I Significant Accounting Policies
a) Revenue recognition
Sales are disclosed net of sales returns and GST.
Revenue from the sale of goods is recognised when (or as) the entity satisfies a performance obligation by transferring a promised good or service
to a customer. The ownership is transferred when (or as) the customer obtains control of those goods.
Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade
discounts and volume rebates. Offered by the company as a part of the contract allocated to that performance obligation Income from operations
includes revenue earned on account of job work income which is accounted as per the due terms agreed with the customers.
Income from operations includes revenue earned on account of job work income which is accounted as per the due terms agreed with the
customers.
Other income is comprised primarily of interest and Rental income. Interest income is recognized using the effective interest method.
b) Employee benefits
1) Short term employee benefits
All employee Benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Benefits such
as Salaries, wages, and short term compensated absences etc. is recognised in the period in which the employee renders the related service.
2) Post-Employment Benefits
i) Defined Benefit Obligation Plans:
For gratuity being defined benefit retirement benefit plan, the cost of providing benefits is determined using the projected unit credit method, with
actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the
effect of the changes to the asset ceiling (if applicable), is reflected immediately in the statement of financial position with a charge or credit
recognized in other comprehensive income in the period in which they occur. Re-measurement recognized in other comprehensive income is
reflected immediately in retained earnings and will not be reclassified to Statement of Profit or Loss. Past service cost is recognized in Statement
of Profit or Loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the
Period to the net defined benefit liability or asset.
ii) Defined Contribution plan
Define contribution plans are post-employment benefit plans under which the company pays fixed contributions into separate entities (fund) or to
financial institutions or state managed benefit schemes. The Company operates defined contribution plans pertaining to Provident Fund,
Employees state Insurance, Pension Fund Scheme for eligible employees. The Company contribution to defined contribution plans are recognised
in the profit and loss account in the financial year to which they relate.
c) Property, plant and equipment
Property, plant and equipment are recorded at cost of acquisition / construction less accumulated depreciation and impairment losses, if any. Cost
comprises of the purchase price net of creditable Goods and Services Tax, creditable customs duty, if any, and any attributable cost of bringing
the assets to its working condition for its intended use.
Components of an asset are separated where their value is significant in relation to the total value of the asset and where those components have
different useful lives to the remainder of the asset. Where a component is replaced or restored, the carrying amount of the old component will be
derecognised and value of new component / restoration cost will be added. Where the carrying value of the derecognised/replaced component is
not known, a best estimate will be determined by reference to the current cost.
The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement or impairment of the asset
and the resultant gains or losses are recognized in the Statement of Profit and Loss. Assets to be disposed off are reported at the lower of the
carrying value or the fair value less cost to sell.
d) Intangible Assets
Intangible assets are stated at cost less provisions for amortisation and impairments. Software licenses fees are charged to statement of profit
and loss when incurred.
Gains or losses arising from the retirement or disposal of an intangible asset, are determined as the difference between disposal proceeds and
carrying amount of the asset and are recognised as income or expense in the Statement of Profit and Loss.
e) Depreciation / Amortisation on Property, Plant & Equipment and Investment Properties
Depreciation / Amortisation on Property, Plant & Equipment and Investment Properties (other than freehold land and capital work-in-progress) is
charged on a Straight Line Basis so as to write off the original cost of the assets over the useful lives. The useful life of the fixed assets has been
adopted as prescribed under the Companies Act, 2013.
f) Capital Work-in-Progress
Assets under construction wherein assets are not ready for use in the manner as intended by the management are shown as Capital Work-In¬
Progress.
g) Leases
i) Company as a lessee
A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
The company has selected not to recognise right-of-use assets and lease liabilities for short-term leases of all assets that have a lease term of 12
months or less and leases of low-value assets. The company recognizes the lease payments associated with these leases as an expense on a
straight-line basis over the lease term.
ii) Company as a lessor
Leases for which the company is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer substantially all
the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
Lease income from operating lease is recognised in the statement of profit and loss on straight line basis over the lease term.
h) Fair value measurement of non-financial Assets
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the
asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair
value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
i) Impairments of non-current assets
Non-financial assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not
be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in¬
use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other
assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs.
