2 Material Accounting Policies
2.1 Basis of preparation of financial statements
a) Basis Of Preparation and compliance with Ind AS
The financial statements of the company have been prepared in accordance with Indian Accounting Standards (Ind-AS) notified
under the Companies (Indian Accounting Standards) Rules, 2015.
For all periods up to and including the year ended 31st March 2026, the Company prepared its financial statements in accordance
with accounting standards notified under the section 133 of the Companies Act 2013, read together with Rule 7 of the Companies
(Accounts) Rules, 2014 (Indian GAAP).
The financial statements have been prepared on the historical cost basis, except for certain financial instruments (refer accounting
policy regarding financial instruments), which are measured at fair values at the end of each reporting period, as explained in the
accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and
services as at the date of respective transactions.
b) Use of Estimates and Judgments
The preparation of the financial statements in conformity with Ind AS requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses and
disclosures of contingent assets and liabilities at the date of these financial statements and the reported amounts of revenues and
expenses for the years presented. Actual results may differ from these estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and future periods
affected.
c) Basis of measurement
The Ind AS Financial Statements have been prepared on a going concern basis using historical cost convention and on an accrual
method of accounting, except for certain financial assets and liabilities, including derivative financial instruments which have
been measured at fair value as described below and defined benefit plans which have been measured at actuarial valuation as
required by relevant Ind AS.
Fair value measurement
The Company measures financial instruments, such as, derivatives at fair value at each balance sheet date. 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. 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 be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the
asset or liability, assuming that 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 selling it to another market participant that would use the asset in its highest
and best use.
Fair value for measurement and /or disclosure purpose in these financial statements is determined on such a basis, except for
share based payment transactions that are within the scope of Ind AS 102, leasing transactions that are within the scope of Ind AS
116, and measurements that have some similarities to fair value, such as net realisable value in Ind AS 2 or value in use in Ind AS
36.
With effect from April 1, 2019, the Company adopted Ind-AS 116 - Leases. The effect on adoption of Ind-AS 116 is insignificant
on the financial statements.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
d) Functional and presentation currency
These Ind AS Financial Statements are prepared in Indian Rupee which is the Company's functional currency. All financial
information presented in Rupees has been rounded to the nearest lakhs with two decimals.
2.2 Adoption of new and amended standards
The company has adopted all relevant, new and revised financial reporting standards effective for annual financial period beginning on
or after 1 April 2025.
a) Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable, net of discounts, volume rebates, Goods &
Service Tax (GST) and other indirect taxes.
i) Sales are recognised when the substantial risks and rewards of ownership in the goods are transferred to the buyer as per
the terms of the contract.
ii) Processing Charges are recognised at the time of dispatch of goods to the customers and are net of trade discounts, rebates,
etc.
iii) Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.
iv) Income from duty drawback is recognised on accrual basis
v) Income from other Export Incentive are recognised as and when accepted by the Government Authority
vi) Dividend Income is recognised when right to receive is established.
vii) Claim receivables are accounted for depending on the certainty of receipt and claims payable are accounted for at the time
of acceptance.
b) Property, Plant and Equipment
(i) Property, plant and equipment
On transition to Ind-AS, the Company has elected to continue with the carrying value of all its property, plant and
equipment recognised as at 1st April, 2015 measured as per the previous GAAP and use that carrying value as a deemed
cost of property, plant and equipment.
(ii) Capital Work in Progress
Capital work in progress, property,plant and equipment is stated at cost, net of accumulated depreciation and accumulated
impairment losses, if any. Such cost includes the cost of replacing part of the plant and equipment and borrowing costs for
long-term construction projects if the recognition criteria are met. When significant parts of property, plant and equipment are
required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. Likewise,
when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement
if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.
The Company identifies and determines cost of each component/ part of Property,plant and equipment separately, if the
component/ part has a cost which is significant to the total cost of the Property, plant and equipment and has useful life
that is materially different from that of the remaining asset.
Expenses incurred towards the acquisition/construction of property, plant and equipment not ready for use at the balance
sheet date are disclosed under capital work- in- progress.
(iii) Depreciation
Assets in the course of development or construction and freehold land are not depreciated.
Other property, plant and equipment are stated at cost less accumulated depreciation and any provision for impairment.
Depreciation commences when the assets are ready for their intended use.
Depreciation on all plant and machinery is provided on Written Down Value Method and on other fixed assets is provided
on the basis of Straight Line Method. Depreciation has been provided on the basis of useful life of the assets and the manner
as prescribed in Schedule II of The Companies Act 2013. Following useful life were used for calculating depreciation amount
as per Schedule II of The Companies Act 2013:
c) Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried
at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding capitalised
developmentcosts,arenotcapitalisedandtherelatedexpenditureisreflectedinprofitorlossintheperiodinwhichtheexpenditureisincurred.
Intangible assets are amortised over the useful economic life and assessed for impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset are reviewed at least
at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic
benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes
in accounting estimates. The amortisation expense on intangible assets is recognised in the statement of profit and loss unless such
expenditure forms part of carrying value of another asset.
d) Impairment of financial assets
(i) Financial assets (other than at fair value)
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109
('Financial Instruments') requires expected credit losses to be measured through a loss allowance. The Company recognises lifetime
expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial
assets, expected credit losses are measured at an amount equal to the 12-month expected credit losses or at an amount equal to the life
time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. The Company
provides for impairment upon the occurrence of the triggering event.
