Parag Milk Foods Ltd. कंपली की लेखा नीति

Mar 31, 2025

3 Material Accounting policies

3.1 Property, plant and equipment

Recognition and measurement

Freehold land is carried at historical cost. For freehold land as no finite useful life can be determined, related carrying amounts are
not amortised.

Items of property, plant and equipment, are measured at cost (which includes capitalised borrowing costs, if any) less accumulated
depreciation and accumulated impairment losses, if any.

Cost of an item of property, plant and equipment includes its purchase price, duties, taxes, after deducting trade discounts and
rebates, any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of
dismantling and removing the item and restoring the site on which it is located.

The cost of a self-constructed item of property, plant and equipment comprises the cost of materials, direct labour and any other
costs directly attributable to bringing the item to its intended working condition and estimated costs of dismantling, removing and
restoring the site on which it is located, wherever applicable. If significant parts of an item of property, plant and equipment have
different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

Items such as spare parts, stand-by equipment and servicing equipment that meet the definition of PPE are capitalised at cost and
depreciated over their useful life.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in statement of profit and loss.

Subsequent expenditure

Subsequent expenditure is capitalised in the carrying amount of assets or recognized as a separate asset only if it is probable that
the future economic benefits associated with the expenditure will flow to the Company and the cost can be measured reliably.

All other repairs and maintenances are charged to the statement of profit and loss during the reporting period in which they
are incurred.

Depreciation

Depreciation on cost of fixed assets is provided on straight-line-method at estimated useful life, which is in line with the estimated
useful life as specified in Schedule II to the Act, except for second hand machineries which are depreciated basis the balance useful
life as specified in Schedule II to the Act. Leasehold building improvements are depreciated base on the management estimates of
useful life, namely 3 years.

Depreciation on additions is provided on a pro-rata basis from the date of ready to use and in case of Projects from the date of
commencement of commercial production. Depreciation on deductions/disposals is provided on a pro-rata basis up to the month
proceeding the month of deduction/disposal.

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

The residual values, useful lives and methods of depreciation of property plant and equipment are reviewed at each financial year-
end and adjusted prospectively, if appropriate.

Derecognition

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no
future economic benefits are expected from its use or disposal. Gains or losses arising from de-recognition of a tangible asset are
measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the
statement of profit and loss when the asset is derecognized.

Reclassification to investment property

When the use of a property changes from owner-occupied to investment property, the property is reclassified as investment
property at its carrying amount on the date of classification.

Capital work-in-progress

Capital work-in-progress includes expenditure incurred, till the assets are put into intended use. Capital work-in-progress are
measured at cost less accumulated impairment losses, if any

3.2 Intangible assets

Recognition and measurement

Intangibles 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 that are acquired by the Company which have finite useful lives, are measured at cost less accumulated
amortization and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the
intangible asset.

Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific assets to
which it relates. All other expenditures are recognized in the statement of profit and loss when incurred.

Amortization

Amortization is recognized in profit and loss on a straight-line basis over the estimated useful lives of the intangible assets from the
date that they are available for use. The estimated useful lives are as follows:

Amortization method, useful lives and residual values are reviewed at the end of each financial year and adjusted, if appropriate.

Intangible assets with finite lives are assessed for impairment whenever there is an indication that the intangible asset may be
impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least
at the end of each reporting period.

The amortization expense on intangible assets with finite lives is recognized in the statement of profit and loss unless such
expenditure forms part of carrying value of another asset.

Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the
cash-generating unit (CGU) level.

Derecognition

The carrying amount of an intangible asset is derecognised on disposal or when no future economic benefits are expected from
its use or disposal. The gain or loss arising from the derecognition of an intangible asset is measured as the difference between the
net disposal proceeds and the carrying amount of the intangible asset and is recognised in the Statement of Profit and Loss when
the asset is derecognised.

3.3. Impairment
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 with simplified approach. For all other financial assets, ECL 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 ECL (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 statement of profit and loss.

Non - Financial Assets

Intangible Assets and Property, Plant and Equipment

Intangible Assets and 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 assets. In such cases, the recoverable amount is
determined for the 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 assets exceeds the estimated
recoverable amount of the asset. An impairment loss is reversed 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
amortization or depreciation) had no impairment loss been recognized for the asset in prior years.

3.4 Leases

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

The Company as a lessee

The Company’s lease asset classes primarily consist of leases for land and buildings. The Company assesses whether a contract
contains a lease, at inception of contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an
identified asset, the Company assesses whether:

(i) The contract involves use of identified asset;

(ii) The Company has substantially all of the economic benefit of from use of the asset through the period of the lease; and

(iii) The Company has the right to direct the use of the asset

At the date of commencement of lease, the Company recognize a Right-of-Use asset (“ROU”) and a corresponding lease liability
for all lease arrangements in which it is a lessee, except for leases with a term of twelve month or less (short-term leases) and low

value leases. For these short-term and low value leases, the Company recognizes the lease payments as operating expense on
straight-line basis over the term of lease.

Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. ROU assets and
lease liabilities includes these options when it is reasonably certain that they will be exercised

The ROU assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease
payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are
subsequently measured at cost less accumulated depreciation and impairment losses.

The Company depreciates the ROU assets on a straight-line basis from the lease commencement date to the earlier of the end
of the useful life of the ROU assets or the end of the lease term. The Company also assesses the ROU asset for impairment when
such indicators exist.

The Lease liability is initially measured at amortized cost at the present value of future lease payments. The lease payments are
discounted using the interest rate implicit in the lease, or if not readily determinable, using the incremental borrowing rates in the
country of domicile of the leases. Lease liabilities are re-measured with corresponding adjustment to the related ROU asset if
Company changes its assessment if whether it will exercise an extension or termination option.

Carrying amount of lease liability is increased by interest on lease liability and reduced by lease payments made.

Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as
financing cash flows.

The following is the summary of practical expedients:

1. Applied a single discount rate to portfolio of leases of similar assets in similar economic environment with similar end date.

2. Applied the exemption not to recognize ROU asset and liabilities for leases with less than twelve months of lease term of the
date of initial application.

3. Applied the practical expedient to grandfather the assessment of which transactions are leases. Accordingly, Ind AS 116, is
applied only to contracts that were previously identified as leases under Ind AS 17, Leases.

4. Excluding initial direct costs for the measurement of ROU asset at the date of initial application.

The Company as a lessor

Leases for which the Company is a lessor classified as finance or operating lease. Lease income from operating leases where
the Company is a lessor is recognized 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.

3.5 Inventories

Inventories are valued at the lower of cost (including prime cost, GST and other overheads incurred in bringing the inventories
to their present location and condition) and estimated net realisable value, after providing for obsolescence, where appropriate.
Taxes which are subsequently recoverable from taxation authorities are not included in the cost. The comparison of cost and net
realisable value is made on an item-by-item basis. The net realisable value of materials in process is determined with reference
to the selling prices of related finished goods. Raw materials, packing materials and other supplies held for use in production of
inventories are not written down below cost except in cases where material prices have declined, and it is estimated that the cost
of the finished products will exceed their net realisable value.

The provision for inventory obsolescence is assessed regularly based on estimated usage and shelf life of products.

Raw materials, packing materials and stores and spares are valued at cost computed on weighted average basis. The cost includes
purchase price, inward freight and other incidental expenses net of refundable duties, levies and taxes, where applicable.

Work-in-progress is valued at input material cost plus conversion cost as applicable.

Finished goods are valued at the lower of net realisable value and cost (including prime cost and other overheads incurred in
bringing the inventories to their present location and condition), computed on weighted average basis.

3.6 Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, cheques on hand, demand deposits with banks and other short-term, highly
liquid investments with original maturities of three months or less, that are readily convertible to known amounts of cash and which
are subject to an insignificant risk of change in value. Short-term and liquid investments being subject to more than insignificant risk
of change in value, are not included as part of cash and cash equivalents.

3.7 Trade Receivable

Trade receivable are amounts due from customers for goods sold or services performed in the ordinary course of business and
reflects Company unconditional right to consideration.

3.8 Trade and other payable

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

3.9 Financial instruments
Recognition and initial measurement

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of
another entity

The Company initially recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of
the instrument. All financial assets and liabilities are measured at fair value on initial recognition. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities that are not at fair value through profit or loss are
added to the fair value on initial recognition. However, trade receivables that do not contain a significant financing component are
measured at transaction price. Regular way purchase and sale of financial assets are accounted for at trade date.

Classification and subsequent measurement
Financial assets

Financial assets carried at amortized cost

A debt instrument is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the
asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR)
method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortization is included in finance income in the statement of profit and loss. The losses arising
from impairment are recognized in the statement of profit and loss

Financial assets at Fair Value Through Other Comprehensive Income (FVOCI)

A debt instrument is subsequently measured at FVOCI if it is held within a business model whose objective is achieved by both
collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Debt instruments included within the FVOCI category are measured initially as well as at each reporting date at fair value. Fair value
movements are recognized in the Other Comprehensive Income (OCI). On de-recognition of the asset, cumulative gain or loss
previously recognized in OCI is reclassified from the equity to the statement of profit and loss. Interest earned whilst holding FVOCI
debt instrument is reported as interest income using the EIR method

In case, the Company’s management has made an irrevocable election at the time of initial recognition to account for the equity
investment (Other than Investments in equity instruments of Subsidiary) FVOCI. This election is not permitted if the equity
investment is held for trading. The classification is made on initial recognition and is irrevocable.

Investment in subsidiaries

Investment in subsidiary is carried at cost less impairment wherever applicable in the financial statements.

Financial assets at Fair Value Through Profit or Loss (FVTPL)

A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.

Financial liabilities at Fair Value Through Profit or Loss (FVTPL )

Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition
as at FVTPL. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near
term. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging
instruments in hedge relationships as defined by Ind AS 109, Financial Instruments. Separated embedded derivatives are also
classified as held for trading unless they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognized in the statement of profit and loss.

Financial liabilities designated upon initial recognition at FVTPL are designated as such at the initial date of recognition, and only
if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own
credit risk are recognized in OCI. These gains/ losses are not subsequently transferred to the standalone statement of profit and
loss. However, the Company may transfer the cumulative gain or loss within equity All other changes in fair value of such liability are
recognized in the statement of profit and loss. The Company has not designated any financial liability as at FVTPL.

Financial liabilities at amortised cost

Financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables
maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of
these instruments.

Derecognition
Financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it
transfers the right to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of
ownership of the financial assets are transferred or in which the Company neither transfers nor retains substantially all of the risks
and rewards of ownership and does not retain control of the financial asset.

