2. Material Accounting Policies
This note provides a list of the Material accounting policies adopted in the preparation of these financial statements. These policies
have been consistently applied to all the years presented, unless otherwise stated.
The Company's equity shares are listed in both National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
The Company's Financial Statements were authorized for issue as per the resolution of the Board of Directors dated 22nd May, 2025.
2.1 General Information and Statement of compliance
These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the
'Ind AS') as notified by Ministry of Corporate Affairs ('MCA') under Section 133 of the Companies Act, 2013 ('the Act') read with the
Companies (Indian Accounting Standards) Rules, 2015, as amended and other relevant provisions of the Act.
2.2 Basis of Preparation and Presentation
The Financial Statements have been prepared on going concern basis in accordance with accounting principles generally accepted
in India. The presentation of financial statement is based on Ind AS Schedule III of the Companies Act, 2013.
The financial statements have been prepared on historical cost basis, except for the following:
(a) Financial assets are measured either at fair value or at amortised cost depending on their classification;
(b) Employee defined benefit assets/ liabilities are recognised as the net total of fair value of plan assets, adjusted for actuarial
gains/losses and the present value of defined benefit obligations;
(c) Right -of - use of assets are recognised at the present value of lease payments that are not paid on that date. This amount is
adjusted for any lease payment made at or before the commencement of the lease and initial direct cost incurred, if any.
(d) Long term borrowings are measured at amortised cost using the effective interest rate method;
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation
technique. In estimating 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. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis and
measurements that have some similarities to fair value but are not fair value, such as net realisable value in Ind AS 2 or value in use in
Ind AS 36.
2.3 Current versus Non-Current classification
The entity presents assets and liabilities in the Balance Sheet based on current/ non-current classification.
An asset is classified as current, when:
a) It is expected to be realised or intended to be sold or consumed in normal operating cycle.
b) It is held primarily for the purpose of trading.
c) It is expected to be realised within twelve months after the reporting period, or
d) It is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after
the reporting period.
All other assets are classified as non-current.
A liability is classified as current, when:
a) It is expected to be settled in normal operating cycle.
b) It is held primarily for the purpose of trading.
c) It is due to be settled within twelve months after the reporting period, or
d) There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The entity classifies all other liabilities as non-current. Deferred tax assets and liabilities are always classified as non-current assets and
liabilities.
2.4 Revenue recognition
Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price ( net of variable
consideration) allocated to that performance obligation. The transaction price of goods sold and services rendered is net of variable
consideration on account of various discounts and schemes offered by the company as part of the contract.
Revenue from contracts with customers is recognized when control of the goods and services are transferred to the customer at an
amount that reflects the consideration which the company expects to be entitled in exchange for those goods or services.
Revenue is recognised when the performance obligation is satisfied either over time or at a point of time. The Indian accounting
standards read with international terms and conditions is being appropriately factored in recognising revenue.
However, Goods and Services tax (GST) are not received by the Company on its own account. Rather, it is tax collected on value added
to the commodity by the seller on behalf of the government. Accordingly, it is excluded from revenue.
a. Sale of goods
Revenue from sale of goods is recognised when control of the goods is transferred to the customers, which coincides with the
delivery of goods. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net
of returns and allowances, trade discounts and volume rebates.
b. Sale of services
The Company recognises revenue when the significant terms of the arrangement are enforceable, services have been delivered
and the collectability is reasonably assured.
c. Other operating revenue
Other Operating Revenues comprise of income from ancillary activities incidental to the operations of the Company and is
recognised when the right to receive the income is established as per the terms of the contract.
Income incidental to exports such as income from import entitlement and premium on sale of such entitlement are recognised
when the right to receive the income is established as per the terms of the contract.
d. Dividend
Dividend Income from investments is recognised when the shareholder's right to receive payment has been established
(provided that it is probable that economic benefits will flow to the Company and the amount of income can be measured
reliably).
e. Interest
Interest income from a financial asset is recognized 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 taking into account the amount
outstanding at the effective interest rate applicable, which is the rate that exactly discount estimated future cash receipts
through the expected life of the financial asset to that asset's net carrying amount on initial recognition.
f. Rental Income
The Company's policy for recognition of revenue from operating leases is described in Note 2.5 (A) below.
2.5 Leases
A. The Company as a lessor
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to
the lessee. All other leases are classified as operating leases.
Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Company to the
lessee. Amounts due from lessees under finance leases are recorded as receivables at the Company's net investment in the leases.
Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment
outstanding in respect of the lease.
Rental income from operating leases is recognised on straight-line basis over the term of the relevant lease. Initial direct cost incurred
in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on straight-line
basis over the lease term.
B. The Company as a lessee
Right-of-use assets:
The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available
for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs
incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Company
is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right-of-use assets are
depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to
impairment test.
Lease liabilities
The lease liability is initially measured at amortised cost at the present value of the future lease payments. The lease payments
are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates.
