Accounting Policies of Tatva Chintan Pharma Chem Ltd. Company

Mar 31, 2025

2 Material accounting policies

a) Statement of compliance, basis of preparation and
presentation
Statement of compliance:

The standalone financial statements of the Company have
been prepared in accordance with Indian Accounting
Standards (Ind AS) as per the Companies (Indian Accounting
Standards) Rules, 2015 as amended and notified under
section 133 of the Companies Act, 2013 and presentation
requirements of Division II of Schedule III to the Companies
Act, 2013.

Basis of preparation and presentation:

These standalone financial statements are prepared under
the historical cost convention on the accrual basis except
for certain financial instruments, which are measured at fair
values.

The classification of assets and liabilities of the Company
have been done into current and non-current based on the
operating cycle of the business of the Company.

The Company has ascertained its operating cycle of the
business as twelve months and therefore all current and
non-current classifications are done based on the status of
reliability and expected settlement of the respective asset and
liability within a period of twelve months from the reporting
date as required by Schedule III to the Companies Act, 2013.

The financial statements are presented in Indian Rupees (''?''),
which is Company''s functional currency and all values are

rounded to the nearest "million" with two decimal places,
except otherwise indicated.

Foreign currency transactions and translation:

Foreign currency transactions are translated in to functional
currency at the exchange rates prevailing on the date of such
transactions.

Monetary assets and liabilities denominated in foreign
currencies are translated at the functional currency spot
rates of exchange prevailing at the reporting date. Differences
arising on settlement or translation of monetary items are
recognized in the statement of profit and loss.

Non-monetary items that are measured at historical costs in
a foreign currency are translated using the exchange rates
at the dates of initial transactions. Non-monetary items that
are measured at fair value in foreign currency are translated
using the exchange rates at the date when the fair value was
determined.

Translation differences on non-monetary items measured at
fair value is to be reported in line with the recognition of the
gain or loss on the change in the fair value of the item (i.e.,
FVTOCI or FVTPL). Any profit or loss arising on cancellation,
maturity or renewal of forward exchange contracts is
recognized as income or expenses in the statement of profit
and loss and included in exchange difference.

The Company has elected to continue the policy adopted for
accounting for exchange differences arising from translation
of long-term foreign currency monetary items as described
in Para D13AA of Ind AS 101 "First-Time Adoption of Ind AS".
Accordingly, exchange loss/ (gain) arising on all long-term
monetary items financed or re-financed relating to acquisition
of property, plant and equipment are added to/adjusted from
the cost of such assets/ capital work-in-progress and will be
depreciated over the balance useful life of such assets.

b) Use of significant accounting estimates and judgements

The preparation of the standalone financial statements
in conformity with Ind AS requires management to make
estimates, judgements and assumptions.

These estimates, judgements and assumptions affect the
application of accounting policies and the reported amounts
of assets and liabilities, the disclosures of contingent assets
and liabilities at the date of standalone financial statements
and reported amounts of revenues and expenses for the
years presented.

The estimates and associated assumptions are based on
historical experience and other factors that are considered to
be relevant. Actual results may differ from those estimates.

2. Material accounting policies (Continued)

The estimates and underlying assumptions are reviewed
on ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised,
if the revision affects only that period or in the period of
revision and future period, if the revision affects current and
future periods.

The estimates and assumptions that have a significant risk
of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year are
discussed below:

i. Recoverability of deferred tax and other income tax
assets

The Company has unabsorbed depreciation and MAT
credit that are available for offset against future taxable
profit. Deferred tax assets are recognised only to the
extent that it is probable that taxable profit will be
available against which the unused tax credits can be
utilised.

This involves an assessment of when those assets are
likely to reverse, and a judgement as to whether or not
there will be sufficient taxable profits available to offset
the assets.

This requires assumptions regarding future profitability,
which is inherently uncertain. To the extent assumptions
regarding future profitability change, there can be
an increase or decrease in the amounts recognised in
respect of deferred tax assets and consequential impact
in the statement of profit and loss.

ii. Useful lives of property, plant and equipment

The Company reviews the useful life of property, plant
and equipment at the end of each reporting period.
This re-assessment may result in change in depreciation
expense in future periods.

iii. Defined benefit plans (gratuity benefits)

The obligation arising from defined benefit plans is
determined on the basis of actuarial assumptions.
Key actuarial assumptions include 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. Any change in these assumptions would have a
significant impact on the Company''s balance sheet and
the statement of profit and loss.

iv. Impairment of property, plant and equipment and
intangible assets

For property, plant and equipment and intangible
assets, an assessment is made at each reporting date
to determine whether there is an indication that the
carrying amount may not be recoverable or previously
recognised impairment losses no longer exist or have
decreased.

If such indication exists, then Company estimates
recoverable amount of the assets or cash generating
unit (CGU). A previously recognised impairment loss
is reversed only if there has been a change in the
assumptions used to determine the asset''s recoverable
amount since the last impairment loss was recognised.

v. Impairment of investment

The Company assesses impairment of investments in
subsidiaries which are recorded at cost. At the time
when there are any indications that such investments
have suffered a loss, if any, is recognised in the statement
of profit and loss.

The recoverable amount requires estimates of operating
margin, discount rate, future growth rate, terminal
values, etc. based on management''s best estimate. Any
subsequent changes to the cash flows due to changes in
the above-mentioned factors could impact the carrying
value of investments.

vi. Provisions and contingencies

A provision is recognised when the Company has a
present obligation as result of a past event and it is
probable that the outflow of resources will be required
to settle the obligation, in respect of which a reliable
estimate can be made. These are reviewed at each
balance sheet date and adjusted to reflect the current
best estimates.

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.

Contingent liabilities are disclosed in notes but not
recognised in the financial statements.

Contingent assets are not recognised, but disclosed in
the financial statements when an inflow of economic

benefit is probable. The actual outflow or inflow of
resources at a future date may therefore, vary from the
amount included in provisions and contingencies.

c) Fair value measurement

Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date.

The fair value measurement is based on the presumption that
the transaction to sell the asset or transfer the liability takes
place either:

> In the principal market for the asset or liability, or

> In the absence of a principal market, in the most
advantageous market for the asset or liability

The principal or the most advantageous market must be
accessible by the Company.

The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in
their economic best interest.

A fair value measurement of a non-financial asset takes into
account a market participant''s ability to generate economic
benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the
asset in its highest and best use.

The Company uses valuation techniques that are appropriate
in the circumstances and for which sufficient data are
available to measure fair value, maximising the use of relevant
observable inputs and minimising the use of unobservable
inputs.

All assets and liabilities for which fair value is measured
or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based
on the lowest level input that is significant to the fair value
measurement as a whole:

Level 1: Quoted (unadjusted) market prices in active markets
for identical assets or liabilities

Level 2: Valuation techniques for which the lowest level input
that is significant to the fair value measurement is directly or
indirectly observable

Level 3: Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
unobservable.

For assets and liabilities that are recognised in the financial
statements on a recurring basis, the Company determines
whether transfers have occurred between levels in the
hierarchy by re-assessing categorisation (based on the lowest
level input that is significant to the fair value measurement as
a whole) at the end of each reporting period.

The Company''s management determines the appropriate
valuation techniques and inputs for fair value measurements.
In estimating the fair value of an asset or a liability, the
Company uses market-observable data to the extent it is
available.

Where level 1 inputs are not available, the Company engages
third party qualified valuers to perform the valuation. Any
change in the fair value of each asset and liability is also
compared with relevant external sources to determine
whether the change is reasonable.

For the purpose of fair value disclosures, the Company has
determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and
the level of the fair value hierarchy as explained above.

d) Property, plant and equipment

Property, plant and equipment are stated at cost less
accumulated depreciation. Cost includes all expenses and
financing costs related to acquisition and construction of the
concerned assets and any attributable cost of bringing the
asset to the condition of its intended use.

The Company has elected to continue the policy adopted for
accounting for exchange differences arising from translation
of long-term foreign currency monetary items as described
in Para D13AA of Ind AS 101 "First-Time Adoption of Ind AS".
Accordingly, exchange loss/ (gain) arising on all long-term
monetary items financed or re-financed relating to acquisition
of property, plant and equipment are added to/ adjusted
from the cost of such assets/ capital work-in-progress and will
be depreciated over the balance useful life of such assets.

Subsequent expenditures relating to property, plant and
equipment are capitalized only when it is probable that future
economic benefits associated with these will flow to the
Company and the cost of the item can be measured reliably.

Repair and maintenance cost are recognized in the statement
of profit and loss when incurred. The cost and related
accumulated depreciation are eliminated from the financial
statements upon sale or retirement of the asset and the
resultant gains or losses are recognized in the statement of
profit and loss.

measured reliably. Intangible assets are stated at original
cost net of tax/duty credits availed, if any, less accumulated
amortization and cumulative impairment.

Administrative and other general overhead expenses that are
specifically attributable to acquisition of intangible assets are
allocated and capitalized as a part of the cost of the intangible
assets.

Computer software that is expected to provide future
enduring economic benefits is capitalized. The capitalized
cost includes license fees and cost of implementation/
system integration services. Gains or losses arising from the
retirement or disposal of an intangible asset are determined
as the difference between the net disposal proceeds and the
carrying amount of the asset and recognized as income or
expense in the statement of profit and loss.

The intangible assets with a finite useful life are amortised
using straight line method over their estimated useful lives.
The management''s estimates of the useful lives for various
class of intangibles are as given below:

Intangible assets under development: Research is original
and planned investigation undertaken with the prospect
of gaining new scientific or technical knowledge and
understanding. Expenditure pertaining to research activities
is charged to the statement of profit and loss, when incurred.

Development is the application of research findings or other
knowledge activities to a plan or design for the production
of new or substantially improved material, devices, products,
processes systems or services before the start of commercial
production or use.

Development expenditure is capitalised as part of the cost of
the resulting intangible asset only if the expenditure can be
measured reliably, the product or process is technically and
commercially feasible, future economic benefits are probable
and the Company intends to and has sufficient resources to
complete development and to use or sell the asset. Otherwise,
it is recognised in statement of profit and loss as incurred.
Subsequent to initial recognition, development expenditure
is measured at cost less accumulated amortisation and any
accumulated impairment losses.

Gains or losses arising from the retirement or disposal of
an asset are determined as the difference between the net
disposal proceeds and the carrying amount of the asset and
recognized as income or expense in the statement of profit
and loss.

Capital work-in-progress: Capital work-in-progress comprises
of property, plant and equipment under development that
are not ready for their intended use at the end of reporting
period and are carried at cost comprising direct costs, related
incidental expenses, other directly attributable costs and
borrowing costs, less impairment losses if any.

e) Depreciation and amortization

Depreciation on tangible property, plant and equipment has
been provided on the basis of useful life as stated in Schedule
II of the Companies Act, 2013 using the straight-line method.
Lease hold land is amortized over the period of lease.
Depreciation methods, useful lives and residual values are
reviewed periodically, including at each financial year end.
The following are the estimated useful lives:

f) Intangible assets

Intangible assets are recognized when it is probable that the
future economic benefits that are attributable to the asset
will flow to the enterprise and the cost of the asset can be

g) Impairment of tangible assets and intangible assets
other than goodwill

At the end of each reporting period, the Company reviews
the carrying amounts of its tangible and intangible assets to
determine whether there is any indication that those assets
have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in
order to determine the extent of the impairment loss (if any).

When it is not possible to estimate the recoverable amount of
an individual asset, the Company estimates the recoverable
amount of the cash-generating unit (CGU) to which the
asset belongs. When a reasonable and consistent basis
of allocation can be identified, corporate assets are also
allocated to individual cash-generating units, or otherwise
they are allocated to the smallest group of cash-generating
units for which a reasonable and consistent allocation basis
can be identified. Recoverable amount is the higher of fair
value less costs of disposal and value in use.

In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time
value of money and the risks specific to the asset for which
the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset or cash-generating unit
is estimated to be less than its carrying amount, the assets is
considered impaired and is written down to its recoverable
amount and impairment loss is recognized in statement of
profit and loss. A previously recognised impairment loss is
reversed only if there has been a change in the assumptions
used to determine the assets recoverable amount since the
last impairment loss was recognised.

When an impairment loss subsequently reverses, the carrying
amount of the asset (or a cash-generating unit) is increased
to the revised estimate of its recoverable amount, but the
increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment
loss been recognised for the asset (or cash generating unit) in
prior years. Such reversal is recognised in statement of profit
and loss unless the assets is carried at a revalued amount, in
which case, the reversal is treated as a revaluation increase.

h) Investments and other financial assets

i) 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 statement of profit and loss); and

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

ii) Initial measurement

Financial assets are initially measured at fair value.
Transaction costs that are directly attributable to the
acquisition of financial assets (other than financial
assets at fair value through profit or loss) are added to
the fair value of the financial assets, as appropriate, on
initial recognition.

Transaction costs directly attributable to the acquisition
of financial assets at fair value through profit or loss are
recognised immediately in statement of profit and loss.

iii) Subsequent measurement - debt instruments

Subsequent measurement of the debt instruments
depends on the Company''s business model for
managing the asset and the cash flow characteristics of
the asset.

The Company classifies its debt instruments in the
following three categories:

Amortized cost: Assets that are held for collection of
contractual cash flows where those cash flows represent
solely payments of principal and interest are measured
at amortized cost.

A gain or loss on a debt investment that is subsequently
measured at amortized cost and is not a part of the
hedging relationship is recognized in the statement
of profit and loss when the asset is derecognized or
impaired. Interest income from these financial assets
is included in other income using the effective interest
rate method.

Fair value through other comprehensive income
(FVTOCI): Assets that are held for collection of
contractual cash flows and for selling the financial assets
where the assets cash flows represent solely payments
of principal and interest are measured at fair value
through other comprehensive income (OCI).

