1. MATERIAL ACCOUNTING POLICIES
The accounting policies mentioned herein are relating
to the standalone financial statements of the Company.
a. Basis of Preparation
The financial statements comply in all material aspects
with Indian Accounting Standards (Ind AS) notified
under Section 133 of the Companies Act, 2013
(the Act) read with Companies (Indian Accounting
Standards) Rules, 2015 and other relevant provisions
of the Act.
The Hon’ble National Company Law Tribunal (NCLT),
Kolkata Bench, approved Rossell India Limited’s
restructuring scheme on April 25, 2024, under the
Companies Act, 2013. The scheme, filed with the
Registrar of Companies (RoC) on August 30, 2024,
transferred the business (including the assets and
liabilities) of Rossell Techsys Division from Rossell
India Limited (Demerged Company) to the company.
The Assets and Liabilities of the Rossell techsys
Division have been vested at book values, effective
retrospectively from the appointed date of April 1,
2023. Consequently, the company restated its financial
information from April 1, 2023, to effect this.
Subsequent to the vesting of the Rossell Techsys
Division in the The Company, the company is in the
process of obtaining the registrations/ approvals/
certifications from key authorities and transfer of bank
accounts and loan facilities. Pending completion of
these formalities, the company has continued to operate
its business in the existing registration/ approvals/ bank
accounts and loan facilities of demerged company till
the balance sheet date.
The company has prepared its financial statements in
accordance with conceptual framework for financial
reporting under Indian Accounting Standards referred
in Para 15 of IND AS 1 Presentation of Financial
Statements, which emphasises the substance of the
transaction over its form, ensuring that the economic
essence of demerger is faithfully represented.
b. Basis of Measurement
The financial statement has been prepared on a
historical cost basis except Defined benefit plans - plan
assets measured at fair value.
c. Going Concern
The Company’s financial statements have been
prepared on a going concern basis.
d. Use of estimates and judgements
The preparation of financial statements in accordance
with Ind AS requires management to use of certain critical
accounting estimates, judgments and assumptions. It
also requires management to exercise judgment in the
process of applying accounting policies. Actual results
could differ from those estimates. These estimates,
judgments and assumptions affect application of the
accounting policies and the reported amounts of assets,
liabilities, revenue, expenditure, contingent liabilities
etc.
The estimates and underlying assumptions are
reviewed on an ongoing basis and changes are made
as management becomes aware of changes in the
circumstances surrounding the estimates. They are
based on historical experience and other factors,
including expectations of future events that may have a
financial impact on the Company and that are believed
to be reasonable under the circumstances. Revisions
to accounting estimates are recognized in the financial
statements in the period in which the estimate is
revised if the revision affects only that period or in the
period of the revision and future periods if the revision
affects both current and future periods.
Significant estimates and judgments
The areas involving significant estimates or judgments
are:
i. Estimation of defined benefit obligation.
ii. Estimation of useful life of Property, Plant and
Equipment
e. Cost Recognition
Costs and expenses are recognised when incurred and
are classified according to their nature. Expenditure are
capitalized where appropriate.
f. Classification of current and non-current
All assets and liabilities have been classified as current
or non-current as per the Company’s normal operating
cycle and other criteria set out in the Ind AS 1 -
Presentation of financial statements and 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 realization 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.
g. Property, Plant and Equipment
i. Tangible Assets
Property, Plant and Equipment are measured
at cost / deemed cost, less accumulated
depreciation and impairment losses, if any. Cost
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 attributable
costs of dismantling and removing the item and
restoring the site on which it is located. Deemed
Cost is the carrying value of all of its Property,
Plant and Equipment (other than Bearer Plants)
as of 1st April, 2016 measured as per the previous
GAAP as the Company elected to continue with
the same carrying value as on the aforesaid
transition date for Ind AS.
Subsequent costs are included in the asset’s
carrying amount or recognized as a separate
asset, as appropriate, only when it is probable
that future economic benefits associated with
the item will flow to the Company and the cost of
the item can be measured reliably. The carrying
amount of any component accounted for as a
separate asset is derecognized when replaced. All
other repairs and maintenance are charged to the
Statement of Profit and Loss during the reporting
period in which they are incurred.
