2. Material Accounting Policies
I) Basis of Preparation of Standalone financial statements
(a) Statement of compliance
These Standalone financial statements are prepared in accordance with Indian Accounting Standards (Ind AS)
notified under Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) notified
under Section 133 of the Companies Act, 2013 (Act') and other relevant provisions of the Act and guidelines
issued by the Securities and Exchange Board of India (‘SEBI'), as applicable.
The Standalone financial statements are authorized for issue by the Board of Directors of the Company at their
meeting held on May 6th, 2026.
(b) Functional and presentation currency
These Standalone financial statements are presented in Indian Rupees (Rs.), which is also the Company's
functional currency. All amounts have been rounded off to the nearest lakhs, unless otherwise indicated.
(c) Basis of measurement
These financial statements are prepared under the historical cost convention on the accrual basis except for Certain
financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments).
(d) Use of estimates and judgments
The preparation of the Company's Standalone financial statements requires management to make judgments,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and
the accompanying disclosures, and the disclosure of contingent liabilities. Estimates and underlying assumptions
are reviewed on an ongoing basis. Uncertainty about these assumptions and estimates could result in outcomes
that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. The
application of accounting policies that require critical accounting estimates involving complex and subjective
judgments and the use of assumptions in these Standalone financial statements have been disclosed below.
Accounting estimates could change from period to period. Actual results could differ from those estimates.
Appropriate changes in estimates are made as management becomes aware of changes in circumstances
surrounding the estimates. The changes in the estimates are reflected in the Standalone financial statements in
the period in which changes are made and, if material, their effects are disclosed in the notes to the Standalone
financial statements.
II) Revenue from contract with customer
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. Revenue is measured at the fair value of the consideration received or receivable, net of
returns, discounts, volume rebates, and goods and service tax. The Company recognises revenue when the amount of
revenue can be reliably measured, it is probable that future economic benefits will flow to the Company regardless of
when the payment is being made.
The specific recognition criteria described below must also be met before revenue is recognised.
Sale of Products
Revenue from sale of products is recognized when the Company transfers the control of goods to the customer as
per the terms of contract. The Company considers whether there are other promises in the contract that are separate
performance obligations to which a portion of the transaction price needs to be allocated. In determining the
transaction price, the Company considers the effects of variable consideration, the existence of significant financing
component, non-cash considerations and consideration payable to the customer (if any). In case of domestic sales,
the company believes that the control gets transferred to the customer on dispatch of the goods from the factory and
in case of exports, revenue is recognised on passage of control as per the terms of contract / incoterms.
Variable consideration in the form of volume rebates is recognised at the time of sale made to the customers and are
offset against the amounts payable by them.
Contract balances
Trade receivables
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).
Refund Liabilities
A refund liability is the obligation to refund some or all of the consideration received (or receivable) from the customer
and is measured at the amount the Company ultimately expects it will have to return to the customer. The Company
updates its estimates of refund liabilities (and the corresponding change in the transaction price) at the end of each
reporting period.
Dividend income is recognized in Statement of Profit and Loss on the date on which the Company's right to receive
payment is established. Interest income is recognized using the effective interest method.
All other income are recognized on accrual basis.
III) Property, Plant & Equipment
Property, plant and equipment are stated at acquisition cost, less accumulated depreciation and accumulated
impairment loss, if any. The cost of Property, Plant & Equipment comprises of its purchase price, including import
duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working
condition for its intended use. Interest and other financial charges on loans borrowed specifically for acquisition of
capital assets are capitalised till the start of commercial production.
Depreciation is provided on the straight line method over the estimated useful lives of assets and are in line with the
requirements of Part C of Schedule II of the Companies Act, 2013. The estimated useful lives are as follows :
Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date are
classified as 'Capital Advances' under other 'Non-Current Assets' Assets and the cost of assets not put to use before
such date are disclosed under ‘Capital Work in Progress'.
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.
IV) Intangible Assets
Intangible Assets acquired separately are measured on initial recognition at cost. Intangible Assets acquired in a
business combination is valued at their fair value at the date of acquisition. Following initial recognition, intangible
assets are carried at cost less accumulated amortization and accumulated impairment losses, if any.
