Note: 1 Material Accounting Policies and Accounting
Estimates and Judgements
1) Basis of preparation:
Statement of Compliance
The Standalone Financial Statements have been
prepared in accordance with the accounting principles
generally accepted in India including Indian Accounting
Standards (Ind AS) prescribed under the Section
133 of the Companies Act, 2013, Companies (Indian
Accounting Standards) Rules, 2015 as amended
and relevant provisions of the Companies Act, 2013
including presentation and disclosure requirements of
Division II of Schedule III of the Act as amended from
time to time
Accordingly, the Company has prepared these Financial
Statements which comprise the Balance Sheet as
at March 31, 2025, the Statement of Profit and Loss
for the year ended March 31, 2025, the Statement of
Cash Flows for the year ended March 31, 2025 and
the Statement of Changes in Equity for the year ended
as on that date, and accounting policies and other
explanatory information (together hereinafter referred
to as ' Standalone Financial Statements')
Classification of Assets and Liabilities:
All assets and liabilities have been classified as current
or non-current as per the Company's normal operating
cycle and other criteria set out in the Schedule III of the
Companies Act, 2013. Based on the nature of products
and services and the time between the acquisition
of assets for processing and their realisation in cash
and cash equivalents, the Company has ascertained
its operating cycle as 12 months for the purpose of
current and non - current classification of assets and
liabilities.
The Statement of Cash flows have been prepared
under Indirect Method.
Basis of Measurement
The financial statements have been prepared on a
historical cost convention on the accrual basis, except
for certain financial instruments that are measured at
fair value, viz employee benefit plan assets.
Functional and presentation currency
The financial statements are presented in Indian
Rupees which is the functional currency of the
Company and all values are rounded to the nearest
lakhs, except when otherwise indicated.
Use of estimates and Judgements:
The preparation of the financial statements in
conformity with Ind AS requires the management to
make estimates, Judgement & Assumptions. These
estimates, judgements & assumption affect the
application of accounting policies and the reported
amounts of assets & liabilities, the disclosures
of contingent assets & liability at the date of the
financial statement & reported amounts of revenues
and expenses during the period. The application of
accounting policies that require critical accounting
estimates involving complex and subjective
judgements. Accounting estimates could change from
period to period. Actual results could differ from those
estimates. Appropriate changes in estimates are
made as the management becomes aware of changes
in circumstances surrounding the estimates. Changes
in estimates are reflected in the financial statements
in the period in which the changes are made and, if
material, their effects are disclosed in the notes to the
financial statements.
The following are areas involving critical estimates
and judgements:
Jugements:
- Leases
- Estimation of income tax payable and income tax
expense in relation to an uncertain tax position
- Provisions and Contingencies
Estimates:
- Impairment
- Accounting for Defined benefit plans
- Useful lives of property, plant and equipment and
intangible assets - Fair Valuation of Financial
instruments
- Valuation of inventories
2) Revenue recognition:
Revenue from contract with customer
Ind AS 115 applies, with limited exceptions, to all
revenue arising from contracts with its customers. Ind
AS 115 establishes a five-step model to account for
revenue arising from contracts with customers and
requires that revenue be recognised at an amount that
reflects the consideration to which an entity expects
to be entitled in exchange for transferring goods or
services to a customer. Ind AS 115 requires entities to
exercise judgement, taking into consideration all of the
relevant facts and circumstances when applying each
step of the model to contracts with their customers. It
also specifies the accounting for the incremental costs
of obtaining a contract and the costs directly related to
fulfilling a contract.
(i) Sale of goods: 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.
Income from services rendered is recognised
based on agreements/ arrangements with the
customers as the service is performed and there
are no unfulfilled obligations. The Company
recognises revenue from goods sold and services
rendered at Transaction Price which is the amount
of consideration the Company expects to be
entitled to in exchange for transferring promised
goods or services to a customer, excluding the
amounts collected on behalf of a third party.
The Transaction price is net of discounts, sales
incentives, rebates granted, returns, sales taxes,
GST and duties and any other recoverable taxes.
Generally, in case of domestic sales, performance
obligations are satisfied when the goods
are dispatched or delivery is handed over to
transporter, revenue from export of goods is
recognised at the time of Bill of lading or airway
bill or any other similar document evidencing
delivery thereof.
