2. Material accounting policies
A Basis of accounting and preparation of Financial Statements:
Compliance with Indian Accounting Standards (Ind AS):
a) These Standalone Ind AS Financial Statements ("Financial Statements") of the Company, have been prepared in accordance
with the recognition and measurement principles laid down in Indian Accounting Standards ("Ind AS") as notified under section
133 of the Companies Act, 2013 ("the Act") read with Rule 4 of the Companies (Indian Accounting Standards) Rules, 2015 as
amended and other relevant provisions of the Act and accounting principles generally accepted in India. Accounting policies
have been consistently applied. These Financial Statements were authorized for issue by the Company's Board of Directors
on May 22, 2026.
Functional and Presentation Currency:
These Financial Statements are presented in Indian rupees (in Lakhs), which is the functional currency of the Company.
Basis of accounting and measurement:
These Financial Statements are prepared under the historical cost convention except for certain financial instruments which
are measured at fair value or at amortized cost at the end of each reporting period.
Fair value is the price that would be received on sale of an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date.
Fair value measurements are categorised as below, based on the degree to which the inputs to the fair value measurements
are observable and the significance of the inputs to the fair value measurement in its entirety:
(i) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can
access at measurement date;
(ii) Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the asset or liability, either
directly or indirectly; and
(iii) Level 3 inputs are unobservable inputs for the valuation of assets or liabilities.
Above levels of fair value hierarchy are applied consistently and generally, there are no transfers between the levels of the fair
value hierarchy unless the circumstances change warranting such transfer.
Presentation of standalone financial statements:
The balance sheet and the statement of profit and loss are prepared in the format prescribed in schedule III to the Act. The
statement of cash flows has been prepared under indirect method and presented as per the requirements of Ind AS 7
“Statement of cash flows". The disclosure requirements with respect to items in balance sheet and statement of profit and loss,
as prescribed in schedule III to the Act, are presented by way of notes forming part of accounts along with the other notes
required to be disclosed under the notified Ind AS and the SEBI (Listing Obligation and Disclosure Requirements)
Regulations, 2015, as amended. Amounts in the standalone financial statements are presented in Indian Rupees in lakhs
rounded off up to two decimal places as permitted by schedule III to the Companies Act, 2013. Per share data are presented in
Indian Rupees to two decimal places.
Use of Estimates and Judgements:
The preparation of the Standalone Financial Statements in conformity with Ind AS requires the Management to make
estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and
the reported income and expenses during the year. Management believes that the estimates used in preparation of the
Standalone financial statements are prudent and reasonable. Future results could differ due to these estimates and the
differences between the actual results and the estimates are recognised in the year in which the results are known/
materialise. Estimates and underlying assumptions are reviewed on an ongoing basis.
Information about critical judgments in applying accounting policies, as well as estimates and assumptions that have the most
significant effect to the carrying amounts of assets and liabilities within the next financial year, are included in the accounting
policies.
The areas involving critical estimates or judgments are:
- Measurement of defined benefit obligations:
The cost and present value of the gratuity obligation and compensated absences are determined using actuarial valuations. An
actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the
determination of the discount rate, future salary increases, attrition rate and mortality rates. Due to the complexities involved in the
valuation and its long term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions
are reviewed at each reporting date.
- Measurement and likelihood of occurrence of provisions and contingencies:
The Company estimates the provisions that have present obligations as a result of past events and it is probable that outflow of
resources will be required to settle the obligations. These provisions are reviewed at the end of each reporting period and are
adjusted to reflect the current best estimates. The Group uses significant judgements to assess contingent liabilities. Contingent
liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by
the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group or a present
obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the
obligation or a reliable estimate of the amount cannot be made. Contingent assets are neither recognised nor disclosed in the
consolidated financial statements.
- Fair value measurement of financial instruments:
When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted
prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow model. The
inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is
required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility.
Changes in assumptions about these factors could affect the reported fair value of financial instruments.
- Estimation of tax expenses and liability:
The Company uses judgements based on the relevant rulings in the areas of allocation of revenue, costs, allowances and
disallowances which is exercised while determining the provision for income tax. A deferred tax asset is recognised to the extent
that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be
utilised. Accordingly, the Company exercises its judgement to reassess the carrying amount of deferred tax assets at the end of
each reporting period.
