2. Material Accounting Policies
(i) Statement of Compliance
The financial statements of the Company
have been prepared in accordance with Indian
Accounting Standards (Ind AS) notified under Sec
133 of the Companies Act 2013 and other relevant
provisions of the Act as amended thereto.
These financial statements were authorized for
issue by the Board of Directors on May 22, 2026.
These financial statements have been prepared on
accrual and going concern basis.
(ii) Basis of Preparation and Presentation
These financial statements have been prepared on
a historical cost basis, except for certain financial
instruments that are measured at fair value 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 the goods and
services.
As the operating cycle cannot be identified easily
in normal course, the same has been assumed to
have duration of 12 months. Accordingly, all assets
and liabilities have been classified as current or
non-current as per the Company's operating cycle
and other criteria set out in Ind AS-1 'Presentation
of Financial Statements' and Schedule III to the
Companies Act, 2013.
(iii) Fair Value Measurement:
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.
The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximizing the use of relevant observable inputs
and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is
measured or disclosed in the financial statements
are categorized 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 recognized in
the financial statements on a recurring basis,
the Company determines whether transfers have
occurred between levels in the hierarchy by re¬
assessing categorization (based on the lowest
level input that is significant to the fair value
measurement as a whole) at the end of each
reporting period.
At each reporting date, the company analyses the
movements in the values of assets and liabilities
which are required to be re-measured or re¬
assessed in line with the Company's accounting
policies. For this analysis, the company verifies
the major inputs applied in the latest valuation
by agreeing the information in the valuation
computation to contracts and other relevant
documents.
For the purpose of fair value disclosures, the
Company has determined classes of assets and
liabilities on the basis of the nature, characteristics
and risks of the asset or liability and the level of
the fair value hierarchy as explained above.
(iv) Use of Estimates and Judgments
In the application of the Company's accounting
policies, the Management of the Company are
required to make judgments. The preparation
of financial statements in conformity with Ind
AS requires management to make judgments,
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
Estimates and underlying assumptions are
reviewed on an ongoing basis at each balance
sheet date. Revisions to accounting estimates are
recognized in the period in which the estimate is
revised if the revision affects only that period or
in the period of revision and future periods if the
revision affects both current and future periods. In
particular, information about significant areas of
estimation, uncertainty and critical judgments in
applying accounting policies that have the most
significant effect on the amounts recognized in
the financial statements are provided in Note 2.1.
(v) Revenue Recognition
Revenue from Sale of Goods:
Sales are stated at net of returns and GST. Sales
Revenue is recognized when:
Revenue from sale of goods is recognised when
control of the products being sold is transferred
to our customer and when there are no longer
any unfulfilled obligations. The Performance
Obligations in our contracts are fulfilled at the
time of dispatch, delivery or upon formal customer
acceptance depending on terms with customers.
Revenue is measured on the basis of contracted
price, after deduction of any trade discounts,
volume rebates and any taxes or duties collected
on behalf of the Government such as Goods and
Services Tax, etc. Accumulated experience is used
to estimate the provision for such discounts and
rebates. Revenue is only recognised to the extent
that it is highly probable a significant reversal will
not occur.
Our customers have the contractual right to return
goods only when authorised by the Company. An
estimate is made of goods that will be returned
and a liability is recognised for this amount using
a best estimate based on accumulated experience.
A contract liability is recognised for expected
volume discounts payable to customers in relation
to sales made until the end of the reporting
period. The Company adjusts estimate of revenue
at the earlier of when the most likely amount of
consideration company expects to receive changes
or when the consideration becomes fixed. No
element of financing is deemed present as the sales
are made with a credit term of 30-120 days, which
is consistent with market practice. The Company's
obligation to provide a refund for faulty products
under the standard warranty terms is recognised
as a provision.
(vi) Other Income
For all debt instruments measured either at
amortized cost or at fair value through other
comprehensive income, interest income is
recorded using the effective interest rate (EIR). EIR
is the rate that exactly discounts the estimated
future cash payments or receipts over the expected
life of the financial instrument or a shorter period,
where appropriate, to the gross carrying amount
of the financial asset or to the amortized cost of a
financial liability.
