2 - Basis of Preparation of Standalone Financial Statements
a) Statement of Compliance
These financial statements have been prepared in accordance with Indian Accounting
Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015
notified under Section 133 of the Companies Act, 2013 (the 'Act') and the relevant
provisions of the Act.
These financial statements have been prepared on historical cost basis, except for
certain financial instruments which are measured at fair value or amortized cost at
the end of each reporting period, as explained in the accounting policies below.
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. All assets and liabilities have been classified as
current and non-current as per the Company's normal operating cycle.
Based on the nature of services rendered to customers and time elapsed between
deployment of resources and the realization in cash and cash equivalents of the
consideration for such services rendered, the Company has considered an operating
cycle of 1 year.
The statement of cash flows has been prepared under indirect method.
b) Functional and presentation currency
These financial statements are presented in Indian Rupees ('INR'), which is also the
Company's functional currency. All amounts have been rounded-off to the nearest
lakhs, unless otherwise indicated.
c) Basis of Measurement
The financial statements have been prepared on the historical cost basis as a going
concern on accrual basis except for the following items:
d) Basis Of accounting
Revenue from Operations
The Company
♦ Revenue from Lease Rental operations is recognized when the collectability of the
resulting receivables is reasonably assured.
♦ Revenue from trading in Kraft paper is recognized when the product is delivered
to the customer, which is when the risk/reward of ownership is passed on to the
customers.
• Revenue also includes revenue from improvement works undertaken for the
tenants in respect of the Leased premises. The revenue from such services is
recognized when all the services for a transaction have been provided.
• Revenue from Common area maintenance is recognized following the accrual
basis of accounting.
• Revenue also includes other related support services with respect to common area
maintenance. The revenue from such services is recognized when all the services
for a transaction have been provided.
e) Use of Estimates and Judgements
In preparing these financial statements, management has made judgements,
estimates and assumptions that affect the application of accounting policies and the
reported amounts of assets, liabilities, income and expenses. Actual results may
differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognized prospectively.
Judgements
Information about judgements made in applying accounting policies that have the
most significant effects on the amounts recognized in the financial statements is
included in the concerned notes.
Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties that have a significant
risk of resulting in a material adjustment in the year ended 31 March 2025 is
included in the concerned notes.
f) Measurement of Fair Values
A number of the company's accounting policies and disclosures require
measurement of fair values, for both financial and non-financial assets and
liabilities.
The Company has an established control framework with respect to the
measurement of fair values. The Company regularly reviews significant
unobservable inputs and valuation adjustments. If third party information is
required, the Company assesses the evidence obtained by the third parties to
support the conclusions that these valuations meet the requirements of Ind AS,
including the level in the fair value hierarchy in which the valuations should be
classified.
Fair values are categorized into different levels in a fair value hierarchy based on
the inputs used in the valuation techniques as follows:
• Level 1: Quoted prices (unadjusted) in active markets for identical assets or
liabilities.
• Level 2: Inputs other than quoted prices included in Level 1 that are observable for
the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from
prices).
• Level 3: Inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
When measuring the fair value of an asset or a liability, the Company uses
observable market data as far as possible. If the inputs used to measure the fair value
of an asset or a liability fall into different levels of the fair value hierarchy, then the
fair value measurement is categorized in its entirety in the same level of the fair
value hierarchy as the lowest level input that is significant to the entire
measurement.
The Company recognizes transfers between levels of the fair value hierarchy at the
end of the reporting period during which the change has occurred.
3 - Accounting Policies
1) Revenue Recognition
The revenue of the company is recognized on accrual basis in accordance with the
applicable Indian Accounting Standards (Ind AS) and other Generally Accepted
Accounting Principles in India.
The revenue is recognized to the extent that it is probable that the economic benefits
will flow to the company and the revenue can be reliably measured, regardless of
when the payment is being made.
Revenue is measured at the fair value of the consideration received or receivable,
taking into account contractually defined terms of payment and excluding taxes or
duties collected on behalf of the government.
2) Foreign currency
Foreign Currency Transactions
Transactions in foreign currencies are translated into the functional currency of the
Company at the exchange rates at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated
into the functional currency at the exchange rate at the reporting date.
3) Income tax
Income tax comprises current and deferred tax. It is recognized in profit or loss
except to the extent that it relates to an item recognized directly in equity or in other
comprehensive income.
a) Current Tax
Current tax comprises the expected tax payable or receivable on the taxable income
or loss for the year and any adjustment to the tax payable or receivable in respect of
previous years. The amount of current tax reflects the best estimate of the tax
amount expected to be paid or received after considering the uncertainty, if any,
related to income taxes. It is measured using tax rates (and tax laws) enacted or
substantively enacted by the reporting date.
Current tax assets and current tax liabilities are offset only if there is a legally
enforceable right to set off the recognized amounts, and it is intended to realize the
asset and settle the liability on a net basis or simultaneously.
b) Deferred Tax
Deferred tax is recognized in respect of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the
corresponding amounts used for taxation purposes. Deferred tax is also recognized
in respect of carried forward tax losses and tax credits.