(ii) Non-financial assets
Tangible and intangible assets
Property, plant and equipment and intangible assets are evaluated for recoverability whenever there is any indication that their carrying
amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and
the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent
of those from other assets. In such cases, the recoverable amount is determined for the cash generating unit (CGU) to which the asset
belongs If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset
(or CGU) is reduced to its recoverable amount. An impairment loss is recognised in the statement of profit and loss.
e) Financial instruments
Financial assets and liabilities are recognised when the Company becomes a party to the contract that gives rise to financial assets and
financial liabilities. 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.
Cash and cash equivalents
The Company considers all highly liquid financial instruments, which are readily convertible into known amounts of cash that are
subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be
cash equivalents. Cash and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage.
Financial assets at amortised cost
Financial assets are subsequently measured at amortised cost if these financial assets are held within a business whose objective is to
hold these assets 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.
Financial assets at fair value through other comprehensive income
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business 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.
Financial assets at fair value through profit or loss
Financial assets are measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through other
comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets at fair value
through profit or loss are immediately recognised in statement of profit and loss.
Financial liabilities
Financial liabilities are subsequently 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.
De-recognition 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 when the obligation specified in the contract is discharged or cancelled or expires.
Fair value of financial instruments
In determining the fair value of its financial instruments, the Company uses following hierarchy and assumptions that are based on
market conditions and risks existing at each reporting date.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised 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:
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly
observable
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers
have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair
value measurement as a whole) at the end of each reporting period.
For other fair value related disclosures Refer note no 47.
Reclassification of financial assets
The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification
is made for financial assets and financial liabilities. For financial assets a reclassification is made only if there is a change in the business
model for managing those assets. Changes to the business model are expected to be infrequent. If the Company reclassifies financial
assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting
period following the change in business model. The Company does not restate any previously recognized gains, losses (including
impairment gains or losses) or interest.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable
legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities
simultaneously.
For more information on financial instruments Refer note no 47.
f) Derivative financial instruments and hedge accounting
Initial recognition and subsequent measurement
In order to hedge its exposure to foreign exchange, the Company enters into forward, futures and other derivative financial instruments.
The Company does not hold derivative financial instruments for speculative purposes.
Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and
are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial
liabilities when the fair value is negative.
Any gains or losses arising from changes in the fair value of derivatives are taken directly to statement of profit and loss,.
g) Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of
three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined
above.
h) Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in
the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing
of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
Current v/s Non-Current Classification
Company presents assets and liabilities in balance sheet based on current/non current classification.
An asset is current when it is:
* Expected to be realised or intended to be sold or consumed in normal operating cycle
* Held primarily for the purpose of trading
* Expected to be realised within twelve months after the reporting period, or
* 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 current when:
* It is expected to be settled in normal operating cycle
* It is held primarily for the purpose of trading
* It is due to be settled within twelve months after the reporting period, or
* There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
Advance tax paid is classified as current assets.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The
Company has identified twelve months as its operating cycle.
i) Inventories
Inventories are valued at lower of cost or net realizable value after providing for obsolescence, if any. Cost of inventories comprises of
cost of purchase, cost of conversion and other costs including manufacturing overhead incurred in bringing them to their respective
present location and condition. Cost of raw materials, process chemicals, stores and spares, packing material, trading and other products
are determined on First in First out (Weighted Average) method. Scrap is valued at net realizable value.
j) Taxation
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities.
The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive
income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are
subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are recognised for all taxable temporary
differences, except when it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax
losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date 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 tax asset to be utilised. Unrecognised deferred tax assets are
re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the
deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the
liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income
or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
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.
Goods and Service Tax
GST paid on acquisition of assets or on incurring expenses, expenses and assets are recognised net of the amount of GST paid,
except:
* When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the tax paid
is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable.
k) Employee benefit schemes
(i) Short-term employee benefits
Employee benefits payable wholly within twelve months of receiving employee services are classified as short-term employee
benefits. These benefits include salaries and wages, performance incentives and compensated absences which are expected to
occur in next twelve months. The undiscounted amount of short-term employee benefits to be paid in exchange for employee
services is recognised as an expense as the related service is rendered by employees.
(ii) Compensated absences:
The Company recognizes a liability for compensated absences based on the earned leave balance outstanding as at the reporting
date and the expected cost of settlement. The liability is measured at the undiscounted amount expected to be paid and is classified
as current or non-current based on the expected timing of settlement.
(iii) Gratuity
Gratuity, which is a defined benefit plan, is accrued based on an independent actuarial valuation, which is done based on project
unit credit method as at the balance sheet date. The Company recognizes the net obligation of a defined benefit plan in its balance
sheet as an asset or liability. Gains and losses through re-measurements of the net defined benefit liability/(asset) are recognized
in other comprehensive income. In accordance with Ind AS, re-measurement gains and losses on defined benefit plans recognized
in OCI are not to be subsequently reclassified to statement of profit and loss. As required under Ind AS compliant Schedule III,
the Company transfers it immediately to retained earnings.
(iv) Provident Fund
Eligible employees of the Company receive benefits from a provident fund, which is a defined benefit plan. Both the eligible
employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered
employee's salary.
(v) Termination benefits
Termination benefits if any are recognised as an expense immediately.
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