2. MATERIAL ACCOUNTING POLICIES
Statement of Compliance
Th© financlol statements have beer, prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the
'Ind AS') as notified under the Companies (Indian Accounting Standards) Rules. 2015 and Companies (Indian Accounting
Standards) Amendments Rules 2016 prescribed under Section 1 S3 of the Companies Act, 2013 reed with Rule 7 of the Companies
(Accounts) Rules, 2014
Recent accounting pronouncements
Ministry of Corporate Affairs (“MCA') notifies new standards or amendments to the existing standards under Companies (lnd>ar
Accounting Standards) Rules as Issued from time to time. On August 12.2024 ana September 09.2024. MCA issued the Companies
(Indian Accounting Standards) Amendment Rules. 2024 and Companies (Indian Accounting Standards) Second Amendment Rules.
2024 introducing following changes:
a) Ind AS 117 - Insurance Contracts: Ind AS 117: Insurance Contracts was introduced and Ind AS 104 Insurance Contracts was
withdrawn, This was accompanied with consequent amendments in other standards.
b) Ind AS 116 - Leases: The amendments clarity accounting treatment for a seller lessee involved In sale and leoseback
transaetionsond introduced some related illustrative examples.
The above standard are effective from April 01.2024. The Company has reviewed the new pronouncements and based on Its
evaluation has determined that It does not have any significant impact in its financial statements.
TneBoardot Directors approved the Financial Statement tor the year ended 31st March,2025 and authorised foi Issue or24thMay.
2025.
(i) Basis of Accounting
The financial statements have been prepared on accrual basis under the historical cost convention, except tor certain financial
assets and liabilities measured at fair value The accounting policies adopted in the preparation of the financial statements ore
con&ctent with those followed in the previous year
Current and Non-current classification:
(i) The assets and liabilities in the Bolcnce Sheet are based on current/ non - current classification. An asset as current when it s:
a. Expected to be realized or Intended to be sold or consumed in normal operating cycle ol twelve months
b. Hold primanty for the purpose ol trading
c Expected to be realized within twelve monthsafter the report ng period, or
d. Cash oi cosh equivalents unless restricted from being exchanged or used to settle a liability for at least twelve months after
the reporting period. Al other assets are classified as non-current.
(ii) A liabflity is current when:
a. Expected lo be settled in normal operating cycle
b Held primanty for the purpose ot trading
c Due to be settled within twelve months after the reporting period, or
d. there is no unconditional right to defer me settlement of the liability for at leosl twelve months otter the reporting period. All
other i abilities are treated os non currenl,
Deferred fax assets and kabiittes are classified as non-current assets and liabilities respectively.
(II) Use of Estimates
The preparation of the financial statements is In conformity with the Ind AS, requires the Management to make estimates and
assumptions considered m the reported amounts ot assets and liabilities (Including contingent labil ties) and the reported
income and expenses during the year. The Management believes that the estimates used in preparation of the financial
statements ore prudent and reasonable. Future oclual results could differ due lo these estimates and the differences befweer
the actual results and the estimates ore recognised in the periods m which the results are known / materialise.
(iii) Property, Plant and Equipment & Intangible Assets
Freehold land is carried at historical cost. All other items of property, plant and equipment are measured at cost
less accumulated depreciation and impairment losses, if any. Costs include freight.importduties. norvrefundabie
purchase taxes and other expenses directiy attnbutable to the acquisition of the asset. Subsequent costs are
included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Company and the cost ot the
item can be measured reliably. The carrying amount of any component accounted for as a separate asset is
derecognized when replaced. All other repairs and maintenance are charged to the Statement of Profit and Loss
during the reporting period in which they are incurred.
Intangible assets: Intangible assets are stated at cost ot acquisition less accumulated amortisation and
impairment, if any Losses arising from the retirement of. and gains or losses arising from disposal of fixed assets
which are carried at cost or revalued amount are recognized in the Statement of Profit and Loss.
(iv) Depreciation / Amortisation
Depreciation is provided on the straight-line method applying the useful lives as prescribed in part c of Schedule II to
the Companies Act, 2013 except for plant and equipment, wherein useful life is determined based on internal
technical assessment, f he range of estimated useful lives of Property. Plant & Equipment‘s are as under:
the management believes that the useful life as given above the best represent the period over which the management expects to
use these assets. The Company reviews the useful lives end residual value at each reporting date.
Depreciation on assets aaded/sold or discorded during the year s being p'ovided on pro rata basis up to the dote on which such
ossets are odded/sotd or discarded.
