2. SIGNIFICANT ACCOUNTING POLICIES
Statement of compliance
Standalone Financial Statements have been prepared in accordance with the accounting principles generally accepted
in India including Indian Accounting Standards (Ind AS) prescribed under the Section 133 of the Companies Act,
2013 read with rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 as amended and relevant
provisions of the Companies Act, 2013.
Accordingly, the Company has prepared these Standalone Financial Statements which comprise the Balance Sheet
as at 31 March, 2025, the Statement of Profit and Loss for the year ended 31 March 2025, the Statement of Cash
Flows for the year ended 31 March 2025 and the Statement of Changes in Equity for the year ended as on that date,
and accounting policies and other explanatory information (together hereinafter referred to as ‘Standalone Financial
Statements' or ‘financial statements').
a) Basis of preparation of financial statements
The financial statements are prepared in accordance wuth Indian Accounting Standards (IND AS), including the
rules on going concern basis using historical cost convention on the accrual basis as per provisions of Companies
Act, 2013 (“the Act”) , except for certain items that are measured at fair values, as explained in the accounting
policies.
Current and non-current classification
The Company presents assets and liabilities in the balance sheet based on current / non-current classification.
An asset is classified as current when it satisfies any of the following criteria:
• It is expected to be realised in, or is intended for sale or consumption in, the Company's normal operating
cycle
• It is held primarily for the purpose of being traded;
• It is expected to be realised within 12 months after the reporting date; or
• It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at
least 12 months after the reporting date.
• All other assets are classified as non-current.
A liability is classified as current when it satisfies any of the following criteria:
• It is expected to be settled in the Company's normal operating cycle;
• It is held primarily for the purpose of being traded
• It is due to be settled within 12 months after the reporting date; or the Company does not have an
unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms
of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity
instruments do not affect its classification.
• All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current only
Accounting policies have been consistently applied except where a newly issued accounting standard is initially
adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in
use.
b) Use of Estimates & Judgements
The preparation of the financial statements in conformity with Ind AS requires management to make judgments,
estimates and assumptions that affect the application of accounting policies and the reported amounts of
assets, liabilities, income, expenses and disclosures of contingent assets and liabilities at the date of these
financial statements and the reported amounts of revenues and expenses for the years presented. Actual
results may differ from these estimates under different assumptions and conditions.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised if the revision affects only that period; they are
recognised in the period of the revision and future periods if the revision affects both current and future periods.
c) Fair Value Measurement
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, regardless of whether that price is directly observable
or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company
takes into account the characteristics of the asset or liability if market participants would take those characteristics
into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or
disclosure purposes in these financial statements is determined on such a basis, except for share-based
payment transactions that are within the scope of Ind AS 102 - Share-based Payment, leasing transactions
that are within the scope of Ind AS 116 - Leases, and measurements that have some similarities to fair value
but are not fair value, such as net realisable value in Ind AS 2 - Inventories or value in use in Ind AS 36 -
Impairment of Assets.
d) . Functional and Presentation Currency
These Ind AS Financial Statements are prepared in Indian Rupee which is the Company's func tional currency.
All financial information presented in Rupees has been rounded to the nearest lakhs with two decimals.
e) . Operating Cycle
All assets and liabilities have been classified as current or non-current as per the Company's normal operating
cycle and other criteria set out in the Schedule III to the Companies Act, 2013 and Ind AS 1 - Presentation of
Financial Statements based on the nature of products and the time between the acquisition of assets for
processing and their realization in cash and cash equivalents.
ACCOUNTING POLICIES
The Company has applied following accounting policies to all periods presented in the Ind AS Financial statement.
a) . Revenue Recognition
Effective April 1, 2018, the Company has applied Ind AS 115: Revenue from Contracts with Customers which
establishes a comprehensive framework for determining whether, how much and when revenue is to be recognised.
Revenue from sale of goods is recognised when control of the products being sold is transferred to our customer
and when there are no longer any unfulfilled obligations.
The Performance Obligations in our contracts are fulfilled at the time of dispatch, delivery or upon formal customer
acceptance depending on customer terms.
Revenue is measured at fair value of the consideration received or receivable, after deduction of any trade discounts,
volume rebates and any taxes or duties collected on behalf of the government such as goods and services tax, etc.
Accumulated experience is used to estimate the provision for such discounts and rebates. Revenue is only recognised
to the extent that it is highly probable a significant reversal will not occur.
Our customers have the contractual right to return goods only when authorised by the company. An estimate is
made of goods that will be returned and a liability is recognised for this amount using a best estimate based on
accumulated experience.