(ii) Interest Income: Interest income from a financial
asset is recognised when it is probable that the
economic benefits will flow to the Company and
the amount of income can be measured reliably.
Interest income is accrued on a time basis, by
reference to the principle outstanding and at the
effective interest rate applicable, which is the
rate that exactly discounts estimated future cash
receipts through the expected life of the financial
asset to that asset's net carrying amount on initial
recognition.
(iii) Dividend income: Dividend income is recognised
when the right to receive the dividend is
established, it is probable that the economic
benefits associated with the dividend will flow to
the entity and the amount of the dividend can be
measured reliably.
(iv) Export benefits: Export incentives are recognised
as income when the right to receive credit as
per the terms of the scheme is established in
respect of the exports made and where there is
no significant uncertainty regarding the ultimate
collection of the relevant export proceeds.
3) Property, plant and equipment (PPE):
All items of property, plant and equipment are stated at
cost less accumulated depreciation and accumulated
impairment loss, if any.
The cost of PPE comprises its purchase price
(including the costs of materials / components, cost
of acquisition, installation or construction) net of any
trade discounts and rebates, any import duties and
other taxes (other than those subsequently recoverable
from the tax authorities), any directly attributable
expenditure on making the asset ready for its intended
use, including relevant borrowing costs for qualifying
assets including exchange differences arising from
foreign currency borrowings to the extent that they
are regarded as an adjustment to interest costs and
such other incidental costs that may be associated
with acquisition or creation of the asset ready for its
intended use.
When significant parts of plant and equipment
are required to be replaced at intervals, the same
is depreciated separately based on their specific
useful lives. All other repair and maintenance costs
are recognised in the statement of profit or loss as
incurred.
Capital work-in-progress in respect of assets which
are not ready for their intended use are carried at cost,
comprising of direct costs, related incidental expenses
and attributable interest.
Capital expenditure on property, plant and equipment
for research and development is classified under
property, plant and equipment and is depreciated on
the same basis as other property, plant and equipment.
An item or part of PPE is derecognised upon disposal
or when no future economic benefits are expected
from its use. Any gain or loss arising on de-recognition
of the asset (calculated as the difference between the
net disposal proceeds and the carrying amount of the
asset) is included in the Statement of Profit & Loss as
and when the asset is derecognised.
Intangible Assets:
Intangible assets are recognised when it is probable
that the future economic benefits that are attributable
to the asset will flow to the Company and the cost of
the asset can be measured reliably. Intangible assets
are stated at original cost net of tax/duty credits
availed, if any, less accumulated amortisation and
cumulative impairment. Administrative and other
general overhead expenses that are specifically
attributable to acquisition of intangible assets are
allocated and capitalised as a part of the cost of the
intangible assets. Intangible development costs are
capitalised as and when technical and commercial
feasibility of the asset is demonstrated and future
economic benefits are probable.
The useful lives of intangible assets are assessed as
either finite or indefinite. Intangible assets with finite
lives are amortised over the useful economic life
and assessed for impairment whenever there is an
indication that the intangible asset may be impaired.
The amortisation period and the amortisation method
for an intangible asset with a finite useful life are
reviewed at least at the end of each reporting period.
Gains or losses arising from de-recognition 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.
Research and Development:
Research costs are expensed as incurred.
Development expenditures on an individual project are
recognised as an intangible asset when the Company
can demonstrate:¬
- development costs can be measured reliably;¬
- the product or process is technically and
commercially feasible;
- future economic benefits are probable; and
- the Company intends to and has sufficient
resources to complete development and to use or
sell the asset.
Following initial recognition of the development
expenditure as an asset, the asset is carried at cost
less any accumulated amortisation and accumulated
impairment losses. Amortisation of the asset begins
when development is complete and the asset is
available for use. It is amortised over the period of
expected future benefit. Amortisation expense is
recognised in the statement of profit and loss unless
such expenditure forms part of carrying value of
another asset. During the period of development, the
asset is tested for impairment annually.
Depreciation:
Depreciable amount of all items of property, plant and
equipment is the cost of an asset, or other amount
substituted for cost, less its estimated residual value.