If the Company enters into transactions whereby it transfers assets recognized on its balance sheet, but retains either all or
substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognized.

Financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire.

The Company also derecognizes a financial liability when its terms are modified and the cash flows under the modified terms are
substantially different. In this case, a new financial liability based on the modified terms is recognized at fair value. The difference
between the carrying amount of the financial liability extinguished and a new financial liability with modified terms is recognized in
the statement of profit and loss.

Off-setting

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the
Company currently has a legally enforceable right to set-off the amounts and it intends either to settle them on a net basis or realise
the asset and settle the liability simultaneously

3.10 Revenue recognition

The Company is engaged in the business of procurement of cow milk and undertakes processing of milk and manufacture of
various value-added products from milk. The Company derives revenues primarily from sale of milk and value-added products
made from milk. The Company recognizes Ind AS 115, Revenue from contracts with customers, based on a five-step model as set
out in the Standard:

Step 1: Identify contract(s) with a customer: A contract is defined as an agreement between two or more parties that creates
enforceable rights and obligations and sets out the criteria for every contract that must be met.

Step 2: Identify performance obligations in the contract: A performance obligation is a promise in a contract with a customer to
transfer a good or service to the customer.

Step 3: Determine the transaction price: The transaction price is the amount of consideration to which the Company expects
to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of
third parties.

Step 4: Allocate the transaction price to the performance obligations in the contract: For a contract that has more than one
performance obligation, the Company allocates the transaction price to each performance obligation in an amount that depicts
the amount of consideration to which the Company expects to be entitled in exchange for satisfying each performance obligation.

Step 5: Recognize revenue when (or as) the Company satisfies a performance obligation.

Revenue is recognized on satisfaction of performance obligation upon transfer of control of promised products or services to
customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services
(“transaction price”).

Revenue is measured on the basis of transaction price, after deduction of any discounts and any taxes or duties collected on behalf
of the Government such as goods and services tax, etc. Discounts are recognised in accordance with the schemes implemented
by the Company. Revenue is only recognised to the extent that it is highly probable a significant reversal will not occur.

Variable consideration is estimated using the expected value method or most likely amount as appropriate in a given circumstance.
Payment terms agreed with a customer are as per business practice and the financing component, if significant, is separated from
the transaction price and accounted as interest income.

Other operational revenue represents income earned from the activities incidental to the business and is recognised when the
performance obligation is satisfied and right to receive the income is established as per the terms of the contract.

Processing charges is recognized as per the terms of the contract when the related services are rendered.

3.11 Other Income

Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic
benefits will flow to the Company and the amount of income can be measured reliably.

Dividend income is recognized when the Company’s right to receive the payment is established, which is generally when
shareholders approve the dividend.

Interest Income on Bank Deposits is accrued on time proportionate basis and at the applicable interest rate.

3.12 Government grant and incentives

Government incentives are recognized at fair value when there is reasonable assurance that the Company will comply with the
relevant conditions and the grant will be received. The Government incentives are recognized in profit and loss on a systematic
basis over the period in which the Company recognizes the related costs for which the incentives are intended to compensate as
expense or immediately if the costs have already been incurred.

Eligible export incentives and Bio-Gas subsidy are recognized in the year in which the conditions precedents are met and there is
no significant uncertainty about the collectability

3.13 Share-based payment

Employees of the Company receive remuneration in the form of share-based payment in consideration of the services rendered.
Under the equity settled share-based payment, the fair value on the grant date of the award given to employees is recognized as
''employee benefit expense’ with a corresponding increase in equity over the vesting period. The fair value of the options at the
grant date is calculated by an independent valuer using Black Scholes model. At the end of each reporting period, apart from the
non-market vesting condition, the expense is reviewed and adjusted to reflect changes to the level of options expected to vest.

3.14 Foreign currency translation
Initial Recognition

On initial recognition, transaction in foreign currencies entered into by the Company are recorded in the functional currency, by
applying to the foreign currency amount, the spot exchange rate between the functional currency and the foreign currency at the
date of the transaction. Exchange differences arising on foreign exchange transactions settled during the year are recognized in
the statement of profit and loss.

Measurement of foreign currency items at reporting date

Foreign currency monetary items of the Company are translated at the closing exchange rates. Non-monetary items that are
measured at historical cost in foreign currency are translated using the exchange rates at the date of the transaction. Non-monetary
items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value
is measured.

Exchange differences arising out of these translations are recognized in the statement of profit and loss except exchange
differences on long term foreign currency monetary items related to acquisition of fixed assets prior to transition to Ind AS, which
are included in the cost of fixed assets.

3.15 Income tax

Income tax comprises current and deferred tax. It is recognized in statement of profit and loss except to the extent that it relates to
a business combination or to an item recognized directly in equity or in Other Comprehensive Income (OCI).

Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to
the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount
expected to be paid or received after considering the uncertainty if any related to income taxes. It is measured using tax rates (and
tax laws) enacted or substantively enacted by the reporting date.

Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with
the provisions of the Income Tax Act, 1961 and using estimates and judgments based on the expected outcome of assessments/
appeals and the relevant rulings in the areas of allowances and disallowances.

Current tax assets and liabilities are offset only if:

i) there is a legally enforceable right to set-off current tax assets against current tax liabilities and when they relate to income
taxes levied by the same taxation authority; and

ii) there is intention either to settle on a net basis, or to realise the asset and settle the liability simultaneous.

Deferred tax

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the corresponding tax bases used for computation of taxable profits. Deferred tax is also recognized in
respect of carried forward tax losses and tax credits. Deferred tax is not recognized for:

- temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination
and that affects neither accounting nor taxable profit or loss at the time of transaction.

- temporary differences related to investments in subsidiaries, associates and interests in joint ventures, when the timing of the
reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in
the foreseeable future.

Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which those
deductible temporary difference can be utilized.

Deferred tax assets recognized or unrecognized are reviewed at each reporting date and are recognized / reduced to the extent
that it is probable / no longer probable respectively that the related tax benefit will be realised.

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled,
based on the laws that have been enacted or substantively enacted by the reporting date.

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

The Company offsets, the current tax assets and liabilities (on a year-on-year basis) and deferred tax assets and liabilities, where it
has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis.

The Government of India, on 20^th September, 2019, vide the Taxation Laws (Amendment) Ordinance 2019, inserted a new Section
115BAA in the Income Tax Act, 1961, which provides an option to the Company for paying Income Tax at reduced rates as per the
provisions/conditions defined in the said section. The Company has decided to take benefit of the reduced tax rate as permitted
in the said section.

Presentation of current and deferred tax

Current and deferred tax are recognized as income or an expense in the statement of profit and loss, except when they relate to
items that are recognized in OCI, in which case, the current and deferred tax income/ expense are recognized in OCI.

The Company offsets current tax assets and current tax liabilities, where it has legally enforceable right to set-off the recognized
amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously In case
of deferred tax assets and deferred tax liabilities, the same are offset if the Company has legally enforceable right to set-off
corresponding current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to
income taxes levied by the same tax authority on the Company.

3.16 Borrowings

Borrowings are initially recognized at net of transaction costs incurred and measured at amortized cost. Any difference between
the proceeds (net of transaction costs) and the redemption amount is recognized in the statement of profit and loss over the period
of the borrowings using the effective interest method.

3.17 Borrowing costs

Borrowing costs consist of interest, ancillary costs and other costs in connection with the borrowing of funds and exchange
differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to interest costs.

Interest and other borrowing costs attributable to qualifying assets are capitalised up to the date such assets are ready for their
intended use. Other interest and borrowing costs are charged to statement of profit and loss.

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Mar 31, 2024

2A. Material Accounting Policies

Basis of preparation

(1) Compliance with Ind AS

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 from time to time) notified under Section 133 of the Companies Act,2013, (the ''Act''), and other relevant provisions of the Act and presentation requirements of Division II of Schedule III to the Act. The Company has prepared the financial statements on the basis that it will continue to operate as a going concern.

The accounting policies are applied consistently to all the periods presented in the financial statements.

(2) Functional and presentation currency

These standalone financial statements are presented in Indian Rupees (f), which is also the Company''s functional currency.

(3) Basis of measurement

The standalone financial statements have been prepared on the historical cost basis except for the following items:

(4) (i) Current / non-current classification of assets / liabilities

The Company has classified all its assets / liabilities into current / non-current portion based on the time frame of 12 months from the date of the financial statements. Accordingly, assets / liabilities expected to be realised / settled within 12 months from the date of financial statements are classified as current and other assets / liabilities are classified as non-current

The Company presents assets and liabilities in the standalone balance sheet based on current / noncurrent classification.

An asset is treated as current when it is:

• Expected to be realised or intended to be sold or consumed in normal operating cycle

• Held primarily for the purpose of trading

• Expected to be realised within twelve months after the reporting period, or

• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in normal operating cycle

• It is held primarily for the purpose of trading

• It is due to be settled within twelve months after the reporting period, or

• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

(ii) Operating Cycle

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.

(iii) Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest Millions as per the requirement of Division II of Schedule III to the Act, unless otherwise stated.

(5) Use of estimates and judgements

In the preparation of the financial statements, the Company makes judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

Differences between actual results and estimates are recognized in the period in which the results are known / materialised.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively. Information about assumptions, judgements and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year ending March 31, 2024 are as below and also been discussed in detail in the relevant section of accounting policies:

• Measurement of defined benefit obligations: key actuarial assumptions;

• Recognition and measurement of provisions and contingencies: key assumptions about the likelihood and magnitude of an outflow of resources;

• Useful life of property, plant and equipment

• Fair value measurement of financial instruments

• Allowance for doubtful debt

• Estimation of tax expenses, utilization of deferred tax assets and tax payable.

• Lease liabilities - measurement of incremental borrowing costs.

• Impairment of financial assets.

(6) Measurement of fair values

Certain accounting policies and disclosures of the Company require the measurement of fair values, for both financial and non-financial assets and liabilities.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into a different level of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

Further information about the assumptions made in the measuring fair values is included in the following notes:

• Share-based Payments

• Financial instruments

2B. Other Accounting policies

(1) Property, plant and equipment Recognition and measurement

Freehold land is carried at historical cost. For freehold land as no finite useful life can be determined, related carrying amounts are not amortised.

Items of property, plant and equipment, are measured at cost (which includes capitalised borrowing costs, if any) less accumulated depreciation and accumulated impairment losses, if any.

Cost of an item of property, plant and equipment includes its purchase price, duties, taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is located.

