2 Summary of significant accounting policies
2.1. Basis of preparation
These 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 pursuant to Section 133
of the Companies Act, 2013 ('Act') read with of the
Companies (Indian Accounting Standards) Rules, 2015
as amended and other relevant provisions of the Act.
These financial statements have been prepared
on historical cost basis, except for certain financial
instruments which are measured at fair value or
amortised cost at the end of each reporting period,
as explained in the accounting policies below.
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. All assets and liabilities
have been classified as current and non-current as
per the Company’s normal operating cycle.
The financial statements were authorized for
issue by the Company's Board of Directors
on 21st May 2025.
These financial statements are presented in Indian
Rupees (INR), which is also the functional currency.
All the amounts have been rounded off to the
nearest lacs, unless otherwise indicated.
2.2. Use of estimates and judgments
The preparation of financial statements requires
management to make judgments, estimates and
assumptions in the application of accounting
policies that affect the reported amounts of assets,
liabilities, income and expenses. Actual results may
differ from these estimates. 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. Revisions to accounting estimates are
recognised prospectively.
2.3. Current versus non-current classification
All assets and liabilities have been classified as
current or non-current as per the Company's
operating cycle and other criteria set out in the
Schedule III to the Companies Act, 2013. Based
on the nature of products and the time between
the acquisition of assets for processing and their
realisation in cash and cash equivalents, the
Company has ascertained its operating cycle as 12
months for the purpose of current - non-current
classification of assets and liabilities.
2.4. Foreign Exchange Transactions
i. Functional and presentation currency
Items included in the financial statements
of the Company are measured using
the currency of the primary economic
environment in which the Company operates
(‘the functional currency’). The financial
statements are presented in Indian rupee
(INR), which is Company’s functional and
presentation currency
ii. Transactions and balances
Foreign currency transactions are translated
into the functional currency using the exchange
rates at the dates of the transactions. Foreign
exchange gains and losses resulting from the
settlement of such transactions and from the
translation of monetary assets and liabilities
denominated in foreign currencies at year end
exchange rates are generally recognised in
profit or loss. All the foreign exchange gains
and losses are presented in the statement
of Profit and Loss on a net basis within other
expenses or other income as applicable.
2.5. Property Plant and Equipment
An item of PPE is recognized as an asset, if and
only if, it is probable that the future economic
benefits associated with the item will flow to the
Company and its cost can be measured reliably.
PPE are initially recognized at cost. The initial cost
of PPE comprises its purchase price (including
non-refundable duties and taxes but excluding
any trade discounts and rebates), and any directly
attributable cost of bringing the asset to its working
condition and location for its intended use.
Subsequent to initial recognition, PPE are stated
at cost less accumulated depreciation and any
impairment losses. When significant parts of
property, plant and equipment are required to
be replaced in regular intervals, the Company
recognizes such parts as separate component of
assets. When an item of PPE is replaced, then its
carrying amount is de-recognized from the balance
sheet and cost of the new item of PPE is recognized.
Further, in case the replaced part was not being
depreciated separately, the cost of the replacement
is used as an indication to determine the cost of the
replaced part at the time it was acquired.
The expenditures that are incurred after the
item of PPE has been put to use, such as repairs
and maintenance, are normally charged to the
statement of profit and loss in the period in which
such costs are incurred
Depreciation has been charged to statement of
profit & loss on Straight Line Method on Buildings,
Plants and Machineries, Electric Installations and
Dies & Mould, where as other assets on Written
Down Value method determined based on the
economic useful lives of assets estimated by the
management; or at the rates prescribed under
Schedule II of the Companies Act, 2013. Accordingly,
the Company has used the following rates:-
2.6 Investment Property
Property that is held for long-term rental yields
or for capital appreciation or both, and that is
not occupied by the Company, is classified as
Investment property. Investment property is
measured initially at its cost, including related
transaction costs and where applicable borrowing
costs. Subsequent expenditure is capitalised to the
asset’s carrying amount only when it is probable
that future economic benefits associated with
the expenditure will flow to the Company and the
cost of the item can be measured reliably. All other
repairs and maintenance costs are expensed when
incurred. When part of an investment property is
replaced, the carrying amount of the replaced part
is derecognised. Investment properties (except
freehold land) are depreciated using the straight¬
line method over their estimated useful lives at
the rates prescribed under Schedule II of the
Companies Act, 2013.