Depreciation for Property, plant and equipment are
provided on straight line method, over the useful life of
the assets, as specified in Schedule II to the Companies
Act, 2013.
Leasehold Land is amortised over the tenure of lease.
Property, plant and equipment which are added /
disposed off during the year, depreciation is provided
on pro-rata basis.
The asset's residual values, useful lives and methods
of depreciation are reviewed at each financial year end
and adjusted prospectively; if appropriate an asset's
carrying amount is written down immediately to its
recoverable amount if the asset's carrying amount is
greater than its estimated recoverable amount. 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.
Impairment
The Company assesses at each reporting the carrying
amounts of its property, plant and equipment, intangible
assets to determine whether there is any indication that
those assets have suffered an impairment loss. If any
indication exists, or when annual impairment testing
for an asset is required, the Company estimates the
asset's recoverable amount. Impairment loss, if any,
is provided to the extent that the carrying amount of
assets exceeds their recoverable amount. Recoverable
amount is higher of net selling price of an asset or
its value in use. Value in use is the present value of
estimated future cash flows expected to arise from the
continuing use of an asset and from its disposal at the
end of its useful life.
Non-current assets held for sale
Assets held for sale are measured at the lower of
carrying amount or fair value less costs to sell. The
determination of fair value less costs to sell includes
use of management estimates and assumptions. The
fair value of the assets held for sale has been estimated
using valuation techniques (including income and
market approach), which include unobservable inputs.
Non-current assets and disposal group that ceases to
be classified as "Held for Sale" shall be measured at
the lower of carrying amount before the non-current
asset and disposal group was classified as "Held for
Sale" and its recoverable amount at the date of the
subsequent decision not to sell. Recoverable amounts
of assets reclassified from "Held for Sale" have been
estimated using the Management's assumptions.
4) Inventories:
Raw materials, packing materials, store & spares,
traded goods and Work in progress are valued at the
lower of cost and net realisable value. The cost of Raw
materials, packing materials, store & spares and traded
goods includes all cost of purchase, duties and taxes
(other than those subsequently recoverable from the
tax authorities) and all other cost incurred in bringing
the inventory to its present location and conditions.
Cost is arrived on moving stock on FIFO basis.
Finished goods are valued at lower of cost and net
realisable value. The cost of finished goods and Work
in progress have been computed to include all cost of
purchases, cost of conversion, appropriate share of
fixed production overheads based on normal operating
capacity and other related cost incurred in bringing the
inventories to their present condition.
Net realisable value is the estimated selling price in the
ordinary course of business, less the estimated costs
of completion and selling expenses. Slow and non¬
moving material, obsolesces, defective inventory are
provided for and valued at net realisable value.
Goods and material in transits are valued at cost
incurred upto to the date of balance sheet.
5) Retirement and other employee benefits:
Defined contribution plans
Payments to defined contribution plans are charged as
an expense as they fall due. Payments made to state
managed retirement benefit schemes are dealt with
as payments to defined contribution schemes where
the Company's obligations under the schemes are
equivalent to those arising in a defined contribution
retirement benefit scheme.
Defined benefit plans
For defined benefit retirement schemes the cost
of providing benefits is determined using the
Projected Unit Credit Method, with actuarial valuation
being carried out at each balance sheet date. Re¬
measurement gains and losses of the net defined
benefit liability/ (asset) are recognised immediately
in other comprehensive income. The service cost and
net interest on the net defined benefit liability/ (asset)
is treated as a net expense within employment costs.
Past service cost is recognised as an expense when
the plan amendment or curtailment occurs or when any
related restructuring costs or termination benefits are
recognised, whichever is earlier. The retirement benefit
obligation recognised in the balance sheet represents
the present value of the defined benefit obligation as
reduced by the fair value plan assets.
6) Foreign Currency Transactions:
Transaction denominated in foreign currencies is
recorded at the exchange rate that approximates the
actual rate prevailing at the date of the transaction.
Monetary item denominated in foreign currency
remaining unsettled at the year-end are translated
at year end rates. Differences arising on settlement
or conversion of monetary items are recognised in
statement of profit and loss. 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 transactions. Premium in case of
forward contracts is dealt with in the Profit and Loss
Account proportionately over the period of contracts.
The exchange differences arising on settlement/
translation are dealt with in the Statement of Profit and
Loss.
