Aananda Lakshmi Spinning Mills Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2025

1. Corporate information:

Aananda Lakshmi Spinning Mills Limited (The ‘Company'') is a Public Limited Company incorporated on 21.03.2013 and its Registered Office is situated on the 6th Floor, Surya Towers, 105, S.P Road, Secunderabad-500003, Telangana State. The Company was engaged in manufacturing cotton and Polyester yarns. The Company''s Shares are listed on BSE.

The operations of its spinning division discontinued with effect from September 22, 2020, as the Division has become unviable due to Continued cash losses. The Board of Directors have also resolved to dispose of the non - current assets of the said division. (Refer Note. 40)

At present the Company by amending its objects taken up the business of developing land, buildings and other properties and for that purpose the Company has Converted Part of its land as Stock in Trade.

Though, the Company has accumulated losses of '' 3,449.58 Lakhs as at March 31,2025, and also current liabilities are in excess of Current assets, Considering the market value of its new activity the Financials are prepared on a going concern basis.

2. Basis of Preparation:

These Financial Statements have been prepared in accordance with the accounting principles generally accepted in India including Indian Accounting Standards (Ind AS) prescribed under the Section 133 of the Companies Act, 2013 read with rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 as amended and relevant provisions of the Companies Act, 2013

Accordingly, the Company has prepared these Financial Statements which comprise the Balance Sheet as at 31 March 2025, the Statement of Profit and Loss, the Statement of Cash Flows 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).

The financial statements have been prepared on a historical cost basis, except the following financial instruments which have been measured at fair value at the end of each reporting period, as required by the relevant Ind AS and as explained in the accounting policies mentioned below.

Certain Financial Assets and Liabilities measured at fair value

Deferred Benefit Plans and Other Long-Term Employee Benefits

The accounting Policies applied by the Company are consistent with those used in the prior periods, unless otherwise stated elsewhere in these financial statements.

Financial Statements are presented in Indian Rupees, which is the functional currency of the Company.

These financial statements were approved by the Board of Directors and authorised for Issuance in their meeting held on May 28,2025.

3. Material Accounting policies:

a) Significant accounting estimates, assumptions, and judgements:

The preparation of Company''s financial statements requires management to make accounting estimates, assumptions and judgements that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosures of contingencies at the end of the reporting period. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amounts of assets or liabilities in future periods.

Estimates and Assumptions:

i. Impairment of non-current assets:

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value, less costs of disposal and its value in use. The fair value-less costs of disposal are calculated based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices and less incremental costs for disposing of the assets. The value in use calculation is based on a Discounted Cash Flow (“DCF”) model. The value in use is sensitive to the discount rate (generally weighted average cost of capital) used for the DCF model as well as the expected future cash-inflows and the growth rate used for exploration purposes.

ii. Defined Benefit Plans:

The present value of the gratuity obligation is determined using actuarial valuation. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, rate of increment in salaries and mortality rates. Due to complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All the assumptions are reviewed at each reporting date.

iii. Fair Value measurement of financial instruments:

When the fair values of financial assets and financial liabilities on reporting date cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques i.e., the DCF model. The inputs to these models are taken from observable markets.

iv. Contingencies:

Management judgement is required for estimating the possible inflow/outflow of resources, if any, in respect of contingencies/claims/litigations against the company/by the company as it is not possible to predict the outcome of pending matters with accuracy.

v. Property, Plant and Equipment:

Based on evaluations done by the technical assessment team, the management has adopted the useful life and residual value of its Property, Plant and Equipment. Management believes that the assigned useful lives and residual value are reasonable.

vi. Income Taxes:

Management judgment is required for the calculation of provision for income taxes and deferred tax assets/liabilities. The Company reviews at each balance sheet date the carrying amount of deferred tax assets/liabilities. The factors used in estimates may differ from the actual outcome which could lead to significant adjustment to the amounts reported in the financial statements.

vii. Life -Time Expected Credit Loss on Trade and Other Receivables:

Trade and other receivables are stated at net of trade payable to the respective parties where there is a written understanding between the Company and the particular customer/vendor. Trade Receivables and Other Receivables do not carry any interest and are stated at their transaction value as reduced by life-time expected credit losses (“LTECL”). Management has evaluated LTECL for receivables as follows:

Particulars	0 -365 Days	365 - 730 Days	730-1460 Days	1460 -1827Days
Expected loss Rate (%)	0	15.00	40.00	75.00

b) Current Vs Non-current classifications

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.