Income from services rendered is recognised based on agreements/arrangements with the customers as the service
is performed and there are no unfulfilled obligations.
b) . Property, Plant and Equipment - Tangible Assets
Property, plant and equipment are stated at cost of acquisition or construction less accumulated depreciation and
impairment, if any. For this purpose, cost includes deemed cost which represents the carrying value of property,
plant and equipment recognised as at 1st April, 2016 measured as per the previous GAAP.
Cost is inclusive of inward freight, duties and taxes and incidental expenses related to acquisition. In respect of
major projects involving construction, related pre-operational expenses form part of the value of assets capitalised.
Expenses capitalised also include applicable borrowing costs for qualifying assets, if any in accordance with Ind AS
- 23 Borrowing Costs. All upgradation/enhancements are charged off as revenue expenditure unless they bring
similar significant additional benefits. An item of property, plant and equipment is derecognized upon disposal or
when no future economic benefits are expected to arise from the continued use of asset.
Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as
the difference between the sales proceeds and the carrying amount of the asset and is recognised in the Statement
of Profit and Loss.
Company has adpoted the policy of maintaining 5% of cost of asset as residual value.
c) . Capital work in progress
Assets in the course of construction are capitalized in capital work in progress account. At the point when an asset
is capable of operating in the manner intended by management, the cost of construction is transferred to the
appropriate category of property, plant and equipment. Costs associated with the commissioning of an asset are
capitalised when the asset is available for use but incapable of operating at normal levels until the period of
commissioning has been completed. Revenue generated from production during the trial period is credited to capital
work in progress.
d) . Intangible Assets
Intangible Assets that the Company controls and from which it expects future economic benefits are capitalised
upon acquisition and measured initially.
For separately acquired assets, at cost comprising the purchase price (including import duties and nonrefundable
taxes) and directly attributable costs to prepare the asset for its intended use.
Internally generated assets for which the cost is clearly identifiable are capitalised at cost. Research expenditure is
recognised as an expense when it is incurred. Development costs are capitalised only after the technical and
commercial feasibility of the asset for sale or use has been established.
Thereafter, all directly attributable expenditure incurred to prepare the asset for its intended use are recognised as
the cost of such assets. Internally generated brands, websites and customer lists are not recognised as intangible
assets.
The carrying value of intangible assets includes deemed cost which represents the carrying value of intangible
assets recognised as at 1st April, 2016 measured as per the Previous GAAP.
The useful life of an intangible asset is considered finite where the rights to such assets are limited to a specified
period of time by contract or law (e.g., patents, licenses, trademarks, franchise and servicing rights) or the likelihood
of technical, technological obsolescence (e.g., computer software, design, prototypes) or commercial obsolescence
(e.g., lesser known brands are those to which adequate marketing support may not be provided). If, there are no
such limitations, the useful life is taken to be indefinite.
Intangible assets that have finite lives are amortized over their estimated useful lives by the written down value
method unless it is practical to reliably determine the pattern of benefits arising from the asset. An intangible asset
with an indefinite useful life is not amortized.
All intangible assets are tested for impairment. Amortization expenses and impairment losses and reversal of
impairment losses are taken to the Statement of Profit and Loss. Thus, after initial recognition, an intangible asset
is carried at its cost less accumulated amortization and / or impairment losses.
The useful lives of intangible assets are reviewed annually to determine if a reset of such useful life is required for
assets with finite lives and to confirm that business circumstances continue to support an indefinite useful life
assessment for assets so classified. Based on such review, the useful life may change or the useful life assessment
may change from indefinite to finite. The impact of such changes is accounted for as a change in accounting
estimate.
e) . Impairment of Non-Financial Assets
Impairment loss, if any, is provided to the extent, the carrying amount of assets or cash generating units exceed their
recoverable amount. Recoverable amount is higher of an asset's net selling price and its value in use. Value in use
is the present value of estimated future cash flows expected to arise from the continuing use of an asset or cash
generating unit and from its disposal at the end of its useful life.
Impairment losses recognised in prior years are reversed when there is an indication that the impairment losses
recognised no longer exist or have decreased. Such reversals are recognised as an increase in carrying amounts of
assets to the extent that it does not exceed the carrying amounts that would have been determined (net of amortization
or depreciation) had no impairment loss been recognised in previous year.
f). Depreciation
Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated
residual value. Assets in the course of development or construction and freehold land are not depreciated.
