2. MATERIAL ACCOUNTING POLICIES
A) Statement of compliance
The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as prescribed under
section133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules 2015 and other
provisions of the Companies Act, 2013 as amended for time to time.
Accordingly, the Company has prepared these Financial Statements which comprise the Balance Sheet as at 31 March 2025,
the Statement of Profit and Loss, the Statement of Cash Flows and the Statement of Changes in Equity for the year ended
as on that date, and accounting policies and other explanatory information.
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. These financial
statements are approved for issue by the Board of Directors on 26th May 2025.
B) Basis of Preparation of Financial Statements
The financial statements have been prepared on a historical cost basis, except for the certain financial instruments and
defined benefits plans which are measured at fair value at the end of each reporting period (refer accounting policy
regarding financial instruments).
In addition, for financial reporting purposes, fair value measurements are categorized into Level 1,2, or 3 based on the
degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value
measurements in its entirety, which are described as follows:
• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access
at the measurement date;
• Level 2 inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability,
either directly or indirectly; and
• Level 3 inputs are unobservable inputs for the asset or liability.
The functional currency of the Company is in Indian Rupees. These Financial Information are presented in Indian Rupees. All
amounts have been rounded off to the nearest Lakhs and rounded off to two decimals except for Earnings Per Share and
where mentioned otherwise.
C) Use of Estimates & Judgment
The preparation of the Financial Statements in conformity with Ind AS requires management to make estimates, judgments
and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the
reported amounts of assets and liabilities, the disclosures of contingent liabilities on the date of the financial statements and
reported amounts of revenues and expenses for the year. Application of accounting policies that require critical accounting
estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been
disclosed in Note no. "S".
Continuous evaluation is done on the estimation and judgments based on historical experience and other factors, including
expectations of future events that are believed to be reasonable and consequently accounting estimates could change from
period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as
management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected
in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes
to the financial statements.
D) Classification of Assets & Liabilities as Current and Non-Current
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. Based on the nature of product & activities of the
Company and their realisation in cash and cash equivalent, the Company has determined its operating cycle as twelve
months for the purpose of current and non-current classification of assets and liabilities. Deferred tax assets and liabilities
are classified as non-current assets and liabilities.
E) 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. The specific recognition criteria described below must also be met before revenue is recognised.
i) a) Sale of goods
The Company recognises revenue when control over the promised goods or services is transferred to the customer at
an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or
services.
The Company has generally concluded that it is the principal in its revenue arrangements as it typically controls the
goods or services before transferring them to the customer.
Revenue is adjusted for variable consideration such as discounts, rebates, refunds, credits, price concessions,
incentives, or other similar items in a contract when they are highly probable to be provided. The amount of revenue
excludes any amount collected on behalf of third parties.
The Company recognises revenue generally at the point in time when the products are delivered to customer or when
it is delivered to a carrier for export sale, which is when the control over product is transferred to the customer.
b) Sale of power
Revenue from the sale of poweris recognised when the electricity is supplied and is measured as per the contractually
agreed tariff rates.
ii) Interest income
Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Company
and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the
principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future
cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.
iii) Dividend income
Dividend income is recognized when the right to receive payment is established, which is generally when shareholders
approve the same.
iv) Leases
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the
right to control the use of an identified asset for a period of time in exchange for consideration.
Company as lessor
Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an asset
are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms. Initial
direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset
and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the
period in which they are earned.
Company as lessee
The Company applies a single recognition and measurement approach for all leases, except for short-term leases and
leases of low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets. The Company measures the lease liability at the present value of the
lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the
interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the
Company uses incremental borrowing rate.
For short-term and low value leases, the Company recognises the lease payments as an operating expense on a straight-line
basis over the lease term.
v) Government Grants
Government grants are not recognised until there is reasonable assurance that the Company will comply with the
conditions attached to them and that the grants will be received. Government grants are recognised in the Statement
of Profit and Loss on a systematic basis over the periods in which the Company recognises as expenses the related
costs for which the grants are intended to compensate Government grants relating to tangible fixed assets are treated
as deferred income and released to the Statement of profit and loss over the expected useful lives of the assets
concerned.
F) Property, Plant and Equipment & Depreciation
i) Property, Plant and Equipment
Property, plant and equipment are stated at cost net of tax/duty credit availed, less accumulated depreciation and
accumulated impairment losses, if any. The cost includes its purchase price, including import duties and non-refundable
purchase taxes, after deducting trade discounts and rebates and also other costs directly attributable to bringing the
asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
The present value of the expected cost for the decommissioning of an asset after its use is included in the cost of the
respective asset if the recognition criteria for a provision are met.