- Useful lives of property, plant, equipment and intangibles:
The Company reviews the useful life of property, plant and equipment at the end of each reporting period. This reassessment may
result in change in depreciation expense in future periods.
- Right to use:
The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease
requires significant judgement. The Company uses significant judgement in assessing the lease term (including anticipated
renewals) and the applicable discount rate. The Company determines the lease term as the non-cancellable period of a lease,
together with both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and
periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing
whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease,
it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend
the lease, or not to exercise the option to terminate the lease. The Company revises the lease term if there is a change in the non¬
cancellable period of a lease. The discount rate is generally based on the incremental borrowing rate specific to the lease being
evaluated or for a portfolio of leases with similar characteristics.
- Impairment of financial assets such as trade receivables:
Measurement of impairment of financial assets require use of estimates, which have been explained in the note on financial assets,
financial liabilities and equity instruments, under impairment of financial assets (other than at fair value).
B Revenue Recognition:
Revenue from contracts with customers is recognized on transfer of control of promised goods or services to a customer at an
amount that reflects the consideration to which the Company is expected to be entitled to in exchange for those goods or services.
Revenues from customer contracts are considered for recognition and measurement when the contract has been approved by the
parties to the contract, the parties to the contract are committed to perform their respective obligations, each party's rights and
obligations and the payment terms can be identified, the contract has commercial substance and it is probable that the entity will
collect the consideration to which it is entitled to in exchange for the services that will be transferred to the customer.
The Company recognizes provision for sales return, based on the historic results, measured on net basis of the margin of the sale.
Therefore, a refund liability, included in other current liabilities, are recognized for the products expected to be returned.
The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to
the customer and payment by the customer exceeds one year. As a consequence, it does not adjust any of the transaction prices for
the time value of money.
Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable
consideration) allocated to that performance obligation. The transaction price of goods sold and services rendered is net of variable
consideration on account of various discounts and schemes offered by the group as part of the contract. This variable consideration
is estimated based on the expected value of outflow. Revenue (net of variable consideration) is recognized only to the extent that it
is highly probable that the amount will not be subject to significant reversal when uncertainty relating to its recognition is resolved.
i) Sale of products: Revenue from sale of products is recognized when the control on the goods have been transferred to the
customer. The performance obligation in case of sale of product is satisfied at a point in time i.e., when the material is shipped
to the customer or on delivery to the customer, as may be specified in the contract.
ii) Rendering of services: Revenue from services is recognized over time by measuring progress towards satisfaction of
performance obligation for the services rendered.
C Property, Plant and Equipment:
i) Recognition and measurement:
Property, plant and equipment are measured at cost / deemed cost, less accumulated depreciation and impairment losses, if
any. Cost of Property, plant and equipment comprises its purchase price, including import duties and non-refundable
purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the asset to its working
condition for its intended use and estimated attributable costs of dismantling and removing the asset and restoring the site on
which it is located.
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. The carrying amount of any component accounted for as a separate asset is derecognised when replaced.
All other repairs and maintenance are charged to the Statement of Profit and Loss during the reporting period in which they are
incurred.
Gains or losses arising from derecognition of plant, property and equipment 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.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than
its estimated recoverable amount. Any gain or loss on disposal of an item of property, plant and equipment is recognised in
Statement of Profit and Loss.
ii) Depreciation:
Depreciation on Property, Plant and Equipment has been provided on written down value basis and manner prescribed in
Schedule II to the Companies Act 2013.
Depreciation on additions/disposals is provided on a pro-rata basis i.e. from / upto the date on which asset is ready for
use/disposed off.
Leasehold Land are amortised over the term of the underlying lease.
iii) Derecognition:
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 or loss arising from the derecognition of an item of PPE is measured as the difference between the
net disposal proceeds and the carrying amount of the item and is recognised in the Statement of Profit and Loss when the item
is derecognized.
D Capital work in Progress:
Expenditure during the construction/ pre-operative period is included under Capital Work-in-Progress and same is allocated to the
respective Property, Plant and Equipment on the completion of project.
