Material Accounting Policies
The material accounting policies used in the preparation of the financial statements are set out below. These
policies have been consistently applied to all years presented, unless stated otherwise.
3.1 Property, Plant and Equipment
Property, plant and equipment (PPE) are stated at acquisition cost less accumulated depreciation
and accumulated impairment losses, if any.
Properties in the course of construction for production, supply or administrative purposes are
carried at cost, less any recognised impairment loss. Cost includes professional fees and, for
qualifying assets, borrowing costs capitalized in accordance with the Company’s accounting policy.
Such properties are classified to the appropriate categories of PPE when completed and ready for
intended use. Depreciation of these assets, on the same basis as other PPE assets, commences
when the assets are ready for their intended use. PPE which are not ready for intended use are
disclosed under “Capital work-in-progress”.
Subsequent cost/expenses related to an item of PPE are recognized in the carrying amount of
PPE when the cost/expenses meet the recognition criteria, i.e. cost can be measured reliably and
it is probable that the future benefits will flow to the Company.
Notes forming part of the Financial Statements for the year ended 31st March, 2025
Depreciation is charged on a pro-rata basis under written down value method based on the useful
life of individual asset as prescribed in Schedule II of the Companies Act, 2013 (“the Act”), retaining
a residual value of 5% of the cost of the assets except the following:
Plant and equipment are depreciated over a period of 1 to 15 years, office equipment over 2 to 5
years and Dyes and Moulds over 3 to 10 years based on technical evaluation/advice.
No depreciation is charged on the free hold land.
The residual value, useful lives and depreciation method are reviewed at the end of each reporting
period and adjustment required, if any, are done prospectively.
Assets on leased premises, which cannot be used independent of the leased premises, are
depreciated on the remaining period of lease or as per the useful life as stated above, whichever
is earlier. Assets costing ' 5,000 and below are depreciated over a period of one year.
An item of property, plant and equipment is derecognized upon disposal or when no future economic
benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the
disposal or retirement of an item of property, plant and equipment is determined as the difference
between the sale proceeds and the carrying amount of the asset and is recognised in the Statement
of Profit and Loss.
Upon fi rst time adoption of Ind-AS, the Company had elected to measure all its property, plant
and equipment at the carrying value under Previous GAAP as their deemed cost on the date of
transition to Ind-AS (1st April, 2020).
3.2 Intangible Assets
A. Intangible assets acquired separately:
Intangible assets with finite useful lives that are acquired separately are carried at cost less
accumulated amortization and accumulated impairment losses. Amortization is recognised
on a written down value basis over their estimated useful lives. The estimated useful life
and amortization method are reviewed at the end of each reporting period, with the effect
of any changes in estimate being accounted for on a prospective basis. Intangible assets
with indefinite useful lives that are acquired separately are carried at cost less accumulated
impairment losses.
B. Internally-generated intangible assets - research and development expenditure:
Expenditure on research activities is recognised as an expense in the period in which it is
incurred.
An internally-generated intangible asset arising from development (or from the development
phase of an internal project) is recognised if, and only if, all of the following have been
demonstrated:
(a) The technical feasibility of completing the intangible asset so that it will be available for
use or sale;
(b) The intention to complete the intangible asset and use or sell it;
(c) The ability to use or sell the intangible asset;
(d) The probable future economic benefits that will be generated from the intangible asset;
(e) The availability of adequate technical, fi nancial and other resources to complete the
development and to use or sell the intangible asset; and
Notes forming part of the Financial Statements for the year ended 31st March, 2025
(f) The ability to measure reliably the expenditure attributable to the intangible asset during
its development.
The amount initially recognised for internally-generated intangible assets is the sum of the
expenditure incurred from the date when the intangible asset first meets the recognition criteria
listed above. Where no internally generated intangible asset can be recognised, development
expenditure is recognised in the Statement of Profit and Loss in the period in which it is incurred.
Subsequent to initial recognition, internally-generated intangible assets are reported at cost
less accumulated amortization and accumulated impairment losses, on the same basis as
intangible assets that are acquired separately.
C. Derecognition of intangible assets
An intangible asset is derecognized on disposal, or when no future economic benefits are
expected from use or disposal. Gains or losses arising from derecognition of an intangible asset,
measured as the difference between the net disposal proceeds and the carrying amount of
the asset, are recognised in the Statement of Profit and Loss when the asset is derecognized.
Upon first time adoption of Ind-AS, the Company had elected to measure its intangible assets
at the carrying value under Previous GAAP as their deemed cost on the date of transition to
Ind-AS (1st April, 2020).
