2. Material Accounting Policies
(a) Statement of compliance
These standalone financial statements (hereinafter referred to as "financial statements”) are prepared in accordance
with the Indian Accounting Standards ("Ind AS”) as per the Companies (Indian Accounting Standards) Rules, 2015 and
presentation requirements of Division II of Schedule III notified under Section 133 of Companies Act, 2013 ("the Act'')
and amendments thereto, other relevant provisions of the Act and guidelines issued by the Securities and Exchange
Board of India ("SEBI”), as applicable. These financial statements were approved for issue by the Board of Directors on
29th May, 2026.
(b) Basis of preparation and presentation:
(i) The financial statements have been prepared on a historical cost basis, except for the following assets and
liabilities:
- Derivative Financial Instruments measured at fair value
- Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial
instruments)
- Employee's Defined Benefit Plan as per actuarial valuation.
(ii) These Ind AS Financial Statements are prepared in Indian Rupee which is the Company's functional currency.
All financial information presented in Rupees has been rounded to the nearest lakhs, except where otherwise
indicated.
(c) Current versus non-current classification
The operating cycle is 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 twelve months for the purpose of Current / Non-Current
classification of its Assets and Liabilities.
For the purpose of Balance Sheet, an asset is classified as current if:
- Expected to be realised or intended to be sold or consumed in normal operating cycle, or
- Held primarily for the purpose of trading, or
- Expected to be realised within twelve months after the reporting period, or
- The assets is a cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at
least twelve months after the reporting period
All other assets are classified as non-current.
Similarly, a liability is classified as current when:
- It is expected to be settled in normal operating cycle, or
- It is held primarily for the purpose of trading, or
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current.
(d) Revenue from contract with customers
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the
customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for
those goods or services. The Company has generally concluded that it is the principal in its revenue arrangements
because it typically controls the goods or services before transferring them to the customer.
(i) Sale of goods
Revenue from sale of goods is recognised at the point in time when control is transferred to the customer.
Generally, control is transferred upon shipment of goods to the customer or when the goods are made available to
the customer, provided transfer of title to the customer occurs and the Company has not retained any significant
risks of ownership or future obligations with respect to the goods shipped.
Generally, the Company receives short-term advances from its customers. Using the practical expedient in Ind
AS 115, the Company does not adjust the promised amount of consideration for the effects of a significant
financing component if it expects, at contract inception, that the period between the transfer of the promised
goods or services to the customer and when the customer pays for that goods or services will be one year or less.
(ii) Sale of services
Revenue from services rendered are recognized over the time as the services are performed based on agreements/
arrangements with the customers.
Goods and Services Tax (GST) is not received by the Company on its own account. Rather, it is tax collected
on value added to the commodity by the seller on behalf of the Government. Accordingly, it is excluded from
revenue.
The specific recognition criteria described below must also be met before revenue is recognised:
Contract balances
(i) Trade receivables and Contract assets
A receivable represents the Company's right to an amount of consideration that is unconditional (i.e., only the
passage of time is required before payment of the consideration is due). A trade receivable is recognised when the
products are delivered to a customer and consideration becomes unconditional. Contract assets are recognized
when the company has a right to receive consideration that is conditional other than the passage of time.
(ii) Contract liabilities
A contract liability is the obligation to transfer goods to a customer for which the Company has received
consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before
the Company transfers goods to the customer, a contract liability is recognised when the payment is made or the
payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs
under the contract (i.e., transfers control of the related goods to the customer).
(e) Interest and dividend income
Interest income is included in other income in the Statement of Profit and Loss. For all financial instruments, interest
income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future
cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to
the gross carrying amount of the financial asset or to the amortised cost of a financial liability. When calculating the
effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the
financial instrument but does not consider the expected credit losses.
Dividend income from investments is recognised when the right to receive payment has been established.
(f) Property, plant and equipment
Property, plant and equipment ("PPE") is stated at cost, net of accumulated depreciation and accumulated impairment
losses if any. The initial cost of property, plant and equipment comprises its purchase price, including taxes and duties,
and any other directly attributable costs of bringing an asset to working condition and location for its intended use.
Property, plant and equipment which are significant to the total cost of that item of property, plant and equipment and
having different useful life are accounted separately.
Expenditure incurred after the property, plant and equipment have been put into operation, such as repairs and
maintenance, are normally charged to the Statement of Profit and Loss in the period in which the costs are incurred.
Subsequent expenditure would be recognized in the carrying amount of property, plant and equipment when that
cost/ expense would meet the recognition criteria given in paragraph 7 of Ind AS 16 i.e., it is probable that future
economic benefits associated with the item will flow to the entity and the cost of the item can be measured reliably.
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal
or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition
of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is
included in the Statement of Profit and Loss, when the asset is derecognised.
