Shanti Gold International Changes Inventory Valuation Policy from FIFO to Weighted Average Cost
Shanti Gold International Limited announced on May 11, 2026, that its Board of Directors approved a voluntary change in its accounting policy for inventory valuation. The Company has moved from the First-In-First-Out (FIFO) method to the Weighted Average Cost (WAC) method.This change, adopted in accordance with Ind AS 8, is designed to ensure that the financial statements present more reliable and relevant information. The adoption of the WAC method is expected to better reflect the blended cost of inventories, improve cost and revenue matching, and align the Company’s practices with prevailing industry norms. The change will be applied retrospectively, with effect from April 01, 2024, as mandated under Ind AS 8.
Details of the Accounting Policy Change
The change represents a significant operational adjustment in financial reporting, moving the method used to value inventory holdings.| Nature of Change | Change in Accounting Policy |
|---|---|
| Previous Method | First-In-First-Out (FIFO) Method |
| Revised Method | Weighted Average Cost (WAC) Method |
| Effective Date & Year | Retrospective application from April 01, 2024, and effective for financial reporting from FY 2025-26 onwards |
| Application Method | Retrospective Application |
| Applicable Accounting Standards | Ind AS 2, Ind AS 8, Ind AS 1 (Para 38), Ind AS 34, Ind AS 7 |
Rationale for the Transition
The decision to adopt the WAC method was taken following a recommendation from the Audit Committee. The Company determined that the WAC method provides enhanced financial reliability for the following reasons:1. It better reflects the blended cost of inventories, which is particularly relevant given the volatility in raw material procurement costs.
2. It provides improved and consistent cost-revenue matching, thereby enhancing the reliability of reported performance.
3. The move aligns the Company's accounting policy with prevalent industry practice and improves comparability with peer entities.
Financial Impact of the Change
Shanti Gold International Limited has quantified the financial impact of this policy revision on key parameters across all restated periods.The comparative financial position for Profit Before Tax for the quarters and periods ended is detailed below:
| Particulars | FIFO (INR Lakhs) | WAC (INR Lakhs) |
|---|---|---|
| Quarters & Period Ended | ||
| For the Quarter Ended June | 3,291.65 | 4,589.65 |
| For the Period Ended June | 3,291.65 | 4,589.65 |
| For the Quarter Ended September | 5,762.44 | 3,381.61 |
| For the Period Ended September | 9,054.09 | 7,971.26 |
| For the Quarter Ended December | 5,679.79 | 4,041.03 |
| For the Period Ended December | 14,733.82 | 12,012.01 |
The financial information for Fiscal Year 2024-25, after considering the impact due to the change in accounting policy, is presented in the following summary:
| Particulars | FIFO (INR Lakhs) | WAC (INR Lakhs) |
|---|---|---|
| Opening Inventory | 12860.2 | 11569.7 |
| Closing Inventory | 14858.4 | 13394.1 |
| Retained Earnings as on April 01, 2024 | 8766.95 | 7801.19 |
| Profit Before Tax | 7283.09 | 7109.33 |
SHANTIGOLD Stock Price Movement
Today, Shanti Gold International Limited shares shed 2.30% of their value, closing at ₹221.52. The equity saw significant movement today, fluctuating within a range of ₹215 to ₹223.5 on a total volume of 1.66 million shares.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
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