Impairment of Tangible & Intangible Assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and
intangible assets to determine whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in
order to determine the extent of the impairment loss (if any). When it is not possible to estimate
the recoverable amount of an individual asset, the Company estimates the recoverable amount
of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis
of allocation can be identified, corporate assets are also allocated to individual cash generating
units, or otherwise they are allocated to the smallest group of cash generating units for which a
reasonable and consistent allocation basis can be identified.
Intangible assets with indefinite useful lives, goodwill and intangible assets not yet available for
use are tested for impairment at least annually, and whenever there is an indication that the asset
may be impaired.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset (or cash generating unit) is reduced to its
recoverable amount. An impairment loss is recognised immediately in the Statement of Profit and
Loss.
Notes forming part of the Financial Statements for the year ended 31st March, 2025
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash
generating unit) is increased to the revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that would have been determined
had no impairment loss been recognised for the asset (or cash generating unit) in prior years. A
reversal of an impairment loss is recognised immediately in the Statement of Profit and Loss.
3.3 Leases
Company as Lessee
At the inception of a contract, the Company assesses if the contract conveys the right to control the
use of an identified asset for a specified period of time for a consideration. If so, such contracts are
considered to be/to contain lease. Where the Company is a lessee, except in case of short-term
leases (tenure less than twelve months) and leases of low value assets, the Company recognizes
lease liability and right-of-use assets. In the case of leases for short-term and leases of low value
assets, the Company recognises the lease payments as an operating expense on a straight-line
basis over the term of the lease. The right-of-use assets are initially recognised at cost, which
comprises the initial amount of the lease liability adjusted for any lease payments made at or prior
to the commencement date of the lease plus any initial direct costs less any lease incentives. They
are subsequently measured at cost less accumulated depreciation and impairment losses, if any.
Right-of-use 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. The lease liability is initially
measured at the present value of the future lease payments, discounted using the interest rate
implicit in the lease or, if not readily determinable, using the incremental borrowing rates being
the rate the Company would have to pay to borrow fund necessary to obtain an asset of similar
value to the right-of-use asset in a similar economic environment with similar terms, security and
conditions. Subsequent to the initial measurement, the lease liability is increased by the interest
on the lease liability and reduced by the lease payments made. A lease liability is re-measured
when there is a change in the lease term or a change in an index or rate used to determine lease
payments, etc. Lease liability and Right-of-use asset are presented separately in the Balance
Sheet. In the Statement of Cash Flows, lease payments have been classified as cash flow from
financing activities.
Company as Lessor
Rental income from operating leases is recognised on a straight-line basis over the term of the
relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added
to the carrying amount of the leased asset and recognised as expenses over the lease term on
the same basis as lease income. The respective leased assets are included in the balance sheet
based on their nature.
3.4 Investment in Subsidiaries and Joint Ventures
Investments in subsidiaries and joint ventures are carried at cost net of accumulated impairment
losses, if any. Where an indication of impairment exists, the carrying value of the investment is
assessed for the amount of impairment loss and written down to its recoverable amount. At the time
of disposal of investments, the difference between the net proceeds of disposal and the carrying
amount is recognized in the Statement of Profit and Loss.
Upon fi rst time adoption of Ind-AS, the Company had elected to measure its investment in
subsidiaries at the carrying value under Previous GAAP as their deemed cost on the date of
transition to Ind-AS (1st April, 2020).
Notes forming part of the Financial Statements for the year ended 31st March, 2025
3.5 Inventories
Inventories are valued at lower of cost and net realisable value based on FIFO Basis. Cost of
work-in-progress and finished goods includes the cost of purchase, conversion and all other cost
incurred in bringing the inventory to their current condition and location. Net realizable value is the
estimated selling price in the ordinary course of business net of estimated cost of completion and
cost required to be incurred to complete the sale.
3.6 Cash and Cash Equivalents
Cash and cash equivalents are short-term (three months from the date of acquisition), highly liquid
investments which are readily convertible into known amounts of cash and subject to an insignificant
risk of changes in value.
3.7 Financial Instruments
A. Financial Assets
Financial assets comprises investments in equity and debt securities, trade receivables, cash
and cash equivalents, and other financial assets. Financial assets are recognized when the
Company becomes a party to the contractual positions of an instrument.
Trade receivables are recognized initially at transaction cost and other f i nancial assets are
recognized initially at fair value. In the case of financial assets other than those recognized at
fair value through profit and loss (FVTPL), the transaction costs attributable to the acquisition
of financial assets are added to the fair value for the initial recognition. In the case of financial
assets recognized at FVTPL, the transaction costs are recognized in the Statement of Profit
and Loss.