The cost of a self-constructed item of property, plant and equipment comprises the cost of materials, direct labour and any other costs directly attributable to bringing the item to its intended working condition and estimated costs of dismantling, removing and restoring the site on which it is located, wherever applicable. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in statement of profit and loss.

Subsequent expenditure

Subsequent expenditure is capitalised in the carrying amount of assets or recognized as a separate asset only if it is probable that the future economic benefits associated with the expenditure will flow to the Company and the cost can be measured reliably.

All other repairs and maintenances are charged to the statement of profit and loss during the reporting period in which they are incurred.

Depreciation

Depreciation on cost of fixed assets is provided on straight-line-method at estimated useful life, which is in line with the estimated useful life as specified in Schedule II to the Act, except for second hand machineries which are depreciated over an estimated useful life of 10 years based on management''s estimate. Leasehold building improvements are depreciated base on the management estimates of useful life, namely 3 years.

Depreciation on additions is provided on a prorata basis from the date of ready to use and in case of Projects from the date of commencement of commercial production. Depreciation on deductions/disposals is provided on a pro-rata basis up to the month proceeding the month of deduction/disposal.

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

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year-end and adjusted prospectively, if appropriate.

Derecognized

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Gains or losses arising from de-recognition of a tangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the standalone statement of profit and loss when the asset is derecognized.

Capital work-in-progress

Capital work-in-progress includes expenditure incurred till the assets are put into intended use. Capital work-in-progress are measured at cost less accumulated impairment losses, if any.

(2) Intangible assets

Recognition and measurement

Intangibles 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 that are acquired by the Company, which have finite useful lives, are measured at cost less accumulated amortization and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the intangible asset.

Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific assets to which it relates. All other expenditures are recognized in the statement of profit and loss when incurred.

Amortization

Amortization is recognized in profit and loss on a straight-line basis over the estimated useful lives of the intangible assets from the date that they are available for use. The estimated useful lives are as follows:

Amortization method, useful lives and residual values are reviewed at the end of each financial year and adjusted, if appropriate.

Intangible assets with finite lives are assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period.

The amortization expense on intangible assets with finite lives is recognized in the standalone statement of profit and loss unless such expenditure forms part of carrying value of another asset.

Intangible assets with indefinite useful lives are not amortized, but are tested for impairment Annually, either individually or at the cash-generating unit (CGU) level.

(3) Impairment 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 with simplified approach. For all other financial assets, ECL 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 ECL (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 statement of profit and loss.

Non -financial assets

Intangible assets and property, plant and

equipment

Intangible assets and 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 assets. In such cases, the recoverable amount is determined for the 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 assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed 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 amortization or depreciation) had no impairment loss been recognized for the asset in prior years.

(4) Leases

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

The Company as a lessee

The Company''s lease asset classes primarily consist of leases for land and buildings. The Company assesses whether a contract contains a lease, at inception of contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset, the Company assesses whether:

(i) The contract involves use of identified asset;

(ii) The Company has substantially all of the economic benefit of from use of the asset through the period of the lease; and

(iii) The Company has the right to direct the use of the asset

At the date of commencement of lease, the Company recognize a Right-of-Use asset ("ROU") and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve month or less (shortterm leases) and low value leases. For these shortterm and low value leases, the Company recognizes the lease payments as operating expense on straight-line basis over the term of lease.

Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised

The ROU assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.

The Company depreciates the ROU assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the ROU assets or the end of the lease term. The Company also assesses the ROU asset for impairment when such indicators exist.

The Lease liability is initially measured at amortized cost at the present value of future lease payments. The lease payments are discounted using the interest rate implicit in the lease, or if not readily determinable, using the incremental borrowing rates in the country of domicile of the leases. Lease liabilities are re-measured with corresponding adjustment to the related ROU asset if Company changes its assessment if whether it will exercise an extension or termination option.

Carrying amount of lease liability is increased by interest on lease liability and reduced by lease payments made.

Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.

The following is the summary of practical expedients:

1. Applied a single discount rate to portfolio of leases of similar assets in similar economic environment with similar end date.

2. Applied the exemption not to recognize ROU asset and liabilities for leases with less than 12 months of lease term of the date of initial application.

3. Applied the practical expedient to grandfather the assessment of which transactions are leases. Accordingly, Ind AS 116, is applied only to contracts that were previously identified as leases under Ind AS 17, Leases.

4. Excluding initial direct costs for the measurement of ROU asset at the date of initial application.

The Company as a lessor

Leases for which the Company is a lessor classified as finance or operating lease. Lease income from operating leases where the Company is a lessor is recognized 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.

(5) Inventories

Inventories are valued at the lower of cost (including prime cost, GST and other overheads incurred in bringing the inventories to their present location and condition) and estimated net realisable value, after providing for obsolescence, where appropriate. Taxes which are subsequently recoverable from taxation authorities are not included in the cost. The comparison of cost and net realisable value is made on an item-by-item basis. The net realisable value of materials in process is determined with reference to the selling prices of related finished goods. Raw materials, packing materials and other supplies held for use in production of inventories are not written down below cost except in cases where material prices have declined, and it is estimated that the cost of the finished products will exceed their net realisable value.

The provision for inventory obsolescence is assessed regularly based on estimated usage and shelf life of products.

Raw materials, packing materials and stores and spares are valued at cost computed on weighted average basis. The cost includes purchase price, inward freight and other incidental expenses net of refundable duties, levies and taxes, where applicable.

Work-in-progress is valued at input material cost plus conversion cost as applicable.

Finished goods are valued at the lower of net realisable value and cost (including prime cost and other overheads incurred in bringing the inventories to their present location and condition), computed on weighted average basis.

(6) Cash and cash equivalents

Cash and cash equivalents include cash on hand, cheques on hand, demand deposits with banks and other short-term, highly liquid investments with original maturities of three months or less, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value. Short-term and liquid investments being subject to more than insignificant risk of change in value, are not included as part of cash and cash equivalents.

(7) Trade receivable

Trade receivable are amounts due from customers for goods sold or services performed in the ordinary course of business and reflects Company unconditional right to consideration.

(8) Trade and other payable

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

(9) Financial instruments

Recognition and initial measurement

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

The Company initially recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are measured at fair value on initial recognition. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities that are not at fair value through profit or loss are added to the fair value on initial recognition. However, trade receivables that do not contain a significant financing component are measured at transaction price. Regular way purchase and sale of financial assets are accounted for at trade date.

Classification and subsequent measurement Financial assets

Financial assets carried at amortized cost

A debt instrument is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect

contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the standalone statement of profit and loss. The losses arising from impairment are recognized in the standalone statement of profit and loss

Financial assets at Fair Value Through Other Comprehensive Income (FVTOCI)

A debt instrument is subsequently measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the Other Comprehensive Income (OCI). On de-recognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from the equity to the standalone statement of profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method

In case, the Company''s management has made an irrevocable election at the time of initial recognition to account for the equity investment (Other than Investments in equity instruments of Subsidiary) FVTOCI. This election is not permitted if the equity investment is held for trading. The classification is made on initial recognition and is irrevocable.

Investment in subsidiary

Investment in subsidiary is carried at cost less impairment wherever applicable in the financial statements.

Financial assets at Fair Value Through Profit or Loss (FVTPL)

A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.

Financial liabilities at FVTPL

Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as at FVTPL. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109, Financial Instruments. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognized in the standalone statement of profit and loss.

Financial liabilities designated upon initial recognition at FVTPL are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/ losses are not subsequently transferred to the standalone statement of profit and loss. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognized in the standalone statement of profit and loss. The Company has not designated any financial liability as at FVTPL.

Financial liabilities

Financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

Derecognition Financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the right to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial assets are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.

If the Company enters into transactions whereby it transfers assets recognized on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognized.

Financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire.

The Company also derecognizes a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognized at fair value. The difference between the carrying amount of the financial liability extinguished and a new financial liability with modified terms is recognized in the statement of profit and loss.

Off-setting

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set-off the amounts and it intends either to settle them on a net basis or realise the asset and settle the liability simultaneously.

(10) Revenue recognition

The Company recognizes Ind AS 115, Revenue from contracts with customers, based on a five-step model as set out in the Standard:

Step 1: Identify contract(s) with a customer: A contract is defined as an agreement between two or more parties that creates enforceable rights and obligations and sets out the criteria for every contract that must be met.

Step 2: Identify performance obligations in the contract: A performance obligation is a promise in a contract with a customer to transfer a good or service to the customer.

Step 3: Determine the transaction price: The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.

Step 4: Allocate the transaction price to the performance obligations in the contract: For a contract that has more than one performance obligation, the Company allocates the transaction price to each performance obligation in an amount that depicts the amount of consideration to which the Company expects to be entitled in exchange for satisfying each performance obligation.

Step 5: Recognize revenue when (or as) the Company satisfies a performance obligation.

The transfer of the significant risks and rewards of ownership of a goods to the customer may indicate that the customer has obtained the ability to direct the use of, and obtain substantially all of the remaining benefits from the goods.

Amounts disclosed as revenue are net of returns, trade discounts, cash discount, allowances and volume rebates, taxes collected and amounts collected on behalf of third parties. Revenue is recognized to the extent it is probable that the economic benefits will flow to the Company and the revenue and costs, if applicable, can be measured reliably.

Variable consideration is estimated using the expected value method or most likely amount as appropriate in a given circumstance. Payment terms agreed with a customer are as per business practice and the financing component, if significant, is separated from the transaction price and accounted as interest income.

Other operational revenue represents income earned from the activities incidental to the business and is recognised when the performance obligation is satisfied and right to receive the income is established as per the terms of the contract.

Processing charges is recognized as per the terms of the contract when the related services are rendered.

Dividend income is recognized when the Company''s right to receive the payment is established, which is generally when shareholders approve the dividend.

Interest Income on Bank Deposits is accrued on time proportionate basis and at the applicable interest rate.

(11) Other Income

Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably.

(12) Government grant and incentives

Government incentives are recognized at fair value when there is reasonable assurance that the Company will comply with the relevant conditions and the grant will be received. The Government incentives are recognized in profit and loss on a systematic basis over the period in which the Company recognizes the related costs for which the incentives are intended to compensate as expense or immediately if the costs have already been incurred.

Eligible export incentives and Bio-Gas subsidy are recognized in the year in which the conditions precedents are met and there is no significant uncertainty about the collectability.

