s Material Accounting Policies
2.1 Basis of preparation
The financial statements of the company have been prepared and presented in accordance with Indian Accounting
Standards notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the
Companies(Indian Accounting Standards)(Amendment) Rules, 2016 and the relevant provisions of the Companies
Act, 2013 ("the Act").
The financial statements for the period ended March 31,2026 were approved by the Board of Directors and authorized
for issue on May 25, 2026.
The accounting policies are applied consistently (except where a newly issued accounting standard is initially
adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use)
to all the periods presented in the financial statements . The Company has identified twelve months as its operating
cycle.
All 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.
Historical cost convention
The financial statements have been prepared on a historical cost basis, except for the following:
- Certain financial assets and liabilities measured at fair value or at amortised cost depending on the
classification(refer accounting policy regarding financial instruments),
- Employee defined benefit assets/(obligations) are recognised as the net total of the fair value of plan assets,
plus actuarial losses, less actuarial gains and the present value of the defined benefit obligations, and
Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the
requirement of Schedule III, unless otherwise stated.
Use of estimates and judgments:
The estimates and judgements used in the preparation of the financial statements are continuously evaluated by the
Company and are based on historical experience and various other assumptions and factors (including expectations
of future events) that the Company believes to be reasonable under the existing circumstances. Differences between
actual results and estimates are recognised in the period in which the results are known/materialised.
The said estimates are based on the facts and events, that existed as at the reporting date, or that occurred after that
date but provide additional evidence about conditions existing as at the reporting date.
(a) Property, plant and equipment (PPE)
The Company had applied for the one time transition exemption of considering the carrying cost on the
transition date i.e. 1st April, 2016 as the deemed cost under IND AS. Hence regarded thereafter as historical
cost.
Property, plant and equipment are stated at historical cost, less accumulated depreciation and impairment, if
any.
The initial cost of property, plant and equipment comprises its purchase price, including import duties and non¬
refundable purchase taxes, and any directly attributable costs of bringing an asset to working condition and
location for its intended use. It also includes the initial estimate of the costs of dismantling and removing the
item and restoring the site on which it is located. The initial cost also includes the cost of replacing part of the
plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met.
Depreciation is recognised using straight-line method over their estimated useful lives of the assets. Where
cost of a part of the asset ("asset component") is significant to total cost of the asset and useful life of that
part is different from the useful life of the remaining asset, useful life of that significant part is determined
separately and such asset component is depreciated over its separate useful life. In the case of qualifying
assets, cost also includes applicable borrowing costs vide policy relating to borrowing costs.
An item of property, plant and equipment and any significant part initially recognized is de-recognized upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising
on de-recognition of the asset is included in the statement of profit and loss when the property, plant and
equipment is de-recognized.
Costs of assets are not yet ready for their intended use at the balance sheet date are disclosed under capital
work- in- progress. Such cost includes indirect expenses incurred during construction period if the recognition
criteria are met.
Depreciation methods, estimated useful lives and residual value
Depreciation is calculated on straight line basis and written down value method using the useful lives
estimated by the management, which are equal to those prescribed under Schedule II to the Companies Act,
2013. Management believes that useful life of assets are same as those prescribed in Schedule II to the Act,
except for plant and equipment's wherein based on technical evaluation, useful life has been estimated to be
different from that prescribed in Schedule II of the Act.
If the management's estimate of the useful life of a item of property, plant and equipment at the time of
acquisition or the remaining useful life on a subsequent review is shorter than the envisaged in the aforesaid
schedule, depreciation is provided at a higher rate based on the management's estimate of the useful life/
remaining useful life.
Capital work-in-progress is not depreciated.
The residual values are 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. 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.
(b) Intangible assets
Intangible assets that are acquired by the Company and that have finite useful lives are measured at cost
less accumulated amortisation and accumulated impairment losses, if any. Subsequent expenditures are
capitalized only when they increase the future economic benefits embodied in the specific asset to which they
relate.
The estimated useful life of other intangible assets is 3 years.
(c) Research and development
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 in the year it is incurred, unless a product's
technological feasibility has been established, in which case such expenditure is capitalised. These costs
are charged to the respective heads in the Statement of Profit and Loss in the year it is incurred. The amount
capitalised comprises of expenditure that can be directly attributed or allocated on a reasonable and consistent
basis for creating, producing and making the asset ready for its intended use. Property, plant and equipment
utilised for research and development are capitalised and depreciated in accordance with the policies stated
for Property, plant and equipment.
