2. Material accounting policies and key estimates and judgements
2.1 Recent accounting pronouncements:
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. The Ministry of Corporate Affairs
vide notification dated 9 September 2024 and 28 September 2024 notified the Companies (Indian Accounting
Standards) Second Amendment Rules, 2024 and Companies (Indian Accounting Standards) Third Amendment
Rules, 2024, respectively, which amended / notified certain accounting standards (see below), and are effective for
annual reporting period beginning on or after 1 April 2024
• Insurance contracts - Ind AS 117; and
• Lease Liability in Sale and Leaseback - Amendments to Ind AS 116
These amendments did not have any impact on the amounts recognised in current or prior period.
2.2 Statement of compliance
The Financial Statements of the Company which comprise the Balance Sheet as at 31st March, 2025, the Statement of
Profit and Loss, the Statement of Cash Flows and the Statement of Changes in Equity for the year ended 31st March,
2025, and a summary of the material accounting policies and other explanatory information (together hereinafter
referred to as "Financial Statements") have been prepared in accordance with Indian Accounting Standards notified
under Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards)
Rules, 2015, as amended from time to time, the provisions of the Companies Act, 2013 ("the Act") to the extent
notified, guidelines issued by the Securities and Exchange Board of India (SEBI) and other accounting principles
generally accepted in India. The Financial Statements have been approved by the Board of Directors in its meeting
held on 21st May, 2025.
2.3 Basis of preparation and presentation of Financial Statements
The Financial Statements have been prepared under the historical cost convention with the exception of certain
assets and liabilities that are required to be carried at fair values by Ind AS.
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 disclosures
in these Financial Statements is determined on such a basis, and measurements that have some similarities to fair
value but are not fair value, such as value in use in Ind AS 36 - Impairment of Assets.
External valuers are involved for valuation of material assets and liabilities. The management selects external valuer
on various criteria such as market knowledge, reputation, independence and whether professional standards are
maintained by valuer. The management decides, after discussions with the Company's external valuers, which
valuation techniques and inputs to use for each case.
Historical Cost Convention
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
The Financial Statements have been prepared on an accrual basis and under the historical cost convention, except
for the following assets and liabilities which have been measured at fair value:
• Certain financial assets and liabilities that is measured at fair value.
• Defined benefit plans - plan assets measured at fair value.
All amounts disclosed in the Financial Statements and notes have been rounded off to the nearest lakh ('00,000) as
per the requirement of Schedule III of the Companies Act, 2013 unless otherwise stated.
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 is:
• Expected to be realised or intended to be sold or consumed in normal operating cycle;
• Held primarily for the purpose of trading;
• Expected to be realised within twelve months after the reporting period; or
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period.
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 normal operating cycle;
• It is held primarily for the purpose of trading ;
• It is due to be settled within twelve months after the reporting period; or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period.
The Company classifies all other liabilities as non-current.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and
cash equivalents. The Company has identified twelve months as its operating cycle.
Deferred tax assets and liabilities are classified as non-current only.
2.4 Use of estimates and critical accounting judgements
In preparation of the Financial Statements, the Company makes judgements, estimates and assumptions about
the carrying values of assets and liabilities that are not readily, apparent from other sources. The estimates and the
associated assumptions are based on historical experience and other factors that are considered to be relevant.
Actual results may differ from these estimates.
The estimates and the underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised and future periods affected.
Material judgements and estimates relating to the carrying values of assets and liabilities include useful lives of
property, plant and equipment and intangible assets, impairment of property, plant and equipment, intangible
assets, provision for employee benefits and other provisions, recoverability of deferred tax assets, commitments
and contingencies, measurement of lease liability and right to use asset.
2.5. Summary of material accounting policies
a. Revenue recognition
Revenue is recognised 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 recognised
based on the price specified in the sales order taking into account contractually defined terms of payment and
net of taxes collected on behalf of the government such as goods and service tax, etc. Revenues are reduced
for estimated rebates and other similar allowances.
The specific recognition criteria described below must also be met before revenue is recognised.
The Company recognises revenue when all the following criteria are satisfied:
(i) material risks and rewards of ownership has been transferred to the customer;
(ii) there is no continuing management involvement with the goods usually associated with ownership, nor
effective control over the goods sold has been retained;
(iii) the amount of revenue can be measured reliably.
(iv) revenue from sale of services are recognised at a time on which the performance is completed.
b. Expense Recognition
All expenses are recognised in the Statement of Profit and Loss on accrual basis as per the necessary terms of
the contracts entered into with suppliers and service providers.
c. Taxes
Tax expense for the year comprises current and deferred tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as
reported in the statement of profit and loss because it excludes items of income or expense that are taxable
or deductible in other years and it further excludes items that are never taxable or deductible. The Company's
liability for current tax is calculated using tax rates and tax laws that have been enacted by the end of the
reporting period.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of
assets and liabilities in the Financial Statements and the corresponding tax bases used in the computation of
taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally
recognised for all taxable temporary differences. In contrast, deferred tax assets are only recognised to the
extent that it is probable that future taxable profits will be available against which the temporary differences
can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset
to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled
or the asset is realised based on the tax rates and tax laws that have been enacted or substantially enacted
by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax
consequences that would follow from the manner in which the Company expects, at the end of the reporting
period, to cover or settle the carrying amount of its assets and liabilities.