Assets costing up to f 5 .COO each are depreciated futty in the year of purchase,
Galns/I osses on dispo$als/de-recognition of property, plant and equipment are determined by comparing proceeds with carrying
amount and these are recognized in statement of profit & I oss.
Intangible assets are amortised over their estimated useful economic Irfe under Straight Line method Computer software cost is
amortised over a period of five years.
(v) Inventories
Inventories (Includes Raw Material. Work in Progress. Finished goods. Stores & spares. Consumables, Packing Materials) are valued at
cost or net realisable value, whichever Is lower. Net realisable voiue Is the estimated selling price in the ordinary course of Dusnessless
the estimated cost of completion and the estimated costs necessary to make the sale. Cost of Raw Material. Semi-finished and
Finished Goods and Work-In-Progress is determined on weighted average basis and comprises of expenditure incurred m the normal
course of business in bringing inventories to their present location Including appropriate overheads apportioned on a reasonable
and consistent basis. Obsolete, slow moving and defective stocks are identified ot the time of physical verification ot slocks and
where necessary. provision is made for those inventories. Adequate allowance ts made for obsolete and slow moving items.
(vi) Revenue Recognition
The Company recognizes revenue, whenever control over distinct goods or services is transferred to the customer: l.e. when the
customer is able to direct the use of the transferred goods or services and obtains substantially all of the remaining benefits, provided
a controct with enforceable rights and obligations exists and amongst others collectability of consideration e probable taking into
account customer 's creditworthiness.
Revenue is the transaction price the Company expects to be entitled to. In determining the transaction price, the Company
considers effects of variable consideration, the existence of significant financing contracts, noncash consideration and
consideration payable to the customer, if any.
Sole of goods
Revenue from me sale oi goods is recognised wnen the control oi the goods posses to lire buyer either ot the lime of dispatch or
delivery or when the risk of loss transfers. Export sales are recognized based on Ihe terms of the sole which is when substantial risks and
rewards of ownership are passed to the customers.
Revenue from sale of goods is net of taxor, and recovery of charges collected from customers Tike transport. packing ole. Provision Is
made for returns when appropriate. Revenue is measured at the fair value of consideration received or receivable and is net of price
drsc cunts, allowance for volume rebates ana similar items.
Claims / Refunds not ascertainable with reasonable certainty are accounted tor, on final settlement and ore recognized as revenue
on certainty of receipt on prudent basis.
Revenue recognition from sole of 'Duty entitlement Passbook License or Merchandise exports from India Scheme (MEtS>* is mode or
sole of the license after receipt of the same from the office of the Director General of Foreign trade.
income from Duly Drawback is recognised on receipt basis.
Dividend
Dividend Income rrom Investments is recognised when the shareholder's right to receive payment has been established (provided
that it is probable that the economic benefits will flow to the Company and the amount of Income can be measured reliably).
Interest income
interest income torn a financial asset Is recognised when if 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 me principal outstanding
and at me 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 osset's net carrying amount on Initial recognition.
(vii) Income from Investment
Income from Investments (other than Investments in shores of companies and Mutual Funds) is accounted on accrual basis.
Dividend Income on Investments is recognised when the right to receive dividend Is established. Interest Income is recognized on o
time proportionate basis taking Into account the amounts Invested and the rate or Interest. For o:l financial instruments measured at
amortised cost, interest income Is recorded using me E tfectrve interest rare method to the net carrying amount of the financial assets.
(viii) Foreign Currency Transactions
Foreign currency transactions afe occounted at the exchange rotes preva ling on the dote of me fransoctions. Gains and losses, if
any, on setfiemenf or remslaien>eni of year end dosing balances by applying the closing rales in respect of monetary assets and
monef ary liabilities not covered by the forward contracts are recognized in the statement of profit and loss.
Non-monetary Items denominated in foreign currency are stated at me rate prevailing on the dote or the transaction.
The premium or discount arising at the inception of the forward contract entered mto to hedge the existing asset / liabi'ity. is
amortized os expense or income over the life of the contract. Exchange differences on such contract are recognized n the
statement of profif and loss in the reporting period in which the exchange rates change. Any profit or loss arising out of cancellation or
renewal of such contract are recognized as income or expense in the reporting period Forward exchange controcts outstanding
as at the year end on account of firm commitment / highly probable forecast transaction are marked to market and the losses, if
any, are 'ecogmzed in ihe statement of profit and loss and gams are ignored.
(ix) Employee Benefits
The Company has the following post-employment benefit olans
i. Defined benefit plans such as gratuity;
II Defined contribution pans such as Provident funa & Superannuation fund; and
iii. Other employee benefits.