Movements in the carrying amount are taken through
OCI, except for recognition of impairment gains or
losses, interest revenue and foreign exchange gains and
losses which are recognized in the statement of profit
and loss.

When financial asset is derecognized, the cumulative
gain or loss previously recognized in OCI is reclassified
from equity to profit or loss and recognized in other
gains/losses. Interest income from these financial assets
is included in other income using the effective interest
rate method.

Fair value through profit or loss (FVTPL): Assets that
do not meet the criteria for amortized cost or FVTOCI
are measured at fair value through profit or loss. A
gain or loss on a debt investment that is subsequently
measured at fair value through profit or loss and is
not a part of hedging relationship is recognized in the
statement of profit and loss. Interest income from these
financial assets is included in other income.

iv) Subsequent measurement - equity instruments

The Company subsequently measures all equity
instruments at fair value. When the management has
elected to present fair value gains and losses on equity
instruments in other comprehensive income, there is no
subsequent reclassification of fair value gains and losses
to statement of profit and loss.

Dividends from such investments are recognized in the
statement of profit and loss as other income when the
Company''s right to receive payment is established.

Changes in the fair value of financial assets at FVTPL
are recognized in the statement of profit and loss.
Impairment losses (and reversal of impairment losses)
on equity investments measured at FVTOCI are not
reported separately from other changes in fair value.

v) Impairment of financial assets

Expected credit losses are recognised for all financial
assets subsequent to initial recognition other than
financials assets in FVTPL category.

Expected credit losses is the weighted-average of
difference between all contractual cash flows that are
due to the Company in accordance with the contract
and all the cash flows that the Company expects to
receive, discounted at the original effective interest
rate, with the respective risks of default occurring as the
weights. When estimating the cash flows, the Company
is required to consider:

• All contractual terms of the financial assets
(including prepayment and extension) over the
expected life of the assets.

• Cash flows from the sale of collateral held or
other credit enhancements that are integral to the
contractual terms.

I n respect of trade receivables, the Company applies
the simplified approach of Ind AS 109, which requires
measurement of loss allowance at an amount equal to
lifetime expected credit losses. Lifetime expected credit
losses are the expected credit losses that result from
all possible default events over the expected life of a
financial instrument.

For financial assets other than trade receivables, the
Company recognises 12 month expected credit losses as
per Ind AS 109 for all originated or acquired financial
assets, if at the reporting date the credit risk of the
financial asset has not increased significantly since
its initial recognition. The expected credit losses are
measured as lifetime expected credit losses, if the credit
risk on financial asset increases significantly since its
initial recognition.

The Company assumes that the credit risk on a financial
asset has not increased significantly since initial
recognition if the financial asset is determined to have
low credit risk at the balance sheet date.

vi) De-recognition of financial assets

A financial asset is de-recognized when the Company
has transferred the rights to receive cash flows from
the financial asset or 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.

When the Company has transferred an asset, it
evaluates whether it has transferred substantially all the
risks and rewards of ownership of the financial asset. In
such cases, the financial asset is derecognized.

When the Company has neither transferred a financial
asset nor retains substantially all the risks and rewards
of ownership of the financial asset, the financial asset is
derecognized if the Company has not retained control of
the financial asset.

vii) Investment in subsidiaries

The Company has accounted for its investments in
subsidiaries at cost less impairment loss, if any. Cost
includes the purchase price and other costs directly
attributable to the acquisition of investments.

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 subsidiaries, the
difference between net disposal proceeds and the

carrying amounts are recognised in the statement of
profit and loss.

Further, under Ind AS 101, while transitioning to Ind
AS from previous GAAP, the Company had elected to
measure its existing investments in subsidiaries on the
date of transition at cost.

i) Financial liabilities and equity instruments
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.

Equity instruments

An equity instrument is any contract that evidences a residual
interest in the assets of the Company after deducting all of
its liabilities. Equity instruments are recorded at the proceeds
received, net of direct issue costs.

Financial liabilities

Trade and other payables are initially measured at fair value,
net of transaction costs, and are subsequently measured
at amortized cost, using the effective interest rate method.
Interest-bearing bank loans, overdrafts and issued debt are
initially measured at fair value and are subsequently measured
at amortized cost using the effective interest rate method.
Any difference between the proceeds (net of transaction
costs) and the settlement or redemption of borrowings is
recognized over the term of the borrowings in accordance
with the Company''s accounting policy for borrowing costs.

Fair value measurement of financial instruments

The fair value of financial instruments is the price that would
be received to sell an asset or paid to transfer a liability in an
orderly transaction in the principal (or most advantageous)
market at the measurement date under current market
conditions (i.e., an exit price) regardless of whether that price
is directly observable or estimated using another valuation
technique.

When the fair values of financial assets and financial liabilities
recorded in the balance sheet cannot be derived from active
markets, they are determined using a variety of valuation
techniques that include the use of valuation models.

The inputs to these models are taken from observable
markets where possible, but where this is not feasible,
estimation is required in establishing fair values. Judgements
and estimates include considerations of liquidity and model
inputs related to items such as credit risk (both own and
counterparty), correlation and volatility.

Derivative financial instrument

The Company holds derivative financial instruments such as
foreign exchange forward contracts (not designated as cash
flow hedges) to mitigate the risk of changes in exchange rates
on foreign currency exposures. The counterparty for these
contracts is generally a bank.

Financial assets or financial liabilities, at fair value through
profit or loss

This category has derivative financial assets or liabilities which
are not designated as hedges. Although the Company believes
that these derivatives constitute hedges from an economic
perspective, they may not qualify for hedge accounting under
Ind AS 109 Financial Instruments.

Any derivative that is either not designated as hedge, or is so
designated but is ineffective as per Ind AS 109, is categorized
as a financial asset or financial liability, at fair value through
profit or loss. Derivatives not designated as hedges are
recognized initially at fair value and attributable transaction
costs are recognized in net profit in the statement of profit
and loss when incurred.

Subsequent to initial recognition, these derivatives are
measured at fair value through profit or loss and the resulting
exchange gains or losses are included in other income. Assets/
liabilities in this category are presented as current assets/
current liabilities if they are either held for trading or are
expected to be realized within 12 months after the balance
sheet date.

Derecognition of financial liabilities

The Company derecognizes financial liabilities when, and only
when, the Company''s obligations are discharged, cancelled or
they expire.

j) Cash and cash equivalents

Cash and cash equivalents comprise cash at bank, cash on
hand and short term highly liquid investments with original
maturities of three months or less, that is readily convertible
to known amounts of cash and which are subject to an
insignificant risk of changes in value.

k) Inventories

Inventories are valued at lower of cost or net realisable value.
The basis of determining costs for each class of inventories
are as follows:

• Raw materials, packing materials, consumables, stores
and spares: Cost includes cost of purchase and other
costs incurred in bringing inventories to their present
location and condition. Costs are determined on first in,
first out basis. However, these items are considered to

be realisable at cost if the finished products, in which
they will be used, are expected to be sold at or above
cost.

• Finished goods and work-in-progress: Cost includes
cost of direct materials, direct labour and a proportion
of manufacturing overheads based on normal operating
capacity but excluding borrowing costs. Cost is
determined on first in, first out basis.

• Stock-in-trade: Cost includes cost of purchase and other
costs incurred in bringing inventories to their present
location and condition. Costs are determined on first in,
first out basis.

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

l) Revenue recognition

Revenue from contracts with customers

Ind AS 115 "Revenue from contracts with customers" provides
a control-based revenue recognition model and provides a
five-step application approach to be followed for revenue
recognition i.e.:

a) Identify the contract(s) with a customer;

b) Identify the performance obligations;

c) Determine the transaction price;

d) Allocate the transaction price to the performance
obligations;

e) Recognize revenue when or as an entity satisfies
performance obligation.

Revenue is measured based on the transaction price as
specified in the contract with the customer, after the
deduction of any trade discounts, volume rebates, sales
return on transfer of control in respect of ownership to the
buyer which is generally on dispatch of goods and any other
taxes or duties collected on behalf of the Government which
are levied on sales such as Goods and Services Tax (GST),
where applicable. Discounts given include rebates, price
reductions and other incentives given to customers.

As per the terms of the contract with customers, the Company
expects, at the contract inception, that the period between
transfers of a promised goods or services to customer and
related payments for the goods or services will be less than
one year or less. Accordingly, the Company has availed the
practical expedient available as per paragraph 63 of Ind AS 115
and has not adjusted the promised amount of consideration
for the effects of significant financing component, if any.

Revenue from sale of products is recognized when the
control on the goods or services has been transferred to the
customers and Revenue from sale of services is recognised on
satisfaction of performance obligation towards rendering of
such services. The performance obligation in case of sale of
product is satisfied at a point in time i.e., when the material
is shipped to the customer or on delivery to the customer,
as may be specified in the contract. The majority of the
Company''s revenue arrangements generally consist of a
single performance obligation to transfer promised goods or
services.

Revenue is recognised in an amount that reflects the
consideration, which the Company expects to receive
in exchange for those products or services. Revenue 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, regardless of when the payment is being
made. None of the Company''s contracts contain variable
consideration and contract modifications are generally
minimal.

Contract balances

Contract assets: A contract asset is the right to consideration
in exchange for goods or services transferred to the customer.
If the Company performs by transferring goods or services to
a customer before the customer pays consideration or before
payment is due, a contract asset is recognised for the earned
consideration that is conditional.

Trade receivable: A receivable is recognised if an amount of
consideration that is unconditional (i.e., only the passage of
time is required before payment of the consideration is due).

Contract liabilities: A contract liability is the obligation
to transfer goods or services to a customer for which the
Company has received consideration (or an amount of
consideration is due) from the customer. If a customer
pays consideration before the Company transfers goods or
services to the customer, a contract liability is recognised
when the payment is made or the payment is due (whichever
is earlier). Contract liabilities are recognised as revenue when
the Company performs under the contract.

Other incomes

• Claims and rebates receivables are accounted as and
when settled.

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

to the principal outstanding and at the effective interest
rate applicable, which is the rate that exactly discounts
estimated future cash receipts through the expected life
of the financial asset to that asset''s net carrying amount
on initial recognition.

• Dividends are recognized in statement of profit and loss
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.

• Incomes in respect of duty drawback or other export
promotion schemes in respect of exports made during
the year are accounted on accrual basis

m) Employee benefits

Employee benefits of the Company includes all forms of
consideration (directly or indirectly) given by the Company in
exchange for services rendered by employees or termination
of employment. Where employees include their dependents
and their beneficiaries and includes all categories i.e., full
time, part time, casual, temporary and permanent etc.

Employee benefits includes four types of benefits:

A. Short-term employee benefits,

B. Post-employment benefits,

C. Other long-term employee benefits, and

D. Termination benefits

A. Short-term employee benefits

Employee benefits (other than termination benefits) that
are expected to be settled wholly before 12 months after
the end of reporting period. e.g.: salary and wages, social
security contributions, paid leaves, maternity leave,
bonus and other non-monetary benefits such as medical
checkup, group insurance and subsidised services.

The Company measures short-term employee benefits
on an undiscounted basis and they do not involve any
actuarial valuation.

The Company recognises short-term employee benefits
expected to be paid:

a) as employee benefits expense in the statement
of profit and loss, if it does not form part of the
cost of an asset as per any other Ind AS (Ind AS
2 "Inventories" or Ind AS 16 "Property, plant and
equipment"), and

b) as a current liability (employee benefits payable)
or as a current asset (accrued expense) in the

balance sheet, after deducting any amount already
paid.

B. Post-employment benefits

Employee benefits (other than short-term employee
benefits and termination benefits) that are payable
after the completion of employment. e.g.: gratuity.

These benefits are of two types:

i) Defined contribution plans, and

ii) Defined benefits plans.

Defined contribution plans: Contribution to retirement
benefit plans in the form of provident fund, employee
state insurance scheme, pension scheme and
superannuation schemes as per regulations are charged
as an expense on an accrual basis when employees
have rendered the service. The Company has no further
payment obligations once the contributions have been
paid.

Defined benefit plans: Defined benefit plan in the form
of gratuity, are recognized on the basis of actuarial
valuation performed by an independent actuary at
each balance sheet date using the projected unit credit
method or in compliance with the requirements of
the domestic laws. Gratuity is included in employee''s
benefit expense in the statement of profit and loss.
The gratuity plan provides a lump-sum payment to
vested employees at retirement, death, incapacitation
or termination of employment, of an amount based
on the respective employee''s salary and the tenure of
employment with the Company.

The Company recognizes the net obligation of a defined
benefit plan in its balance sheet as an asset or liability.
Gains and losses through remeasurement of the net
defined benefit liability/ (asset) are recognized in
other comprehensive income and are not reclassified
to profit or loss in subsequent periods. The actual
return of the portfolio of plan assets, in excess of the
yields computed by applying the discount rate used to
measure the defined benefit obligation is recognized
in other comprehensive income. The effects of any
plan amendments are recognized on net basis in the
statement of profit and loss.

C. Other long-term employee benefits

Employee benefits (other than short-term employee
benefits, post-employment benefits and termination
benefits) that are not expected to be settled wholly
before 12 months after the end of reporting period.

e.g.: long-term paid absences (compensated absences).
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 recognized
in profit or loss. The said obligations are presented as
current liabilities in the balance sheet, if the entity does
not have an unconditional right to defer settlement for at
least twelve months after the reporting period, regardless
of when the actual settlement is expected to occur.

D. Termination benefits

Employee benefits that are provided in exchange for
termination of an employee''s employment as a result of
either:

a) the Company''s decision to terminate an employee''s
employment before the normal retirement date;
or

b) an employee''s decision to accept an offer of
benefits in exchange for the termination of the
employment. E.g.: Retrenchment compensation
etc.

