Accounting Policies of Subam Papers Ltd. Company

Sale of goods

Revenue is recognised upon transfer of control of promised goods to customer in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.

The Company recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those
goods or services.

Revenue is measured based on the transaction price, which is the consideration, net of customer incentives, discounts, variable considerations, payments made to customers, other similar charges, as specified in
the contract with the customer. Additionally, revenue excludes taxes collected from customers, which are subsequently remitted to governmental authorities. For certain contracts that permits the customer to
return an item, revenue is recognised to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognised will not occur and is reassessed at the end of each reporting period.

Revenue from sale of products is recognised at the point in time when control is transferred to customer. Costs that relate directly to a contract and incurred in securing a contract are recognized as an asset and
amortized over the contract term as reduction in revenue.

Further, revenue from sale of goods is recognized based on a 5-Step Methodology which is as follows:

Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligation in contract
Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation

Contracts are subject to modification to account for changes in contract specification and requirements. The Company reviews modification to contract in conjunction with the original contract, basis which the
transaction price could be allocated to a new performance obligation, or transaction price of an existing obligation could undergo a change. In the event transaction price is revised for existing obligation, a
cumulative adjustment is accounted for.

Scrap Sales

Revenue from sale of scraps in the course of ordinary activities is measured at the transaction price.

Sale of Services

Revenue with respect to sale of services is recognized when the services are rendered, and no significant uncertainty exists regarding the collection of consideration.

Export incentives

Income from export incentives and duty drawbacks is recognised on accrual basis when no significant uncertainties as to the amount of consideration that would be derived and as to its ultimate collection exist.
Other Income

Revenue (other than sale) is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

Interest Income

Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a
time basis, by reference to the principal outstanding and at the effective interest rate applicable.

Rental Income

Rental income from investment properties and subletting of properties is recognised on a straight line basis over the term of the relevant leases.

Renewal Energy Certificate

Renewable Energy Certificate (REC) benefits are recognized in Statement of Profit & Loss on sale of REC’s.

(b) Property Plant and Equipment

On transition to IND AS, the company had adopted optional exception under IND AS 101 to measure Property, Plant and Equipment (PPE) at fair value. Consequently the fair value had been assumed to be
deemed cost of PPE on the date of transition. Subsequently PPE were carried at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenditure that is directly
attributable to the acquisition of the items. The cost property, plant and equipment at 1 April 2024, the Company’s date of transition to Ind AS, was determined with reference to its carrying value recognised as
per the previous GAAP (deemed cost), as at the date of transition to Ind AS.

PPE acquired are stated at cost net of tax/duty credit availed, less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenses directly attributable to bringing the asset to the
location and condition necessary for it to be capable of operating in the manner intended by management.

Capital work-in-progress includes cost of PPE under installation / under development as at the balance sheet date. Advances paid towards the acquisition of PPE outstanding at each balance sheet date is
classified as capital advances under other noncurrentassets.

Subsequent expenditures relating to PPE is capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the costs to the item can be measured reliably.
Repairs and maintenance costs are recognized in net profit in the statement of profit and loss when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale
or retirement of the asset and the resultant gain or losses are recognized in the statement of profit and loss.

Gains or losses that arise on disposal or retirement of an asset are measured as the difference between net disposal proceeds and the carrying value of property, plant and equipment and are recognized in the
statement of profit and loss when the same is derecognized.

Depreciation on additions due to exchange rate fluctuation is provided on the basis of residual life of the assets.

Depreciation will be charged from the date the asset is available for use, i.e., when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The
residual values, useful lives and methods of depreciation of PPE are reviewed at each financial year end and adjusted prospectively, if appropriate.

Depreciation and useful lives

Depreciable amount for assets is the cost of asset less its estimated residual value. Depreciation on property, plant and equipment is calculated on a straight-line basis using the rates arrived at based on the useful
lives estimated by the management. Based on the internal technical assessment, the management believes that the useful lives as given below, which are different from those prescribed in Part C of schedule II of
the Act, best represent the period over which Management expects to use these assets.

