NOTE - 1B - SIGNIFICANT ACCOUNTING POLICIES1B.1 Basis of Preparation
The standalone financial statements have been prepared in accordance with Indian Accounting Standards ("Ind AS") as notified by
Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 ('Act') read with the Companies (Indian
Accounting Standards) Rules, 2015 as amended and other relevant provisions of the Act.
Accordingly, the Company has prepared these standalone Financial Statements which comprise the Balance Sheet as at 31st March,
2026, the Statement of Profit and Loss (including Other Comprehensive Income) for the year ended 31st March 2026, the Statement of
Changes in Equity and the Statement of Cash Flows for the year ended 31st March 2026, and accounting policies and other explanatory
information (together hereinafter referred to as ‘the Financial Statements’).
The standalone financial statements of the Company for the year ended March 31st, 2026 have been authorized for issue in accordance
with a resolution passed in the Meeting of the Board of Directors held on 28th May, 2026.
1B.2 Basis of Measurement
The standalone financial statements have been prepared on a going concern basis using historical cost convention and on accrual
method of accounting, except for the following assets and liabilities which have been measured at fair value:
- Certain financial assets and liabilities (including derivative instruments);
- Defined benefit plans - plan assets
- Assets Held for Sale
1B.3 Functional and Presentation Currency
These standalone financial statements are presented in Indian Rupees (INR), which is the Company's functional currency.
1B.4 Summary of Significant Accounting Policies
1B.4.1 Property, Plant and Equipment (PPE)
(a) Property, Plant and Equipment are stated at cost, net of recoverable taxes, trade discounts and rebates less accumulated
depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any other 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.
(b) Subsequent costs are included in the asset’s carrying amount or recognized 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. In
the carrying amount of an item of PPE , the cost of replacing the part of such an item is recognized when the cost is incurred if
the recognition criterias are met. The carrying amount of those parts that are replaced is derecognized in accordance with the
derecognition principles.
(c) Expenses incurred in relation to a project, net of income earned during the project development stage prior to its intended use,
are considered as Pre - Operative Expenses and are disclosed under 'Capital Work-in-Progress'.
(d) Depreciation on Property, Plant and Equipment is provided using straight line method, except on Freehold Land, on which no
depreciation is provided. .Depreciation provided is based on useful life of the assets as prescribed in Schedule II to the
Companies Act, 2013 . If significant parts of an item of Property, Plant and Equipment have different useful lives, then they are
accounted and depreciated for as separate items (major components) of Property, Plant and Equipment. In respect of the Dies
and Moulds, the useful life is estimated at 12 years, which is different from the prescribed life of 8 years under Schedule II to the
Companies Act, 2013.
(e) The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial
year end and adjusted prospectively, if appropriate.
(f) Gains or losses arising from derecognition of a property, plant and equipment are measured as the difference between the net
disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is
derecognized.
(g) Spare parts procured along with the Plant & Machinery or subsequently which meet the recognition criteria are capitalized and
added in the carrying amount of such item. The carrying amount of those spare parts that are replaced is derecognized when no
future economic benefits are expected from their use or upon disposal. Other machinery spares are treated as “stores & spares”
forming part of the inventory.
1B.4.2 Leases
The Company as a lessee
(a) The Company’s lease asset classes consist of leases for land. The Company assesses whether a contract contains a lease, at
inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset
for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an
identified asset, the Company assesses whether :
(i) the contract involves the use of an identified asset;
(ii) the Company substantially has all of the economic benefits from use of the asset through the period of the lease; and
(iii) the Company has the right to direct the use ofthe asset.
(b) Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to
extend or terminate the lease, if the use of such option is reasonably certain. The Company makes an assessment on the
expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or
terminate the contract will be exercised. In evaluating the lease term, the Company considers factors such as any significant
leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the
underlying asset to Company’s operations taking into account the location of the underlying asset and the availability of
suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic
circumstances. After considering current and future economic conditions, the Company has concluded that no changes are
required to lease period relating to the existing lease contracts.
(c) At the date of commencement of the lease, the Company recognizes a Right-of-Use (ROU) asset and a corresponding lease
liability for all lease arrangements in which it is a lessee, except for short term leases and low value leases. For these short term
and low-value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the
term ofthe lease.
(d) The lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and
lease liabilities includes these options when it is reasonably certain that they will be exercised.
(e) The ROU assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease
payments plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated
depreciation and impairment losses.
(f) ROU assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful
life of the underlying asset. ROU assets are evaluated for recoverability whenever events or changes in circumstances indicate
that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the
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.
(g) The lease liability is initially measured at amortized cost at the present value of the future lease payments made over the lease
term. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the
incremental borrowing rates in the country of domicile of these leases. 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.
(h) Lease liability and ROU assets have been separately presented in the Balance Sheet and lease payments have been classified as
financing cash flows.
The Company as a lessor
(a) The Company has not entered into any long term lease contract during the year in the capacity of "Lessor".
