2. MATERIAL ACCOUNTING POLICIES
2.1.Statement of compliance
The financial statements have been prepared in accordance with IND AS notified under Section. 133 of the Companies Act, 2013 read with the
Companies (Indian Accounting Standards) (IndAS) Rules 2015 and other relevant provisions of the Act.
2.2.Basis of preparation and presentation
These financial statements are prepared in accordance with Indian Accounting Standards (IndAS) under the historical cost convention on the
accrual basis except for certain financial instruments which are measured at fair values, the provisions of the Companies Act, 2013('Act')(to the
extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI).
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
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, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the
fair value of an asset or liability, the company takes into account the characteristics of the asset or liability at the measurement date. In addition,
for financial reporting purposes, fair value measurements are categorised into:
Level 1 (unadjusted quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date);
Level 2 (inputs other than quoted prices included within Level 1) that are observable for the asset or liability, either directly or indirectly;
Level 3 (unobservable inputs for the asset or liability). Fair value in respect of equity financial instruments are the quoted prices of those
instruments in the stock exchanges at the measurement date.
a) 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;
• Expected to be realised within twelve months after the reporting period, or
• 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,
• It is due to be settled within twelve months after the reporting period, or
• 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.
b) Functional and Presentation Currency
Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the
Company operates ("the functional currency"). Indian rupee is the functional currency of the Company.
The financial statements are presented in Indian Rupees (?) which is the Company's presentation currency. All financial information
presented in Indian Rupees has been rounded up to the nearest Lakhs except where otherwise indicated
c) Use of Estimates
The preparation of standalone financial statements in conformity with Ind AS requires the management to make estimates and judgements that
affect the reported amounts of assets, liabilities, revenue, expenses and other comprehensive income (OCI) that are reported and disclosed in the
financial statements and accompanying notes. These estimates are based on the management's best knowledge of current events, historical
experience, actions that the Company may undertake in the future and on various other assumptions that are believed to be reasonable under
the circumstances. Actual results could differ from those estimates. Changes in estimates are reflected in the standalone financial statements in
the year in which the changes are made. Significant estimates and assumptions are used for, but not limited to,
a) Estimation of useful life of Property, Plant and Equipment
b) Estimation of useful life of Intangible Assets
c) Provisions and Contingent Liabilities
d) Recognition of deferred taxes
e) Key actuarial assumptions for measurement of future obligations under employee benefit plans
d) Recent accounting pronouncements
Companies Act (Indian Accounting Standards) Amendment Rules, 2024
The Ministry of Corporate Affairs (MCA) has notified the Companies Act (Indian Accounting Standards)Amendment Rules, 2024 vide
notification dated August 12, 2024 notified Ind AS 117 "Insurance Contracts", which are effective for reporting periods on or after April 1, 2024,
and it supersedes Ind AS 104 "Insurance Contracts". The company is not engaged in insurance contracts. Hence, the amendment does not have
any impact on the financial statements.
Additionally, the notification introduced amendments to Ind AS 101 (First-time Adoption of Indian Accounting Standards), Ind AS 103
(Business Combination), Ind AS 105 (Non-Current Assets Held for Sales and Discontinued Operations), Ind AS 107 (Financial Instruments:
Disclosures), Ind AS 109 (Financial Instruments), Ind AS 115 (Revenue from Contracts with Customers), Ind AS 116 (Leases). The amendments
were primarily focused on ensuring consistency with Ind AS 117. The amendments also provided for enhanced disclosure requirements under
Ind AS 107 (Financial Instruments: Disclosures) and Ind AS 116 (Leases) to provide greater transparency regarding financial instruments linked
to Insurance Contracts and lease transactions. The amendments do not have any material impact on the company's financial statements.
Companies Act (Indian Accounting Standards) Second Amendment Rules, 2024
The Ministry of Corporate Affairs (MCA) has notified the Companies Act (Indian Accounting Standards) Second Amendment Rules, 2024, with
effect from September 9, 2024.
Ind AS 116 - Leases (Amendments applicable with effect from April 1, 2024)
The amendments in the standard address the measurement of lease liability in a sale and leaseback transaction. The seller-lessee shall determine
the lease payments or the 'revised lease payments' in a way that they do not recognize any amount of gain or loss that relates to the right of use
retained by the seller-lessee.
The company is not engaged in any sale and leaseback transactions during the year. Hence, the amendment does not have any impact on the
financial statements. Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time to time. During the year ended March 31, 2025, MCA has not notified any new
standards or amendments to the existing standards applicable to the Company.
2.3. Property, Plant and Equipment
Property, plant and equipment are carried at cost of acquisition including any attributable cost of bringing the assets to its working condition for
its intended use and net of Cenvat /GST or any other claim receivable less accumulated depreciation and impairment losses , if any.