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposal are determined by
comparing proceeds with carrying amount. These are included in statement of profit or loss within other gains / losses.

c) Other Intangible Assets

Intangible Assets are recognised, if the future economic benefits attributable to the assets are expected to flow to the company and cost of the asset can be measured reliably. All other expenditure is expensed as
incurred. The same are amortised over the expected duration of benefits. Such intangible assets are measured at cost less any accumulated amortisation and impairment losses, if any and are amortised over their
respective individual estimated useful life on straight line method.

The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period and adjusted prospectively, if appropriate.

Intangible assets with indefinite useful lives like goodwill acquired in business combination are not amortised but are tested for impairment annually. The assessment of indefinite useful life is reviewed annually
to determine whether indefinite life continues to be supportable. The change in useful life from indefinite to finite life if any, is made on prospective basis.

d) Impairment of non-financials asset

The carrying amount of PPEs, Intangible assets and Investment property are reviewed at each Balance Sheet date to assess impairment if any, based on internal / external factors. An asset is treated as impaired,
when the carrying cost of asset exceeds its recoverable value, being higher of value in use and net selling price. An impairment loss is recognised as an expense in the Statement of Profit and Loss in the year in
which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed, if there has been an improvement in recoverable amount.

e) Capital work-in-progress

Capital work-in-progress representing expenditure incurred in respect of assets under development and not ready for their intended use, are carried at cost. Cost includes related acquisition expenses,
construction cost, related borrowing cost and other direct expenditure.

f) Investment property

Investment property comprises land and buildings held to earn rentals or for capital appreciation. It is measured at cost less accumulated depreciation and impairment losses, if any. The fair value of investment
property is disclosed in the notes to accounts, as determined by an independent valuer.

g) Leases

The Company assesses at contract inception whether a contract is, or contains, a lease, that is if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.

Company as a lessee

The Company accounts for each lease component within the contract as a lease separately from non-lease components of the contract and allocates the consideration in the contract to each lease component on
the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.

The Company has adopted Ind AS 116 “Leases” effective April 1,2024(Transition date) using the simplified approach (Modified retrospective cumulative effect from April 1, 2024)

Right-of-use Assets

The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any re-measurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and
lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis from the commencement date over the shorter of the lease
term and the estimated useful lives of the assets.

If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
Lease Liabilities

At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments
(including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The
lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company
exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event
or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Company uses its existing borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After
the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is re-measured
if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a
change in the assessment of an option to purchase the underlying asset.

Right-of-use assets and Lease liabilities have been presented as a separate line in Note 3(c) of Property, Plant and Equipment (PPE) and Note 18 of Lease Liabilities. Lease payments have been classified as cash
used in financing activities.

Short-Term Leases and Leases of Low-value Assets

The Company has elected not to recognise right-of-use assets and lease liabilities for short term leases of all assets that have a lease term of 12 months or less and leases of low-value assets. The Company
recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease.

Company as a Lessor

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

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

h) Foreign Exchange Transactions and Translations

Financial statements are presented in Indian Rupee, which is Company functional currency. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates
of exchange at the reporting date. Financial instruments designated as Hedge Instruments are mark to market using the valuation given by the bank on the reporting date. Exchange differences arising on
settlement of monetary items on actual payments / realisations and year end translations including on forward contracts are dealt with in Profit and Loss Statement except exchange differences arising on those
Long term foreign currency monetary items, related to acquisition of depreciable capital assets being carried forward from previous GAAP, which are adjusted to cost of such assets and depreciated over their
balance life pursuant to the option in Notification No. G.S.R 914(E) dated 29th December, 2011 issued by Ministry of Corporate Affairs. Non Monetary Foreign Currency items are stated at cost.

i) Employee Benefits
Defined contribution plan

A defined contribution plan is a postemployment benefit plan under which an entity pays specified contributions to a separate entity and has no obligation to pay any further amounts. The Company makes
specified monthly contributions towards employee Provident Fund to Government administered Provident Fund Scheme which is a defined contribution plan. The Company’s contribution is recognized as an
expense in the statement of profit and loss during the period in which the employee renders the related service.