Deferred tax assets are recognized to the extent that it is probable that future taxable
profits will be available against which they can be used. The existence of unused tax
losses is strong evidence that future taxable profit may not be available. Therefore,
in case of a history of recent losses, the Company recognizes a deferred tax asset
only to the extent that it has sufficient taxable temporary differences or there is
convincing other evidence that sufficient taxable profit will be available against
which such deferred tax asset can be realized. Deferred tax assets - unrecognized or
recognized, are reviewed at each reporting date and are recognized/ reduced to the
extent that it is probable/ no longer probable respectively that the related tax benefit
will be realized.
Deferred tax is measured at the tax rates that are expected to apply to the period
when the asset is realized or the liability is settled, based on the laws that have
been enacted or substantively enacted by the reporting date.
The measurement of deferred tax reflects the tax consequences that would follow
from the manner in which the Group expects, at the reporting date, to recover or
settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to
offset current tax liabilities and assets, and they relate to income taxes levied by the
same tax authority on the same taxable entity, or on different tax entities, but they
intend to settle current tax liabilities and assets on a net basis or their tax assets and
liabilities will be realized simultaneously.
4) Going Concern
During the financial year 2024-25, the Company sold its entire warehouse building
along with the associated plant and machinery located at Edayar. This transaction
constituted the sale of a cash-generating unit and has, therefore, been classified as an
exceptional item of revenue.
The Company is currently exploring opportunities to reinvest the surplus funds
generated from this sale into one or more similar projects.
Accordingly, the management is of the opinion that the Company continues to
operate as a "going concern," and the financial statements have been prepared on a
going concern basis
5) Borrowing Cost
Borrowing costs are interest and other costs (including exchange differences
relating to foreign currency borrowings to the extent that they are regarded as an
adjustment to interest costs) incurred in connection with the borrowing of fund.
Borrowing costs directly attributable to acquisition or construction of a qualifying
asset which necessarily take a substantial period of time to get ready for their
intended use/sale are capitalized as part of the cost of that asset. Other borrowing
costs are recognized as an expense in the period in which they are incurred.
6) Cash flow statement
Cash flow statements are is prepared under Indirect Method whereby profit or loss
is adjusted for the effects of transactions of a non-cash nature, any deferrals or
accruals of past or future operating cash receipts or payments, and items of income
or expense associated with investing or financing cash flows. Cash and cash
equivalents comprise of cash in hand, current and other accounts (including fixed
deposits) held with banks.
7) Events occurring after the balance sheet date
Assets and liabilities are adjusted for events occurring after the reporting period
that provides additional evidence to assist the estimation of amounts relating to
conditions existing at the end of the reporting period.
8) Property, Plant and equipment
a) Recognition and Measurement
Land is capitalized on the basis of historical cost of acquisition, which includes
the expenditure directly attributable to acquisition and installation, borrowing
costs during the construction period and excludes any duties / taxes
recoverable.
b) Capitalization of Assets and Charging of Depreciation
Fixed Assets are stated at cost. The cost of acquisition of Fixed Assets is
inclusive of freight, duties, taxes, incidental expenses and the cost of
installation/erection as applicable and excludes any duties/taxes that are
recoverable.
Depreciation is in accordance with the provisions of Schedule II to the
Companies Act, 2013. In the case of assets added / sold/discarded/transferred
depreciation is charged on pro-rata basis.
c) Impairment of Property, Plant and Equipment (PPE)
The evaluation of applicability of indicators of impairment of assets requires
assessment of external factors (significant decline in asset's value, significant
changes in the technological, market, economic or legal environment, market
interest rates etc.) and internal factors (obsolescence or physical damage of an
asset, poor economic performance of the asset etc.) which could result in
significant change in recoverable amount of the PPE.
d) Determination of the estimated useful lives
Useful lives of all PPE are based on the estimation done by the Management
which is in line with the useful lives as prescribed in Part 'C' of Schedule II to
the Act. In cases, where the useful lives are different from those prescribed in
Schedule II and in case of intangible assets, they are estimated by management
based on technical advice, taking into account the nature of the asset, the
estimated usage of the asset, the operating conditions of the asset, past history
of replacement, anticipated technological changes, manufacturers' warranties
and maintenance support.
e) Fixed Assets identified for disposal are stated at Net Block Value or Net
Realizable value whichever is lower and are shown separately in the financial
statements as asset held for sale.
f) Cost of Machinery Spares which can be used only in connection with an item
of fixed asset and the use of which is expected to be irregular is allocated to the
fixed assets and depreciated to the extent of 95% within a period not exceeding
the useful life of the respective fixed asset. Individual spare parts having
significant values are capitalized.
g) Borrowing cost relating to the acquisition/construction of qualifying assets are
capitalized until the time all substantial activities necessary to prepare the
qualifying assets for their intended use/sale are complete. The qualifying asset
is one that necessarily takes substantial period of time to get ready for its
intended use/ sale. All other borrowing costs are charged to revenue.
h) Subsequent Expenditures are capitalized only if it is probable that the future
economic benefits associated with the expenditure will flow to the Company.