The Company recognises termination benefits expected
to be paid:

a) as employee benefits expense in the statement of
profit and loss, and

b) as a current liability (employee benefits payable)
or as a current asset (accrued expense) in the
balance sheet, after deducting any amount already
paid.

n) Leases
As a lessee:

The Company recognises a right-of-use asset and a lease liability
at the lease commencement date. The right-of-use asset is
initially measured at cost, which comprises the initial amount
of the lease liability adjusted for any lease payments made at
or before the commencement date, plus any initial direct costs
incurred and an estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset or the site
on which it is located, less any lease incentives received.

The right-of-use assets are subsequently depreciated using
the straight-line method from the commencement date to
the earlier of the end of the useful life of the right-of-use
asset or the end of the lease term.

In addition, the right-of-use asset is periodically reduced
by impairment losses, if any, and adjusted for certain re¬
measurements of the lease liability.

The lease liability is initially measured at amortised cost at
the present value of the lease payments that are not paid
at the commencement date, discounted using the interest
rate implicit in the lease or, if that rate cannot be readily
determined, using the incremental borrowing rate.

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, leases of low-value
assets and cancellable leases.

The Company recognises the lease payments associated with
these leases as an expense in statement of profit and loss.

As a lessor:

Lease income from operating leases where the Company is
a lessor is recognised in 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.

The Company did not need to make any adjustments to the
accounting for assets held as lessor as a result of adopting the
new leasing standard.

o) Borrowing costs

Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the
cost of such assets.

A qualifying asset is one that necessarily takes substantial
period of time to get ready for its intended use or where
out of general borrowings, funds may have been used, the
borrowing cost is calculated by applying weighted average
cost of borrowing applicable to such general borrowing which
is outstanding during the year, are capitalized up to the date
by which qualifying assets are ready for its intended use and
included in the carrying amount of such assets.

All other borrowing costs are charged to statement of profit
and loss.

Borrowing costs includes exchange differences arising from
foreign currency borrowings to the extent they are regarded
as an adjustment to the finance cost.

p) Income tax

The income tax expense or credit for the period is the tax
payable on the current period''s taxable income based on the
applicable income tax rate adjusted by changes in deferred
tax assets and liabilities attributable to temporary differences
and to unused tax losses.

Current tax: The tax currently payable is based on estimated
taxable income for the year in accordance with the provisions
of the Income Tax Act, 1961. Taxable profit differs from ''profit
before tax'' as reported in the statement of profit and loss
because of items of income or expenses that are taxable or
deductible in other years and items that are never taxable or
deductible.

Management periodically evaluates positions taken in the
tax returns with respect to situations for which applicable
tax regulations are subject to interpretation and revises the
provisions, if so required where consider necessary.

The Company''s current tax is calculated using tax rates
that have been enacted by the end of the reporting period.
Current tax assets and current tax liabilities are offset where
the Company has a legally enforceable right to offset and
intends either to settle on a net basis, or to realize the asset
and settle the liability simultaneously.

Deferred tax: Deferred tax is recognized on temporary
differences between the carrying amounts of assets and
liabilities in the Company''s financial statements and the
corresponding tax bases used in computation of taxable
profit and quantified using the tax rates and laws enacted or
substantively enacted as on the balance sheet date.

Deferred tax assets are generally recognized for all taxable
temporary differences to the extent that is probable that
taxable profit will be available against which those deductible
temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at the
end of each reporting period and reduced to the extent that
it is no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be recovered.

Deferred tax assets relating to unabsorbed depreciation/
business losses/losses under the head capital gains if any
are recognized and carried forward to the extent of available
taxable temporary differences or where there is convincing
other evidence that sufficient future taxable income will
be available against which such deferred tax assets can be
realized.

The measurement of deferred tax liabilities and assets reflects
the tax consequences that would follow from the manner in

which the Company expects, at the end of reporting period,
to recover or settle the carrying amount of its assets and
liabilities. Transaction or event which is recognized outside
profit or loss, either in other comprehensive income or in
equity, is recorded along with the tax as applicable.

Minimum alternate tax (MAT): Deferred tax assets include
minimum alternate tax (MAT) paid in accordance with the tax
laws in India, which is likely to give future economic benefits
in the form of availability of set off against future income tax
liability. Accordingly, MAT is recognized as deferred tax asset
in the balance sheet when the asset can be measured reliably,
and it is probable that the future economic benefit associated
with asset will be realized.

Current and deferred tax expense is recognized in the
statement of profit and loss, except when they relate to
items that are recognized in other comprehensive income
or directly in equity, in which case, the current and deferred
tax are also recognized in other comprehensive income or
directly in equity respectively.

Where current tax or deferred tax arises from the initial
accounting for a business combination, the tax effect is
included in the accounting for the business combination.

---

Mar 31, 2024

1 Corporate information

Tatva Chintan Pharma Chem Limited ("the Company") is public limited company domiciled in India, and incorporated under the Companies Act, 2013 (erstwhile Companies Act, 1956) in year 1996, having its registered office at Plot no. 502/17, GIDC Estate, Ankleshwar, Bharuch, Gujarat, India - 393002.

The equity shares of the Company are listed on the National Stock Exchange of India Limited ("NSE") and BSE Limited ("BSE") in India.

The Company is primarily engaged in manufacturing, distribution and selling of specialty chemicals i.e., phase transfer catalysts (PTC), structure directing agents (SDA), electrolyte salts and solutions (ESS), pharmaceutical and agrochemical intermediates and other specialty chemicals (PASC).

These standalone financial statements have been approved by the Board of Directors of the Company and authorised for issue on 03 May 2024.

2 Material accounting policies

a) Statement of compliance, basis of preparation and presentation Statement of compliance:

The standalone financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 as amended and notified under section 133 of the Companies Act, 2013 and presentation requirements of Division II of Schedule III to the Companies Act, 2013.

Basis of preparation and presentation:

These standalone financial statements are prepared under the historical cost convention on the accrual basis except for certain financial instruments, which are measured at fair values.

The classification of assets and liabilities of the Company have been done into current and non-current based on the operating cycle of the business of the Company.

The Company has ascertained its operating cycle of the business as twelve months and therefore all current and non-current classifications are done based on the status of reliability and expected settlement of the respective asset and liability within a period of twelve months from the reporting date as required by Schedule III to the Companies Act, 2013.

The financial statements are presented in Indian Rupees (''INR''), which is Company''s functional currency and all values

are rounded to the nearest "million" and up to two decimals, except otherwise indicated.

Foreign currency transactions and translation:

Foreign currency transactions are translated in to functional currency at the exchange rates prevailing on the date of such transactions.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange prevailing at the reporting date. Differences arising on settlement or translation of monetary items are recognized in the statement of profit and loss.

Non-monetary items that are measured at historical costs in a foreign currency are translated using the exchange rates at the dates of initial transactions. Non-monetary items that are measured at fair value in foreign currency are translated using the exchange rates at the date when the fair value was determined.

Translation differences on non-monetary items measured at fair value is to be reported in line with the recognition of the gain or loss on the change in the fair value of the item (i.e., FVTOCI or FVTPL). Any profit or loss arising on cancellation, maturity or renewal of forward exchange contracts is recognized as income or expenses in the statement of profit and loss and included in exchange difference.

The Company has elected to continue the policy adopted for accounting for exchange differences arising from translation of long-term foreign currency monetary items as described in Para D13AA of Ind AS 101 "First-Time Adoption of Ind AS". Accordingly, exchange loss/ (gain) arising on all long-term monetary items financed or re-financed relating to acquisition of property, plant and equipment are added to/adjusted from the cost of such assets/ capital work-in-progress and will be depreciated over the balance useful life of such assets.

b) Use of significant accounting estimates and judgements

The preparation of the standalone financial statements in conformity with Ind AS requires management to make estimates, judgements and assumptions.

These estimates, judgements and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of standalone financial statements and reported amounts of revenues and expenses for the years presented.

The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from those estimates.

2 Significant accounting policies (Continued)

The estimates and underlying assumptions are reviewed on ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period or in the period of revision and future period, if the revision affects current and future periods.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

i. Recoverability of deferred tax and other income tax assets

The Company has unabsorbed depreciation and MAT credit that are available for offset against future taxable profit. Deferred tax assets are recognised only to the extent that it is probable that taxable profit will be available against which the unused tax credits can be utilised.

This involves an assessment of when those assets are likely to reverse, and a judgement as to whether or not there will be sufficient taxable profits available to offset the assets.

This requires assumptions regarding future profitability, which is inherently uncertain. To the extent assumptions regarding future profitability change, there can be an increase or decrease in the amounts recognised in respect of deferred tax assets and consequential impact in the statement of profit and loss.

ii. Useful lives of property, plant and equipment

The Company reviews the useful life of property, plant and equipment at the end of each reporting period. This re-assessment may result in change in depreciation expense in future periods.

iii. Defined benefit plans (gratuity benefits)

The obligation arising from defined benefit plans is determined on the basis of actuarial assumptions. Key actuarial assumptions include 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. Any change in these assumptions would have a significant impact on the Company''s balance sheet and the statement of profit and loss.

iv. Impairment of property, plant and equipment and intangible assets

For property, plant and equipment and intangible assets, an assessment is made at each reporting date to determine whether there is an indication that the carrying amount may not be recoverable or previously recognised impairment losses no longer exist or have decreased.

If such indication exists, then Company estimates recoverable amount of the assets or cash generating unit (CGU). A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset''s recoverable amount since the last impairment loss was recognised.

v. Impairment of investment

The Company assesses impairment of investments in subsidiaries which are recorded at cost. At the time when there are any indications that such investments have suffered a loss, if any, is recognised in the statement of profit and loss.

The recoverable amount requires estimates of operating margin, discount rate, future growth rate, terminal values, etc. based on management''s best estimate. Any subsequent changes to the cash flows due to changes in the above-mentioned factors could impact the carrying value of investments.

vi. Provisions and contingencies

A provision is recognised when the Company has a present obligation as result of a past event and it is probable that the outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

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.

Contingent liabilities are disclosed in notes but not recognised in the financial statements.

Contingent assets are not recognised, but disclosed in the financial statements when an inflow of economic benefit is probable. The actual outflow or inflow of resources at a future date may therefore, vary from the amount included in provisions and contingencies.

c) Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

> In the principal market for the asset or liability, or

> In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

The Company''s management determines the appropriate valuation techniques and inputs for fair value measurements. In estimating the fair value of an asset or a liability, the Company uses market-observable data to the extent it is available.

Where level 1 inputs are not available, the Company engages third party qualified valuers to perform the valuation. Any change in the fair value of each asset and liability is also compared with relevant external sources to determine whether the change is reasonable.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

d) Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation. Cost includes all expenses and financing costs related to acquisition and construction of the concerned assets and any attributable cost of bringing the asset to the condition of its intended use.

The Company has elected to continue the policy adopted for accounting for exchange differences arising from translation of long-term foreign currency monetary items as described in Para D13AA of Ind AS 101 "First-Time Adoption of Ind AS". Accordingly, exchange loss/ (gain) arising on all long-term monetary items financed or re-financed relating to acquisition of property, plant and equipment are added to/ adjusted from the cost of such assets/ capital work-in-progress and will be depreciated over the balance useful life of such assets.

Subsequent expenditures relating to property, plant and equipment are capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the cost of the item can be measured reliably.

Repair and maintenance cost are recognized in the statement of profit and loss when incurred. The cost and related

accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the statement of profit and loss.

Gains or losses arising from the retirement or disposal of an asset are determined as the difference between the net disposal proceeds and the carrying amount of the asset and recognized as income or expense in the statement of profit and loss.

Capital work-in-progress: Capital work-in-progress comprises of property, plant and equipment under development that are not ready for their intended use at the end of reporting period and are carried at cost comprising direct costs, related incidental expenses, other directly attributable costs and borrowing costs, less impairment losses if any.

e) Depreciation and amortization

Depreciation on tangible property, plant and equipment has been provided on the basis of useful life as stated in Schedule II of the Companies Act, 2013 using the straight-line method. Lease hold land is amortized over the period of lease. Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year end. The following are the estimated useful lives:

Class of assets	Useful lives (years)
Right-of-use assets	95-99 years
Buildings	Factory building and Building (other than RCC frame structure) - 30 years; Building (RCC frame structure) - 60 years; Building (temporary structure) - 3 years
Roads	Carpeted roads-RCC - 10 years Carpeted roads-other than RCC - 5 years Non-carpeted roads - 3 years
Plant and equipment	Special plant and machinery - 20 years; Plant and machinery other than continuous process plant - 15 years; Continuous process plant - 8 years
Computers and Data processing units	3/6 years
Motor Vehicles	8/10 years
Office equipment	5 years
Electrical installations	10 years
Furniture and fixtures	10 years

f) Intangible assets

Intangible assets are recognized when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably. Intangible assets are stated at original cost net of tax/duty credits availed, if any, less accumulated amortization and cumulative impairment.

Administrative and other general overhead expenses that are specifically attributable to acquisition of intangible assets are allocated and capitalized as a part of the cost of the intangible assets.

Computer software that is expected to provide future enduring economic benefits is capitalized. The capitalized cost includes license fees and cost of implementation/system integration services. Gains or losses arising from the retirement or disposal of an intangible asset are determined as the difference between the net disposal proceeds and the carrying amount of the asset and recognized as income or expense in the statement of profit and loss.

The intangible assets with a finite useful life are amortised using straight line method over their estimated useful lives. The management''s estimates of the useful lives for various class of intangibles are as given below:

Class of assets	Useful lives estimated by the
	management (years)
Computer software	3 years
Technical know-how	10 years
Development cost	5 years

Intangible assets under development: Research is original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge and understanding. Expenditure pertaining to research activities is charged to the statement of profit and loss, when incurred.

Development is the application of research findings or other knowledge activities to a plan or design for the production of new or substantially improved material, devices, products, processes systems or services before the start of commercial production or use.

