bonds that have terms approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit and Loss.

U) Research and Development expenditure:

Research and Development expenditure is charged to revenue under the natural heads of account in the year in which it is incurred. Research and Development expenditure on property, plant and equipment is treated in the same way as expenditure on other property, plant and equipment.

V) Earnings per share:

Earnings per share (EPS) is calculated by dividing the net profit or loss for the period attributable to Equity Shareholders by the weighted average number of Equity shares outstanding during the period. Earnings considered in ascertaining the EPS is the net profit for the period and any attributable tax thereto for the period.

W) Contributed equity:

Equity shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

X) Critical estimates and judgements

Preparation of the Financial Statements requires use of accounting estimates which, by definition, will seldom equal the actual results. This Note provides an overview of the areas that involved a higher degree of judgements

or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the Financial Statements.

The areas involving critical estimates or judgements are: i) Estimation of useful life of tangible assets ii) Estimation of defined benefit obligation

Estimates and judgements are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances

Y) Transition to Ind AS

These are the first Financial Statements of the Company prepared in accordance with Ind AS.

The Accounting Policies set out in Note 1 have been applied in preparing the Financial Statements for the year ended March 31, 2018, the comparative information presented in these Financial Statements for the year ended March 31, 2017 and in the preparation of an opening Ind AS Balance Sheet as at April 01,2016 (the date of transition). In preparing its opening Ind AS Balance Sheet, the Company has adjusted the amounts reported previously in Financial Statements prepared in accordance with the Accounting Standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (IGAAP). An explanation of how the transition from IGAAP to Ind AS has affected the financial position, financial performance and cash flows of the Company is set out in the following tables and notes:

Exemptions and exceptions availed

In preparing these Ind AS Financial Statements, the Company has availed certain exemptions and exceptions in accordance with Ind AS 101 First-time Adoption of Indian Accounting Standards, as explained below. The resulting difference between the carrying values of the assets and liabilities in the Financial Statements as at the transition date under Ind AS and IGAAP have been recognised directly in equity (retained earnings oranotherappropriate category of equity). This Note explains the adjustments made by the Company in restating its IGAAP Financial Statements, including the Balance Sheet as at April 01,2016 and the Financial Statements as at and for the year ended March 31,2017.

a) Ind AS optional exemptions

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from IGAAP to Ind AS.

i) Deemed cost

Ind AS 101 permits a first-time adopter to elect

to continue with the carrying value for all of its property, plant and equipment as recognised in the Financial Statements as at the date of transition to Ind AS, measured under IGAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38''Intangible Assets''and investment properties covered by Ind AS 40 ''Investment Property''. Accordingly, the Company has elected to measure all of its property, plantand equipment and intangible assets at their IGAAP carrying value in their Financial Statements.

ii) Designation of previously recognised financial instruments

Ind AS 101 allows an entity to designate investments in equity instruments at FVOCI on the basis of the facts and circumstances at the date of transition to Ind AS.

The Company has elected to apply this exemption for its investment in equity investments.

iii) Investments in subsidiary company

Ind AS 101 permits a first-time adopter to measure it''s investment, at the date of transition, at cost determined in accordance with Ind AS 27, or deemed cost,The deemed cost of such investment shall be its fair value at date of transition to Ind AS of the Company, or IGAAP carrying amount at that date. The Company has elected to measure its investment in subsidiary company under IGAAP carrying amount as its deemed cost on the transition date.

b) Ind AS mandatory exceptions

The Company has applied the following exceptions from full retrospective application of Ind AS as mandatorily required under Ind AS 101:

Estimates

Estimates in accordance with Ind AS at the transition date will be consistent with estimates made for the same date in accordance with IGAAP (after adjustments to reflect any difference in Accounting Policies) unless there is objective evidence that those estimates were in error.

Ind AS estimates as at April 01,2016 are consistent with the estimates as at the same date made in conformity with IGAAP.

Z) Others

i) Figures of the earlier year have been reclassified to conform to Ind AS presentation requirements.

ii) The Financial Statements were authorised for issue by the Board of Directors on May 22,2018.