(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. A contract is, or contains, a lease if the contract conveys the right to
control the use of an identified asset for a period of time in exchange for consideration. A period of time may
be described in terms of the amount of use of an identified asset.
Company as a lessee
The Company applies a single recognition and measurement approach for all leases, except for short term
leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and
right-of-use assets representing the right to use the underlying assets.
A lease is classified at the inception date as a finance lease or an operating lease. Leases of property, plant
and equipment where the company, as lessee, has substantially all the risks and rewards of ownership are
classified as finance leases.
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.
A. Right-of-use assets
The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any re-measurement of lease liabilities. The cost
of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and
lease payments made at or before the commencement date - less any lease incentives received. Right-
of-use assets are depreciated on a straight-line basis over the lease term.
If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects
the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
B. Lease Liabilities
At the commencement date of the lease, the Company recognises lease liabilities measured at the
present value of lease payments to be made over the lease term. The lease payments include fixed
payments (including in substance fixed payments) less any lease incentives receivable, variable lease
payments that depend on an index or a rate, and amounts expected to be paid under residual value
guarantees. The lease payments also include the exercise price of a purchase option reasonably certain
to be exercised by the Company and payments of penalties for terminating the lease, if the lease term
reflects the Company exercising the option to terminate.
In calculating the present value of lease payments, the Company uses its incremental borrowing rate at
the lease commencement date because the interest rate implicit in the lease is not readily determinable.
The lease liability is subsequently remeasured if there is a modification, a change in the lease term or a
change in the lease payments.
C. Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition exemption to its short-term leases of machinery
and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement
date and do not contain a purchase option). It also applies the lease of low-value assets recognition
exemption to leases of office equipment that are considered to be low value. Lease payments on short¬
term leases and leases of low-value assets are recognised as expense on a straight-line basis over the
lease term.
(e) Impairment of non financial assets
As at the end of each financial year, the carrying amounts of PPE are reviewed to determine whether there is
any indication that those assets have suffered an impairment loss. If such indication exists, PPE are tested for
impairment so as to determine the impairment loss, if any.
For the purpose of assessing impairment, an estimate of the recoverable amount of the individual asset/cash
generating unit is made. Impairment loss is recognised when the carrying amount of an asset/ cash generating
unit exceeds its recoverable amount.
Recoverable amount is determined:
(i) in the case of an individual asset, at the higher of the fair value less costs to sell and the value-in-use;
and
(ii) in the case of a cash generating unit , at the higher of the cash generating unit's fair value less costs to
sell and the value-in-use.
The amount of value-in-use is determined as the present value of estimated future cash flows from the
continuing use of an asset, which may vary based on the future performance of the Company and from its
disposal at the end of its useful life. For this purpose, the discount rate (pre-tax) is determined based on the
weighted average cost of capital of the company suitably adjusted for risks specified to the estimated cash
flows of the asset. If recoverable amount of an asset (or cash generating unit) is estimated to be less than its
carrying amount, such deficit is recognised immediately in the Statement of Profit and Loss as impairment loss
and the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount.
Impairment losses are 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.
(f) Financial Instruments
Financial assets and financial liabilities are recognised when a Company becomes a party to the contractual
provisions of the instruments.
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.
A. Financial assets
A.1 Initial recognition
Financial assets not carried at fair value through profit or loss, other than trade receivables, are initially
recognized at fair value plus transaction costs. Financial assets carried at fair value through profit or
loss are initially recognized at fair value, and transaction costs are expensed in the Statement of Profit
and Loss. Trade receivables that do not contain a significant financing component or for which the
Group has applied the practical expedient are measured at the transaction price determined under Ind
AS 115. Refer policy on Revenue from contracts with customers.
A.2. Subsequent measurement
Financial assets, other than equity instruments, are subsequently measured at amortized cost, fair value
through other comprehensive income ("FVOCI") or fair value through profit or loss (FVTPL) on the basis
of following:
(i) Financial assets at amortized cost:
A financial asset is measured at amortized cost, if it is held under the hold to collect business
model. Amortized cost is calculated using the effective interest rate ("EIR") method 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 interest income in the Statement of Profit and Loss.
(ii) Measured Financial assets at fair value through other comprehensive income (FVOCI):
A debt instrument is measured at FVOCI, if it is held under the hold to collect and sell business model.
