2. SIGNIFICANT ACCOUNTING POLICIES
A) Basis of preparation and Measurement: -
These financial statements have been prepared in accordance with the generally accepted accounting principles
in India under the historical cost convention on accrual basis. Pursuant to section 133 of the Companies Act,
2013 read with rule 7 of Companies (Accounts) Rules, 2014, till the standards of accounting or any addendum
thereto are prescribed by Central Government in consultation and recommendation of the National Financial
Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue
to apply. Consequently, these financial statements have been prepared to comply in all material aspects with
the Accounting Standards notified under section 211(3C) of the Companies Act, 1956 [Companies (Accounting
Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act, 2013.
The company has prepared the financial statements on accrual basis and under historical cost convention, except
for certain financial assets and liabilities which are measured at fair value.
The company has prepared the financial statements on a going concern basis. The accounting policies are
applied consistently to all the year presented in the financial statements except where a newly issued accounting
standard is initially adopted or a revision to an existing accounting standard requires change in accounting
policy hitherto in use.
The Functional and presentation currency of the company is Indian Rupees (“INR”) which is the currency of the
primary economic environment in which the Company operates. All amounts in the financial statements have
been rounded off to the nearest lacs unless otherwise indicated. Figures in brackets indicate negative values.
B. Revenue recognition: -
Sale of goods; -
The Company recognizes revenues on the sale of products, net of discounts and sales incentives, when the
products are delivered to the customer or when released to the carrier responsible for transporting them to the
customer in the following manner:
• Domestic sales are recognised at the time of dispatch from the point of sale;
• Export sales are recognised on the date when shipped on board as per terms of sale and are initially recorded at
the relevant exchange rate prevailing on the date of the transaction
Income from services; -
Revenue from services is recognised when services have been rendered and there should be no uncertainty
regarding consideration and its ultimate collection.
Interest Income; -
Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate
applicable. However, where the ultimate collection of the same lacks reasonable certainty, revenue recognition is
postponed to the extent of uncertainty.
Duty Drawback; -
Duty drawbacks are recognised where there is no uncertainty regarding consideration and its ultimate collections.
C. Depreciation and amortisation: -
Company provides depreciation on a pro rata basis on the written down value method over the useful lives of
the assets.
Useful Life of Assets is determined by the Management as those prescribed by Schedule II Part 'C' of the
Companies act, 2013. The Management believes that these estimated useful lives are realistic and reflect fair
approximation of the period over which the assets are likely to be used.
Depreciation on property, plant and equipment purchased during the year is provided on pro rata basis.
Depreciation on assets sold, discarded or demolished during the year is being provided at their rates up-to the
date such assets are sold, discarded or demolished.
D. Property, Plant & Equipment: -
Property, Plant and Equipment are stated at cost of acquisition or construction less accumulated depreciation/
amortization and accumulated impairment, if any.
Cost includes purchase price, taxes and duties, labour cost and directly attributable overhead expenditure for
self-constructed assets incurred up to the date the asset is ready for its intended use. Borrowing cost incurred for
qualifying assets is capitalized up to the date the asset is ready for intended use, based on borrowings incurred
specifically for financing the asset or the weighted average rate of all other borrowings, if no specific borrowings
have been incurred for the asset.
Cost also includes the cost of replacing part of the plant and equipment, if the recognition criteria are met.
When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates
them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is
recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are
satisfied. All other repair and maintenance costs are recognised in the Statement of Profit and Loss as incurred.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at
regular intervals and adjusted prospectively, if appropriate.
E. Intangible Assets: -
Intangible assets are non-physical assets such as patent, license agreement, copyright, software. Intangible
Assets must be amortized over their useful life, if possible, sum assets, such as Brand Name have indefinite
life and cannot be capitalize or amortized, other intangible assets such as license agreement have useful life
determined in the license agreement, item with a defined useful life must be amortized. Intangible assets
purchased are measured at cost or fair value as on the date of acquisition less accumulated amortisation and
accumulated impairment, if any.
Amortisation is provided on a WDV basis over estimated useful lives of the intangible assets. The amortisation
period for intangible assets with finite useful lives is reviewed at least at each year-end. Changes in expected
useful lives are treated as changes in accounting estimate.
F. Impairment: -
At each Balance Sheet date, the Company assesses whether there is any indication that the property, plant and
equipment with finite lives may be impaired. If any such indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the impairment, if any. Where it is not possible to estimate the
recoverable amount of individual asset, the Company estimates the recoverable amount of the cash-generating
unit to which the asset belongs.
As of March 31st, 2025 none of the property, plant and equipment was considered impaired.
G. Inventories: -
Raw materials, Stores & Spare Parts and packing materials are valued at lower of cost and net realisable value.
Cost includes purchase price, (excluding those subsequently recoverable by the enterprise from the concerned
revenue authorities), freight inwards and other expenditure incurred in bringing such inventories to their
present location and condition. In determining the cost, weighted average method is used.
Manufactured finished goods and WIP are valued at the lower of cost and net realisable value. Cost ofmanufactured
WIP/finished goods comprises direct material, direct labour and an appropriate proportion of variable and fixed
overhead expenditure, the latter being allocated on the basis of normal operating capacity.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of
completion and the estimated costs necessary to make the sale.
H. Earnings per share: -
Basic Earnings Per Share is calculated by dividing the net profit or loss for the period attributable to equity
shareholders by the weighted average number of equity shares outstanding during the period. Earnings
considered in ascertaining the Company's earnings per share is the net profit for the period. The weighted
average number of equity shares outstanding during the year and all years presented is adjusted for events, such
as bonus shares, other than the conversion of potential equity shares that have changed the number of equity
shares outstanding, without a corresponding change in resources.
I. Taxes on Income: -
The accounting treatment for the Income Tax in respect of the Company's income is based on the Accounting
Standard on 'Accounting for Taxes on Income’ (AS-22). The provision made for Income Tax in Accounts comprises
both. Income tax expenses for the Period comprises of current tax and deferred tax. Current tax provision is
determined on the basis of taxable income computed as per the provision of the income tax Act 1961.
Deferred tax assets and liabilities are recognised for the future tax consequences of temporary differences
between the carrying values of assets and liabilities and their respective tax bases, unutilised business loss and
depreciation carry-forwards and tax credits. Such deferred tax assets and liabilities are computed separately for
each taxable entity.
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 the tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date.
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