f) Provisions, Contingent Liabilities and Contingent Assets and Commitments
i) Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation. Such provisions are determined
based on management estimate of the amount required to settle the obligation at the balance sheet date. When the
Company expects some or all of a provision to be reimbursed, the reimbursement is recognised as a standalone
asset only when the reimbursement is virtually certain.
ii) If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision
due to the passage of time is recognised as a finance cost.
iii) Contingent liabilities are disclosed on the basis of judgment of management. These are reviewed at each balance
sheet date are adjusted to reflect the current management estimate.
iv) Contingent assets are not recognized but are disclosed in the financial statements when inflow of economic
benefits is probable.
g) Income Taxes
The tax expense for the period comprises current and deferred tax. Tax is recognised in Statement of Profit and Loss,
except to the extent that it relates to items recognised in the other comprehensive income or in equity. In which case,
the tax is also recognised in other comprehensive income or equity.
i) Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation
authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance sheet date.
ii) Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which
the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively
enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed
at the end of each reporting period.
h) Employee Benefits Expense
Short Term Employee Benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered
by employees are recognised as an expense during the period when the employees render the services.
Post-Employment Benefits
Defined Contribution Plans
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions
to a separate entity. The Company makes specified monthly contributions towards Provident Fund, Superannuation
Fund and Pension Scheme. The Company's contribution is recognised as an expense in the Statement of Profit and Loss
during the period in which the employee renders the related service.
i) Revenue recognition
Revenue from sale of goods is recognised when the significant risks and rewards of ownership have been transferred to
the buyer, recovery of the consideration is probable, the associated cost can be estimated reliably, there is no continuing
effective control or managerial involvement with the goods, and the amount of revenue can be measured reliably.
Revenue from rendering of services is recognised when the performance of agreed contractual task has been
completed.
Revenue from sale of goods is measured at the fair 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
such as Goods and Service Tax(GST)
Revenue from operations includes sale of goods, services, service tax, excise duty and adjusted for discounts (net), and
gain/ loss on corresponding hedge contracts.
Interest income
Interest income from a financial asset is recognised using effective interest rate (EIR) method.
Dividends
Revenue is recognised when the Company's right to receive the payment has been established, which is generally
when shareholders approve the dividend.
j) Financial Intruments
i) Financial Assets
A. Initial recognition and measurement
All financial assets and liabilities are initially recognized at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value
through profit or loss, are adjusted to the fair value on initial recognition. Purchase and sale of financial assets
are recognised using trade date accounting.
B. Subsequent measurement
Financial assets carried at amortised cost
A financial asset is measured at amortised cost if it is held within a business model whose objective is to hold
the asset 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.
Financial assets at fair value through other comprehensive income (FVTOCI)
A financial asset is measured at FVTOCI if it is held within a business model whose objective is achieved by
both collecting contractual cash flows and selling financial assets 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.
Financial assets at fair value through profit or loss (FVTPL1
A financial asset not classified as either amortised cost or FVOCI, is classified as FVTPL.
C. Investment in subsidiaries, Associates and Joint Ventures
The Company has elected to measure investment in subsidiaries, Associates and Joint Ventures at its carrying
cost.
D. Other Equity Investments
All other equity investments are measured at fair value, with value changes recognised in Statement of Profit
and Loss, except for those equity investments for which the Company has elected to present the value changes
in 'Other Comprehensive Income'.
E. Impairment of financial assets
In accordance with Ind AS 109, the Company uses 'Expected Credit Loss' (ECL) model, for evaluating
impairment of financial assets other than those measured at fair value through profit and loss (FVTPL).
Expected credit losses are measured through a loss allowance at an amount equal to:
• The 12-months expected credit losses (expected credit losses that result from those default events on the
financial instrument that are possible within 12 months after the reporting date); or
• Full lifetime expected credit losses (expected credit losses that result from all possible default events over the
life of the financial instrument)
For trade receivables Company applies 'simplified approach' which requires expected lifetime losses to be
recognised from initial recognition of the receivables. The Company uses historical default rates to determine
impairment loss on the portfolio of trade receivables. At every reporting date these historical default rates are
reviewed and changes in the forward looking estimates are analysed.
For other assets, the Company uses 12 month ECL to provide for impairment loss where there is no significant
increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used,
ii) Financial Liabilities
A. Initial recognition and measurement
All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost. Fees of
recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.
B. Subsequent measurement
Financial liabilities are carried 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.
C Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial
asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A
financial liability (or a part of a financial liability) is derecognized from the Company's Balance Sheet when the
obligation specified in the contract is discharged or cancelled or expires.
K) Operating Cycle
The Company presents assets and liabilities in the balance sheet based on current / non-current classification based on
operating cycle.
An asset is treated as current when it is:
a. Expected to be realized or intended to be sold or consumed in normal operating cycle;
b. Held primarily for the purpose of trading;
c. Expected to be realized within twelve months after the reporting period, or
d. Cash or cash equivalent unless 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.
A liability is current when:
a. It is expected to be settled in normal operating cycle;
b. It is held primarily for the purpose of trading;
c. It is due to be settled within twelve months after the reporting period, or
d. 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.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The company has identified twelve months as its operating cycle.
l) Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity
shareholders by weighted average number of equity shares outstanding during the period. The weighted average
number of equity shares outstanding during the period are adjusted for events of bonus issue; bonus element in a right
issue to existing shareholders.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity
shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all
dilutive potential equity shares.
m) Dividend Distribution
Dividend distribution to the shareholders is recognised as a liability in the company's financial statements in the
period in which the dividends are approved by the company's shareholders.
n) Statement of Cash Flows
i) Cash and Cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand,
other short-term, highly liquid investments 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.
ii) Statement of Cash Flows is prepared in accordance with the Indirect Method prescribed in the relevant Ind AS.
2.3 CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of the financial statements in conformity with the Ind AS requires management to make judgments,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities
and disclosures as at date of the financial statements and the reported amounts of the revenues and expenses for the years
presented. The estimates and associated assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates under different assumptions and conditions. The
estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized
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.
a) Depreciation / amortisation and useful lives of property plant and equipment / intangible assets
Properly, plant and equipment / intangible assets are depreciated / amortised over their estimated useful lives, after
taking into account estimated residual value. Management reviews the estimated useful lives and residual values of the
assets annually in order to determine the amount of depreciation / amortisation to be recorded during any reporting
period. The useful lives and residual values are based on the Company's historical experience with similar assets and
take into account anticipated technological changes. The depreciation / amortisation for future periods is revised if
there are significant changes from previous estimates.
b) Recoverability of trade receivable
Judgements are required in assessing the recoverability of overdue trade receivables and determining whether a
provision against those receivables is required. Factors considered include the credit rating of the counterparty, the
amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non¬
payment.
c) Provisions
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of
funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of
recognition and quantification of the liability requires the application of judgment to existing facts and circumstances,
which can be subject to change. The carrying amounts of provisions and liabilities are reviewed regularly and revised
to take account of changing facts and circumstances.
d) Impairment of non-financial assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any
indication exists, the Company estimates the asset's recoverable amount. An asset's recoverable amount is the higher of
an asset's or Cash Generating Units (CGU's) fair value less costs of disposal and its value in use. It is determined for an
individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets
or a groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset. In
determining fair value less costs of disposal, recent market transactions are taken into account, if no such transactions
can be identified, an appropriate valuation model is used.
e) Impairment of financial assets
The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss
rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment
calculation, based on Company's past history, existing market conditions as well as forward looking estimates at the
end of each reporting period.
3 Recent accounting pronouncements
There are no recent pronouncements applicable for financial year 2024-25.
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