An asset’s carrying amount is written down
immediately to its recoverable amount if the
asset’s carrying amount is greater than its
estimated recoverable amount. Any gain or loss
on disposal of an item of property, plant and
equipment is recognized in Statement of Profit
and Loss.
An item of Property, Plant and Equipment is
derecognized upon disposal or when no future
economic benefits are expected to arise from the
continued use of asset. Any gain or loss arising on
the disposal or retirement of an item of Property,
Plant and Equipment is determined as the
difference between the sales proceeds and the
carrying amount of the asset and is recognized in
profit or loss.
ii. Intangible Assets
Computer Software
Intangible Assets of the Company comprise
acquired Computer Software having a finite life.
Cost of software is capitalized when it is expected
to provide future enduring economic benefits.
The capitalization cost includes license fee, cost of
implementation and system integration services.
The costs are capitalized in the year in which the
relevant Software is implemented for use and is
amortized across a period not exceeding 5 years.
Research & Development
Research and Development costs are expensed
as incurred unless technical and commercial
feasibility of the project demonstrate that: (a)
the future economic benefits are available, (b)
the activity is being carried out with an intention
and ability to complete as well as use the asset
and (c) the cost can be measured reliably. In
such case, the cost is capitalized as Intangible
Asset - Knowhow. The cost which can be
capitalized include the cost of material, direct
labour, overhead costs including finance cost, if
applicable that are directly attributable to bringing
the asset for its intended use.
iii. Impairment
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 group of assets (cash-generating units).
Non-financial assets other than goodwill that
suffered impairment are reviewed for possible
reversal of the impairment at the end of each
reporting period.
iv. Depreciation
Items of Property, Plant and Equipment are
depreciated in a manner that amortizes the cost of
the assets less its residual value, over their useful
lives on a straight line basis. Estimated useful lives
of the assets are as specified in Schedule II of the
Companies Act, 2013 except in respect of the
following assets, where useful life is as under:
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Description
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Years
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Plant And Equipment*
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15 to 18
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Office Equipment*
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5 to 10
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*Over its useful life as technically assessed
The estimated useful lives, residual values
and depreciation method are reviewed at the
end of each reporting period and the effect of
any changes in estimate is accounted for on a
prospective basis.
h. Foreign Currency Translation
Foreign currency transactions are translated into Indian
Rupee (INR) which is the functional currency (i.e. the
currency of the primary economic environment in
which the entity operates) using the exchange rates at
the dates of the transactions.
a. 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 recognized in profit or loss.
b. Non-monetary items denominated in foreign
currency such as investments, propert plant and
equipment , etc., are valued at the exchange rate
prevailing on the date of transaction.
i. Inventories
Stock of finished goods are valued at lower of cost and
net realizable value.
Raw Materials purchased and Stores and Spare Parts
are valued at or under cost. Work-in-progress is valued
at works cost based on technical evaluation of the
stage of completion.
Provision is made for obsolete, slow moving and
defective inventories, wherever necessary and
reviewed from time to time.
Costs are ascertained to the individual item of inventory
by adopting weighted average method. Net realizable
value is the estimated selling price for inventories less
all selling costs.
j. Revenue Recognition
i. Sale of products:
Revenue is recognized when the performance
obligations are satisfied and the control of the
goods is transferred, being when the goods
are delivered as per the relevant terms of the
contract at which point in time the Company has
a right to payment for the goods, customer has
possession and legal title to the goods, customer
bears significant risk and rewards of ownership
and the customer has accepted the goods or the
Company has objective evidence that all criteria
for acceptance have been satisfied.
ii. Revenue from Services:
Revenue from Services is recognised in the
accounting period in which the services are
rendered.
k. Financial Instruments
Financial assets and financial liabilities are recognized
when the Company becomes a party to the contractual
provisions of the relevant instrument and are initially
measured at fair value. Transaction costs that are
directly attributable to the acquisition or issues of
financial assets and financial liabilities (other than
financial assets and financial liabilities measured at fair
value through profit or loss) are added to or deducted
from the fair value measured on initial recognition of
financial assets or financial liabilities. Purchase or sale
of financial assets that require delivery of assets within
a time frame established by regulation or convention in
the market place (regular way trades) are recognized on
the trade date i.e. the date when the Company commits
to purchase or sell the asset.
