NOTE 2 MATERIAL ACCOUNTING POLICIES INFORMATION :
a. Basis of preparation of Financial Statements :
(i) Statement of Compliance
These financial statements of the Company have been prepared in accordance with the Indian Accounting Standards
(hereinafter referred to as the 'Ind AS') as per the Companies (Indian Accounting Standards) Rules, 2015 (as
amended) notified under Section 133 of Companies Act, 2013, (the 'Act') and other relevant provisions of the Act
and Rules thereunder.
These financial statements were authorised for issue in accordance with a resolution of the Board of Directors in it's
meeting held on May 26, 2025.
The accounting policies are applied consistently to all the periods presented in the financial statements.
The financial statements have been prepared on accrual and historical cost basis with the exception of certain
financial assets and liabilities including derivative instruments which have been measured at fair value.
(ii) Current and non-current Classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.
An asset is treated as 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
• 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
• 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.
Based on the nature of products and the time between acquisition of assets for processing and their realisation in
cash and cash equivalents, the Company has identified twelve months as its operating cycle for the purpose of
current / non current classification of assets and liabilities.
(iii) Functional and presentation currency
The financial statements are presented in Indian rupee (INR), which is Company's functional and presentation
currency.
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lacs, unless
otherwise stated.
(iv) Use of Estimates :
The preparation of financial statement requires management to make critical accounting estimates and
assumptions and exercise judgement, that affect the application of accounting policies and the reported amounts of
assets and liabilities and disclosures of contingent liabilities at the date of these financial statements and the
reported amount of revenue and expenses for the year presented. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on a regular basis. Revision to accounting estimates are
recognised in the financial statements in the period in which the estimate is revised.
Areas involving critical estimates and judgements are:
1. Estimation of tax expense and liabilities. (refer note 36)
2. Impairment/Loss allowances on financial assets such as investments, loans & trade receivables. (refer note 4,
5,10, 13, 46)
3. Estimation of defined benefit obligation. (refer note 44)
4. Impairment of non financial asset. (refer note 8 and 47)
5. Provision for warranty (refer note 26)
b. Property, Plant & Equipments :
(i) Recognition and Measurement
Items of property, plant and equipment are measured at cost of acquisition or construction less accumulated
depreciation and/or accumulated impairment loss, if any.
The cost of an item of property, plant and equipment comprises its purchase price, including import duties and other
non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its
intended use; any trade discounts and rebates are deducted in arriving at the purchase price. Borrowing costs
directly attributable to the construction of a qualifying asset are capitalised as part of the cost.Company has valued
carrying amount as per Ind AS 16.
Cost of assets not ready for intended use, as on the Balance Sheet date, is shown as capital work in progress.
Advances given towards acquisition of fixed assets outstanding at each Balance Sheet date are disclosed as Other
Non-Current Assets.
Carrying value of fixed assets is tested for impairment as at the reporting date.
(ii) Subsequent measurement
Subsequent costs are included in assets carrying amount or recognised as a seperate asset only when it is probable
that future economic benefits associated with the item will flow to the Company and the cost of the item can be
measured reliably. The carrying amount of any component accounted for as a seperate asset is derecognised when
replaced. All other repairs and maintenance costs are charged to the Statement of Profit and Loss as incurred.
(iii) Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no future benefits are expected
from its use or disposal. 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
recognised in the statement of profit and loss.
(iv) Depreciation methods and estimated useful lives
Depreciation on leasehold land has been provided at equal annual installments so as to write off the cost thereof
completely two years before the termination date of the lease.
Property, Plant & Equipment are stated at cost less accumulated depreciation thereon. The Company provides
depreciation on pro-rata basis using straight line method from the date on which asset is acquired/ready for
intended use. Depreciation has been provided as per Schedule II of the Companies Act, 2013 considering useful life
of the asset. The tangible fixed assets for which useful life is different than the one prescribed in the Schedule II are
The residual values and useful lives of property plant equipment are reviewed at each financial year and adjusted if
appropriate, at the end of each reporting date.
c. Intangible Assets and amortisation :
(i) Recognition and Measurement
Intangible assets with finite useful lives that are acquired seperately are measured on initial recognition at cost. An
intangible asset is recognised when the asset is identifiable, is within the control of the company, it is probable that
the future economic benefits that are attributable to the asset will flow to the company and cost of the asset can be
reliably measured. Intangible assets with indefinite life are stated at cost.
Intangible Assets are carried at acquisition cost less deductions for accumulated amortisation and impairment
losses, if any.
Costs associated with maintaining softwares/intangible assets is recognised as an expense as and when incurred.
