Note: 1 Material Accounting Policies
This note provides a list of the significant accounting policies adopted in the preparation of these financial statements. These policies have
been consistently applied to all the years presented, unless otherwise stated.
a) Statement of Compliance
These Financial Statements comply in all material aspects with Indian Accounting Standards (IND AS) notified under section 133 of
the Companies Act, 2013 (the Act) read with rule 4 of the Companies (Indian Accounting standards) Rules, 2015 & Companies (Indian
Accounting Standards) Amendment Rules 2016.
b) Basis of Preparation
The Financial Statements of the Company have been prepared on historical cost convention under accrual method of accounting and
as a going concern concept except for certain assets and liabilities which are measured at fair values as required by Ind AS.
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 per the Company's normal operating cycle and the other criteria as set out in the Division
II of Schedule III to the Companies Act, 2013 (as amended). The Company has ascertained its operating cycle as 12 months for the
purpose of current and noncurrent classification of assets and liabilities.
c) Use of Estimates
In preparing the financial statements in conformity with Ind AS, management has made estimates, judgments and assumptions which
affect the application of accounting policies and the reported amounts of assets and liabilities as at the date of financial statements and
the reported amounts of revenues and expenses during the year. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting are recognized prospectively.
Changes in estimates are reflected in the financial statements in the year in which changes are made and, if material, their affects are
disclosed in the notes to financial statements.
Critical estimates and judgements
The areas involving critical estimates or judgements are as follows:
• Estimated useful life of intangible asset
Intangible asset comprises of computer software. The management estimates the useful life of the software to be 6 years based
on the expected technical obsolescence of such assets. However, the actual useful life may be shorter or longer than 6 years,
depending on technical innovations and competitor actions.
• Recognition of deferred tax assets for carried forward tax losses
The management has made estimates regarding the probability that the future taxable profits will be available against which
deferred tax assets can be used.
• Impairment of trade receivables
The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The
management uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the
company's past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
d) New Standards, Interpretations And Amendments Adopted By The Company
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. In May 2025, MCA notified amendments to Ind AS 21 - The Effects of Changes
in Foreign Exchange Rates, applicable w.e.f. April 1, 2025. The Company has reviewed the amendment and based on its evaluation
has determined that it does not have any significant impact in its financial statements. In August 2025, MCA notified the following
amendments to:
(i) Ind AS 1, Presentation of Financial Statements, applicable w.e.f. 1st April, 2025 - The amendment relates to classification of
liabilities as current or non-current and non-current liabilities with covenants. In the context of classifying a liability as current, it
removes the requirement of existence of a right to defer settlement for at least 12 months after the reporting date and instead
requires that the said right should exist on the reporting date and have substance. The amendment also introduces guidance on
classification of liabilities with covenants. The Company has no impact of these amendments in its classification criteria of current
and non-current liabilities.
(ii) Ind AS 7, Statement of Cash Flows and Ind AS 107, Financial Instruments: Disclosures, applicable w.e.f. 1st April, 2025 - The
amendment in Ind AS 7 requires to inform users of financial statements of the existence of supplier finance arrangements and
explain the nature of the arrangements, the carrying amount of liabilities and the range of payment due dates. Ind AS 107 has
been amended to add supplier finance arrangements as a factor that may cause concentration of liquidity risk. The Company has
reviewed the amendment and ensured appropriate disclosures.
(iii) Ind AS 12, International Tax Reform - Pillar Two Model Rules applicable immediately - The Company has no impact of these
changes.
e) Property, plant and equipment
Property, plant and equipment (PPE) are stated at cost less accumulated depreciation/amortization and impairment, if any. Cost
comprises of purchase price and directly attributable cost of acquisition/ bringing the asset to its working condition for its intended
use (net of credit availed, if any). Capital work in progress, plant and equipment is stated at cost, net of accumulated depreciation and
accumulated impairment losses, if any.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable
that future economic benefits associated with the item will flow to the entity and the cost of the item can be measured reliably. The
carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance
are charged to profit or loss during the reporting period in which they are incurred.
An item of property, plant and equipment and any significant part initially recognised is derecognized upon disposal or when no
future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as
the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the
asset is derecognized.
Depreciation
Depreciation is the systematic allocation of the depreciable amount of PPE over its useful life and is provided on a straight line method
basis over the useful lives as prescribed under Schedule II to the Companies Act, 2013.
Depreciable amount for PPE is the cost of PPE less its estimated residual value. The useful life of PPE is the period over which PPE is
expected to be available for use by the Company, or the number of production or similar units expected to be obtained from the asset
by the Company.
Depreciation on additions is provided on a pro-rata basis from the date of installation or acquisition. Depreciation on deductions/
disposals is provided on a pro-rata basis up to the date of deduction/disposal.
f) Intangible Assets
Intangible assets include Computer Software acquired separately and measured on initial recognition at cost. Directly attributable costs
that are capitalized as a part of the software includes its purchase price. The useful life of the Computer Software has been assessed as
finite by the management on the justification of technological obsolescence. The useful life of all the Software has been assumed six
years. Annual maintenance charges and Renewal Fees are expensed in the period occurred.
Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment
losses.
g) Impairment of Non-financial assets
The Company assesses at each reporting date whether there is any indication that any property, plant and equipment and intangible
assets or group of assets, called cash generating unit may be impaired. If any such indication exists, the Company estimates the
recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to
which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is
treated as an impairment loss and is recognised in the Statement of Profit and Loss. If at the balance sheet date there is an indication
that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed, and the asset is reflected at the
recoverable amount.
h) Inventories
Inventories are valued at the lower of the cost and net realizable value (NRV). Cost of inventories is computed on first in, first out basis
(FIFO) basis. Cost incurred in bringing each product to its present location and condition are accounted as follows:
(a) Raw Materials: Cost includes Cost of Purchase and other costs incurred in bringing the inventories to their present location and
condition. Cost is determined on first in, first out basis.
(b) Finished Goods & WIP: cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on
the normal operating capacity but excluding borrowing costs.
(c) Stores & Spares: Cost is determined on FIFO basis.
NRV 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.
i) Borrowing costs
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are
capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale and borrowing costs
are being incurred. All other borrowing costs are expensed in the year in which they occur. Qualifying assets are assets that necessarily
take a substantial period to get ready for their intended use or sale.
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