Defined benefit plans

The Company Liabilities on account of Gratuity and Earned Leave on retirement of employees are determined at the end ofeach financial year on the basis of actuarial valuation certificates obtained from
Registered Actuary in accordance with the measurement procedure as per Indian Accounting Standard (Ind AS-19), ‘Employee Benefits’. These liabilities are funded on year-to-year basis by contribution to
respective funds. The costs of providing benefits under these plans are also determined on the basis of actuarial valuation at each year end. Actuarial gains and losses for defined benefit plans are recognized
through OCI in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.

The Provident Fund Contribution other than contribution to Employees’ Regional Provident Fund, is made to trust administered by the trustees. The interest rate to the members of the trust shall not be lower
than the statutory rate declared by the Central Government under Employees’ Provident Fund and Miscellaneous Provision Act, 1952. The Employer shall make good deficiency, if any.

The Defined Benefit Plan can be short term or Long terms which are defined below:

i) Short-Term Employee Benefit:

All employees’ benefits payable wholly within twelve months rendering services are classified as short term employee benefits. Benefits such as salaries, wages, short-term compensated absences, performance
incentives etc., and the expected cost of bonus, ex-gratia are recognized during the period in which the employee renders related service.

ii) Long-Term Employee Benefits:

Compensated absences which are not expected to occur within 12 months after the end of the period in which the employee renders the related services are recognized as a liability at the present value of the
defined benefit obligation at the balance sheet date.

Termination Benefits

Termination benefits are recognized as an expense in the period in which they are incurred. The Company shall recognise a liability and expense for termination benefits at the earlier of the following dates:

(a) When the entity can no longer withdraw the offer of those benefits; and

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j) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of
the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

k) Earnings per Share (EPS)

Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period.

Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earnings
per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the
proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as of the
beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.

The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the
approval of the financial statements by the Board of Directors.

l) Income Tax
Current Tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are
enacted or substantively enacted, at the reporting date.

Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit and loss. Management periodically evaluates positions taken in the tax returns with
respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred Tax

Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose
at reporting date. Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to
taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or
expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against
which the deductible temporary differences and tax losses can be utilized. The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized
amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

m) Inventory Valuation

Inventories such as Raw Materials, Finished Goods are valued at the lower of cost or net realisable value (except scrap/waste which are value at net realisable value) and the Work-in-Progress, Stores & Spares
are valued at cost.

The cost is computed on FIFO basis. Finished Goods and Process Stock include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

Inventories are valued at the lower of cost and net realisable value. Cost of inventories comprises purchase price, costs of conversion and other costs incurred in bringing the inventories to their present location
and condition, and Goods in Transit (GIT). GIT is included in inventory valuation when the risks and rewards of ownership are transferred to the Company. In determining the cost, FIFO cost is used. Net
realizable value is the estimated selling price in the ordinary course of business, less estimated costs to sell. The comparison of cost and net realizable value is made on an item-by-item basis.

The method of determination of cost is as follows:

• Raw materials, Goods in Transit and components- on a FIFO

• Stores and spares - on a FIFO

• Work-in-progress - includes cost of conversion.

• Finished goods- includes cost of conversion.

n) Cash and Cash Equivalents

Cash flows are reported using the indirect method, whereby profit for the period 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 Company are segregated.

2. Significant Accounting Policies
Basis of Preparation

These financial statements have been prepared in accordance with the Generally Accepted
Accounting Principles in India (‘Indian GAAP’) to comply with the Accounting Standards
specified under Section 133 of the Companies Act, 2013, read with rule 7 of the Companies
(Accounts) Rules, 2014 as applicable. The financial statements have been prepared under
the historical cost convention on accrual basis, except for certain financial instruments
which are measured at fair value.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting period. Although these
estimates are based upon management’s best knowledge of current events and actions,
actual results could differ from these estimate

2.1 Fixed Assets

Tangible Fixed Assets is stated at acquisition cost net of accumulated depreciation and
accumulated impairment losses, if any. Cost of acquisition or construction of property, plant
and equipment comprises its purchase price including import duties and non-refundable
purchase taxes after deducting trade discounts, rebates and any directly attributable cost of
bringing the item to its working condition for its intended use.