E Intangible assets:
Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to
the Company and the cost of the asset can be measured reliably.
Intangible Assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any.
Intangible assets are amortized on a Straight Line Basis over their estimated useful lives. Costs related to patents are written off
over the remaining useful life from the day of grant. Computer Software's are amortized over a period of 3 years from the date of
acquisition.
Losses arising from retirement and gains or losses arising from disposal of an intangible asset are measured as the difference
between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss.
Expenditure on research and development eligible for capitalisation are carried as Intangible assets under development where
such assets are not yet ready for their intended use.
F Investment Property:
Investment property is property (land or a building or part of a building or both) held either to earn rental income or for capital
appreciation or for both, but neither for sale in the ordinary course of business nor used in production or supply of goods or services
or for administrative purposes. Investment properties are stated at cost net of accumulated depreciation and accumulated
impairment losses, if any.
Based on technical evaluation and consequent advice, the management believes a period of 54 years as representing the best
estimate of the period over which investment property are expected to be used. Accordingly, the Company depreciates investment
properties over a period of 54 years on a written down value basis.
Any gain or loss on disposal of investment property calculated as the difference between the net proceeds from disposal and the
carrying amount of the Investment Property is recognized in Statement of Profit and Loss.
Fair values is determined by an independent valuer who holds a recognized and relevant professional qualification and has recent
experience in the location and category of the investment property valued.
G Research and Development Cost:
Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are also
charged to the Statement of Profit and Loss unless a products' technical feasibility has been established, in which case such
expenditure is capitalized.
Product development costs that are directly attributable to the design and testing of identifiable and unique products controlled by
the Company are recognised as intangible assets if, and only if, technical and commercial feasibility of the project is demonstrated,
future economic benefit are probable, the Company has intention and ability to complete and use or sell the assets and cost can be
measured reliably.
The amount capitalized comprise expenditure that can be directly attributed or allocated on a reasonable and consistent basis to
creating, producing and making the asset ready for its intended use. Capitalised product development costs are recorded as
intangible assets and amortised bssis the useful life as estimated by the management.
H Impairment of Assets:
i) Financial assets:
In accordance with Ind-AS 109, the Company applies Expected Credit Loss (“ECL") model for measurement and recognition
of impairment loss on the financial assets measured at amortised cost and debt instruments measured at FVOCI. Loss
allowances on trade receivables are measured following the 'simplified approach' at an amount equal to the lifetime ECL at
each reporting date. In respect of other financial assets, the loss allowance is measured at 12 month ECL only if there is no
significant deterioration in the credit risk since initial recognition of the asset or asset is determined to have a low credit risk at
the reporting date. The amount of ECLs (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.
ii) Non-Financial Assets:
The carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment if any indication
of impairment exists.
An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset's fair value less costs of disposal and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely
independent of the cash inflows from other assets or groups of assets (cash generating units). The impairment loss is
recognised as an expense in the Statement of Profit and Loss.
I Investment:
Investments that are readily realisable and intended to be held for not more than a year from the date on which such investments
are made, are classified as current investments. All other investments are classified as long term investments. Current investments
are carried at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost.
However, provision for diminution in value is made to recognise a decline, other than temporary, in the value of the long term
investments.
J Inventories:
i) Raw Materials, packing materials, Stores and Spares are valued at lower of cost arrived on First In First Out method and Net
Realisable Value. Cost of raw materials comprises cost of purchases.
ii) Work-in-progress and Finished Goods are valued at lower of cost and Net Realisable Value. Cost of work-in-progress and
finished goods comprises direct materials, direct labor and an appropriate proportion of variable and fixed overhead
expenditure, the latter being allocated on the basis of normal operating capacity.
iii) Traded goods are valued at lower of cost and net realizable value. Cost includes cost of purchase and other costs incurred in
bringing the inventories to their present location and condition. Cost is determined on a FIFO 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 estimated costs of completion and estimated costs necessary to make the
sale.
K 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 recognised in respect of employees services
up to 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 obligations:
The liabilities for earned leave and sick leave are not expected to be settled wholly within 12 months after the end of the period
in which the employees render the related service. They are therefore measured as the present value of expected future
payments to be made in respect of services provided by employees up to the end of the reporting period using the projected
unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms
approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in
actuarial assumptions are recognised in the Statement of Profit and Loss.
