2) Significant accounting policies:
a) Statement of compliance
These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per
the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act,
2013 as amended from time to time and other relevant provisions of the Companies Act, 2013.
b) Basis of Preparation:
The Financial Statements have been prepared under the historical cost convention on an accrual basis except for
certain financial instruments and provisions for defined benefit plans which are measured at fair value.
c) Current and Non-Current Classification
The Company presents assets and liabilities in balance sheet based on current/non-current classification. An
asset is stated as current when it is -
i. Expected to be realised or intended to be sold or consumed in normal operating cycle
ii. Held primarily for the purpose of trading
iii. Expected to be realized within twelve months after the reporting period or
iv. 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 assets.
Similarly, a liability is classified as current if -
i. It is expected to be settled in normal operating cycle
ii. It is held primarily for the purpose of trading
iii. It is due to be settled within twelve months after the reporting period or
iv. There is no unconditional right to differ the settlement of the liability for at least twelve months after the
reporting period.
All other liabilities are classified as non-current.
The company has ascertained its operating cycle as twelve months for the purpose of current/non -current
classification of its assets and liabilities.
d) Use of Estimates:
The preparation of financial statements is in conformity with Ind. AS requires judgments, estimates and
assumptions to be made that affect the reported amount of assets and liabilities, disclosures of contingent
liabilities on the date of the financial statements and the reported amount of revenues and expenses during the
reporting period. Difference between the actual results and estimates are recognized in the period in which the
results are known/ materialized. Any material changes in estimates are separately disclosed in financial
statements by way notes.
e) Property Plants and Equipment
Fixed assets are stated at Cost less accumulated depreciation, if any. Cost comprises purchase price and any
other attributable cost of bringing the assets to its working condition for its intended use.
If significant parts of an item have different useful life, then they are accounted for as a separate item (major
components) of PPE. The carrying amount of any component accounted for as a separate asset is derecognized
when replaced.
Material items such as spare parts stand by equipment and service equipment are classified as PPE when they
meet the definition of PPE as specified in Ind AS 16. Subsequent expenditure on PPE is capitalized only if it is
probable that the future economic benefits associated with the expenditure will flow to the company.
f) Depreciation/ Amortization:
Depreciation on Tangible Fixed Assets is provided on the Written Down Value method considering the useful
life of the assets the useful life of the assets is considered as per the schedule II of the Companies Act., 2013
except plant and machineries where useful life of the same is determined and certified by the chartered engineer.
g) Inventories:
Inventories are valued as follows:
i. Raw material is valued at lower of weighted average cost or net realizable value. However material held for
use in the production of inventories are not written down below cost, if the finished products in which they
will be incorporated are expected to be sold at or above cost. Cost comprises of its purchase price, non¬
refundable purchase taxes and any directly attributable expenses related to inventories.
ii. Work in Progress is valued at weighted average cost.
iii. Finished goods are valued at lower of weighted average cost and net realizable value. Cost for this purpose
includes direct cost and attributable overheads.
iv. Traded goods are valued at weighted average cost or net realizable value whichever is lower.
v. Packing Material and consumable items are valued at weighted average cost.
Net realizable value is estimated selling price in the ordinary course of the business, less the estimated costs of
completion and the estimated costs necessary to make the sale.
There are slow - moving items of inventories are laying with the company at the year ended on 31 st March,
2024. The company has procured such slow-moving items for export order. Due to Covid - 19 situation during
last two years the company could not get expected export order. Now the management is trying to get such
export order so that such slow-moving items lying in inventory can be converted into the cash.
h) T rade Receivable
Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary
course of business. If collection is due in one year or less they are classified as current assets. Balances of Trade
Receivable are shown net-off from advance received and subject to confirmation, reconciliation and
consequential adjustments, if any.
i) Cash and Cash Equivalents:
Cash and cash equivalents in the balance sheet comprise cash or banks and on hand and deposits which are
readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
j) Borrowings
Borrowings are recognised initially at fair value net of transaction cost incurred. Borrowings are subsequently
carried at amortised cost; any difference between the proceeds (net of transaction cost) and the redemption value
is recognised in the income statement over the period of borrowings using the effective interest rate method.
Borrowings are classified as current liabilities unless the company has an unconditional right to defer their
settlement for at least 12 months after the end of reporting period. During the year, there is rescheduling /
restructuring of term loans of NBFC. As the details of instalments repayable of such rescheduled / restructured
term loans is under process due to Covid pandemic and various instructions and notifications issued by the
Government of India, balances of such term loans are subject to confirmation, reconciliation and consequential
adjustments if any.
The company has been categorised NPA by lender banks and other financial institutions and they have
stopped charging interest on their outstanding debts as per the Prudential Norms on Income Recognition
issued by the RBI. Accordingly, the company has not recognised interest expense on borrowing from such
banks and financial institutions. The balances of such financial institutions are subject to reconciliation /
confirmation.
k) Trade Payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of
business from supplier. Trade payable are classified as current liabilities if payment is due within one year or
less. Balances of Trade Payables are net-off from advance paid and subject to confirmation, reconciliation and
consequential adjustments, if any.
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