(13) Share-based Payments

Employees of the Company receive remuneration in the form of share-based payment in consideration of the services rendered. Under the equity settled share-based payment, the fair value on the grant date of the award given to employees is recognized as ''employee benefit expense'' with a corresponding increase in equity over the vesting period. The fair value of the options at the grant date is calculated by an independent valuer basis Black Scholes model. At the end of each reporting period, apart from the non-market vesting condition, the expense is reviewed and adjusted to reflect changes to the level of options expected to vest. When the options are exercised, the Company issues fresh equity shares.

(14) Foreign currencies Initial Recognition

On initial recognition, transaction in foreign currencies entered into by the Company are recorded in the functional currency, by applying to the foreign currency amount, the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the statement of profit and loss.

Measurement of foreign currency items at reporting date

Foreign currency monetary items of the Company are translated at the closing exchange rates. Nonmonetary items that are measured at historical cost in foreign currency are translated using the exchange rates at the date of the transaction. Nonmonetary items that are measured at fair value in a foreign currency, are translated using the exchange rates at the date when the fair value is measured.

Exchange differences arising out of these translations are recognized in the statement of profit and loss except exchange differences on long term foreign currency monetary items related to acquisition of fixed assets prior to transition to Ind AS, which are included in the cost of fixed assets.

(15) Income tax

Income tax comprises current and deferred tax. It is recognized in statement of profit and loss except to the extent that it relates to a business combination or to an item recognized directly in equity or in OCI.

Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.

Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act,1961 and using estimates and judgments based on the expected outcome of assessments/appeals and the relevant rulings in the areas of allowances and disallowances.

Current tax assets and liabilities are offset only if:

i) there is a legally enforceable right to set-off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority; and

ii) there is intention either to settle on a net basis, or to realise the asset and settle the liability simultaneous.

Deferred tax

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognized in respect of carried forward tax losses and tax credits. Deferred tax is not recognized for:

- temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss at the time of transaction.

- temporary differences related to investments in subsidiaries, associates and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which they can be used.

Deferred tax assets recognized or unrecognized are reviewed at each reporting date and are recognized

/ reduced to the extent that it is probable / no longer probable respectively that the related tax benefit will be realised.

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date.

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

The Company offsets, the current tax assets and liabilities (on a year-on-year basis) and deferred tax assets and liabilities, where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis.

The Government of India, on September 20, 2019, vide the Taxation Laws (Amendment) Ordinance 2019, inserted a new Section 115BAA in the Income Tax Act, 1961, which provides an option to the Company for paying Income Tax at reduced rates as per the provisions/conditions defined in the said section. The Company has decided to take benefit of the reduced tax rate as permitted in the said section.

Presentation of current and deferred tax

Current and deferred tax are recognized as income or an expense in the statement of profit and loss, except when they relate to items that are recognized in OCI, in which case, the current and deferred tax income/ expense are recognized in OCI.

The Company offsets current tax assets and current tax liabilities, where it has legally enforceable right to set-off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. In case of deferred tax assets and deferred tax liabilities, the same are offset if the Company has legally enforceable right to set-off corresponding current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority on the Company.

(16) Borrowings

Borrowings are initially recognized at net of transaction costs incurred and measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in the statement of profit and loss over the period of the borrowings using the effective interest method.

(17) Borrowing costs

Borrowing costs consist of interest, ancillary costs and other costs in connection with the borrowing of funds and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to interest costs.

Interest and other borrowing costs attributable to qualifying assets are capitalised upto the date such assets are ready for their intended use. Other interest and borrowing costs are charged to statement of profit and loss.

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Mar 31, 2023

Significant accounting policies

a) Property, plant and equipment

On transition to Ind AS, the Company elected
to continue with the carrying value of all of its
Property, Plant and Equipment recognised as
at April 1, 2015 ("transition date") measured as
per the previous GAAP and use that carrying
value as its deemed cost as of the transition
date, thereafter as historical cost.

Estimated useful lives, residual values
and depreciation methods are reviewed
periodically, including at each reporting
date, taking into account commercial and
technological obsolescence as well as normal
wear and tear and adjusted prospectively, if
appropriate.

i. Recognition and measurement

Items of property, plant and equipment,
are measured at cost (which includes
capitalised borrowing costs, if any)
less accumulated depreciation and
accumulated impairment losses, if any.

Cost of an item of property, plant and
equipment includes its purchase price,
duties, taxes, after deducting trade
discounts and rebates, any directly
attributable cost of bringing the item to
its working condition for its intended use
and estimated costs of dismantling and
removing the item and restoring the site
on which it is located.

The cost of a self-constructed item of
property, plant and equipment comprises
the cost of materials, direct labour and any
other costs directly attributable to bringing
the item to its intended working condition
and estimated costs of dismantling,
removing and restoring the site on which
it is located, wherever applicable. If
significant parts of an item of property,
plant and equipment have different useful
lives, then they are accounted for as
separate items (major components) of
property, plant and equipment.

Any gain or loss on disposal of an item
of property, plant and equipment is
recognised in statement of profit or loss.

ii. Subsequent expenditure

Subsequent expenditure is capitalised
in the carrying amount of assets or
recognised as a separate asset only if
it is probable that the future economic
benefits associated with the expenditure
will flow to the Company and the cost can
be measured reliably.

All other repairs and maintenances are
charged to the statement of profit and loss
during the reporting period in which they
are incurred.

iii. Depreciation

Depreciation on cost of fixed assets is
provided on straight line method at
estimated useful life, which is in line with
the estimated useful life as specified in
Schedule II of the Companies Act, 2013,
except for Second hand machineries which
are depreciated over an estimated useful
life of 10 years based on management
estimate.

Depreciation on additions is provided on
a pro-rata basis from the date of ready
to use and in case of Projects from the
date of commencement of commercial
production. Depreciation on deductions/
disposals is provided on a pro-rata basis
up to the month proceeding the month of
deduction/disposal.

An item of property, plant and equipment
and any significant part initially recognized
is derecognized upon disposal or when no
future economic benefits are expected
from its use or disposal. Gains or losses
arising from de-recognition of a tangible
asset are measured as the difference
between the net disposal proceeds and
the carrying amount of the asset and are
recognized in the standalone statement
of profit and loss when the asset is
derecognized.

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

The residual values, useful lives and
methods of depreciation of property,
plant and equipment are reviewed at
each financial year-end and adjusted
prospectively, if appropriate.

iv. Capital work-in-progress includes
expenditure incurred till the assets are
put into intended use. Capital Works-
in-progress are measured at cost less
accumulated impairment losses, if any.

b) Intangible assets

i. Recognition and measurement

Intangibles are recognised 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 that are acquired by the
Company, which have finite useful lives,
are measured at cost less accumulated
amortisation and accumulated
impairment losses. Cost includes
expenditures that are directly attributable
to the acquisition of the intangible asset.

ii. Subsequent expenditure

Subsequent expenditure is capitalised
only when it increase the future economic
benefits embodied in the specific assets to
which it relates. All other expenditure are
recognised in profit or loss as incurred.

iii. Amortisation

Amortisation is recognised in profit or loss
on a straight line basis over the estimated
useful lives of the intangible assets from
the date that they are available for use.
The estimated useful lives are as follows:

Amortisation method, useful lives and
residual values are reviewed at the end
of each financial year and adjusted if
appropriate.

Intangible assets with finite lives are
assessed for impairment whenever
there is an indication that the intangible
asset may be impaired. The amortisation
period and the amortisation method for
an intangible asset with a finite useful life
are reviewed at least at the end of each
reporting period.

The amortisation expense on intangible
assets with finite lives is recognised in the
standalone statement of profit and loss
unless such expenditure forms part of
carrying value of another asset.

Intangible assets with indefinite useful
lives are not amortised, but are tested for
impairment annually, either individually or
at the cash-generating unit level.

c) Impairment

The carrying amount of assets are reviewed
at each Balance Sheet date to assess if
there is any indication of impairment based
on internal/ external facto f An impairment
loss on such assessment will be recognized
wherever the carrying amount of an asset
exceeds its recoverable amount.

i. Financial assets

The Company recognises 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 with simplified approach. 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 recognised is recognised as
an impairment gain or loss in statement of
profit or loss.

ii. Non -financial assets

Intangible assets and property, plant and
equipment

Intangible assets and 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 assets.
In such cases, the recoverable amount is
determined for the CGU to which the asset
belongs. If such assets are considered
to be impaired, the impairment to be
recognised in the Statement of Profit and
Loss is measured by the amount by which
the carrying value of the assets exceeds
the estimated recoverable amount of the

asset. An impairment loss is reversed 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
amortisation or depreciation) had no
impairment loss been recognised for the
asset in prior years.

d) Leases

The Company has implemented the Ind AS
116 "Leases" as notified by the Ministry of
Corporate Affairs on 30th March 2019 through
the Companies (Indian Accounting Standards)
Amendment Rules, 2019.

Effective April 1, 2019, the Company has
adopted Ind AS 116 "Leases", applied to all the
lease contracts existing on April 1, 2019 using the
modified retrospective method of transition.
Accordingly, comparatives for the year ended
31st March, 2019 have not been retrospectively
adjusted. The Company''s lease asset classes
primarily consist of leases of land, building
and equipment.

The company as a lessee

The company''s lease asset classes primarily
consist of leases for land and buildings.
The company assesses whether a contract
contains a lease, at inception of contract.
A contract is, or contains, a lease if the
contract conveys the right to control the use
of an identified asset, the company assesses
whether:

(i) The contract involves use of identified asset;

(ii) The company has substantially all of the
economic benefit of from use of the asset
through the period of the lease; and

(iii) The company has the right to direct the
use of the asset

At the date of commencement of lease, the
Company recognise a right-of-use asset
("ROU") and a corresponding lease liability for
all lease arrangements in which it is a lessee,
except for leases with a term of twelve month or
less (short-term leases) and low value leases.
For these short-term and low value leases, the
Company recognizes the lease payments as
operating expense on straight-line basis over
the term of lease.

Certain lease arrangements includes the
options to extend or terminate the lease
before the end of the lease term. ROU assets
and lease liabilities includes these options
when it is reasonably certain that they will
be exercised.

The right-of-use assets are initially
recognized at cost, which comprises the
initial amount of the lease liability adjusted
for any lease payments made at or prior
to the commencement date of the lease
plus any initial direct costs less any lease
incentives. They are subsequently measured
at cost less accumulated depreciation and
impairment losses.

The Company depreciates the right-of-use
assets on a straight-line basis from the lease
commencement date to the earlier of the end
of the useful life of the right-of-use assets or
the end of the lease term. The Company also
assesses the right-of-use asset for impairment
when such indicators exist.

