2. Material Accounting Poilicies
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 29th day of May, 2026.
(b) Functional and presentation currency
These Standalone financial statements are presented in Indian Rupees (H) in lacs, 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
The Standalone financial statements have been prepared on historical cost convention on the accrual basis, except
for the following items:
(i) Certain financial assets and financial liabilities measured at fair value;
(ii) Assets held for sale-measured at the lower of its carrying amount and fair value less costs to sell; and
(iii) Employee's defined benefit plan as per actuarial valuation
Fair value is the price that would be received on the sale of an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date under current market conditions, regardless of
whether that price is directly observable or estimated using another valuation technique. In determining the fair
value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market
participants would take those characteristics into account when pricing the asset or liability at the measurement date.
(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.
Critical accounting estimates and key sources of estimation uncertainty: Key assumptions
(i) Useful lives of Property, plant and equipment
The Company uses its technical expertise along with historical and industry trends for determining the economic
life of an asset/ component of an asset. The useful lives are reviewed by management periodically and revised,
if appropriate. In case of a revision, the unamortized depreciable amount is charged over the remaining useful
life of the assets. See Note 3 for details.
(ii) Fair value measurement of financial instruments
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual
provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs
that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the
fair value measured on initial recognition of financial asset or financial liability. The transaction costs directly
attributable to the acquisition of financial assets and financial liabilities at fair value through profit and loss are
immediately recognized in the statement of profit and loss. See Note 36 for details.
(iii) Defined benefit plan
The cost of the defined benefit plan includes gratuity and leave encashment. The present value of the obligations
are determined using actuarial valuations using Projected unit method. An actuarial valuation involves making
various assumptions that may differ from actual developments in the future. These include the determination of
the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation
and its long term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All
assumptions are reviewed at each reporting date. See Note 35 for details.
(iv) Recognition of current tax and deferred tax
Current taxes are recognized at tax rates (and tax laws) enacted or substantively enacted by the reporting date
and the amount of current tax reflects the best estimate of the tax amount expected to be paid or received
after considering the uncertainty, if any, related to income taxes. Deferred tax is measured at the tax rates that
are expected to apply to the period when the asset is realized or the liability is settled, based on the laws that
have been enacted or substantively enacted by the reporting date. Deferred tax assets are recognized to the
extent that it is probable that future taxable profits will be available against which they can be used. See Note
33 for details.
(v) Recognition and measurement of provisions and contingencies
The certain key assumptions about the likelihood and magnitude of an outflow of resources. Provision is towards
known contractual obligation, litigation cases and pending assessments in respect of taxes, duties and other
levies in respect of which management believes that there are present obligations and the settlement of such
obligations are expected to result in outflow of resources, to the extent provided for. See Note 31 for details.
(e) Measurement of fair values
A number of the Company's accounting policies and disclosures require the measurement of fair values, for financial
assets and financial liabilities. The Company has an established control framework with respect to the measurement
of fair values. The management has overall responsibility for overseeing all significant fair value measurements and it
regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker
quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained
from the third parties to support the conclusion that these valuations meet the requirements of Ind AS, including the
level in the fair value hierarchy in which the valuations should be classified. Fair values are categorized into different
levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can
access at the measurement date;
Level 2: Inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or
liability, either directly or indirectly; and
Level 3: No significant observable inputs for the asset or liability. Some observable inputs used in fair value
measurement are discounted cash flows, market multiple method etc. When measuring the fair value of an asset or
a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of
an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized
in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire
measurement.
The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during
which the change has occurred. Further information about the assumptions made in measuring fair values is included
in Note 36.
II) Current and non-current classification
All assets and liabilities are 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.
Assets
An asset is classified as current when it satisfies any of the following criteria:
(i) it is expected to be realized in, or is intended for sale or consumption in, the Company's normal operating cycle;
(ii) it is held primarily for the purpose of being traded;
(iii) it is expected to be realized within 12 months after the reporting date; or
(iv) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12
months after the reporting date. Current assets include current portion of non-current financial assets. All other
assets are classified as non-current.
Liabilities
A liability is classified as current when it satisfies any of the following criteria:
(i) it is expected to be settled in the Company's normal operating cycle;
(ii) it is held primarily for the purpose of being traded;
(iii) it is due to be settled within 12 months after the reporting date; or
(iv) the Company does not have an unconditional right to defer settlement of the liability for at least 12 months after
the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the
issue of equity instruments do not affect its classification. Current liabilities include current portion of non-current
financial liabilities. All other liabilities are classified as non-current. Deferred tax assets and liabilities are classified as
noncurrent assets and liabilities.
Operating cycle
For the purpose of current/ non-current classification of assets and liabilities, the Company has ascertained its normal
operating cycle as twelve months. This is based on the nature of business and the time between the acquisition of assets
for processing and their realization in cash and cash equivalents.
III) 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/ Godown 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.
IV) 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' 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.
V) 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.
The useful lives of Intangible Assets are assessed as either finite or indefinite.
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. The estimated useful life is as follows:
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.
VI) 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.
VII) Foreign currency transactions
The functional currency of the Company is Indian Rupee. These Financial Statements are presented in Indian Rupee
(rounded off to the nearest Lacs).
Transactions in foreign currencies entered into by the company are accounted at the exchange rates prevailing on the date
of the transaction. Gains & losses arising on account of realization are accounted for in the Statement of Profit & Loss.
Monetary Assets & Liabilities in foreign currency that are outstanding at the year-end are translated at the year-end
exchange rates and the resultant gain/loss is accounted for in the Statement of Profit & Loss.
VIII) Financial Instruments
(i) Recognition and initial 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.
(ii) Classification and subsequent measurement
Financial assets
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 (FVTOCI)
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 (FVTPL)
A financial asset which is not classified in any of the above categories are subsequently fair valued through
profit or loss.
Financial liabilities: Classification, subsequent measurement, gains and losses
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.
(iii) Derecognition
Financial assets
The Company derecognizes a financial asset:
- when the contractual rights to the cash flows from the financial asset expire, or
- it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks
and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor
retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.
Financial liabilities
The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire.
The Company also derecognizes a financial liability when its terms are modified and the cash flows under the modified
terms are substantially different. In this case, a new financial liability based on the modified terms is recognized at fair
value. The difference between the carrying amount of the financial liability extinguished and the new financial liability
with modified terms is recognized in Statement of Profit and Loss.
(iv) Off setting
Financial assets and financial liabilities are off set and the net amount presented in the balance sheet when, and only
when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle
them on a net basis or to realize the asset and settle the liability simultaneously.
IX) 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
X) 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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