Note 2: ACCOUTING POLICIES:
2.1 STATEMENT OF COMPLIANCE
The Standalone Financial Statements of the Company have been prepared in accordance with the
Accounting Principles generally accepted in India. The Financial Statements have been prepared to comply
in all material respects with the Accounting Standards, as prescribed under section 133 of the Companies
Act, 2013 and the rules defined there under, as amended from time to time and in accordance with the
requirements of Regulation 33 of the SEBl (Listing Obligations and disclosure Requirements) Regulations
2015, as amended. The above financial results were reviewed by the Audit Committee and approved by
the Board of Directors at their respective meetings held on 22/05/2024. IND AS is currently NOT
applicable on the company.
2.2 BASIS OF PREPARATION OF FINANCIAL STATEMENTS
2.2.1 i) The standalone financial statements of the company have been prepared in accordance with the
Accounting Standards as prescribed under Section 133 of the Companies Act, 2013 and the rules framed
thereunder as applicable and guidelines issued by the Securities and Exchange Board of India ("SEBI").
ii) The Financial Statements are prepared on accrual basis under the historical cost convention.
2.2.2 FUNCTIONAL AND PRESENTATION CURRENCY
The functional currency of the Company is Indian rupee (INR). The standalone financial statements are
presented in Indian rupees (INR) and all values are rounded to nearest Lakhs up to two decimals, unless
otherwise stated.
2.2.3 USE OF ESTIMATES
The preparation of financial statements in conformity with the generally accepted Accounting Standards
and principles requires the management to make estimates, judgements and assumptions. These estimates,
judgments and assumptions affect the application of accounting policies and reported amounts of assets
and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and
reported amounts of revenue and expenses during the year. Accounting Estimates could change^frem^edod
to period. Actual results could differ from those estimates. Appropriate changes and estimates are made as
Management become aware of changes in circumstances surrounding the estimates. Changes in estimates
are reflected in the financial statements in the period in which changes are made and, if material, their
effects are disclosed in the notes to the financial statements.
2.3 PROPERTY, PLANT AND EQUIPMENT
i) Tangible assets:
Property, Plant and Equipment are stated at cost net of recoverable taxes, trade discounts and rebates, less
accumulated depreciation and impairment loss, if any. The cost of Assets comprises its purchase price,
borrowing cost and any cost directly attributable to bringing the asset to its working condition for its
intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate
variations attributable to the assets. Subsequent expenditures related to an item of Property, Plant and
Equipment are added to its book value only if they increase the future benefits from the existing assets
beyond its previously assessed standard of performance. Projects under which assets are not ready for their
intended use are reflected under Capital Work-in- Progress.
ii) Depreciation :
Depreciation on Property, Plant and Equipment is provided on Straight Line Method (SLM). Depreciation
is provided based on useful life of the assets as prescribed in Schedule II of the Companies Act, 2013 except
in respect of those assets where useful life is different than those prescribed in Schedule II are used. The
residual value is not more than 5% of the original cost of the Asset. The Asset residual value, useful lives
and method of depreciation are reviewed at each financial year end and adjusted prospectively, if
appropriate.
In respect of addition or extensions forming an integral part of existing assets and insurance spares,
including incremental cost arising on account of translation of foreign currency liabilities for acquisition
of Fixed Assets, depreciation is provided as aforesaid over the residual life of the respective assets.
iii) Intangible Assets :
The Company does not have any Intangible Assets.
iv) Impairment of Assets:
An asset is treated as impaired, if any, when the carrying cost of asset exceeds its recoverable value. An
impairment loss, if any, is charged to the Statement of Profit and Loss in the year in which an asset is
identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has
been a change in the estimate of recoverable amount.
2.4 INVESTMENTS
All investments are classified as Long Term Investments. On initial recognition, all Investments are
measured at Cost. The Cost comprises the Purchase Price and directly attributable acquisition charges such
as Brokerage, Fees and Duties.
Long Term Investments are carried at Cost. However, provision for diminution in value is made to
recognize a decline other than temporary in the value of the Long Term Investments.
On disposal of an investment, the difference between its Carrying Amount and Netpispngal Proceeds is
charged or credited to the Statement of Profit and Loss.
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2.5 VALUATION OF INVENTORIES
Items of inventories are measured at lower of cost or net realizable value after providing for obsolescence,
if any, except in case of by-products, which are valued at the net realizable value. Cost of inventories
comprises of all costs of purchase, cost of conversion and other costs including manufacturing overheads
incurred in bringing them to their respective present location and condition. Cost of raw materials, process
chemicals, store and spares, packing materials, trading and other products are determined on the basis of
valuation of the finished goods as per the provisions so applicable.
i) Raw Material, Components, stores and spares: Raw Material, Components, stores and spares are
valued at cost.
ii) Work-in-Progress and Finished Goods: Work-in-Progress and Finished goods are valued at lower
of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing
overhead based on normal operating capacity. Net Realizable value is the estimated selling price in the
ordinary course of business, less estimated cost of completion and estimated costs necessary to make the
sale.