An asset is treated as current when it satisfies any of the following criteria:

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 realised 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.

A liability is classified as current when it satisfies any of the following criteria:

i. Expected to settle the liability in normal operating cycle;

ii. Held primarily for the purpose of trading;

iii. Due to be settled within twelve months after the reporting period, or

iv. 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 operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. However, a period of 12 months is considered as the ultimate operating cycle.

c) Property, Plant and Equipment:

Property, Plant and Equipment are stated at cost net of input credits, less accumulated depreciation, and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of property, plant and equipment which take substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use.

The company adopted cost model as its accounting policy, in recognition of the property, Plant and Equipment and recognises the transaction value as the cost.

Subsequent expenditure is capitalised to the asset''s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the company and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred.

Capital work in progress includes cost of property, plant, and equipment under installation/under development as at the balance sheet date.

An item of Property, Plant and Equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognised in the Statement of Profit and Loss. Property, Plant and Equipment which are found to be not usable or retired from active use or when no further benefits are expected from their use are removed from the books of account and the carrying value if any is charged to Statement of Profit and Loss.

Assets costing five thousand rupees or less are fully depreciated in the year of purchase.

Depreciation on Property, Plant and Equipment is provided based on the useful lives of the assets as estimated by the Management, which are in line with Schedule II to the Companies Act, 2013

Estimated useful life of the assets are as follows:
Type of the Asset	Method of Depreciation	Useful life considered (Years)
Buildings	SLM	3 - 60
Plant and Equipment	SLM	5-15
Furniture and Fittings	SLM	10
Vehicles	SLM	8
Data processing Equipment	SLM	3-6
Office Equipment	SLM	5

d. Intangible Assets:

Intangible assets are carried at cost, net of accumulated amortisation expenses and impairment losses, if any. The cost of an intangible asset comprises of purchase price and attributable expenditure on making the asset ready for its intended use.

Computer software:

Computer software is recognised at cost and is amortised over the useful life as estimated by the Management which is about 3 years for all the intangible computer software assets, and the useful life is reviewed at every financial year ending.

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

An intangible asset is derecognised on disposal or when no future economic benefits are expected from its use. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, and are recognized in the Statement of Profit and Loss.

e) Impairment of non-financial assets:

i. The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

ii. Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the asset no longer exist or have decreased. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years.

f) Leases:

The determination of whether an agreement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.

For arrangements entered into prior to date of transition, the Company has determined whether the arrangement contains lease on the basis of facts and circumstances existing on the date of transition.

Classification on inception of lease:

i. Operating lease:

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases.

ii. Finance Lease:

A lease is classified as a financial lease where the lessor transfers substantially all the risks and rewards incidental to the ownership of the leased item.

The Company has adopted Ind AS 116-Leases effective 1st April 2019, using the modified retrospective method. The Company has applied the standard to its leases with the cumulative impact recognised in the Reserves on the date of initial application (1st April 2019). Accordingly, previous period information has not been restated and continues to be reported under Ind AS 17 - Leases.

Accounting of Operating leases:

i. Where the Company is the lessee:

At the date of commencement of the lease, the Company recognises a right-of-use asset (“ROU”) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for short- term and Cancellable leases having a lease term up to 36 months. For remaining leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the period of the lease. In case the escalation in operating lease payments is in line with the expected general inflation rate then the lease payments are charged to statement of profit and loss instead of straight-line method.

The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date. They are subsequently measured at cost, less accumulated depreciation and impairment losses, if any. Right-of-use assets are depreciated from the commencement date on a straight-line basis over the lease period.