2.7. Intangible assets
i. An intangible asset shall be recognised
if, and only if:
(a) it is probable that the expected future
economic benefits that are attributable to
the asset will flow to the Company and
(b) the cost of the asset can be
measured reliably.
ii. Cost of technical know-how is amortised over a
period of life of contract.
iii. Computer software is capitalised where it is
expected to provide future enduring economic
benefits. Capitalisation costs include license
fees and costs of implementation / system
integration services. The costs are capitalised
in the year in which the relevant software
is implemented for use. The softwares are
amortised over a period of 3 to 8 years based on
the life it is expected to provide future enduring
benefits on straight-line method.
2.8 Borrowing Cost
Borrowing costs specifically relating to the
acquisition or construction of a qualifying asset
that necessarily takes a substantial period of time
to get ready for its intended use are capitalized as
part of the cost of the asset. All other borrowing
costs are charged to statement of profit & loss
in the period in which it is incurred except loan
processing fees which is recognized as per Effective
Interest Rate method.
Borrowing costs consist of interest and other
costs that company 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.
2.9 Tax Expenses
Income Tax expense comprises of current tax and
deferred tax charge or credit. Provision for current
tax is made with reference to taxable income
computed for the financial year for which the
financial statements are prepared by applying the
tax rates as applicable.
i. Current Tax
Current tax charge is based on taxable profit
for the year. The tax rates and tax laws used
to compute the amount are those that are
enacted or substantively enacted, at the
reporting date where the Company operates
and generates taxable income. Management
periodically evaluates positions taken in
tax returns with respect to situations in
which applicable tax regulation is subject to
interpretation. It establishes provisions where
appropriate on the basis of amounts expected
to be paid to the tax authorities.
Current tax assets and tax liabilities are offset
when there is a legally enforceable right to
set off current tax assets against current tax
liabilities and Company intends either to settle
on a net basis, or to realise the asset and settle
the liability simultaneously.
ii. Deferred Tax
Deferred tax is provided using the liability
method on temporary differences arising
between the tax bases of assets and liabilities
and their carrying amounts in the financial
statements at the reporting date. Deferred
tax assets are recognised to the extent that
it is probable that future taxable income will
be available against which the deductible
temporary differences, unused tax losses,
depreciation carry-forwards and unused tax
credits could be utilised.
Deferred income tax is not accounted for if it
arises from initial recognition of an asset or
liability in a transaction other than a business
combination that at the time of the transaction
affects neither accounting profit nor taxable
profit (tax loss).
Deferred tax assets and liabilities are measured
based on the tax rates that are expected to
apply in the period when the asset is realised or
the liability is settled, based on tax rates and tax
laws that have been enacted or substantively
enacted by the balance sheet date.
The carrying amount of deferred tax assets is
reviewed at each reporting date and adjusted
to reflect changes in probability that sufficient
taxable profits will be available to allow all or
part of the asset to be recovered.
Deferred income tax assets and liabilities are
off-set against each other and the resultant
net amount is presented in the Balance Sheet,
if and only when, (a) the Company has a legally
enforceable right to set-off the current income
tax assets and liabilities, and (b) the deferred
income tax assets and liabilities relate to income
tax levied by the same taxation authority.
Minimum Alternate Tax credit is recognised as
an asset only when and to the extent there is
convincing evidence that the company will pay
normal income tax during the specified period.
Such asset is reviewed at each Balance Sheet
date and the carrying amount of the MAT
credit asset is written down to the extent there
is no longer a convincing evidence to the effect
that the Company will pay normal income tax
during the specified period.
2.10.Revenue
a) Revenue from operation
The Company derives revenues primarily from
sale of manufactured goods, traded goods and
related services.
Revenue is recognized on satisfaction of
performance obligation upon transfer of
control of promised products or services to
customers in an amount that reflects the
consideration the Company expects to receive
in exchange for those products or services.
The Company does not expect to have any
contracts where the period between the
transfer of the promised goods or services to
the customer and payment by the customer
exceeds one year. As a consequence, it does
not adjust any of the transaction prices for the
time value of money.
The Company satisfies a performance
obligation and recognises revenue over time, if
one of the following criteria is met:
1. The customer simultaneously receives
and consumes the benefits provided
by the Company’s performance as the
Group performs; or
2. The Company’s performance creates or
enhances an asset that the customer
controls as the asset is created
or enhanced; or
3. The Company’s performance does
not create an asset with an alternative
use to the Company and an entity has
an enforceable right to payment for
performance completed to date.