7) Leases (as a lessee):
The company recognises a right-of-use asset and
a lease liability at the lease commencement date.
The right-of-use asset is initially measured at cost,
which comprises the initial amount of the lease
liability adjusted for any lease payments made at or
before the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle
and remove the underlying asset or to restore the
underlying asset or the site on which it is located, less
any lease incentives received.
The right-of-use asset is subsequently depreciated
using the straight-line method from the commencement
date to the earlier of the end of the useful life of the
right-of-use asset or the end of the lease term. The
estimated useful lives of right-of-use assets are
determined on the same basis as those of property,
plant and equipment. In addition, the right-of-use asset
is periodically reduced by impairment losses, if any,
and adjusted for certain remeasurements of the lease
liability.
The lease liability is initially measured at the present
value of the lease payments that are not paid at the
commencement date, discounted using the interest
rate implicit in the lease or, if that rate cannot be readily
determined, company's incremental borrowing rate.
Generally, the Company uses its incremental borrowing
rate as the discount rate.
Lease payments included in the measurement of the
lease liability comprise the following: -
• Fixed payments, including in-substance fixed
payments;
• Variable lease payments that depend on an index
or a rate, initially measured using the index or rate
as at the commencement date;
• Amounts expected to be payable under a residual
value guarantee; and
• The exercise price under a purchase option that
the Company is reasonably certain to exercise,
lease payments in an optional renewal period if
the Company is reasonably certain to exercise
an extension option, and penalties for early
termination of a lease unless the Company is
reasonably certain not to terminate early.
The lease liability is measured at amortised cost using
the effective interest method. It is remeasured when
there is a change in future lease payments arising
from a change in an index or rate, if there is a change
in the Company's estimate of the amount expected
to be payable under a residual value guarantee, or if
company changes its assessment of whether it will
exercise a purchase, extension or termination option.
When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying
amount of the right-of-use asset, or is recorded in
profit or loss if the carrying amount of the right-of -use
asset has been reduced to zero.
The company presents right-of-use assets that do not
meet the definition of investment property in 'property,
plant and equipment' and lease liabilities in 'loans and
borrowings' in the statement of financial position.
8) Income Taxes:
Income tax expense comprises of current tax expense
and deferred tax expenses.
Current and deferred taxes are recognised in Statement
of Profit and Loss, except when they relate to items
that are recognised in other comprehensive income or
directly in equity, in which case, the current and deferred
tax are also recognised in other comprehensive income
or directly in equity, respectively.
Current income tax:
Current tax is the amount of tax payable on the taxable
income for the year as determined in accordance with
the provisions of the Income Tax Act of the respective
jurisdiction. The current tax is calculated using tax
rates that have been enacted or substantively enacted,
at the reporting date.
Deferred tax:
Deferred tax is recognised for all temporary differences
arising between the tax bases of assets and liabilities
and their carrying amounts. Deferred tax liabilities are
recognised for all taxable temporary differences.
The carrying amount of deferred tax assets is reviewed
at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profit will
be available to allow all or part of the deferred tax asset
to be utilised. Unrecognised deferred tax assets are re¬
assessed at each reporting date and are recognised
to the extent that it has become probable that future
taxable profits will allow the deferred tax asset to be
recovered.
Deferred tax assets and liabilities are offset when there
is legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances
related 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 net basis, or to realise the asset and settle
the liability simultaneously.
Deferred tax assets and liabilities are measured using
substantively enacted tax rates expected to apply to
taxable income in the years in which the temporary
differences are expected to be recovered or settled.
9) Borrowing Costs:
Borrowing costs include interest, other costs
incurred in connection with borrowing and exchange
differences arising from foreign currency borrowings
to the extent that they are regarded as an adjustment to
the interest cost. General and specific borrowing costs
directly attributable to the acquisition, construction
or production of qualifying assets, which are assets
that necessarily take a substantial period of time to
get ready for their intended use or sale, are added to
the cost of those assets, until such time as the assets
are substantially ready for their intended use or sale.
Premium in the form of fees paid on refinancing of
loans are accounted for as an expense over the life of
the loan using effective interest rate method. All other
borrowing costs are recognised in the Statement of
profit and loss in the period in which they are incurred.
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