2. Material accounting policies
I. Basis of preparation
The financial statement of the Company has been prepared in accordance with the Indian accounting standards (Ind AS) notified under
the Companies (Indian Accounting Standard), Rules 2015, as amended and other relevant provisions of the Companies Act, 2013.
Accordingly, the Company has prepared these standalone financial statements which comprise the Balance Sheet as at 31st March
2025, the Statement of Profit and Loss, the Statement of Cash Flows and the Statement of Changes in Equity for the year ended as on
that date, and accounting policies and other explanatory information (together hereinafter referred to as “standalone financial
statements” or “financial statements").
These standalone financial statements have been prepared under the historical cost convention on the accrual basis, except for
certain financial instruments measured at fair value, as explained in accounting policies.
Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or revision to
an existing accounting standard requires a change in the accounting policy hitherto in use.
The preparation of the financial statements in conformity with Indian Accounting Standards (Ind AS) requires management to make
judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the
accompanying disclosures at the date of the financial statements. The judgements, estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the
revision effects only that period or in the period of the revision and future periods if the revision affects both current and future years
and, if material, their effects are disclosed in the notes to the financial statements. Actual results could vary from these estimates.
The standalone financial statements for the year ended 31st March 2025 were authorized and approved for issue by the Board of
Directors on 27th May, 2025.
II. Property, plant and equipment
Plant & Machinery and Buildings are measured at fair value less accumulated depreciation and impairment losses recognised at the
date of revaluation. Valuations are performed with sufficient frequency to ensure that the carrying amount of a revalued asset does not
differ materially from its fair value. All other assets viz. Land, Furniture, vehicles, Equipment, Electrical fittings etc. are stated at original
cost net of tax/duty credit availed, less accumulated depreciation and accumulated impairment losses.
A revaluation surplus is recorded in OCI and credited to the asset revaluation surplus in equity. However, to the extent that it reverses a
revaluation deficit of the same asset previously recognised in profit or loss, the increase is recognised in profit and loss. A revaluation
deficit is recognised in the statement of profit and loss, except to the extent that it offsets an existing surplus on the same asset
recognised in the asset revaluation reserve.
An annual transfer from the asset revaluation reserve to retained earnings is made for the difference between depreciation based on
the revalued carrying amount of the asset and depreciation based on the asset's original cost. Additionally, accumulated depreciation
as at the revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued
amount of the asset. Upon disposal, any revaluation reserve relating to the particular asset being sold is transferred directly to retained
earnings.
Property, plant and equipment are recognized at cost net of duty or tax credit availed, if any. The cost comprises purchase price, borrowing
cost if capitalization criteria are met and directly attributable cost of bringing the assets to its working condition for the intended use. Any
trade discounts, rebates & Input of GST and other taxes availed, are deducted in arriving at the purchase price. When significant part of the
property, plant and equipment are required to be replaced at intervals, the Company derecognized the replaced part and recognized the
new parts with its own associated useful life and depreciated it accordingly. All other repair and maintenance cost are recognized in the
statement of the profit and loss as incurred. Machinery Spares /Standby equipment's which are used only in connection with Property, plant
and equipment and are of material value to the overall value of the asset are capitalized.
Subsequent expenditures relating to property, plant and equipment is capitalized only when it is probable that future economic benefits
associated with these will flow to the Company and the costs of the item can be measured reliably. Repairs and maintenance costs are
recognized in net profit in the statement of profit and loss when incurred. The cost and related accumulated depreciation are eliminated
from the financial statements upon sale or retirement of the asset and the resultant gain or losses are recognized in the statement of
profit and loss.
Property, plant and equipment are eliminated from the financial statement either on disposal or when retired from the active use.Gains
or losses arising from de-recognition of property, plant and equipment are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.
Assets in the course of construction are capitalised in the assets under Capital work in progress. At the point when an asset is operating
at management's intended use, the cost of construction is transferred to the appropriate category of property, plant and equipment and
depreciation commences. Costs associated with the commissioning of an asset and any obligatory decommissioning costs are
capitalized. Where the asset is available for use but incapable of operating at normal levels, revenue (net of cost) generated from
production during the trial period is capitalised.