It is subsequently measured at fair value with fair value movements recognized in the OCI, except for
interest income which is recognized using EIR method. On de-recognition, cumulative gain or loss
previously recognized in the OCI is reclassified from the equity to Statement of Profit and Loss.
For equity instruments, the Company may make an irrevocable election to present subsequent
changes in the fair value in OCI. The Company makes such election on an instrument-by-instrument
basis. If the Company decides to classify an equity instrument as at FVOCI, then all fair value
changes on the instrument, excluding dividends, are recognised in the OCI. There is no recycling
of the amounts from OCI to the statement of profit and loss, even on sale of investment. However,
the Company may transfer the cumulative gain or loss within equity.
(iii) Financial assets at fair value through profit or loss (FVTPL):
Investment in financial asset other than equity instrument, not measured at either amortized cost
or FVOCI is measured at FVTPL. Such financial assets are measured at fair value with all changes
in fair value, including interest income and dividend income if any, recognized in the Statement of
Profit and Loss.
Any equity instrument in the scope of Ind AS 109 are measured at fair value, unless elected to
measure at FVOCI.
A.3. Impairment
The Company follows 'simplified approach' for recognition of impairment loss allowance on trade
receivables, contract assets and lease receivables. The application of simplified approach does not
require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance
based on lifetime ECLs at each reporting date, right from its initial recognition.
At each reporting date, for recognition of impairment loss on other financial assets and risk exposure,
the Company determines whether there has been a significant increase in the credit risk since initial
recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment
loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period,
credit quality of the instrument improves such that there is no longer a significant increase in credit risk
since initial recognition, then the Company reverts to recognising impairment loss allowance based on
12-month ECL.
For assessing increase in credit risk and impairment loss, the Company combines financial instruments
on the basis of shared credit risk characteristics with the objective of facilitating an analysis that is
designed to enable significant increases in credit risk to be identified on a timely basis.
A.4. Trade Receivables
Trade receivables that do not contain a significant financing component are measured at transaction
price.
In respect of trade receivables, the Company applies the simplified approach of IND AS 109 "Financial
Instruments", which requires measurement of loss allowance at an amount equal to lifetime expected
credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible
default events over the expected life of a financial instrument.
For Trade Receivables, the Company applies 'simplified approach' which requires expected lifetime
losses to be recognised from initial recognition of the receivables.
A. 5. De-recognition
The Company de-recognizes a financial asset when the contractual rights to the cash flows from the
financial asset expire, or it transfers rights to receive cash flows from an asset, it evaluates if and to what
extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained
substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company
continues to recognize the transferred asset to the extent of the Company's continuing involvement. In
that case, the Company also recognizes an associated liability. The transferred asset and the associated
liability are measured on a basis that reflects the rights and obligations that the Company has retained.
B. Financial Liabilities
B. 1. Initial Recognition and measurement
All financial liabilities are recognised initially at fair value and, in the case of financial liabilities at
amortised cost, net of directly attributable transaction costs.
After initial recognition, interest-bearing loans, borrowings and trade and other payables are subsequently
measured at amortised cost using the EIR method. Gains and losses are recognised in the statement of
profit and loss when the liabilities are derecognised as well as through the EIR amortisation process.
B.2. De-recognition
A financial liability is de-recognized when the obligations under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the recognition of a new liability.
The When a new financial liability is recognised in place of an existing one, the difference in the respective
carrying amounts is recognised in the statement of profit and loss.
C. 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.
The Company recognises a liability to pay dividend to equity holders of the Company when the
distribution is authorised, and the distribution is no longer at the discretion of the Company. As per the
corporate laws in India, a distribution with respect to interim dividend is authorised when it is approved
by the board of directors of the Company and final dividend is authorised when it is approved by the
shareholders. A corresponding amount is recognised directly in equity.
(g) Inventories
Inventories are valued at the lower of cost and net realisable value.
Raw materials: cost includes cost of purchase and other costs incurred in bringing the inventories to their
present location and condition. Cost is determined on First In First Out (FIFO) basis.
Finished goods and work in progress: cost includes cost of purchase, cost of conversion and other costs
including manufacturing overheads allocated based on the normal operating capacity incurred in bringing
them to their respective present location and condition. Cost is determined on FIFO basis.
Stores and Spares: cost includes cost of purchase and other costs incurred in bringing the inventories to their
present location and condition. Cost is determined on First In First Out (FIFO) basis.
Materials in transit: cost incurred to date.
Obsolete, slow moving and defective inventories are identified from time to time and, where necessary, a
provision is made for such inventories.