9) Intangible Assets - Recognition, Measurement and Amortization:
Intangible Assets are amortized over the useful life of the respective assets.
Subsequent expenditure is capitalized only when it increases the future economic
benefits embodied in the specific asset to which it relates. All other expenditure is
recognized in profit or loss as incurred.
10) Valuation of investments:
(i) Financial instruments
a) Recognition and initial measurement
All financial assets and financial liabilities are initially recognized when the
Company becomes a party to the contractual provisions of the instrument. A
financial asset or financial liability is initially measured at fair value plus, for an
item not at fair value through profit and loss (FVTPL), transaction costs that are
directly attributable to its acquisition or issue.
b) Classification and subsequent measurement
Financial assets:
On initial recognition, a financial asset is classified as measured at -
• Amortized cost;
• Fair Value through Other Comprehensive Income (FVOCI) - equity investment;
or
• Fair Value Through Profit and Loss (FVTPL)
Financial assets are not reclassified subsequent to their initial recognition, except
if and in the period the Company changes its business model for managing
financial assets.
A financial asset is measured at amortized cost if it meets both of the following
conditions and is not designated as at FVTPL:
• the asset is held within a business model whose objective is to hold assets 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.
On initial recognition of an equity investment that is not held for trading, the
Company may irrevocably elect to present subsequent changes in the investment's
fair value in OCI. (Designated as FVOCI - equity investment). This election is
made on an investment-by-investment basis.
All financial assets not classified as measured at amortized cost or FVOCI as
described above are measured at FVTPL. This includes all derivative financial
assets. On initial recognition, the Company may irrevocably designate a financial
asset that otherwise meets the requirements to be measured at amortized cost or
at FVOCI or at FVTPL if doing so eliminates or significantly reduces an accounting
mismatch that would otherwise arise.
Financial assets that are held for trading or are managed and whose performance
is evaluated on a fair value basis are measured at FVTPL.
Financial assets at FVTPL: These assets are subsequently measured at fair value.
Net gains and losses, including any interest or dividend income, are recognized in
profit or loss.
Financial assets at amortized cost: These assets are subsequently measured at
amortized cost using the effective interest method. The amortized cost is reduced
by impairment losses. Interest income, foreign exchange gains and losses and
impairment are recognized in profit or loss. Any gain or loss on de-recognition is
recognized in profit or loss.
Equity investments at FVOCI: These assets are subsequently measured at fair
value. Dividends are recognized as income in profit or loss. Other net gains and
losses are recognized in OCI and are not reclassified to profit or loss. And upon
sale of the instruments the gain or loss is recognized in P&L
Financial liabilities
Financial liabilities are classified as measured at amortized cost or FVTPL. A
financial liability is classified as at FVTPL if it is classified as held-for-trading, or it
is a derivative or it is designated as such on initial recognition. Financial liabilities
at FVTPL are measured at fair value and net gains and losses, including any
interest expense, are recognized in profit or loss. Other financial liabilities are
subsequently measured at amortized cost using the effective interest method.
Interest expense and foreign exchange gains and losses are recognized in profit or
loss. Any gain or loss on de-recognition is also recognized in profit or loss.
c) De-recognition
Financial assets
The Company de-recognizes a financial asset when the contractual rights to the
cash flows from the financial asset expire, or it transfers the rights to receive the
contractual cash flows in a transaction in which substantially all of the risks and
rewards of ownership of the financial asset are transferred or in which the
company neither transfers nor retains substantially all of the risks and rewards of
ownership and does not retain control of the financial asset. If the company enters
into transactions whereby it transfers assets recognized on its balance sheet, but
retains either all or substantially all of the risks and rewards of the transferred
assets, the transferred assets are not derecognized.
Financial liabilities
The Company de-recognizes a financial liability when its contractual obligations
are discharged or cancelled, or expire. The Company also de-recognizes a financial
liability when its terms are modified and the cash flows under the modified terms
are substantially different. In this case, a new financial liability based on the
modified terms is recognized at fair value. The difference between the carrying
amount of the financial liability extinguished and the new financial liability with
modified terms is recognized in profit or loss.
11) Valuation of Current Assets / Inventory:
Finished Goods are accounted for at lower of the cost on FIFO Method or Net
Realizable Value.
12) Retirement/Terminal Benefits/Bonus/Leave encashment
a) Company's liability towards employee benefits such as gratuity and leave
encashment are provided for on the basis of actuarial valuation.
b) Expenditure incurred on short term employee benefits including bonus,
production incentive, medical benefits and other perquisites etc. are charged to the
Profit and Loss Account at un-discounted amounts in the year in which services
are rendered.
c) Expenditure on employee benefits in the nature of contributions to Provident
Fund, Employees State Insurance, Labour Welfare Fund etc. are charged to the
Profit and Loss Account as and when contributions to the respective funds are
due.
d) Liability for bonus is provided for as per the provisions of the Payment of Bonus
Act 1965.
e) Actuarial gains or losses, as the case may be, in respect of valuation of employee
benefits are charged to the Profit and Loss Account.
f) Re-measurements of the net defined benefit liability, which comprise actuarial
gains and losses are recognized in OCI.
|