(ii) Amortisation methods and periods
The Company amortizes Computer Software using straight-line method over the period of 3 years and Technical
Know How wherein there is agreement, over the period of the agreement, other than that, it is amortized over the
period of 5 Years.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in
the Statement of Profit and Loss.
d. Leases:
The Company, as a lessee, recognises a right-of-use asset and a lease liability for its leasing arrangements, if the contract
conveys the right to control the use of an identified asset. The contract conveys the right to control the use of an identified
asset, if it involves the use of an identified asset and the Company has substantially all of the economic benefits from use
of the asset and has right to direct the use of the identified asset. The cost of the right-of-use asset shall comprise of the
amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the
commencement date plus any initial direct costs incurred. The right-of-use assets is subsequently measured at cost less
any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease
liability. The right-of-use assets is depreciated using the straight-line method from the commencement date over the
shorter of lease term or useful life of right-of-use asset.
The Company measures the lease liability at the present value of the lease payments that are not paid at the
commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that
rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate.
For short-term and low value leases, the Company recognises the lease payments as an operating expense on a straight¬
line basis over the lease term.
e. Cash and Cash Equivalents
Cash and cash equivalent in the balance sheet comprises of cash at bank and on hand and short term deposit with an
original maturity of 3 months or less, which are subject to an insignificant risk of changes in value. For the purpose of
presentation in the statement of cash flows, cash and cash equivalents consist of cash and short term deposits as defined
above, net of outstanding bank overdraft as they are considered an integral part of the company's cash management.
f. Inventories
Raw material, stores, work in progress and finsihed goods are valued at lower of cost or net realisable value. Cost of raw
materials and components is arrived on a moving weighted average basis. Cost of work-in-progress (including made in
components) and finished goods comprises the moving weighted average rates of raw materials and components, direct
labour and includes appropriate allocation of works overheads. Cost of inventories also include all other costs incurred in
bringing the inventories to their present location and condition.
Materials in transit are valued at cost to date.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale.
g. Borrowings and borrowing costs
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured
at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is
recognised in the statement of profit & loss over the period of borrowings using effective interest method. Fees paid on
the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that
some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs.
Borrowings are removed from balance sheet when obligation specified in the contract is discharged, cancelled or expired.
The difference between the carrying amount of a financial liability that has been extinguished or transferred to another
party and the consideration paid, including any non cash assets transferred or liabilities assumed, is recognised in the
statement of profit and loss.
Borrowings are classified as current borrowings unless the company has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting period.
Borrowing costs consist of interest and transactions costs incurred in connection with the borrowing of funds. Borrowing
costs also include exchange differences to the extent regarded as an adjustment to the borrowing costs.
Borrowing costs that are attributable to the acquisition or construction of qualifying assets (i.e. an asset that necessarily
takes a substantial period of time to get ready for its intended use) are capitalized as a part of the cost of such assets. All
other borrowing costs are charged to the statement of profit and loss.
Investment income earned on the temporary investment of funds for specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalisation.
h. Financial Instruments:
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
(A) Financial Assets
(i) Recognition and initial measurement
Trade receivables are initially recognised when they are originated. All other financial assets are recognised when
the company becomes a party to the contractual provisions of the instrument. All financial assets other than those
measured subsequently at fair value through profit and loss, are recognised initially at fair value plus transaction
costs that are attributable to the acquisition of the financial asset. However trade receivables that do not contain
a significant financing component are measured at transaction price.
(ii) Classification and subsequent measurement
Subsequent measurement is determined with reference to the classification of the respective financial assets.
Based on the business model for managing the financial assets and the contractual cash flow characteristics of the
financial asset, the company classifies financial assets as subsequently measured at amortised cost, fair value
through profit and loss or fair value through other comprehensive income.
Financial Assets at Amortised Cost
A financial asset is measured at amortised cost if it is held within a business model whose objective is to hold the
asset 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.
After initial measurement, such financial assets are subsequently measured at amortized cost using the Effective
Interest rate method (EIR). Amortized cost is calculated by taking into account any discount or premium and fees or
cost that are an integral part of the EIR. The EIR amortization is included in finance income in the statement of profit
& loss. The losses arising from impairment are recognized in the statement of profit and loss.
Financial Assets Measured at Fair Value through Other Comprehensive Income ( FVOCI )
The asset is held within a business model whose objective is achieved by both
• Collecting contractual cash flows and selling financial assets and
• Contractual terms of the asset give rise on specified dates to cash flows that are SPPI on the principal amount
outstanding
After initial recognition, these assets are subsequently measured at Fair Value. Interest Income under Effective
Interest Rate method, foreign exchange gains and losses and impairment losses are recognized in the statement of
profit and Loss. Other net gains and losses are recognized in OCI.
