1 Summary of Material Accounting Policies
a. Statement of compliance
The Financial statement of the company comprise the
balance sheet as of March 31, 2025 and March 31, 2024,
the related statement of profit and loss (including other
comprehensive income) for the year ended, the statement
of changes in equity and the statement of cash flows for
the year ended March 31, 2025 and March 31, 2024 and
the Material accounting policies, and other explanatory
information (together referred to as 'financial statements').
The Financial statement has been prepared on a going-
concern basis.
The financial statements comply in all material aspects with
Indian Accounting Standards (Ind AS) notified under Section
133 of the Companies Act, 2013 (the Act), Companies
(Indian Accounting Standards) Rules, 2015 and other
relevant provisions of the Act and other accounting principles
generally accepted in India.
These Financial statements do not reflect the effects of events
that occurred after the respective dates of the board meeting
held for the approval of the financial statements as at and for
the year ended March 31, 2025, as mentioned above.
The accounting policies are applied consistently and
presented in the financial statement except where a newly
issued accounting standard is initially adopted or a revision
to an existing accounting standard requires a change in
accounting policy hitherto in use.
This note provides a list of the accounting policies adopted
in the preparation of the financial statement. These policies
have been consistently applied to all the year presented
unless otherwise stated.
The Financial statement have been prepared on an accrual
basis under the historical cost convention except where the
Ind AS requires a different accounting treatment.
b. Functional and presentation currency
These Financial statements are presented in % which is
also functional currency of the Company. All amounts
disclosed in the financial statement and notes have been
rounded off to the nearest "lakhs" with two decimals, unless
otherwise stated.
c. Historical cost convention
These financial statements are prepared in accordance with
Indian Accounting Standards (Ind AS) under the historical
cost convention on the accrual basis, except for the following:
- certain financial assets and liabilities which are measured
at fair value or amortised cost;
- defined benefit plans and
- share-based payments
d. Current and non-current classification
The Company presents assets and liabilities in the balance
sheet based on current / non-current classification.
An asset is classified as current when it is expected to be
realized in, or is intended for sale or consumption in, the
Company's normal operating cycle, held primarily for the
purpose of being traded, expected to be realized within
12 months after the reporting date; cash or cash equivalent
unless it is restricted from being exchanged or used to settle
a liability for at least 12 months after the reporting date.
All other assets are classified as non-current.
A liability is classified as current it is expected to be settled
in the Company's normal operating cycle, it is held primarily
for the purpose of being traded, it is due to be settled within
12 months after the reporting date, or the Company does not
have an unconditional right to defer settlement of the liability
for at least 12 months after the reporting date. Terms of a
liability that could, at the option of the counterparty, result in
its settlement by the issue of equity instruments do not affect
its classification.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non¬
current only.
The company has ascertained its operating cycle as twelve
months for current and non-current classification of assets
and liabilities.
e. Use of estimates
The preparation of financial statement in conformity with
Ind AS requires the Management to make estimates and
assumptions that affect the reported amount of assets and
liabilities as at the Balance Sheet date, reported amount of
revenue and expenditure for the period and disclosures of
contingent liabilities as at the Balance Sheet date. Actual
results could differ from those estimates.
Estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates are
recognized in the period in which the estimates are revised
and in any future periods affected.
This note provides an overview of the areas where there
is a higher degree of judgment or complexity. Detailed
information about each of these estimates and judgments is
included in relevant notes together with information about
the basis of calculation.
Critical accounting estimates:
(a) Useful lives of Property, plant and
equipment
The Company reviews the useful life of property, plant
and equipment at the end of each reporting period.
This reassessment may result in change in depreciation
expense in future periods.
(b) Income Taxes
Significant judgments are involved in determining
the provision for income taxes including judgment on
whether tax positions are probable of being sustained
in tax assessments. A tax assessment can involve
complex issues, which can only be resolved over
extended time periods.
(c) Deferred Taxes
Deferred tax is recorded on temporary differences
between the tax bases of assets and liabilities and their
carrying amounts, at the rates that have been enacted
or substantively enacted at the reporting date. The
ultimate realization of deferred tax assets is dependent
upon the generation of future taxable profits during
the periods in which those temporary differences
and tax loss carry forwards become deductible. The
Company considers the expected reversal of deferred
tax liabilities and projected future taxable income in
making this assessment. The amount of the deferred
tax assets considered realizable, however, could be
reduced in the near term if estimates of future taxable
income during the carry-forward period is reduced.