Capital expenditure on tangible assets for research and development is classified under property, plant and machinery and are
depreciated on the same basis as other property, plant and equipment.
III. Current and non-current classification
The Company presents assets and liabilities in the balance sheet based on current / non-current classification.
An asset is treated as current when it is :
• Expected to be realized or intended to be sold or consumed in normal operating cycle.
• Held primarily for the purpose of trading
• Expected to be realized within twelve months after the reporting period, or
• Cash or a cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the
reporting period.
All other assets are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets /liabilities.
A liability is treated as current when it is:
• Expected to be settled in normal operating cycle.
• Held primarily for the purpose of trading
• Due to be settled within twelve months after the reporting period, or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The
Company has identified twelve months as its operating cycle.
IV. Intangible assets
Capital expenditure on purchase and development of identifiable assets without physical substance is recognized as intangible assets
in accordance with principles given under Ind AS-38 - Intangible Assets.
The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of
each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits
embodied in the assets are considered to modify the amortization period or method, as appropriate, and are treated as changes in
accounting estimates.
V. Depreciation and amortization
The assets' residual values, useful lives and methods of depreciation are reviewed each financial year end and adjusted prospectively,
if applicable.
Depreciation on property, plant and equipment is provided over the useful life of assets as specified in schedule II to the Companies
Act, 2013 on straight line method except in case of heavy & light vehicles which are depreciated on written down basis.
However, in respect of certain plant & machinery and electric installation, depreciation is provided as per their useful lives assessed on
the basis of technical evaluation by the technical expert and management estimate. The details of which are as follows: -
Property, plant and equipment which are added / disposed-off during the year, depreciation is provided on pro-rata basis with reference
to the month of addition / deletion.
No depreciation is charged on free hold land and capital work in progress.
Intangible assets are amortised over its useful life not exceeding six years on straight line basis.
VI. Impairment of non-financial assets
Property, plant and equipment, intangible assets and assets classified as investment property with finite life are evaluated for
recoverability whenever there is any indication that their carrying amounts may not be recoverable. If any such indication exists, the
recoverable amount (i.e. higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless
the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount
is determined for the cash generating unit (CGU) to which the asset belongs.
If the recoverable amount of an asset or CGU is estimated to be less than its carrying amount, the carrying amount of the asset or CGU
is reduced to its recoverable amount. An impairment loss is recognized in the statement of profit or loss.
An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the
recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does
not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no
impairment loss been recognized for the asset in prior years.
Impairment losses on continuing operations, including impairment on inventories are recognized in the statement of profit and loss,
except for the assets previously revalued with the revaluation taken to other comprehensive income (OCI). For such assets, the
impairment is recognized in OCI up to the amount of any previous revaluation surplus.
Cost represents, cost incurred in bringing the inventories to their present location and condition. Slow and non-moving material,
obsolete, defective inventories are duly provided for and valued at net realisable value.
Cost is calculated on weighted average basis.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and costs
required to make the sale.
The cost of inventories has been computed to include all cost of purchases, cost of conversion and other related expenses. Materials
and supplies held for use in the production of inventories are not written down if the finished product in which they will be used are
expected to be sold at above cost.
VIII. Cash and cash equivalents
Cash and cash equivalents includes cash on hand and at bank, deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less that are readily convertible to a known amount of cash and are subject to an
insignificant risk of changes in value and are held for the purpose of meeting short-term cash commitments.
For the purpose of the statement of cash flows, cash and cash equivalents consists of cash and short term deposits, as defined above,
net of outstanding bank overdraft as they are being considered as integral part of the Company's cash management.
