2.16. Provisions, Contingent Liabilities, and Contingent Assets
Provisions are recognised when the Company has a present legal or constructive obligation as a result of a past event, it
is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a
reliable estimate can be made of the amount of the obligation. Contingent liabilities are disclosed in respect of possible
obligations that arise from past events, but their existence is confirmed by the occurrence or non-occurrence of one or
more uncertain future events not wholly within the control of the Company, or present obligations where the outflow of
resources is not probable or the amount cannot be reliably estimated. Contingent assets are neither recognised nor
disclosed.
2.17. Government Grants
Government grants are recognised only when there is reasonable assurance that the Company will comply with the
conditions attached to them and that the grants will be received. Grants related to specific fixed assets are presented by
deducting the grant from the gross value of the asset concerned. Grants related to revenue are recognised in the
Statement of Profit and Loss on a systematic basis over the periods necessary to match them with the related costs they
are intended to compensate. Grants in the nature of capital subsidy / promoters' contribution are credited to Capital
Reserve.
2.18. Cash Flow Statement
The Cash Flow Statement is prepared using the Indirect Method as set out in AS 3, "Cash Flow Statements". Cash flows
are classified under Operating, Investing, and Financing activities.
2.19. Events Occurring After the Reporting Period
Events occurring after the Balance Sheet date that provide additional evidence relating to conditions existing at the
Balance Sheet date (adjusting events) are considered in the preparation of financial statements. Events occurring after
the Balance Sheet date that are indicative of conditions arising after the Balance Sheet date (non-adjusting events) are
disclosed in the notes, where material.
a) The Company has taken on lease land from Kerala Industrial Infrastructure Development Corporation (KINFRA) under
a tripartite agreement dated 20.02.2018 for the Kannur factory (Unit-3) for a period of 25 years, five months, and 15 days.
Lease premium paid amounted to S20,37,743. During the year ended March 31, 2025, an amount of S73,836 (Previous
Year: S76,853) has been amortized and charged to the Statement of Profit and Loss (included under Depreciation and
Amortization expense - Note 24).
b) During the financial year ended 2019-20, the Company entered into an operating lease agreement with Solve Plastic
Products, a proprietorship concern of director Mr. B Sudheer Kumar, under a tenancy agreement dated 10.12.2019. The
lease pertains to 20 cents of property housing a factory building, along with other structural amenities and accessories.
The license for this lease was renewed on 01.12.2024, with a monthly payment of Rs. 5.00. Also, the Company entered into
a lease agreement with Mr. B Sudheer Kumar covering lease of second Floor BALCO Building admeasuring approximate
6700 sq. feet for the purpose of corporate office of the Company. The license for this lease was renewed on 01.12.2024,
with a monthly payment of Rs. 1.00. Consequently, during the financial year 2024-25, an amount of Rs. 72.00 has been
charged to the Statement of Profit and Loss Account as Lease Rentals.
2.Contingent Liabilities:
Note: This relates to Disputed Goods and Services Tax shown under Loans & Advances - Note 16.
Management believes that the ultimate outcome of these proceedings will not have a material adverse
effect on the Company's financial position.
3.Employee Benefits (Gratuity)
3.1. The Company operates a post-employment defined benefit plan for gratuity covering eligible
employees. The plan provides for lump sum payments to employees upon retirement, death,
incapacitation, or termination of employment, based on years of service and last drawn salary as per the
Payment of Gratuity Act, 1972. The plan is partially funded through a Group Gratuity scheme administered
by the Life Insurance Corporation of India (LIC).
3.2. For the financial year ended 31st March 2024, LIC had furnished only the summary actuarial report
which did not reflect various information required to be reported vide AS 15 - Employee benefits. Hence,
the disclosure requirements as per AS-15 have been furnished only for financial year ended 31st March
2025.
3.3. Reconciliation of opening and closing balances of Defined Benefit Obligation (DBO):
*Note on Weighted Average Shares for FY 2024-25: The weighted average number of equity shares
outstanding for the year ended March 31, 2025, reflects the time-weighted impact of 13,02,000 shares
issued via Initial Public Offer dated August 16, 2024, resulting in 38,68,853 shares (Previous Year: 30,66,250
shares).
6.Deferred Tax (AS 22):
As per Accounting Standard (AS) 22 "Accounting for Taxes on Income" issued by the Institute of Chartered
Accountants of India, the movement in Deferred Tax Liability / (Asset) during the year is as follows:
7.Going Concern:
7.1. The accompanying standalone financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and the settlement of liabilities in the normal course of
business. During the year ended March 31, 2025, the Company reported a net loss of ^478.81 lakhs
(Previous Year: Profit S142.48 lakhs). This financial result was primarily influenced by a temporary decline
in domestic product demand, planned investments in market development activities, and specific, non¬
recurring expenditures related to the Company's successful Initial Public Offer during the year.
7.2. Management has conducted a comprehensive evaluation of the Company's financial position and its
ability to continue as a going concern for at least twelve months from the approval date of these
financial statements. This evaluation has taken into account the significant strengthening of the
Company's financial base, notably through the S11.85 Crores raised via the Initial Public Offer, and its
healthy cash and bank balances (including fixed deposits) which aggregated to ^2.97 Crores as at
March 31, 2025. Furthermore, management is actively implementing strategic initiatives focused on
enhancing domestic market share, achieving cost efficiencies, optimizing working capital, and exploring
product diversification, all of which are projected to improve future operational performance and cash
flows. Considering these substantial financial resources, the detailed operational forecasts, and the
strategic plans in place, management is confident that the Company is well-positioned with adequate
resources to continue its operations, meet its financial obligations as they fall due in the foreseeable
future (being at least twelve months from the balance sheet date), and progress towards its business
objectives. Consequently, management has concluded that the going concern basis for the preparation
of these financial statements is appropriate and that no material uncertainty exists regarding the
Company's ability to continue its operations.
8.Initial Public Offering (IPO)
8.1. During the Financial Year 2024-2025, the company successfully completed its Initial Public Offering
(IPO), which comprised of a fresh issue of 13,02,000 equity shares with a face value of ^10 each, offered at
an issue price of ^91 per equity share (including a share premium of ^81 per equity share). The total
aggregated value of the issue amounted to f1,184.82 Lakhs. The equity shares of the company were listed
on the SME EMERGE Platform of the National Stock Exchange of India Limited (NSE EMERGE) on August 21,
2024.
8.2. The net proceeds from the IPO are primarily intended for funding capital expenditure towards the
purchase of additional plant and machinery, meeting working capital requirements, issue-related
expenses, and general corporate purposes (^88.00 Lakhs). This listing is a significant step for the
company, aimed at enhancing its brand visibility and providing liquidity for its equity shares.
9. Provision for Non-Moving Inventory:-
A provision amounting to ^69.63 lakhs has been made during the financial year for inventory items that
have remained non-moving for over three years.
10. Foreign Currency Disclosures
10.1. Transactions in Foreign Exchange:
*Export operations commenced in FY 24-25
11.Additional Disclosures mandated under Schedule III:
11.1. No funds have been advanced or loaned or invested (either from borrowed funds or share premium
or any other sources or kind of funds) by the company to or in any other persons or entities, including
foreign entities ("lntermediaries"), with the understanding, whether recorded in writing or otherwise, that
the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in
any maru1er whatsoever by or on behalf of the company ("Ultimate Beneficiaries") or provide any
guarantee, security or the like on behalf of the Ultimate Beneficiaries.
11.2. No funds have been received by the company from any persons or entities, including foreign
entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the
company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any
guarantee, security or the like on behalf of the Ultimate Beneficiaries.
11.3. Ratios:
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