(d) Expected credit losses on financial assets
The impairment provisions of financial assets are based
on assumptions about risk of default and expected
timing of collection. The Company uses judgment in
making these assumptions and selecting the inputs to
the impairment calculation, based on the Company's
past history, customer's creditworthiness, existing
market conditions as well as forward looking estimates
at the end of each reporting period.
(f) Defined benefit plans and compensated
absences
The cost of the defined benefit plans, compensated
absences and the present value of the defined benefit
obligation are based on actuarial valuation using the
projected unit credit method. An actuarial valuation
involves making various assumptions that may differ
from actual developments in the future. These include
the determination of the discount rate, future salary
increases and mortality rates. Due to the complexities
involved in the valuation and its long-term nature,
a defined benefit obligation is highly sensitive to
changes in these assumptions. All assumptions are
reviewed at each reporting date.
(g) Leases
The Company evaluates if an arrangement qualifies
to be a lease as per the requirements of Ind AS 116.
Identification of a lease requires significant judgment.
The Company uses significant judgement in assessing
the lease term (including anticipated renewals) and the
applicable discount rate.
The Company determines the lease term as the non¬
cancellable period of a lease, together with both
periods covered by an option to extend the lease if
the Company is reasonably certain to exercise that
option; and periods covered by an option to terminate
the lease if the Company is reasonably certain not
to exercise that option. In assessing whether the
Company is reasonably certain to exercise an option
to extend a lease, or not to exercise an option to
terminate a lease, it considers all relevant facts and
circumstances that create an economic incentive for
the Company to exercise the option to extend the
lease, or not to exercise the option to terminate the
lease. The Company revises the lease term if there is a
change in the non-cancellable period of a lease.
The discount rate is generally based on the incremental
borrowing rate specific to the lease being evaluated
or for a portfolio of leases with similar characteristics.
Accounting Policies
The accounting policies set out below have been applied consistently to
the year presented in the financial statements.
1.1 (a) Revenue recognition
Revenue is recognised when control of goods is transferred
to a customer in accordance with the terms of the contract.
The control of the goods is transferred upon delivery to the
customers either at factory gate of the Company or specific
location of the customer or when the goods are handed
over to the freight carrier, as per the terms of the contract.
A receivable is recognised by the Company when the
goods are delivered to the customer as this represents the
point in time at which the right to consideration becomes
unconditional, as only the passage of time is required before
payment is due.
Revenue from services, including those embedded in
contract for sale of goods, namely, freight and insurance
services mainly in case of export sales, is recognised upon
completion of services.
Revenue is measured based on the consideration to which
the Company expects to be entitled as per contract with
a customer. The consideration is determined based on the
price specified in the contract, net of the estimated variable
consideration. Accumulated experience is used to estimate
and provide for the variable consideration, using the
expected value method and revenue is only recognised to
the extent that it is highly probable that a significant reversal
will not occur. Contracts with customers are for short-term,
at an agreed price basis having contracted credit period
ranging up to 180 days. The contracts do not grant any rights
of return to the customer. Returns of goods are accepted by
the Company only on an exception basis. Revenue excludes
any taxes or duties collected on behalf of government that
are levied on sales such as goods and services tax.
Eligible export incentives are recognised in the year in which
the conditions precedent are met and there is no significant
uncertainty about the collectability.
(b) Other income
Dividend income from investments is recognised when the
shareholder's right to receive payment has been established
(provided that it is probable that the economic benefits will
flow to the Company and the amount of income can be
measured reliably).
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 principal 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.
1.2 Inventories
(a) Raw materials - valued at the lower of cost or net
realisable value. The cost is determined on FIFO /specific
identification basis.
(b) Finished goods - valued at the lower of cost or net
realisable value. The cost of material is determined on FIFO/
specific identification basis.
(c) Work-in-progress - valued at material cost including
appropriate production overhead.
(d) Stores and spares - valued at the lower of cost or net
realisable value. Cost is determined on FIFO basis.