Financial Assets
i. Recognition and Classification
The financial assets are classified at initial
recognition in the following measurement
categories as:
• those subsequently measured at amortized
cost.
• those to be subsequently measured at fair
value [either through other comprehensive
income (OCI), or through profit or loss]
ii. Subsequent Measurement
• Financial assets measured at amortized cost
- Financial assets which are held within the
business model of collection of contractual
cash flows and where those cash flows
represent payments solely towards
principal and interest on the principal
amount outstanding are measured at
amortized cost. A gain or loss on a financial
asset that is measured at amortized cost
and is not a part of hedging relationship is
recognized in profit or loss when the asset
is derecognized or impaired.
• Financial assets measured at fair value
through other comprehensive income
- Financial assets that are held within a
business model of collection of contractual
cash flows and for selling and where the
assets’ cash flow represents solely payment
of principal and interest on the principal
amount outstanding are measured at
fair value through OCI. Movements in
carrying amount are taken through OCI,
except for recognition of impairment gains
or losses. When a financial asset, other
than investment in equity instrument, is
derecognized, the cumulative gain or loss
previously recognized in OCI is reclassified
from equity to statement of profit and loss.
Classification of equity instruments, not
being investments in subsidiaries, associates
and joint arrangements, depend on whether
the Company has made an irrevocable
election at the time of initial recognition
to account for the equity investment at
fair value through OCI. When investment
in such equity instrument is derecognized,
the cumulative gains or losses recognized
in OCI is transferred within equity on such
derecognition.
• Financial assets measured at fair value
through profit or loss - Financial assets are
measured at fair value through profit or loss
unless it is measured at amortized cost or
at fair value through other comprehensive
income on initial recognition. Movements
in fair value of these instruments are taken
in profit or loss.
n. Impairment of financial assets
The Company assesses at each date of balance sheet
whether a financial asset or a group of financial assets
is impaired. Impairment losses are recognized in the
profit or loss, where there is objective evidence of
impairment based on reasonable and supportable
information that is available without undue cost or
effort. For all financial assets, expected credit losses
are measured at an amount equal to the 12 month
expected credit losses or at an amount equal to the
life time expected credit losses if the credit risk on the
financial asset has increased significantly since initial
recognition. The Company recognizes loss allowances
on trade receivables when there is objective evidence
that the Company will not be able to collect all the
due amount depending on product categories and the
payment mechanism prevailing in the industry.
i. Income recognition on financial assets
Interest income from financial assets is recognized
in profit or loss using effective interest rate method,
where applicable.
Dividend income is recognized in profit or loss only when
the Company’s right to receive payments is established
and the amount of dividend can be measured reliably.
>. Financial Liabilities
Financial liabilities are classified according to the
substance of the contractual arrangements entered into.
Financial liabilities are classified, at initial recognition, as
subsequently measured at amortized cost unless they
fulfill the requirement of measurement at fair value
through profit or loss. Where the financial liability
has been measured at amortized cost, the difference
between the initial carrying amount of the financial
liabilities and their redemption value is recognized in
the statement of profit and loss over the contractual
terms using the effective interest rate method. Financial
liabilities at fair value through profit or loss are carried
at fair value with changes in fair value recognized in
the finance income or finance cost in the statement of
profit or loss.
p. Derecognition of financial assets and financial
liabilities
Financial assets are derecognized when the rights to
receive benefits have expired or been transferred,
and the Company has transferred substantially all
risks and rewards of ownership of such financial asset.
Financial liabilities are derecognized when the liability is
extinguished that is when the contractual obligation is
discharged, cancelled or expired.
q. Offsetting of financial instruments
Financial assets and liabilities are offset and the net
amount is reported in the balance sheet where there
is a legally enforceable right to offset the recognized
amounts and there is an intention to settle on a
net basis or realize the asset and settle the liability
simultaneously.
r. Derivatives and hedging activities
The Company do have derivative financial instruments
such as forward contracts, and to mitigate risk of
changes in exchange and interest rates, although nil
outstanding at on 31st March, 2025. The counterparty
for these contracts is generally banks.
s. Derivatives
Derivatives are measured at fair value. All fair value
gains and losses are recognized in profit and loss except
where the derivatives qualify as hedging instruments in
cash flow hedges or net investment hedges.
t. Cash flow hedges that qualify for hedge accounting:
The Company designates their derivatives as hedges of
foreign exchange risk associated with the cash flows of
highly probable forecast transactions.
