2. Significant accounting policies;
A summary of the significant accounting policies applied in the preparation of the financial
statements is as given below. These accounting policies have been applied consistently to all
the periods presented in the financial statements.
2.1 Ind AS 105: Non-Current Assets held for Sale or Discontinued Operations:
This standard specifies accounting for assets held for sale, and the presentation and disclosure
for discontinued operations:
(a) Assets that meet the criteria to be classified as held for sale to be measured at the lower of
carrying amount and fair value less cost to sell, and depreciation on such assets to cease; and
(b) Assets that meet the criteria to be classified as held for sale to be presented separately in the
balance sheet and the results of discontinued operations to be presented separately in the
statement of profit and loss.
2.2 Ind AS 106: Exploration for Evolution of Mineral resources:
This standard specifies the financial reporting for the exploration for evaluation of mineral resources.
In particular, this standard requires:
a. Limited improvements to existing accounting practices for exploration and evaluation of
expenditures
b. Entities that recognize exploration and evaluation of assets to assess such assets for
impairment in accordance with this standard and measure any impairment.
Disclosures that identify and explain the amounts in the entity's financial statements arising from the
exploration for the evaluation of mineral resources and help users of those financial statements
understand the amount, timing and certainty of future cash flows from any exploration and
evaluation of assets recognized.
This Ind AS 106 not applicable, the company is in the business of Infrastructure. Hence this Ind AS
does not have any financial impact on the financial statements of the company.
2.3 Ind AS-16: Property, Plant and Equipment:
Property, Plant and Equipment are stated at cost less accumulated depreciation.
Cost of an item 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 item to its working condition for its intended use and estimated costs
of dismantling and removing the item and restoring the site on which it is located.
The cost of a self-constructed item of property, plant and equipment comprises the cost of materials
and direct labor, any other costs directly attributable to bringing the item to working condition for
its intended use, and estimated costs of dismantling and removing the item and restoring the site on
which it is located.
Property, plant and equipment which are significant to the total cost of that item of Property Plant
and Equipment and having different useful life are accounted for as separately.
Gains or losses arising from derecognition of property, plant and equipment are measured as the
difference between the net disposal proceeds and carrying amount of the asset is recognized in the
statement of profit or loss when the asset is derecognized.
Depreciation on Property Plant and Equipment is provided on Straight line method. Depreciation is
provided based on useful life as prescribed under part C of the schedule II of the Companies act,
2013.
Depreciation on additions (disposals) is provided on a pro-rata basis i.e. from (upto) the date on which
asset is ready for use (disposed of).
Impairment
Property Plant and Equipment are evaluated for recoverability whenever events or changes in
circumstances indicate that their carrying amount may not be recoverable. 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 cost of disposal and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there
are separately identifiable cash inflows which are largely independent of the cash inflows from other
assets or groups of assets (cash-generating units).
2.4 Impairment Assets (Ind AS 36)
The Company's non-financial assets, other than deferred tax assets are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indication exists, then
the asset's recoverable amount is estimated.
For impairment testing, assets that do not generate independent cash inflows are grouped together
into cash-generating units (CGUs). Each CGU represents the smallest group of assets that generates
cash inflows that are largely independent of the cash inflows of other assets or CGUs.
The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair
value less costs to sell. Value in use is based on the estimated future cash flows, 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 CGU (or the asset).
An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its estimated
recoverable amount. Impairment losses are recognized in the statement of profit and loss.
Impairment loss recognized in respect of a CGU is allocated first to reduce the carrying amount of
any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets of
the CGU (or group of CGUs) on a pro rata basis.
The books of accounts of the company doesn't carry any impairment of assets during the reporting
period, hence this accounting standard does not have financial impact on the financial statements of
the company.
2.5 Intangible assets (Ind AS 38):
Intangible assets are amortized over the estimated useful lives and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. The amortization period
and the amortization method are reviewed at least at each financial year end. Changes in the
expected useful life or the expected pattern of consumption of future economic benefits embodied
in the asset is accounted for by changing the amortization period or method, as appropriate, and are
treated as change in accounting estimates. The amortization expense on intangible assets with finite
useful lives is recognized in profit or loss.
