2. SIGNIFICANT ACCOUNTING POLICIES
i) Basis of Preparation
The financial statements have been prepared in accordance with Indian Accounting Standards (‘IND AS’) notified under section 133 of the Companies
Act 2013, read together with the Companies (Indian Accounting Standards) Rules, 2015.
For all the periods up to and including the year ended 31 March, 2025, the Company prepared its financial statements in accordance with accounting
standards notified under the section 133 of the Companies Act 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014 (‘Previous
GAAP’).
The Standalone financial statements have been prepared under the historical convention, on the accrual basis of accounting except for certain finan¬
cial assets and financials liabilities that are measured at fair value at the end of each reporting period, as stated in the accounting policies below. The
accounting policies have been applied consistently over all the periods presented in the Standalone financial statements.
The accounting policies have been consistently applied by the Company and except for the changes in accounting policy discussed more fully below,
are consistent with those used in the previous year.
ii) The preparation of the financial statements in conformity with IND AS requires management to make estimates, judgments and assumptions. These
estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of
contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Accounting
estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as man¬
agement becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in
the period in which changes are made. Differences between actual results and estimates are recognized in the period in which the results are known/
materialized.
iii) REVENUE RECOGNITION
Revenue is recognized to the extent that it is probable that economic benefits will flow to the Company and the revenue can be reliably measured.
A. SALE OF GOODS
Revenue from sale of goods is recognized when the significant risks and rewards of ownership in the goods are transferred to the buyer of goods as
per the terms of contracts, the Company retains no effective control of the goods transferred to a degree usually associated with the ownership and no
significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. The Company collects GST on the
behalf of the Government and therefore these are not economic benefits flowing to the company. Hence they are excluded from Revenue.
B INTEREST:
Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the company and the amount of income
can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding at the effective interest rate applicable,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount
on initial recognition.
C Duty drawback and export incentives
Income from duty drawback and export incentives is recognized on an accrual basis.
iv) PROPERTY PLANT AND EQUIPMENT:
Fixed Assets are stated at cost less depreciation. Cost of acquisition or construction is inclusive of duties, taxes and other incidental expenses. Cenvat
credit available is deducted from cost of fixed assets.
Capital work-in-progress includes advances paid for purchase of Fixed Assets, preoperative expenses pending capitalization, and capital work in
progress. As per practice, expenses incurred on modernization / debottlenecking of plant are capitalised.
The plant being a continuous process plant, so rates of depreciation as applicable to continuous process Industry have been applied.
vi) INVENTORIES:
• The cost in respect of various items of inventories are computed as under: -
• In case of raw materials stores and spares at weighted average cost plus direct expenses.
• In case of work in process at raw material cost plus conversion expenses depending upon stage of completion.
• In case of finished goods at raw materials cost plus conversion cost, packing cost and other overheads to bring the goods to present condition
and location.
• Raw material and other stocks lying at port pending clearance at cost inclusive of custom duty actually paid. The custom duty payable on
material lying into bond is accounted on clearance for home consumption.
vii) BORROWING COST
Borrowing costs that are directly attributable to acquisition, construction or production of a qualifying asset are capitalized/inventoried as part of cost of
such assets till such time the asset is ready for its intended use/or sale. Qualifying asset is one that necessarily takes substantial period of time to get
ready for its intended use. All other borrowing costs are expensed in the period in which they are incurred.
viii) LEASES
Leases under which the company assumes substantially all the risks and rewards of ownership are classified as finance leases. When acquired, such
assets are capitalized at fair value or present value of the minimum lease payments at the inception of the lease, whichever is lower. Lease under which
the risks and rewards incidental to ownership are not transferred to lessee is classified as operating lease. Lease payments under operating leases are
recognized as an expense on a straight line basis in net profit in the statement of profit and loss over the lease term.
ix) RETIREMENT BENEFITS:
The Company provides for gratuity, a defined benefit plan (the “Gratuity Plan”) covering eligible employees in accordance with the Payment of Gratuity
Act, 1972. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of
an amount based on the respective employee’s salary and the tenure of employment. The gratuity plan in Company is funded through annual contribu¬
tions to Life Insurance Corporation of India (LIC) under its Company’s Gratuity Scheme whereas others are not funded. The liability or asset recognized
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 Company’s liability is actuarially determined (using the Projected Unit Credit method) at the end of each year.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of government
bonds. Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity
in other comprehensive income in the period in which they arise. They are included in retained earnings in the statement of changes in equity and in
the balance sheet. Past-service costs are recognized immediately in profit or loss. Gratuity and earned leave encashment has been provided for in the
books of accounts on actuarial valuation basis as at the end of the year.
x) FOREIGN CURRENCY TRASANCTIONS:
Functional and Presentation currency:
The functional currency of the Company is Indian Rupee. These financial statements are presented in Indian Rupee (rounded off to lakhs).
Transactions and Balances:
The foreign currency transactions are recorded, on initial recognition in the functional currency, by applying to the foreign currency amount the spot ex¬
change rate between the functional currency and the foreign currency at the date of the transaction. The foreign currency monetary items are translated
using the closing rate at the end of each reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency shall
be translated using the exchange rate at the date of the transaction. Exchange differences arising on the settlement of monetary items or on translating
monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements
shall be recognized in profit or loss in the period in which they arise.
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