The cost of Property, Plant and equipment also includes the cost of replacing part of the plant and equipment and
borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of plant
and equipment are required to be replaced at intervals, the Company depreciates them separately based on their
specific useful lives. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the
plant and equipment as a replacement if the recognition criteria are satisfied.
Capital work-in-progress includes cost of property, plant and equipment under installation / under development as at
the balance sheet date. Advances paid towards the acquisition of property, plant and equipment outstanding at each
balance sheet date is classified as capital advances under other non-current assets.
Subsequent expenditures relating to property, plant and equipment is capitalized only when it is probable that future
economic benefits associated with these will flow to the Company and the costs to the item can be measured reliably.
Repairs and maintenance costs are recognized in the statement of profit and loss when incurred. The cost and related
accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the
resultant gain or losses are recognized in the statement of profit and loss. Assets to be disposed off are reported at the
lower of the carrying value or the fair value less cost to sell.
ii) Depreciation
Depreciation on Fixed Assets has been provided on straight line method. Depreciation is provided based on useful life
of the assets as prescribed in Schedule II of the Companies Act, 2013
Depreciation will be charged from the date the assets is available for use, i.e., when it is in the location and condition
necessary for it to be capable of operating in the manner intended by management.
An item of property, plant and equipment and any significant 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 derecognition of
the asset (calculated as the difference between the net disposal proceeds if any and the carrying amount of the asset)
is included in the income statement when the asset is derecognised. The residual values, useful lives and methods of
depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if
appropriate.
iii) Intangible assets
Intangible assets are stated at cost net of tax/duty credit availed, less accumulated amortization and impairment losses,
if any. The cost includes its purchase price, including non-refundable purchase taxes, after deducting trade discounts
and rebates and also other costs directly attributable to bringing the asset to the location and condition necessary for
it to be capable of operating in the manner intended by management. This includes computer software packages.
iv) Impairment of Non-Financial Assets
Property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate
that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount
(i.e. the higher of the fair value less cost to sell and the value in use) is determined on an individual asset basis if the
asset generate cash flows independently otherwise the recoverable amount is determined for the Cash Generating Unit
(CGU) to which the asset belongs. If such assets are considered to be impaired, the impairment to be recognized in the
Statement of Profit and Loss is measured by the amount by which the carrying values of the assets exceed the
estimated recoverable amount of the asset. An impairment loss is reversed in the Statement of Profit and Loss if there
has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is
increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that
would have been determined (net of any accumulated depreciation) had no impairment loss been recognized for the
asset in prior years.
G) Financial Instruments
a. Initial recognition
The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions
of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade
receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial liabilities, which are not at fair value through profit or loss, are added
to the fair value on initial recognition. Regular way purchase and sale of financial assets are accounted for at trade date.
All recognized financial assets are subsequently measured in their entirety at either amortized cost or fair value,
depending on the classification of the financial assets.
b. Subsequent measurement
I. Non-Derivative financial instruments
(i) Financial assets carried at amortized cost
A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to
hold the asset 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.
(ii) Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a
business model whose objective is achieved by both collecting contractual cash flows and selling 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.
(iii) Financial assets at fair value through profit or loss
A financial asset, which is not classified in any of the above categories, is subsequently fair valued through profit or loss.
(iv) Financial liabilities
Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent
consideration recognized in a business combination, which is subsequently measured at fair value through profit or
loss. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts
approximate fair value due to the short maturity of these instruments.
II. Derivative financial instruments
The Company holds derivative financial instruments such as foreign exchange forward and options contracts to mitigate
the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally
a bank.
Financial assets or financial liabilities are valued at fair value through profit or loss. This category includes derivative
financial assets or liabilities which are not designated as hedges.
Although the Company believes that these derivatives constitute hedges from an economic perspective, they may not
qualify for hedge accounting under Ind AS 109, Financial Instruments. Any derivative that is either not designated as
hedge, or is so designated but is ineffective as per Ind AS 109, is categorized as a financial asset or financial liability, at
fair value through profit or loss.
Derivatives not designated as hedges are recognized initially at fair value and attributable transaction costs are
recognized in the Statement of Profit and Loss when incurred. Subsequent to initial recognition, these derivatives are
measured at fair value through profit or loss and the resulting exchange gains or losses are included in other income.
Assets/liabilities in this category are presented as current assets/current liabilities if they are either held for trading or
are expected to be realized within 12 months after the Balance Sheet date.
c. Investment in subsidiaries, Associates and Joint Ventures
The Company has accounted for its investments in subsidiaries, associates and joint venture at cost less provision for
permanent diminution. On disposal of investments in subsidiaries, associates and joint venture, the difference between
net disposal proceeds and the carrying amounts are recognized in the Statement of Profit and Loss.
d. De-recognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset
expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability
(or a part of a financial liability) is derecognized from the Company's Balance Sheet when the obligation specified in the
contract is discharged or cancelled or expires.
e. Other Equity Investments
All other equity investments are measured at fair value, with value changes recognized in Statement of Profit and Loss
f. Impairment of financial assets.
