2.1 Basis of Preparation of Financial
Statements
2.1.1 Statement of Compliance
The financial statements comprising Balance
Sheet, Statement of Profit and Loss, Statement
of changes in Equity and Cash flow Statement,
together with notes as at and for the year
ended March 31, 2026 have been prepared in
accordance with Ind AS's notified under Section
133 of the Companies Act, 2013 ('the Act'),
Companies (Indian Accounting Standards) Rules,
2015, other relevant provision of the Act and
amendments there to.
2.1.2Historical Cost convention
The Financial Statements have been prepared
under historical cost convention on accrual basis
except for certain assets and liabilities as stated
in the respective policies, which have been
measured at fair value.
2.1.3Current/Non-Current classification
The assets and liabilities have been classified as
current or non-current as per the Company's
normal operating cycle and other criteria set
out in the Schedule III to the Act. Based on the
nature of products and the time between the
acquisition of assets for processing and their
realisation in cash and cash equivalents, the
Company has ascertained its operating cycle as
12 months for the purpose of current and non¬
current classification of assets and liabilities.
Accordingly, all assets and liabilities have been
classified as current or non-current as per the
Company's operating cycle and other criteria
set out in Ind AS-1 'Presentation of Financial
Statements' and Schedule III to the Companies
Act, 2013. Cash or cash equivalent is treated as
current, unless restricted from being exchanged
or used to settle a liability for at least twelve
months after the reporting period.
Deferred tax assets and liabilities are classified
as non-current assets and liabilities.
2.1.4 Functional and Presentation currency
Items included in the Financial Statements of the
Company are measured and presented using the
currency of the primary economic environment
in which the Company operates ("Functional
Currency”). Indian Rupee is the Functional and
Presentation Currency of the Company.
2.2 Revenue recognition
2.2.1Revenue from Sale of Goods/Services
Revenue from sale of goods/services are
recognised on satisfaction of performance
obligations and at transaction price (net of
variable consideration) as per the terms of the
contract with customers. Revenue is stated
at net of returns and taxes on sales. Variable
consideration shall include discounts and
schemes offered by the Company as part of
the contract.
2.2.2Interest Income
Interest income is recognised using the effective
interest rate method. The effective interest rate is
the rate that exactly discounts estimated future
cash receipts through the expected life of the
financial asset to the gross carrying amount of
a financial asset.
2.3 Property Plant and Equipment
2.3.1 Tangible Assets
All property plant and equipment are stated at
historical cost of acquisition less accumulated
depreciation and impairment, if any. Historical
cost includes purchase price, taxes and duties
(net of tax credits), labour cost and directly
attributable overhead expenditure incurred up
to the date the asset is ready for its intended use.
The Cost of self-constructed assets includes the
cost of materials, direct labour and any other
costs directly attributable to bringing the asset
to a working conditions 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. The carrying
amount of any component accounted for as
separate asset is derecognised when replaced.
All other repairs and maintenance are charged
to Profit or Loss during the reporting period in
which they are incurred.
2.3.2 Intangible assets
I ntangible assets are measured at cost less
accumulated amortisation and impairment
losses, if any.
Identifiable intangible assets are recognised
when the Company controls the asset; it
is probable that future economic benefits
expected with the respective assets will flow
to the Company for more than one economic
period; and the cost of the asset can be
measured reliably. Amortisation is provided on
Straight Line Method (SLM), which reflect the
management's estimate of the useful life of the
intangible assets.
The useful lives of intangible assets are reviewed
annually to determine if a reset of such useful
life is required for assets. Based on such review,
the useful life may change. The impact of such
changes, if any, is accounted for as a change in
accounting estimate.
Intangible assets with finite lives are amortised
over the useful economic life and assessed for
impairment whenever there is an indication
that the intangible asset may be impaired. The
amortisation expense on intangible assets with
finite lives is recognised in the statement of profit
and loss unless such expenditure forms part of
carrying value of another asset
2.3.3 Impairment of assets
Assessment is done at each Balance Sheet date
as to whether there is any indication that an
asset (tangible and intangible) may be impaired.