(i) Defined benefit plan:
Voluntary Retirement Scheme Expenses, if any. are fully charged off in the year of payment.
The liobility or asset recognised in -he botance sneet in respect of defined benefit gratuity plan is the present vaiue of defined benefit
obligations at the end of the reporting period less fair value of plan assets. The defined benefit obligation is calculated annually by
actuaries through actuarial valuation using the Projected Unit Credit method.
The Company recognises the following changes a me net definea benefit obligation os an expense In the statement of profit and
loss:
o. Serv.ae costs comprising current service costs, past-service costs, gains and losses on curtailment ana non-routine settlements,
and
b. Net interest expense or Income
The net Interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation ana fair value of
plan assets, mis cost is Included In employee benefit expense In me statement of profit and loss
Re-measurement comprising:
a. Re-measurement of Actuarial (galns)/k>$$es
b Return on plan assets, excluding amount recognized in effect of asset ceil-ng
c Re-measurement ansing because of change in effect of asset ceiling
are recognised in the period In whlcn they occur directly In Other Comprehensive income. Re-measurements are not reclassified to
profit or loss in subsequent periods.
Ind AS 19. Employees benefits requires me exercise of judgment in relation to various assumptions Including future pay rises, Inflation
and discount rates and employee end pensioner demographics Ihe Company determines the assumptions in conjunction with its
actuaries, and believes these assumptions to be in line with best practice, but the appticafion of different assumptions could have a
significant effect on the amounts reflected in the income statement, other comprehensive income and balance sheet. There may
be also inter-dependency between some of the assumptions.
(ii) Defined contribution plan:
Under defined contribution plans, the Company pays pre-defined amounts to separate funds and does not have any legal or
Informal obligation to pay additional sums Defined contribution plans comprise of contributions to provident fund, insurance and
Employees' Pension Scheme. The Company's payments to the defined contribution plans are recognised os expenses during the
period in which the employees per form the services that the payment covers.
(iii) Other employee benefits
a Compensated absences which are not expected to occur within twelve months after the end of the period In which the
employee renders the related services ore recogrused as a liability at the present voiue of the oblation as at the balance sheet
dare determined based on an actuarial valuation
b. Undiscounted amount of short-term employee benefits expected to be paid In exchonge for the services rendered by
employees are recognised during the peiiod when the employee renders the related services,
c Expenses incurred towards voluntary retirement scheme are charged to the statement of profit and loss as and 'when incurred
d. Other benefits comprsing of discretionary long service awards are recognized as and when determined.
(x> Current and Deferred tax
Income tax comprises current and deferred tax Income tax expense Is recognized in the statement of profit and loss except to the
extent It relates to items directty recognized In equity or in other comprehensive income. Current tax. is bcsed or taxable profit for the
year. Taxable profit is different from accounting profit due to temporary differences between accounting and tax Treatments, and
due to items that are never taxable or tax deductible. Tax provisions are incfuded in current liabilities, interest and penalties on tax
liabilities ore provided for m the tax charge. The Company offsets, the current tax assets and liabilities (on a year on year basis) where
it has a legally enforceable right and where it Intends to settle such assets and liabilities on a net basis or to realise the ossets and
liabilities on net basis. Deferred income tax is recognized using the balance sheet approach. Deferred income tax assets and
liabilities are recognized for deductible and taxable temporary differences arising between the tax base of assets and liabilities and
their copying amount in financial statements. Deferred income tax asset ore recognized to the extent thot it is probable that taxable
profit will be available against which the deductible temporary differences, and the carry forward of unused tax cred-.ts and unused
tax losses can be utilized. Deferred tax ossets are not recognised where it Is more likely than not that the assets will rot be realised ir
the future The carrying amount of deferred income tax assets is reviewed ot each reporting dote and reduced to the extent that it is
no longer probable That sufficient taxable profit will be available to allow all or part of the deferred income tax csset to be utilized.
DofcrTod income tax assets and liabilities arc measured at the tax rates that arc expected to appty In the period when the asset is
realized or the liability is settled. based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting
date Deferred t ax items arc- recognised in correlation to the underlying transaction either in Other comprehensive income or directly
inequity.