A deferred tax asset arising from unused tax losses or tax credits are recognised only to the extent that the
entity has sufficient taxable temporary differences or there is convincing other evidence that sufficient taxable
profit will be available against which the unused tax losses or unused tax credits can be utilised by the entity.
Current and deferred tax are recognised as an expense or income in the Statement of Profit and Loss, except
when they relate to items credited or debited either in other comprehensive income or directly in equity, in
which case the tax is also recognised in other comprehensive income or directly in other equity.
d. Property, plant and equipment
An item of property, plant and equipment is recognised as an asset if it is probable that future economic benefits
associated with the item will flow to the Company and its cost can be measured reliably. This recognition
principle is applied to the costs incurred initially to acquire an item of property, plant and equipment and also
to costs incurred subsequently to add to, replace part of, or service it. All other repair and maintenance costs,
including regular servicing, are recognised in the Statement of Profit and Loss as incurred. When a replacement
occurs, the carrying amount of the replaced part is derecognised.
Property, plant and equipment are stated at cost, less accumulated depreciation and impairment losses. Cost
includes all direct costs and expenditures incurred to bring the asset to its working condition and location for
its intended use.
The gain or loss arising on disposal of an asset is determined as the difference between the sale proceeds and
the carrying amount of the asset, and is recognised in the statement of profit and loss.
e. Depreciation of property, plant and equipment
Depreciation is provided so as to write off, on a straight-line basis, at rates specified in the Schedule II of the
Companies Act, 2013. These charges are commenced from the dates the assets are available for their intended
use and are spread over their estimated useful economic lives. The estimated useful lives of assets and residual
values are reviewed regularly and, when necessary, revised.
Depreciation on assets under construction commences only when the assets are ready for their intended use.
The estimated useful life of the Property, plant and equipment is given below:
An item of property, plant and equipment and any material part initially recognised is derecognised 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 statement of profit and loss when the asset is derecognised.
f. Capital work-in-progress (CWIP)
Capital work in progress are Stated at Cost, Net of impairment loss, if any. 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.
g. Intangible assets
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated
amortisation and accumulated impairment losses. Amortisation is recognised on a straight - line basis over
their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each
reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use
or disposal. Gains or losses arising from de-recognition of an intangible asset, measured as the difference
between the net disposal proceeds and the carrying amount of the asset, and are recognised in profit or loss
when the asset is derecognised.
h. Impairment
At each balance sheet date, the Company reviews the carrying amounts of its property, plant and equipment
and intangible assets to determine whether there is any indication that the carrying amount of those assets
may not be recoverable through continuing use. If any such indication exists, the recoverable amount of the
asset is reviewed in order to determine the extent of impairment loss (if any). Where the asset does not generate
cash flows that are independent from other assets, the Company estimates the recoverable amount of the cash
generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the
estimates of future cash flows have not been adjusted. An impairment loss is recognised in the statement of
profit and loss as and when the carrying amount of an asset exceeds its recoverable amount.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit)
is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does
not exceed the carrying amount that would have been determined had no impairment loss been recognised
for the asset (or cash generating unit) in prior years. A reversal of an impairment loss is recognised as income
in Statement Profit and Loss immediately.
i. 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 until such time as the assets are substantially ready for intended use or sale.
All other borrowing costs are expensed in the period they occur. The borrowing cost is measured at amortised
cost using the effective interest method.
j. Leases
The Company assesses whether a contract contains a lease, at inception of contract. A contract is/or contains a
lease if the contract conveys the right to control the use of unidentified assets for a period of time in exchange
for consideration. To assess whether a contract conveys the right to control the use of identified assets the
company assess:
i) The contract involves the use of identified assets,
ii) The Company has substantially, all the economic benefits from the use of assets through the period of
lease,
iii) The Company has the right to direct the use of assets.
The Company recognises the lease (right of use) assets and corresponding lease liability for all lease arrangement
except for the lease with a term of 12 months or less (short term lease) and low value leases.
The right of use assets are depreciated from the commencement date on a straight line basis over the lease
term. The Company also assess the right of use assets for impairment when such indicators exists.
k. Inventories
Inventories are valued at the lower of cost and net realisable value. Cost for the purpose of valuation of raw
materials and stores & spares have been computed on weighted average method. Cost for the purpose of
valuation of finished goods and work-in-progress has been computed taking into account cost of direct
materials, direct labour costs and other overheads that have been incurred in bringing the inventories to
their present location and condition. By-products have been valued at net realisable value. Net realisable
value is the estimated selling price in the ordinary course of business less estimated cost of completion and
the estimated cost necessary to make the sale. Provision is made for obsolete/slow moving/defective stock,
wherever necessary.
l. Retirement and other employee benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and
sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected
to be paid in exchange for that service. 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.