The depreciation charge is based on useful life and the expected residual value at the end of its life and are determined by management at the
time the asset is acquired and reviewed periodically, including at each financial year end with the effect of any changes in estimate accounted for
on a prospective basis. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact
their life, such as changes in technology.
An item of property, plant and equipment is de recognised upon disposal or when no future economic benefits are expected to arise from the
continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the
difference between the sales proceeds and the carrying amount of the asset and is recognised in the profit or loss.
For transition to IND AS, the company has elected to continue with the carrying value of all of its property, plant and equipment recognised as of
1st April 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
2.4 . Intangible Assets
Intangible assets are carried at cost less accumulated amortisation. Amortisation is recognised on a straight line basis over their estimated useful
lives.
For transition to IND AS, the company has elected to continue with the carrying value of Zero of its intangible assets viz Technical know which
was fully amortised as of 1st April 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of
the transition date.
2.5.Impairment of assets
A tangible or intangible asset is treated as impaired when the carrying amount of the asset exceeds its estimated recoverable value. Carrying
amounts of tangible or intangible assets are reviewed at each balance sheet date to determine indications of impairment, if any, of those assets. If
any such indication exists, the recoverable amount of the asset is estimated and an impairment loss equal to the excess of the carrying amount
over its recoverable value is recognised as an impairment loss. The impairment loss, if any, recognised in prior accounting period is reversed if
there is a change in estimate of recoverable amount.
2.6 Financial Instruments
Financial assets and financial liabilities constitute Financial Instruments and are recognised only when the company becomes party to the
contractual provisions of the instrument.
On initial recognition , (i) financial assets are classified either at amortised cost or fair value through other comprehensive income ( OCI) or
fair value through profit or loss ( FVTPL) and (ii) financial liabilities either at amortised cost or fair value through profit or loss ( FVTPL)
On initial recognition, a financial asset or a financial liability is measured at its fair value. In the case of a financial asset or liability which is not
categorised at FVTPL , the financial asset or liability will be measured at its fair value plus/minus transaction cost that are directly contributed
to the acquisition or issue of the financial asset or financial liability.
The financial assets and liabilities are carried at FVTPL and there are no financial assets and liabilities falling under other categories.
The equity instruments are categorised at FVTPL and are measured at the end of each reporting period.
In the case of derivatives, the contractual rights and obligations are recognised as assets or liabilities in the balance sheet.
The financial assets are derecognised when the contractual rights to the cash flows from the asset expires.
The financial liabilities are derecognised when the obligations are discharged.
2.7 Equity Instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity
instruments issued by the entity are recognised at the proceeds received, net of direct issue costs.
Repurchase of the company's own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss
on the purchase, sale, issue or cancellation of the company's own equity instruments.
2.8 Valuation of Inventories
Inventories are valued at lower of cost and net realisable value after providing for obsolescence and other losses, where considered necessary.
The costs of inventories are ascertained on weighted average method. 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.
2.9 Foreign Currency transactions
Foreign currency transactions are recorded at the exchange rates prevailing at the date of the transaction.
Foreign currency monetary items at the balance sheet date are reported using the closing rate.
Exchange differences arising on the settlement of monetary items or on reporting of monetary items at rates different from those at which they
were initially recorded during the year or reported in previous financial statements are recognized as income or expense in the year in which
they arise.
Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
2.10 Recognition of revenue
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns. The company
recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity.
Dividend income from investments is recognised when the right to receive payment is established
Interest income is recognized on time proportionate basis with reference to the principal outstanding and at the effective interest rate applicable.
Export incentives are recognised when the right to receive payment/credit is established and no significant uncertainity as to measurability or
collectability exists.
2.11 Borrowing Cost
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.
2.12 Date of recording of Final Dividend declared by the Company as a liability
Final dividend on shares are recorded as a liability on the date of approval by the shareholders at the annual general meeting and interim
dividend are recorded as a liability on the date of declaration by the Company's Board of Directors.
2.13 Earnings per share:
Basic Earnings per share is calculated by dividing the Net Profit after tax attributable to the equity shareholders by the weighted average number
of Equity Shares outstanding during the year.
2.14 Employee Benefits:
Employee benefits consist of provident fund and gratuity. The company's contribution to provident fund is considered as defined contribution
plan and charged as an expense based on the amount of contribution required to be made. For defined benefit plan the company contributes to
group gratuity scheme formulated by Life Insurance Corporation of India as demanded by the said corporation to discharge its liability on
account of employee post employment benefits.
2.15. Taxes on Income
Income tax expense comprises current and deferred income tax.
Current tax
Current income tax for current and prior periods is recognised at the amount expected to be paid to or recovered from the tax authorities, using
the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting date.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities. Deferred tax liabilities are recognised
for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable
that taxable profits will be available against which those deductible temporary differences can be utilised.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset
realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the company
expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Current and deferred tax for the year
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income, in
which case, the current and deferred tax are also recognised in other comprehensive income .
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