1. Significant Accounting Policies
A. Basis of Preparation & Measurement:
These financial statements have been prepared in accordance with Indian Accounting standards
('Ind AS') notified by the Ministry of Corporate Affairs under section 133 of the Companies Act,
2013 ('Act') read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 (as
amended) and the relevant provisions of the Act.
Accordingly, the Company has prepared these Financial Statements which comprise the Balance
Sheet as at 31st March, 2024, the Statement of Profit and Loss for the year ended 31st March, 2024,
the Statement of Cash Flows for the year ended 31st March, 2024 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 'financial statements').
These Financial Statements were approved by the Board of Directors and authorized for issue on
15th April, 2024.
The Financial Statements have been presented in Indian Rupees (INR), which is the Company's
functional currency. All financial information presented in INR has been rounded off to the nearest
rupee, unless otherwise stated.
The financial statements have been prepared on an accrual system, based on the principle of going
concern and under the historical cost convention, unless otherwise stated. Accounting policies have
been consistently applied except where a newly issued accounting standard is initially adopted or
are vision to an existing accounting standard requires a change in the accounting policy hitherto in
use.
Accounting Estimates and Judgments:
The preparation of financial statements in accordance with Ind AS requires management to Make
certain judgments, estimates and assumptions in the application of accounting policies that affect
the reported amounts of assets, liabilities, income and expenses. Actual results may differ from
these estimates, with the differences between the same being recognized in the period in which
the results are known or materialize. Continuous evaluation is done on the estimation and
judgments based on historical experience and other factors, including expectations of future events
that are believed to be reasonable. Revisions to accounting estimates are recognized prospectively.
Information about areas involving a higher degree of judgment or complexity or critical judgments
in applying accounting policies, as well as estimates and assumptions that have the most significant
effect to the carrying amounts of assets and liabilities are included in the following notes:
The areas involving critical estimates or judgments are:
a. Impairment of Financial Assets such as Trade Receivable.
b. Impairment of Non-Financial Assets.
c. Estimates of Tax Expenses and Liability.
d. Revenue recognitions.
Estimates and judgments are regularly revisited. Estimates are based on historical experience and
other factors, including futuristic reasonable information that may have a financial impact on the
company.
1. Property Plant &Equipment:
(a) Initial Measurement & Recognition
Property, plant and equipment are carried at cost less accumulated depreciation and
impairment losses, if any. The cost of an item of Property, plant and equipment comprises
its purchase price, including import duties and other non-refundable taxes or levies and
any directly attributable cost of bringing the assets to its working condition for its intended
use with any trade discounts or rebates being deducted in arriving at purchase price. Cost
of the assets also includes interest on borrowings attributable to acquisition, if any, of
qualifying fixed assets incurred up to the date the asset is ready for its intended use.
If significant parts of an item of property, plant and equipment have different useful lives,
then they are accounted for as separate items (major components) of Property, plant and
equipment.
Cost of Property, plant and equipment not ready for intended use as on the balance sheet
date, is disclosed as capital work in progress. Advances given towards acquisition of
property, plant and equipment outstanding at each balance sheet date are disclosed as
Capital Advances under Other non-current Assets.
Any gain or loss on disposal of an item of property plant and equipment is recognized
instatement of profit and loss.
(b) Subsequent expenditure
Subsequent costs are included in the asset's carrying recognized 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 other
repairs and maintenance are charged to the Statement of Profit and Loss during the period
in which they are incurred.
(c) Depreciation:
Depreciation is provided on the written down value method based on estimated useful life
prescribed under Schedule II to the Companies Act, 2013 Depreciation on assets
added/disposed off during the year is provided on pro-rata basis from the date of addition
or up to the date of disposal, as applicable.
The residual values, useful lives and method of depreciation of property, plant and
equipment is reviewed at each financial year end and adjusted prospectively, if
appropriate.
2. Cash and Cash Equivalents
Cash and cash equivalents are short-term (three months or less from the date of acquisition),
highly liquid investments that are readily convertible into cash and which are subject to an
insignificant risk of changes in value.
3. Impairment of Non-Financial Assets:
Assessment for impairment is done at each Balance Sheet date as to whether there is any
indication that a non-financial asset maybe impaired. If any indication of impairment exists, an
estimate of the recoverable amount of the individual asset/cash generating unit is made.
Asset/cash generating unit whose carrying value exceeds their recoverable amount are written
down to the recoverable amount by recognizing the impairment loss as an expense in the
Statement of Profit and Loss. Recoverable amount is higher of an asset's or cash generating
unit's fair value less cost of disposal and its value in use. Value in use is the present value of
estimated future cash flows expected to arise from the continuing use of an asset or cash
generating unit and from its disposal at the end of its useful life.
Assessment is also done at each Balance Sheet date as to whether there is any indication that
an impairment loss recognized for an asset in prior accounting periods may no longer exist or
may have decreased. An impairment loss recognized for goodwill is not reversed in subsequent
periods.
4. Financial Instruments:
(A) Financial Assets
Recognition and measurement
Financial assets are recognized when the Company becomes a party to the contractual
provisions of the instrument. On initial recognition, a financial asset is recognized at fair
value, in case of financial assets which are recognized at fair value through profit and loss
(FVTPL), its transaction cost is recognized in the statement of profit and loss. In other cases,
the transaction cost is attributed to the acquisition value of the financial asset.