The lease liability is initially measured at the present value of the future lease payments. The lease payments are discounted using the borrowing rates. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made.

ii. where the Company is the lessor:

Lease liability and ROU assets have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.

Lease income is recognised in the Statement of Profit and Loss on a straight-line basis over the lease term. Initial direct costs such as legal costs, brokerage costs, etc., are added to the carrying amount of the leased assets and recognised as an expense over the lease term.

g) Inventories:

i. Raw Materials, Stores and Spares and Consumables are stated at lower of Cost and Net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost in which they will be incorporated and expected to be sold at or above cost. Cost is determined on a weighted average basis.

ii. Work-in-progress and finished goods are stated at the lower of cost and net realizable value.

iii. Cost includes direct materials, labour and a proportion of manufacturing overheads based on actual production. Cost is determined on a weighted average basis.

iv. Net realizable 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.

h) Revenue recognition:

Revenue from contracts with customers includes Sale of Goods and Services and is recognised when control of goods or services are transferred to the customer at an amount that reflects the consideration entitled in exchange for those goods or services.

Revenue is measured at the fair value of consideration received or receivable and is recognized when the control in all respects, over the Goods or Services is transferred to and accepted by the customer and the company has not retained any significant risks of ownership and future obligations with respect to such Goods or Services. Specifically, the following basis is adopted for various sources of income:

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, it does not adjust any of the transaction prices for the time value of money.

i. Sale of goods: Revenue is recognised when the significant risks and rewards of ownership of the goods have been passed to the buyer and are disclosed net off discounts, taxes collected and returns.

ii. Interest: Interest Income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

iii. Dividend: Dividend income is recognized when the company''s right to receive the payment is established.

iv. Export Incentives: Export benefits are recognised on an accrual basis.

i) Foreign Currency Transactions:

i. Functional and Reporting Currency: The Company''s functional and reporting currency is Indian National Rupee.

ii. Initial Recognition: Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency the exchange rate between the reporting currency and the foreign currency on the date of the transaction.

iii. Conversion on reporting date: Foreign currency monetary items are reported at the closing rate. Foreign currency non-monetary items are reported at historical cost.

iv. Exchange Differences: Exchange differences arising on the settlement of monetary items or on reporting monetary items of company at rates different from those at which they were initially recorded during the year or reported in previous financial statements are recognised as income or as expenses in the year in which they arise.

j) Borrowing Costs:

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

k) Retirement and other employee benefits:

i. Employer''s contribution to Provident Fund/Employee State Insurance, which is in the nature of defined contribution scheme, is expensed off when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to these funds.

ii. The company operates a gratuity plan which is in the nature of defined benefit obligation. The company''s liability is provided based on independent actuarial valuation on projected unit credit method made at the end of each financial year as per the requirements of Ind AS 19 on “Employee Benefits”.

iii. Gratuity liability is considered as a post-employment benefit expense as per Ind AS -19. Accordingly, Actuarial gain/loss) on re-measurement of present value of defined benefit obligation and actual return on plan assets excluding net interest is recognised under other comprehensive income for the year.

iv. Accumulated leaves, which are expected to be utilised within the next twelve months, are treated as short-term employee benefits. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

v. The Company treats accumulated leaves expected to be carried forward beyond twelve months, as longterm employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred.

l) Earnings Per Share:

Basic earnings per share are calculated by dividing the profit for the period attributable to equity shareholders by the weighted average number of Equity Shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

m) Provisions:

Provisions are recognised when there is a present legal or constructive obligation that can be estimated reliably, as a result of a past event, when 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. Provisions are not recognised for future operating losses.

Any reimbursement that the Company can be virtually certain to collect from a third party with respect to the obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related provisions.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provisions are reversed. Where the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provisions due to the passage of time is recognised as a finance cost.

n) Contingencies:

Where it is not probable that an inflow or an outflow of economic resources will be required, or the amount cannot be estimated reliably, the asset or the obligation is not recognised in the statement of balance sheet and is disclosed as a contingent asset or contingent liability. Possible outcomes on obligations/rights, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent assets or contingent liabilities.