When calculating the effective interest rate,
the company estimates the expected cash flows
by considering all the contractual terms of the
financial instrument (for example, prepayment,
extension, call and similar options) but does not
consider the expected credit losses. Interest income
is included in finance income in the statement of
profit and loss. Interest arising on overdue bills is
recognized on date of reliable measurement being
the date of settlement.
Dividend income from investments is accounted
for when the right to receive the payment is
established.
(vii) Foreign Currency
• Initial Recognition
On initial recognition, all foreign currency
transactions are recorded by applying to
the foreign currency amount the exchange
rate between the reporting currency and the
foreign currency at the date of the transaction.
• Subsequent Recognition
As at the reporting date, non-monetary
items which are carried at historical cost
and denominated in a foreign currency are
reported using the exchange rate at the date
of the transaction. All non-monetary items
which are carried at fair value or other similar
valuation denominated in a foreign currency
are reported using the exchange rates that
existed when the values were fair value
measured.
All monetary assets and liabilities in foreign
currency are restated at the end of accounting
period.
(viii) Investment in subsidiaries, associates and joint
ventures:
The Company records the investments in
subsidiaries, associates and joint ventures at cost
less impairment loss, if any. The Company reviews
its carrying value of investments carried at cost
or amortised cost annually, or more frequently
when there is indication for impairment. If the
recoverable amount is less than its carrying
amount, the impairment loss is accounted for.
(ix) Financial Instruments
1. (a) Financial Assets - Other than investment in
subsidiaries, associates and joint ventures
Financial assets other than investment in
subsidiaries, associates and joint ventures
comprise of investments in equity and debt
securities, trade receivables, cash and cash
equivalents and other financial assets.
Initial Recognition:
All financial assets are recognized initially at
Fair value or in case of financial assets not
recorded at FVTPL, transaction costs that are
attributable to the Acquisition of the financial
asset. Purchase or sales of financial asset
within a time frame established by regulation
or convention in the market place (regular
way trades) are recognized on the trade
date. However, trade receivables that do not
contain a significant financing component are
measured at transaction price
Subsequent Measurement:
(i) Financial assets measured at amortized cost:
Financial assets held within a business model
whose objective is to hold financial 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
are measured at amortized cost using
effective interest rate (EIR) method. The EIR
amortization is recognized as finance income
in the statement of profit and loss.
The Company while applying above criteria
has classified the following at amortized cost
a) Trade receivable
b) Other financial assets
(ii) Financial Asset at FVTOCI
Financial assets that are held within a business
model whose objective is achieved by both
collecting contractual cash flow and selling
financial asset and the contractual terms of
financial assets give rise on specified dates
to cash flow that are solely payments of
principal and interest on the principal amount
outstanding are subsequently measured at
FVTOCI. Fair value movements in financial
assets at FVTOCI are recognized in other
comprehensive income.
Equity instruments held for trading are
classified as FTVPL. For other equity
instruments the Company classifies the same
as FVTOCI. The classification is made on initial
recognition and is irrevocable. Fair value
changes on equity instruments at FVTOCI
excluding dividends, are recognized in other
comprehensive income (OCI).
(iii) Financial Asset at FVTPL
Financial asset are measured at fair value
through Profit and loss if it does not meet
the criteria for classification as measured at
amortized cost or at fair value through other
comprehensive income. All fair value changes
are recognized in the Statement of Profit and
loss.
1. (b) De-recognition on Financial Asset:
Financial assets are de-recognized when
the contractual right to cash flows from the
financial asset expires or the financial asset is
transferred and the transfer qualifies for De¬
recognition. On De-recognition of a financial
asset in its entirety, the difference between the
carrying amount (measured at the date of De¬
recognition) and the consideration received
(including any new asset obtained less any
new liability Assumed) shall be recognized in
the statement of profit and loss (except for
equity instruments designated as FVTOCI).
1. (c) Impairment of financial asset:
Trade receivables under IND AS 109,
investments in debt instruments that are
carried at amortized cost, investments in debt
instruments that are carried at FVTOCI are
tested for impairment based on the expected
credit losses for their respective financial
asset.