(h) Revenue from contracts with customers
The Company recognizes revenue, whenever control over distinct goods or services is transferred to the
customer, provided a contract with enforceable rights and obligations exists and amongst others collectability
of consideration is probable taking into account customer's credit worthiness.
Revenue is the transaction price the Company expects to be entitled to. In determining the transaction
price, the Company considers effects of variable consideration such as the amount of discounts, incentives,
volume rebates, outgoing taxes on sales etc., and the existence of significant financing contracts, non-cash
consideration and consideration payable to the customer, if any.
Variable Consideration
If the consideration in a contract includes a variable amount, the company estimates the amount of
consideration to which it will be entitled to in exchange for transferring goods or services to the customer.
The variable consideration is estimated at contract inception and constrained until it is highly probable that a
significant reversal of revenue will not occur once associated uncertainties are resolved. Some contracts with
the customers provide them with a right to return and volume rebates. The right to return and volume rebates
gives rise to variable consideration.
The amount of variable consideration is calculated by either using the expected value or the most likely amount
depending on which is expected to better predict the amount of variable consideration. If a contract contains
more than one distinct good or service, the transaction price is allocated to each performance obligation based
on relative stand-alone selling prices. If stand-alone selling prices are not observable, the Company reasonably
estimates those.
If a customer pays consideration before the Company transfers goods or services to the customer, a contract
liability is recognised when the payment is received. The advance payments received plus a specified rate of
return/ discount, at the prevailing market rates, is settled by supplying respective goods over a period of up
to twenty four months under an agreed delivery schedule as per the terms of the respective agreements. As
these are contracts that the Company expects, and has the ability, to fulfil through delivery of a non-financial
item, these are presented as advance from customers and are recognised as revenue as and when control of
respective commodities is transferred to customers under the agreements. The fixed rate of return/ discount is
treated as finance cost. The portion of the advance where either the Company does not have a unilateral right
to defer settlement beyond 12 months or expects settlement within 12 months from the balance sheet date is
classified as a current liability.
Recognising revenue from major business activities
Sale of goods
Revenues are recognized at a point in time when control of the goods passes to the buyer, usually upon
either at the time of dispatch or delivery. Revenue from the sale of goods is measured at the fair value of
the consideration received or receivable, net of taxes, net of returns and allowances, trade discounts, volume
rebates and recovery of charges collected from customers like transport, packing etc.
Interest income
Interest income is recorded using the Effective interest rate method.
(i) Taxes
Current income tax
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.
Deferred tax
Deferred income tax is recognized using the balance sheet approach, deferred tax is recognized on temporary
differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts
for financial reporting purposes, except when the deferred income tax arises from the initial recognition
of goodwill or an asset or liability in a transaction that is not a business combination and affects neither
accounting nor taxable profit or loss at the time of the transaction.
Deferred income tax assets are recognized for all deductible temporary differences, carry forward of unused tax
credits and unused tax losses, 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 income tax assets is reviewed at each balance sheet 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 income tax asset to be utilized.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period
when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance sheet date.
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.
(j) Employee benefits Plan:
(i) Short-Term Employee Benefits
Employee benefits such as salaries, wages, short-term compensated absences, bonus, ex-gratia and
performance-linked rewards that are expected to be settled wholly within twelve months of rendering
the service are classified as short-term employee benefits and are expensed in the period in which the
employee renders the service.
(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.
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 obligations
The company operates the following post-employment schemes:
(a) defined benefit plans viz gratuity,
(b) defined contribution plans viz 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.
Remeasurement 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.
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.
(iv) Termination benefits
Termination benefits are payable when employment is terminated by the company before the normal
retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits.
(k) Foreign currency translation
Functional and presentation currency
Items included in the financial statements of the entity are measured using the currency of the primary
economic environment in which the entity operates ('the functional currency'). The financial statements are
presented in Indian rupee (INR), which is entity's functional and presentation currency.
Transactions and balances
In the financial statements of the Company, transactions in currencies other than the functional currency are
translated into the functional currency at the exchange rates ruling at the date of the transaction. Monetary
assets and liabilities denominated in other currencies are translated into the functional currency at exchange
rates prevailing on the reporting date. Non-monetary assets and liabilities denominated in other currencies and
measured at historical cost or fair value are translated at the exchange rates prevailing on the dates on which
such values were determined.
All exchange differences are recognized in the Statement of Profit and Loss of the year.
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