The obligations are presented as current liabilities in the Balance Sheet if the Company 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 obligations:
The Company operates the following post-employment schemes:
(a) defined benefit plans such as gratuity; and
(b) defined contribution plans such as provident fund.
Defined Benefit Plans:
The liability or asset recognised in the Balance Sheet in respect of defined benefit gratuity plans 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 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 year 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 the Statement of Profit and Loss as past service cost.
- Defined contribution plan:
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.
- Leave entitlement and compensated absences:
Accumulated leave which is expected to be utilised within next twelve months, is treated as short-term employee benefit.
Leave entitlement, other than short term compensated absences, are provided based on a actuarial valuation, similar to that of
gratuity benefit. Re-measurement, comprising of actuarial gains and losses, in respect of leave entitlement are recognised in
the Statement of Profit and Loss in the period in which they occur.
-Short-term Benefits:
Short-term employee benefits such as salaries, wages, performance incentives etc. are recognised as expenses at the
undiscounted amounts in the Statement of Profit and Loss of the period in which the related service is rendered. Expenses on
non-accumulating compensated absences is recognised in the period in which the absences occur.
-Termination benefits:
Termination benefits are recognised as an expense as and when incurred.
L Leases:
Company is lessee:
At the date of commencement of the lease, the Company recognizes 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 months or less (short-term leases)
and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating
expense on a straight-line basis over the term of the lease.
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 lease liability is initially measured at amortized cost at the present value of the 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 these leases. Lease liabilities are premeasured with a corresponding adjustment to the related right of use
asset if the Company changes its assessment if whether it will exercise an extension or a termination option.
Lease liability and right-to-use 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 elected on initial application.
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.
4) Excluding initial direct costs for the measurement of right to use of asset at the date of initial application.
Company is lessor:
Leases for which the Company is a lessor is classified as finance or operating lease. Leases in which the Company does not
transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Rental income from
operating lease is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating
and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the
same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.
Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Company to
the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Company's net investment in the
leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net
investment outstanding in respect of the lease.
M Foreign Currency Transactions / Translations:
Initial Recognition:
Foreign currency transactions are initially recorded in the reporting currency, by applying to the foreign currency amount the
exchange rate between the reporting currency and the foreign currency at the date of the transaction. However, for practical
reasons, the Company uses a monthly average rate if the average rate approximate the actual rate at the date of the transactions.
Conversion:
Monetary assets and liabilities denominated in foreign currencies are reported using the closing rate at the reporting date. Non¬
monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate
at the date of the transaction.
Treatment of Exchange Difference:
Exchange differences arising on settlement/ restatement of short-term foreign currency monetary assets and liabilities of the
Company are recognised as income or expense in the Statement of Profit and Loss.
N Income Tax:
Income tax expense comprises current tax and deferred tax. It is recognised in Statement of Profit and Loss except to the extent that
it relates items recognised directly in equity or in Other Comprehensive Income (OCI).
The income tax expense or credit for the period is tax payable on the current year's taxable income based on the applicable income
tax rate adjusted by change 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 reporting date.
Current tax comprises of expected tax payable or receivable on taxable income/loss for the year or any adjustment or receivable in
respect of previous year. Management periodically evaluates position 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 amount expected to
be paid to the tax authorities.
Deferred income tax is provided in full, using the Balance Sheet method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantially enacted by the end of the reporting date and are expected to apply to the Company
when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences, unused losses and unused tax credits. Deferred tax assets
- unrecognised or recognised, are reviewed at each reporting date and are recognised / reduced to the extent that it is probable or
no longer probable respectively that the related tax benefit will be realized.
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.
The Company recognizes interest levied related to income tax assessments in interest expenses.
O Earnings Per Share:
(i) Basic earnings per share:
Basic earnings per share is calculated by dividing:
- the profit attributable to owners of the Company;
- by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in
equity shares issued during the year.
(ii) Diluted earnings per share:
Diluted earnings per share is calculated by dividing:
- the net profit or loss after tax for the year attributable to owners of the Company;
- by the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential
equity shares.
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