If such assets are considered to be impaired, the impairment to be recognized in the statement of profit and loss is measured by the amount by
which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement
of profit and loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is
increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined
(net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.
j) Inventories
All Inventories are valued at the lower of cost and net realisable value.
Raw Materials are valued at lower of cost (net of GST) or net realisable value. Cost is determined at FIFO basis.
Semi-Finished Goods are valued at cost of material and other direct manufacturing expenses.
Finished Goods are valued at lower of cost or net realisable value. Cost of finished goods includes material cost, direct variable overheads and
fixed overheads.
**Cost comprises of cost of purchase, cost of conversion and other cost incurred in bringing the inventory to its present location and condition.
k) Trade receivables
Trade receivables that do not contain a significant financing component, are measured and carried at its transaction price i.e. original invoice
amount less any provisions for doubtful debts. Provisions are made where there is evidence of a risk of non-payment, taking into account ageing,
previous experience and general economic conditions. When a trade receivables determined to be uncollectable it is written off, firstly against any
provision available and then to the Statement of Profit and Loss.
l) Cash and Cash equivalents
Cash and cash equivalents include cash at bank and cash in hand and highly liquid interest-bearing securities with maturities of three months or
less from the date of inception/acquisition.
m) Borrowing Costs
Borrowing costs directly attributable to the acquisition and/or construction of an asset that necessarily takes a substantial period of time to get
ready for its intended use are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur.
Borrowing costs consist of interest expenses calculated using the effective interest method and other costs that an entity incurs in connection with
the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
n) Taxation
i) Current income tax
Income tax expense is recognized in the statement of profit and loss except to the extent that it relates to items recognized directly in equity/OCI,
in which case it is recognized in other comprehensive income. Current income tax for current and prior periods is recognized 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 on
the reporting date. The company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized
amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
ii) Deferred tax
Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and
their carrying amounts in the financial statements. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is
no longer probable that the related tax benefit will be realized.
"Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted on the
reporting date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or
settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that
includes the enactment or the substantive enactment date.
o) Financial instruments
The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the financial instrument.
I) Financial Assets
a. Initial recognition and measurement
Except for Trade Receivables that do not contain a significant financing component, all financial assets are recognized initially at fair value plus,
in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the
financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention
in the marketplace (regular way trades) are recognised on the trade date i.e., the date that the Company commits to purchase or sell the asset.
b. Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in three categories:
(i) Financials Assets at amortised cost:
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to
collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding.
After initial measurement, debt instruments are subsequently measured at amortised cost using the effective interest rate method, less impairment,
if any.
(ii) Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective
is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The fair value is measured adopting valuation techniques as per prevailing valuation guidelines, to the extent applicable, as at the reporting date.
iii) Financial assets at fair value through profit or loss
Financial assets which are not classified in any of the above categories are subsequently fair valued through profit or loss.
c. Impairment of financial assets
The Company applies the expected credit loss model for recognising impairment loss on financial assets measured at amortised cost, lease
receivables, trade receivables, other contractual rights to receive cash or other financial asset. For trade receivables, the Company measures the
loss allowance at an amount equal to lifetime expected credit losses. Further, for the purpose of measuring lifetime expected credit loss allowance
for trade receivables, the Company has used practical expedience as permitted under Ind AS 109. This expected credit loss allowance is computed
based on a provision matrix which takes into account historical credit loss experience and adjusted for forward-looking information.
d. De-recognition of financial assets
A financial asset is primarily derecognised when:
1. the right to receive cash flows from the asset has expired, or
2. the Company has transferred its rights to receive cash flows from the asset; and
(a) the Company has transferred substantially all the risks and rewards of the asset, or
(b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
II) Financial Liabilities:
a. Initial recognition and measurement
The Company's financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts
and derivative financial instruments.
Financial liabilities are classified, at initial recognition, as at fair value through profit and loss or as those measured at amortised cost.
b. Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as follows:
i) Financial liabilities at fair value through profit and loss
Financial liabilities at fair value through profit and loss include financial liabilities held for trading. The Company has not designated any financial
liabilities upon initial recognition at fair value through profit and loss.
ii) Financial liabilities measured at amortised cost
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate
method except for those designated in an effective hedging relationship.
c. De-recognition of financial liabilities
A financial liability (or a part of a financial liability) is derecognized from the company's balance sheet when the obligation specified in the contract
is discharged or cancelled or expires.
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