2. Property, Plant and Equipment

Particulars Land Office Factory Plant & Office '' Computers Furni- Vehicles Total
Building Shed & Machinery Equipment ture & Tangible
Buildina Fixtures Assets
Deemed Cost as at	849.35	449.19	981.89	2,998.05	36.08	7.24	95.07	94.82	5,511.69
1st April, 201 6
Additions	109.10	61.93	289.72	1,223.70	10.59	9.29	4.07	47.40	1,755.80
Disposals	-	-	-	-	-	-	-	-5.44	-5.44
Gross Carrying amt.	958.45	511.12	1,271.60	4,221.75	46.67	16.53	99.14	136.78	7,262.05
as at 31st March,
2017
Addition	-	1,596.72	1 42.69	1,360.15	4.87	1.65	13.30	113.50	3,232.88
Disposals	-	-	-	-	-	-	-	-	-
Gross Carrying amt.	958.45	2,107.84	1,414.29	5,581.90	51.54	18.18	112.44	250.28	10,494.94
as at 31st March, 2018

Accumulated Depreciation/Amortisation and impairment

Balance as 31.03.2016	-	-	-	-	-	-	-	-	-
Depriciation for the year	-	24.72	96.79	397.56	15.15	5.80	26.82	39.68	606.52
Depriciation on Disposals	-
Balance as 31.03.2017	-	24.72	96.79	397.56	15.15	5.80	26.82	39.68	606.52
Depriciation for the year	-	13.03	43.27	204.57	11.59	7.12	13.45	30.30	323.33
Depriciation on Disposals	-	-	-	-	-	-	-	-	-
Balance as 31.03.2018	-	37.75	140.06	602.13	26.74	12.92	40.27	69.98	929.85

Net Carrying amount

As at 31. 03. 201 8	958.45	2,070.10	1,274.24	4,979.77	24.80	5.26	72.17	180.30	9,569.52
As at 31. 03.201 7	958.45	486.40	1,174.81	3,824.19	31.52	10.73	72.33	97.10	6,659.97
As at 01. 04.201 6	849.35	449.19	981.89	2,998.05	36.08	7.24	95.07	94.82	5,511.69
Useful life of Assets (Years)	NA	60	30	15-25	5	3	10	8-10	-
Method of Depreciation	NA	SLM	SLM	SLM	SLM	SLM	SLM	SLM	-

Note:

a) The company has elected to continue with the carrying value for all of its property, plant and equipment as recognised in financial statements as at the date of the transition to Ind AS i.e. 1st April, 2016 measured as per the previous GAAP and use that as its deemed cost as at the date of transition. The carrying value as at 1 st April, 2016 amounting to ?5511.70 lakhs of property, plant & equipment represents gross cost of ?9290.95 net of accumulated depreciation of Rs 3779.25 as at 31st March, 2016.

b) Property, Plant & equipment have been pledged as security against certain long term borrowings of the company as at 31 March 2018 (Refer Note 15)

c) Considering the nature of property, plant and equipment using in the business and operations of the company, it has been analyzed and observed that assets are depreciating in linear and steady rate every year because repair and maintenance costs were almost equal on particular assets in preceding financial years irrespective of its capacity utilization. Since assets are depreciating in linear vertical, therefore method of depreciation on all assets has been changed from written down method to straight line method prospectively w.e.f Financial Year 2017-18.

d) The company was having some Property lying as Inventory. In order to fulfill its business requirement the company has decided to use some those Property for business purposes & accordingly during FY 2018 company has re-classified Inventory Property of Rs 1049.84 Lakhs as Fixed Assets.

e) The Company has capitalised Rs 25.53 Lakhs as borrowing cost during the FY 2017-18 (FY 17 Rs 201.71, FY 16 Rs 115)

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Mar 31, 2016

a) BASIS OF PREPARATION OF FINANCIAL STATEMENT

The Financial Statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India to comply with the Accounting Standards as specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and other relevant provisions of the Companies Act, 2013, as applicable.