(i) Trade Receivable:
An impairment analysis is performed at each
reporting date. The expected credit losses over
lifetime of the asset are estimated by adopting
the simplified approach using a provision
matrix which is based on historical loss rate
reflecting future economic conditions. In this
approach assets are grouped on the basis of
similar credit characteristics such as industry,
customer segment, past due status and other
factors which are relevant to estimate the
expected cash loss from these assets.
(ii) Other financial assets:
Other financial assets are tested for
impairment and expected credit losses are
measured at an amount equal to 12 month
expected credit loss.If the credit risk on the
financial asset has increased significantly since
initial recognition, then the expected credit
losses are measured at an amount equal to
life-time expected credit loss.
2. Financial Liabilities:
Initial Recognition and Measurement:
Financial liabilities are initially recognized at
fair value plus any transaction cost that are
attributable to the acquisition of financial
liability except financial liabilities at fair value
through profit and loss which are initially
measured at fair value.
Subsequent Measurement:
The financial liabilities are classified for
subsequent measurement into following
categories
• at amortized cost
• at fair value through profit and loss
De-recognition of financial liabilities
A financial liability is derecognized when
and only when, it is extinguished i.e. when
the obligation specified in the contract is
discharged or cancelled or expires.
3. Derivative Financial Instruments:
Foreign exchange forward contracts and
options are entered into by the Company
to mitigate the risk of changes in foreign
exchange rates associated with certain
payables, receivables and forecasted
transactions denominated in certain foreign
currencies. These derivative contracts that do
not qualify for hedge accounting under IND
AS 109, are initially recognized at fair value
on the date the contract is entered into and
subsequently measured through Profit or
Loss. Gains or loss arising from changes in
the fair value of the derivative contracts are
recognized in profit or loss.
4. Offsetting of Financial Assets and Liabilities:
Financial assets and liabilities are offset and
the net amount is presented in Balance Sheet
when, and only when, the Company has a
legal right to offset the recognized amounts
and intends either to settle on a net basis or
to realize the assets and settle the liability
simultaneously.
5. 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
which are categorized as equity instruments
at FVTOCI and financial assets or liabilities
that are specifically designated as FVTPL. For
financial assets which are debt instruments,
a reclassification is made only if there is a
change in the business model for managing
those assets. Changes to the business are
expected to be infrequent.
(x) Property, Plant and Equipment
Property plant and equipment is stated at
cost less accumulated depreciation and where
applicable accumulated impairment losses. Cost
includes expenditure that is directly attributable
to acquisition of the asset. The cost of self-
constructed assets includes the cost of materials,
direct labour and any other costs directly
attributable to bringing the asset to a working
condition for its intended use, and the costs of
dismantling and removing the items and restoring
the site on which they are located.
When parts of an item of Property, Plant and
equipment have differential useful life, they
are accounted for as separate items (major
components) of property, plant and equipment.
Gains and losses on disposal of an item of
property plant and equipment are determined by
comparing the proceeds from disposal with the
carrying amount of Property, Plant and equipment
and are recognized net within other income/
other expenses in the statement of profit and loss
account.
The cost of replacing part of an item of property,
plant and equipment is recognized in the carrying
amount of the item if it is probable that future
economic benefits embodied within the part will
flow to the company and its cost can be measured
reliably.The carrying amount of the replaced part
is de-recognized. The cost of day to day servicing
is recognized in the statement of profit and loss
account. All other repair and maintenance costs
are recognized in profit or loss as incurred.
Depreciation on fixed assets has been provided
on the straight-line method as per the useful life
prescribed in Schedule II to the Companies Act,
2013 except in respect of the following categories
of assets, in whose case the life of the assets has
been re-assessed as under based on technical
evaluation, taking into the account the nature of
the asset, the estimated usage of the asset, the
operating conditions of the asset, past history of
replacement, anticipated technological changes,
manufacturers' warranties,maintenance support,
etc.