0) Taxes on Income:

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961. Current tax includes taxes to be paid on the profit earned during the year and for the prior periods.

Deferred income taxes are provided based on the balance sheet approach considering the temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if it is probable that they can be utilised against future taxable profits.

The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes off the carrying amount of a deferred tax asset to the extent that it is no longer probable that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-off is reversed to the extent that it becomes reasonably certain that sufficient future taxable income will be available.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

p) Prior period items:

In case prior period adjustments are material in nature, the company prepares the restated financial statement as required under Ind AS 8 - ‘Accounting Policies, Changes in Accounting Estimates and Errors”. In case of immaterial items, such adjustments are shown under respective items in the Statement of Profit and Loss.

q) Cash and cash equivalents:

Cash and cash equivalents include cash on hand and at the bank, deposits held at call with banks, other shortterm highly liquid investment with original maturities of three months or less that are readily convertible to a known amount of cash which are subject to an insignificant risk of changes in value and are held for meeting short-term cash commitments.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.

r) Segment Reporting:

Operating segments are reported in a manner consistent with the internal reporting provided to the Executive Management/Chief operating decision maker (“CODM”).

s) Financial instruments:

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial Assets:

a. Initial recognition and measurement:

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in the statement of profit or loss. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e., the date that the company commits to purchase or sell the asset.

b. Subsequent measurement:

For the purpose of subsequent measurement, financial assets are classified in to following categories

a. Debt instruments at amortised cost

b. Debt Instruments at fair value through profit and loss (FVTPL)

c. Equity instruments at fair value through profit and loss (FVTPL)

a. Debts Instruments at amortised cost:

A ‘Debt Instrument'' is measured at the amortised cost if both the following conditions are met:

i. The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

ii. Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of EIR. The EIR amortisation is included in other income in the profit or loss. The losses arising from impairment are recognised in the profit or loss.

b. Debt Instruments at Fair value through profit and loss (FVTPL):

As per the Ind AS 101 and Ind AS 109, the Company is permitted to designate the previously recognised financial asset at initial recognition irrevocably at fair value through profit and loss on the basis of fact and circumstances that exists on the date of transition to Ind AS. Debt instruments included within the FVTPL category are measured at fair value with all changes recognised in the statement of Profit and Loss.

c. Equity instruments at fair value through profit and loss (FVTPL):

Equity instruments in the scope of Ind AS 109 are measured at fair value. The classification is made on initial recognition and is irrevocable. Subsequent changes in the fair values at each reporting date are recognised in the Statement of Profit and Loss.

c. Derecognition:

A financial asset or where applicable, a part of a financial asset is primarily derecognised when:

a. The rights to receive cash flows from the asset have expired, or

b. 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 ‘passthrough'' 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. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the company continues to recognise the

transferred asset to the extent of the company''s continuing involvement. In that case, the company also recognises an associated liability. The transferred assets and the associated liability are measured on a basis that reflects the rights and obligations that the company has retained.

d. Impairment of financial assets:

In accordance with Ind AS 109, the Company applies the expected credit loss (ECL) model for measurement and recognition of impairment loss on financial instruments.

Expected credit loss is the difference between all contractual cash flows that are due to the company in accordance with the contract and all the cash flows that the entity expects to receive.

The management uses a provision matrix to determine the impairment loss on the portfolio of trade and other receivables. The provision matrix is based on its historically observed expected credit loss rates over the expected life of the trade receivables and is adjusted for forward-looking estimates.

The expected credit loss allowance or reversal recognised during the period is recognised as income or expense, as the case may be, in the statement of profit and loss. In the case of balance sheet, it is shown as an adjustment from the specific financial asset.