Financial assets are subsequently measured at
(i) Amortized cost
(ii) Fair value through other comprehensive income (FVOCI) or
(iii) Fair value through profit and loss (FVTPL)
(i) Amortized Cost
Financial assets that are held within the business model with an objective to hold them
to collect the contractual cash flows that are solely payments of principal and interest on
the principal outstanding are measured subsequently at amortized cost using the effective
interest rate method (EIR method) net of impairment, if any. The amortization as per EIR
and loss on account of impairment, if any, are recognized in the Statement of Profit and
Loss.
By applying the above criteria, the following financial assets are measured at amortized
cost:
(a) Trade receivables
(b) Loans
c) Other financial assets
(ii) Fair value through other comprehensive income
Financial assets that are held within the business model whose objective is achieved by
both selling the financial assets and collecting the contractual cash flows that are solely
payments of principal and interest are measured subsequently at fair value through other
comprehensive income. Movements in the fair value of such financial asset are recognized
in the other comprehensive income. Interest income as per EIR and loss on account of
impairment, if any, are recognized in the Statement of Profit and Loss. On derecognition,
the cumulative gain or loss that has previously been recognized in the other comprehensive
income is reclassified to other income in the Statement of Profit and Loss.
(iii) Fair value through profit or loss
A financial asset is measured subsequently at fair value through profit or loss if it does
not meet the classification criteria for measurement at amortized cost or fair value through
other comprehensive income. Such financial assets are measured at fair value with all
changes in the fair value, including interest and dividend income, if any, being recognized
as other income in the Statement of Profit and Loss.
A financial asset is derecognized when the contractual rights to the cash flow from the
asset expires, or when the contractual rights to receive the cash flows are transferred.
Subsequent to initial recognition, impairment losses are recognized in respect of all financial
assets other than those classified for subsequent measurement under FVTPL. In respect
of trade receivables, expected credit loss over the lifetime of the asset is estimated by
adopting a simplified approach of provision matrix based on historical loss rates reflecting
present conditions and forecast of future economic conditions. Under this approach, trade
receivables are grouped on the basis of similar credit characteristics such as industry,
customer segment, past due status and other relevant factors to estimate the expected
cash loss from these assets. In respect of financial assets other than trade receivables,
if the credit risk has increased significantly since initial recognition, the impairment is
measured at lifetime credit losses. The impairment losses and reversals are recognized
in the Statement of Profit and Loss.
Foreign exchange gains and losses
The fair value of fi nancial assets denominated in a foreign currency is determined in that
foreign currency and translated at the spot rate at the end of each reporting period.
For foreign currency denominated financial assets measured at amortized cost and FVTPL,
the exchange differences are recognised in the Statement of Profit and Loss except for those
which are designated as hedging instruments in a hedging relationship.
B. Financial Liabilities
Financial liabilities are recognized when the Company becomes a party to the contractual
positions of an instrument.
Financial liabilities are recognized initially at fair value. In the case of financial liabilities other
than those recognized at fair value through profit and loss (FVTPL), the transaction costs
attributable to the acquisition of the financial liability are added to the fair value for the initial
recognition. In the case of financial liabilities recognized at FVTPL, the transaction costs are
recognized in the Statement of Profit and Loss.
Financial liabilities other than those recognized at FVTPL are subsequently measured at
amortized cost using EIR method. Financial liabilities carried at FVTPL are measured at fair
value with all changes in fair value recognized in the Statement of Profit and Loss.
The Company measures the following financial liabilities under amortized cost:
(a) Borrowings
(b) Lease liabilities
(c) Trade payables
d) Other financial liabilities
Financial liabilities held for trading are measured at FVTPL.
Financial liabilities and financial assets are offset and net amount presented in the Balance
sheet when the Company has a legal right to offset and intends to settle the same on net basis
or realize the asset and settle the liability simultaneously.
A financial liability is derecognized when it is extinguished, i.e. when the obligation specified
in the contract is discharged, cancelled or expires.
Foreign exchange gains and losses
For financial liabilities that are denominated in a foreign currency and are measured at amortized
cost at the end of each reporting period, the foreign exchange gains and losses are determined
based on the amortized cost of the instruments and are recognised in Statement of Profit and
Loss under other income.
The fair value of financial liabilities denominated in a foreign currency is determined in that
foreign currency and translated at the spot rate at the end of the reporting period. For financial
liabilities that are measured at FVTPL, the foreign exchange component forms part of the fair
value gains or losses and is recognised in the Statement of Profit and Loss.
C. Fair Value Hierarchy
The fair value of financial instruments are classifiable into three categories based on the inputs
used in valuation technique. The three categories are as follows:
Level 1: Quoted prices for identical instruments in an active market
Level 2: Directly or indirectly observable market inputs, other than Level 1 inputs and
Level 3: Inputs which are not based on observable market data.
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