Depreciation
Depreciation of these assets (other than freehold land and properties under construction) commences when the assets
are available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the
manner intended by management and is calculated on the depreciable amount, which is the cost of an asset less its
residual value. Depreciation on deductions/ disposals is provided up to the date of deduction/disposal.
Depreciation is provided at rates calculated to write off the cost, less estimated residual value, of each asset on a written
down value method basis, as specified in Part C Schedule - II of the Companies Act, 2013 over its expected useful life
as follows:
# Roads are included under Building and factory shed and are depreciated considering useful life of 3 to 10 years.
No depreciation is provided on freehold land.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each
financial year end and adjusted prospectively, if appropriate.
Capital work-in-progress
Cost of assets not ready for intended use, at the Balance Sheet date, is shown as capital work in progress. Capital work
in progress is stated at cost, net of accumulated impairment loss, if any. Cost includes items directly attributable to the
construction or acquisition of the item of property, plant and equipment, and, for qualifying assets, borrowing costs
capitalised in accordance with the Company's accounting policy. Such properties are classified to the appropriate
categories of property, plant and equipment when completed and ready for intended use. Depreciation of these
assets, on the same basis as other property assets, commences when the assets are ready for their intended use.
(g) Intangible assets
Computer software and other intangible assets with finite useful lives that are acquired separately are carried at cost less
accumulated amortisation and accumulated impairment loss, if any. Cost comprises the purchase price (net of tax
/ duty credits availed wherever applicable) and any directly attributable cost of bringing the assets to its working
condition for its intended use. The Company determines the amortisation period as the period over which the future
economic benefits will flow to the Company after taking into account all relevant facts and circumstances. Computer
software is amortised on a straight-line basis over its expected useful life ranging from 3 to 5 years. The estimated useful
life and amortisation method are reviewed periodically, with the effect of any changes in estimate being accounted for
on a prospective basis.
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from its use or
disposal. Gains or losses arising from derecognition of an item of intangible asset are measured as the difference
between the net disposal proceeds and the carrying amount of such item of intangible asset and are recognised in the
Statement of Profit and Loss when the asset is derecognised.
Intangible assets under development
Costs incurred on intangible assets under development are recognised as intangible assets from the date when all of
the following conditions are met:
(i) completion of the development is technically feasible.
(ii) it is clear that the intangible asset will generate probable future economic benefits.
(iii) it is possible to reliably measure the expenditure attributable to the intangible asset during its development.
Recognition of costs as an asset is ceased when the project is complete and available for its intended use.
Where development activities do not meet the conditions for recognition as an asset, any associated expenditure is
treated as an expense in the period in which it is incurred.
(h) Leases
The Company assesses at inception of a contract, whether the contract is, or contains, a 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. To assess whether a contract conveys the right to control the use of an identified asset, the Company
assesses whether
(i) the contract involves the use of identified asset;
(ii) the Company has substantially all of the economic benefits from the use of the asset through the period of lease
and;
(iii) the Company has the right to direct the use of the asset.
As a lessee
The Company recognizes a right-of-use asset ("ROU") and a lease liability at the lease commencement date. The ROU
is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments
made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle
and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease
incentives received. The ROU is subsequently depreciated using the straight-line method from the commencement
date to the earlier of the end of the useful life of the ROU asset or the end of the lease term, but 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. In addition, the ROU asset is periodically reduced
by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
Short-term leases and leases of low-value assets
The Company has elected not to recognise ROU and lease liabilities for short term leases that have a lease term of 12
months or lower and leases of low value assets. The Company recognises the lease payments associated with these
leases as an expense over the lease term. The related cash flows are classified as Operating activities in the Statement
of Cash Flows.
As lessor
(i) Operating lease - Rental income from operating leases is recognised in the statement of profit and loss on a
straight-line basis over the term of the relevant lease unless another systematic basis is more representative of
the time pattern in which economic benefits from the leased asset is diminished. Initial direct costs incurred in
negotiating and arranging an operating lease are added to the carrying value of the leased asset and recognised
on a straight-line basis over the lease term.
(ii) Finance lease - When assets are leased out under a finance lease, the present value of minimum lease payments
is recognised as a receivable. The difference between the gross receivable and the present value of receivable
is recognised as unearned finance income. Lease income is recognised over the term of the lease using the net
investment method before tax, which reflects a constant periodic rate of return. Such rate is the interest rate
which is implicit in the lease contract.
(i) Impairment of non-financial assets
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. Property,
plant and equipment and intangible assets with finite life are evaluated for recoverability whenever there is any
indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e.
higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis. An impairment
loss is recognised in the Statement of Profit and Loss.
(j) Foreign currencies
The financial statements are presented in Indian Rupees (INR) and are rounded to two decimal places of lakhs, which is
also the Company's functional currency.