The Lease liability is initially measured at
amortized cost at the present value of future
lease payments. The lease payments are
discounted using the interest rate implicit in
the lease, or if not readily determinable, using
the incremental borrowing rates in the country
of domicile of the leases. Lease Liabilities are
re measured with corresponding adjustment
to the related right to use of asset if company
changes its assessment if whether it will
exercise an extension or termination option.

Lease liability and ROU asset have been
separately presented in the Balance Sheet
and lease payments have been classified as
financing cash flows.

The following is the summary of practical
expedients.

1. Applied a single discount rate to portfolio of
leases of similar assets in similar economic
environment with similar end date.

2. Applied the exemption not to recognize
right to use of asset and liabilities for
leases with less than 12 months of lease
term of the date of initial application.

3. Applied the practical expedient to
grandfather the assessment of which
transactions are leases. Accordingly
IND AS 116 is applied only to contracts that
were previously identified as leases under
IND AS 17

4. Excluding initial direct costs for the
measurement of right to use of asset at
the date of initial application.

e) Inventories

Inventories are valued at the lower of
cost (including prime cost, GST and other
overheads incurred in bringing the inventories
to their present location and condition) and
estimated net realisable value, after providing
for obsolescence, where appropriate. The
comparison of cost and net realisable value
is made on an item-by-item basis. The net
realisable value of materials in process is
determined with reference to the selling prices
of related finished goods. Raw materials,
packing materials and other supplies held
for use in production of inventories are not
written down below cost except in cases
where material prices have declined, and
it is estimated that the cost of the finished
products will exceed their net realisable value.

The provision for inventory obsolescence is
assessed regularly based on estimated usage
and shelf life of products.

Raw materials, packing materials and stores
and spares are valued at cost computed on
weighted average basis. The cost includes
purchase price, inward freight and other
incidental expenses net of refundable duties,
levies and taxes, where applicable.

Work-in-progress is valued at input material
cost plus conversion cost as applicable.

Finished goods are valued at the lower of net
realisable value and cost (including prime
cost and other overheads incurred in bringing
the inventories to their present location and
condition), computed on weighted average
basis.

f) Cash and Cash Equivalents

Cash and cash equivalents include cash on
hand, cheques on hand, demand deposits
with banks and other short-term, highly liquid
investments with original maturities of three
months or less, that are readily convertible to
known amounts of cash and which are subject
to an insignificant risk of change in value.

g) Trade receivable

Trade receivable are amounts due from
customers for goods sold or services
performed in the ordinary course of business
and reflects company unconditional right to
consideration.

h) Trade and other payable

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

i) Financial instruments

i. Recognition and initial measurement

A financial instrument is any contract that
gives rise to a financial asset of one entity
and a financial liability or equity instrument
of another entity.

The Company initially recognises financial
assets and financial liabilities when it
becomes a party to the contractual
provisions of the instrument. All financial
assets and liabilities are measured at fair
value on initial recognition. Transaction
costs that are directly attributable to the
acquisition or issue of financial assets and
financial liabilities that are not at fair value
through profit or loss are added to the fair
value on initial recognition. Regular way
purchase and sale of financial assets are
accounted for at trade date.

ii. Classification and subsequent
measurement Financial Assets

Financial assets carried at amortised cost

A debt instrument is subsequently
measured at amortised cost if it is held
within a business model whose objective
is to hold the asset in order to collect
contractual cash flows and the contractual
terms of the financial asset give rise on
specified dates to cash flows that are
solely payments of principal and interest
on the principal amount outstanding.

After initial measurement, such financial
assets are subsequently measured at
amortised cost using the effective interest
rate (EIR) method. Amortised cost is
calculated by taking into account any
discount or premium on acquisition and
fees or costs that are an integral part of
the EIR. The EIR amortisation is included
in finance income in the standalone
statement of profit and loss. The losses
arising from impairment are recognised in
the standalone statement of profit and loss.

Financial assets at fair value through
other comprehensive income (FVTOCI)

A debt instrument is subsequently
measured at fair value through other
comprehensive income if it is held within
a business model whose objective is
achieved by both collecting contractual
cash flows and selling financial assets
and the contractual terms of the financial
asset give rise on specified dates to
cash flows that are solely payments of
principal and interest on the principal
amount outstanding.

Debt instruments included within the
FVTOCI category are measured initially as
well as at each reporting date at fair value.
Fair value movements are recognized in
the other comprehensive income (OCI).
On de-recognition of the asset, cumulative
gain or loss previously recognised in
OCI is reclassified from the equity to the
standalone statement of profit and loss.
Interest earned whilst holding FVTOCI debt
instrument is reported as interest income
using the EIR method.

In case, the Company''s management has
made an irrevocable election at the time
of initial recognition to account for the
equity investment (Other than Investments
in equity instruments of Subsidiary) fair
value through other comprehensive
income. This election is not permitted if the
equity investment is held for trading. The
classification is made on initial recognition
and is irrevocable.

Investment in subsidiary

Investment in subsidiary is carried at cost
in the financial statements.

Financial assets at fair value through
profit or loss (FVTPL)

A financial asset which is not classified
in any of the above categories are
subsequently fair valued through profit
or loss.

Financial liabilities at fair value through
profit or loss (FLTPL)

Financial liabilities at fair value through
profit or loss include financial liabilities
held for trading and financial liabilities
designated upon initial recognition
as at fair value through profit or loss.
Financial liabilities are classified as held
for trading if they are incurred for the
purpose of repurchasing in the near term.

This category also includes derivative
financial instruments entered into by
the company that are not designated
as hedging instruments in hedge
relationships as defined by Ind AS 109.
Separated embedded derivatives are
also classified as held for trading unless
they are designated as effective hedging
instruments.

Gains or losses on liabilities held for
trading are recognised in the standalone
statement of profit and loss.

Financial liabilities designated upon
initial recognition at fair value through
profit or loss are designated as such at
the initial date of recognition, and only if
the criteria in Ind AS 109 are satisfied. For
liabilities designated as FVTPL, fair value
gains/ losses attributable to changes
in own credit risk are recognized in OCI.
These gains/ loss are not subsequently
transferred to the standalone statement
of profit and loss. However, the company
may transfer the cumulative gain or loss
within equity. All other changes in fair
value of such liability are recognised in the
standalone statement of profit and loss.
The company has not designated any
financial liability as at fair value through
profit and loss.

Financial liabilities

Financial liabilities are subsequently
carried at amortised cost using the
effective interest method. For trade and
other payables maturing within one year
from the balance sheet date, the carrying
amounts approximate fair value due to
the short maturity of these instruments.

iii. Derecognition
Financial assets

The Company derecognises a financial
asset when the contractual rights to the
cash flows from the financial asset expire,
or it transfers the right to receive the
contractual cash flows in a transaction
in which substantially all of the risks and
rewards of ownership of the financial
assets are transferred or in which the
Company neither transfers nor retains
substantially all of the risks and rewards of
ownership and does not retain control of
the financial asset.

If the Company enters into transactions
whereby it transfers assets recognised on
its balance sheet, but retains either all or

substantially all of the risks and rewards
of the transferred assets, the transferred
assets are not derecognised.

Financial liabilities

The Company derecognises a financial
liability when its contractual obligations
are discharged or cancelled, or expire.

The Company also derecognises a
financial liability when its terms are
modified and the cash flows under the
modified terms are substantially different.
In this case, a new financial liability based
on the modified terms is recognised at
fair value. The difference between the
carrying amount of the financial liability
extinguished and a new financial liability
with modified terms is recognised in the
statement of profit and loss.

iv. Offsetting

Financial assets and financial liabilities
are offset and the net amount presented
in the balance sheet when, and only when,
the Company currently has a legally
enforceable right to set off the amounts
and it intends either to settle them on a
net basis or realise the asset and settle the
liability simultaneously.

j) Revenue recognition

The Company recognises revenue from
contracts with customers when it satisfies
a performance obligation by transferring
promised goods or services to a customer.
Revenue is recognised to the extent of
transaction price allocated to the performance
obligation satisfied. Performance obligation
is satisfied over time when the transfer of
control of assets (goods or services) to a
customer is done over time and in other cases,
performance obligations satisfied at a point
in time. For performance obligation satisfied
over time, the revenue recognition is done by
measuring the progress towards complete
satisfaction of performance obligation and
the progress is measured in terms of a
proportion of actual cost incurred to date, to
the total estimated cost attributable to the
performance obligation.

Gross turnover is reduced by rebates, discounts,
allowances and product returns given or
expected to be given, which vary by product
arrangements and buying groups. These
arrangements with purchasing organisations
are dependent upon the submission of
claims sometime after the initial recognition
of the sale. Accruals are made at the time of

sale for the estimated rebates, discounts or
allowances payable or returns to be made,
based on available market information and
historical experience.

Because the amounts are estimate they may
not fully reflect the final outcome, and the
amounts are subject to change dependent
upon, amongst other things, the types of
buying Group and product sales mix.

The level of accrual for rebates and returns is
reviewed and adjusted regularly in the light of
contractual and legal obligations, historical
trends, past experience and projected market
conditions. Market conditions are evaluated
using wholesaler and other third-party
analyses, market research data and internally
generated information.

Future events could cause the assumptions on
which the accruals are based to change, which
could affect the future results of the company.

Processing charges is recognised as per the
terms of the contract when the related services
are rendered.

Dividend income is recognised when the
Company''s right to receive the payment
is established, which is generally when
shareholders approve the dividend.

Interest Income on Bank Deposits is accrued on
time proportionate basis and at the applicable
interest rate.

k) Other Income

Other items of income are accounted as and
when the right to receive such income arises
and it is probable that the economic benefits
will flow to the company and the amount of
income can be measured reliably.

l) Government Grant and incentives

Government incentives are recognised
at fair value when there is reasonable
assurance that the Company will comply
with the relevant conditions and the
grant will be received. The Government
incentives are recognised in profit or loss
on a systematic basis over the period
in which the Company recognises the
related costs for which the incentives are
intended to compensate as expense or
immediately if the costs have already
been incurred.

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

m) Share-based payments

Employees of the Company receive
remuneration in the form of share-based
payment in consideration of the services
rendered. Under the equity settled share-
based payment, the fair value on the grant
date of the award given to employees is
recognised as ''employee benefit expense''
with a corresponding increase in equity
over the vesting period. The fair value of the
options at the grant date is calculated by an
independent valuer basis Black Scholes model.
At the end of each reporting period, apart from
the non-market vesting condition, the expense
is reviewed and adjusted to reflect changes to
the level of options expected to vest. When the
options are exercised, the Company issues
fresh equity shares.

n) Foreign currencies
Initial Recognition

On initial recognition, transaction in foreign
currencies entered into by the company are
recorded in the functional currency (f), by
applying to the foreign currency amount, the
spot exchange rate between the functional
currency and the foreign currency at the
date of the transaction. Exchange differences
arising on foreign exchange transactions
settled during the year are recognised in the
Statement of Profit & Loss.