Financial liabilities:

a. Initial recognition and measurement:

At initial recognition, all financial liabilities are recognised at fair value and in the case of loans, borrowings and payables, net of directly attributable transaction costs.

b. Subsequent measurement:

i. Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Gains or losses on liabilities held for trading are recognised in the profit or loss. The company does not designate any financial liability at fair value through profit or loss.

ii. Financial liabilities at amortised cost:

Amortised cost, in the case of financial liabilities with maturity more than one year, is calculated by discounting the future cash flows with an effective interest rate. Effective interest rate amortisation is included as finance costs in the statement of profit and loss. Financial liability with maturity of less than one year is shown at transaction value.

c. Derecognition:

Financial liability is derecognised when the obligation under the liability is discharged, cancelled, or expires. The difference between the carrying amount of financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.

Reclassification:

The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date, which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognised gains, losses (including impairment gains or losses) or interest.

t) Fair Value Measurement:

The Company measures financial instruments at fair value at each balance sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either

• in the principal market for such asset or liability, or

• in the absence of a principal market, in the most advantageous market which is accessible to the company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

a. Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

b. Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurements is directly or indirectly observable.

c. Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re assessing the categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

u) Recent pronouncements:

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2025, MCA has notified Ind AS - 117 Insurance Contracts and amendments to Ind AS 116 - Leases, relating to sale and lease back transactions, applicable with effect from April 1,2024. The Company has assessed that there is no significant impact on its financial statements.

On May 9, 2025, MCA notifies the amendments to Ind AS 21 Effects of Changes in Foreign Exchange Rates. These amendments aim to provide clearer guidance on assessing currency exchangeability and estimating exchange rates when currencies are not readily exchangeable. The amendments are effective for annual periods beginning on or after April 1,2025. The Company is currently assessing the probable impact of these amendments on its financial statements.

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Mar 31, 2024

3. Material Accounting policies:

a) Significant accounting estimates, assumptions, and judgements:

The preparation of Company''s financial statements requires management to make accounting estimates,
assumptions and judgements that affect the reported amounts of revenues, expenses, assets and liabilities and
the accompanying disclosures of contingencies at the end of the reporting period. Uncertainty about these
assumptions and estimates could result in outcomes that require a material adjustment to the carrying amounts
of assets or liabilities in future periods.

Estimates and Assumptions:

i. Impairment of non-current assets:

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable
amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less
costs of disposal is calculated based on available data from binding sales transactions, conducted at arm''s
length, for similar assets or observable market prices less incremental costs for disposing of the asset. The
value in use calculation is based on a Discounted Cash Flow (“DCF”) model. The value in use is sensitive
to the discount rate (generally weighted average cost of capital) used for the DCF model as well as the
expected future cash-inflows and the growth rate used for exploration purposes.

ii. Defined Benefit Plans:

The present value of the gratuity obligation is determined using actuarial valuation. An actuarial valuation
involves making various assumptions that may differ from actual developments in the future. These
include the determination of the discount rate, rate of increment in salaries and mortality rates. Due
to complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly
sensitive to changes in these assumptions. All the assumptions are reviewed at each reporting date.

iii. Fair Value measurement of financial instruments:

When the fair values of financial assets and financial liabilities on reporting date cannot be measured based
on quoted prices in active markets, their fair value is measured using valuation techniques i.e., the DCF
model. The inputs to these models are taken from observable markets.

iv. Contingencies:

Management judgement is required for estimating the possible inflow/outflow of resources, if any, in
respect of contingencies/claims/litigations against the company/by the company as it is not possible to
predict the outcome of pending matters with accuracy.

v. Property, Plant and Equipment:

Based on evaluations done by the technical assessment team, the management has adopted the useful
life and residual value of its Property, Plant and Equipment. Management believes that the assigned useful
lives and residual value are reasonable.

vi. Income Taxes:

Management judgment is required for the calculation of provision for income taxes and deferred tax
assets/liabilities. The Company reviews at each balance sheet date the carrying amount of deferred
tax assets/liabilities. The factors used in estimates may differ from actual outcome which could lead to
significant adjustment to the amounts reported in the financial statements.

vii. Life -Time Expected Credit Loss on Trade and Other Receivables:

Trade and other receivables are stated at net of trade payable to the respective party where there is a
written understanding between the Company and the particular customer/vendor. Trade Receivables
and Other Receivables do not carry any interest and are stated at their transaction value as reduced by
life-time expected credit losses (“LTECL”). Management has evaluated LTECL for receivables as follows:

An asset is treated as current when it satisfies any of the following criteria:

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 realised 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.

