SIGNIFICANT ACCOUNTING POLOCIES
1. BASIS OF PREPARATION
The Financial Statements have been prepared in accordance with Section 133 of the Companies Act, 2013,
Indian Accounting Standards (Ind AS) notified under Companies (Indian Accounting Standards) Rules, 2015.
The Financial statements have been prepared on accrual and going concern basis. The accounting policies
are applied consistently to all periods presented in the financial statements. All assets and liabilities have
been classified as current and non-current as per the Company’s normal operating cycle and other criteria
as set out in the Division II of Schedule III of the Companies Act, 2013. Based on the nature of products and
the time between 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 or non-current
classification of assets.
Transactions and balances with values below the rounding off norm adopted by the company have been
reflected as “0” in the relevant notes in these financial statements.
The Financial Statements of the Company for the year ended 31/03/2025 were approved for issue in
accordance with the resolution of the board of directors on 29/05/2025
2. Basis of Measurement: These Financial Statements are prepared under historical cost convention unless
otherwise stated.
3. Revenue Recognition: Revenue from contracts with customers are recognized as per Ind AS 115 when
control of the goods or services are transferred to the customers at the fair value of consideration received
or receivable. The Company recognizes revenue when the same can be reliably measured, it is probable
that future economic benefits will flow to the Company and specific criteria have been met for each of the
Company’s activities as described below. 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. Amounts disclosed as revenue are exclusive of GST and net of
returns, trade allowances, rebates, discounts, and amounts collected on behalf of third parties.
(i) Sale of Goods
Sales are recognized when substantial risk and rewards of ownership are transferred to customer,
In case of domestic customers, sales generally take place when goods are dispatched or delivery is
handed over to the transporter. In case of export customers, sales generally take place when goods are
shipped on-board based on bill of lading.
ii) Interest Income is recognized on time proportion basis taking into account the amount invested and
rate of interest.
iii) Revenue in respect of other claims is recognized on accrual basis to the extent the ultimate realization
is reasonably.
4. Expenses are accounted on accrual basis.
5. Employee Benefits:
(i) Contributions to defined contribution schemes such as ESI, Labor welfare fund, employee pension
scheme are charged as expense based on the amount of contribution required to be made as and when
services are rendered by the employees. Companies provident fund contribution in respect of certain
employees is made to government administered fund and charged as an expense to the statement of
profit and loss. The above benefits are classified as Defined contribution schemes as the company has
no further defined obligations beyond the monthly contribution.
(ii) Defined benefit plans: In accordance with payment of Gratuity Act, 1972, the company provides gratuity
a defined benefit retirement plan covering eligible employees. The plan provides for a payment to
vested employees at retirement, death while in employment or on termination of employment, an
amount equivalent to 15 days salary payable for each completed year of service, subject to maximum
as may be prescribed. Vesting occurs upon completion of five years of service, except in case of death
while in employment in which case the legal heirs would receive the gratuity. Accordingly, a lump sum
provision is made as per management policy.
6. Property, Plant and Equipment: Property, plant and equipment are stated at acquisition cost includes
related duties freight etc., and interest on borrowed fund if any directly attributable to acquisition/
construction of qualifying fixed assets and is net of duty/tax credit availed.
Subsequent expenditure related to an item of property, plant and equipment are added to book value
only if they increase the future benefits from existing asset beyond its previously assessed standard of
performance. In all such cases, the useful life of assets subsequently added to parent asset are brought at
par and depreciated in line with parent asset.
Losses arising from the retirement of, and gains or losses arising from disposal of property, plant and
equipment which are carried at cost are recognized in statement of profit or loss.
Depreciation is provided on SLM basis, based on useful life of the assets in accordance with Schedule II of
the Companies Act, 2013.
Free hold land is not depreciated.
The residual value of 5% is retained in books for all assets other than the assets whose useful life has elapsed
as on 01-04-2014 or those assets whose book value has already been reduced below 5% of acquisition cost.
The depreciation has been provided on SLM basis based on the life of the asset given below:
- Building 30 years
- Plant and Machinery 15 years
- Lab Equipment 10 years
- Electrical Installation 10 years
- Office Equipment 5 years
- Vehicles 8 years
- Computers 3 years
De-recognition: The carrying amount of an item of property, plant and equipment shall be derecognized
(i) On disposal or
(ii) When no future economic benefits are expected from its use or disposal
7. Intangible Assets: Separately purchased intangible assets are initially measured at cost. Subsequently,
intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses
if any.
The useful lives of intangible assets are assessed as either finite or indefinite. Finite life assets are amortized
on a straight-line basis over the period of their expected useful lives.
Estimated useful lives by major class of finite life intangible assets are as follows:
Computer Software 10 Years
The amortization period and amortization method for finite life intangible assets is reviewed at each
financial year and adjusted prospectively, if appropriate.
8. Foreign Currencies: The Company’s financial statements are presented in INR, which is also the functional
currency of the company.
Transactions and Balances: Transactions in foreign currencies are initially recognized by the company at its
functional currency spot rates at the date the transaction when it first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency
spot rates of exchange at the reporting date.
Exchange differences arising on settlement or translation of monetary items are recognized in profit and
loss statement.
9. Income Taxes: Income tax expense for the year comprises of current tax and deferred tax. It is recognized
in profit and loss.
Current tax is the expected tax payable / receivable on the taxable income / loss for the year using
applicable tax rates at the Balance Sheet date, and any adjustment to taxes in respect of the previous years.
Deferred tax is recognized in respect of temporary differences between carrying amount of assets and
liabilities for financial reporting purposes and corresponding amounts used for taxation purposes.
A deferred tax liability is recognized based on the expected manner of realization or settlement of the
carrying amount of assets and liabilities, using tax rates enacted or substantially enacted by the end of the
reporting period.
A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be
available against which the asset can be utilized. Deferred tax assets are reviewed at each reporting date
and reduced to the extent that it is no longer probable that the related tax benefit will be realized.
10. Dividend: Final Dividend on shares are recorded as a liability on the date of approval by the shareholders.
11. Use of Estimates: The preparation of Financial Statements is in conformity with Indian accounting standards
(Ind AS), requires the management to make estimates and assumptions considered in the reported amount
of assets and liabilities and disclosure relating to contingent liabilities as at the date of financial statements
and reported income and expenses during the year. The management believes that the estimates used in
preparation of financial statements are prudent and reasonable. Future results could differ due to these
estimates and differences between actual results and estimates are recognized in the periods in which
results are known / materialize.
12. Financial Instruments: Financial Assets and Financial Liabilities are recognized when the company becomes
a party to contractual provisions of the instrument.
A Financial Asset is:
• Cash
• A Contractual right to receive cash or another Financial Asset.
• A Contractual right to exchange Financial Assets or Liabilities with another entity under potentially
favourable conditions; or
• An equity instrument of another entity.
B Financial Liability is:
• A Contractual obligation to deliver cash or another financial asset; or
• To exchange Financial Instruments with another entity under potentially unfavourable conditions.
A derivative is a Financial Instrument that derives its value from underlying price or index;
requires little or no initial net investment; and is settled at a future date.
IND AS 109 divides all Financial Assets into Two Classifications:
Those measured at amortised at cost.
Those measured at Fair Value.
When assets are measured at fair value, gains and losses are recognized entirely in profit or loss
(Fair value through profit or loss, FVTPL), or recognized in other comprehensive income (Fair
value through other comprehensive income, FVTOCI).
The classification of Financial Asset is made at the time it is initially recognized, namely when the
entity becomes a party to contractual provisions of the instrument.
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