I. Basis of preparation and presentation
(i) Compliance with Ind AS
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 (‘Act5) read with of the Companies (Indian Accounting Standards) Rules,
2016 as amended and other relevant provisions of the Act.
These financial statements for the year ended 31st March, 2024 are prepared with comparatives under Ind AS.
The accounting policies are applied consistently to all the periods presented in the financial statements.
(ii) Historical cost convention
The financial statements have been prepared on a historical cost basis, except for the following:
1) certain financial assets and liabilities that are measured at fair value;
2) assets held for sale - measured at lower of canying amount or fair value less cost to sell;
3) defined benefit plans - plan assets measured at fair value;
(iii) Current non-current classification
All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle (twelve months) and other criteria set out
in the Schedule III to the Act.
(iv) Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the requirement of Schedule III, unless
otherwise stated.
II. Use of estimates, assumption and judgement
The preparation of the financial statements in conformity with recognition and measurement principles of Ind AS requires the Management to make
estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and
expenses during the year.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognized in the period in which estimates are 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.
The following are the key assumptions concerning the future, and other sources of estimation uncertainty at the end of the reporting period that may have a
significant risk of causing a material adjustment to the canying amounts of assets and liabilities in future are:
(i) Useful lives and residual value of property, plant and equipment, intangible assets and investment properties :
Useful life and residual value are determined by the management based on a technical evaluation by management considering nature of asset, past
experience, estimated usage of the asset, vendor's advice etc and same is reviewed at each financial year end.
(ii) Deferred tax assets :
The Company has reviewed the canying amount of deferred tax assets including MAT credit at the end of each reporting period and reduced to the extent that
it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
(iii) Contingencies
Management judgement is required for estimating the possible outflow of resources, if any, in respect of contingencies/claim/litigations against the Company
as it is not possible to predict the outcome of pending matters with accuracy
(iv) Employee benefit expenses
Actuarial valuation for gratuity liability of the Company has been done by an independent actuarial valuer on the basis of data provided by the management
and assumptions used by the actuary. The data so provided and the assumptions used have been disclosed in the notes to accounts.
(v) Discounting of Security deposit, and other long term liabilities
For majority of the security deposits received, the timing of outflow, as mentioned in the underlying contracts, is not ascertainable or is not substantially long
enough to discount. The treatment would not provide any meaningful information and would have no material impact on the financial statements.
Ill Property, Plant and Equipment
i Recognition and Measurement
Property, plant and equipment are stated at cost of acquisition or construction less accumulated depreciation and impairment, if any For this purpose, cost
includes deemed cost which represents the carrying value of property, plant and equipment. Cost is inclusive of inward freight, non refundable duties and
taxes and incidental expenses related to acquisition or construction.
Subsequent costs are included in the asset’s carrying amount or recognised 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
All upgradation / enhancements are charged off as revenue expenditure unless they bring similar significant additional benefits.
An item of property, plant and equipment is derecognised 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 recognised in the Statement of Profit and Loss.
Depreciation of these assets commences when the assets are ready for their intended use which is generally on commissioning,
ii. Capital work-in-progress
Projects under which tangible fixed assets are not yet ready for their intended use are carried at cost, comprising direct cost, related incidental expenses.
IV Depreciation / amortisation
i. The Company is following the written down value method of depreciation in respect of Property, plant and equipment.
ii. Items of property, plant and equipment are depreciated in a manner that amortizes the cost (or other amount substituted for cost) of the assets after
commissioning, less its residual value, over their useful lives as specified in Schedule II of the Companies Act, 2013 on a written down value basis.
iii. Freehold Land is not depreciated.
iv. Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value.
V Leases
Lease payments under operating leases are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term unless
another systematic basis is more representative of the time pattern of the Company’s benefit.
Where the rentals are structured solely to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases,
such increases are recognised in the year in which such benefits accrue.
Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.
Financial lease transactions entered are considered as financial arrangements and the leased assets are capitalised on an amount equal to the present value
of future lease payments and corresponding amount is recognised as a liability. The lease payments made are apportioned between finance charge and
reduction of outstanding liability in relation to leased asset.
VI Cash and Cash Equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash in hand, bank overdraft 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.
VII Inventories
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
Raw Materials: Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is
determined on first in first out basis.
Finished Goods and Work in Progress: Cost includes cost of direct materials and labour and a proportion of fixed manufacturing overheads based on the
normal operating capacity. Cost is determined on first in first out basis.
Traded Goods: Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined
on first in first out basis.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make
the sale.
VIII Financial Instruments
A. Initial recognition
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of
financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from
the fair value of financial asset or financial liabilities, as appropriate, on initial recognition.
B. Subsequent measurement
(i) Financial assets carried at amortised cost : A financial asset is subsequently measured at amortised cost if it is held in order to collect contractual cash
flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
(ii) Financial assets carried at fair value through other comprehensive income (FVTOCI): A financial asset is subsequently measured at FVTOCI if it is
held not only for collection of cash flows arising from payments of principal and interest but also from the sale of such assets. Such assets are subsequently
measured at fair value, with unrealised gains and losses arising from changes in the fair value being recognised in other comprehensive income.
(iv) Financial assets carried at fair value through profit or loss (FVTPL): A financial asset which is not classified in any of the above categories are
subsequently measured at fair value through profit or loss.
(v) Financial liabilities : Financial liabilities are subsequently measured at amortized cost using the effective interest method. For trade and other payables
maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
De-recognition of financial Asset
A financial asset is primarily derecognised (i.e. removed from the balance sheet) when:
• The rights to receive cash flows from the asset have expired, or
• The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without
material delay to a third party under a ‘pass-through ’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the
asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what
extent it has retained the risks and rewards of ownership.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. The difference between the canying amount of
a financial liability that has been extinguished or transferred to another party and the consideration paid is recognised in profit or loss as "Other Income" or
"Finance Expense".
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset
the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
C. Impairment
(i) Financial assets
The Company recognizes loss allowances using the expected credit loss for the financial assets which are not measured at fair value through profit or loss.
Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime expected credit loss.
Individual trade receivables are written off when management deems them not to be collectible.
(ii) Non - financial assets
Tangible and intangible assets
Property, plant and equipment and intangible assets are evaluated for recoverability whenever there is any indication that their canying amounts 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 purpose 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). The Company reviews/assesses at each reporting date if there is any indication that an asset maybe impaired.
IX Segment Reporting
Factors used to identify segments
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker,which comprises of the
Board of Directors, Managing Director and CFO which assesses the financial performance and position of the company and makes strategic decision.
The Company is engaged in manufacture and sale of PET, PP and other plastic products which constitutes a single business segment.
X Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial
period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their
intended use or sale.
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