(xi) Impairment of Assets
The Company assesses at each reporting date whether the-e Is any abject ve evidence thot a nan-financial asset or a group of non-
financial assets are impaired. It any such indication exists, the Company estimates the amount of impairment loss For the purpose of
assessing impairment, the smallest identifiable group ot assets thot gene'ates cash inflows from continuing use that are lorgely
independent ot the cash mftows from other ossets or groups of assets is considered as a cash generating unit if any such indication
exists, an estimate of the recoverable amount of the Individual asset/cosh geneiotlng unit is made An impairment loss is calculated
as the difference between an asset's carrying amount and recoverable amount. losses ore recognised In profit or loss ond reflected
in an allowance occount When the Company considers that there ore no realistic prospects of recovery of the asset, the relevant
omounts are written off, If the amount o* impairment loss subsequently decreases and the decrease can be related objectively to ar
event occurring after the .mpoirment was recognised, tner the previously recognised impairment loss is reversed through profit or
loss.
(xii) Financial Instruments
Financial assets - Initial recognition
Financial assets ore recognised when the Company becomes a party to the contractual provisions of the Instruments. Financial
assets other than trade receivables are initially recognised ot fair value plus transaction costs for ail financial assets not carried ai fair
value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised of fair value, ana
transaction costs are expensed in the statement ot profit and loss.
Subsequent measurement
Financal ossets. other than equity instruments, are subsequently measured at amortised cost, fair value through other
comprehensive Income or fair value through profit or loss on the basis of:
a the entity's business model for managing the flnancal assets; and
b. the contractualcash flow characteristics of the financial asset
(i) Measured at amortised cost:
A financial asset Is measured ot amortised cost, If It is held under rne hold to collect business model i.e. hold with an objective ot
holding the assets to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest on
the principal outstanding, Amortised cost is calculated using the effective interest rote (EiR) method by taking into account any
discount or prem.um on acquisition and fees or costs that are an integral part ot the EIR. The EIR amortisation is included In interest
Income In the statement of profit and loss. The losses arising from Impairment are recognised In the statement ot profit and loss. Or
derecognition, gain or loss. If any. is recognised to statement of profit ond loss
(ii) Measured at fair voiue through other comprehensive income (FVOCI):
A financial asset is measured at FVOCI. if it is held under the hold to collect and sell business model i.e held with an objective to
collect contractual cash flows and selling such financial asset and the contractual cash flows ere solely payments of principal and
interest on the principal outstanding It is subsequently measured at fair value with fair value movements recognised in the OCI.
except for interest Income which recognised using effective Interest rate method, the losses arising from impairment are recognised
ir. the statement of profit and toss. On derecognition, cumulative gain or loss previously recognised In the OO is reclassified from the
equity to statement of profit and loss.
(iii) Measured at fair value through profit or loss (FVTPL):
Investment in financial asse' other than equity instrument, not measured at either amortised cost or FVOCI is measured of FVTPL Such
financial assets are measured at fair va ue with all changes In fair value. Including interest Income and dividend Income If any,
recognised In the stolernent of profit and loss
Equity Instruments:
All investments In equity instruments if any classified under financial assets are suosequentiy measured at fair value.
the Company recognises a loss allowance for Expected Credit Losses (fcCL) on financial assets that ore measured at amortised cost
and at FVOCI ihe credit loss is difference Detween an contractual cash flows that ere due to an entity In accordance with the
contract and aa the cosh flows that the entity expects to receive (he. all cosh shortfalls), discounted at the original effective interest
rate. This is assessed on an Individual or collective basis offer considering all reasonable and supportable including that which Is
forward-looking
The Company's Trade receivables or contract revenue receivables do not contain significant financing component and
loss allowance on trade lecervables is measured ot an amount equal to life time expected losses i.e expected cash shortfall, being
simplified opprooch for recognition of impairment loss allowance.
Under simplified approach, the Company does not track changes in cred't risk Rather it recognizes impairment lass allowance
based on the lifetime Expected Credit Losses ot each reporting date right from its initial recognition. The Company uses a provision
matrix to determine impairment toss allowance on the portfolio of trade receivables.
The provision matilx is based on its historically observed default rates over the expected life of the trade receivable and Is adjusted for
forward looking estimates. At every reporting dote. Ihe hrsto'ical observed default rates ore updated and changes in the forword
looking estimates are analysed.
For financial assets other than trade receivables, the Company recognises 12 month expected credit losses for all originated or
acquired financial assets If at the reporting date the credit risk of the financial asset has not Increased significantly since its initial
recognition. The expected credit iosses are measured os lifetime expected credit losses if the credit risk on financial asset increases
significantly since its initial recognition. If. In a subsequent period, credit quality of the instrument improves such that there is no longer
significant Increase in credit risks since initial recognition, then ihe Company reverts to recognizing impairment loss allowance based
on 12 months Expected Credit Losses
The impairment losses and reversals are recognised In statement of profit and loss. For equity instruments and financial assets
measured at FVTPL. there Is no requirement for impairment testing
De-recognition
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or It
transfers rights to receive cosh flows from an asset. it eva-uates if and to whot extent it has retained the risks and rewards of ownership.