Financial Assets Measured at Fair Value through profit and loss
Financial asset not measured at amortised cost or at fair value through OCI is carried at FVTPL.
Equity Instruments
All Equity investments within the scope of Ind AS 109 are measured at Fair Value except for equity investment in
subsidiary and joint venture are recognized at cost as per Ind AS 27. Such equity instruments which are held for
trading are classified as FVTPL. For all other such equity instruments, the company decides to classify the same
either as FVOCI or FVTPL. The company makes such election on an instrument by instrument basis. The classification
is made on initial recognition and is irrevocable. For Equity instruments classified as FVOCI, all fair value changes in
the instrument excluding dividends are recognized in OCI. Dividends on such equity instruments are recognized in
the statement of Profit or loss.
Equity Instruments included within the FVTPL category are measured at Fair Value with all changes recognised in
Statement of Profit and Loss. Dividends on such equity instruments are recognized in the statement of Profit or loss.
All other equity investments are fair valued through profit and loss.
(iii) De-recognition of Financial Assets:
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is
primarily derecognised when:
• The rights to receive cash flows from the asset have expired, or
• The company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay
the received cash flows in full without material delay to a third party under a 'pass-through' arrangement; and
either
(a) the company has transferred substantially all the risks and rewards of the asset, or
(b) the company has neither transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.
On de-recognition, any gains or losses on all debt instruments (other than debt instruments measured at FVOCI) and
equity instruments (measured at FVTPL) are recognised in the statement of Profit and Loss. Gains and losses in
respect of debt instrument measured at FVOCI and that are accumulated in OCI are reclassified to Profit and Loss on
de-recognition. Gains or losses on equity instruments measured at FVOCI that are recognised and accumulated in
OCI are not reclassified to Profit or Loss on derecognition.
(B) Financial Liabilities
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the
contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
(i) Recognition and Initial Measurement
Financial liabilities are initially recognized when the company becomes a party to the contractual provisions of the
instrument. Financial Liability is initially measured at fair value plus, for an item not at fair value through profit and
loss, net of transaction costs that are directly attributable to its acquisition or issue.
(ii) Classification and Subsequent Measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through Profit or Loss (FVTPL )
Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial
recognition as at FVTPL. Financial Liabilities at FVTPL are measured at fair value and changes therein, including any
interest expense, are recognised in Statement of Profit and Loss.
Financial liabilities at amortised cost
After initial recognition, financial liabilities other than those which are classified as FVTPL are subsequently
measured at amortised cost using the EIR method. Amortised cost is calculated by taking into account any discount
or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as
finance costs in the Statement of Profit and Loss.
(iii) De-recognition of Financial Liabilities
Financial liabilities are de-recognised when the obligation specified in the contract is discharged, cancelled or
expired. When an existing financial liability is replaced by another from the same lender on substantially different
terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as
de-recognition of the original liability and recognition of a new liability. The difference in the respective carrying
amounts is recognised in the Statement of Profit and Loss.
(iv) Offsetting Financial Instruments
Financial assets and liabilities are offset and the net amount is reported in the Balance Sheet where there is a legally
enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the
asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events
and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of
the Company or the counterparty.
I Revenue recognition :
Revenue is recognised upon transfer of control of promised goods or services to customers in an amount that reflects the
consideration which the Company expects to receive in exchange for those goods or services.
Revenue from sale of manufactured goods and traded goods
The Company derives revenues primarily from sale of manufactured goods and traded goods.
Revenue is recognized on satisfaction of performance obligation upon transfer of control of promised products or services
to customers or delivered to a carrier for export sale is measured at the amount of transaction price (net of variable
consideration) alloted to that performance obligation. Transaction price is amount that reflects the consideration the
Company expects to receive in exchange for those products or services. Revenue excludes taxes collected from customers
on behalf of the government.
Amount received as Advance from customers towards sale of goods are classified as Contract Liabilities. The company's
right to consideration in exchange for goods or services that the company has transferred to the customer are classified as
contract assets.
The Company has adopted Ind AS 115 Revenue from contracts with customers, with effect from April 1, 2018. Ind AS 115
establishes principles for reporting information about the nature, amount, timing and uncertainty of revenues and cash
flows arising from the contracts with its customers and replaces Ind AS 18 "Revenue" for entities to whom Ind AS is
applicable.The comparative amounts of revenue and the corresponding contract assets / liabilities have not been
retrospectively adjusted. The effect on adoption of Ind-AS 115 was insignificant.
Rendering of services
Income from services are recognized as and when the services are rendered.