Lease liabilities are remeasured with a corresponding adjustment to the related ROU asset if the Company changes its assessment of
whether it will exercise an extension or a termination option.
Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term of
12 months or less from the commencement date and do not contain a purchase option). Lease payments on short-term leases are
recognised as expense on a straight-line basis over the lease term.
Significant judgement in determining the lease term of contracts with renewal options:
The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option
to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is
reasonably certain not to be exercised.
2.6 Foreign currency transactions and translations
a) Functional and presentation currency
Items included in the financial statements of the Company are measured using the currency of the primary economic
environment in which the Company operates ('the functional currency'). The financial statements are presented in Indian rupee
(INR), which is the Company's functional and presentation currency.
b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of
monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in profit
or loss.
Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the statement of profit and loss,
within finance costs. All other foreign exchange gains and losses are presented in the statement of profit and loss on a net basis
within other gains/(losses).
2.7 Property plant and equipment
Initial Cost
Property, Plant and Equipment (PPE), being fixed assets are tangible items that are held for use in the production or supply of goods
or services, for rental to others, or for administrative purposes and are expected to be used for more than a period of twelve months.
Items of PPE are measured at cost, which includes capitalised borrowing costs, less accumulated depreciation and accumulated
impairment losses, if any. Financing costs (if any) relating to acquisition of assets which take substantial period of time to get ready
for intended use are also included to the extent they relate to the period up to such assets are ready for their intended use
Initial Cost of an item of PPE comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting
trade discounts and rebates, any directly attributable costs of bringing the item to its location and working condition necessary for it
to be capable of operating in the manner intended by the Management and estimated costs of dismantling and removing the item
and restoring the site on which it is located.
Items such as spare parts, stand-by equipment and servicing equipment are capitalized when they meet the definition of property,
plant and equipment.
If significant parts of an item of PPE have different useful lives, then they are accounted for as separate items (major components) of
PPE.
Subsequent costs and disposal
Subsequent expenditure related to an item of PPE is added to its book value only if it increases the future economic benefits from the
existing asset beyond its previously assessed standard of performance/life.
All other expenses on existing PPE, including day-to-day repair and maintenance expenditure and cost of replacing parts re-charged
to the statement of profit and loss for the period during which such expenses are incurred
De-recognition
The carrying amount of an item of PPE is derecognised on disposal or when no future economic benefits are expected from its use or
disposal.
Gains or losses arising from De-recognition of PPE are measured as the difference between the net disposal proceeds and the carrying
amount of the assets and are recognized in the statement of profit and loss when the asset is derecognized
Capital work-in-progress:
Assets in the course of construction are capitalized in capital work in progress account. At the point when an asset is capable of
operating in the manner intended by management, the cost of construction is transferred to the appropriate category of property,
plant and equipment. Costs (net of income) associated with the commissioning of an asset are capitalised until the period of
commissioning has been completed and the asset is ready for its intended use
Depreciation
Depreciation commences when the assets are ready for their intended use. Depreciable amount for assets is the cost of an asset, or
other amount substituted for cost, less its estimated residual value. Depreciation is recognized so as to write off the cost of assets
(other than freehold land and properties under construction) less their residual values over their useful lives, using straight-line
method as per the useful life prescribed in Schedule II to the Companies Act, 2013
The Company reviews the residual value, useful lives and depreciation method annually and, if expectations differ from previous
estimates, the change is accounted for as a change in accounting estimate on a prospective basis.
Depreciation on PPE is provided under straight line method as per the useful lives and manner prescribed under Schedule II to the
Companies Act, 2013, except for Plant & machinery where the useful life is estimated to be 25 years (7.5 years based on triple shift
basis), based on technical evaluation
The Management believes that the estimated useful lives as per the provisions of Schedule II to the Companies Act, 2013, wherever
adopted, are realistic and reflect fair approximation of the period over which the assets are likely to be used.
The estimated useful lives, residual values and depreciation method are reviewed annually, if there has been a significant change in
the expected pattern of consumption of future economic benefits embodied in the asset, depreciation is charged prospectively to
reflect the changed pattern.
2.8 Intangible Assets and Amortisation
An intangible asset is an identifiable non-monetary asset without physical substance
Intangible assets are recognised only if it is probable that future economic benefits that are attributable to the asset will flow to the
enterprise and the cost of the asset can be measured reliably.
Intangible assets are measured on initial recognition at cost and subsequently are carried at cost less accumulated amortization and
impairment, if any.
Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method
are reviewed annually, with the effect of any changes in estimate being accounted for on a prospective basis.
2.9 Impairment of Property, Plant and Equipment and Intangible Assets
The carrying amounts of the tangible and intangible assets are reviewed, as at each Balance Sheet date, to determine if there is any
indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. The recoverable amount is greater of the asset's net selling price and value in use. In assessing value in use,
the estimated future cash flows as a cash generating unit are discounted to the present value. An impairment loss is charged to the
Statement of Profit and Loss in the year in which an asset is identified as impaired. An impairment loss for an asset is reversed if, and
only if, the reversal can be related objectively to an extent occurring after the impairment loss was recognised.
