A. Basis of Preparation
(i) Statement of Compliance
These standalone financial statements of the Company have been prepared in accordance with Indian Accounting Standard (Ind AS)
under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values, the
provisions of the Companies Act, 2013 ('the Act') (to the extent notified). The Ind AS are prescribed under Section 133 of the Act read
with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter.
The Company has consistently applied accounting policies to all years. Comparative Financial information has been regrouped,
wherever necessary, to correspond to the figures of the current year.
(ii) Basis of preparation and presentation of Financial Statement
These standalone financial statements of the Company have been prepared in accordance with Indian Accounting Standard (Ind AS)
under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values, the
provisions of the Companies Act, 2013 (’the Act’) (to the extent notified). The Ind AS are prescribed under Section 133 of the Act read
with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter.
The standalone financial statements have been prepared on accrual basis under the historical cost convention except for the certain
financial instruments that are measured at fair values as required by relevant Ind AS:
a) Certain financial assets and liabilities (including derivative instruments)
b) Defined employee benefit plans are measured at fair value
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. 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.
The standalone financial statements have been prepared by the management as a going concern on the basis of relevant Ind AS that are
effective as on the balance sheet date and using presentation and disclosure requirements of Division II of Schedule III of The
Companies Act, 2013.
B. Significant accounting judgments, estimates and assumptions
The preparation of the standalone financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of
contingent liabilities on the date of the Financial Statement. Uncertainty about these assumptions and estimates could result in
outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are
described below. The Company based its assumptions and estimates on parameters available when the standalone financial statements
were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or
circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
The Company reviews the useful life of property, plant and equipment at the end of each reporting period. This re- assessment may
result in change in depreciation expense in future periods.
(i) Revenue recognition
Revenue from contracts includes revenue with customers for sale of goods. Revenue from contracts with customers is recognized
when control of the goods and services are transferred to the customer at an amount that reflects the consideration to which the
company expects to be entitled in exchange for those goods and services. To recognize revenues, we apply the following five step
approach:
(1) Identify the contract with a customer,
(2) Identify the performance obligations in the contract,
(3) Determine the transaction price,
(4) Allocate the transaction price to the performance obligations in the contract, and
(5) Recognize revenues when a performance obligation is satisfied.
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, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received
or receivable, taking into account contractually defined terms of payment and excluding taxes or duty. The specific recognition criteria
described below must also be met before revenue is recognized.
Sale of goods
The Company satisfies a performance obligation at a point in time and recognizes revenue when the performance obligation is satisfied
and control as per Ind AS 115 is transferred to the customer therefore Revenue is recognised upon transfer of control of promised
goods to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those goods.
The control of the goods is transferred on delivery of goods to the customer.
Revenue is measured at the value of the consideration received or receivable, taking into account contractually defined terms of
payment and excluding taxes or duties collected on behalf of the government.
Interest income
Interest income from a financial asset is recognised 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.
For all financial instruments measured at amortized cost, interest income is recorded using the effective interest rate (EIR). EIR is the
rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a
shorter period, where appropriate, to the net carrying amount of the financial asset or liability.
(ii) Taxes
Income tax expense for the year comprises current and deferred tax. It is recognized in the Statement of Profit and Loss except to the
extent that it relates to an item recognized directly in equity or in Other Comprehensive Income.
Current Tax:
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax
payable or receivable in respect of previous years.
Current tax is determined as the amount of tax payable in respect of taxable income for the year. It is measured at tax rate applicable at
reporting date.
An entity shall offset current tax asset and current tax liabilities if ,and only if the equity :
- has legally enforceable right to set off the recognised amounts; and
- intends either to settle on a net basis, or to realise the assets and settle the liability simultaneously
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 the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a
business combination and, at the time of the transaction, affects neither the accounting profit nor the taxable profit or loss.
Deferred tax assets (including MAT credit entitlement, if any) are recognised for all deductible temporary differences, the carry
forward of unused tax credits and any unused tax losses if any. 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, except:
• When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability
in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit not taxable
profit or loss.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the
liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.
At each reporting date the Company re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax assets to the
extent that it has become probable that sufficient future taxable income will be available against which such deferred tax assets can be
realized.
The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes-down the carrying amount of
deferred tax asset to the extent that it is no longer probable that sufficient future taxable income will be available against which
deferred tax asset can be realized.
GST paid on acquisition of assets or on incurring expenses
Expenses and Assets are recognized net of the amount of Goods and Service Tax (GST) paid except:
• When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the tax
paid is recognized as part of the cost of acquisition of the asset or as part of the expense item, as applicable.
• When receivables and payables are stated with the amount of tax included :
The net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables.
(iii) Current versus Non-current classification
The Company presents assets and liabilities in the Balance Sheet based on Current or Non-current classification.
An asset is treated as current when it is:
- Expected to be realized or intended to be sold or consumed in the normal operating cycle
- Held primarily for the purpose of trading
- Expected to be realized 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 treated as Current when it is:
- 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.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
Based on the nature of products and services and their realization in cash and cash equivalent the company has ascertained its
operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities.