Development expenditure is capitalised as part of the cost of the resulting intangible asset only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Company intends to and has sufficient resources to complete development and to use or sell the asset. Otherwise,

it is recognised in statement of profit and loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost less accumulated amortisation and any accumulated impairment losses.

g) Impairment of tangible assets and intangible assets other than goodwill

At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).

When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit (CGU) to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified. Recoverable amount is the higher of fair value less costs of disposal and value in use.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the assets is considered impaired and is written down to its recoverable amount and impairment loss is recognized in statement of profit and loss. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the assets recoverable amount since the last impairment loss was recognised.

When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash generating unit) in prior years. Such reversal is recognised in statement of profit and loss unless the assets is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.

h) Investments and other financial assets

i) 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 statement of profit and loss); and

• those measured at amortized cost.

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

ii) Initial measurement

Financial assets are initially measured at fair value. Transaction costs that are directly attributable to the acquisition of financial assets (other than financial assets at fair value through profit or loss) are added to the fair value of the financial assets, as appropriate, on initial recognition.

Transaction costs directly attributable to the acquisition of financial assets at fair value through profit or loss are recognised immediately in statement of profit and loss.

iii) Subsequent measurement - debt instruments

Subsequent measurement of the debt instruments depends on the Company''s business model for managing the asset and the cash flow characteristics of the asset.

The Company classifies its debt instruments in the following three categories:

Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost.

A gain or loss on a debt investment that is subsequently measured at amortized cost and is not a part of the hedging relationship is recognized in the statement of profit and loss when the asset is derecognized or impaired. Interest income from these financial assets is included in other income using the effective interest rate method.

Fair value through other comprehensive income (FVTOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets where the assets cash flows represent solely payments of principal

and interest are measured at fair value through other comprehensive income (OCI).

Movements in the carrying amount are taken through OCI, except for recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in the statement of profit and loss.

When financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss and recognized in other gains/losses. Interest income from these financial assets is included in other income using the effective interest rate method.

Fair value through profit or loss (FVTPL): Assets that do not meet the criteria for amortized cost or FVTOCI are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not a part of hedging relationship is recognized in the statement of profit and loss. Interest income from these financial assets is included in other income.

iv) Subsequent measurement - equity instruments

The Company subsequently measures all equity instruments at fair value. When the management has elected to present fair value gains and losses on equity instruments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to statement of profit and loss.

Dividends from such investments are recognized in the statement of profit and loss as other income when the Company''s right to receive payment is established.

Changes in the fair value of financial assets at FVTPL are recognized in the statement of profit and loss. Impairment losses (and reversal of impairment losses) on equity investments measured at FVTOCI are not reported separately from other changes in fair value.

v) Impairment of financial assets

Expected credit losses are recognised for all financial assets subsequent to initial recognition other than financials assets in FVTPL category.

Expected credit losses is the weighted-average of difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive,

discounted at the original effective interest rate, with the respective risks of default occurring as the weights. When estimating the cash flows, the Company is required to consider:

• All contractual terms of the financial assets (including prepayment and extension) over the expected life of the assets.

• Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

In respect of trade receivables, the Company applies the simplified approach of Ind AS 109, which requires measurement of loss allowance at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument.

For financial assets other than trade receivables, the Company recognises 12 month expected credit losses as per Ind AS 109 for all originated or acquired financial assets, if at the reporting date the credit risk of the financial asset has not increased significantly since its initial recognition. The expected credit losses are measured as lifetime expected credit losses, if the credit risk on financial asset increases significantly since its initial recognition.

The Company assumes that the credit risk on a financial asset has not increased significantly since initial recognition if the financial asset is determined to have low credit risk at the balance sheet date.

vi) De-recognition of financial assets

A financial asset is de-recognized when the Company has transferred the rights to receive cash flows from the financial asset or 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.

When the Company has transferred an asset, it evaluates whether it has transferred substantially all the risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognized.

When the Company has neither transferred a financial asset nor retains substantially all the risks and rewards of ownership of the financial asset, the financial asset is

derecognized if the Company has not retained control of the financial asset.

vii) Investment in subsidiaries

The Company has accounted for its investments in subsidiaries at cost less impairment loss, if any. Cost includes the purchase price and other costs directly attributable to the acquisition of investments.

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 subsidiaries, the difference between net disposal proceeds and the carrying amounts are recognised in the statement of profit and loss.

Further, under Ind AS 101, while transitioning to Ind AS from previous GAAP, the Company had elected to measure its existing investments in subsidiaries on the date of transition at cost.

i) Financial liabilities and equity instruments 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.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

Financial liabilities

Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortized cost, using the effective interest rate method. Interest-bearing bank loans, overdrafts and issued debt are initially measured at fair value and are subsequently measured at amortized cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognized over the term of the borrowings in accordance with the Company''s accounting policy for borrowing costs.

Fair value measurement of financial instruments

The fair value of financial instruments is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous)

market at the measurement date under current market conditions (i.e., an exit price) regardless of whether that price is directly observable or estimated using another valuation technique.

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using a variety of valuation techniques that include the use of valuation models.

The inputs to these models are taken from observable markets where possible, but where this is not feasible, estimation is required in establishing fair values. Judgements and estimates include considerations of liquidity and model inputs related to items such as credit risk (both own and counterparty), correlation and volatility.

Derivative financial instrument

The Company holds derivative financial instruments such as foreign exchange forward contracts (not designated as cash flow hedges) to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank.

Financial assets or financial liabilities, at fair value through profit or loss

This category has derivative financial assets or liabilities which are not designated as hedges. Although the Company believes that these derivatives constitute hedges from an economic perspective, they may not qualify for hedge accounting under Ind AS 109 Financial Instruments.

Any derivative that is either not designated as hedge, or is so designated but is ineffective as per Ind AS 109, is categorized as a financial asset or financial liability, at fair value through profit or loss. Derivatives not designated as hedges are recognized initially at fair value and attributable transaction costs are recognized in net profit in the statement of profit and loss when incurred.

Subsequent to initial recognition, these derivatives are measured at fair value through profit or loss and the resulting exchange gains or losses are included in other income. Assets/ liabilities in this category are presented as current assets/ current liabilities if they are either held for trading or are expected to be realized within 12 months after the balance sheet date.

Derecognition of financial liabilities

The Company derecognizes financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or they expire.

j) Cash and cash equivalents

Cash and cash equivalents comprise cash at bank, cash on hand and short term highly liquid investments with original maturities of three months or less, that is readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

k) Inventories

Inventories are valued at lower of cost or net realisable value. The basis of determining costs for each class of inventories are as follows:

• Raw materials, packing materials, consumables, stores and spares: Cost includes cost of purchase and other costs incurred in bringing inventories to their present location and condition. Costs are determined on first in, first out basis. However, these items are considered to be realisable at cost if the finished products, in which they will be used, are expected to be sold at or above cost.

• Finished goods and work-in-progress: Cost includes cost of direct materials, direct labour and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs. Cost is determined on first in, first out basis.

• Stock-in-trade: Cost includes cost of purchase and other costs incurred in bringing inventories to their present location and condition. Costs are determined on first in, first out basis.

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

l) Revenue recognition

Revenue from contracts with customers

Ind AS 115 "Revenue from contracts with customers" provides a control-based revenue recognition model and provides a five-step application approach to be followed for revenue recognition i.e.:

a) Identify the contract(s) with a customer;

b) Identify the performance obligations;

c) Determine the transaction price;

d) Allocate the transaction price to the performance obligations;

e) Recognize revenue when or as an entity satisfies performance obligation.

Revenue is measured based on the transaction price as specified in the contract with the customer, after the deduction of any trade discounts, volume rebates, sales return on transfer of control in respect of ownership to the buyer which is generally on dispatch of goods and any other taxes or duties collected on behalf of the Government which are levied on sales such as Goods and Services Tax (GST), where applicable. Discounts given include rebates, price reductions and other incentives given to customers.

As per the terms of the contract with customers, the Company expects, at the contract inception, that the period between transfers of a promised goods or services to customer and related payments for the goods or services will be less than one year or less. Accordingly, the Company has availed the practical expedient available as per paragraph 63 of Ind AS 115 and has not adjusted the promised amount of consideration for the effects of significant financing component, if any.

Revenue from sale of products is recognized when the control on the goods or services has been transferred to the customers and Revenue from sale of services is recognised on satisfaction of performance obligation towards rendering of such services. The performance obligation in case of sale of product is satisfied at a point in time i.e., when the material is shipped to the customer or on delivery to the customer, as may be specified in the contract. The majority of the Company''s revenue arrangements generally consist of a single performance obligation to transfer promised goods or services.

Revenue is recognised in an amount that reflects the consideration, which the Company expects to receive in exchange for those products or services. Revenue 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, regardless of when the payment is being made. None of the Company''s contracts contain variable consideration and contract modifications are generally minimal.

Contract balances

Contract assets: A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.

Trade receivable: A receivable is recognised if an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).

Contract liabilities: A contract liability is the obligation to transfer goods or services to a customer for which the Company

has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract.

Other incomes

• Claims and rebates receivables are accounted as and when settled.

• Interest income from a financial asset is recognized using the effective interest rate method when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.

• Dividends are recognized in statement of profit and loss 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.

• Incomes in respect of duty drawback or other export promotion schemes in respect of exports made during the year are accounted on accrual basis

m) Employee benefits

Employee benefits of the Company includes all forms of consideration (directly or indirectly) given by the Company in exchange for services rendered by employees or termination of employment. Where employees include their dependents and their beneficiaries and includes all categories i.e., full time, part time, casual, temporary and permanent etc.

Employee benefits includes four types of benefits:

A. Short-term employee benefits,

B. Post-employment benefits,

C. Other long-term employee benefits, and

D. Termination benefits

A. Short-term employee benefits

Employee benefits (other than termination benefits) that are expected to be settled wholly before 12 months after the end of reporting period. e.g.: salary and wages, social security contributions, paid leaves, maternity leave,

bonus and other non-monetary benefits such as medical checkup, group insurance and subsidised services.

The Company measures short-term employee benefits on an undiscounted basis and they do not involve any actuarial valuation.

The Company recognises short-term employee benefits expected to be paid:

a) as employee benefits expense in the statement of profit and loss, if it does not form part of the cost of an asset as per any other Ind AS (Ind AS 2 "Inventories" or Ind AS 16 "Property, plant and equipment"), and

b) as a current liability (employee benefits payable) or as a current asset (accrued expense) in the balance sheet, after deducting any amount already paid.

B. Post-employment benefits

Employee benefits (other than short-term employee benefits and termination benefits) that are payable after the completion of employment. e.g.: gratuity.

These benefits are of two types:

i) Defined contribution plans, and

ii) Defined benefits plans.

Defined contribution plans: Contribution to retirement benefit plans in the form of provident fund, employee state insurance scheme, pension scheme and superannuation schemes as per regulations are charged as an expense on an accrual basis when employees have rendered the service. The Company has no further payment obligations once the contributions have been paid.

Defined benefit plans: Defined benefit plan in the form of gratuity, are recognized on the basis of actuarial valuation performed by an independent actuary at each balance sheet date using the projected unit credit method or in compliance with the requirements of the domestic laws. Gratuity is included in employee''s benefit expense in the statement of profit and loss. The gratuity plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the tenure of employment with the Company.

The Company recognizes the net obligation of a defined benefit plan in its balance sheet as an asset or liability.

Gains and losses through remeasurement of the net defined benefit liability/ (asset) are recognized in other comprehensive income and are not reclassified to profit or loss in subsequent periods. The actual return of the portfolio of plan assets, in excess of the yields computed by applying the discount rate used to measure the defined benefit obligation is recognized in other comprehensive income. The effects of any plan amendments are recognized on net basis in the statement of profit and loss.

C. Other long-term employee benefits

Employee benefits (other than short-term employee benefits, post-employment benefits and termination benefits) that are not expected to be settled wholly before 12 months after the end of reporting period. e.g.: long-term paid absences (compensated absences). 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 recognized in profit or loss. The said obligations are presented as current liabilities in the balance sheet, if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.

D. Termination benefits

Employee benefits that are provided in exchange for termination of an employee''s employment as a result of either:

a) the Company''s decision to terminate an employee''s employment before the normal retirement date; or

b) an employee''s decision to accept an offer of benefits in exchange for the termination of the employment.

E.g.: Retrenchment compensation etc.

The Company recognises termination benefits expected to be paid:

a) as employee benefits expense in the statement of profit and loss, and

b) as a current liability (employee benefits payable) or as a current asset (accrued expense) in the balance sheet, after deducting any amount already paid.

n) Leases

As a lessee:

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use assets are subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at amortised cost at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, using the incremental borrowing rate.

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, leases of low-value assets and cancellable leases.

The Company recognises the lease payments associated with these leases as an expense in statement of profit and loss.

As a lessor:

Lease income from operating leases where the Company is a lessor is recognised in 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.

The Company did not need to make any adjustments to the accounting for assets held as lessor as a result of adopting the new leasing standard.

o) Borrowing costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets.

A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use or where out of general borrowings, funds may have been used, the borrowing cost is calculated by applying weighted average cost of borrowing applicable to such general borrowing which is outstanding during the year, are capitalized up to the date by which qualifying assets are ready for its intended use and included in the carrying amount of such assets.

All other borrowing costs are charged to statement of profit and loss.

Borrowing costs includes exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the finance cost.

p) Income tax

The income tax expense or credit for the period is the tax payable on the current period''s taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

Current tax: The tax currently payable is based on estimated taxable income for the year in accordance with the provisions of the Income Tax Act, 1961. Taxable profit differs from ''profit before tax'' as reported in the statement of profit and loss because of items of income or expenses that are taxable or deductible in other years and items that are never taxable or deductible.

Management periodically evaluates positions taken in the tax returns with respect to situations for which applicable tax regulations are subject to interpretation and revises the provisions, if so required where consider necessary.

