2. Material Accounting Policies
This note provides a list of the Material
accounting policies adopted in the
preparation of the financial statements.
These policies have been consistently
applied to all the years presented, unless
otherwise stated.
A) Statement of Compliance
The financial statements have been
prepared in accordance with the 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, ("Act") and other
relevant provisions of the Act.
B) Basis of preparation
The financial statements have been
prepared under the historical cost
convention on accrual basis with the
exception of certain assets and liabilities
that are required to be carried at fair values
by Ind AS. Fair value is the price that would
be received to sell an asset or paid to
transfer a liability in an orderly transaction
between market participants at the
measurement date."
The Standalone financial statements were
approved for issue by the Board of Directors
on 30th May 2025.
C) Revenue Recognition
Revenue is measured at the fair value of the
consideration received or receivable, net of
returns and allowances, trade discounts
and volume rebates.
The Company recognises revenue when
the amount of revenue can be reliably
measured, it is probable that future
economic benefits will flow to the entity
and specific criteria have been met
for each of the company's activities as
described below.
a) Sale of products
Timing of recognition - Revenue
from sale of products is recognised
when significant risks and rewards in
respect of ownership of products are
transferred to customers based on
the terms of sale.
Measurement of revenue - Revenue
from sales is based on the price
specified in the sales, net of all discounts
and returns at the time of sale.
b) Interest income is recognized on time
proportion basis taking into account
the amount outstanding and the
rate applicable.
D) Income tax
Current tax
Current income tax assets and liabilities
are measured at the amount expected to
be recovered from or paid to the taxation
authorities. The tax rates and tax laws used
to compute the amount are those that
are enacted or substantively enacted, at
the reporting date in the countries where
the Company operates and generates
taxable income.
Current income tax relating to items
recognised outside profit or loss is
recognised in outside profit or loss
(either in other comprehensive income
or in equity). Current tax items are
recognised in correlation to the underlying
transaction either in OCI or directly
in equity. Management periodically
evaluates positions taken in the tax
returns with respect to situations in which
applicable tax regulations are subject to
interpretation and establishes provisions
where appropriate."
Deferred tax
Deferred tax is provided using the liability
method on temporary differences between
the tax bases of assets and liabilities
and their carrying amounts for financial
reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all
taxable temporary differences.
Deferred tax assets are recognised for all
deductible temporary differences, the
carry forward of unused tax credits and any
unused tax losses. Deferred tax assets are
recognised to the extent that it is probable
that taxable profit will be available
against which the deductible temporary
differences, and the carry forward of
unused tax credits and unused tax losses
can be utilized.
The carrying amount of deferred tax
assets is reviewed at each reporting date
and reduced to the extent that it is no
longer probable that sufficient taxable
profit will be available to allow all or part
of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are
re-assessed at each reporting date and are
recognised to the extent that it has become
probable that future taxable profits will
allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are
measured at the tax rates that are
expected to apply in the year when the
asset is realised or the liability is settled,
based on tax rates and tax laws that have
been enacted or substantively enacted at
the reporting date. Deferred tax items are
recognised in correlation to the underlying
transaction either in OCI or directly in
equity. Deferred tax assets and deferred tax
liabilities are offset if a legally enforceable
right exists to set off current tax assets
against current tax liabilities and the
deferred taxes relate to the same taxable
entity and the same taxation authority.
E) Financial Instruments
Financial assets and financial liabilities are
recognised when the Company becomes
a party to the contractual provisions of
the instrument. Financial assets and
financial liabilities are initially measured
at fair value. Transaction costs that are
directly attributable to the acquisition
or issue of financial assets and financial
liabilities (other than financial assets and
financial liabilities at fair value through
profit or loss) are added to or deducted
from the fair value of the financial assets
or financial liabilities, as appropriate,
on initial recognition. Transaction costs
directly attributable to the acquisition of
financial assets or financial liabilities at fair
value through profit or loss are recognised
immediately in profit or loss.
Financial Assets
(i) Financial assets carried at amortised
cost
A financial asset 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.
(ii) Financial assets at fair value through
other comprehensive income
A financial asset 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. Further, in case where
the company has made an irrevocable
selection based on its business model,
for its investments which are classified
as equity instruments, the subsequent
changes in fair value are recognized in
other comprehensive income.
(iii) 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.