Measurement of foreign currency items at
reporting date

Foreign currency monetary items of the
company are translated at the closing
exchange rates. Non-monetary items that are
measured at historical cost in foreign currency
are translated using the exchange rates at
the date of the transaction. Non-monetary
items that are measured at fair value in a
foreign currency, are translated using the
exchange rates at the date when the fair value
is measured.

Exchange differences arising out of these
translations are recognised in the Statement
of Profit & Loss except exchange differences
on long term foreign currency monetary items
related to acquisition of fixed assets prior to
transition to Ind AS, which are included in the
cost of fixed assets.

o) Income tax

Income tax comprises current and deferred
tax. It is recognised in profit or loss except to the
extent that it relates to a business combination
or to an item recognised directly in equity or in
other comprehensive income.

i. Current tax

Current tax comprises the expected tax
payable or receivable on the taxable
income or loss for the year and any
adjustment to the tax payable or
receivable in respect of previous year f
The amount of current tax reflects the best
estimate of the tax amount expected to
be paid or received after considering the
uncertainty, if any related to income taxes.
It is measured using tax rates (and tax
laws) enacted or substantively enacted by
the reporting date.

Current tax assets and liabilities are offset
only if:

i) there is a legally enforceable right
to set off current tax assets against
current tax liabilities and when they
relate to income taxes levied by the
same taxation authority; and

ii) there is intention either to settle on a
net basis, or to realise the asset and
settle the liability simultaneous.

ii. Deferred tax

Deferred tax is recognised in respect
of temporary differences between the
carrying amounts of assets and liabilities
for financial reporting purposes and the
corresponding amounts used for taxation
purposes. Deferred tax is also recognised
in respect of carried forward tax losses
and tax credits. Deferred tax is not
recognised for:

- Temporary differences arising on the
initial recognition of assets or liabilities
in a transaction that is not a business
combination and that affects neither
accounting nor taxable profit or loss at
the time of transaction.

- Temporary differences related to
investments in subsidiaries, associates
and interests in joint ventures,
when the timing of the reversal of
the temporary differences can be
controlled and it is probable that the
temporary differences will not reverse
in the foreseeable future.

Deferred tax assets are recognised to
the extent that it is probable that future
taxable profits will be available against
which they can be used.

Deferred tax assets recognised or
unrecognised are reviewed at each
reporting date and are recognised /
reduced to the extent that it is probable /
no longer probable respectively that the
related tax benefit will be realised.

Deferred tax is measured at the tax rates
that are expected to apply to the period
when the asset is realised or the liability is
settled, based on the laws that have been
enacted or substantively enacted by the
reporting date.

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

The Company offsets, the current tax assets
and liabilities (on a year on year basis)
and deferred tax assets and liabilities,
where it has a legally enforceable right
and where it intends to settle such assets
and liabilities on a net basis.

The Government of India, on September 20,
2019, vide the Taxation Laws (Amendment)
Ordinance 2019, inserted a new Section
115BAA in the Income Tax Act, 1961, which
provides an option to the Company for
paying Income Tax at reduced rates as per
the provisions/conditions defined in the
said section. The Company has decided
to take benefit of the reduced tax rate as
permitted in the said section.

Presentation of current and deferred tax

Current and deferred tax are recognised
as income or an expense in the Statement
of Profit & Loss, except when they relate
to items that are recognised in Other
Comprehensive Income, in which case,
the current and deferred tax income/
expense are recognised in Other
Comprehensive Income.

The Company offsets current tax assets and
current tax liabilities, where it has legally
enforceable right to set off the recognised
amounts and where it intends either to
settle on a net basis, or to realize the asset
and settle the liability simultaneously. In
case of deferred tax assets and deferred
tax liabilities, the same are offset if the
company has legally enforceable right
to set off corresponding current tax
assets against current tax liabilities and
the deferred tax assets and deferred tax
liabilities relate to income taxes levied by
the same tax authority on the company.

MAT Credits are in the form of unused tax
credits that are carried forward by the
Company for a specified period of time,
hence it is grouped with Deferred Tax
Asset/Net of Deferred tax liabilities.

p) Borrowings

Borrowings are initially recognised at net of
transaction costs incurred and measured
at amortised cost. Any difference between
the proceeds (net of transaction costs)
and the redemption amount is recognised
in the Statement of Profit and Loss over the
period of the borrowings using the effective
interest method.

q) Borrowing costs

Borrowing costs consist of interest, ancillary
costs and other costs in connection with the
borrowing of funds and exchange differences
arising from foreign currency borrowings to
the extent they are regarded as an adjustment
to interest costs.

Interest and other borrowing costs attributable
to qualifying assets are capitalised upto the
date such assets are ready for their intended
use. Other interest and borrowing costs are
charged to Statement of Profit and Loss.

---

Mar 31, 2018

a) Property, plant and equipment

i. Recognition and measurement

Items of property, plant and equipment, are measured at cost (which includes capitalised borrowing costs, if any) less accumulated depreciation and accumulated impairment losses, if any.

Cost of an item of property, plant and equipment includes its purchase price, duties, taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is located.

The cost of a self-constructed item of property,

plant and equipment comprises the cost of materials, direct labour and any other costs directly attributable to bringing the item to its intended working condition and estimated costs of dismantling, removing and restoring the site on which it is located, wherever applicable.If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognised in statement of profit or loss.

ii. Transition to Ind AS

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as on 1 April 2016, measured as per the previous GAAP, and use that carrying value as the deemed cost of such property, plant and equipment (refer note 55).

iii. Subsequent expenditure

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

iv. Depreciation

Depreciation on cost of fixed assets is provided on straight line method at estimated useful life, which is in line with the estimated useful life as specified in Schedule II of the Companies Act, 2013, except for Second hand machineries which are depreciated over an estimated useful life of 10 years based on management estimate.

Depreciation on additions is provided on a prorata basis from the date of ready to use and in case of Projects from the date of commencement of commercial production. Depreciation on deductions/disposals is provided on a pro-rata basis upto the month proceeding the month of deduction/disposal. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year-end and adjusted prospectively, if appropriate.

v. Reclassification to investment property When the use of a property changes from owner-occupied to investment property, the property is reclassified as investment property at its carrying amount on the date of classification.

vi. Capital work-in-progress includes cost of property, plant and equipment under installation / under development as at the balance sheet date.

b) Intangible assets

i. Recognition and measurement

Intangible assets that are acquired by the Company, which have finite useful lives, are measured at cost less accumulated amortisation and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the intangible asset.

ii. Subsequent expenditure

Subsequent expenditure is capitalised only when it increase the future economic benefits embodied in the specific assets to which it relates. All other expenditure are recognised in profit or loss as incurred.

iii. Amortisation

Amortisation is recognised in profit or loss on a straight line basis over the estimated useful lives of the intangible assets from the date that they are available for use. The estimated useful lives are as follows:

iv. Transition to Ind AS

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its intangible assets recognised as at 1 April 2016, measured as per the previous GAAP, and use that carrying value as the deemed cost of such intangible assets (Refer note 55).

c) Impairment

i. Financial assets

The Company recognises 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 with simplified approach. 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 recognised is recognised as an impairment gain or loss in statement of profit or loss.

ii. Non -financial assets

I ntangible assets and property, plant and equipment

Intangible assets and 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 assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs. If such assets are considered to be impaired, the impairment to be recognised in the Statement of Profit and Loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed 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 amortisation or depreciation) had no impairment loss been recognised for the asset in prior years.

d) Leases

The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement. For arrangements entered into prior to 1 April 2016, the date of inception is deemed to be 1 April 2016 in accordance with Ind-AS 101 First-time Adoption of Indian Accounting Standard.

For arrangements entered into prior to 1 April 2016, the Company has determined whether the arrangement contains lease on the basis of facts and circumstances existing on the date of transition.

As a lessee

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases.

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 inflation.

e) Inventories

Inventories are valued at the lower of cost (including prime cost, excise duty and other overheads incurred in bringing the inventories to their present location and condition) and estimated net realisable value, after providing for obsolescence, where appropriate. The comparison of cost and net realisable value is made on an item-by-item basis. The net realisable value of materials in process is determined with reference to the selling prices of related finished goods. Raw materials, packing materials and other supplies held for use in production of inventories are not written down below cost except in cases where material prices have declined, and it is estimated that the cost of the finished products will exceed their net realisable value.

The provision for inventory obsolescence is assessed regularly based on estimated usage and shelf life of products.

Raw materials, packing materials and stores and spares are valued at cost computed on first in first out basis. The cost includes purchase price, inward freight and other incidental expenses net of refundable duties, levies and taxes, where applicable.

Work-in-progress is valued at input material cost plus conversion cost as applicable.

Stock-in-trade and finished goods are valued at the lower of net realisable value and cost (including prime cost and other overheads incurred in bringing the inventories to their present location and condition), computed on a first in first out basis.

f) Financial instruments

i. Recognition and initial measurement

The Company initially recognises financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are measured at fair value on initial recognition. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities that are not at fair value through profit or loss are added to the fair value on initial recognition. Regular way purchase and sale of financial assets are accounted for at trade date.

ii. Classification and subsequent measurement Financial Assets

Financial assets carried at amortised cost A debt instrument is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at fair value through other comprehensive income

A debt instrument is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

In case, the Company’s management has made an irrevocable election at the time of initial recognition to account for the equity investment (Other than Investments in equity instruments of Subsidiary) fair value through other comprehensive income. This election is not permitted if the equity investment is held for trading. The classification is made on initial recognition and is irrevocable.

Investment, in subsidiary I nvestment in subsidiary is carried at cost in the financial statements.

Financial assets at fair value through profit or loss

A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.

Financial liabilities

Financial liabilities are subsequently carried at amortised cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

iii. Derecognition Financial assets

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the right to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial assets are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.

If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.

Financial liabilities

The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.

The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and a new financial liability with modified terms is recognised in the statement of profit and loss.

iv. Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or realise the asset and settle the liability simultaneously.

g) Revenue recognition

Revenue is recognised when it is probable that the economic benefits associated with a transaction flow to the company in the ordinary course of its activities and the amount of revenue can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates allowed by the company.

