2 Significant accounting policies:
a Basis of accounting and preparation of Financial Statements:
Compliance with Indian Accounting Standards (Ind AS):
a) These Standalone Ind AS Financial Statements ("Financial Statements") of the Company, have been prepared in accordance with the recognition and measurement
principles laid down in Indian Accounting Standards ("Ind AS") as notified under Section 133 of the Companies Act, 2013 ("the Act") read with Rule 4 of the Companies
(Indian Accounting Standards) Rules, 2015 as amended and other relevant provisions of the Act and accounting principles generally accepted in India. These financial
statements were authorized for issue by the Company's Board of Directors on lune 29, 2021.
Functional and Presentation Currency:
These financial statements are presented in Indian rupees, which is the functional currency of the Company. All financial information presented in Indian rupees has
been rounded to the nearest rupee, except otherwise indicated.
Basis of measurement:
These Financial statements are prepared under the historical cost convention unless otherwise indicated.
b Revenue Recognition:
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are and net of returns, trade allowances, rebates,
value added taxes and Goods and Service Tax.
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.
i) Sale of goods: Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually
on delivery ofthe goods. Revenue is measured net of returns, trade discounts and volume rebates. The timing ofthe transfer of risks and rewards varies depending on
the individual terms of the sales contract.
ii) Rendering of services : In contracts involving rendering of services, revenue is recognised in profit or loss in the proportion of the stage of completion of the
transaction at the reporting date and are measured net of sales tax, works contract tax, service tax and Goods and Service Tax.
iii) Interest income
Interest income from debt instruments is recognised using the EIR method or proportionate basis. The effective interest rate is the rate that exactly discounts
estimated future cash receipts through the expected life ofthe financial asset to the gross carrying amount of a financial asset. While calculating the effective interest
rate, the Company estimated the expected cash flows by considering all the contractual terms of the financial instrument (for example prepayment, extension, call
and similar options but does not consider the expected credit losses).
c Property, Plant and Equipment, Depreciation and Impairment:
i) Property, Plant and Equipment:
Property, plant and equipment are measured at cost / deemed cost, less accumulated depreciation and impairment losses, if any. Cost of Property, plant and
equipment comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly
attributable cost of bringing the asset to its working condition for its intended use and estimated attributable costs of dismantling and removing the asset and
restoring the site on which it is located.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable thatfuture economic benefits
associated with the item will flow to the Company 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 the Statement of Profit and Loss during the reporting period in which
they are incurred.
Gains or losses arising from derecognition of plant, property and equipment are measured as the difference between the net disposal proceeds and the carrying
amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.
Any gain or loss on disposal of an item of property, plant and equipment is recognised in Statement of Profit and Loss.
Depreciation on additions / disposals is provided on a pro-rata basis i.e. from / up to the date on which asset is
ready for use / disposed of
The Company has elected to use the exemption available under Ind AS 101 to continue the carrying value for all of its Property, plant and equipment as recognised in
the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and used that as its deemed cost as at the date of transition (April
01, 2018).
ii) Depreciation:
Depreciation on Property, Plant and Equipment has been provided on written down value basis and manner prescribed in Schedule II to the Act.
iii) Intangible Assets:
Intangible Assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any. Intangible assets are amortised on
written down value basis over a period of five years.
The Company has elected to continue with the carrying value of all its intangible assets as recognised in the standalone financial statements as at the date of
transition to Ind AS, measured as per the previous GAAP and use that as the deemed cost as at the transition date pursuant to the exemption under Ind AS 101.
iv) Intangible assets under development:
Expenditure incurred for intangible assets during development stage are included under intangible assets under development and later allocated to the respective
intangible asset on completion of the development stage.
d Impairment of Assets:
i) Financial assets:
In accordance with Ind-AS 109, the Company applies Expected Credit Loss ("ECL") model for measurement and
recognition of impairment loss on the financial assets measured at amortised cost and debt instruments measured at FVOCI. Loss allowances on trade receivables are
measured following the 'simplified approach' at an amount equal to the lifetime ECL at each reporting date. In respect of other financial assets, the loss allowance is
measured at 12 month ECL only if there is no significant deterioration in the credit risk since initial recognition of the asset or asset is determined to have a low credit
risk at the reporting date. The amount of ECLs (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be
recognized is recognized as an impairment gain or loss in Statement of Profit and Loss.
ii) Non-financial assets:
The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment if any indication of impairment exists.
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 costs of disposal and value in use. For the purposes of assessing impairment,
assets are grouped at the lowest levels forwhich there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or
groups of assets (cash generating units) The impairment loss is recognised as an expense in the Statement of Profit and I oss
e Investment in subsidiary:
Investment in subsidiary is carried at cost in the separate financial statements. Investment carried at cost is tested for impairment as per IND AS 36.
f Inventories:
Traded goods are valued at lower of cost and net realisable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present
location and condition. Cost is determined on a FIFO basis.