Subsequent costs are included in the asset''s carrying amount or recognised as a separate
asset, as appropriate, only when it is probable that future economic benefits associated with
the item will flow to the Company and the cost of the item can be measured reliably. All
other repairs and maintenance cost are charged to the standalone statement of profit and loss
during the period in which they are incurred.

Gains or losses that arise on disposal or retirement of an asset are measured as the difference
between net disposal proceeds and the carrying value of property, plant and equipment and
are recognized in the statement of profit and loss when the same is derecognized

2.2 Capital Work-in-Progress

All project / capital related expenditure viz., civil works, machinery under erection,
construction and erection materials, pre-operating expenditure including interest net of
revenue included / attributable to the contracts of the project / as of incurred up to the date
when the asset is ready for its intended use are shown as Capital work-in-progress.

2.3 Borrowing Costs

Borrowing costs directly attributable to acquisition or construction of an asset which
necessarily take a substantial period of time to get ready for their intended use are
capitalized as part of the cost of that asset. Other borrowing costs are recognized as an
expense in the period in which they are incurred.

2.4 Depreciation

Depreciation is calculated on cost of items of the Fixed Assets less their estimated useful
values over their estimated useful lives using the straight-line method and is generally
recognized in the statement of profit &loss account. Freehold land is not depreciated.

The estimated useful lives of the Fixed Assets are as follows:

Assets Management estimate of useful life
Buildinga 30 Year

Office Equipment and Furniture 3 to 10 Years
Plant & Machinery 15 to 25 Years
Vehicles 10 Years

Depreciation method and useful lives and residual values are reviewed at each financial year
end adjusted if appropriate. The management believes that its estimates of useful lives as
given above best represent the period over which the management expects to use the assets.

2.5 Current / Non-current classification

For the purpose of Current / Non-Current classification, the Company has reckoned its
normal operating cycle as twelve months based on the nature of products and the time
between the acquisition of assets or inventories for processing and their realisation in cash
and cash equivalents.

2.6 Impairment

At each balance sheet date, the management reviews the carrying amounts of its assets
included in each cash generating unit to determine whether there is any indication that those
assets were impaired. If any such indication exists, the recoverable amount of the asset is
estimated in order to determine the extent of impairment. Recoverable amount is the higher
of an asset’s net selling price and value in use. In assessing value in use, the estimated future
cash flows expected from the continuing use of the asset and from its disposal are
discounted to their present value using a pre-tax discount rate that reflects the current market
assessments of time value of money and the risks specific to the asset. Reversal of
impairment loss is recognised as income in the statement of profit and loss.

2.7 Investments

Long-term investments and current maturities of long-term investments are stated at cost,
less provision for other than temporary diminution in value. Current investments, except for
current maturities of long-term investments, comprising investments in mutual funds,
government securities and bonds are stated at the lower of cost and fair value.

2.8 Revenue recognition

Revenue is measured based on the transaction price, which is the fair value of the
consideration received or receivable after netting trade discounts, volume discounts, sales
returns and Goods and Services Tax. Revenue from sale of goods is recognized upon
transfer of control of promised goods or services to customers

Income from interest is being accounted for on time proportion basis taking into account the
amount outstanding and the applicable rate of interest. In respect of other heads of income,
the company follows the practice of accounting of such income on accrual basis

Earnings from Non-Conventional Energy sources

The company has installed Off-site Solar Plant and Windmills for captive consumption of
power. The value of power so generated from the Off-site Solar Plant and Windmills are
shown separately under "Other Operating Revenues".