Transactions in foreign currencies are initially recorded by the Company at its functional currency spot rates at the date
the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of
exchange at the reporting date.
Exchange differences arising on settlement or translation of monetary items as at reporting date are recognised in
Statement of Profit and Loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rates at the dates of the initial transactions.
Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date
when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair
value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation
differences on items whose fair value gain or loss is recognised in other comprehensive income ('OCI') or profit or loss
are also recognised in OCI or statement of profit and loss, respectively).
(k) Taxes
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively
enacted, at the reporting date. Management periodically evaluates positions taken in the tax returns with respect to
situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are
recognised for all taxable temporary differences, except when it is probable that the temporary differences will not
reverse in the foreseeable future.
Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which
the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised.
The tax rates and tax laws used to compute the tax are those that are enacted or substantively enacted at the reporting
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.
GST paid on acquisition of assets or on incurring expenses
Expenses and assets are recognised net of the amount of GST paid, except:
When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case,
the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable.
When receivables and payables are stated with the amount of tax included, the net amount of tax recoverable from, or
payable to, the taxation authority is included as part of receivables or payables in the Balance Sheet.
(l) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes
a substantial period of time to get ready for its intended use (known as Qualifying assets) or sale are capitalised as
part of the cost of the asset. Borrowing Costs include interest, amortisation of ancillary costs incurred and exchange
differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the borrowing
costs. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of
activities relating to construction / development of the qualifying asset upto the date the asset is ready for its intended
use is added to the cost of the assets. Capitalisation of Borrowing Costs is suspended and charged to the Statement of
Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted. All
other borrowing costs are expensed in the period they occur.
(m) Inventories
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition is accounted for as below:
- Raw materials (including packing materials), stores and spares parts: Cost includes cost of purchase like purchase
price, import duties, taxes (net of tax credit) and other costs incurred in bringing the inventories to their present
location and condition. Cost is determined on weighted average basis.
- Work-in-progress and finished goods: Cost includes cost of direct materials and cost of conversion and a
proportion of manufacturing overheads based on the normal operating capacity but excluding borrowing costs.
Cost is determined on weighted average basis.
- Stock-in-trade: Cost includes cost of purchase and other costs incurred in bringing the inventories to their present
location and condition. Cost is determined on weighted average basis.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion
and the estimated costs necessary to make the sale.
Slow moving and defective inventories are identified and provided to net realisable value
(n) Employee benefit schemes
(i) Short-term employee benefits
Employee benefits payable wholly within twelve months of receiving employee services are classified as short¬
term employee benefits. These benefits include salaries and wages, performance incentives and compensated
absences which are expected to occur in next twelve months. The undiscounted amount of short-term employee
benefits to be paid in exchange for employee services is recognised as an expense as the related service is rendered by
employees.
(ii) Post-employment benefits
Defined contribution plan
Provident fund, pension fund and ESI
A defined contribution plan is a plan under which the Company pays fixed contributions into an independent
fund administered by the government, for example, contribution towards Employees' Provident Fund Scheme.
The Company has no legal or constructive obligations to pay further contributions after its payment of the fixed
contribution, which are recognised as an expense in the year that related employee services are received.
Defined benefit plan
Gratuity
The gratuity, an unfunded defined benefit plan, payable to the employees is based on the employees' service and
last drawn salary at the time of the leaving of the services of the Company and is in accordance with the Rules of
the Company for payment of Gratuity.
The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method
with actuarial valuations being carried out at each balance sheet date, which recognizes each period of service as
giving rise to additional unit of employee benefit entitlement and measure each unit separately to build up the final
obligation.
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.
Past service cost is recognised in the Statement of Profit and Loss in the period of a plan amendment. Interest is
calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset
and is recognised in the Statement of Profit and Loss.
Remeasurements, comprising of actuarial gains and losses, excluding amounts included in net interest on the net
defined benefit liability are recognized immediately in the Balance Sheet with a corresponding debit or credit to
Retained Earnings through Other Comprehensive Income in the period in which they occur. Remeasurements are not
reclassified to profit or loss in subsequent periods.
(iii) Compensated absences
Compensated absences that are not expected to occur within twelve months after the end of the period in which
the employee renders the related service are recognized based on actuarial valuation.
Privilege Leave (PL) is eligible for carry forward and encashment as per company policy. Accordingly, liabilities
for Privilege Leave, being long-term employee benefits, are measured at the present value of estimated future
obligations using the projected unit credit method based on actuarial valuation at each reporting date. Actuarial
gains and losses are recognized in the Statement of Profit and Loss in the period in which they arise.
Casual Leave and Sick Leave are not encashable; and therefore treated as a short-term employee benefits.
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