b. Summary of material accounting policies:
I. General Information and Statement of Compliance
These Standalone financial statements have been prepared
in accordance with the Indian Accounting Standards
(hereinafter referred to as the ’Ind AS’) as notified by Ministry
of Corporate Affairs (’MCA’) under Section 133 of the
Companies Act, 2013 (’the Act’) read with the Companies
(Indian Accounting Standards) Rules, 2015, as amended and
other relevant provisions of the Act.
The Standalone financial statements were authorized and
approved for issue by the Board of Directors on 23rd May
2025.
II. Basis of Preparation and Presentation
The Standalone financial statements have been prepared on
going concern basis in accordance with accounting principles
generally accepted in India. The presentation of financial
statement is based on Ind AS Schedule III of the Companies
Act, 2013. The Standalone financial statements are
presented in Indian Rupee (?) which is also the functional and
presentation currency of the Company.
The Financial Statements have been prepared & presented
on the historical convention and on accrual basis, except for
the following material items in the Balance Sheet:
• Certain financial assets and liabilities are measured at fair
value;
• Derivative instruments are measured at their fair values;
• Employee defined benefit assets/ liabilities are recognised as
the net total of fair value of plan assets, adjusted for actuarial
gains/losses and the present value of defined benefit
obligations;
• Long term borrowings are measured at amortised cost using
the effective interest rate method;
• Assets held for sale are measured at fair value less cost to sell;
• Right-of-use of Assets are recognised at the present value of
lease payments that are not paid as on that date. This amount
is adjusted for any lease payments made at or before the
commencement of the lease and initial direct cost incurred, if any.
III. Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable. Amounts disclosed as revenue are net
of returns, trade allowances, rebates, goods and services
taxes plus amount collected on behalf of third parties.
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 which
the company expects to be entitled in exchange for those
goods or services.
Revenue from sale of goods is recognized at the point of time
when the control of the goods is transferred to the customer.
The company considers any other promises in the contract
that are separate performance obligations to which a portion
of the transaction price needs to be allocated. In determining
transaction price for the goods, the company consider the
effect of variable consideration, the existence significant
financing components, non-cash consideration and
consideration payable to the customer, if any.
Revenue is recognised when the performance obligation is
satisfied either over time or at a point of time. The Indian
accounting standards read with international terms and
conditions is being appropriately factored in recognising
revenue.
Other Operating Revenues comprise of income from
ancillary activities incidental to the operations of the
Company and is recognised when the right to receive the
income is established as per the terms of the contract.
Dividend income from investments is recognised when the
Company’s right to receive payment has been established.
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, which is the rate that exactly
discounts estimated future cash receipts through the
expected life of the financial asset or shorter period, where
appropriate to the gross carrying amount of the financial asset
or to the amortized cost of a financial asset.
When calculating the effective interest rate, the company
estimates the expected cash flows by considering all the
contractual terms of the financial instrument but does not
consider the expected credit losses. Interest income is
included in other income in the statement of profit and loss.
The expected cash flows are reassessed on a yearly basis
and changes, if any, are accounted prospectively.
IV. Property, Plant and Equipment
Property, Plant and Equipment (PPE), being fixed assets are
tangible items that are held for use in the production or supply
of goods or services, for rental to others, or for administrative
purposes and are expected to be used for more than a period
of twelve months.
Items of PPE are measured at cost, which includes capitalised
borrowing costs, less accumulated depreciation and
accumulated impairment losses, if any. Financing costs (if any)
relating to acquisition of assets which take substantial period
of time to get ready for intended use are also included to the
extent they relate to the period up to such assets are ready for
their intended use.
Initial Cost of an item of PPE 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 location and working
condition necessary for it to be capable of operating in the
manner intended by the Management and estimated costs of
dismantling and removing the item and restoring the site on
which it is located.
Items such as spare parts, stand-by equipment and servicing
equipment are capitalized when they meet the definition of
property, plant and equipment.
If significant parts of an item of PPE have different useful lives,
then they are accounted for as separate items (major
components) of PPE.
Subsequent costs and disposal: Subsequent expenditure
related to an item of PPE is added to its book value only if it
increases the future economic benefits from the existing asset
beyond its previously assessed standard of performance/life.
All other expenses on existing PPE, including day-to-day
repair and maintenance expenditure and cost of replacing
parts re charged to the statement of profit and loss for the
period during which such expenses are incurred.
Derecognition: The carrying amount of an item of PPE is
derecognised on disposal or when no future economic benefits
are expected from its use or disposal.
Gains or losses arising from derecognition of PPE are
measured as the difference between the net disposal
proceeds and the carrying amount of the assets and are
recognized in the statement of profit and loss when the asset is
derecognized.
V. Investment Property
Investment Property is a land or building, held to earn rentals
or for capital appreciation or both, rather than for use in the
production or supply of goods or services or for administrative
purposes; or sale in the ordinary course of business.
Investment properties, are measured at cost less
accumulated depreciation and accumulated impairment loss,
if any. The building components of Investment properties (if
any) are depreciated using the straight-line method over their
estimated useful lives.