Intangible Assets with finite lives are amortized over the useful economic life and assessed for impairment whenever
there is an indication that the intangible asset may be impaired. The amortization period and the amortization method
for an Intangible Asset with a finite useful life are reviewed at the end of each reporting period. The amortization
expense on Intangible Assets with finite lives is recognized in the Statement of Profit & Loss. The Company amortizes
intangible assets over their estimated useful lives using the straight line method.
Intangible Assets with indefinite useful lives are not amortized, but are tested for impairment annually, either
individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine
whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made
on a prospective basis.
Gains or losses arising from derecognition of an intangible asset 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 & Loss when
the asset is derecognized.
V) Inventories
Inventories are valued at cost or net realisable value whichever is lower except for saleable scraps, whose cost is not
identifiable, which are valued at estimated net realisable value. Closing stock has been valued on Weighted Average
basis. Cost comprises expenditure incurred in the normal course of business in bringing such inventories to its location
and includes, where applicable, appropriate overheads based on normal level of activity.
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.
VI) Financial Instruments
Initial recognition and measurement
The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions
of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for
trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to
the acquisition or issue of financial assets and financial liabilities, which are not at fair value through profit or loss,
are added to the fair value on initial recognition. Regular way purchase and sale of financial assets are accounted
for at trade date.
Subsequent measurement
i. Non derivative financial instruments
a) Financial assets carried at amortized cost
A financial asset is subsequently measured at amortized cost if it is held within a business model whose
objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the
financial asset give rise on specified dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding.
b) Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive income if it is held
within a business model whose objective is achieved by both collecting contractual cash flows and selling
financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount outstanding. The Company has
made an irrevocable election for its investments which are classified as equity instruments to present the
subsequent changes in fair value in other comprehensive income based on its business model.
c) Financial assets at fair value through profit or loss
A financial asset which is not classified in any of the above categories are subsequently fair valued through
profit or loss.
d) Financial liabilities
Financial liabilities are subsequently carried at amortized cost using the effective interest method, except
for contingent consideration recognized in a business combination which is subsequently measured at fair
value through profit and loss. For trade and other payables maturing within one year from the Balance
Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
e) Investment in subsidiaries
Investment in subsidiaries is carried at cost in the separate financial statements.
ii. Derivative financial instruments
The Company holds derivative financial instruments such as foreign exchange forward and option contracts
to mitigate the risk of changes in exchange rates on foreign currency exposures. Such derivative financial
instruments are initially recognized at fair value on the date on which a derivative contract is entered into and
are subsequently re-measured at fair value through profit or loss and the resulting exchange gains or losses are
included in other income.
Derecognition of financial instruments
The company derecognizes a financial asset when the contractual rights to the cash flows from the financial
asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A
financial liability (or a part of a financial liability) is derecognized from the Company's Balance Sheet when the
obligation specified in the contract is discharged or cancelled or expires.
VII) Fair Value Measurement
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of
unobservable inputs. All methods of assessing fair value result in general approximation of value, and such value may
never actually be realized.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value
measurement as a whole:
i) Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
ii) Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement
is directly or indirectly observable
iii) Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable
VIII) Impairment
Impairment is recognized based on the following principles:
Financial Assets
The Company recognizes loss allowances using the Expected Credit Loss (ECL) model for the financial assets which
are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component
is measured at an amount equal to life time ECL. For all other financial assets, expected credit losses are measured at
an amount equal to the 12 month ECL, unless there has been a significant increase in credit risk from initial recognition
in which case those are measured at life time ECL. The amount of expected credit losses (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 profit or loss.
Non-Financial Assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortization and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that they might be
impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the assets carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of an assets fair value less costs of
disposal and value in use. For the purpose of assessing impairment, assets are grouped at the lowest level 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 unit) Non- financial assets other than goodwill that suffered an impairment are
reviewed for possible reversal of the impairment at the end of reporting period.
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