Note 1: Material accounting policies
A. Corporate Information
Banganga Paper Industries Limited (Earlier Known as Inertia Steel Limited) ("the
Company") is domiciled and incorporated in India under the provision of the
Companies Act, 1956 and its shares are listed on the Bombay Stock Exchange ('BSE').
The registered office of the Company is situated at 422, Tulsiani Chambers, Nariman
Point, Mumbai - 400021, Maharashtra, India.
The Company is Primarily engaged in Trading of Goods/Provision of Services.
The financial statements of the Company for the year ended 31st March, 2025 were
approved and adopted by the Board of Directors at their meeting held on 15th May,
2025.
B. Material Accounting Policies
a) Statement of Compliance
The standalone financial statements of the Company have been prepared in
accordance with Indian Accounting Standards ("Ind AS") notified under the
Companies (Indian Accounting Standards) Rules, 2015 and relevant provisions of the
Companies Act, 2013 ("the Act") (as amended from time to time).
b) Basis of preparation
The standalone financial statements have been prepared on a historical cost basis,
except for the following:
• certain financial assets and liabilities that are measured at fair value;
• defined benefit plans - plan assets measured at fair value; and
• share-based payments.
The financial statements are presented in Indian Rupees which is the functional
currency and presentation currency of the Company and all values are rounded to the
nearest lakhs (INR 00,000), except where otherwise indicated.
c) Operating cycle
The operating cycle of the Company is the time between the acquisition of assets for
processing and their realisation in cash or cash equivalents. When the Company’s
normal operating cycle is not clearly identifiable, it is assumed to be twelve months.
d) Property, plant and equipment
Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated
depreciation and impairment, if any. The cost of property, plant and equipment
includes purchase price, including freight, duties, taxes and any costs directly
attributable to bringing the asset to the location and condition necessary for it to be
capable of operating in the manner intended by management.
If significant parts of an item of property, plant and equipment have different useful
lives, then they are accounted for as separate items (major components) of property,
plant and equipment.
Property, plant and equipment are derecognized from financial statements, either on
disposal or when no economic benefits are expected from its use or disposal. The gain
or losses arising from disposal of property, plant and equipment are recognized in the
Statement of Profit and Loss in the year of occurrence.
Assets under construction include the cost of property, plant and equipment that are
not ready to use at the balance sheet date. Advances paid to acquire property; plant
and equipment before the balance sheet date are disclosed under other non-current
assets. Assets under construction are not depreciated as these assets are not yet
available for use.
Subsequent expenditures
Subsequent expenditures related to an item of property, plant and equipment are
added to its carrying value only when it is probable that the future economic benefits
from the asset will flow to the Company and cost can be reliably measured. All other
repair and maintenance costs are recognized in the Statement of Profit and Loss during
the year in which they are incurred.
Intangible Assets
An intangible asset shall be recognized if, and only if:
a) it is probable that the expected future economic benefits that are attributable to
the asset will flow to the Company; and
b) the cost of the asset can be measured reliably.
Intangible assets are stated at cost less accumulated amortization and impairment.
Intangible assets are amortized over their respective individual estimated useful lives on
a straight-line basis, from the date that they are available for use.
Computer software’s / licenses are carried at historical cost. They have an expected
finite useful life of 3 years and are carried at cost less accumulated amortization and
impairment losses. Computer licenses which are purchased on annual subscription
basis are expensed off in the year of purchase.
Depreciation and amortization
Depreciable amount for assets is the cost of an asset, or other amount substituted for
cost, less its estimated residual value.
Depreciation / Amortization on property, plant & equipment of the Company has been
provided using the straight line method based on the useful life specified in Schedule II
to the Companies Act, 2013. The useful life is as follows:
Assets acquired on lease and leasehold improvements are amortized over the primary
period of the lease on straight line basis.
The estimated useful lives and residual values of the property, plant & equipment and
intangible assets are reviewed at the end of each reporting period, with the effect of
any changes in estimate accounted for on a prospective basis.
e) Impairment of non-financial assets:
The carrying values of all non-current assets are reviewed for impairment, either on a
stand-alone basis or as part of a larger cash generating unit, when there is an
indication that the assets might be impaired. 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 cost of disposal and value
in use. Any provision for impairment is charged to the income statement in the year
concerned. Non-financial assets that suffered an impairment are reviewed for possible
reversal of the impairment at the end of each reporting period.
f) Leases ' T
The Company has evaluated its lease arrangements in accordance with Ind AS 116 -
Leases, and has concluded that it does not have any arrangements that qualify as
leases. Accordingly, the requirements of Ind AS 116 are not applicable for the year
ended March 31,2025.
g) 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.