2.9 Taxation

Current income tax expense comprises taxes on income from operations in India Income tax
payable in India is determined in accordance with the provisions of the Income Tax Act,
1961

Deferred tax expense or benefit is recognised on timing differences being the difference
between taxable income and accounting income that originate in one period and is likely to
reverse in one or more subsequent periods. Deferred tax assets and liabilities are measured
using the tax rates and tax laws that have been enacted or substantively enacted by the
balance sheet date

Advance taxes and provisions for current income taxes are presented in the balance sheet
after off-setting advance tax paid and income tax provision arising in the same tax
jurisdiction for relevant tax paying units and where the Company is able to and intends to
settle the asset and liability on a net basis. The Company offsets deferred tax assets and
deferred tax liabilities if it has a legally enforceable right and these relate to taxes on income
levied by the same governing taxation laws.

a) Foreign exchange transactions/translations:

i. Initial Recognition: Foreign currency transactions are reported in the reporting currency,
by applying to the foreign currency amount the exchange rate between the reporting
currency and the foreign currency at the date of transaction.

ii. Conversion: Foreign currency monetary items are retranslated using the exchange rate
prevailing at the reporting date.

iii. Exchange Differences: Exchange difference arising on long term currency monetary
items related to acquisition of a fixed asset a recapitalized and depreciated over the
remaining useful life of the asset. The exchange differences on other foreign currency
monetary items are accumulated in.

“Foreign currency monetary item translation difference account” and amortized over the
remaining life of the concerned monetary item. All other exchange differences are
recognised as income or as expense in the period in which they arise according to the
accounting standard 11 “The effects of change in Foreign exchange rates”.

2.10 Inventories

Raw materials are carried at the lower of cost and net realisable value. Cost is determined on
a FIFO basis Work-in-progress is carried at the cost. Stores and spare parts are carried at
cost. Finished goods produced or purchased by the Company are carried at lower of cost and
net realisable value. Cost includes direct material and labor cost and a proportion of
manufacturing overheads

2. Significant Accounting Policies
Basis of Preparation

These financial statements have been prepared in accordance with the Generally Accepted Accounting
Principles in India (‘Indian GAAP’) to comply with the Accounting Standards specified under Section
133 of the Companies Act, 2013, read with rule 7 of the Companies (Accounts) Rules, 2014 as applicable.
The financial statements have been prepared under the historical cost convention on accrual basis, except
for certain financial instruments which are measured at fair value.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of
operations during the reporting period. Although these estimates are based upon management’s best
knowledge of current events and actions, actual results could differ from these estimates.

Change in Depreciation Method

During the year ended 31st March 2024, the company revised the estimated useful life of its machinery
from the rates specified in Schedule II of the Companies Act, 2013, to management''s estimated useful life.
This change was based on a detailed review of the machinery''s usage and technological advancements.

The impact of this change on the financial statements for the year is as follows:

- Increase in profit before tax by ?553.74 Lacs due to lower depreciation expense.

- Decrease in depreciation expense by ?553.74 Lacs.

The effect of the change on future periods is impracticable to determine at this time.

2.1 Fixed Assets

Tangible Fixed Assets is stated at acquisition cost net of accumulated depreciation and accumulated
impairment losses, if any. Cost of acquisition or construction of property, plant and equipment comprises
its purchase price including import duties and non-refundable purchase taxes after deducting trade
discounts, rebates and any directly attributable cost of bringing the item to its working condition for its
intended use.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to
the Company and the cost of the item can be measured reliably. All other repairs and maintenance cost
are charged to the standalone statement of profit and loss during the period in which they are incurred.

Gains or losses that arise on disposal or retirement of an asset are measured as the difference between net
disposal proceeds and the carrying value of property, plant and equipment and are recognized in the
statement of profit and loss when the same is derecognized.

22 Capital Work-in-Progress

All project / capital related expenditure viz., civil works, machinery under erection, construction and
erection materials, pre-operating expenditure including interest net of revenue included / attributable to
the contracts of the project / as of incurred up to the date when the asset is ready for its intended use are
shown as Capital work-in-progress.