When it has neither transferred nor retained substantially all of the risks and rewards of Ihe asset, nor transferred control of the asset,
the Company continues to recognise 1he transferred asset to the extent ot the Company's continuing involvement.
In that case. The Company also recognises an associated liafc irry. The transferred asset and the associated liability are measured on
a basis that reflects the rights and obligations that the Company has retained.
Financial Liabilities
Inlttal Recognition and measurement
Financial liabilities are recognised when rhe Company becomes a pahy to the contractual provisions of the instruments Financial
liabilities are initially recognised at fair value net of transaction costs for all financial liabilities not carried at fair value through profit or
loss.
The Company's financial liabilities includes trade and other payables, loans and borrowings including bank overdrafts and
derivative Instruments.
Subsequent measurement
Financial liabilities measured at amortised cost aro subsequently moasurod at using EIR method, rinoncla' liabilities carried at fair
value through profit or loss oremeasured at fair value with all changes in fair value recognised In the statement of profit and loss.
Loans & Borrowings
After Initial recognition. Interest bearing loans and borrowings are subsequently measurea at amortised cost using EiR method. Gains
and losses ore recognized In profit & loss wnen the nobilities ore derecognized as well as through Elf? amortIzotion process.
Financial Guarantee Contracts
Financial guarantee contracts issued by the Company ore those contracts that 'equ.res o payment to be made or to reimburse the
holder for a loss il incurs because the specified debtors foils to make payment when due in accordance with trie term of a debt
Instrument Financial guarantee contracts ore recognized initially os a liability at fair value, adjusted for transaction costs ihot are
directly attributable to the issuance of the guarantee
Subsequently, the liability s meosured ol the higher of the omount of toss oltowonce determined os per impairment requirements of
Ind AS i 09 and the omount recognized less cumulative adjustments.
De-recognition
A financial liability is de-recognssed when the obligation under the liability is discharged or canceled or expires. When an existing
financial Mobility Is replaced by another trom the same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated os the derecognition of the original liability and the recognition
of a new Mobility. The difference in the respective carrying amounts is recognised in the statement of profit and toss
Derivative financial instruments & hedge accounting
The Company uses derivative financial instruments, such as forward foreign exchange contracts to hedge Its foreign currency risks.
Such derivative financial Instruments are initially recognised at fair value on the date on which a derivative contract is entered into
and are subsequently remeasured at fair vatoo. with changes in fair value recognised in statement of piofit and loss.
Derivatives are carried as financial assets wt%en the fair value is positive and as fmoncial "abilities when the fair vo ue s negative. The
Company designates their derivatives as hedges of foreign currency risk associated with the cash flows of highly probable forecast
transactions and variable interest rate risks associated with the borrowings.
(xili) Fair Value Measurement
The Company measures financial Instruments, such as. derivatives a: fair va ue at each balance sheet date, rair value is the price
that would oe received to sell an asset or paid to transfer a tiablftty in an orderly transaction between market participants ct the
measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the
liability takes place either
• In the principal market for the asset or liability, or
• In the absence of a principal market. In the most advantageous market for the asset or liability The principal or the most
advantageous market must bo accessible by thcCompany
The fair value of an asset or a liability is measured using Ihe assumptions that market participants would use when pricing the asset or
liability. assuming thot market participants act In their economic best interest
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits
by using the asset In its highest and best use or by soiling it to another market participant that would use the assot in its highest and best
use.
The Company uses valuation techniques that are appropriate m the circumstances and for which sufficient data are available to
measure fair value, maximising ihe use of relevant observable inputs and minimising the use of unobservable inputs.
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by vaiuatlor
tecnnrque:
Level I: Quoted (unadjusted) prices in active markets for identical assets or i-abiiities
Level 2: Other techniques for which all Inputs which have a significant effect on the recorded fa>r value are cbseivabie. either directly
or Indirectly
Level 3. techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable
market data.
For assets and liabilities that are recognised in the financial statements an a recurring basis, the Company determines whether
transfers have occurred between eves In the hierarchy by re assessing categorisation (based on the lowest level Input that Is
significant to Ihe fair value measurement as a whole) at Ihe end of each reporting period.
For the pjipose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature,
characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
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