Depreciation is provided on pro-rata basis on written down value method over the estimated useful life of the assets
as provided in schedule II of the Companies Act 2013, except for following assets where useful taken is different
from schedule II based on internal assessment and technical evaluations, 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, etc.:
Raw material spares - At cost. Cost is ascertained on FIFO basis.
Cost includes purchase cost, cost of conversion and other cost incurred in bringing the inventories to their present
location and conditions (Inclusive of VAT/ Excise/ GST and other taxes, wherever not recoverable). Net realizable
value is the estimated selling price less the estimated costs necessary to make the sale.
h) . Investment in Subsidiaries, Associates and Joint Ventures
The investments in subsidiaries, associates and joint ventures are carried in these financial statements at historical
‘cost', except when the investment, or a portion thereof, is classified as held for sale, in which case it is accounted
for as Non-current assets held for sale and discontinued operations. Where the carrying amount of an investment in
greater than its estimated recoverable amount, it is written down immediately to its recoverable amount and the
difference is transferred to the Statement of Profit and Loss. On disposal of investment, the difference between the
net disposal proceeds and the carrying amount is charged or credited to the Statement of Profit and Loss.
i) . Financial Instruments, Financial Assets and Financial Liabilities
Financial assets and financial liabilities are recognised when an entity becomes a party to the contractual provisions
of the instrument.Financial assets and financial liabilities are initially measured at fair value. Transaction costs that
are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial
assets and financial liabilities at fair value through Statement of Profit and Loss (FVTPL)) are added to or deducted
from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction
costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit and
loss are recognised immediately in Statement of Profit and Loss.
Financial Assets
Recognition: Financial assets include Investments, Trade receivables, Advances, Security Deposits, Cash and
cash equivalents. Such assets are initially recognised at transaction price when the Company becomes party to
contractual obligations. The transaction price includes transaction costs unless the asset is being fair valued through
the Statement of Profit and Loss.
Classification: Management determines the classification of an asset at initial recognition depending on the purpose
for which the assets were acquired. The subsequent measurement of financial assets depends on such classification.
Financial assets are classified as those measured at:
(a) amortised cost, where the financial assets are held solely for collection of cash flows arising from payments of
principal and/ or interest.
(b) fair value through other comprehensive income (FVTOCI), where the financial assets are held not only for
collection of cash flows arising from payments of principal and interest but also from the sale of such assets.
Such assets are subsequently measured at fair value, with unrealised gains and losses arising from changes
in the fair value being recognised in other comprehensive income.
(c) fair value through profit or loss (FVTPL), where the assets are managed in accordance with an approved
investment strategy that triggers purchase and sale decisions based on the fair value of such assets. Such
assets are subsequently measured at fair value, with unrealised gains and losses arising from changes in the
fair value being recognised in the Statement of Profit and Loss in the period in which they arise.
Trade receivables, Advances, Security Deposits, Cash and cash equivalents etc. are classified for measurement at
amortised cost while investments may fall under any of the aforesaid classes. However, in respect of particular
investments in equity instruments that would otherwise be measured at fair value through profit or loss, an irrevocable
election at initial recognition may be made to present subsequent changes in fair value through other comprehensive
income.
Impairment: The Company assesses at each reporting date whether a financial asset (or a group of financial
assets) such as investments, trade receivables, advances and security deposits held at amortised cost and financial
assets that are measured at fair value through other comprehensive income are tested for impairment based on
evidence or information that is available without undue cost or effort. Expected credit losses are assessed and loss
allowances recognized if the credit quality of the financial asset has deteriorated significantly since initial recognition.
The company uses simplified approach to determine impairment loss or allowance on portfolio of its trade receivables.
Application of simplified approach does not require the company to track changes in credit risk rather it recognize
impairment loss based on life time ECL at each reporting date right from its initial recognition. ECL is based on
historically observe default rate over the expected life of the trade receivable and is adjusted for forward looking
estimates.
Reclassification: When and only when the business model is changed, the Company shall reclassify all affected
financial assets prospectively from the reclassification date as subsequently measured at amortised cost, fair value
through other comprehensive income, fair value through profit or loss without restating the previously recognised
gains, losses or interest and in terms of the reclassification principles laid down in the Ind AS relating to Financial
Instruments.
Equity Investments: All equity investment in scope of Ind AS 109 is measured at fair value. Equity instruments
which are held for trading and contingent recognized by an acquirer combination to which Ind AS103 applies are
reclassified as at FVTPL. There are no such investments in the company.
De-recognition: Financial assets are derecognised when the right to receive cash flows from the assets has expired,
or has been transferred, and the Company has transferred substantially all of the risks and rewards of ownership.