23 Borrowing Costs

Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a
substantial period of time to get ready for their intended use are capitalized as part of the cost of that asset.
Other borrowing costs are recognized as an expense in the period in which they are incurred.

2.4 Depreciation

Depreciation is calculated on cost of items of the Fixed Assets less their estimated useful values over their
estimated useful lives using the straight-line method and is generally recognized in the statement of profit
and loss account. Freehold land is not depreciated.

Depreciation method and useful lives and residual values are reviewed at each financial year end adjusted
if appropriate. The management believes that its estimates of useful lives as given above best represent
the period over which the management expects to use the assets.

2.5 Current / Non-current classification

For the purpose of Current / Non-Current classification, the Company has reckoned its normal operating
cycle as twelve months based on the nature of products and the time between the acquisition of assets or
inventories for processing and their realisation in cash and cash equivalents.

2.6 Impairment

At each balance sheet date, the management reviews the carrying amounts of its assets included in each
cash generating unit to determine whether there is any indication that those assets were impaired. If any

such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of
impairment. Recoverable amount is the higher of an asset’s net selling price and value in use. In assessing
value in use, the estimated future cash flows expected from the continuing use of the asset and from its
disposal are discounted to their present value using a pre-tax discount rate that reflects the current market
assessments of time value of money and the risks specific to the asset. Reversal of impairment loss is
recognised as income in the statement of profit and loss.

2.7 Investments

Long-term investments and current maturities of long-term investments are stated at cost, less provision
for other than temporary diminution in value. Current investments, except for current maturities of long¬
term investments, comprising investments in mutual funds, government securities and bonds are stated at
the lower of cost and fair value.

2.8 Revenue recognition

Revenue is measured based on the transaction price, which is the fair value of the consideration received
or receivable after netting trade discounts, volume discounts, sales returns and Goods and Services Tax.
Revenue from sale of goods is recognized upon transfer of control of promised goods or services to
customers.

Income from interest is being accounted for on time proportion basis taking into account the amount
outstanding and the applicable rate of interest. In respect of other heads of income, the company follows
the practice of accounting of such income on accrual basis.

Earnings from Non-Conventional Energy sources

The company has installed Off-site Solar Plant and Windmills for captive consumption of power. The
value of power so generated from the Off-site Solar Plant and Windmills are shown separately under
"Other Operating Revenues".

2.9 Taxation

Current income tax expense comprises taxes on income from operations in India Income tax payable in
India is determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax expense or benefit is recognised on timing differences being the difference between taxable
income and accounting income that originate in one period and is likely to reverse in one or more
subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that
have been enacted or substantively enacted by the balance sheet date.

Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting
advance tax paid and income tax provision arising in the same tax jurisdiction for relevant tax paying
units and where the Company is able to and intends to settle the asset and liability on a net basis. The
Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and
these relate to taxes on income levied by the same governing taxation laws.

i. Initial Recognition: Foreign currency transactions are reported in the reporting currency, by applying
to the foreign currency amount the exchange rate between the reporting currency and the foreign
currency at the date of transaction.

ii. Conversion: Foreign currency monetary items are retranslated using the exchange rate prevailing at
the reporting date.

iii. Exchange Differences: Exchange difference arising on long term currency monetary items related
to acquisition of a fixed asset a recapitalized and depreciated over the remaining useful life of the
asset. The exchange differences on other foreign currency monetary items are accumulated in.

“Foreign currency monetary item translation difference account” and amortized over the remaining life
of the concerned monetary item. All other exchange differences are recognised as income or as expense
in the period in which they arise according to the accounting standard 11 “The effects of change in Foreign
exchange rates”.

2.10 Inventories

Raw materials are carried at the lower of cost and net realisable value. Cost is determined on a FIFO basis
Work-in-progress is carried at the cost. Stores and spare parts are carried at cost. Finished goods produced
or purchased by the Company are carried at lower of cost and net realisable value. Cost includes direct
material and labor cost and a proportion of manufacturing overheads.