2.6 REVENUE RECOGNITION
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company
and the revenue can be readily measured, regardless of when the payment is being made. Revenue is
measured at fair value of the consideration received or receivable, volume rebates if any, and taxes or duties
collected on behalf of the government, which are levied on sales such as Goods and Services Tax. Revenue
is recognized either in time or point of time, when (or as) the Company satisfies performance obligations
by transferring the goods or services to its customers. The company applies the revenue recognition criteria
to each separately identifiable component of the sales transaction as mentioned in Statement of Profit &
Loss.
i) Sale of Goods: Revenue from sale of goods is recognized at the point of dispatch of the finished goods
to the customers against invoice(s). The company collects Goods & Service Tax on behalf of the
government and therefore these are not economic benefits flowing to the companies, hence, they are
excluded from the revenues.
ii) Export Benefits: Export Benefits constituting import duty benefits under Duty Draw Back are
accounted for on accrual basis. The same is recognized in the books of accounts in the year in which the
right to receive the duty draw back credit as per the terms of the scheme is established in respect of the
export made.
iii) Dividends: Dividend Income is recognized when the right to receive payment is established.
iv) Interest Income: Interest Income is recognized on a time proportion basis taking into account the
amount outstanding and the interest rate applicable.
v) Insurance Claims: Insurance and other claims, if any, are recognized when there exist no significant
uncertainty with regard to the amount to be realized and the ultimate collection thereof__
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2.7 FOREIGN EXCHANGE TRANSACTION
Transactions denominated in foreign currencies are translated into functional currency using the exchange
rate prevailing on the date of the transaction or that approximates the actual rate at the date of the
transaction.
Monetary items denominated in foreign currencies at the year-end are restated at year-end rates. In the case
of items which are covered by forward exchange contracts, the difference between the yearend rate and
rate on the date of the contract, if any, is recognized as exchange difference and the premium paid on
forward contracts is recognized over the ! ife of the contract.
Non-monetary foreign currency items are carried at cost.
In respect of integral foreign operations, all transactions are translated at rates prevailing on the date of
transaction or that approximates the actual rate at the date of transaction.
Any income or expense on account of exchange difference either on settlement or on translation is
recognized in the Statement of Profit and Loss, except in case of long term liabilities, where they relate to
acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.
2.8 BORROWING COSTS
Borrowing cost attributable to the acquisition or construction of a qualifying asset are capitalized as part of
the cost of such asset. A qualifying asset is one that necessarily takes substantial period of time to get ready
for intended use. All other Borrowing costs are recognized as an expense in the period in which they are
incurred. Borrowing Cost consist of Interest and Other Cost that an entity incurs in connection with the
Borrowing of funds.
2.9 EMPLOYEE BENEFITS
i) POST EMPLOYMENT BENEFITS
Defined Contribution Plan: 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 recognized as an expense in the Statement of Profit and Loss during the period in which the
employee renders the related service.
ii) SHORT TERM EMPLOYEE BENEFITS
All employee benefits payable wholly within twelve months of rendering the services are classified as
short-term employee benefits, such as salaries, wages, bonus etc. The undiscounted amount of short term
employee benefits expected to be paid in exchange for the services rendered by employees are recognized
as an expense during the period when the employees render the services. These benefits include
performance incentive and compensated absences.
2.10 TAXATION
Income Tax comprised of Current Income tax. Deferred Taxes and Mat Credit.
i) Current Income Tax: Current Income Tax for the current and prior periods are measureiflf^^^mbgnt
expected to be paid to the tax authorities, using the applicable tax rates. The tax rates and tax laws used to
compute the current tax amounts are those that are enacted or substantively enacted as at the reporting date
and applicable for the period. While determining the tax provisions, the Company assesses whether each
uncertain tax position is to be considered separately or together with one or more uncertain tax positions
depending the nature and circumstances of each uncertain tax position. The Company offsets current tax
assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts
and where it intends either to settle on a net basis, or to realize the asset and liability simultaneously.
ii) Deferred Income Tax: Deferred income tax is recognized using the Balance Sheet approach. Deferred
income tax assets and liabilities are recognized for deductible and taxable temporary differences arising
between the tax base of assets and liabilities and their carrying amount in financial statements, except
when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in
a transaction that is not a business combination and affects neither accounting nor taxable profits or loss at
the time of the transaction.
Deferred income tax assets are recognized to the extent it is probable that taxable profit will be available
against which the deductible temporary differences and the carry forward of unused tax credits and
unused tax losses can be utilized. The carrying amount of deferred income tax assets is reviewed at each
reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and
liabilities are measured at the tax rates that are expected to apply in the period when the asset is realized or
the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at
the reporting date.
iii) MAT Credit: MAT Credit is recognized as an asset only when and to the extent there is convincing
evidence that the company will pay normal Income Tax during the specified period. In the year in which
the MAT Credit becomes eligible to be recognized as an asset in accordance with the recommendation
contained in Guidance Notes issued by the 1CAI, the said asset is created by way of a credit to the statement
of profit & loss and shown as MAT Credit entitlement. The Company reviews the same at each Balance
Sheet date and writes down the carrying amount of MAT Credit entitlement to the extent there is no longer
convincing evidence to the effect that company will pay normal Income Tax during the specified period.
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