The financial statements have been prepared on accrual basis under the historical cost convention method.

b) FIXED ASSETS

1) TANGIBLE ASSETS

1) Tangible assets are carried at cost, net of tax credit entitlement availed less accumulated depreciation. The cost includes cost of acquisition/construction, installation and pre-operative expenditure including trial run expenses (net of revenue) and borrowing costs incurred during pre-operation period. Expenses incurred on capital assets are carried forward as capital work in progress at cost till the same are put to use.

ii) When an asset is scrapped or otherwise disposed off, the cost and related depreciation are removed from the books of account and resultant profit or loss, if any, is reflected in the Statement of Profit and Loss.

iii) Pre-operative expenses including interest on borrowings for the capital goods, wherever applicable and any other cost incurred which is directly attributable to bringing the assets to its working condition for its intended use are treated as part of the cost of capital goods, hence capitalized.

2) INTANGIBLE ASSETS Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization/depletion z and impairment loss, if any. The cost comprises purchase price, borrowing costs, and any cost directly attributable to ^ bringing the asset to its working condition for the intended use.

c) DEPRECIATION

Depreciable amount for assets is the written down value of an asset, or other amount substituted for such asset, less its estimated residual value. Depreciation on tangible fixed assets have been provided on depreciable amount on the written down value method as per the useful life prescribed in ‘Schedule II’ to the Companies Act, 2013 except in respect of the following categories of assets, in whose case the life of assets has been assessed under based on technical advice, taking into account yj the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufactures warranties and maintenance support, etc. Certain items of Plant Machinery -having 5, 15, 20, and 25 Years of life as per their nature and usage and past experiences. Intangible assets are carried at cost and co amortized on a Straight Line Basis so as to reflect the pattern in which the asset’s economic benefits are consumed. The Computer software is amortized over a period of five financial years.

d) INVENTORIES VALUATION

Inventories comprise all cost of purchases, conversion and other cost incurred in bringing the inventories to their present location and conditions.

Raw Materials and spares are valued at the cost and net of modvat credit availed.

Work-in-progress is valued at estimated cost.

Finished goods at (inclusive of excise) cost or market value whichever is lower.

Scraps are valued Net estimated realizable value.

Immovable Property valued at cost.

The basis of valuation of inventories in respect to finished goods has been taken to confirm to the revised standard on valuation of Inventories (AS-2) issued by the Institute of Chartered Accountants of India to include excise duty thereon, which has no impact on the profit of the company.

e) EXCISE DUTY

Excise duty liability on finished goods manufactured and lying in the factory is accounted for and the corresponding amount is considered for valuation thereof.

f) REVENUE RECOGNITION

Sale of goods is recognized, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the dispatch of goods to customers. Sales include excise duty but exclude sales tax, value added tax. Sales net of excise duty is also disclosed separately. Revenue from services is recognized when the services are completed. Other income is accounted on accrual basis.

g) FOREIGN EXCHANGE TRANSACTIONS

Foreign currency transactions are recorded at the rate of exchange prevailing on the date of transaction. All exchange differences are dealt within statement of profit and loss account. Current assets and current liabilities in foreign currency outstanding at the yearend are translated at the rate of exchange prevailing at the close of the year and resultant gains/losses are recognized in the statement of profit and loss account of the year except in cases where they are covered by forward foreign exchange contracts in which these cases are translated at the contracted rates of exchange and the resultant gains/losses recognized in statement of profit and loss account over the life of the contract.

h) BORROWING COST

Borrowing costs include interest; amortization of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit ^L and Loss over the tenure of the loan. Borrowing costs, allocated to and utilized for qualifying assets, pertaining to the period N from commencement of activities relating to construction / development of the qualifying asset up to the date of capitalization of such asset are added to the cost of the assets.

i) CASH AND CASH EQUIVALENTS

Cash comprises cash in hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

j) CASH FLOW STATEMENT

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Group are segregated.

k) EMPLOYEES BENEFITS

a) Short term employee’s benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

b) Long term employee’s benefits: Liability towards Gratuity and un-availed leaves has been provided on the basis of actuarial valuation.

I) INCOME TAX

Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates.

Deferred income tax reflects the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/ period.

Deferred tax assets are recognized only to the extent that there is a reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed depreciation or losses, are recognized if there is virtual certainty that sufficient future taxable income will be available to realize the same.