The Company''s current tax is calculated using tax rates that have been enacted by the end of the reporting period. Current tax assets and current tax liabilities are offset where the Company has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Deferred tax: Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the Company''s financial statements and the corresponding tax bases used in computation of taxable profit and quantified using the tax rates and laws enacted or substantively enacted as on the balance sheet date.

Deferred tax assets are generally recognized for all taxable temporary differences to the extent that is probable that

taxable profit will be available against which those deductible temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax assets relating to unabsorbed depreciation/ business losses/losses under the head capital gains if any are recognized and carried forward to the extent of available taxable temporary differences or where there is convincing other evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of reporting period, to recover or settle the carrying amount of its assets and liabilities. Transaction or event which is recognized outside profit or loss, either in other comprehensive income or in equity, is recorded along with the tax as applicable.

Minimum alternate tax (MAT): Deferred tax assets include minimum alternate tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. Accordingly, MAT is recognized as deferred tax asset in the balance sheet when the asset can be measured reliably, and it is probable that the future economic benefit associated with asset will be realized.

Current and deferred tax expense is recognized in the statement of profit and loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.

Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

q) Provisions, contingent liabilities and contingent assets

A provision is made when there is a present obligation (legal or constructive) as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. Provisions are determined based on the present value of the management''s best estimate of the amount required to settle the present obligation at the end of the reporting period. The discount rate used to determine present value is a pre-tax rate that reflects current market

assessment of time value of money and the risks specific to the liability.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent assets are not recognized but disclosed in the financial statements.

r) Operating segments

"Operating segments" are components of the Company whose operating results are regularly reviewed by the "chief operating decision maker" (CODM) to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. "Specialty chemical business" is identified as single operating segment for the purpose of making decision on allocation of resources and assessing its performance.

s) Earnings per share

Earnings per share are calculated by dividing the net profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period.

Diluted earnings per share is computed by adjusting the figures used in the determination of basic EPS to take into account:

a) after tax effect of interest and other financing costs associated with dilutive potential equity shares,

b) the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.

t) Cash flows statement

Statement of cash flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flows are reported using the indirect method, whereby net profit for the period is adjusted for the effects of transactions of non-cash nature, working capital changes, any deferrals or accruals of past or future operating cash receipts or payments and items of income or expenses associated with investing or financing cash flows.

For the purpose of presentation in the statement of cash flows, cash and cash equivalents include cash on hand, cash at banks, other short-term deposits and highly liquid investments with original maturity of three months or less that are readily convertible into cash.

u) Cost recognition

Costs and expenses are recognised in statement of profit and loss when incurred and are classified according to their nature.

v) Government grants

The Company recognizes government grants only when there is reasonable assurance that the conditions attached to them will be complied with and the grants will be received.

When the grant relates to an expense item, it is recognized as income in statement of profit and loss on a systematic basis over the periods, to match with the related costs, for which it is intended to compensate.

When the grant relates to an asset, it is recognized as deferred government grant in the balance sheet and then subsequently transferred to statement of profit or loss on a systematic basis over the expected useful life of the related asset.

w) Exceptional items

Exceptional items refer to items of income or expense, including tax items, within the statement

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Mar 31, 2023

1 Corporate information

Tatva Chintan Pharma Chem Limited (formerly known as Tatva Chintan Pharma Chem Private Limited) ("the Company") is public limited company domiciled in India, and incorporated under the Companies Act 2013 (erstwhile Companies Act 1956) in year 1996, having its registered office at Plot no. 502/17, GIDC Estate, Ankleshwar, Bharuch, Gujarat, India - 393002.

The equity shares of the Company are listed on the National Stock Exchange of India Limited ("NSE") and BSE Limited ("BSE") in India. The Company is primarily engaged in manufacturing and selling of specialty chemicals, phase transfer catalysts (PTC), structure directing agents (SDA), electrolyte salts (ES), pharmaceutical and agrochemical intermediates and other specialty chemicals (PASC).

These standalone financial statements have been approved by the Board of Directors and authorised for issue on 05 May 2023.

2 Significant accounting policies

a) Statement of compliance, basis of preparation and presentation

Statement of compliance: The standalone financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 as amended and notified under section 133 of the Companies Act, 2013 and presentation requirements of Division II of Schedule III to the Companies Act, 2013.

Basis of preparation and presentation: These standalone financial statements are prepared under the historical cost convention on the accrual basis except for certain financial instruments, which are measured at fair values.

The classification of assets and liabilities of the Company have been done into current and non-current based on the operating cycle of the business of the Company. The Company has ascertained its operating cycle of the business as twelve months and therefore all current and non-current classifications are done based on the status of reliability and expected settlement of the respective asset and liability within a period of twelve months from the reporting date as required by Schedule III to the Companies Act, 2013.

The financial statements are presented in Indian Rupees (''INR''), which is Company''s functional currency and all values are rounded to the nearest "million" up to two decimals, except otherwise indicated.

Foreign currency transactions and translation: Foreign currency transactions are translated in to functional currency at the exchange rates prevailing on the date of such transactions.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange prevailing at the reporting date. Differences arising on settlement or translation of monetary items are recognized in the statement of profit and loss.

Non-monetary items that are measured at historical costs in a foreign currency are translated using the exchange rates at the dates of initial transactions. Non-monetary items that are measured at fair value in foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on non-monetary items measured at fair value is to be reported in line with the recognition of the gain or loss on the change in the fair value of the item (i.e. FVTOCI or FVTPL). Any profit or loss arising on cancellation, maturity or renewal of forward exchange contracts is recognized as income or expenses in the statement of profit and loss and included in exchange difference.

The Company has elected to continue the policy adopted for accounting for exchange differences arising from translation of long-term foreign currency monetary items as described in Para D13AA of Ind AS 101 "First-Time Adoption of Ind AS". Accordingly, exchange loss/ (gain) arising on all long-term monetary items financed or re-financed relating to acquisition of property, plant and equipment are added to/ adjusted from the cost of such assets/ capital work-in-progress and will be depreciated over the balance useful life of such assets.

b) Use of significant accounting estimates and judgements

The preparation of the standalone financial statements in conformity with Ind AS requires management to make estimates, judgements and assumptions. These estimates, judgements and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of standalone financial statements and reported amounts of revenues and expenses for the years presented. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from those estimates.

The estimates and underlying assumptions are reviewed on ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of revision and future period, if the revision affects current and future periods.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

2 Significant accounting policies (Continued)

i. Recoverability of deferred tax and other income tax assets

The Company has unabsorbed depreciation and MAT credit that are available for offset against future taxable profit. Deferred tax assets are recognised only to the extent that it is probable that taxable profit will be available against which the unused tax credits can be utilised. This involves an assessment of when those assets are likely to reverse, and a judgement as to whether or not there will be sufficient taxable profits available to offset the assets. This requires assumptions regarding future profitability, which is inherently uncertain. To the extent assumptions regarding future profitability change, there can be an increase or decrease in the amounts recognised in respect of deferred tax assets and consequential impact in the statement of profit and loss.

ii. Useful lives of property, plant and equipment

The Company reviews the useful life of property, plant and equipment at the end of each reporting period. This re-assessment may result in change in depreciation expense in future periods.

iii. Defined benefit plans (gratuity benefits)

The obligation arising from defined benefit plans is determined on the basis of actuarial assumptions. Key actuarial assumptions include 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. Any change in these assumptions would have a significant impact on the Company''s balance sheet and the statement of profit and loss.

iv. Impairment of property, plant and equipment

For property, plant and equipment and intangibles, an assessment is made at each reporting date to determine whether there is an indication that the carrying amount may not be recoverable or previously recognised impairment losses no longer exist or have decreased. If such indication exists, then Company estimates recoverable amount the assets or cash generating unit (CGU). A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset''s recoverable amount since the last impairment loss was recognised.

v. Impairment of investment

The Company assesses impairment of investments in subsidiaries which are recorded at cost. At the time

when there are any indications that such investments have suffered a loss, if any, is recognised in the statement of profit and loss. The recoverable amount requires estimates of operating margin, discount rate, future growth rate, terminal values, etc. based on management''s best estimate. Any subsequent changes to the cash flows due to changes in the above-mentioned factors could impact the carrying value of investments.

vi. Provisions and contingencies

A provision is recognised when the Company has a present obligation as result of a past event and it is probable that the outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be

made. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

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. Contingent liabilities are disclosed in notes but not recognised in the financial statements.

Contingent assets are not recognised, but disclosed in the financial statements when an inflow of economic benefit is probable. The actual outflow or inflow of resources at a future date may therefore, vary from the amount included in provisions and contingencies.

c) Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing

the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the standalone financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognised in the standalone financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

The Company''s management determines the appropriate valuation techniques and inputs for fair value measurements. In estimating the fair value of an asset or a liability, the Company uses market-observable data to the extent it is available. Where level 1 inputs are not available, the Company engages third party qualified valuers to perform the valuation. Any change in the fair value of each asset and liability is also compared with relevant external sources to determine whether the change is reasonable.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

d) Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation. Cost includes all expenses and financing costs related to acquisition and construction of the concerned assets and any attributable cost of bringing the asset to the condition of its intended use.

The Company has elected to continue the policy adopted for accounting for exchange differences arising from translation of long-term foreign currency monetary items as described in Para D13AA of Ind AS 101 "First-Time Adoption of Ind AS". Accordingly, exchange loss/ (gain) arising on all long-term monetary items financed or re-financed relating to acquisition of property, plant and equipment are added to/ adjusted from the cost of such assets/ capital work-in-progress and will be depreciated over the balance useful life of such assets.

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances under other non-current assets. Subsequent expenditures relating to property, plant and equipment are capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the cost of the item can be measured reliably.

Repair and maintenance cost are recognized in the statement of profit and loss when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the statement of profit and loss.

Gains or losses arising from the retirement or disposal of an asset are determined as the difference between the net disposal proceeds and the carrying amount of the asset and recognized as income or expense in the statement of profit and loss.

Capital work-in-progress: Capital work-in-progress includes cost of assets under development, all taxes and duties and other expenses to bring the asset to the Company. Cost of property, plant and equipment not ready for their intended use before such date is disclosed under capital work-in-progress.

e) Intangible assets

Intangible assets are recognized when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably. Intangible assets are stated at original cost net of tax/duty credits availed, if any, less accumulated amortization and cumulative impairment.

Administrative and other general overhead expenses that are specifically attributable to acquisition of intangible assets are allocated and capitalized as a part of the cost of the intangible assets.

Computer software where it is expected to provide future enduring economic benefits is capitalized. The capitalized cost includes license fees and cost of implementation/system integration services.

Gains or losses arising from the retirement or disposal of an intangible asset are determined as the difference between the net disposal proceeds and the carrying amount of the asset and recognized as income or expense in the statement of profit and loss.

The intangible assets with a finite useful life are amortised using straight line method over their estimated useful lives. The management''s estimates of the useful lives for various class of intangibles are as given below:

Class of assets	Useful lives estimated by the
	management (years)
Computer software	3 years
Technical know-how	10 years

f) Depreciation and amortization

Depreciation on tangible property, plant and equipment has been provided on the basis of useful life as stated in Schedule II of the Companies Act, 2013 using the straight-line method. Lease hold land is amortized over the period of lease. Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year end. The following are the estimated useful lives:

Class of assets	Useful lives (years)
Buildings	Factory building and Building (other than RCC frame structure) - 30 years; Building (RCC frame structure) - 60 years; Building (temporary structure) - 3 years
Plant and equipment	Special plant and machinery - 20 years; Plant and machinery other than continuous process plant - 15 years; Continuous process plant - 8 years
Computers and Data processing units	3/6 years
Motor Vehicles	8/10 years
Office equipment	5 years
Electrical installations	10 years
Furniture and fixtures	10 years

g) Impairment of tangible assets and intangible assets other than goodwill

At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit (CGU) to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified. Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the assets is considered impaired and is written down to its recoverable amount and impairment loss is recognized in statement of profit and loss. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the assets recoverable amount since the last impairment loss was recognised.

When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash generating unit) in prior years. Such reversal is recognised in statement of profit and loss unless the assets is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.

h) Investments and other financial assets

i) 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 statement of profit and loss); and

• those measured at amortized cost.

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

ii) Initial measurement

Financial assets are initially measured at fair value. Transaction costs that are directly attributable to the acquisition of financial assets (other than financial assets at fair value through profit or loss) are added to the fair value of the financial assets, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets at fair value through profit or loss are recognised immediately in statement of profit and loss.

iii) Subsequent measurement - debt instruments

Subsequent measurement of the debt instruments depends on the Company''s business model for managing the asset and the cash flow characteristics of the asset. The Company classifies its debt instruments in the following three categories:

Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. A gain or loss on a debt investment that is subsequently measured at amortized cost and is not a part of the hedging relationship is recognized in the statement of profit and loss when the asset is derecognized or impaired. Interest income from these financial assets is included in other income using the effective interest rate method.

Fair value through other comprehensive income (FVTOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets where the assets cash flows represent solely payments of principal and interest are measured at fair value through other comprehensive income (OCI). Movements in the carrying amount are taken through OCI, except for recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in the statement of profit and loss. When financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss and recognized in other gains / losses. Interest income from these financial assets is included in other income using the effective interest rate method.

Fair value through profit or loss (FVTPL): Assets that do not meet the criteria for amortized cost or FVTOCI are

measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not a part of hedging relationship is recognized in the statement of profit and loss. Interest income from these financial assets is included in other income.

iv) Subsequent measurement - equity instruments

The Company subsequently measures all equity instruments at fair value. When the management has elected to present fair value gains and losses on equity instruments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to statement of profit and loss. Dividends from such investments are recognized in the statement of profit and loss as other income when the Company''s right to receive payment is established. Changes in the fair value of financial assets at FVTPL are recognized in the statement of profit and loss. Impairment losses (and reversal of impairment losses) on equity investments measured at FVTOCI are not reported separately from other changes in fair value.

v) Impairment of financial assets

Expected credit losses are recognised for all financial assets subsequent to initial recognition other than financials assets in FVTPL category.