The books of accounts of the company carry Intangible assets worth Rs. 2,56,08,976 during the
reporting period, In the FY 2023-24, these Assets were classified under Computer & Software which
is related to In-house Developed Software as on 31.03.2024. However, this amount has been re¬
classified under Intangible Assets for the FY 2024-25.
2.6 Cash Flow Statement (Ind AS 7):
Cash flows are reported using the indirect method under Ind AS 7, whereby profit/(loss) before
extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any
deferrals or accruals of past or future cash receipts or payments. The cash flows from operating,
investing and financing activities of the Company are segregated based on the available information.
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term
balances (with an original maturity of three months or less from the date of acquisition), highly liquid
investments that are readily convertible into known amounts of cash and which are subject to
insignificant risk of changes in value.
2.7 Operating Cycle:
The Company has adopted its normal operating cycle as twelve months based on the nature of
products and the time between the acquisition of assets for processing and their realization, for the
purpose of current / non-current classification of assets and liabilities.
2.8 Capital Work in Progress
The Books of Accounts of Company doesn't carry Capital work-in-progress during the reporting
period.
2.9 Investments:
Investments are classified as Non-Current and Current investments.
Investments, which are readily realisable and are 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.
Current investments are carried at lower of cost and fair value. Non-Current Investments are carried
at cost less provision for other than temporary diminution, if any, in value of such investments.
The Books of Accounts of Company doesn't carry any Investments during the reporting period.
2.10 Effects of changes in foreign Rates (Ind AS 21):
Foreign currency transactions are recorded at the exchange rates prevailing on the dates when the
relevant transactions took place. Exchange difference arising on settled foreign currency transactions
during the year and translation of assets and liabilities at the yearend are recognized in the statement
of profit and loss.
In respect of Forward contracts entered into to hedge risks associated with foreign currency
fluctuation on its assets and liabilities, the premium or discount at the inception of the contract is
amortized as income or expense over the period of contract. Any profit or loss arising on the
cancellation or renewal of forward contracts is recognized as income or expense in the period in
which such cancellation or renewal is made.
The company has not entered any foreign exchange transactions during the reporting period; hence
this accounting standard does not have financial impact on the financial statements.
2.11 Borrowing Costs (Ind AS 23):
Borrowing costs directly attributable to the acquisition, construction or production of qualifying
assets, which are assets that necessarily take a substantial period of time to get ready for their
intended use or sale, are added to the cost of those assets, until such time as the assets are
substantially ready for the intended use or sale.
Investment income earned on temporary investment of specific borrowings pending their
expenditure on qualifying assets is recognized in statement of profit and loss.
Discounts or premiums and expenses on the issue of debt securities are amortized over the term of
related securities are included within borrowing costs. Premiums payable on early redemptions of
debt securities, in lieu of future costs, are recognized as borrowing costs.
All other borrowing costs are recognized as expenses in the period in which it is incurred.
2.12 Revenue Recognition (Ind AS 18-Revenues):
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. The following specific recognition criteria must
also be met before revenue is recognized:
a) Sales Revenue is recognized on dispatch to customers as per the terms of the order. Gross sales are
net of returns and applicable trade discounts and excluding GST billed to the customers.
b) Subsidy from Government is recognized when such subsidy has been earned by the company and it
is reasonably certain that the ultimate collection will be made.
c) Interest income is recognized on a time proportion basis taking into account the amount outstanding
and the applicable interest rate. Interest income is included under the head "other income" in the
statement of profit and loss.
d) All other incomes are recognized based on the communications held with the parties and based on
the certainty of the incomes.
2.13 Accounting for Government Grants and Disclosure of Government Assistance (Ind AS 20):
Government grants:
Government grants are not recognized 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 recognized in the Statement of Profit and Loss on a systematic basis
over the years in which the Company recognizes as expenses the related costs for which the
grants are intended to compensate or when performance obligations are me.
Government grants, whose primary condition is that the Company should purchase,
construct or otherwise acquire non-current assets and nonmonetary grants are recognized and
disclosed as 'deferred income' under non-current liability in the Balance Sheet and
transferred to the Statement of Profit and Loss on a systematic and rational basis over the
useful lives of the related assets.