• Plant and machinery - 5 to 20 years
• Electrical installations and equipment - 5 to 20
years
• Tools and Moulds- 3 to 10 years
The management believes that these estimated
useful lives are realistic and reflect fair
approximation of the period over which the assets
are likely to be used. The residual values, useful
lives and method of depreciation of property, plant
and equipment is reviewed at each financial year
end and adjusted prospectively, if appropriate.
(xi) Impairment of Non-Financial Asset
The Company assesses at each reporting date,
whether there is an indication that an asset may
be impaired. If any indication exists, or when
annual impairment testing for an asset is required,
the Company estimates the asset's recoverable
amount. An asset's recoverable amount is the
higher of an asset's or cash-generating units
(CGU) fair value less costs of disposal and its
value in use. Recoverable amount is determined
for an individual asset, unless the asset does not
generate cash inflows that are largely independent
of those from other assets of the Company. When
the carrying amount of an asset or CGU exceeds
its recoverable amount, the asset is considered
impaired and is written down to its recoverable
amount.
(xii) Employee Benefits
a) Defined Contribution Plans
The eligible employees of the Company
are entitled to receive benefits under the
provident fund, a defined contribution plan,
in which both employees and the Company
make monthly contributions at a specified
percentage of the covered employees' salary
(currently 12% of employees' salary), which is
recognized as an expense in the Statement of
Profit and Loss. The contributions as specified
under the law are paid to respective Regional
Provident fund commissioner.
b) Defined Benefit Plans (Superannuation)
The eligible employees of the Company
are entitled to receive benefits under
the superannuation scheme, a defined
contribution plan, in which the Company
makes annual contributions of a specified
sum, which is recognized as an expense in the
Statement of Profit and Loss. The Contributions
are by way of annual premium payable in
respect of a superannuation policy issued by
the Life Insurance Corporation of India, which
confers benefits to retired/resigned employees
based on policy norms. No other liabilities are
incurred by the Company in this regard.
c) Defined Benefit Plans (Gratuity and
Compensated Absences)
The Company makes annual contributions
to gratuity funds administered by the
trustees for amounts notified by the funds.
The Company accounts for the net present
value of its obligations for gratuity benefits,
based on an independent actuarial valuation,
determined on the basis of the projected unit
credit method, carried out as at the Balance
Sheet date.
Re-measurement, 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 immediately in the Balance sheet
with a charge or credit recognized in other
comprehensive income in the period in which
they occur. Re-measurement recognized in
other comprehensive income is reflected
immediately in retained earnings and will not
be reclassified to Statement of Profit and Loss.
Past service cost is recognized in Statement
of profit and 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. Defined benefit costs are categorized
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
• Re-measurement.
The Company presents the first two
components of defined benefit costs in
statement profit and loss in the line item
"Employee Benefits Expenses". Curtailment
gains and losses are accounted for as past
service costs.
The defined benefit obligation recognized
in the balance sheet represents the actual
deficit or surplus in the Company's defined
benefit plans. Any surplus resulting from this
calculation is limited to the present value of
any economic benefits available in the form
of reductions in future contributions to the
plans.
d) Employee Stock Option Plan ("ESOP"):
Stock Options are granted to eligible
employees under the Employee Stock Option
Schemes, as may be decided by the Nomination
& Remuneration Committee / Board. Eligible
employees for this purpose include employees
of the Company including Directors. Company
has an equity settled ESOP. Options granted
under the ESOP are measured at fair value
of the option on the grant date using the
Black Scholes model. Grant-date fair value
is recognized as an employee compensation
expense over the vesting period with a
corresponding liability recorded under
ESOP Outstanding Reserve Account which
is grouped under Reserves & Surplus. When
the option is settled, the related liability in
the ESOP Outstanding Reserve Account is
transferred to share premium account along
with excess of Grant Price over the face value.
e) Other Employee Benefits
Other benefits, comprising of Leave
Travel Allowances, are determined on an
undiscounted basis and recognized based on
the likely entitlement thereof.
f) Termination Benefits
A liability for a termination benefit is
recognized at the earlier of when the company
can no longer withdraw the offer of the
termination benefit and when the company
recognizes any related restructuring costs.
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