Expected credit losses is the weighted-average of difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive, discounted at the original effective interest rate, with the respective risks of default occurring as the weights. When estimating the cash flows, the Company is required to consider:

• All contractual terms of the financial assets (including prepayment and extension) over the expected life of the assets.

• Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

In respect of trade receivables, the Company applies the simplified approach of Ind AS 109, which requires measurement of loss allowance at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument.

For financial assets other than trade receivables, the Company recognises 12 month expected credit losses as per Ind AS 109 for all originated or acquired financial assets, if at the reporting date the credit risk of the financial asset has not increased significantly since its initial recognition. The expected credit losses are measured as lifetime expected credit losses, if the credit risk on financial asset increases significantly since its initial recognition. The Company assumes that the credit risk on a financial asset has not increased significantly since initial recognition if the financial asset is determined to have low credit risk at the balance sheet date.

vi) De-recognition of financial assets

A financial asset is de-recognized when the Company has transferred the rights to receive cash flows from the financial asset or 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. When the Company has transferred an asset, it evaluates whether it has transferred substantially all the risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognized. When the Company has neither transferred a financial asset nor retains substantially all the risks and rewards of ownership of the financial asset, the financial asset is derecognized if the Company has not retained control of the financial asset.

vii) Investment in subsidiaries

The Company has accounted for its investments in subsidiaries at cost less impairment loss, if any. Cost includes the purchase price and other costs directly attributable to the acquisition of investments. 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 subsidiaries, the difference between net disposal proceeds and the carrying amounts are recognised in the statement of profit and loss. Further, under Ind AS 101, while transitioning to Ind AS from previous GAAP, the Company had elected to measure its existing investments in subsidiaries on the date of transition at cost.

i) Financial liabilities and equity instruments 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.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

Financial liabilities

Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortized cost, using the effective interest rate method. Interest-bearing bank loans, overdrafts and issued debt are initially measured at fair value and are subsequently measured at amortized cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognized over the term of the borrowings in accordance with the Company''s accounting policy for borrowing costs.

Fair value measurement of financial instruments

The fair value of financial instruments is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions (i.e., an exit price) regardless of whether that price is directly observable or estimated using another valuation technique. When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using a variety of valuation techniques that include the use of valuation models. The inputs to these models are taken from observable markets where possible, but where this is not feasible, estimation is required in establishing fair values. Judgements and estimates include considerations of liquidity and model inputs related to items such as credit risk (both own and counterparty), correlation and volatility.

Derivative financial instrument

The Company holds derivative financial instruments such as foreign exchange forward contracts (not designated as cash flow hedges) to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank.

Financial assets or financial liabilities, at fair value through profit or loss

This category has derivative financial assets or liabilities which are not designated as hedges. Although the Company believes that these derivatives constitute hedges from an economic perspective, they may not qualify for hedge accounting under Ind AS 109 Financial Instruments. Any derivative that is either not designated as hedge, or is so designated but is ineffective

as per Ind AS 109, is categorized as a financial asset or financial liability, at fair value through profit or loss. Derivatives not designated as hedges are recognized initially at fair value and attributable transaction costs are recognized in net profit in the statement of profit and loss when incurred. Subsequent to initial recognition, these derivatives are measured at fair value through profit or loss and the resulting exchange gains or losses are included in other income. Assets/liabilities in this category are presented as current assets/current liabilities if they are either held for trading or are expected to be realized within 12 months after the balance sheet date.

Derecognition of financial liabilities

The Company derecognizes financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or they expire.

j) Cash and cash equivalents

Cash and cash equivalents comprise cash at bank, cash on hand and short term highly liquid investments with original maturities of three months or less, that is readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

k) Inventories

Inventories are valued at lower of cost or net realisable value. The basis of determining costs for each class of inventories are as follows:

• Raw materials, packing materials, consumables, stores and spares: Cost includes cost of purchase and other costs incurred in bringing inventories to their present location and condition. Costs are determined on first in, first out basis. However, these items are considered to be realisable at cost if the finished products, in which they will be used, are expected to be sold at or above cost.

• Finished goods and work-in-progress: Cost includes cost of direct materials, direct labour and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs. Cost is determined on first in, first out basis.

• Stock-in-trade: Cost includes cost of purchase and other costs incurred in bringing inventories to their present location and condition. Costs are determined on first in, first out basis.

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

l) Revenue recognition

Revenue from contracts with customers

Ind AS 115 "Revenue from contracts with customers" provides a control-based revenue recognition model and provides a five-step application approach to be followed for revenue recognition i.e.: a) Identify the contract(s) with a customer; b) Identify the performance obligations; c) Determine the transaction price; d) Allocate the transaction price to the performance obligations; e) Recognize revenue when or as an entity satisfies performance obligation.

Revenue is measured based on the transaction price as specified in the contract with the customer, after the deduction of any trade discounts, volume rebates, sales return on transfer of control in respect of ownership to the buyer which is generally on dispatch of goods and any other taxes or duties collected on behalf of the Government which are levied on sales such as Goods and Services Tax (GST), where applicable. Discounts given include rebates, price reductions and other incentives given to customers.

As per the terms of the contract with customers, the Company expects, at the contract inception, that the period between transfers of a promised goods or services to customer and related payments for the goods or services will be less than one year or less. Accordingly, the Company has availed the practical expedient available as per paragraph 63 of Ind AS 115 and has not adjusted the promised amount of consideration for the effects of significant financing component, if any.

Revenue from sale of products is recognized when the control on the goods or services has been transferred to the customers and Revenue from sale of services is recognised on satisfaction of performance obligation towards rendering of such services. The performance obligation in case of sale of product is satisfied at a point in time i.e., when the material is shipped to the customer or on delivery to the customer, as may be specified in the contract. The majority of the Company''s revenue arrangements generally consist of a single performance obligation to transfer promised goods or services.

Revenue is recognised in an amount that reflects the consideration, which the Company expects to receive in exchange for those products or services. Revenue 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, regardless of when the payment is being made. None of the Company''s contracts contain variable consideration and contract modifications are generally minimal.

Contract balances

Contract assets: A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.

Trade receivable: A receivable is recognised if an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).

Contract liabilities: A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract.

Other incomes

• Claims and rebates receivables are accounted as and when settled.

• Interest income from a financial asset is recognized using the effective interest rate method when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.

• Dividends are recognized in statement of profit and loss 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.

• Incomes in respect of duty drawback or other export promotion schemes in respect of exports made during the year are accounted on accrual basis

m) Employee benefits

Employee benefits of the Company includes all forms of consideration (directly or indirectly) given by the Company in exchange for services rendered by employees or termination of employment. Where employees include their dependents

and their beneficiaries and includes all categories i.e., full time, part time, casual, temporary and permanent etc. Employee benefits includes four types of benefits: A. Short-term employee benefits, B. Post-employment benefits, C. Other long-term employee benefits, and D. Termination benefits

A. Short-term employee benefits

Employee benefits (other than termination benefits) that are expected to be settled wholly before 12 months after the end of reporting period. e.g.: salary and wages, social security contributions, paid leaves, maternity leave, bonus and other non-monetary benefits such as medical checkup, group insurance and subsidised services. The Company measures short-term employee benefits on an undiscounted basis and they do not involve any actuarial valuation.

The Company recognises short-term employee benefits expected to be paid:

a) as employee benefits expense in the statement of profit and loss, if it does not form part of the cost of an asset as per any other Ind AS (Ind AS 2 "Inventories" or Ind AS 16 "Property, plant and equipment"), and

b) as a current liability (employee benefits payable) or as a current asset (accrued expense) in the balance sheet, after deducting any amount already paid.

B. Post-employment benefits

Employee benefits (other than short-term employee benefits and termination benefits) that are payable after the completion of employment. e.g.: gratuity. These benefits are of two types i). Defined contribution plans, and ii). Defined benefits plans.

Defined contribution plans: Contribution to retirement benefit plans in the form of provident fund, employee state insurance scheme, pension scheme and superannuation schemes as per regulations are charged as an expense on an accrual basis when employees have rendered the service. The Company has no further payment obligations once the contributions have been paid.

Defined benefit plans: Defined benefit plan in the form of gratuity, are recognized on the basis of actuarial valuation performed by an independent actuary at each balance sheet date using the projected unit credit method or in compliance with the requirements of the domestic laws. Gratuity is included in employee''s benefit expense in the

statement of profit and loss. The gratuity plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the tenure of employment with the Company. The Company recognizes the net obligation of a defined benefit plan in its balance sheet as an asset or liability. Gains and losses through remeasurement of the net defined benefit liability/ (asset) are recognized in other comprehensive income and are not reclassified to profit or loss in subsequent periods. The actual return of the portfolio of plan assets, in excess of the yields computed by applying the discount rate used to measure the defined benefit obligation is recognized in other comprehensive income. The effects of any plan amendments are recognized on net basis in the statement of profit and loss.

C. Other long-term employee benefits

Employee benefits (other than short-term employee benefits, post-employment benefits and termination benefits) that are not expected to be settled wholly before 12 months after the end of reporting period. e.g.: long-term paid absences (compensated absences). 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 recognized in profit or loss. The said obligations are presented as current liabilities in the balance sheet, if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.

D. Termination benefits

Employee benefits that are provided in exchange for termination of an employee''s employment as a result of either: a) the Company''s decision to terminate an employee''s employment before the normal retirement date; or b) an employee''s decision to accept an offer of benefits in exchange for the termination of the employment. E.g.: Retrenchment compensation etc.

The Company recognises termination benefits expected to be paid:

a) as employee benefits expense in the statement of profit and loss, and

b) as a current liability (employee benefits payable) or as a current asset (accrued expense) in the balance sheet, after deducting any amount already paid.

n) Leases As a lessee

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use assets are subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of the lease liability.

The lease liability is initially measured at amortised cost at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, using the incremental borrowing rate.

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, leases of low-value assets and cancellable leases. The Company recognises the lease payments associated with these leases as an expense in statement of profit and loss.

As a lessor

Lease income from operating leases where the Company is a lessor is recognised in 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. The Company did not need to make any adjustments to the accounting for assets held as lessor as a result of adopting the new leasing standard.

o) Borrowing costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use or where out of general borrowings, funds may have been used, the borrowing cost is calculated by applying weighted average cost of borrowing applicable to such general borrowing which is outstanding during the year, are capitalized up to the date by which qualifying assets are ready for its intended use and included in the carrying amount of such assets. All other borrowing costs are charged to statement of profit and loss.

Borrowing costs includes exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the finance cost.

p) Income tax

The income tax expense or credit for the period is the tax payable on the current period''s taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

Current tax

The tax currently payable is based on estimated taxable income for the year in accordance with the provisions of the Income Tax Act, 1961. Taxable profit differs from ''profit before tax'' as reported in the standalone statement of profit and loss because of items of income or expenses that are taxable or deductible in other years and items that are never taxable or deductible.

Management periodically evaluates positions taken in the tax returns with respect to situations for which applicable tax regulations are subject to interpretation and revises the provisions, if so required where consider necessary.

The Company''s current tax is calculated using tax rates that have been enacted by the end of the reporting period. Current tax assets and current tax liabilities are offset where the Company has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the Company''s financial statements and the corresponding tax bases used in computation of taxable profit and quantified using the tax rates and laws enacted or substantively enacted as on the balance sheet date.

Deferred tax assets are generally recognized for all taxable temporary differences to the extent that is probable that

taxable profit will be available against which those deductible temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax assets relating to unabsorbed depreciation/ business losses/losses under the head "capital gains" are recognized and carried forward to the extent of available taxable temporary differences or where there is convincing other evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of reporting period, to recover or settle the carrying amount of its assets and liabilities. Transaction or event which is recognized outside profit or loss, either in other comprehensive income or in equity, is recorded along with the tax as applicable.

Minimum alternate tax (MAT)

Deferred tax assets include minimum alternate tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. Accordingly, MAT is recognized as deferred tax asset in the balance sheet when the asset can be measured reliably, and it is probable that the future economic benefit associated with asset will be realized.

Current and deferred tax expense is recognized in the statement of profit and loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.

Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

q) Provisions, contingent liabilities and contingent assets

A provision is made when there is a present obligation (legal or constructive) as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. Provisions are determined based on the present value of the management''s best estimate of the amount required to settle the present obligation at the end of the reporting period. The discount rate used to determine

present value is a pre-tax rate that reflects current market assessment of time value of money and the risks specific to the liability.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent assets are not recognized but disclosed in the financial statements.

r) Operating segments

"Operating segments" are components of the Company whose operating results are regularly reviewed by the "chief operating decision maker (CODM)" to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. "Specialty chemical business" is identified as single operating segment for the purpose of making decision on allocation of resources and assessing its performance.

s) Earnings per share

Earnings per share are calculated by dividing the net profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period.

Diluted earnings per share is computed by adjusting the figures used in the determination of basic EPS to take into account:

a) after tax effect of interest and other financing costs associated with dilutive potential equity shares,

b) the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.

t) Cash flows statement

Statement of cash flows is prepared segregating the cash flows into operating, investing and financing activities.

Cash flows are reported using the indirect method, whereby net profit for the period is adjusted for the effects of transactions of non-cash nature, working capital changes, any deferrals or accruals of past or future operating cash receipts or payments and items of income or expenses associated with investing or financing cash flows.