IX. Leases
Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or
terminate the lease, if the use of such option is reasonably certain. The Company makes an assessment on the expected lease term on
a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will
be exercised. In evaluating the lease term, the Company considers factors such as any significant leasehold improvements
undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to Company's
operations taking into account the location of the underlying asset and the availability of suitable alternatives. The lease term in future
periods is reassessed to ensure that the lease term reflects the current economic circumstances. After considering current and future
economic conditions, the Company has concluded that no changes are required to lease period relating to the existing lease contracts.
Company as a lessee
The Company's lease asset classes primarily consist of leases for buildings. The Company assesses whether a contract contains a
lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified
asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an
identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has
substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to
direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use asset (“ROU”) and a corresponding lease liability for
all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value
leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a
straight-line basis over the term of the lease.
Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. ROU assets and
lease liabilities includes these options when it is reasonably certain that they will be exercised.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease
payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are
subsequently measured at cost less accumulated depreciation and impairment losses.
"Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and
useful life of the underlying asset. Right of use assets are evaluated for recoverability whenever events or changes in circumstances
indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the
higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not
generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for
the Cash Generating Unit (CGU) to which the asset belongs.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are
discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the
country of domicile of these leases. Lease liabilities are re-measured with a corresponding adjustment to the related right- of- use asset
if the Company changes its assessment if whether it will exercise an extension or a termination option. Lease liability and ROU asset
have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows."
Company as a lessor
Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer
substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are
classified as operating leases. When the Company is an intermediate lessor, it accounts for its interests in the head lease and the
sublease separately. The sublease is classified as a finance or operating lease by reference to the right-of-use asset arising from the
head lease. For operating leases, rental income is recognized on a straight line basis over the term of the relevant lease.
The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-
value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use
the underlying assets.
In calculating the present value of lease payments, the Company uses its existing borrowing rate at the lease commencement date
because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is
increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease
liabilities is re-measured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future
payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an
option to purchase the underlying asset.
Lease liabilities and Right-of-use assets have been presented as a separate line in the balance sheet. Lease payments have been
classified as cash used in financing activities.
Short-term leases and leases of low-value assets
The Company has elected not to recognise right-of-use assets and lease liabilities for short term leases of all assets that have a lease
term of 12 months or less and leases of low-value assets. The Company recognises the lease payments associated with these leases
as an expense on a straight-line basis over the lease.
(. Employee benefits
Expenses and liabilities in respect of employee benefits are recorded in accordance with Indian Accounting Standard Ind AS-19 -
Employee Benefits.
a) Retirement benefit costs
¦ Defined benefit plan
The Company's liabilities on account of gratuity is determined at the end of each financial year on the basis of actuarial valuation
certificates obtained from registered actuary in accordance with the measurement procedure as per Indian Accounting Standard
(INDAS)-19- 'Employee Benefits'. Gratuity liability is funded on year to year basis by contribution gratuity policy taken from Life
Insurance Corporation (LIC). The costs of providing benefits under these plans are also determined on the basis of actuarial
valuation at each year end. Actuarial gains and losses for defined benefit plans are recognized through OCI in the period in which
they occur.
¦ Defined contribution plan
Retirement benefits in the form of provident fund are accrued as per the provisions of the Employees Provident Funds and
Miscellaneous Provisions Act, 1952. Contributions payable to the employee's provident fund in respect of the Company are
charged to the statement of profit and loss. There are no other than the contribution payable to the provident fund/trust.
Liability towards superannuation is funded in accordance with the scheme with Life Insurance Corporation of India.
b) Short term benefits
Short term employee benefits are recognized as expenses in the statement of profit & loss of the year in which related services are
rendered.
Liability in respect of compensated absences due or expected to be availed within one year from the Balance Sheet date is
estimated on the basis of valuation carried out by third party actuaries at each Balance Sheet date. Re-Measurements comprising
actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged / credited to
profit and loss in the period in which they arise.
Leave salary in respect of accumulated earned leave has been provided for according to the service rules of the Company.
XI. 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.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the
weighted average number of shares outstanding during the period are adjusted for the effects of all potential dilutive equity shares.
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