Deferred tax assets and liabilities are measured using the tax rates and tax law that have been enacted or substantively enacted by the Balance Sheet date.

m) SHARE ISSUE EXPENSES

Share issue expenses are adjusted against the Securities Premium Account as permissible under Section 52 of the Companies Act, 2013, to the extent any balance is available for utilization in the Securities Premium Account and balance if any remained treated as expense in the Statement of Profit and Loss.

---

Mar 31, 2015

Note 1 : Significant Accounting Policies

a. Basis of Preparation of Financial Statement

The Financial Statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India to comply with the Accounting Standards as specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and other relevant provisions of the Companies Act, 2013, as applicable. The financial statements have been prepared on accrual basis under the historical cost convention method.

b. Fixed Assets

1) Tangible Assets

1) Tangible assets are carried at cost, net of tax credit entitlement availed less accumulated depreciation. The cost includes cost of acquisition/construction, installation and preoperative expenditure including trial run expenses (net of revenue) and borrowing costs incurred during pre-operation period. Expenses incurred on capital assets are carried forward as capital work in progress at cost till the same are put to use.

ii) When an asset is scrapped or otherwise disposed off, the cost and related depreciation are removed from the books of account and resultant profit or loss, if any, is reflected in the Statement of Profit and Loss.

iii) Pre-operative expenses including interest on borrowings for the capital goods, wherever applicable and any other cost incurred which is directly attributable to bringing the assets to its working condition for its intended use are treated as part of the cost of capital goods, hence capitalized.

2) Intangible Assets

Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization/depletion and impairment loss, if any. The cost comprises purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use.

c. Depreciation

Depreciable amount for assets is the written down value of an asset, or other amount substituted for such asset, less its estimated residual value.

Depreciation on tangible fixed assets have been provided on depreciable amount on the written down value method as per the useful life prescribed in ''Schedule II'' to the Companies Act, 2013 except in respect of the following categories of assets, in whose case the life of assets has been assessed under based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufactures warranties and maintenance support, etc.

Certain items of Plant Machinery - having 15, 20, and 25 Years of life as per their nature and usage and past experiences.

Intangible assets are carried at cost and amortized on a Straight Line Basis so as to reflect the pattern in which the asset''s economic benefits are consumed.

The Computer software is amortized over a period of five financial years.

d. Inventories Valuation

Inventories comprise all cost of purchase, conversion and other cost incurred in bringing the inventories to their present location and conditions.

Raw Materials and spares are valued at the cost and net of modvat credit availed.

Work-in-progress is valued at estimated cost.

Finished goods at estimated (inclusive of excise) cost or market value whichever is lower.

Scraps are valued Net estimated realizable value.

The basis of valuation of inventories in respect to finished goods has been taken to confirm to the revised standard on valuation of Inventories (AS-2) issued by the Institute of Chartered Accountants of India to include excise duty thereon, which has no impact on the profit of the company.

e. Excise Duty

Excise duty liability on finished goods manufactured and lying in the factory is accounted for and the corresponding amount is considered for valuation thereof.

f. Revenue Recognition

Sale of goods is recognized, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales include excise duty but exclude sales tax, value added tax. Sales net of excise duty and inter-divisional transfer is also disclosed separately. Revenue from services is recognized when the services are completed. Other income is accounted on received and accrual basis.

g. Foreign Exchange Transactions

Foreign currency transactions are recorded at the rate of exchange prevailing on the date of transaction. All exchange differences are dealt within statement of profit and loss account. Current assets and current liabilities in foreign currency outstanding at the yearend are translated at the rate of exchange prevailing at the close of the year and resultant gains/losses are recognized in the statement of profit and loss account of the year except in cases where they are covered by forward foreign exchange contracts in which these cases are translated at the contracted rates of exchange and the resultant gains/losses recognized in statement of profit and loss account over the life of the contract.

h. Borrowing Cost

Borrowing costs include interest; amortization of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilized for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset up to the date of capitalization of such asset are added to the cost of the assets.

i. Cash and cash equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

j. Cash Flow Statement

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Group are segregated.