For the purpose of presentation in the statement of cash flows, cash and cash equivalents include cash on hand, cash at

banks, other short-term deposits and highly liquid investments with original maturity of three months or less that are readily convertible into cash.

u) Cost recognition

Costs and expenses are recognised in statement of profit and loss when incurred and are classified according to their nature. Revenue expenditure pertaining to research is charged to the statement of profit and loss. Development costs of products are charged to the statement of profit and loss. Development expenditure of certain nature is capitalized when the criteria for recognizing an intangible asset are met. Expenditure on research activities undertaken with the prospect of gaining new scientific or technical knowledge and understanding are recognised as an expense when incurred. Development activities involve a plan or design for the production of new or substantially improved products and processes.

v) Government grants

The Company recognizes government grants only when there is reasonable assurance that the conditions attached to them will be complied with and the grants will be received.

When the grant relates to an expense item, it is recognized as income in statement of profit and loss on a systematic basis over the periods, to match with the related costs, for which it is intended to compensate.

When the grant relates to an asset, it is recognized as deferred government grant in the balance sheet and then subsequently transferred to statement of profit or loss on a systematic basis over the expected useful life of the related asset.

w) Exceptional items

Exceptional items refer to items of income or expense, including tax items, within the statement of profit and loss from ordinary activities which are non-recurring and are of such size, nature or incidence that their separate disclosure is considered necessary to explain the performance of the Company.

x) Events after the reporting period

Adjusting events (that provides evidence of condition that existed at the balance sheet date) occurring after the balance sheet date are recognized in the standalone financial statements. Material non-adjusting events (that are inductive of conditions that arose subsequent to the balance sheet date) occurring after the balance sheet date that represents material change and commitment affecting the financial position are disclosed in the Directors'' report.

Dividend: The Company recognises a liability to make distributions of dividend to equity holders, when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. After approval, a corresponding amount is recognised directly in equity.

y) Recent accounting pronouncements

Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On 31 March 2023, MCA notified the Companies (Indian Accounting Standards) Amendment Rules, 2023, and has made following amendments to Ind AS which are effective from 01 April 2023:

• Ind AS 1 - Presentation of financial statements: This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. Accounting policy information, together with other information, is material when it can reasonably be expected to influence decisions of primary users of general-purpose financial statements.

The Company does not expect the amendment to have any significant impact in its standalone financial statements.

• Ind AS 8 - Accounting policies, changes in accounting estimates and errors : This amendment clarify the distinction between "changes in accounting estimates"

and "changes in accounting policies" and the "correction of errors". The definition of a "change in accounting estimates" has been replaced with a definition of "accounting estimates". Under the new definition, accounting estimates are "monetary amounts in financial statements that are subject to measurement uncertainty". It also clarifies how entities use measurement techniques and inputs to develop accounting estimates if accounting policies require items in financial statements to b

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Mar 31, 2021

1) Corporate information:

Tatva Chintan Pharma Chem Limited (formerly known as "Tatva Chintan Pharma Chem Private Limited" ("the Company") was private limited company domiciled in India, and incorporated under the Companies Act 2013 (erstwhile Companies Act 1956) in India on 12 June 1996 having its registered office at Plot No 502/17, GIDC Estate, Ankleshwar, Bharuch - 393002, Gujarat, India.

The Company is primarily engaged in manufacturing and selling of specialty chemicals, Pharma & Agro intermediates, Quaternary Compounds & Quats. The Company has become a Public Limited Company w.e.f. 27 January 2021 and consequently the name of the Company has changed from Tatva Chintan Pharma Chem Private Limited to Tatva Chintan Pharma Chem Limited.

2) Significant accounting policies:

a) Statement of compliance and basis of preparation:

• The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and presentation requirements of Division II of Schedule III to the Companies Act, 2013.

• These financial statements are prepared under the historical cost convention on the accrual basis except for certain financial instruments, which are measured at fair values, which are disclosed in the Standalone Financial Statements. Also Terminologies and classification of certain products has been changed as recommended by management.

• The classification of assets and liabilities of the Company is done into current and non-current based on the operating cycle of the business of the Company. The operating cycle of the business of the Company is less than twelve months and therefore all current and noncurrent classifications are done based on the status of reliability and expected settlement of the respective asset and liability within a period of twelve months from the reporting date as required by Schedule III to the Companies Act, 2013.

• The financial statements are presented in Indian Rupees (''INR'') and all values are rounded to the nearest Millions, except otherwise indicated.

b) Significant accounting judgements, estimates and assumptions

The preparation of the standalone financial statements in conformity with Ind AS requires management to make estimates, judgements and assumptions. These estimates, judgements and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures

of contingent assets and liabilities at the date of standalone financial statements and reported amounts of revenues and expenses during the periods. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of circumstances surrounding the estimates. Changes in estimates are reflected in the standalone financial statement in the period in which changes are made and if material, their effects are disclosed in the notes to the standalone financial statements.

Estimates

The preparation of the standalone financial statements in conformity with Ind AS requires management to make estimates, judgements and assumptions. These estimates, judgements and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of financial statements and reported amounts of revenues and expenses during the period. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of circumstances surrounding the estimates. Changes in estimates are reflected in the financial statement in the period in which changes are made and if material, their effects are disclosed in the notes to the financial statements.

Judgements

The Company''s management has made the following judgements, which have the most significant effect on the amounts recognised in the separate financial statements, while formulating the Company''s accounting policies:

i. Taxes - The Company is eligible for deductions for business which are established in Special Economic Zones (SEZ) under section 10A of the Income Tax Act,1961.

ii. Estimation of uncertainties relating to the global health pandemic from COVID-19 (COVID-19):

Due to the outbreak of the COVID-19 pandemic and the consequent lock-down announced by Government, the operations of the Company were temporarily-suspended in initial phase of the financial year. The Company continued to closely monitor the situation and take appropriate action, as necessary to scale up operations, in due compliance with the applicable regulations. The Company has been running on its normal operations after government allowed the same since June, 2020. However, situation of COVID-19 outbreak has resurged again towards the end of the current financial year, it is expected to not affect the operations of the Company. Based on the current assessment of impact of COVID-19 on the operations of the Company and ongoing

discussions with the Customers, vendors and service providers, the Company is positive of serving customer orders and obtaining regular supply of raw materials and logistics services. The Management has considered the possible effects, if any, that may result from the pandemic on the carrying amounts of its current and noncurrent assets, after considering internal and external sources of information as at the date of approval of these financial statements. The Company has considered the possible effects that may result from the pandemic relating to COVID-19 on the carrying amounts of Trade Receivables and Inventories. In assessing recoverability of trade receivables, the Company has considered subsequent recoveries, past trends, credit risk profiles of the customers based on their industry, macroeconomic forecasts and internal and external information available up to the date of issuance of these financial statements. In assessing the recoverability of inventories, the Company has considered the latest selling prices, customer orders on hand and margins. Based on the above assessment, the Company is of the view that carrying amounts of trade receivables and inventories are expected to be realisable. The impact of COVID-19 may be different from that estimated as at the date of approval of these financial statements, and the Company will continue to closely monitor the developments.

iii. Defined benefit plans (gratuity benefits) - The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. 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.

Discount rate: The said parameter is subject to change. In determining the appropriate discount rate (for plans operated in India), the management considers the interest rates of government securities in currencies which are consistent with the post-employment benefit obligation. The underlying bonds are reviewed periodically for quality. Those having excessive credit spreads are excluded from the analysis since that they do not represent high quality corporate bonds.

Mortality rate: It is based on publicly available mortality tables. Those mortality tables tend to change at an interval in response to demographic changes. Prospective increase in salary and gratuity are based on expected future inflation rates.

iv. Useful lives of property, plant and equipment - The

Company reviews the useful life of property, plant and equipment at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods.

v. Impairment of property, plant and equipment - For

property, plant and equipment and intangibles an assessment is made at each reporting date to determine whether there is an indication that the carrying amount may not be recoverable or previously recognised impairment losses no longer exist or have decreased. If such indication exists, the Company estimates the asset''s or CGU''s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset''s recoverable amount since the last impairment loss was recognised.

vi. Impairment of investment - For determining whether the investments in subsidiaries, joint ventures and associates are impaired requires an estimate in the value in use of investments. In considering the value in use, the Directors have estimated the future cash flow, capacity utilization, operating margins and other factors of the underlying businesses / operations of the investee companies. Any subsequent changes to the cash flows due to changes in the above mentioned factors could impact the carrying value of investments.

vii. Inventories - The Company estimates the net realisable value (NRV) of its inventories by taking into account estimated selling price, estimated cost of completion, estimated costs necessary to make the sale, obsolescence considering the past trend. Inventories are written down to NRV where such NRV is lower than their cost.

viii. Recognition and measurement of other provisions -

The recognition and measurement of other provisions is based on the assessment of the probability of an outflow of resources, and on past experience and circumstances known at the closing date. The actual outflow of resources at a future date may therefore, vary from the amount included in other provisions.

c) Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the

Liability takes place either:

> In the principal market for the asset or liability, or

> In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the Ind AS Standalone Financials Statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognised in the Audited Ind AS Financial Statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

The Company''s Management determines the appropriate valuation techniques and inputs for fair value measurements. In estimating the fair value of an asset or a liability, the Company uses market-observable data to the extent it is available. Where level 1 inputs are not available, the Company engages third party qualified valuers to perform the valuation. Any change in the fair value of each asset and liability is also compared with relevant external sources to determine whether the change is reasonable.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

d) Property, plant and equipment:

Property, plant and equipment are stated at cost less accumulated depreciation. Cost includes all expenses and financing costs related to acquisition and construction of the concerned assets and any attributable cost of bringing the asset to the condition of its intended use.

Advances paid towards the acquisition of property, plant and equipment outstanding at each Balance sheet date is classified as capital advances under other non-current assets. Subsequent expenditures relating to property, plant and equipment are capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the cost of the item can be measured reliably. Repair and maintenance cost are recognized in the Statement of Profit and Loss when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the Statement of Profit and Loss.

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

If such assets are considered to be impaired, the impairment to be recognized in the Statement of Profit and Loss is measured by the amount by which the carrying value of the asset exceeds the estimated recoverable amount of the asset. An impairment loss is reviewed in the Statement of Profit and Loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated depreciation) had no impairment loss been recognized for the asset in prior years.

Gains or losses arising from the retirement or disposal of an asset are determined as the difference between the net disposal proceeds and the carrying amount of the asset and recognized as income or expense in the Statement of Profit and Loss. These are included in profit or loss within other gains/ (losses).

e) Capital work-in-progress

Capital work-in-progress includes cost of assets under development, all taxes and duties and other expenses to bring the asset to the Company.

Cost of Property, plant and equipment not ready for their intended use before such date is disclosed under Capital work-in-progress.

f) Intangible assets

Intangible assets are recognized when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably. Intangible assets are stated at original cost net of tax/duty credits availed, if any, less accumulated amortization and cumulative impairment. Administrative and other general overhead expenses that are specifically attributable to acquisition of intangible assets are allocated and capitalized as a part of the cost of the intangible assets.

Computer software where it is expected to provide future enduring economic benefits is capitalized. The capitalized cost includes license fees and cost of implementation/system integration services.

Gains or losses arising from the retirement or disposal of an intangible asset are determined as the difference between the net disposal proceeds and the carrying amount of the asset and recognized as income or expense in the Statement of Profit and Loss. These are included in profit or loss within other gains/ (losses).

g) Depreciation and amortization:

Depreciation on tangible Property, Plant and Equipment has been provided on the basis of useful life as stated in Schedule II of the Companies Act, 2013 using the straight-line method.

Lease hold land is amortized over the period of lease.

Depreciation methods, useful lives and residual values are reviewed periodically, including at each financial year end.

The following are the estimated useful lives:

Class of Assets Useful lives estimated by the

Buildings	Factory Building - 30 years Building (RCC Frame Structure) - 60 years Building (Other than RCC Frame Structure) - 30 Years
Plant and	Special Plant and Machinery used in
equipment	manufacture of pharmaceuticals and chemicals - 20 years Plant and Machinery other than continuous process plant not covered under specific - 15 year; Continuous process plant for which no special rate has been prescribed in Special Plant and Machinery - 8 Years

Class of Assets	Useful lives estimated by the management (years)
Computer	3 / 6 years
Vehicles	8 to 10 years
Office equipment	5 years
Electrical installations	10 years
Furniture and fixtures	10 years
Software	3 to 10 years
Lease hold Land	30 to 99 years

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.

i) Investments and other financial assets:

i) 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 statement of profit and loss); and

• those measured at amortized cost.

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

ii) Initial measurement

At initial recognition, the Company measures a financial asset at its fair value plus transaction costs, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly 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.

iii) Subsequent measurement - Debt instruments

Subsequent measurement of the debt instruments depend on the Company''s business model for managing the asset and the cash flow characteristics of the asset. The Company classifies its debt instruments in the following three categories:

• Amortized cost

Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. A gain or loss on a debt investment that is subsequently measured at amortized cost and is not a part of the hedging relationship is recognized in the statement of profit and loss when

the asset is derecognized or impaired. Interest income from these financial assets is included in finance income using the effective interest rate method.

• Fair value through other comprehensive income (FVOCI)

Assets that are held for collection of contractual cash flows and for selling the financial assets where the assets'' cash flows represent solely payments of principal and interest are measured at fair value through other comprehensive income (OCI). Movements in the carrying amount are taken through OCI, except for recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in the statement of profit and loss. When financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss and recognized in other gains / losses. Interest income from these financial assets is included in finance income using the effective interest rate method.

• Fair value through profit or loss (FVPL)

Assets that do not meet the criteria for amortized cost or FVOCI are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not a part of hedging relationship is recognized in the statement of profit and loss. Interest income from these financial assets is included in finance income.

iv) Subsequent measurement - Equity instruments

The Company subsequently measures all equity instruments at fair value. When the management has elected to present fair value gains and losses on equity instruments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to statement of profit and loss. Dividends from such investments are recognized in the statement of profit and loss as other income when the Company''s right to receive payment is established.