The Company documents at the inception of the
hedging transaction the economic relationship between
hedging instruments and hedged items including
whether the hedging instrument is expected to offset
changes in cash flows of hedged items.
The effective portion of changes in the fair value of
derivatives that are designated and qualify as cash
flow hedges is recognized in the Other Comprehensive
Income.
u. Government Grants
Grants from the government are recognized at their
fair value where there is a reasonable assurance that
the grant will be received and the Company will comply
with all attached conditions.
Government grants relating to income are deferred and
recognized in the Statement of Profit and Loss over the
period necessary to match them with the costs that
they are intended to compensate and presented within
other income.
Government grants relating to the purchase of Property,
Plant and Equipment are included in non-current
liabilities as deferred income and are credited to the
Statement of Profit and Loss on a Straight-Line basis
over the useful life of the related assets and presented
within other income. During the year the company has
not received any government grant.
v. Income Tax
Tax expense comprises of (i) current tax and (ii) deferred
tax. The income tax expense or credit for the period is
the tax payable on the current period’s taxable income
based on the applicable income tax rate adjusted by
changes in deferred tax assets and liabilities attributable
to temporary differences and to unused tax losses.
The current income tax charge is calculated on the
basis of the tax laws enacted or substantively enacted
at the end of the reporting period.
Deferred income tax is provided in full, using the
balance sheet method, on temporary differences arising
between the tax bases of assets and liabilities and their
carrying amounts in the financial statements. Deferred
income tax is determined using tax rates (and laws) that
have been enacted or substantially enacted by the end
of the reporting period and are expected to apply when
the related deferred income tax asset is realised or the
deferred income tax liability is settled.
Deferred tax assets are recognised only if it is probable
that future taxable amounts will be available to utilise
those temporary differences and losses.
Deferred tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate
to the same taxation authority. Current tax assets and
tax liabilities are offset where the entity has a legally
enforceable right to offset and intends either to settle
on a net basis, or to realise the asset and settle the
liability simultaneously.
Current and deferred tax is recognised in profit or loss,
except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this
case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.
w. Employee Benefits
These are recognized at the undiscounted amount as
expense for the year in which the related service is
rendered.
The Company is contributing regularly to the Provident
Funds, administered by the Governments and
independent of Company’s finances, in respect of all
its eligible employees. The Company also operates
Defined Contribution Scheme for payment of Pension
to certain classes of employees.
Defined Benefit Gratuity Plan is also maintained by
the Company. The Contributes to the recognized
Gratuity Fund, which is administered by the Trustees
and is independent of Company’s finance. The Annual
Contribution is determined by the actuary at the end
of the year. Actuarial gains and losses are recognized
in the Profit and Loss Statement. The Company also
recognizes in the Profit and Loss Statement gains or
losses on curtailment or settlement of the defined
benefit plan as and when the curtailment or settlement
occurs.
Remeasurement gains and losses arising from experience
adjustments and changes in actuarial assumptions are
recognized, in the year in which they occur, directly in
Other Comprehensive Income and eventually included
in retained earnings in the Statement of changes in
Other Equity and in the Balance Sheet.
Changes in the present value of the defined benefit
obligation resulting from plan amendments or
curtailments are recognized immediately in the
Statement of Profit and Loss as past service cost.
. Leases
Leases are recognized as per Ind AS 116 when there is
a contract that conveys the right to control the use of
an identified asset. Such leases are amortized over the
lease term.
'. Borrowing costs
Borrowing costs consist of interest and related costs
incurred in connection with the borrowing of funds.
Borrowing costs also include exchange differences to
the extent regarded as an adjustment to the borrowing
costs.
Borrowing costs that are attributable to the acquisition
or construction of qualifying assets or for self-created
assets (i.e. an asset that necessarily takes a substantial
period of time to get ready for its intended use) are
capitalized as a part of the cost of such assets. All other
borrowing costs are charged to the Statement of Profit
and Loss.
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