2. Significant accounting policies:
I. Basis of Preparation of financial statements:
(i) The Financial Statements of the company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The Company has prepared these Financial
Statements to comply in all material respects, with the accounting
standards notified under the Companies (Accounting Standards) Rules,
2006, (as amended) and the relevant provisions of the Companies Act,
2013. The Financial Statements have been prepared on the accrual
basis and under the historical cost convention. The financial statements
are presented in Indian rupees rounded off to the nearest rupees in
Lakhs.
(ii) The accounting policies adopted in the preparation of financial
statements are consistent with those of previous year except for the
change in accounting policy, if any explained below.
II. Changes in accounting policy:
(i) During the period ended 31 March, 2025, there is no change in
accounting policy having significant impact on presentation and
disclosure made in the financial statements. The company has also
reclassified the previous year figures in accordance with the
requirements applicable in the current year.
III. Uses of Estimates
(i) The preparation of financial statements in conformity with Indian GAAP
requires judgments, estimates and assumptions to be made that affect
the reported amount of assets and liabilities, disclosure of contingent
liabilities on the date of the financial statements and the reported amount
of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period in
which the results are known / materialized.
IV. Property, plant and equipment:
Tangible Assets:
(i) Tangible Assets are stated at cost net of recoverable taxes, trade
discounts and rebates and include amounts added on revaluation, less
accumulated depreciation and impairment loss, if any. The cost of
Tangible Assets comprises its purchase price, borrowing cost and any
cost directly attributable to bringing the asset to its working condition for
its intended use, net charges on foreign exchange contracts and
adjustments arising from exchange rate variations attributable to the
assets. Any subsidy/ reimbursement/ contribution received for
installation and acquisition of any Property, Plant and Equipment is
shown as deduction in the year of receipt.
(ii) Subsequent expenditures related to an item of Tangible Asset are
added to its book value only if they increase the future benefits from the
existing asset beyond its previously assessed standard of performance.
(iii) Projects under which assets are not ready for their intended use are
disclosed under Capital Work-in-Progress and is stated at cost.
Intangible Assets
(iv) Intangible Assets are stated at cost of acquisition net of accumulated
amortization/depletion and impairment loss, if any. Internally generated
intangible assets are not capitalized and expensed off in the statement
of Profit and loss in the year in which the expenditure is incurred.
V. Depreciation, Amortization and Depletion:
(i) Depreciation on tangible assets has been provided as per the WDV
method over the useful lives of the assets considering the nature
estimated usage, operating conditions, past history of replacement and
anticipated technological changes as estimated by the management.
Pursuant to the notification on schedule II of the companies Act, 2013,
by the ministry of corporate Affairs effective from 01/04/2014 the
management has reassessed based on the internal assessment and/or
external evaluation carried out by independent valuers/reference to
earlier law and change the useful lives of the class of assets at Sr. No.
1 to 6 below to compute depreciation, to confirm to the requirement of
the Companies Act, 2013. For the following class of assets, the
management believe that the useful lives as given below best represent
the period over which management expected to use these assets.
Hence the useful lives of the class of assets at Sr. No. 1 to 6 below are
different from the useful lives as prescribed under part C of Schedule II
of the Companies Act. 2013.
(ii) In respect of additions or extensions forming an integral part of existing
assets and insurance spares, including incremental cost arising on
account of translation of foreign currency liabilities for acquisition of
Property, Plant and Equipment, depreciation is provided as aforesaid
over the residual life of the respective assets.
VI. Impairment:
(i) An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. An impairment loss is charged to the Profit and
Loss Statement in the year in which an asset is identified as impaired.
The impairment loss recognized in prior accounting period is reversed
if there has been a change in the estimate of recoverable amount.
(ii) After impairment, depreciation is provided on the revised carrying
amount of the assets over its remaining useful life.
VII. Investments:
(i) Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as non-current investments.
(ii) Current investments are carried at lower of cost and quoted/fair value,
computed category-wise. Non-Current investments are stated at cost.
Provision for diminution in the value of non-current investments is made
only if such a decline is other than temporary.
VIII. Inventories:
(i) Items of inventories are measured at lower of cost and net realizable
value after providing for obsolescence, if any, except in case of by¬
products which are valued at net realizable value. Cost of inventories
comprises of cost of purchase, cost of conversion and other costs
including manufacturing overheads incurred in bringing them to their
respective present location and condition. In case of Gunny bags,
quantitative details of bags manufactured denotes the bags received
along with the raw materials.
(ii) Cost of raw materials, work in progress and finished goods are
determined on weighted average basis.
IX. Revenue Recognition:
(i) Revenue is recognized only when risks and rewards incidental to
ownership are transferred to the customer, it can be reliably measured
and it is reasonable to expect ultimate collection. Revenue from
operations includes sale of goods, services, net of Goods and Services
Tax, service tax, excise duty and sales during trial run period, adjusted
for discounts.
(ii) Claims for damages etc. against the contractors/service providers are
recognized on due basis, as and when the certainty to receive the claim
is ascertained.
(iii) Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the interest rate applicable.
X. Employee Benefits:
(i) The undiscounted amount of short-term employee benefits expected to
be paid in exchange for the services rendered by employees are
recognized as an expense during the period when the employees
render the services. These benefits include performance incentive and
compensated absences.
(ii) A defined contribution plan is a post-employment benefit plan under
which the Company pays specified contributions to a separate entity.
The Company makes specified monthly contributions towards
Provident Fund, State Government Schemes. The Company’s
contribution is recognized as an expense in the Profit and Loss
Statement during the period in which the employee renders the related
service.
XI. Borrowing Costs:
(i) Borrowing costs that are attributable to the acquisition or construction
of qualifying assets are capitalized as part of the cost of such assets. A
qualifying asset is one that necessarily takes substantial period of time
to get ready for its intended use. All other borrowing costs are charged
to the Profit and Loss Statement in the period in which they are incurred.
XII. Income Taxes
(i) Tax expense comprises of current tax and deferred tax. Current tax is
measured at the amount expected to be paid to the tax authorities in
accordance with the Income-tax Act, 1961 using the applicable tax
rates. Deferred income tax reflects the current period timing differences
between taxable income and accounting income for the period and
reversal of timing differences of earlier years/period.
(ii) Deferred tax assets are recognized only to the extent that there is a
reasonable certainty that sufficient future income will be available
except that deferred tax assets, in case there are unabsorbed
depreciation or losses, are recognized if there is virtual certainty that
sufficient future taxable income will be available to realize the same.
(iii) Deferred tax assets and liabilities are measured using the tax rates and
tax law that have been enacted or substantively enacted by the Balance
Sheet date.
XIII. Earnings / (Loss) per share:
(i) Basic earnings/(loss) per share are calculated by dividing the net profit
/ (loss) for the period attributable to equity shareholders (after deducting
preference dividends and attributable taxes, if any) by the weighted
average number of equity shares outstanding during the period. The
weighted average number of equity shares outstanding during the
period are adjusted for any bonus shares issued during the year and
also after the balance sheet date but before the date the financial
statements are approved by the board of directors.
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