Revenue includes only the gross inflows of economic benefits, including excise duty, received or receivable by the company, on its own account. Amount collected on behalf of third parties such as sales tax, value added tax and goods and services tax are excluded from revenue.

Processing charges is recognised as per the terms of the contract when the related services are rendered. Dividend income is recognised when the Company’s right to receive the payment is established, which is generally when shareholders approve the dividend. Interest income is recognised using the effective interest method.

h) Foreign currencies

Initial Recognition

On initial recognition, transaction in foreign currencies entered into by the company are recorded in the functional currency (INR), by applying to the foreign currency amount, the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. Exchange differences arising on foreign exchange transactions settled during the year are recognised in the Statement of Profit & Loss.

Measurement of foreign currency items at reporting date

Foreign currency monetary items of the company are translated at the closing exchange rates. Non monetary items that are measured at historical cost in foreign currency are translated using the exchange rates at the date of the transaction. Non monetary items that are measured at fair value in a foreign currency, are translated using the exchange rates at the date when the fair value is measured. Exchange differences arising out of these translations are recognised in the Statement of Profit & Loss except exchange differences on long term foreign currency monetary items related to acquisition of fixed assets prior to transition to Ind AS, which are included in the cost of fixed assets.

i) Government grants

Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to revenue, it is recognised in the statement of profit and loss on a systematic basis over the periods to which they relate. When the grant relates to an asset, it is treated as deferred income and recognised in the statement of profit and loss on a systematic basis over the useful life of the asset.

j) Income tax

I ncome tax comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business combination or to an item recognised directly in equity or in other comprehensive income.

i. Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.

ii. Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognised in respect of carried forward tax losses and tax credits. Deferred tax is not recognised for:

- temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss at the time of transaction.

- temporary differences related to investments in subsidiaries, associates and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which they can be used.

Deferred tax assets recognised or unrecognised are reviewed at each reporting date and are recognised / reduced to the extent that it is probable / no longer probable respectively that the related tax benefit will be realised. Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

The Company offsets, the current tax assets and liabilities (on a year on year basis) and deferred tax assets and liabilities, where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis.

Presentation of current and deferred tax Current and deferred tax are recognised as income or an expense in the Statement of Profit & Loss, except when they relate to items that are recognised in Other Comprehensive Income, in which case, the current and deferred tax income/ expense are recognised in Other Comprehensive Income.

The Company offsets current tax assets and current tax liabilities, where it has legally enforceable right to set off the recognised amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. In case of deferred tax assets and deferred tax liabilities, the same are offset if the company has legally enforceable right to set off corresponding current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority on the company.

MAT Credits are in the form of unused tax credits that are carried forward by the Company for a specified period of time, hence it is grouped with Deferred Tax Asset/Net of Deferred tax liabilities.

k) Borrowing costs

Borrowing costs directly attributable to the acquisition or construction of those property, plant and equipment which necessarily takes a substantial period of time to get ready for their intended use are capitalised. All other borrowing costs are expensed in the period in which they incur in the statement of profit and loss.

l) Provisions, contingent liabilities and contingent assets

The company recognizes the provisions when a present obligation (legal or constructive) as a result of past event exists and it is probable that an outflow of resources embodying economic benefits will be required to settle such obligation and the amount of such obligation can be reliably estimated.

If the effect of time value of money is material, provisions are discounted using a current pretax rate that reflects when appropriate, the risk specific to the liability. When discounting is used, the increase in provision due to passage of time is recognised as a finance cost.

A disclosure for a contingent liability is made when there is possible obligation or a present obligation that may, but probably will not require an outflow of resources embodying the economic benefits or the amount of such obligation cannot be measured reliably. When there is possible obligation or a present obligation in respect of which likelihood of outflow of resources embodying the economic benefits is remote, no provision or disclosure is made.

Contingent assets are not recognised. However, when the realisation of income is virtually certain, then the related asset is no longer a contingent asset, and is recognised as an asset.

m) Employee benefits

Short-term employee benefits All employee benefits falling due wholly within twelve months of rendering the services are classified as short-term employee benefits, which include benefits like salaries, wages, short-term compensated absences and performance incentives and are recognised as expenses in the period in which the employee renders the related service.

Post-employment benefits

Contributions to defined contribution schemes such as Provident Fund, Employees State Insurance., are recognised as expenses in the period in which the employee renders the related service. The Company has no further obligations beyond its monthly contributions. The Company also provides for postemployment defined benefit in the form of gratuity. The cost of providing benefit is determined using the projected unit credit method, with actuarial valuation being carried out at each balance sheet date. Remeasurement of the net benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interests) and the effect of the assets ceiling (if any, excluding interest) are recognised in other comprehensive income. he effect of any plan amendments are recognised in net profit in the Statement of Profit and Loss.

Other long-term employee benefits All employee benefits (other than post-employment benefits and termination benefits) which do not fall due wholly within twelve months after the end of the period in which the employees render the related services are determined based on actuarial valuation or discounted present value method carried out at each balance sheet date. The expected cost of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary as at every year end using projected unit credit method on the additional amount expected to be paid / availed as a result of the unused entitlement that has accumulated at the balance sheet date. Expense on non-accumulating compensated absences is recognised in the period in which the absences occur.

n) Share-based payments

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model. That cost is recognised, together with a corresponding increase in share-based payment (SBP) reserves in equity, over the period in which the performance and/or service conditions are fulfilled in employee benefits expense. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.

o) Cash and cash equivalents

Cash and cash equivalents includes cash on hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three months or less.

p) Earnings per share

Basic Earnings Per Share (‘EPS’) is computed by dividing the net profit attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the net profit by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the year, unless issued at a later date. In computing diluted earnings per share, only potential equity shares that are dilutive and that either reduces earnings per share or increases loss per share are included. The number of shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for the share splits.

q) Cash flow statement

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

r) Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM) of the company. The CODM is responsible for allocating resources and assessing performance of the operating segments of the company

s) Recent accounting pronouncements/ Standards issued but not yet effective:

In March 2018, the Ministry of Corporate Affairs (MCA) issued the Companies (Indian Accounting Standards) Amendment Rules, 2018, notifying Ind AS 115, Revenue from Contract with Customers, Appendix B to Ind AS 21, Foreign currency transactions and advance consideration and amendments to certain other standards. These amendments are in line with recent amendments made by International Accounting Standards Board (IASB). These amendments are applicable to the Company from 1st April, 2018. The Company will be adopting the amendments from their effective date.

i. Ind AS 115, Revenue from Contract with Customers:

Ind AS 115 supersedes Ind AS 11, Construction Contracts and Ind AS 18, Revenue. Ind AS 115 requires an entity to report information regarding nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with customers. The principle of Ind AS 115 is that an entity should recognize revenue that demonstrates the transfer of promised goods and services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard can be applied either retrospectively to each prior reporting period presented or can be applied retrospectively with recognition of cumulative effect of contracts that are not completed contracts at the date of initial application of the standard.

Based on the preliminary assessment performed by the Company, the impact of application of the Standards is not expected to be material.

ii. Appendix B to Ind AS 21, Foreign currency transactions and advance consideration:

The Appendix clarifies that the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of assets, expense or income (or part of it) is the date on which the entity initially recognises the non-monetary asset or non monetary liability arising from the payment or receipt of advance consideration towards such assets, expenses or income. If there are multiple payments or receipt in advance, then an entity must determine transaction date for each payment or receipts of advance consideration. The impact of the appendix on the financial statements, as assessed by the Company, is expected to be not material.

iii. Ind AS 12 - Income taxes

In March 2018, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2018, notifying amendments to Ind AS 12, ‘Income taxes’. The amendments are applicable to the Company from April 01, 2018. The amendments explain how to apply the recognition and measurement requirements in Ind AS 12 Income taxes when there is uncertainty over income tax treatment. The amendments considers that:

- Tax law determines which deductions are offset against taxable income in determining taxable profits

- No deferred tax asset is recognised if the reversal of the deductible temporary difference will not lead to tax deductions.

The Company is evaluating the impact of this amendment on its financial statements. However, based on preliminary assessment, there will not be any material impact on the financial position and performance of the Company.

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Mar 31, 2017

1. Corporate Information

Parag Milk Foods Limited (formerly Parag Milk Foods Private Limited) ("the Company") was incorporated under the provisions of the Companies Act, 1956. The Company is engaged in the business of procurement of cow milk mainly in western and southern region. The Company undertakes processing of milk and manufacture the various value added products namely cheese, butter, ghee, fresh cream, milk powder, flavored milk, lassi, curd etc. which are marketed under its registered brand name "Gowardhan", "Go" and "Topp up".

The registered office of the Company is situated in the state of Maharashtra, India. The Company changed its name to Parag Milk Foods Limited effective from July 07, 2015.

2. Basis of preparation

The financial statements have been prepared and presented on the basis of generally accepted accounting principles in India under the historical cost convention on accrual basis of accounting in accordance with Accounting Standards as specified under Section 133 of the Companies Act, 2013 ("the Act"), read with rule 7 of the companies (Accounts) Rules 2014, and the relevant provisions of the 2013 Act, as applicable. The accounting policies adopted in the preparation of these financial statements are consistent with those of the previous year.

These financial statements are presented in Indian rupees and rounded off to nearest million unless otherwise stated.

2.1 Significant accounting policies i. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in India (Indian GAAP) requires management to make judgments, estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and disclosure of contingent liabilities on the date of the financial statements. The estimates and assumptions used in the accompanying financial statements are based upon management''s evaluation of the relevant facts and circumstances as of the date of financial statements which in management''s opinion are prudent and reasonable. Actual results may differ from the estimates used in preparing the accompanying financial statements. Any revision to accounting estimates is recognized prospectively in current and future periods.

iii. Cash flow statement

The cash flow statement is prepared using the "indirect method" set out in Accounting Standard 3 "Cash Flow Statements" and presents the cash flows by operating, investing and financing activities of the Company.

Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short term investments with an original maturity of three months or less.

iv. Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

- Sales of goods

Revenue from sale of goods is recognized on transfer of all significant risks and rewards of ownership to the buyer which is normally on dispatch of goods. Sales are stated net of returns and trade discount. Sales tax and VAT are excluded.

- Processing charges

Processing charges is recognized as per the terms of the contract when the related services are rendered.

- Interest income

Interest income is recognized on time proportion basis.

- Dividends

Dividend income is recognized when the company''s right to receive dividend is established by the reporting date.

v. Property, plant and equipment

Property, plant and equipment (PPE) are tangible items held for use in the production or supply of goods or services, for rental to others or for administrative purposes and are measured at cost less accumulated depreciation and any accumulated impairment. The total cost of assets comprises its purchase price, freight, duties, taxes and any other incidental expenses directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by the management.