If any such indication exists, an estimate of
the recoverable amount of the asset/cash
generating unit is made. For the purpose of
assessing impairment, the smallest identifiable
group of assets that generates cash inflows from
continuing use that are largely independent of
the cash inflows from other assets or groups
of assets, is considered as a cash generating
unit. Assets whose carrying value exceeds their
recoverable amount are written down to the
recoverable amount. Recoverable amount is
higher of cash generating unit's net selling price
and its value in use. Value in use is the present
value of estimated future cash flows expected
to arise from the continuing use of an asset
and from its disposal at the end of its useful life.
Assessment is also done at each Balance Sheet
date as to whether there is any indication that an
impairment loss recognised for an asset in prior
accounting periods may no longer exist or may
have decreased.
2.4 Depreciation
The depreciable amount of an item of Property, Plant
and Equipment (PPE) is allocated on a straight-line
basis over its useful life as prescribed in the manner
specified in Schedule II of the Act.
Management believes that such estimated useful lives
are realistic and reflect a fair approximation of the
period over which the assets are likely to be used.
If part of an item of PPE with a cost that is significant in
relation to the total cost of the asset and useful life of
that part is different from remaining part of the asset;
such significant part is depreciated separately.
Depreciation is charged on pro-rata basis from the
date of addition (i.e., when the assets are ready for
their intended use)/till the date of disposal. An item of
PPE is derecognised upon disposal or when no future
economic benefits are expected to arise from the
continued use of the asset. Gains or losses on such
disposal of assets are recognised in statement of
profit and loss.
Where the residual values are not more than 5% of
original cost of the asset no depreciation is provided.
2.5 Borrowing Costs
The Company capitalises borrowing costs that are
directly attributable to the acquisition, construction
or production of qualifying asset as a part of the
cost of the asset. The Company recognises other
borrowing costs as an expense in the period in which
it incurs them. A qualifying asset is an asset that
necessarily takes a substantial period of time to get
ready for its intended use or sale.
To the extent the Company borrows generally and uses
them for the purpose of obtaining a qualifying asset,
amount of borrowing cost eligible for capitalisation
is computed by applying a capitalisation rate to
the expenditure incurred. The capitalisation rate
is determined based on the weighted average
of borrowing costs, other than borrowings made
specifically towards purchase of a qualifying asset.
2.6 Foreign Currency Translation
2.6.1 Functional and presentation currency
Items included in the financial statements are
measured using the currency of the primary
economic environment in which the Company
operates ('the functional currency'). i.e in Indian
rupee (INR - '.)
2.6.2 Transaction and Balances
Foreign currency transactions are recorded in
functional currency using the exchange rates
prevailing on the date of transaction. As 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 prevailing at the date of the
transaction. All monetary assets and liabilities
denominated in foreign currency are restated
at the closing exchange rates. Exchange
differences arising out of foreign currency
transactions are recognised in the Statement of
Profit and Loss.
2.7 Inventories
2.7.1 Inventories are stated at the lower of cost
(computed on moving weighted average basis)
and net realisable value
2.7.2 Cost includes the cost of purchase including
duties and taxes (net of tax credit), freight
inward and other expenditure directly
attributable to purchase.
Cost of work-in-progress and finished goods
comprises of all direct costs and applicable
manufacturing overheads incurred to bringing
the inventories to the present location
and condition.
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.
2.8 Employee Benefits
2.8.1Defined Benefit Plan:
Provision for gratuity, is made on the basis of
actuarial valuation using the projected unit credit
method. Re-measurement, comprising actuarial
gains and losses, the effect of the changes to
the asset ceiling and the return on plan assets
excluding interest (if applicable), is reflected
immediately in the balance sheet with a charge
or credit recognised in other comprehensive
income in the period in which they occur.
Re-measurement recognised in other
comprehensive income will not be reclassified
to Statement of Profit or Loss.