Financial assets
The Company classifies its financial assets in the following measurement categories:
- those to be measured subsequently at fair value (either through other
comprehensive income, or through profit or loss), and
- those measured at amortised cost.
The classification depends on the Company's business model for managing financial
assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in the
statement of profit and loss or other comprehensive income. For investments in debt
instruments, this will depend on the business model in which the investment is held. For
investments in equity instruments, this will depend on whether the Company has made
an irrevocable election at the time of initial recognition to account for the equity
investment at fair value through other comprehensive income.
Amortised cost: Assets that are held for collection of contractual cash flows where
those cash flows represent solely payments of principal and interest are measured at
amortised cost.
Fair value through profit or Ioss: Assets that do not meet the criteria for amortised cost or
FVOCI are measured at fair value through profit or Ioss.
Financial liabilities
All financial liabilities (other than derivative instruments) are subsequently measured at
amortized cost using the effective interest method. The carrying amounts of financial
liabilities that are subsequently measured at amortized cost are determined based on
the effective interest method. Interest expense that is not capitalised as a part of cost
of an asset is included in the "Finance Costs".
Trade Receivables
Trade receivables are amounts due from customers for goods sold or services rendered
in the ordinary course of business. They are classified as current assets if collection is
expected within the Company’s normal operating cycle or within 12 months after the
reporting date, whichever is longer. Trade receivables are initially recognized at
transaction price and are subsequently measured at amortized cost, less provision for
impairment, if any. The Company applies the simplified approach permitted by Ind AS
109 - Financial Instruments to measure expected credit losses (ECL) on trade
receivables, which requires lifetime expected credit losses to be recognized from initial
recognition of the receivables.
h) Revenue recognition
Revenue from Operations
Revenue from the sale of goods is recognized when it is probable that the economic
benefits will flow to the Company and the revenue can be reliably measured,
regardless of when the proceeds are received. Revenue is measured at the fair value
of the consideration received or receivable, taking into account contractually defined
terms of payment and excluding taxes and duties collected on behalf of the
Government. '
Revenue from the sale of goods is recognized when the significant risks and rewards of
ownership have been transferred to the buyer, recovery of the consideration is
probable, the associated cost can be estimated reliably, there is no continuing
effective control or managerial involvement with the goods, and the amount of
revenue can be measured reliably. Revenue is recognized net of trade discounts,
rebates, and applicable taxes.
During the year, the Holding Company did not have any sale of goods.
Sale of Services
Revenue from sale of services is recognized as per the terms of the contract with the
buyer, based on the stage of completion, when the outcome of the transaction can
be reliably estimated. The percentage of completion method requires the Company to
estimate the services performed to date as a proportion of the total services to be
performed.
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
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.
i) Inventories:
Trading Unit
Inventories are valued at lower of cost and net realisable value. Cost of Inventories
comprise costs of purchase and other costs incurred in bringing the inventories to their
present condition and location. Net realisable value is the estimated selling price in the
ordinary course of business less necessary costs to complete the sale.
j) Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand
and short-term deposits with an original maturity of three months or less, which are
subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of
cash and short-term deposits, as defined above, net of outstanding bank overdrafts as
they are considered an integral part of the Company’s cash management.
k) Foreign currency transactions
Foreign currency transactions are recorded at the exchange rates prevailing on the
date of the transaction. Monetary assets and liabilities denominated in foreign
currencies are translated at the exchange rate prevailing as at the reporting date.
Exchange differences arising on settlement or translation of monetary items are
recognized in the Statement of Profit and Loss in the year in which they arise.
Non-monetary items that are measured in terms of historical cost in a foreign currency
are translated at the exchange rates prevailing at the date of the transaction. Non¬
monetary items that are measured at fair value in a foreign currency are translated
using the exchange rates at the date when the fair value was determined.
l) Taxes
Income tax expense represents the sum of the current tax and deferred tax.
Current tax charge is based on taxable profit for the year. Taxable profit differs from
profit as reported in the statement of profit and loss because some items of income or
expense are taxable or deductible in different years or may never be taxable or
deductible. The Company’s liability for current tax is calculated using Indian tax rates
and laws that have been enacted by the reporting date.
Current tax assets and liabilities are offset when there is a legally enforceable right to
set off current tax assets against current tax liabilities and when they relate to income
taxes levied by the same taxation authority.
The Company 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 is the tax expected to be payable or recoverable in the future arising from
temporary differences between the carrying amounts of assets and liabilities in the
balance sheet and the corresponding tax bases used in the computation of taxable
profit. It is accounted for using the balance sheet liability method. Deferred tax liabilities
are generally recognised for all taxable temporary differences and deferred tax assets
are recognised to the extent that it is probable that taxable profits will be available
against which deductible temporary differences can be utilised. Deferred tax is
calculated at the tax rates that are expected to apply in the period when the liability is
settled or the asset realised, based on tax rates that have been enacted or
substantively enacted by the reporting date.