Export Benefits
The benefit accrued under the Duty Drawback, Merchandise Export Incentive Scheme and other schemes as per the
Import and Export Policy in respect of exports made under the said schemes is included as 'Export Incentives' under the
head 'Other operating revenue'.
Interest Income
Interest income from debt instruments is recognised using the EIR method or proportionate basis. The effective interest
rate is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial asset to the
gross carrying amount of the financial asset. 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.
Dividends
Revenue is recognised when the company's right to receive the payment is established, which is generally when
shareholders approve the dividend.
j. Foreign currency transactions
Transactions in foreign currency are recorded applying the exchange rate at the date of transaction. Monetary assets and
liabilities denominated in foreign currency remaining unsettled at the end of the year, are translated at the closing rates
prevailing on the Balance Sheet date. Non-monetary items which are carried in terms of historical cost denominated in
foreign currency are reported using the exchange rate at the date of transaction. Exchange differences arising as a result
of the above are recognized under other operating income or other expenses in the statement of profit and loss on Net
basis. Exchange difference arising on the settlement of monetary items at rates different from those at which they were
initially recorded during the year, or reported in previous financial statements, are recognised as income or expenses in
the year in which they arise.
k. Employee Benefits
(i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12
months after the end of the period in which the employees render the related service are recognised in respect of
employees' services up to the end of the reporting period and are measured at the amounts expected to be paid
when the liabilities are settled.
(ii) Other long-term employee benefit obligations
The liabilities for earned leave and sick leave that are not expected to be settled wholly within 12 months are
measured as the present value of expected future payments to be made in respect of services provided by
employees up to the end of the reporting period using the projected unit credit method. The benefits are
discounted using the market yields at the end of the reporting period that have terms approximating to the terms of
the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial
assumptions are recognised in the Statement of Profit and Loss.
(iii) Post-employment obligations
The Company operates the following post-employment schemes:
(a) defined benefit plans such as gratuity; and
(b) defined contribution plans such as provident fund.
Defined Benefit Plans - Gratuity Obligations
The liability or asset recognised in the balance sheet in respect of defined benefit pension and gratuity plans is the
present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets.
The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows
by reference to market yields at the end of the reporting period on government bonds that have terms
approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation
and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit and
Loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are
recognised in the period in which they occur, directly in other comprehensive income. They are included in retained
earnings in the statement of changes in equity and in the balance sheet.
Defined contribution plan
The Company pays provident fund contributions to publicly administered provident funds as per local regulations.
The Company has no further payment obligations once the contributions have been paid. The contributions are
accounted for as defined contributions are recognised as employee benefit expense when they are due.
l. Segment Reporting policies
For the purposes of presenting segment information, the activities of the company are divided into operating segments in
accordance with Ind AS 108 (Operating Segments). Segments are identified having regard to the dominant source and
nature of risks and returns and internal organisation and management structure. Each segment represent strategic
business unit. Revenues and expenses have been identified to the segments based on their relationship to the business
activity of the segment. Income/ Expenses relating to the enterprise as a whole and not allocable on a reasonable basis to
business segments are reflected as unallocated corporate income/expenses. Inter-segment transfers are at prices which
are generally market led.
m. Impairment
(i) Impairment of financial assets
The Company measures the expected credit loss associated with its assets based on historical observed default rate,
industry practices and the business environment in which the entity operates or any other appropriate basis. The
impairment methodology applied depends on whether there has been a significant increase in credit risk. At every
reporting date, historical observed default rates are updated and changes in the forward looking estimates are
analysed.
(ii) Impairment of non-financial assets
The Company's non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indication exists, then the asset's
recoverable amount is estimated. An impairment loss is recognised for the amount by which the asset's carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of
disposal and value in use.
n. Derivative financial instruments
Derivative financial instruments such as forward contracts are re-measured at their fair value on reporting date with
changes in fair value recognised in the Statement of Profit and Loss in the period when they arise.
o. Income Tax:
The income tax expense or credit for the period is the tax payable on the current year's taxable income based on the
applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences
and to unused tax losses.
The current income tax charge is calculated based on the tax laws enacted or substantively enacted at the reporting date.
Current tax comprises of expected tax payable or receivable on taxable income/loss for the year or any adjustment or
receivable in respect of previous year. Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate
based on amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the Balance Sheet method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. However deferred tax liabilities are
not recognised if they arise from the initial recognition of goodwill. Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantially enacted by the end of the reporting date and are expected to apply to the
Company when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities
are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise
the asset and settle the liability simultaneously.
Current and deferred tax is recognized in Statement of Profit and Loss, except to the extent that it relates to the items
recognized in OCI or directly in equity. In this case, the tax is also recognised in OCI or directly in equity, respectively.
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