B. 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.
i. Basis of Preparation and 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.
The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under
Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015]
and other relevant provisions of the Act. The financial statements have been prepared under the historical cost
convention on accrual basis of accounting except for certain financial assets and liabilities (as per the accounting
policies given below) which have been measured at fair value.
The financial statements are approved for issue by the Company's Board of Directors on 23 rd May, 2025.
ii. Use of estimates
The preparation of financial statements requires management to make certain estimates and assumptions
that affect the amounts reported in the financial statements and notes thereto. The management believes that
these estimates and assumptions are reasonable and prudent. However, actual results could differ from these
estimates. Any revision to accounting estimates is recognised prospectively in the current and future periods.
This note provides an overview of the areas that involve a higher degree of judgment or complexity, and of items
which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than
those originally assessed. Detailed information about each of these estimates and judgments is included in the
relevant notes together with information about the basis of calculation for each affected line item in the financial
statements.
iii. Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue
are net of returns, rebates and trade discounts.
Sale of products:
Timing of recognition — Revenue from sale of products is recognized when control of the products is transferred
to customers based on terms of sale.
Measurement of Revenue: Revenue from sales is based on the price specified in the sales contract, net of all
discounts and returns in relation to sales made until end of the reporting period.
iv. Property, Plant and Equipment
Freehold Land is stated at historical cost. All other property plant and equipment are stated at cost of acquisition
less accumulated depreciation / amortization and impairment, if any. Cost includes purchase price, taxes and
duties, labour cost and directly attributable overhead expenditure incurred upto the date the asset is ready for its
intended use. However, cost excludes input credit of the duty or tax is availed of.
Subsequent costs are included in the asset's carrying amount or recognized 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. The carrying amount of any component accounted for as separate
asset is derecognized when replaced. All other repairs and maintenance are charged to Profit or Loss during the
reporting period in which they are incurred.
v. Depreciation
i) Depreciation of Property, plant and Equipment is provided on straight line method of depreciation based
on the useful lives estimated by the Company from the technical evaluation carried out. The useful lives so
determined are equal to those prescribed under the Part C of Schedule II of the Companies Act, 2013.
ii) The assets' residual values are measured at not more than 5% of the original cost of the asset. The assets'
residual values and useful lives are reviewed, and adjusted, if appropriate, at the end of each reporting
period.
iii) On tangible property, plant and equipment added / disposed-off during the year, depreciation is charged
on pro-rata basis from the date of addition / till the date of disposal.
iv) Gains and losses on disposal of assets are determined by comparing the sale proceeds with the carrying
amount. These are included in profit or loss within other income.
vi. Impairment of assets
Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognized for the amount by which the asset's carrying amount
exceeds its recoverable amount.
vii. Borrowings
Borrowings are initially recognised at fair value, net of transaction cost incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction cost) and the redemption
amount is recognised in profit or loss over the period of the borrowings, using the effective interest method.
Fees paid on the established loan facilities are recognised as transaction cost of the loan, to the extent that it is
probable that some or all the facility will be drawn down.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished
or transferred to another party and the consideration paid, (including any non-cash assets transferred or liabilities
assumed), is recognised in profit or loss as other gain/(loss).
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement
of the liability for at least 12 months after the reporting period.
viii. Inventories
Inventories are valued at the lower of cost and net realisable value.
i) Cost of raw materials and components, packing materials, stores and spares, work-in-process and finished
goods are ascertained on a weighted average basis.
ii) Cost of finished goods and work-in-process comprises of direct materials, direct labour and an appropriate
proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal
operating capacity. Costs are assigned to individual items of inventory on the basis of weighted average
costs. Costs of purchased inventory are determined after deducting rebates and discounts.
iii) Net realisable 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.
iv) Materials and supplies held for use in production of inventories are not written down if the finished products
in which they will be used are expected to be sold at or above cost.
v) Slow and non-moving material, obsolesces, defective inventories are duly provided for.
ix. Employee benefits
i) Short term obligations:
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly
within 12 months after the end of the period in which the employees render the related service are
recognized in respect of employees' services upto the end of the reporting period and are measured at
the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current
employee benefit obligations in the balance sheet.
ii) Other long term employee benefit:
The liabilities for earned leave are not expected to be settled wholly within 12 months after the end of
the period in which the employees render the related service. They are therefore measured as the present
value of the expected future payments to be made in respect of services provided by employee upto the
end of reporting period using the projected unit credit method. The benefits are discounted using the
market yields at the end of the reporting period that have terms approximating to the terms of the related
obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions
are recognised in profit or loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an
unconditional right to defer settlement for at least twelve months after the reporting period, regardless of
when the actual settlement is expected to occur.
iii) Post-employment obligation:
The Company operates the following post-employment schemes:
a) Defined benefit plans such as gratuity for its eligible employees; and
b) Defined contribution plans such as provident fund.
a) Gratuity obligation:
The liability or asset recognised in the balance sheet in respect of defined benefit pension and gratuity plan
is the present value of the defined benefit obligation at the end of the reporting period less the fair value
of plan assets. The defined benefit obligation is calculated annually by Actuaries using the projected unit
credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash
outflows by reference to market yields at the end of the reporting period on the government bonds that have
terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit
obligation and the fair value of plan assets. This cost is included in employee benefit expense in the
statement of profit and loss.
Re-measurement gains and losses arising from experience adjustments and changes in actuarial
assumptions are recognised in the period in which they occur, directly in other comprehensive income.
They are included in retained earnings in the statement of changes in equity and in the balance sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or
curtailments are recognised immediately in profit or loss as past service cost.
b) Provident fund
The Company pays provident fund contributions to publicly administered provident funds as per local
regulations. The Company has no further payment obligations once the contributions have been paid.
The contributions are accounted for as defined contribution plans and the contributions are recognised as
employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent
that a cash refund or a reduction in the future payments is available.
iv) Bonus plans:
The Company recognises a liability and an expense for bonuses. The Company recognises a provision
where statutory liability exists, contractually obliged or where there is a past practice that has created a
constructive obligation.
x. 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 throu gh
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 liabilities and equity instruments
Classification as debt or equity
Financial liabilities and equity instruments issued by the Company are classified according to the substance of
the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
Equity Instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting
all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.
Financial Liabilities
Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently
measured at amortised cost, using the effective interest rate method where the time value of money is significant.
Interest bearing bank loans, overdrafts and unsecured loans are initially measured at fair value and are
subsequently measured at amortised cost using the effective interest rate method. Any difference between the
proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term
of the borrowings in the statement of profit and loss.
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.
xi. Income tax
Tax expense comprises of current and deferred taxes.
The income tax expense or credit for the period is the tax payable on the current period's taxable income based
on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at
the end of the reporting period. The management periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred
tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is
also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a
business combination that at the time of the transaction affects neither accounting profit nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by
the end of the reporting period and are expected to apply when the related deferred income tax asset is realised
or the deferred income tax liability is settled.
Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise
those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and
tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a
net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in
other comprehensive income or directly in equity.
Where the Company is entitled to claim special tax deductions for investments in qualifying assets or in relation to
qualifying expenditure (the Research and Development or other investment allowances), the Company accounts
for such allowances as tax credits, which means that the allowance reduce income tax payable and current tax
expense. A deferred tax asset is recognised for unclaimed tax credits that are carried forward as deferred tax
assets.
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