Concomitantly, if the asset is one that is measured at:
(a) amortised cost, the gain or loss is recognised in the Statement of Profit and Loss;
(b) fair value through other comprehensive income, the cumulative fair value adjustments previously taken to
reserves are reclassified to the Statement of Profit and Loss unless the asset represents an equity investment
in which case the cumulative fair value adjustments previously taken to reserves is reclassified within equity.
Income Recognition:
Interest income is recognised in the Statement of Profit and Loss using the effective interest method. Dividend
income is recognised in the Statement of Profit and Loss when the right to receive dividend is established.
Financial Liabilities and Equity Instruments
Classification as Debt or Equity
Debt and equity instruments issued by a company are classified as either financial liabilities or as equity in accordance
with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of
its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of directly
attributable transaction costs.
Financial Liabilities
Borrowings, trade payables and other financial liabilities are initially recognised at the value of the respective contractual
obligations. They are subsequently measured at amortised cost. Any discount or premium on redemption / settlement
is recognised in the Statement of Profit and Loss as finance cost over the life of the liability using the effective
interest method and adjusted to the liability figure disclosed in the Balance Sheet.
Financial liabilities are derecognised when the liability is extinguished, that is, when the contractual obligation is
discharged, cancelled and on expiry.
Offsetting Financial Instruments
Financial assets and liabilities are offset and the net amount is included in the Balance Sheet where there is a legally
enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the
asset and settle the liability simultaneously.
j) . Dividend Distribution
Dividends paid (including income tax thereon) is recognized in the period in which the interim dividends are approved
by the Board of Directors, or in respect of the final dividend when approved by shareholders.
k) . 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.
l) . Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes
a substantial period of time to get ready for its intended use or sale 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 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.
m) . Taxation
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively
enacted, at the reporting date. Current income tax relating to items recognised outside profit or loss is recognised
outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognised in
correlation to the underlying transaction either in OCI or directly in equity. Management 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
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are
recognised for all taxable temporary differences, except when it is probable that the temporary differences will not
reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits
and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will
be available against which the deductible temporary differences, and the carry forward of unused tax credits and
unused tax losses can be utilized.
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 deferred tax asset to be
utilised.
Unrecognized deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it
has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset
is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss (either in other comprehensive income or in equity).
Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation
authority.
Minimum Alternate Tax (MAT)
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form
of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company
will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that
future economic benefit associated with it will flow to the Company.
n). Employee Benefits
Employee benefits include salaries, wages, contribution to provident fund, gratuity, leave encashment towards un¬
availed leave, compensated absences, post-retirement medical benefits and other terminal benefits.
Short Term Employee Benefits
All employee benefits payable wholly within twelve months of rendering services are classified as short term employee
benefits. Benefits such as salaries, wages, expected cost of bonus, ex-gratia, leave travel allowance, medical
reimbursement, etc. are recognised in the period in which the employee renders the related services.
Post Employment Benefits
Defined Contribution Plans
Employee Benefit under defined contribution plans comprises of Contributory provident fund, Post Retirement benefit
scheme, Employee pension scheme, composite social security scheme etc. is recognized based on the undiscounted
amount of obligations of the Company to contribute to the plan. The same is paid to a fund administered through a
separate trust.
Defined Benefit Plan
Defined benefit plans comprising of gratuity, post-retirement medical benefits and other terminal benefits, are
recognized based on the present value of defined benefit obligations which is computed using the projected unit
credit method, with actuarial valuations being carried out at regular intervals of 3 years. These are accounted either
as current employee cost or included in cost of assets as permitted.
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 period 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 profit or
loss as past service cost.
Measurement of Other Long Term Employee Benefits & Short Term Employee Benefits
Other long-term employee benefit comprises of leave encashment towards unavailed leave and compensated
absences, these are recognized based on the present value of defined obligation which is computed using the
projected unit credit method, with actuarial valuations being carried out at regular intervals. These are accounted
either as current employee cost or included in cost of assets as permitted.
Remeasurements of leave encashment towards unavailed leave and compensated absences are recognized in the
Statement of Profit and Loss except those included in cost of assets as permitted in the period in which they occur.
Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the
benefits expected to be paid in exchange for the related service.
Voluntary Retirement Scheme - Termination Benefits
Termination benefits are payable when employment is terminated by the Company before the normal retirement
date, or when an employee accepts voluntary retirement scheme in exchange for these benefits. Expenditure on
Voluntary Retirement Scheme (VRS) is charged to the Statement of Profit and Loss when incurred.
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