31. SIGNIFICANT ACCOUNTING POLICIES
31.1 Statement of Compliance
Financial Statements have been prepared in accordance with the accounting principles generally accepted in
India including Indian Accounting Standards (Ind AS) prescribed under the section 133 of the Companies Act,
2013 read with rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and the Companies
(Accounting Standards) Amendment Rules, 2016. The aforesaid financial statements have been approved by the
Board of Directors in the meeting held on 28th May 2025.
31.2 Basis of Preparation of Financial Statements
These financial statements have been prepared in accordance with the accounting policies, set out below and
were consistently applied to all periods presented unless otherwise stated.
The financial statements have been prepared on a going concern basis using historical cost convention and on
an accrual method of accounting.
Company’s financial statements are presented in Indian Rupees ('), which is also its functional currency.
31.3 Property, Plant & Equipment
Property, plant and equipment are stated at cost, net of recoverable taxes, trade discount and rebates less
accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and
any cost directly attributable to bringing the assets to its working condition for its intended use, net charges on
foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.
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 entity and the cost
can be measured reliably.
Expenses incurred relating to project, net of income earned during the project development stage prior to its
intended use, are considered as pre - operative expenses and disclosed under Capital Work - in - Progress.
Depreciation on property, plant and equipment is provided using straight line method based on useful life of the
assets as prescribed in Schedule II to the Companies Act, 2013
31.4 Inventory
Inventories are stated at the lower of cost and net realizable value except in case of waste and scrape which are
valued at net realizable value.
Cost of raw material includes cost of purchase and other costs incurred in bringing the inventories to their present
location and condition. Cost of finished goods and work in progress include cost of direct materials and labour
and a proportion of manufacturing overheads based on the normal operating capacity but excluding borrowing
costs.
31.5 Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable. The Company recognizes
revenues on sale of products, net of discounts, returns, sales taxes and duties when the products are delivered to
customer or when delivered to a carrier for export sale, when significant risks and rewards of ownership pass to
the customer. Sale of products is presented gross of manufacturing taxes like excise duty wherever applicable.
Revenue from sale of waste and scrap are included in revenue.
Interest income from a financial asset is recognised 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, using
effective interest rate.
31.6 Employee Benefit
Contributions to Provident Fund, a defined contribution plan are made in accordance with the statute, and are
recognized as an expense when employees have rendered service entitling them to the contribution.
Company’s contribution to state defined contribution plan namely, Employee State Insurance are made in
accordance with the statute, and are recognized as an expenses when employees have rendered services
entitling them to the contribution.
31.7 Borrowing Cost
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part
of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready
for its intended use. All other borrowing costs are charged to Profit and Loss account.
31.8 Foreign Currency Transaction
The functional currency of the Company is determined on the basis of the primary economic environment in
which it operates. The functional currency of the Company is Indian Rupee (').
The transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at
the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary
items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items
carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date
when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign
currency are not retranslated.
Exchange differences on monetary items are recognised in Statement of Profit and Loss in the period in which
they arise.
31.9 Financial Instruments
31.9.1 Financial Assets
31.9.1.1 Initial recognition and measurement
All financial assets are initially recognized at fair value. Transaction costs that are directly attributable to the
acquisition of financial assets, which are not at fair value are adjusted through profit or loss on initial recognition.
Purchase and sale of financial assets are recognised using trade date accounting.
31.9.1.2 Subsequent measurement
31.9.1.2.1 Financial assets carried at amortised cost
A financial asset is measured at amortised 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.
31.9.1.2.ii Financial assets at fair value through other comprehensive income (FVTOCI)
A financial asset is measured at FVTOCI 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.
31.9.1.2.iii Financial assets at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories are measured at FVTPL.
31.9.1.3 Impairment of Financial assets
The Company assesses on a forward looking basis the expected credit losses associated with its assets carried
at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there
has been a significant increase in credit risk.
31.9.2 Financial Liabilities
31.9.2.1 Initial recognition and measurement
All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost. Fees of
recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.
31.9.2.2 Subsequent measurement
Financial liabilities are carried at amortized cost using the effective interest method. 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.
31.9.3 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.
31.10 Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
31.10.1 Current Tax
Current tax is the amount of tax payable based on the taxable profit for the year as determined in accordance
with the provisions of section 115BAA of the Income Tax Act, 1961.
31.10.2 Deffered Tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to
be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which
the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same
taxation authority.
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