Capital-work-in-progress: Assets in the course of
construction are capitalized in capital work in progress
account. 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. Costs (net of income) associated with the
commissioning of an asset are capitalised until the period of
commissioning has been completed and the asset is ready for
its intended use.
Depreciation: Depreciation on PPE is provided under straight
line method as per the useful lives and manner prescribed
under Schedule II to the Companies Act, 2013, except for plant
& equipments where the useful life is estimated to be 20 years
(10 years based on triple shift basis), based on technical
evaluation.
The Management believes that the estimated useful lives as
per the provisions of Schedule II to the Companies Act, 2013,
wherever adopted, are realistic and reflect fair approximation
of the period over which the assets are likely to be used.
The estimated useful lives, residual values and depreciation
method are reviewed at the end of each reporting period, if
there has been a significant change in the expected pattern of
consumption of future economic benefits embodied in the
asset, depreciation is charged prospectively to reflect the
changed pattern.
The Company has used the following useful lives to provide
depreciation on its Property, Plant and Equipment:
V I. Impairment of Non Financial assets:
The Company periodically assesses whether there is any
indication that an asset or a group of assets comprising a cash
generating unit may be impaired. If any such indication exists,
the Company estimates the recoverable amount of the asset.
For an asset or group of assets that does not generate largely
independent cash inflows, the recoverable amount is
determined for the cash- generating unit to which the asset
belongs. If such recoverable amount of the asset or the
recoverable amount of the cash generating unit to which the
asset belongs is less than its carrying amount, the carrying
amount is reduced to its recoverable amount. The reduction is
treated as an impairment loss and is recognized in the
statement of profit and loss. If at the balance sheet date there
is an indication that if a previously assessed impairment loss
no longer exists, the recoverable amount is reassessed and
the asset is reflected at the recoverable amount subject to a
maximum of depreciable historical cost. An impairment loss is
reversed only to the extent that the amount of asset does not
exceed the net book value that would have been determined if
no impairment loss had been recognized.
VII. Borrowings:
Borrowing cost includes interest expense as per Effective
Interest Rate (EIR) and exchange differences arising from
foreign currency borrowings to the extent they are regarded as
an adjustment to the interest cost.
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 their intended use or sale.
All other borrowing costs are recognised in the statement of
profit and loss in the period in which they are incurred.
VIII. Inventories:
Inventories are stated at the lower of cost and net realisable
value.
Cost of raw materials includes cost of purchase and other
costs incurred in bringing the inventories to their present
location and condition.
Cost of finished goods and work in progress include cost of
direct materials and labour and a proportion of manufacturing
overheads based on the normal operating capacity but
excluding borrowing costs.
Costs of inventories are determined on weighted average
basis. Net realisable value represents the estimated selling
price for inventories less all estimated costs of completion and
costs necessary to make the sale.
The Net realisable value of work-in-progress is determined
with reference to the selling prices of related finished products.
Raw Material, components and other supplies held for use in
the production of finished products are not written down below
cost except in cases where material prices have declined and
it is estimated that the cost of the finished products will exceed
their net realisable value. The comparison of cost and net
realisable value is made on item-by-item basis.
Stores & Spares which do not meet the definition of PPE are
accounted as inventories.
IX. Employee Benefits
Retirement benefit costs and termination benefits:
i. Defined Contribution Plan: 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 and Employee State Insurance. The Company’s
contribution is recognized as an expense in the Statement of
Profit and Loss during the period in which the employee
renders the related service. Payments to defined contribution
retirement benefit plans are recognised as an expense when
employees have rendered service entitling them to the
contributions.
ii. Defined Benefit Plan: The cost of providing benefits is
determined using the projected unit credit method, with
actuarial valuations being carried out at the end of each
annual reporting period. Re-measurement, comprising
actuarial gains and losses, the effect of the changes to the
asset ceiling (if applicable) and the return on plan assets
(excluding interest), is reflected immediately in the statement
of financial position with a charge or credit recognised in other
comprehensive income in the period in which they occur.
Re-measurement recognised in other comprehensive income
is reflected immediately in retained earnings and will not be
reclassified to profit or loss. Past service cost is recognised in
profit or loss in the period of a plan amendment.
Net interest is calculated by applying the discount rate at the
beginning of the period to the net defined benefit liability or
asset. Defined benefit costs are categorised as follows:
a. service cost (including current service cost, past service
cost, as well as gains and losses on curtailments and
settlements);
b. net interest expense or income; and
c. re-measurement
The Company presents the first two components of defined
benefit costs in profit or loss in the line item ’Employee benefits
expenses’. Curtailment gains and losses are accounted for
as past service costs. The retirement benefit obligation
recognised in the statement of financial position represents
the actual deficit or surplus in the Company’s defined benefit
plans. The Company presents the above liability/(asset) as
current and non-current in the Balance Sheet as per actuarial
valuation by the independent actuary and also considering
whether the Company will contribute this amount to the
gratuity fund within the next twelve months.
A liability for a termination benefit is recognised at the earlier of
when the entity can no longer withdraw the offer of the
termination benefit and when the entity recognises any
related restructuring costs.
Short-term and other long-term 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.
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