For performance obligations where one of
the above conditions are not met, revenue
is recognised at the point in time at which
the performance obligation is satisfied.
(b) Other Income:
i. Dividends are recognised in profit or
loss only when the right to receive
payment is established, it is probable
that the economic benefits associated
with the dividend will flow to the group,
and the amount of the dividend can be
measured reliably.
ii. Export incentives are accounted for on
export of goods if the entitlements can
be estimated with reasonable accuracy.
Premium of sale of import licenses is
recognised on an accrual basis.
iii. Interest income from debt instruments is
recognised using the effective interest rate
method. The effective interest rate is the rate
that exactly discounts estimated future cash
receipts through the expected life of the
financial asset to the gross carrying amount
of a financial asset. When calculating the
effective interest rate, the group estimates
the expected cash flows by considering
all the contractual terms of the financial
instrument (for example, prepayment,
extension, call and similar options) but does
not consider the expected credit losses.
2.11 Inventory
Raw materials, Packing materials, Stores and
Spare parts are valued at Lower of cost (cost
includes direct cost & attributable overheads)
or net realizable value. The Company follows
Weighted Average Cost method for valuation of
Raw materials, Packing materials, Stores and Spare
parts. However, materials and other items held for
use in the production of inventories are not written
down below cost if the finished products in which
they will be incorporated are expected to be sold at
or above cost. Semi-finished & Finished goods are
valued at lower of estimated cost or net realizable
value. Scrap is valued at net realizable value.
2.12 Segment Reporting
Primary Segment is identified based on the
nature of products and services, the different risks
and returns and the internal business reporting
system. Secondary segment is identified based
on geographical area in which major operating
divisions of the Company operate.
2.13 Impairment Of Assets
Intangible assets that have an indefinite useful
life are not subject to amortization and are tested
annually for impairment or more frequently if
events or changes in circumstances indicate that
they might be impaired. Other assets are tested
for impairment whenever events or changes in
circumstances indicate that the 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 costs 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).
Non-financial assets that suffered impairment are
reviewed for possible reversal of the impairment at
the end of each reporting period.
2.14 Fair Value Measurement
The Company measures certain financial
instruments at fair value at each balance sheet date.
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 fair value measurement is
based on the presumption that the transaction to sell
the asset or transfer the liability takes place either:
• In the principal market for the asset or liability, or
• In the absence of a principal market, in the most
advantageous market for the asset or liability
The principal or the most advantageous market
must be accessible by the Company. The fair
value of an asset or a liability is measured using
the assumptions that market participants
would use when pricing the asset or liability,
assuming that market participants act in their
economic best interest.
A fair value measurement of a non-financial asset
takes into account a market participant’s ability to
generate economic benefits by using the asset in
its highest and best use or by selling it to another
market participant that would use the asset in its
highest and best use.
The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximizing the use of relevant observable inputs
and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is
measured or disclosed in the financial statements
are categorised within the fair value hierarchy,
described as follows, based on the lowest
level input that is significant to the fair value
measurement as a whole:
Level 1: Quoted (unadjusted) prices for identical
assets or liabilities in active markets
Level 2: Significant inputs to the fair value
measurement are directly or indirectly observable
Level 3: Significant inputs to the fair value
measurement are unobservable
For assets and liabilities that are recognised in
the financial statements on a recurring basis, the
Company determines whether transfers have
occurred between levels in the hierarchy by re¬
assessing categorization (based on the lowest level
input that is significant to the fair value measurement
as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the
Company has determined classes of assets &
liabilities on the basis of the nature, characteristics
and the risks of the asset or liability and the level of
the fair value hierarchy as explained above
2.15 Financial Instrument
2.15.1 Recognition, classification and presentation
The financial instruments are recognised
in the balance sheet when the company
becomes a party to the contractual provisions
of the instrument.
The Company determines the classification of
its financial instruments at initial recognition.
The Company classifies its financial assets in the
following categories: a) those to be measured
subsequently at fair value (either through
other comprehensive income, or through
profit or loss), and b) those to be measured at
amortized cost. The classification depends on
the entity’s business model for managing the
financial assets and the contractual terms of
the cash flows.
Financial assets and liabilities arising from
different transactions are off-set against each
other and the resultant net amount is presented
in the balance sheet, if and only when, the
Company currently has a legally enforceable right
to set-off the related recognised amounts and
intends either to settle on a net basis or to realize
the assets and settle the liabilities simultaneously.