(iv) Functional and presentation currency
Items included in the standalone financial statement of the Company are measured using the currency of the primary economic
environment in which the entity operates ('the functional currency'). The standalone Financial Statement are presented in the Indian
currency (INR), which is the Company's functional and presentation currency. All amounts disclosed in standalone financial statement
have been rounded off to the nearest Lakhs up to 2 decimal places, unless otherwise stated.
C. Recent accounting pronouncements
The Ministry of Corporate Affairs (MCA), Government of India, has notified certain amendments to the Companies (Indian Accounting
Standards) Rules, 2015, through the following notifications during the financial year:
- Companies (Indian Accounting Standards) Second Amendment Rules, 2024, dated 12 August 2024
- Companies (Indian Accounting Standards) Amendment Rules, 2024, dated 9 September 2024
- Companies (Indian Accounting Standards) Third Amendment Rules, 2024, dated 28 September 2024
The key amendments and their applicability to the Company are summarized below:
1. Ind AS 117 - Insurance Contracts
This standard was introduced to replace Ind AS 104 and establishes principles for the recognition, measurement, presentation, and
disclosure of insurance contracts.
As the Company is not engaged in the issuance of insurance contracts, the standard is not applicable to the Company and is expected to
have no impact on the financial statements.
2. Amendment to Ind AS 116 - Leases (Sale and Leaseback Transactions)
The amendment provides clarification on accounting for sale and leaseback transactions that include variable lease payments. The
amendment is applicable for annual periods beginning on or after 1 April 2024.
The Company currently does not enter into sale and leaseback transactions, and accordingly, this amendment is not expected to have a
material impact on its financial statements.
3. Amendments to Ind AS 7 - Statement of Cash Flows and Ind AS 107 - Financial Instruments: Disclosures
These amendments introduce new disclosure requirements for supplier finance arrangements, including information about the terms,
risks, and liquidity implications of such arrangements.
The Company is evaluating the impact of these amendments. Based on the preliminary assessment, there are no supplier financing
arrangements currently in place. However, the Company will provide the necessary disclosures in future periods if such arrangements
become material.
The Company will continue to evaluate the impact of these amendments and implement changes where applicable in compliance with
the notified effective dates.
3 Notes to the Standalone Financial Statement
1. 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 that 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.
b. Subsequent measurement of Financial Assets
(i) Financial Asset 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. Further, in cases where the Company has made an irrevocable election based on its business model, for its investments
which are classified as equity instruments, the subsequent changes in fair value are recognized in other comprehensive income.
(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. When the
business model is sell the financial asset and collect the contractual cash flow i.e. Business model is to Trade in the financial asset
Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for
i. Contingent consideration recognized in a business combination
ii. Liabilities that meet the definition of held for trading
which is subsequently measured at fair value through profit and 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.
d .Derecognition of Financial Instrument
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expir 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. Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable
legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the
liabilities simultaneously.
2.Share Capital
Ordinary Shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares and share
options are recognized as a deduction from equity, net of any tax effects.
3.Impairment
a) Non Financial Assets
Intangible assets and 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 unless the asset does not
generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for
the 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 value of the assets exceeds 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 amortization or depreciation) had no impairment loss been
recognized for the asset in prior years.
b) Determination of cash generating units for impairment analysis
As part of its impairment assessment for non-financial assets (i.e. property ,plant and equipment),the management needs to identify
Cash Generating Units i.e. lowest group of assets that generate cash flows which are independent of those from other assets.
Considering the nature of its assets, operations and administrative structure , the management has defined all assets put together as a
single Cash Generating Unit.
4. Property, Plant and Equipment (PPE) and Intangible Assets
a)Property Plant and Equipment
Recognition and initial measurement
Property, plant and equipment are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost if
capitalization criteria are met, any expected costs of decommissioning and any directly attributable cost of bringing the asset to its
working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price
Subsequent measurement
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable
that future economic benefits associated with the item will flow to the Company. All other repair and maintenance costs are recognised
in statement of profit and loss as incurred
Depreciation and useful lives
Depreciation/amortization on fixed assets is provided on the straight line basis, based on the useful life of asset specified in Schedule II
to the Companies Act, 2013. The Management estimates the useful lives of the assets as per the indicative useful life prescribed in
Schedule II to the Companies Act, 2013. Residual values, useful lives and method of depreciation are reviewed at each financial year
end and adjusted prospectively, if appropriate.
De-recognition
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 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.
b) Intangible assets
Recognition and initial measurement
Intangible assets acquired separately are measured on initial recognition at cost.
Subsequent Measurement
Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if
any.
De-recognition
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds
and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
Amortization of intangibles
The useful lives of intangible assets are assessed by management as 2 to 10 years except for intangible asset class - "Brand Design”, and
the same shall be amortized on a straight-line basis over its useful life. However, for intangible asset class - "Brand Design” the useful
life has been assessed by management as 2 years.
5. Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprises of cash at banks and on hand. For the purpose of the statement of cash flows,
cash and cash equivalents consist of cash and short-term deposits 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, net of outstanding bank overdrafts as they are considered an integral part of the Company's cash management.
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