Changes in the fair value of financial assets at FVPL are recognized 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.

v) The company has accounted for its investments in subsidiaries at cost less impairment loss.

vi) Impairment of financial assets

Loss allowance for expected credit losses is recognized for financial assets measured at amortized cost and fair value through other comprehensive income.

Loss allowance equal to the lifetime expected credit losses is recognized if the credit risk on the financial instruments has significantly increased since initial recognition. For financial instruments whose credit risk has not significantly increased since initial recognition, loss allowance equal to twelve months expected credit losses is recognized.

vii) Derecognition of financial assets

A financial asset is derecognized when the Company has transferred the rights to receive cash flows from the financial asset or 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. When the Company has transferred an asset, it evaluates whether it has transferred substantially all the risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognized. When the Company has neither transferred a financial asset nor retains substantially all the risks and rewards of ownership of the financial asset, the financial asset is derecognized if the Company has not retained control of the financial asset.

i) Financial liabilities and equity instruments 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.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

Financial liabilities

Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortized cost, using the effective interest rate method.

Interest-bearing bank loans, overdrafts and issued debt are initially measured at fair value and are subsequently measured at amortized cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognized over the term of the borrowings in accordance with the Company''s accounting policy for borrowing costs.

Fair value measurement of financial instruments:

The fair value of financial instruments is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions (i.e., an exit price) regardless of whether that price is directly observable or estimated using another valuation technique. When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using a variety of valuation techniques that include the use of valuation models. The inputs to these models are taken from observable markets where possible, but where this is not feasible, estimation is required in establishing fair values. Judgements and estimates include considerations of liquidity and model inputs related to items such as credit risk (both own and counterparty), correlation and volatility.

Derivative financial instrument:

The Company holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank.

i) Financial assets or financial liabilities, at fair value through profit or loss:

This category has derivative financial assets or liabilities which are not designated as hedges.

Although the Company believes that these derivatives constitute hedges from an economic perspective, they may not qualify for hedge accounting under Ind AS 109, Financial Instruments. Any derivative that is either not designated as hedge, or is so designated but is ineffective as per Ind AS 109, is categorized as a financial asset or financial liability, at fair value through profit or loss.

Derivatives not designated as hedges are recognized initially at fair value and attributable transaction costs are recognized in net profit in the Statement of Profit and Loss when incurred. Subsequent to initial recognition, these derivatives are measured at fair value through profit or loss and the resulting exchange gains or losses are included in other income. Assets/liabilities in this category are presented as current assets/ current liabilities if they are either held for trading or are expected to be realized within 12 months after the Balance Sheet date.

Derecognition of financial liabilities

The Company derecognizes financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or they expire.

j) Cash and cash equivalents:

Cash and cash equivalents comprise cash at bank, cash on hand and short term highly liquid investments with original maturities of three months or less that is readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

k) Inventories:

Items of inventories are valued lower of cost or estimated net realisable value as given below.

• Raw materials, components and packing materials: Raw

Materials, Components and packing materials are valued at Lower of Cost or Net Realizable Value, (Cost is net of Goods and Service Tax, wherever applicable). However materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Costs are determined on first in, first out (FIFO) method

• Finished goods & work-in-progress: Finished Goods & work-in-progress are valued at lower of cost and net realizable value. The cost is determined on FIFO basis and includes cost of materials, cost of conversion and other costs incurred in acquiring the inventory and bringing them to their present location and condition.

• Stores and spares: Stores and spare parts are valued at lower of purchase Costs are determined on FIFO method and net realisable value.

• Stock in trade: Stock in Trade is valued at lower of purchase cost and net realizable value.

l) Revenue recognition:

• The Company earns revenue primarily from sale of specialty chemicals, Pharma & Agro intermediates, Quaternary Compounds & Quats. The Company is primarily engaged in manufacturing and selling of Quaternary compounds, bulk drugs and specialty chemicals.

• Ind AS 115 "Revenue from Contracts with Customers" provides a control-based revenue recognition model and provides a five step application approach to be followed for revenue recognition.

> Identify the contract(s) with a customer;

> Identify the performance obligations;

> Determine the transaction price;

> Allocate the transaction price to the performance obligations;

> Recognize revenue when or as an entity satisfies performance obligation.

• Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The point at which control passes is determine based on the terms and condition by each customer agreements, but generally occurs on dispatch to the customer.

• Revenue is measured at the fair value of the consideration received or receivable, after the deduction of any trade discounts, volume rebates, sales return on transfer of control in respect of ownership to the buyer which is generally on dispatch of goods and any other taxes or duties collected on behalf of the Government which are levied on sales such as Goods and Services Tax (GST), where applicable. Discounts given include rebates, price reductions and other incentives given to customers. No element of financing is deemed present as the sales are made with a payment term which is consistent with market practice.

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

• Revenue 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, regardless of when the payment is being made.

• Revenue is recognized at point in time when the performance obligation with respect to Quaternary compounds, Pharma & Agro Product and specialty chemicals or rendering of services to the Customer which is the point in time when the customer receives the goods and services.

Contract balances Contract assets

A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.

Trade receivable

A receivable is recognised if an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).

Contract liabilities

A contract liability is the obligation to transfer goods or services to a customer for which the Company has received

consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract.

• Claims and rebates receivables are accounted as and when settled.

• Interest income from a financial asset is recognized using the effective interest rate method when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.

• Dividends are recognized in statement of profit and loss 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.

• Incomes in respect of Duty Drawback in respect of exports made during the year are accounted on accrual basis

• Merchandise Exports from India Scheme (MEIS) income is recognized on accrual basis when considering the related expenses to the same profit or losses on transfer of licenses are accounted in year of the sales. Duty free imports of material under Advance License matched with the export made against the said licenses. Export benefits on account of export promotion schemes are accrued and accounted in the period of export and are included in other operating revenue. MEIS Scheme has been ended as on December 31, 2020 and replaced by the new scheme introduced by the Government of India

i.e. Remission of Duties and Taxes on Exported Products (RoDTEP). Notification related to the final incentive rates is still awaited accordingly Company has recognized the MEIS incentive till December 31, 2020.

• Other incomes are recognized on accrual basis.

m) Employee benefits:

I. Defined contribution plans:

Contribution to retirement benefit plans in the form of provident fund, employee state insurance scheme, pension scheme and superannuation schemes as per regulations are charged as an expense on an accrual basis when employees have rendered the service. The Group has no further payment obligations once the contributions have been paid.

II. Defined benefit plans

Defined benefit plan in the form of gratuity, are recognized on the basis of actuarial valuation performed by an independent actuary at each balance sheet date using the projected unit credit method or in compliance with the requirements of the domestic laws. Gratuity is included in employees'' benefit expense in the statement of profit and loss.

The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the tenure of employment with the Company. The Company recognizes the net obligation of a defined benefit plan in its Balance Sheet as an asset or liability.

Gains and losses through remeasurement of the net defined benefit liability/ (asset) are recognized in other comprehensive income and are not reclassified to profit or loss in subsequent periods. The actual return of the portfolio of plan assets, in excess of the yields computed by applying the discount rate used to measure the defined benefit obligation is recognized in other comprehensive income. The effects of any plan amendments are recognized in net profit in the Statement of Profit and Loss.

The undiscounted amount of short-term employee benefits that are expected to be paid in exchange for services rendered by an employee is recognized during the period/year when the employee renders the services.

III. Other long-term employee benefit obligations

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 recognized in profit or loss.

The said obligations are presented as current liabilities in the consolidated balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.

n) Leases:

As a lessee

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use assets are subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of the lease liability. The lease liability is initially measured at amortised cost at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, using the incremental borrowing rate.

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, leases of low-value assets and cancellable leases. The Company recognises the lease payments associated with these leases as an expense in Profit and loss account.

As a lessor

Lease income from operating leases where the Company is a lessor is recognised in 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. The Company did not need to make any adjustments to the accounting for assets held as lessor as a result of adopting the new leasing standard.

o) Borrowing costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use or where out of general borrowings, funds may have been used, the borrowing cost is calculated by applying weighted average cost of borrowing applicable to such general borrowing which is outstanding during the year, are capitalized up to the date by which qualifying assets are ready for its intended use and included in the carrying amount of such assets. All other borrowing costs are charged to statement of Profit and Loss.

Borrowing cost includes exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the finance cost.

p) Transaction in foreign currencies:

• Foreign currency transactions are translated in to functional currency at the exchange rates prevailing on the date of such transactions. Foreign currency monetary assets and liabilities as at the balance sheet date are translated at the rates of exchange prevailing at the date of the balance sheet. Gains and losses arising on account of differences in foreign exchange rates on settlement / translation of foreign currency monetary assets and liabilities are recognized in the statement of profit and loss in the year in which they are incurred. Non-monetary foreign currency items that are measured at fair value are translated using the exchange rates when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as a part of the fair value gain or loss.

• Any profit or loss arising on cancellation, maturity or renewal of forward exchange contracts is recognized as income or expenses in the statement of profit & loss of the year and included in Exchange Difference

• Gains and losses on account of foreign exchange fluctuation in respect of liabilities in foreign currencies specific to acquisition of property, plant and equipment in foreign currency are recognized as income and expense in profit and loss account.

q) Income tax:

The income tax expense or credit for the period is the tax payable on the current period''s taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

i) Current tax

The tax currently payable is based on estimated taxable income for the year in accordance with the provisions of the Income Tax Act, 1961. Taxable profit differs from ''profit before tax'' as reported in the consolidated statement of profit and loss because of items of income or expenses that are taxable or deductible in other years and items that are never taxable or deductible. Management periodically evaluates positions taken in the tax returns with respect to situations for which applicable tax regulations are subject to interpretation and revises the provisions, if so required where consider necessary.

Current tax assets and current tax liabilities are offset where the Company has a legally enforceable right to

offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

No change in provision has been made on restating of financials as per Indian Accounting Standards (lnd AS) notified under Section 133 of the Companies Act, 2013 ("the Act") [Companies (Indian Accounting Standards) Rules, 2015].

ii) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the Company''s financial statements and the corresponding tax bases used in computation of taxable profit and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are generally recognized for all taxable temporary differences to the extent that is probable that taxable profit will be available against which those deductible temporary differences can be utilized. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax assets relating to unabsorbed depreciation/ business losses/losses under the head "capital gains" are recognized and carried forward to the extent of available taxable temporary differences or where there is convincing other evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.

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

Transaction or event which is recognized outside profit or loss, either in other comprehensive income or in equity, is recorded along with the tax as applicable.

iii) Minimum alternate tax (MAT)

Deferred tax assets include Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. Accordingly, MAT is recognized as deferred tax asset in the balance sheet when the asset can be measured reliably, and it is probable that the future economic benefit associated with asset will be realized.

Current and deferred tax expense is recognized in the Statement of Profit and Loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

r) Provisions, contingent liabilities and contingent assets:

A provision is made when there is a present obligation (legal or constructive) as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. Provisions are determined based on the present value of the management''s best estimate of the amount required to settle the present obligation at the end of the reporting period. The discount rate used to determine present value is a pre-tax rate that reflects current market assessment of time value of money and the risks specific to the liability.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent assets are neither recognized nor disclosed in the financial statements.

s) Impairment of assets:

Financial assets:

The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in the statement of profit and loss.

Non-financial assets:

Goodwill and intangible assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment or more frequently if events or change in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized in the statement

of profit and loss for the amount by which the assets carrying amount exceeds its recoverable amount. The recoverable amount is the higher of assets'' fair value less costs of disposal and value in use.

If, at the balance sheet date, there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.

t) Accounting and reporting of information for operating segments:

Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating decision making body in the Company to make decisions for performance assessment and resource allocation.

The reporting of segment information is the same as provided to the management for the purpose of the performance assessment and resource allocation to the segments.

Segment accounting policies are in line with the accounting policies of the Company.

u) Earnings per share:

Earnings per share are calculated by dividing the net profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period.

Diluted earnings per share is computed by adjusting the figures used in the determination of basic EPS to take into account:

• After tax effect of interest and other financing costs associated with dilutive potential equity shares

• The weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.

v) Cash flow statement:

Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from operating activities is reported using indirect method, adjusting the net profit for the effects of:

i. changes during the period in inventories and operating receivables and payables transactions of a non-cash nature;

ii. Non-cash items such as depreciation, provisions, deferred taxes, unrealized foreign currency gains and losses, and undistributed profits of associates; and

iii. all other items for which the cash effects are investing or financing cash flows.

Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available for general use as on the date of Balance Sheet.

w) Research and development expenditure

Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are charged to the Statement of Profit and Loss, Development expenditure of certain nature is capitalized when the criteria for recognizing an intangible asset are met. Expenditure on research activities undertaken with the prospect of gaining new scientific or technical knowledge and understanding are recognised as an expense when incurred. Development activities involve a plan or design for the production of new or substantially improved products and processes.

x) Government grants

The Company recognizes government grants only when there is reasonable assurance that the conditions attached to them will be complied with, and the grants will be received. When the grant relates to an expense item. It is recognized as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognized as deferred revenue in the balance sheet and transferred to profit or loss on a systematic basis over the expected useful life of the related asset.

y) Exceptional items

Exceptional items refer to items of income or expense, including tax items, within the statement of profit and loss from ordinary activities which are non-recurring and are of such size, nature or incidence that their separate disclosure is considered necessary to explain the performance of the Company.

z) Recent accounting pronouncements:

The company has applied the following standards and amendments for the first time for their annual reporting period commencing 1 April 2020:

• Definition of material - amendments to Ind AS 1 and Ind AS 8

• Definition of business - amendments to Ind AS 103

• Covid-19 related concessions - amendments to Ind AS 116

• Interest rate benchmark reform - amendments to Ind AS109 and Ind AS 107

The amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.