Adoption of Ind AS 116
Ministry of Corporate Affairs (“MCA”) through Companies (Indian Accounting Standards) Amendment Rules, 2019 and Companies
(Indian Accounting Standards) Second Amendment Rules, has notified Ind AS 116 Leases, which replaces the existing lease standard,
Ind AS 17 Leases, and other interpretations. Ind AS 116 sets out the principles for the recognition, measurement, presentation and
disclosure of leases for both lessees and lessors. It introduces a single, on-balance sheet lease accounting model for lessees.
1B.4.3 Capital Work-in-Progress
(a) Expenditure incurred on assets under construction (including a project) is carried at cost under 'Capital Work-in-Progress'.
Such costs comprises purchase price of asset including import duties and non-refundable taxes and costs that are directly
attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended
by management and after deducting trade discounts and rebates.
(b) Cost directly attributable to projects under construction include costs of employee benefits, expenditure in relation to survey
and investigation activities of the projects, cost of site preparation, initial delivery and handling charges, installation and
assembly costs, professional fees, expenditure on maintenance and up-gradation etc. of common public facilities, depreciation
on assets used in construction of project, interest during construction and other costs if attributable to construction of projects.
Such costs are accumulated under 'Capital Work-in-Progress' and subsequently allocated on systematic basis over major
assets, other than land and infrastructure facilities, on commissioning ofprojects.
(c) Capital Expenditure incurred for creation of facilities, over which the Company does not have control but the creation of which
is essential principally for construction of the project, is capitalized and carried under 'Capital Work-in-Progress' and
subsequently allocated on systematic basis over major assets, other than land and infrastructure facilities, on commissioning
of projects, keeping in view the “attributability” and the “Unit of Measure” concepts in Ind AS 16- “Property, Plant &
Equipment”. Expenditure of such nature incurred after completion ofthe project, is charged to Statement of Profit and Loss.
1B.4.4 Investment Property
(a) Recognition and Measurement
The Freehold Land classified as Investment Property is stated at Revalued Cost as on the date of transition to Ind-AS.
(b) Depreciation
No depreciation is provided on Freehold Land, considering its infinite useful life.
(c) Disposal
Gains or losses arising from derecognition of investment property is measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is
derecognised.
1B.4.5 Intangible assets
(a) Intangible Assets purchased are stated at cost of acquisition net of recoverable taxes, trade discount and rebates less
accumulated amortization /depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any
cost directly attributable to bringing the asset to its working condition for the intended use, net charges on foreign exchange
contracts and adjustments arising from exchange rate variations attributable to the intangible 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.
(b) Amortisation is provided on straight-line basis over estimated useful lives of the intangible assets, which is taken at 5 years for
Computer Software. The amortisation period for intangible assets with finite useful lives are reviewed at least at each year end.
Changes in useful lives are treated as changes in accounting estimates.
(c) Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is
derecognised.
(d) Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are
charged to the Statement of Profit and Loss unless a product’s technological and commercial feasibility has been established,
in which case such expenditure is capitalised.
(e) The Company has no internally generated Intangible Assets.
1B.4.6 Impairment ofNon-Financial Assets - Property, Plant and Equipment and Intangible Assets
(a) The Company assesses at each reporting date as to whether there is any indication that any property, plant and equipment and
intangible assets or group of assets, called Cash Generating Units (CGU) may be impaired. If any such indication exists the
recoverable amount of an asset or CGU is estimated to determine the extent of impairment, if any. When it is not possible to
estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the CGU to which
the asset belongs.
(b) An impairment loss is recognised in the Statement of Profit and Loss to the extent asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is higher of an asset’s fair value less cost of disposal and value in use. Value in
use is based on the estimated future cash flows, discounted to their present value using pre-tax discount rate that reflects current
market assessments of the time value of money and risk specific to the assets.
(c) The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable
amount.
1B.4.7 Borrowing Costs
(a) Borrowing costs include exchange differences arising from foreign currency borrowings to the extent they are regarded as an
adjustment to the interest cost. 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. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.
(b) 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.
(c) All other borrowing costs are expensed in the period in which they occur.
1B.4.8 Inventories
(a) Items of inventories are measured at lower of cost and net realisable value after providing for obsolescence, if any, except in
case of by-products which are valued at net realisable value. Cost of inventories comprises of cost of purchase, cost of
conversion and other costs including manufacturing overheads net of recoverable taxes incurred in bringing them to their
respective present location and condition.
(b) Cost of raw materials, work-in- progress, finished goods, stock-in-trade, stores and spares and packing materials are
determined at Cost, with moving average price on First in First Out [FIFO] basis.
1B.4.9 Assets Held For Sale
The assets are classified as held for sale if their carrying amount is intended to be recovered principally through sale rather than
through continuing use. The condition for classification of held for sale is met when the asset is available for immediate sale and the
same is highly probable of being completed within one year from the date of classification under held for sale.
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