Costs of purchased inventory are determined after deducting rebates and discounts. Net realizable value is the estimated selling price in the ordinary course of
business, less estimated costs of completion and estimated costs necessary to make the sale.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the
sale.
g Employee Benefits:
i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the
employees render the related service are recognised in respect of employees services up to the end of the reporting period and are measured at the amounts
expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the Balance Sheet.
ii) Other long-term employee benefit obligations
The liabilities for earned leave and sick leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the
related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the
end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have
terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are
recognised in the Statement of Profit and Loss.
The obligations are presented as current liabilities in the Balance Sheet if the Company does not have an unconditional right to defer settlement for at least twelve
months after the reporting period, regardless of when the actual settlement is expected to occur.
iii) Post-employment obligations
The Company operates the following post-employment schemes:
(a) defined benefit plans such as gratuity; and
(b) defined contribution plans such as provident fund.
Defined Benefit Plans - Gratuity obligations
The liability or asset recognised in the Balance Sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the
reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the
reporting period on government bonds that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is
included in employee Benefit expense in the Statement of Profit and Loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the year in which they occur, directly in
other comprehensive income they are included in retained earnings in the Statement of changes in equity and in the Balance Sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in the Statement of Profit
and Loss as past service cost.
- Defined contribution plan
The Company pays provident fund and ESIC contributions to publicly administered provident funds / ESIC as per local regulations. The Company has no further
payment obligations once The contributions have been paid. The contributions are accounted for as Defined contribution Plans and The contributions are recognised
as employee Benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future
payments is available.
h Leases (where the Company is a lessee):
At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease. At the inception or on reassessment of an arrangement
that contains a lease, the Company separates payments and other consideration required by the arrangement into those for the lease and those for the other
elements on the basis of their relative fair values.
Leases of property, plant and equipmentwhere the Company, as lessee, in which a significant portion ofthe risks and rewards of ownership are not transferred to the
Company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the
Statement of Profit and Loss as per the terms of the lease or on a straight-line basis over the period of the lease unless the payments are structured to increase in line
with expected general inflation to compensate for the lessor's expected inflationary cost increases.
i Borrowings:
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between
the proceeds (net of transaction costs) and the redemption amount is recognised in the Statement of Profit and Loss over the period of the borrowings using the
effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or
all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs.
Borrowings are removed from the Balance Sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the
carrying amount of a financial liability that has been extinguished ortransferred to another party and the consideration paid, including any non-cash assets transferred
or liabilities assumed, is recognised in the Statement of Profit and Loss.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the
reporting period.
j Borrowing Costs:
Borrowing costs consist of interest and transactions costs incurred in connection with the borrowing of funds. Borrowing costs may include exchange differences to
the extent regarded as an adjustment to the borrowing costs.
Borrowing costs that are attributable to the acquisition or construction of qualifying assets (i.e. an asset that necessarily takes a substantial period of time to get ready
for its intended use) are capitalized as a part of the cost of such assets. All other borrowing costs are charged to the Statement of Profit and Loss.
k Foreign Currency Transactions / Translations:
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange
rates are generally recognised in Statement of Profit and Loss as either profit or loss. A monetary item for which settlement is neither planned nor likely to occur in
the foreseeable future is considered as a part of the entity's net investment in that foreign operation.
Foreign exchange gains and losses are presented in the Statement of Profit and Loss on a net basis within other income and expenses accordingly.
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.
Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss in the Statement of Profit and Loss. For example,
translation differences on nonmonetary assets and liabilities such as equity instruments held at fair value through profit or loss are included in net profit in the
Statement of Profit and Loss as part of the fair value gain or loss and translation differences on non-monetary assets such as equity investments classified as FairValue
through Other Comprehensive Income ("FVOCI") are recognised in other comprehensive income ("OCI").
l Taxes on Income:
Income tax expense comprises current tax and deferred tax. It is recognised in Statement of Profit and Loss except to the extent that it relates items recognised
directly in equity or in OCI.
The income tax expense or credit for the period is tax payable on the current year's taxable income based on the applicable income tax rate adjusted by change in
deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted orsubstantively enacted atthe reporting date. Currenttax comprises of expected tax
payable or receivable on taxable income/loss for the year or any adjustment or receivable in respect of previous year. Management periodically evaluates position
taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate onthe basis of
amount expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the Balance Sheet method, on temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts inthe financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income
tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting date and are expected to apply to the
Company when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits (Minimum alternate tax credit entitlement) only
if it is probable that future taxable amounts will be available to utilise those temporary differences, unused losses and unused tax credits. Deferred tax assets -
unrecognised or recognised, are reviewed at each reporting date and are recognised / reduced to the extent that it is probable or no longer probable respectively that
the related tax benefit will be realized
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances
relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to
settle on a net basis, or to realise the asset and settle the liability simultaneously.
m Earnings Per Share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
- the profit attributable to owners of the Company;
- by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share is calculated by dividing:
- the net profit or loss after tax for the year attributable to owners of the Company , and
- the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares
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