The benefit of a government loan at a below-market rate of interest and effect of this
favorable interest is treated as a government grant. The loan or assistance is initially
recognized at fair value and the government grant is measured as the difference between
proceeds received and the fair value of the loan based on prevailing market interest rates and
recognized to the income statement immediately on fulfillment of the performance
obligations. The loan is subsequently measured as per the accounting policy applicable to
financial liabilities.
The company has not received any Government Grants during the reporting period, hence this
accounting standard does not have financial impact on the financial statements.
• Cost of Material excludes duties and taxes which are subsequently recoverable.
• Stocks at Depots are inclusive of duty, wherever applicable, paid at the time of dispatch from
Factories.
• Based on the information provided the difference between physical verification and
valuation of the of inventories are charged to the profit and loss account.
2.15 Trade Receivables - Doubtful debts:
Provision has not made in the Accounts for Debts/Advances which is in the opinion of Management,
no provision has been recognized in the Profit and Loss Account for the year ended 31.03.2025
2.16 Retirement and other Employee Benefits:
Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has
no obligation, other than contribution payable to the provident fund. The Company recognizes
contribution payable to the provident fund scheme as expenditure, when an employee renders
related service.
The Company has not conducted an actuarial valuation of the gratuity liability at the end of the
reporting period, as required under Ind AS 19. The standard mandates that the defined benefit
obligation be measured using the projected unit credit method, based on actuarial assumptions, at
each reporting date.
Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short
term employee benefit. The Company measures the expected cost of such absences as the additional
amount that it expects to pay as a result of the unused entitlement that has accumulated at the
reporting date.
It has been noted that the Company follows a compensation policy under which all employee
benefits, including leave, are structured within the total Cost to Company (CTC). The Company does
not permit leave encashment either during the period of service or upon separation, and unavailed
leave lapses as per the Company’s leave policy. Accordingly, no separate provision for leave
encashment has been made in the financial statements.
2.17 Ind AS 116- Leases
The Company assesses whether a contract is or contains a lease at the inception of the contract. A
contract is classified as a lease if it conveys the right to control the use of an identified asset for a
period of time in exchange for consideration.
a) As a Lessee
The Company applies the single lease accounting model for all leases, except for:
Short-term leases (lease term of 12 months or less), and
Leases of low-value assets (such as small office equipment)
For these exempted leases, the Company recognises lease payments as an expense on a straight-line
basis over the lease term.
For all other leases, the Company recognises a right-of-use (ROU) asset and a corresponding lease
liability at the lease commencement date.
The ROU asset is initially measured at cost and subsequently depreciated on a straight-line basis over
the shorter of the lease term or useful life of the asset. It is also adjusted for impairment losses, if
any.
The lease liability is initially measured at the present value of future lease payments, discounted using
the Company's incremental borrowing rate. Subsequently, it is measured at amortized cost using the
effective interest method.
Lease liabilities are re-measured when there is a change in future lease payments arising from a
change in an index or rate or a reassessment of the lease term. The corresponding adjustment is
made to the carrying amount of the ROU asset.
b) Lease Term
The lease term includes the non-cancellable period of the lease and any periods covered by an option
to extend or terminate the lease, if the Company is reasonably certain to exercise or not exercise
those options.
c) Disclosure
The Company has applied the exemption available under Ind AS 116 for leases of low-value assets
and leases with lease terms of 12 months or less.
These provisions are not applicable to the company therefore, such lease payments are not
recognised as an expense in the Statement of Profit and Loss on a straight-line basis over the lease
term.
2.18 Insurance Claims:
Insurance Claims are accounted for on the basis of claims admitted/expected to be admitted and to
the extent that the amount recoverable can be measured reliably and it is reasonable to expect
ultimate collection.
2.19 Earnings per Share (Ind AS 33):
Basic earnings per share are calculated 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.
Partly paid equity shares are treated as a fraction of an equity share to the extent that they are
entitled to participate in dividends relative to a fully paid equity share during the reporting period.
The weighted average number of equity shares outstanding during the period is adjusted for events
such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation
of shares) that have changed the number of equity shares outstanding, without a corresponding
change in resources.
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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