Liabilities recognised in respect of other long-term employee benefits are measured at the present value of
the estimated future cash outflows expected to be made by the Company in respect of services provided by
employees up to the reporting date.
Payments to defined contribution retirement benefit plans are recognised as an expense when employees have
rendered service entitling them to the contributions. These are measured as per the provisions of Employees'
Provident Fund Act, 1952 and Employees' State Insurance Act, 1948.
Expenses and liabilities in respect of employee benefit are recorded in accordance with Indian Accounting
Standard (Ind AS 19 Employee Benefits). Post-employment benefits in the nature of defined benefit plans are
recognised as expenses based on actuarial valuation carried by actuary at the Balance sheet date. Actuarial
gain / loss, if any, arising from change in actuarial valuation are charged or credited to Other Comprehensive
Income in the period in which they arise.
Past service cost is recognised as an expense when the plan amendment or curtailment occurs or when any
related restructuring costs or termination benefits are recognised, whichever is earlier.
The retirement benefit obligation recognised in the balance sheet represents the present value of the defined
benefit obligation as reduced by the fair value plan assets.
m. Foreign currency transactions and translations
The Financial Statements of the Company are presented in Indian rupees (INR), which is the functional currency
of the Company and the presentation currency for the Financial Statements.
Transactions in foreign currency are accounted for at the exchange rate prevailing on the date of transactions.
Transactions remaining unsettled are translated at the exchange rate prevailing at the end of the financial year.
Exchange gain or loss arising on settlement / translation is recognised in the Statement of Profit and Loss.
n. Financial instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual
provisions of the instrument. Financial assets and 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 profit or loss) are added to or deducted from the
fair value measured on initial recognition of financial asset or financial liability. The transaction costs directly
attributable to the acquisition of financial assets and financial liabilities at fair value through profit and loss are
immediately recognised in the Statement of Profit and Loss.
(i) Financial assets
Financial assets are subsequently measured at amortised cost if these financial assets are held within a
business model whose objective is to hold these assets 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.
Financial assets measured at fair value
Financial assets are measured at fair value through other comprehensive income if these financial assets
are held within a business model whose objective is to hold these assets in order to collect contractual
cash flows or to sell these 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.
Financial asset not measured at amortised cost or at fair value through other comprehensive income is
carried at fair value through profit or loss.
Impairment of financial assets
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets
is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The
Company recognises lifetime expected losses for all trade receivables that do not constitute a financing
transaction. For financial assets whose credit risk has not materially increased since the initial recognition,
loss allowance equal to twelve months credit losses is recognised.
Loss allowance equal to the lifetime expected credit losses is recognised if the credit risk on the financial
instruments has materially increased since the initial recognition.
Derecognition of financial assets
The Company derecognises a financial asset only when the contractual rights to the cash flows from the
asset expire, or it transfers the financial asset and substantially all risks and rewards of ownership of the
asset to another entity. If the Company neither transfers nor retains substantially all the risks and rewards
of ownership and continues to control the transferred asset, the Company recognises its retained interest
in the assets and an associated liability for amounts it may have to pay. If the Company retains substantially
all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise
the financial asset.
(ii) Financial liabilities and equity instruments
Classification as debt or equity
Financial liabilities and equity instruments issued by the Company are classified according to the
substance of the contractual arrangements entered into 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 the Company after
deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue
costs.
Financial liabilities
Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently
measured at amortised cost, using the effective interest rate method.
Interest-bearing bank loans, overdrafts and issued debt are initially measured at fair value and are
subsequently measured at amortised cost using the effective interest rate method. Any difference between
the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised
over the term of the borrowings in accordance with the Company's accounting policy for borrowing costs.
Derecognition of financial liabilities
The Company derecognises financial liabilities when, and only when, the Company's obligations are
discharged, cancelled or they expire.
o. 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 in material risk of changes in value.
For the purposes of the Cash Flow Statement, cash and cash equivalents is as defined above, net of cash credit.
In the balance sheet, bank overdrafts or cash credit are shown within borrowings in current liabilities.
p. Cash flow statement
Cash flows are reported using the indirect method, where by profit before tax 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 item of income or expenses associated with investing or financing cash flows. The cash flows
from operating, investing and financing activities of the Company are segregated.
q. Other bank balances
Other bank balances include deposits with maturity less than twelve months but greater than three months
and balances and deposits with banks that are restricted for withdrawal and usage.
r. Earnings per share
Earnings per share is computed by dividing the net profit or loss for the period attributable to equity
shareholders by the weighted average number of equity shares outstanding during the period. For the
purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity
shareholders 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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