The Company measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit
losses if the credit risk on that financial instrument has increased significantly since initial recognition. If the credit risk
on a financial instrument has not increased significantly since initial recognition, the Company measures the loss
allowance for that financial instrument at an amount equal to twelve month expected credit losses. Twelve month
expected credit losses are portion of the lifetime expected credit losses and represent the lifetime cash shortfalls that
will result if default occurs within the twelve month after the reporting date and thus, are not cash shortfalls that are
predicted over the next twelve month.
For trade receivables or any contractual right to receive cash or another financial asset that result from transactions
that are within the scope of Ind AS 115, the Company always measures the loss allowance at an amount equal to lifetime
expected credit losses.
H) Inventory Valuation
Raw Materials are valued at lower of cost (FIFO basis) or net realisable value.
Work - in - Process is valued at direct material cost plus conversion cost depending upon the stage of completion or
estimated net realisable value whichever is lower.
Finished goods are valued at lower of cost or net realisable value. Cost for this purpose includes direct material cost plus
conversion cost and other direct overheads incurred to bring the goods to their present location & conditions.
Stores & Spare parts are valued at lower of cost (Weighted Average Method) or net realisable value.
Scrap is valued at net realisable value.
I) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker.
The Board of directors of the Company has been identified as the Chief Operating Decision Maker which reviews and
assesses the financial performance and makes the strategic decisions.
J) Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand and balance with banks which are short-term that are readily convertible
into known amounts of cash and which are subject to insignificant risk of changes in value.
K) Employee Benefits
i) Short term employee benefits are recognised as an expense at the undiscounted amount in the Profit & Loss Account
of the year in which the related service is rendered.
ii) Post-employment and other long-term benefits are recognised as an expense in the Profit & Loss Account for the year
in which the employee has rendered services. The expense is recognised at the present value of the amounts payable
determined using actuarial valuation techniques at the end of financial year. Actuarial gains and losses in respect of
post-employment and other long-term benefits are charged to Other Comprehensive Income.
iii) Payment to defined contribution retirement benefit scheme, if any, is charged as expenses during the year in which
related services are rendered.
iv) Termination benefits are recognized as an expense in the period in which they are incurred.
L) Earning Per Equity Shares
Basic earning per equity share is computed by dividing the net profit attributable to the equity holders of the Company by
the weighted average number of equities shares outstanding during the period. Diluted Earning per share is computed by
dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares
considered for deriving basic earning per equity share and also the weighted average number of equity shares that could
have been issued upon conversion of all dilutive potential equity shares are adjusted for the proceeds receivable had the
equity shares been actually issued at fair value (i.e., the average market value of the outstanding equity shares). Dilutive
potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive
potential equity shares are determined independently for each period presented.
The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for
any share splits and bonus shares issues including for changes affected prior to the approval of the financial statements by
the Board of Directors.
M) Foreign Currency Transactions
The financial statements of the Company are presented in Indian rupees, which is the functional currency of the Company.
In presenting the financial statements, transactions in currencies other than the Company's functional currency are
recorded at the rate of exchange prevailing on the date of the transactions.
At the end of each reporting period monetary assets and liabilities denominated in foreign currency are re-translated at the
rates prevailing at the end of the reporting period. Non-monetary items that are measured in terms of historical cost in a
foreign currency are not translated.
The differences in translation of monetary assets and liabilities and realized gains and losses on foreign exchange
transaction are recognized in Statement of Profit & Loss.
N) Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets 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.
O) Income Tax
i) Current income tax
Current tax is the amount of expected tax payable based on the taxable profit for the year as determined in accordance
with the applicable tax rates and the provisions of the Income Tax Act, 1961
ii) Deferred tax
Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between the
tax bases of assets and liabilities and their carrying amounts for financial reporting purpose at reporting date. Deferred
income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively
enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets
and liabilities is recognized as income or expense in the period that includes the enactment or the substantive
enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will
be available against which the deductible temporary differences and tax losses can be utilized. The Company offsets
current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts
and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Current tax and deferred tax for the year:
Current and deferred tax are recognised in statement of profit and loss, except when they relate to items that are
recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also
recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises
from the initial accounting for a business combination, the tax effect is included in the accounting for the business
combination.
P) Events occurring after the Balance Sheet Date
Events occurring after the Balance Sheet date and till the date on which the financial statements are approved, which are
material in the nature and indicate the need for adjustments in the financial statements have been considered.
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