2.15.2. Measurement
I. Initial measurement
At initial recognition, the Company
measures financial instruments at its fair
value plus, in the case of a financial asset
not at fair value through profit or loss,
transaction costs. Otherwise transaction
costs are expensed in the statement of
profit and loss.
II. Subsequent measurement - financial
assets
The subsequent measurement of
the financial assets depends on their
classification as follows:
i. Financial assets measured at
amortized cost
Assets that are held for collection
of contractual cash flows where
those cash flows represent solely
payments of principal and interest
are measured at amortized cost
using the effective interest rate (‘EIR’)
method (if the impact of discounting
/ any transaction costs is significant).
Interest income from these financial
assets is included in finance income.
ii. Financial assets at fair value through
other comprehensive income
(‘FVTOCI’)
Equity investments which are not
held for trading and for which the
Company has elected to present
the change in the fair value in
other comprehensive income and
debt instruments that are held for
collection of contractual cash flows
and for selling the financial assets,
where the assets’ cash flow represent
solely payment of principal and
interest, are measured at FVTOCI.
The changes in fair value are taken
through OCI, except for the impairment,
interest (basis EIR method), dividend
and foreign exchange differences
which are recognised in the statement
of profit and loss.
When the financial asset is
derecognized, the related accumulated
fair value adjustments in OCI as at the
date of derecognition are reclassified
from equity and recognised in the
statement of profit and loss. However,
there is no subsequent reclassification
of fair value gains and losses to
statement of profit and loss in case of
equity instruments.
iii. Financial assets at fair value through
profit or loss (‘FVTPL’)
All equity instruments and financial
assets that do not meet the criteria
for amortized cost or FVTOCI are
measured at fair value through profit
or loss. Interest (basis EIR method)
and dividend income from FVTPL
is recognised in the statement of
profit and loss within finance income
/ finance costs separately from the
other gains/losses arising from
changes in the fair value.
Impairment
The company assesses on a forward
looking basis the expected credit
losses associated with its assets
carried at amortized cost and debt
instrument carried at FVTOCI. The
impairment methodology applied
depends on whether there has been a
significant increase in credit risk since
initial recognition. If credit risk has not
increased significantly, twelve month
ECL is used to provide for impairment
loss, otherwise lifetime ECL is used.
However, only in case of trade
receivables, the company applies the
simplified approach which requires
expected lifetime losses to be
recognized from initial recognition of
the receivables.
III. Subsequent measurement - financial
liabilities
Other financial liabilities are initially
recognised at fair value less any directly
attributable transaction costs. They are
subsequently measured at amortized
cost using the EIR method (if the impact
of discounting / any transaction costs
is significant).
2.15.3 De-recognition
The financial liabilities are de-recognised
from the balance sheet when the under-lying
obligations are extinguished, discharged,
lapsed, cancelled, expires or legally released.
The financial assets are de-recognised from the
balance sheet when the rights to receive cash
flows from the financial assets have expired, or
have been transferred and the Company has
transferred substantially all risks and rewards
of ownership. A financial instrument is any
contract that gives rise to a financial asset of
one entity and a financial liability or equity
instrument of another entity.
2.16 Cash and cash Equivalents
Cash and cash equivalents includes cash in hand,
deposits with banks, other short term highly
liquid investments with original maturities of
three months or less that are readily convertible
to known amounts of cash and which are subject
to an insignificant risk of changes in value.
For the purpose of presentation in the statement
of cash flows, cash and cash equivalents includes
outstanding bank overdraft shown within current
liabilities in statement of financial balance sheet
and which are considered as integral part of
company’s cash management policy.
2.17 Cash Flow Statement
Cash flows are reported using the indirect method,
whereby net profit before tax is adjusted for the
effects of transactions of a non-cash nature, any
deferrals or accruals of past or future operating
cash receipts or payments and item of income or
expenses associated with investing or financing
cash flows. The cash flows from operating,
investing and financing activities of the Company
are segregated.
2.18 Investment
Investment which are of equity in nature is carried
at Fair Value and gain/loss on fair valuation are
recognised through Other Comprehensive Income.
2.19 Trade Receivable
Trade receivables are recognized initially at their
fair value and subsequently measured at amortised
cost using the effective interest method, less
provision for expected credit loss.
2.20. Trade and Other payable
These amounts represent liabilities for goods and
services provided to the Company prior to the end
of financial year which are unpaid. Trade and other
payables are recognised, initially at fair value, and
subsequently measured at amortised cost using
effective interest rate method.
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