Subsequent expenditure related to an item of tangible asset are added to its gross value only if it increases the future benefits of the existing asset, beyond its previously assessed standards of performance.

Where cost of a part of the asset is significant to total cost of the asset and useful life of that part is different from useful life of the remaining asset, useful life of that significant part is determined separately, and depreciated as per its respective assessed useful life.

Items such as spare parts, stand by equipment and servicing equipment are capitalized only when they meet the definition of property, plant and equipment. Otherwise such items are classified as inventory.

The carrying amount of an item of PPE is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain/loss arising from derecognition of an item of PPE is included in the Statement of Profit and Loss. The gain or loss arising from the derecognition of an item of PPE would be the difference between the net disposal proceeds, if any, and the carrying amount of the item. The the residual value, useful life and method of depreciation are reviewed at each financial year end and adjusted prospectively if required.

vi. Depreciation

Depreciation on cost of fixed assets is provided on straight line method at estimated useful life, which is in line with the estimated useful life as specified in Schedule II of the Companies Act, 2013, as per table given below, except for Second hand machineries which are depreciated over an estimated useful life of 10 years based on management estimate.

Depreciation on additions is provided on a prorata basis from the date of ready to use and in case of Projects from the date of commencement of commercial production. Depreciation on deductions/disposals is provided on a pro-rata basis up to the month proceeding the month of deduction/disposal.

Leasehold improvements include all expenditure incurred on the leasehold premises that have future economic benefits. Leasehold Improvements are amortized over the period of lease or estimated period of useful life of such improvement, whichever is lower.

vii. Intangible assets and amortization

Intangible assets are carried at cost less accumulated amortization and impairment losses, if any. The cost of an intangible asset comprises its purchase price and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates.

Intangible assets are amortized on a straight line basis over its estimated useful life. The costs relating to acquisition of trademark is amortized over a period of ten years. Computer software is amortized over its license period or 3 years whichever is lower.

The amortization period and the amortization method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly.

Gains or losses from derecognition of intangible assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset are recognized in the Statement of Profit and Loss when the asset is derecognized.

viii. Foreign Currency Transactions

- Initial recognition

Foreign currency transactions are recorded in the reporting currency which is Indian Rupee, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

- Conversion

Monetary assets and liabilities in foreign currency, which are outstanding as at the year-end, are translated at the year-end at the closing exchange rate and the resultant exchange differences are recognized in the Statement of Profit and Loss. Non-monetary foreign currency items are carried at cost.

- Exchange Differences

Exchange differences arising on the settlement of monetary items or on reporting monetary items of the Company at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise except exchange differences on long term foreign currency monetary items related to acquisition of fixed assets, which are included in the cost of fixed assets.

ix. Government grants and subsidies

Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the company will comply with the conditions attached to them and (ii) the grant/subsidy will be received.

Grant related to revenues are recognized in the statement of profit and loss on a systematic and rational basis over the periods necessary to match them with the related costs.

x. Investments

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as ‘current investments''. All other investments are classified as ‘non-current investments''.

Investments are classified under ‘non-current'' and ‘current categories''.

Non-current Investments'' are carried at acquisition / amortized cost. A provision is made for diminution other than temporary on an individual basis.

'' Current Investments'' are carried at the lower of cost or fair value on an individual basis.

Profit or loss on sale of Investments is recorded on transfer of title from the Company and is determined as the difference between the sales price and the carrying value of the investment.

xi. Retirement and Other Employee Benefits

- Short term employee benefit

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. These benefits include short term compensated absences such as paid annual leave. The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees is recognized as an expense during the period. Benefits such as salaries and wages, etc. and the expected cost of the bonus / ex-gratia are recognized in the period in which the employee renders the related service.

- Post-employment employee benefits

Defined Contribution schemes

Company''s contributions to the Provident Fund and Employee''s State Insurance Fund are charged to the Statement of Profit and Loss of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective authorities.

Defined benefits plans

The Company''s gratuity benefit scheme is a defined benefit plan. The Company''s net obligation in respect of the gratuity benefit scheme is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any plan assets is deducted. Company''s contribution in the case of gratuity is funded annually with Life Insurance Corporation of India.

The present value of the obligation under such defined benefit plan is determined based on actuarial valuation, carried out by an independent actuary at each Balance Sheet date, using the Projected Unit Credit Method, which recognizes each period of service as giving rise to an additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plan are based on the market yields on Government Securities as at the Balance Sheet date.

Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss.

Other long term employee benefits

Company''s liabilities towards compensated absences to employees are accrued on the basis of valuations, as at the Balance Sheet date, carried out by an independent actuary using Projected Unit Credit Method. Actuarial gains and losses comprise experience adjustments and the effects of changes in actuarial assumptions and are recognized immediately in the Statement of Profit and Loss.

xii. Borrowing cost

Borrowing cost includes interest and amortization of ancillary costs incurred in connection with the arrangement of borrowings. Borrowing costs to the extent related/attributable to the acquisition/construction of assets that takes substantial period of time to get ready for their intended use are capitalized along with the respective fixed asset up to the date such asset is ready for use. Other borrowing costs are charged to the Statement of Profit and Loss in the period they occur.

xiii. Segment reporting

The Company has identified manufacturing and processing of milk & milk products as its sole operating segment and the same has been treated as primary segment. The Company secondary geographical segments have been identified based on the location of customers and are demarcated into Indian and Overseas revenue earnings.

xiv. Leases

Where Company is the lessee

Assets taken under leases, where the company assumes substantially all the risks and rewards of ownership are classified as Finance Leases. Such assets are capitalized at the inception of the lease at the lower of fair value or the present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on outstanding liability for each period.

Assets taken under leases, where the less or effectively retains substantially all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.

xv. Earnings Per Share

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

Diluted earnings per share are calculated after adjusting effects of potential equity shares (PES). PES are those shares which will convert into equity shares at a later stage. Profit / loss is adjusted by the expenses incurred on such PES. Adjusted profit/loss is divided by the weighted average number of ordinary plus potential equity shares.

xvi. Taxation

Income-tax expense comprises current tax, deferred tax charge or credit and minimum alternative tax (MAT).

Current tax

Current income-tax is measured at the amount expected to be paid to the tax authorities after considering tax allowances, deductions and exemptions determined in accordance with Income Tax Act, 1961 and the prevailing tax laws.

Minimum alternative tax

Minimum alternative tax (MAT) obligation in accordance with the tax laws, which give rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal tax during the specified period. Accordingly, it is recognized as an asset in the Balance Sheet when it is probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably and reviewed at each reporting date.

Deferred tax

Deferred tax liability or asset is recognized for timing differences between the profits/losses offered for income tax and profits/losses as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted at the Balance Sheet date.

Deferred tax asset is recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax asset is recognized only if there is a virtual certainty of realization of such asset. Deferred tax asset is reviewed as at each Balance Sheet date and written down or written up to reflect the amount that is reasonably/virtually certain to be realized.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority.

xvii. Impairment of Assets

The Company assesses at each Balance Sheet date whether there is any indication that an asset or a group of assets (cash generating unit) may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset or a group of assets. The recoverable amount of the asset (or where applicable, that of the cash generating unit to which the asset belongs) is estimated as the higher of its net selling price and its value in use. If such recoverable amount of the asset or the recoverable amount of the cash-generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Statement of Profit and Loss. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

Value in use is the present value of estimated future cash flow expected to arise from the continuing use of the assets and from its disposal at the end of its useful life.

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 depreciable historical cost.

xviii. Provisions and Contingencies

A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present values and are determined based on management estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current management estimates.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the financial statements.

When there is an obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

xix. Employee stock option

Employees (including senior executives) of the company receive remuneration in the form of share based payment transactions, whereby employees render services as consideration for equity instruments (equity-settled transactions).

In accordance with the Guidance Note on Accounting for Employee Share-based Payments, the cost of equity-settled transactions is measured using the intrinsic value method. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the company''s best estimate of the number of equity instruments that will ultimately vest. The expense or credit recognized in the statement of profit and loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period and is recognized in employee benefits expense.

As per records of the company, including its register of shareholders/members, the above shareholding represents legal ownerships of shares.

d. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs,10 per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

a. Indian rupee loan from a bank of Rs, 181.03 million (March 31, 2016: Rs,303.57 million) carries interest @ 12.00%-12.50%.The loans are repayable in 38-43 monthly installments starting from Feb 2013 and November 2013 along with interest .The loan is secured by pari pasu charge on fixed assets and second pari pasu charge on current assets of the Company and personal guarantee of Promoter Directors.

b. Foreign currency loan from a financial institution of Rs,783.47 million (March 31, 2016: Rs,961.83 million) carries interest @ 5.15%-5.92%.The loans are repayable in 12 semiannual installments along with interest starting from June, 2016.The loan is secured by first pari passu charge on movable and immovable fixed property of the Company and second pari pasu of entire current assets of the Company along with other banks and personal guarantees of Directors and their relatives.

c. Indian rupee loans from financial institutions of Rs, 30.53 million (March 31, 2016: Rs, 38.02 million) represents loan secured by hypothecation of equipments and vehicles with installments in the range of 36-78 and interest rate in the range of 9.75%-12.98%.

d. Hire purchase loan from banks of Rs, 2.61 million (March 31, 2016: Rs,4.87 million) carries interest @ 9.38% to 11.24 % p.a. The loans are repayable in 36 to 60 monthly installments starting from the respective date of finance. The loan is secured by specific assets financed (vehicle).

# Cash credit from banks is secured by first pari pasu charge on all current assets of the Company and second pari pasu charge on fixed assets of the Company, personal guarantee of Promoter Directors and their relative. The cash credit is repayable on demand and carries interest @ 12.40% p.a. to 15.00% p.a.

@ The Company had made an issue of 18,000,000 Nos of Non Convertible Debentures of nominal value of Rs, 10 each aggregating Rs, 180.00 million at 0% interest to the Promoters. The life of such debentures is 10 years from the issue date, i.e., March 2013 or anytimeto be redeemed on demand after the Comany''s IPO.

@ Includes consultancy fee paid to director Rs, 9.61 million (March 31, 2016: Rs, 9.53 million)

# Includes VAT & CST Rs, 7.42 million in relation to prior period (March 31, 2016: Rs, Nil)

# Fees for other services and reimbursement of expenses are in relation to IPO and accounted for as IPO expenses under Note 21