A liability is classified as current when it satisfies any of the following criteria:

i. Expected to settle the liability in normal operating cycle;

ii. Held primarily for the purpose of trading;

iii. Due to be settled within twelve months after the reporting period, or

iv. 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 operating cycle is the time between the acquisition of assets for processing and their realisation
in cash and cash equivalents. However, a period of 12 months is considered as ultimate operating
cycle.

c) Property, Plant and Equipment:

Property, Plant and Equipment are stated at cost net of input credits, less accumulated depreciation, and
impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its
working condition for its intended use. Borrowing costs relating to acquisition of property, plant and equipment
which take substantial period of time to get ready for its intended use are also included to the extent they relate
to the period till such assets are ready to be put to use.

The company adopted cost model as its accounting policy, in recognition of the property, Plant and Equipment
and recognises the transaction value as the cost.

Subsequent expenditure is capitalised to the asset''s carrying amount only when it is probable that future
economic benefits associated with the expenditure will flow to the company and the cost of the item can be
measured reliably. All other repairs and maintenance costs are expensed when incurred.

Capital work in progress includes cost of property, plant, and equipment under installation/under development
as at the balance sheet date.

An item of Property, Plant and Equipment is derecognised upon disposal or when no future economic benefits
are expected from its use. Any gain or loss arising from derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is recognised in the Statement of
Profit and Loss. Property, Plant and Equipment which are found to be not usable or retired from active use or
when no further benefits are expected from their use are removed from the books of account and the carrying
value if any is charged to Statement of Profit and Loss.

Assets costing five thousand rupees or less are fully depreciated in the year of purchase.

Depreciation on Property, Plant and Equipment is provided based on the useful lives of the assets as estimated
by the Management, which are in line with Schedule II to the Companies Act, 2013

d. Intangible Assets:

Intangible assets are carried at cost, net of accumulated amortisation expenses and impairment losses, if any.
Cost of an intangible asset comprise of purchase price and attributable expenditure on making the asset ready
for its intended use.

Computer software:

Computer software is recognised at cost and are amortised over the useful life as estimated by the Management
which is about 3 years for all the intangible computer software assets.

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either
individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to
determine whether indefinite life continues to be supportable. If not, the change in useful life from indefinite to
finite is made on a prospective basis.

An intangible asset is derecognized on disposal or when no future economic benefits are expected from its use.
Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net
disposal proceeds and the carrying amount of the asset, and are recognized in the Statement of Profit and Loss.

e) Impairment of non-financial assets:

i. The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of
impairment based on internal/external factors. An impairment loss is recognized wherever the carrying
amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset''s
net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted
to their present value at the weighted average cost of capital. After impairment, depreciation is provided
on the revised carrying amount of the asset over its remaining useful life.

ii. Reversal of impairment losses recognised in prior years is recorded when there is an indication that the
impairment losses recognised for the asset no longer exists or have decreased. The reversal is limited so
that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying
amount that would have been determined, net of depreciation, had no impairment loss been recognised
for the asset in prior years.

f) Leases:

The determination of whether an agreement is (or contains) a lease is based on the substance of the arrangement
at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is
dependent on the use of a specific asset or assets and the arrangement convey a right to use the asset or assets,
even if that right is not explicitly specified in an arrangement.

For arrangements entered into prior to date of transition, the Company has determined whether the
arrangement contain lease on the basis of facts and circumstances existing on the date of transition.

Classification on inception of lease:

i. Operating lease:

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the
leased item, are classified as operating leases.

ii. Finance Lease:

A lease is classified as a financial lease where the lessor transfers substantially all the risks and rewards
incidental to the ownership of the leased item.