Deferred income tax assets and liabilities are off-set against each other and the
resultant net amount is presented in the balance sheet, if and only when the Company
currently has a legally enforceable right to set- off the current income tax assets and
liabilities.
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 asset to be recovered.
Current and deferred tax is recognised in the statement of profit and loss, except to the
extent that it relates to items recognised in other comprehensive income or directly in
equity. In this case, the tax is also recognised in other comprehensive income or directly
in equity, respectively.
MAT Credit is recognised as an asset only when and to the extent there is convincing
evidence that the Company will pay normal income tax during the specified period,
i.e., the period for which MAT credit is allowed to be carried forward. In the year in
which the MAT credit becomes eligible to be recognised as an asset, the said asset is
created by way of a credit to the statement of profit and loss and shown as MAT credit
entitlement. The Company reviews the same at each balance sheet date and writes
down the carrying amount of MAT credit entitlement to the extent there is no longer
convincing evidence to the effect that the Company will pay normal income tax
during the specified period.
m) Earnings per share
Basic earnings per share is calculated by dividing the profit for the period attributable
to the owners of Company by the weighted average number of equity shares
outstanding during the period. The weighted average number of equity shares
outstanding during the period and for all periods presented is adjusted for events, such
as bonus shares.
Diluted earnings per share is computed using the net profit for the year attributable to
the shareholder’ and weighted average number of equity and potential equity shares
outstanding during the year including share options, convertible preference shares and
debentures, except where the result would be anti-dilutive. Potential equity shares that
are converted during the year are included in the calculation of diluted earnings per
share, from the beginning of the year or date of issuance of such potential equity
shares, to the date of conversion.
n) Employee benefits
a) Short term employee benefits
A liability is recognised for benefits accruing to employees in respect of salaries,
wages, performance incentives, medical benefits and other short term benefits in
the period the related service is rendered, at the undiscounted amount of the
benefits expected to be paid in exchange for that service.
b) Post-Employment Benefits
Defined Contribution Plans
The Company’s/Group’s defined contribution plans include Superannuation,
Employees’ Pension Scheme (under the provisions of the Employees’ Provident
Funds and Miscellaneous Provisions Act, 1952), statutory Provident Fund (PF), and
Employees’ State Insurance (ESIC). Contributions under these plans are recognized
as an expense in the Statement of Profit and Loss on an accrual basis in the period
in which they are incurred. The Company has no further obligation beyond making
these contributions.
Defined Benefit Plans
Liability for defined benefit plans, such as gratuity is determined based on
valuations carried out by an independent actuary as at the balance sheet date.
These plans require the Company/Group to provide a specified benefit to
employees, and the obligation is recognized in the Statement of Profit and Loss
over the period of employment using the projected unit credit method.
Gratuity:
The Company/Group provides for gratuity, a defined benefit plan covering eligible
employees. As per Ind AS 19 - Employee Benefits, gratuity is recognized only for
employees who have completed the minimum qualifying period of continuous
service under the Payment of Gratuity Act, 1972.
Holding Company: Since the Company does not have sufficient employees on its
rolls, disclosures as required under Ind AS 19 have not been provided.
Subsidiary Company: The subsidiary was incorporated in FY 2023-24. As at March
31,2025, no employee has completed the minimum qualifying period of five years’
continuous service. Accordingly, no provision for gratuity is required, and no
actuarial valuation has been carried out.
o) Investment in subsidiary.
Investments in subsidiary companies are carried at cost in accordance with Ind AS 27 -
Separate Financial Statements. These investments are tested for impairment whenever
there is an indication that the carrying amount may not be recoverable. Any
impairment loss is recognized in the Statement of Profit and Loss. Dividend income from
such investments is recognized in the Statement of Profit and Loss when the right to
receive the dividend is established.
p) Exceptional items
When items of income or expense are of such nature, size or incidence that their
disclosure is necessary to explain the performance of the Company for the year, the
Company makes a disclosure of the nature and amount of such items separately under
the head "Exceptional items". _
q) Segment reporting
The Company/Group is primarily engaged in a single business activity and operates in
a single geographical segment. In accordance with Ind AS 108 - Operating Segments,
no separate reportable segments exist for the year ended March 31, 2025.
Consequently, segment reporting is not applicable for the year.
For the purpose of this assessment, the Company/Group has considered the internal
reporting provided to the Chief Operating Decision Maker (CODM) and has concluded
that all operations relate to a single business segment and are conducted within a
single geographic region.
The Managing Director of the Company has been identified as CODM and he is
responsible for allocating the resources, assess the financial performance and position
of the Company and makes strategic decisions.
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