Financial assets are subsequently classified as measured at
• Amortized cost
• Fair value through profit and loss (FVTPL)
• Fair value through other comprehensive income (FVOCI)
(a) Measured at amortized cost: Financial assets that are held within a business model
whose objective is to hold financial assets in order to collect contractual cash flows
that are solely payments of principal and interest, are subsequently measured at
amortized cost using the effective interest rate ('EIR') method less impairment, if
any. The amortization of EIR and loss arising from impairment, if any, is recognized
in the Statement of Profit and Loss.
(b) Measured at fair value through other comprehensive income: Financial assets that
are held within a business model whose objective is achieved by both, selling
financial assets and collecting contractual cash flows that are solely payments of
principal and interest, are subsequently measured at fair value through other
comprehensive income. Fair value movements are recognized in the other
comprehensive income (OCI). Interest income measured using the EIR method and
impairment losses, if any are recognized in the Statement of Profit and Loss. On de¬
recognition, cumulative gain or loss previously recognized in OCI is reclassified from
the equity to 'other income' in the Statement of Profit and Loss.
(c) Measured at fair value through profit or loss: A financial asset not classified as
either amortized cost or FVOCI, is classified as FVTPL. Such financial assets are
measured at fair value with all changes in fair value, including interest income and
dividend income if any, recognized as 'other income' in the Statement of Profit and
Loss
Financial assets are not reclassified subsequent to their recognition, except if and in
the period the Company changes its business model for managing financial assets.
Trade Receivables and Loans:
Trade receivables and loans are initially recognized at fair value. Subsequently, these assets
are held at amortized cost, using the effective interest rate (EIR) method net of any
expected credit losses. The EIR is the rate that discounts estimated future cash income
through the expected life of financial instrument.
Equity Instruments:
Investments in equity instruments, if any, are classified under financial assets are initially
measured at fair value.
De-recognition
The Company derecognizes a financial asset when the contractual rights to the cash flows
from the financial asset expire, or it transfers the contractual rights to receive the cash flows
from the asset.
Impairment of Financial Assets
Expected credit losses are recognized for all financial assets subsequent to initial recognition
other than financials assets in FVTPL category. For financial assets other than trade
receivables, as per Ind AS 109, the Company recognizes 12 month expected credit losses for
all originated or acquired financial assets if at the reporting date the credit risk of the
financial asset has not increased significantly since its initial recognition. The expected credit
losses are measured as lifetime expected credit losses if the credit risk on financial asset
increases significantly since its initial recognition. The Company's trade receivables do not
contain significant financing component and loss allowance on trade receivables is measure
date an amount equal to life time expected losses i.e. expected cash short fall. The
impairment losses and reversals are recognized in Statement of Profit and Loss, if any.
(B) Financial Liabilities:
Initial recognition and measurement
Financial liabilities are recognized when the Company becomes a party to the contractual
provisions of the instrument. Financial liabilities are initially measured at the amortized
cost unless at initial recognition, they are classified as fair value through profit and loss. In
case of trade payables, they are initially recognized at fair value and subsequently, these
liabilities are held at amortized cost, using the effective interest method.
Subsequent measurement
Financial liabilities are subsequently measured at amortized cost using the EIR method.
Financial liabilities carried at fair value through profit or loss is measured at fair value with
all changes in fair value recognized in the Statement of Profit and Loss.
De-recognition
A financial liability is derecognized when the obligation specified in the contract is
discharged, cancelled or expires.
5. Revenue Recognition
Sale of goods
Revenue from the sale of goods is recognized when the significant risks and rewards of
ownership of the goods have passed to the buyer, usually on delivery of the goods. In case of
export sales, revenue is recognized as on the date of bill of lading, being the effective date of
dispatch. Revenue from the sale of goods is measured at the value of the consideration
received or receivable, net of returns and discounts and net of all taxes.
6. Taxation:
Income tax expense for the year comprises of current tax and deferred tax. It is recognized in
the Statement of Profit and Loss except to the extent it relates to a business combination or to
an item which is recognized directly in equity or in other comprehensive income.
Current tax is the expected tax payable/receivable on the taxable income/ loss for the year
using applicable tax rates at the Balance Sheet date, and any adjustment to taxes in respect of
previous years. Interest income/ expenses and penalties, if any, related to income tax are
included in current tax expense.
Deferred tax is recognized in respect of temporary differences between the carrying amount of
assets and liabilities for financial reporting purposes and the corresponding amounts used for
taxation purposes. Deferred tax is recognized using the tax rates enacted, or substantively
enacted, by the end of the reporting period.
Deferred tax assets are recognized only to the extent that it is probable that future taxable
profits will be available against which the asset can be utilized. Deferred tax assets are
reviewed at each reporting date and reduced to the extent that it is no longer probable that the
related tax benefit will be realized.
Current tax assets and current tax liabilities are offset when there is a legally enforceable right
to set off the recognized amounts and there is an intention to settle the asset and the liability
on a net basis. Deferred tax assets and deferred tax liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax liabilities; and the deferred tax
assets and the deferred tax liabilities relate to income taxes levied by the same taxation
authority.
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