The Company has adopted Ind AS 116-Leases effective 1st April 2019, using the modified retrospective
method. The Company has applied the standard to its leases with the cumulative impact recognised in
the Reserves on the date of initial application (1st April 2019). Accordingly, previous period information
has not been restated and continues to be reported under Ind AS 17 - Leases.

i. Accounting of Operating leases:

Where the Company is the lessee:

At the date of commencement of the lease, the Company recognises a right-of-use asset (“ROU”)
and a corresponding lease liability for all lease arrangements in which it is a lessee, except for
short- term and Cancellable leases having a lease term up to 36 months. For remaining leases, the
Company recognises the lease payments as an operating expense on a straight-line basis over the
period of the lease. In case the escalation in operating lease payments is in line with the expected
general inflation rate then the lease payments are charged to statement of profit and loss instead of
straight-line method.

The right-of-use assets are initially recognised at cost, which comprises the initial amount of the
lease liability adjusted for any lease payments made at or prior to the commencement date. They
are subsequently measured at cost, less accumulated depreciation and impairment losses, if any.
Right-of-use assets are depreciated from the commencement date on a straight-line basis over the
lease period.

The lease liability is initially measured at the present value of the future lease payments. The lease
payments are discounted using the borrowing rates. The lease liability is subsequently remeasured
by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying
amount to reflect the lease payments made.

Lease liability and ROU asset have been separately presented in the Balance Sheet and lease
payments have been classified as financing cash flows.

ii. where the Company is the lessor:

Lease income is recognised in the Statement of Profit and Loss on a straight-line basis over the lease
term. Initial direct costs such as legal costs, brokerage costs, etc., are added to the carrying amount
of the leased asset and recognised as an expense over the lease term.

g) Inventories:

i. Raw Materials, Stores and Spares and Consumables are stated at lower of Cost and Net realizable
value. However, materials and other items held for use in the production of inventories are not written
down below cost in which they will be incorporated and expected to be sold at or above cost. Cost is
determined on a weighted average basis.

ii. Work-in-progress and finished goods are stated at the lower of cost and net realizable value.

iii. Cost includes direct materials, labour and a proportion of manufacturing overheads based on actual
production. Cost is determined on a weighted average basis.

iv. Net realizable 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.

h) Revenue recognition:

Revenue from contracts with customers includes Sale of Goods and Services and is recognised when control
of goods or services are transferred to the customer at an amount that reflects the consideration entitled in
exchange for those goods or services.

Revenue is measured at the fair value of consideration received or receivable and is recognized when the
control in all respects, over the Goods or Services is transferred to and accepted by the customer and the
company has not retained any significant risks of ownership and future obligations with respect to such Goods
or Services. Specifically, the following basis is adopted for various sources of income:

The Company does not expect to have any contracts where the period between the transfer of the promised
goods or services to the customer and payment by the customer exceeds one year. As a consequence, it does
not adjust any of the transaction prices for the time value of money.

i. Sale of goods: Revenue is recognised when the significant risks and rewards of ownership of the goods
have been passed to the buyer and is disclosed net off discounts, taxes collected and returns.

ii. Interest: Interest Income is recognised on a time proportion basis taking into account the amount
outstanding and the rate applicable.

iii. Dividend: Dividend income is recognized when the company''s right to receive the payment is established.

iv. Export Incentives: Export benefits are recognised on an accrual basis.

i) Foreign Currency Transactions:

i. Functional and Reporting Currency: The Company''s functional and reporting currency is Indian
National Rupee.

ii. Initial Recognition: Foreign currency transactions are recorded in the reporting currency, by applying
to the foreign currency amounts the exchange rate between the reporting currency and the foreign
currency on the date of the transaction.

iii. Conversion on reporting date: Foreign currency monetary items are reported at the closing rate.
Foreign currency non-monetary items are reported at historical cost.

iv. Exchange Differences: Exchange difference arising on the settlement of monetary items or on reporting
monetary items of company at rates different from those at which they were initially recorded during the
year or reported in previous financial statements are recognised as income or as expenses in the year in
which they arise.