The carrying amount of an asset is increased to its revised recoverable amount, provided that this amount does not exceed the
carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss
been recognised for the asset in prior years.
2.10 Borrowings cost
Borrowings are recognised initially at cost (net of transaction costs incurred). Borrowings are subsequently stated at amortised cost.
Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement
over the period of the borrowings using the effective interest rate method. Borrowings are classified as current liabilities unless the
Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that
necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until
such time as the assets are substantially ready for their intended use or sale.
Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is
deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in statement of profit and
loss in the period in which they are incurred.
2.11 Earnings per share
Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number of equity shares
outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for dividend,
interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of
equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have
been issued on the conversion of all dilutive potential equity shares.
2.12 Inventories
Inventories are valued at lower of cost and net realisable value. Cost of raw materials, Packing materials, Stores and
Spares and consumables are valued at Cost on weighted average cost basis. Value of finished goods and work-in-progress
are determined on weighted average cost basis and include appropriate share of overheads. on item-by-item basis.
Stores & Spares which do not meet the definition of PPE are accounted as inventories.
Raw Material, components and other supplies held for use in the production of finished products are not written down below cost
except in cases where material prices have declined and it is estimated that the cost of the finished products will exceed their net
realisable value. The comparison of cost and net realisable value is made on item-by-item basis.
2.13 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, cash at bank and demand deposits with banks other than deposits pledged with
government authorities and margin money deposits.
Bank borrowings are generally considered to be financing activities. However, where bank overdrafts which are repayable on demand
form an integral part of an entity's cash management, bank overdrafts are included as a component of cash and cash equivalents. A
characteristic of such banking arrangements is that the bank balance often fluctuates from being positive to overdrawn.
2.14 Cash flow statement
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the
effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows
from operating, investing and financing activities of the Company are segregated based on the available information.
2.15 Income Tax
a) Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from 'profit before tax' as reported in the
statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items
that are never taxable or deductible. The Company's current tax is calculated using tax rates that have been enacted and are
applicable as at the end of the reporting period. In the absence of adequate taxable profits, the Company is required to pay
Minimum Alternate Tax (MAT) on the book profits, as adjusted for certain provisions.
b) Deferred 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. Deferred tax liabilities are generally
recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary
differences to the extent that it is probable that taxable profits will be available against which those deductible temporary
differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from
the initial recognition of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
MAT paid in accordance with the tax laws, if any, which gives future economic benefits in the form of adjustment to future
income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal tax. Accordingly,
MAT is recognised as a deferred tax asset in the Balance sheet when it is highly probable that future economic benefit associated
with it will flow to the Company.
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 liabilities and assets 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.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in
which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and
liabilities.
c) Current and deferred tax for the year
Current and deferred tax are recognised in the Statement of profit and loss, except when they relate to items that are recognised
in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other
comprehensive income or directly in equity respectively.
2.16 Employee benefits
Employee benefits include provident fund, employee state insurance, gratuity fund and compensated absences.
a) Retirement benefit costs and termination benefits
Payments to defined contribution Retirement Benefit Plans are recognised as an expense when employees have rendered
service entitling them to the contributions.
For defined benefit Retirement Benefit Plans, the cost of providing benefits is determined using the projected unit credit
method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising
actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding
net interest), is reflected in the balance sheet with a charge or credit recognised in other comprehensive income in the period
in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings
and is not reclassified to profit or loss. Past service cost is recognised in profit or loss in the period of a plan amendment. Net
interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset.
b) Defined benefit costs are categorised as follows:
- service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
- net interest expense or income; and
- remeasurement
For defined benefit plan, in the form of gratuity fund, the cost of providing benefits is determined using the Projected Unit
Credit method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised
in the Statement of Profit and Loss in the period in which they occur. The retirement benefit obligation recognised in the
Balance Sheet represents the present value of the defined benefit obligation as adjusted for unrecognised past service cost,
as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the
present value of available refunds and reductions in future contributions to the scheme. The gratuity fund is maintained with
Life Insurance Corporation of India.
The Company presents the first two components of defined benefit costs in profit or loss in the line item 'Employee benefits
expenses' Curtailment gains and losses are accounted for as past service costs.
The retirement benefit obligation recognised in the balance sheet represents the actual deficit or surplus in the Company’s
defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any economic benefits
available in the form of refunds from the plans or reductions in future contributions to the plans.
A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the
termination benefit and when the entity recognises any related restructuring costs.
c) Short-term and other long term employee benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the
period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that
service.
Liabilities recognised in respect of short term employee benefits are measured at the undiscounted amount of the benefits
expected to be paid in exchange for the related service.
Liabilities recognised in respect of other long term employee benefits are measured at the present value of the estimated future
cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.
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