(iv) The Company recognizes loss
allowances using the expected credit
loss (ECL) model for the financial assets
which are not fair valued through
profit or loss. Loss allowance for
trade receivables with no significant
financing component is measured at
an amount equal to lifetime ECL. For all
other financial assets, expected credit
losses are measured at an amount
equal to the 12-month ECL, unless
there has been a significant increase
in credit risk from initial recognition
in which case those are measured at
lifetime ECL. The amount of expected
credit losses (or reversal) that is
required to adjust the loss allowance
at the reporting date to the amount
that is required to be recognised is
recognized as an impairment gain or
loss in statement of profit or loss.
Financial liabilites
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 the fair value due to
the short maturity of these instruments.
Derecognition of financial instruments
The Company derecognizes a financial
asset when the contractual rights to the
cash flows from the financial asset expire
or it transfers the financial asset and the
transfer qualifies for derecognition under
Ind AS 109. A financial liability (or a part
of a financial liability) is derecognized
from the Company's balance sheet when
the obligation specified in the contract is
discharged or cancelled or expires.
Fair value of financial instruments
In determining the fair value of its financial
instruments, the Company uses a variety of
methods and assumptions that are based
on market conditions and risks existing at
each reporting date. The methods used to
determine fair value include discounted
cash flow analysis, available quoted market
prices and dealer quotes. All methods
of assessing fair value result in general
approximation of value, and such value
may or may not be realized.
Offsetting financial instruments
Financial assets and liabilities are offset and
the net amount is reported in the balance
sheet where there is a legally enforceable
right to offset the recognized amounts and
there is an intention to settle on a net basis
or realize the asset and settle the liability
simultaneously. The legally enforceable
right must not be contingent on future
events and must be enforceable in the
normal course of business and in the event
of default, insolvency or bankruptcy of the
Company or the counterparty.
F) Inventories
Raw materials, finished goods are stated
at the lower of cost and net realizable
value. Cost of raw materials comprise of
cost of purchase. Cost of finished goods
comprises direct materials, direct labour
and an appropriate proportion of variable
and fixed overhead expenditure, the later
being allocated on the basis of normal
operating capacity. Cost of inventories also
include all other cost incurred in bringing
the inventories to their present location
and condition. Costs are assigned to
individual items of inventory on weighted
average basis. Costs of purchased inventory
are determined after deducting rebates
and discounts. Net realizable value is the
estimated selling price in the ordinary
course of business less the estimated costs
of completion and the estimated costs
necessary to make the sale.
G) Property, plant and equipment (PPE)
Property, plant and equipment are carried
at acquisition cost less accumulated
depreciation and accumulated impairment
losses, if any. The acquisition cost for this
purpose includes the purchase price (net of
duties and taxes which are recoverable in
future) and expenses directly attributable
to the asset to bring it to the site and in the
working condition for its intended use.
Subsequent costs are included in the
asset's carrying amount or recognised as a
separate asset, as appropriate, only when it
is probable that future economic benefits
associated with the item will flow to the
Company and the cost of the item can be
measured reliably. All other repairs and
maintenance are charged to statement of
profit and loss during the reporting period
in which they are incurred.
An item of property, plant and equipment
is derecognized upon disposal or when no
future economic benefits are expected to
arise from its use. Difference between the
sales proceeds and the carrying amount of
the asset is recognized in the statement of
profit and loss."
H) Intangible Assets
Intangible assets (software) are stated in the
balance sheet at their carrying value being
the cost of acquisition less accumulated
depreciation. The cost comprises purchase
price and directly attributable cost of
bringing the asset to its working condition
for the intended use. Any trade discount
and rebates are deducted in arriving at the
purchase price.
I) Depreciation and Amortisation
Depreciation on property, plant and
equipment is provided on written
down value method, computed on
the basis of useful lives as estimated
by management which coincides with
rates prescribed in Schedule II to the
Companies Act, 2013.
Intangible assets are amortised
on written down value method
computed on the basis of useful lives
as estimated by management.
The residual values, useful lives and
method of depreciation are reviewed
at each financial year end and adjusted
prospectively, if appropriate.
Factory Buildings are depreciated over
the estimated useful life of 30 years
Non Factory Buildings are depreciated
over the estimated useful life of 60 years.
J) Borrowing costs
General and specific borrowing costs that
are directly attributable to the acquisition,
construction or production of a qualifying
asset are capitalized during the period
of time that is required to complete and
prepare the asset for its intended use
or sale. Qualifying assets are assets that
necessarily take a substantial period of time
to get ready for their intended use or sale.
Investment income earned on the
temporary investment of specific
borrowings pending their expenditure
on qualifying assets is deducted from the
borrowing cost eligible for capitalization.
Other borrowings costs are expensed in
the period in which they are incurred.
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