(e) Due allowances - made for slow | non-moving, defective
and obsolete inventories based on estimates made by
the Company.
1.3 Fair value measurement
All assets and liabilities for which fair value is measured or
disclosed in the financial statements are categorised 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 recognised in the financial
statements on a recurring basis, the Company determines whether
transfers have occurred between levels in the hierarchy by re¬
assessing categorisation (based on the lowest level input that is
significant to the fair value measurement as a whole) at the end of
each reporting period.
The Company's Management determines the policies and
procedures for both recurring fair value measurement, such as
derivative instruments and unquoted financial assets measured at
fair value, and for non-recurring measurement, such as assets held
for distribution in discontinued operations.
At each reporting date, the Management analyses the movements
in the values of assets and liabilities which are required to be
remeasured or re-assessed as per the Company's accounting
policies. For this analysis, the Management verifies the major inputs
applied in the latest valuation by agreeing the information in the
valuation computation to contracts and other relevant documents.
The Management also compares the change in the fair value of
each asset and liability with relevant external sources to determine
whether the change is reasonable.
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.
This note summarises accounting policy for fair value. Other fair
value related disclosures are given in the relevant notes.
Disclosures for valuation methods, significant estimates and
assumptions (note 45)
Financial instruments (including those carried at amortised cost)
(note 45)
1.4 Foreign currency transactions and translation
i) Functional and presentation currency:
Items included in the Standalone Financial Statements of the
Company are measured using the currency of the primary
economic environment in which the Company operates
(functional currency). The Standalone Financial Statements
of the Company are presented in Indian currency, which is
also the functional currency of the Company.
ii) Transactions and balances:
Foreign currency transactions are translated into the
functional currency using the exchange rates at the dates
of the transactions. Foreign exchange gain | (loss) resulting
from the settlement of such transactions and from the
translation of monetary assets and liabilities denominated in
foreign currencies at year end exchange rates are generally
recognised in the Standalone Statement of Profit and Loss,
except that they are deferred in other equity if they relate to
qualifying cash flow hedges. Foreign exchange differences
regarded as an adjustment to borrowing costs are presented
in the Standalone Statement of Profit and Loss, within finance
costs. All other foreign exchange gain | (loss) presented in
the Standalone Statement of Profit and Loss are on a net
basis within other income.
Non-monetary items that are measured at fair value and
denominated in a foreign currency are translated using
the exchange rates at the date when the fair value was
determined. Translation differences on assets and liabilities
carried at fair value are reported as part of the fair value
gain | (loss). Non-monetary items that are measured in terms
of historical cost in a foreign currency are not revalued.
1.5 Taxes
Current income tax
Current income tax assets and liabilities are measured at the
amount expected to be recovered from or paid to the taxation
authorities. The Company determines the tax as per the provisions
of Income Tax Act 1961 and other rules specified thereunder.
Current income tax relating to items recognised outside profit or loss
is recognised outside profit or loss (either in other comprehensive
income or in equity). Current tax items are recognised in
correlation to the underlying transaction either in OCI or directly
in equity. Management periodically evaluates positions taken in
the tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provisions
where appropriate.
Deferred tax
Deferred tax is provided in full using the liability method on
temporary differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting
purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary
differences, except:
When the deferred tax liability arises from the initial recognition
of goodwill or an asset or liability in a transaction that is not a
business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss.
Deferred tax assets are recognised for all deductible temporary
differences, the carry forward of unused tax credits and any unused
tax losses. Deferred tax assets are recognised to the extent that
it is probable that taxable profit will be available against which
the deductible temporary differences, and the carry forward of
unused tax credits and unused tax losses can be utilised, except
when the deferred tax asset relating to the deductible temporary
difference arises from the initial recognition of an asset or liability
in a transaction that is not a business combination and, at the time
of the transaction, affects neither the accounting profit nor taxable
profit or loss.
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 measured at the tax rates that
are expected to apply in the year when the asset is realised or the
liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is
recognised outside profit or loss (either in other comprehensive
income or in equity). Deferred tax items are recognised in
correlation to the underlying transaction either in OCI or directly
in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally
enforceable right exists to set off current tax assets against current
tax liabilities and the deferred taxes relate to the same taxable
entity and the same taxation authority.
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