2. Material Accounting Policies
I) Basis of Preparation
(a) Statement of compliance
These 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, as applicable.
The financial statements are authorized for issue by the Board of Directors of the Company at their meeting
held on May 22, 2026.
(b) Functional and presentation currency
These financial statements are presented in Indian Rupees (H), which is also the Company's
functional currency.
(c) Basis of measurement
These financial statements are prepared under the 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 Group 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 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 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
financial statements in the period in which changes are made and, if material, their effects are disclosed in
the notes to the 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 control of goods is transferred
to the customer either upon dispatch of goods from the factory premises or upon delivery of goods at
the customer's designated location, depending upon the terms of sale agreed with the customer 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' 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.
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.
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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