j) Borrowing Costs:

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily
takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of
the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist
of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also
includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

k) Retirement and other employee benefits:

i. Employer''s contribution to Provident Fund/Employee State Insurance, which is in the nature of defined
contribution scheme is expensed off when the contributions to the respective funds are due. There are
no other obligations other than the contribution payable to these funds.

ii. The company operates a gratuity plan which is in the nature of defined benefit obligation. The company''s
liability is provided based on independent actuarial valuation on projected unit credit method made at the
end of each financial year as per the requirements of Ind AS 19 on “Employee Benefits”.

iii. Gratuity liability is considered as post-employment benefit expense as per Ind AS -19. Accordingly,
Actuarial gain/(loss) on re-measurement of present value of defined benefit obligation and actual return
on plan assets excluding net interest is recognised under other comprehensive income for the year.

iv. Accumulated leaves, which are expected to be utilised within the next twelve months, are treated as
short-term employee benefits. The Company measures the expected cost of such absences as the
additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the
reporting date.

v. The Company treats accumulated leaves expected to be carried forward beyond twelve months, as long¬
term employee benefit for measurement purposes. Such long-term compensated absences are provided
for based on the actuarial valuation using the projected unit credit method at the year-end. Actuarial
gains/losses are immediately taken to the statement of profit and loss and are not deferred.

l) Earnings Per Share:

Basic earnings per share are calculated by dividing the profit for the period attributable to equity shareholders
by the weighted average number of Equity Shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the profit for the period attributable to equity
shareholders and the weighted average number of shares outstanding during the period are adjusted for the
effects of all dilutive potential equity shares.

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Mar 31, 2014

1 Accounting Convention

The financial statements are prepared under historical cost convention and on an accrual basis in accordance with the generally accepted accounting principles.

2 Fixed Assets

Fixed Assets are stated at cost net of depreciation provided in the statements. Cost of acquisition of Fixed Assets is inclusive of all direct and indirect expenditure up to the date of commercial use.

Depreciation is provided on straight line method in accordance with the rates prescribed under Schedule XIV of the Companies Act, 1956

3 Inventories

Raw material and Stores and Spares valued at cost on weighted average basis. Stock-in-process and Finished Goods are valued at lower of cost or net realisable value.

4 Borrowing Cost

Borrowing costs that are directly attributable to the acquisition of fixed assets are capitalised as part of cost of the asset till the date the asset is ready for commercial use. All other borrowing cost are charge to revenue

5 Investments

Investments are stated at cost and diminution in the value, which is permanent in nature, is provided for.

6 Contingent Liabilities And Provisions

All Contingent liabilities are indicated by way of a note and will be paid / provided on crystalisation.

7 Retirement Benefits

Provident fund contributions is charged to the Statement of Profit and Loss as and when the contributions are due. Gratuity and leave encashment provision is made as per actuarial valuation on the basis of projected unit credit method.

8 Foreign Exchange Transactions

Foreign currency transactions are recorded at the rates prevailing on the date of the transaction. Assets and liabilites arising out of foreign exchange transactions are translated at the rate of exchange ruling on the date of balance sheet. and are suitably adjusted to the appropriate revenue/ capital account.

9 Impairment Of Assets

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods, is reversed if there has been a change in the estimate of recoverable amount.

10 Provision For Taxation

Provision for taxation for the year is based on tax liability computed in accordance with relevant tax rates and tax laws as at the Balance Sheet date. Provision for deferred tax is made for all timing differences arising between taxable income and accounting income at rates that have been enacted or substantively enacted as at the Balance Sheet date. Deferred tax assets are recognised only if there is a reasonable certainity that they will be realised and are reviewed for the appropriateness of their respective carrying value at each Balance Sheet date.

11 Revenue recognition

Sales represents the amount receivable for goods sold. Incentives on export sales are recognised as income on accrual basis

12 Earning Per Share

Earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

13 Use Of Estimates

Preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognised in the period in which the results are known/materialised.