Past service cost is recognised in Statement of
profit and loss in the period of a plan amendment.
Net interest is calculated by applying the
discount rate at the beginning of the period to
the net defined benefit liability or asset. Defined
benefit costs are categorised as follows:
• Service cost (including current service cost,
past service cost as well as gains and losses
on curtailments and settlements);
• Net interest expense or income; and
• Re-measurement.
The Company presents the first two components
of defined benefit costs in statement of profit
and loss in the line item "Employee Benefits
Expenses”. Curtailment gains and losses are
accounted for as past service costs. The defined
benefit obligation recognised in the balance
sheet represents the actual deficit or surplus in
the Company's defined benefit plans. Any surplus
resulting from this calculation is limited to the
present value of any economic benefits available
in the form of reductions in future contributions
to the plans.
2.8.2 Defined Contribution Plan:
Company's contributions during the year towards
provident fund, pension scheme and employees’
state insurance ('ESI') scheme are recognised in
the statement of profit and loss.
2.8.3 Other Long-Term Employee Benefits:
Compensated absences: Accumulated
compensated absences, which are expected to
be availed or encashed within 12 months from
the end of the year are treated as short-term
employee benefits. Those that are expected to
be encashed after 12 months from the end of the
year are treated as other long-term employee
benefits. The obligation towards the same is
measured at the expected cost of accumulating
compensated absences as the additional amount
expected to be paid as a result of the unused
entitlement as at the year end. The obligation is
measured on the basis of an annual independent
actuarial valuation using the projected unit credit
method. Remeasurements gains or losses are
recognised in profit or loss in the period in which
they arise.
2.8.4 Short term employee benefits obligations are
measured on an undiscounted basis and are
expensed as the related services provided. A
liability is recognised for the amount expected
to be paid under short-term employee
benefits if the Company has a present legal or
constructive obligation to pay this amount as a
result of past service provided by the employee
and the obligation can be estimated reliably.
2.9 Taxes on Income
Income tax expense represents the sum of the current
tax and deferred tax.
2.9.1 Current Tax
The current tax is based on taxable profit for the
year. Taxable profit differs from 'profit before
tax’ as reported in the statement of profit or
loss and other comprehensive income because
of items of income or expense that are taxable
or deductible in other years and items that are
never taxable or deductible. The Company’s
current tax is calculated using tax rates that have
been enacted or substantively enacted by the
end of the reporting period.
Current tax assets and liabilities are offset only if
there is a legally enforceable right to set off the
recognised amounts and it is intended to settle
the liability on a net basis or simultaneously.
2.9.2 Deferred Tax
Deferred tax is provided using the balance
sheet approach on temporary differences
at the reporting date between the tax bases
of assets and liabilities and their carrying
amounts for financial reporting purposes at the
reporting date.
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 profits will be available to
allow all or part of the asset to be utilised.
Unrecognised deferred tax assets are reassessed
at each reporting date and are recognised to
the extent that it has become probable that
future taxable profits will allow the deferred tax
assets to be recovered.
Deferred tax liabilities and assets are measured
at the tax rates that are expected to apply in the
period in which the liability is settled or the asset
realised, based on tax rates (and tax laws) that
have been enacted or substantively enacted by
the end of the reporting period.
Deferred tax assets and deferred tax liabilities
are offset if a legally enforceable right exists
to set off current tax assets against current
income tax liabilities and the deferred taxes
relate to the same taxable entity and the same
taxation authority.
The break-up of the major components of the
deferred tax assets and liabilities as at balance
sheet date has been arrived at after setting
off deferred tax assets and liabilities where the
Company has a legally enforceable right to
set-off assets against liabilities and where such
assets and liabilities relate to taxes on income
levied by the same governing taxation laws.
2.9.3 Current and Deferred Tax for the year
Current and deferred tax are recognised in
profit or loss, except when they relate to items
that are recognised in other comprehensive
income or directly in equity, in which case, the
current and deferred tax are also recognised
in other comprehensive income or directly in
equity respectively.
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