k) Provisions and contingent liabilities
Provisions are recognised when the Company has a present legal or constructive obligation as a
result of past events, it is probable that an outflow of resources will be required to settle the
obligation and the amount can be reliably estimated. Provisions are not recognised for future
operating losses.
Provisions are measured at the present value of management's best estimate of the expenditure
required to settle the present obligation at the end of the reporting period. The discount rate
used to determine the present value is a pre-tax rate that reflects current market assessments of
the time value of money and the risks specific to the liability. The increase in the provision due to
the passage of time is recognised as interest expense.
Contingent Liabilities are disclosed in respect of possible obligations that arise from past events
but their existence will be confirmed by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of the Company or where any present
obligation cannot be measured in terms of future outflow of resources or where a reliable
estimate of the obligation cannot be made. The Company does not recognize a contingent
liability but discloses its existence in the financial statements.
l) Revenue recognition
The Company recognises revenue when the amount of revenue can be reliably measured, it is
probable that future economic benefits will flow to the Company and specific criteria have been
met for each of the Company's activities as described below.
Sale of goods
Revenue from sale of goods is recognised when control of the products being sold is transferred
to our customers and there are no longer any unfulfilled obligations. The performance
obligations in our contracts are fulfilled at the time of dispatch, delivery or upon formal customer
acceptance depending on customer terms.
Sale of Service
Revenue from contract with customers for product design and development is recognised at a
point of time in accordance with the terms of the contract.
Sales Return
The Company recognises provision for sales return, on the basis of mutual satisfaction which is
measured at the Sales value excluding taxes & duties.
Export Incentive
Export Incentives under various schemes are accounted in the year in which right to receive is
irrevocably established.
Other revenue:
Interest income is recognized on a time proportion basis taking into account the amount
outstanding and the applicable rate of interest.
Revenue in respect of insurance/other claims etc. is recognized only when it is reasonably
certain that the ultimate collection will be made.
Dividends are generally recognised in the Statement of Profit and Loss only when the right to
receive payment is established.
m) Employee benefits
(i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be
settled wholly within 12 months after the end of the period in which the employees render
the related service are recognised in respect of employees' services up to the end of the
reporting period and are measured at the amounts expected to be paid when the liabilities
are settled.
(ii) Other long-term employee benefit obligations
The liabilities for earned leave and sick leave that are not expected to be settled wholly
within 12 months are measured as the present value of expected future payments to be
made in respect of services provided by employees up to the end of the reporting period
using the projected unit credit method.
The Company operates the following post-employment schemes:
(a) defined benefit plans such as gratuity; and
(b) defined contribution plans such as provident fund.
Gratuity obligations
The liability or asset recognised in the balance sheet in respect of defined benefit plans is
the present value of the defined benefit obligation at the end of the reporting period less the
fair value of plan assets. The defined benefit obligation is calculated annually by actuaries
using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the
estimated future cash outflows by reference to market yields at the end of the reporting
period on government bonds that have terms approximating to the terms of the related
obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the
defined benefit obligation and the fair value of plan assets. This cost is included in
employee benefit expense in the Statement of Profit and Loss.
Remeasurement gains and losses arising from experience adjustments and changes in
actuarial assumptions are recognised in the period in which they occur, directly in other
comprehensive income. They are included in retained earnings in the statement of changes
in equity and in the balance sheet.
Defined Contribution Plans
Defined Contribution Plans such as Provident Fund, etc., are charged to the Statement of
Profit and Loss as incurred.
Termination benefits
Termination benefits are payable when employment is terminated by the Company before
the normal retirement date, or when an employee accepts voluntary redundancy in
exchange for these benefits. The Company recognises termination benefits at the earlier of
the following dates: (a) when the Company can no longer withdraw the offer of those
benefits; and (b) when the Company recognises costs for a restructuring that is within the
scope of Ind AS 37 and involves the payment of terminations benefits. In the case of an
offer made to encourage voluntary redundancy, the termination benefits are measured
based on the number of employees expected to accept the offer. Benefits falling due more
than 12 months after the end of the reporting period are discounted to present value.
n) Foreign currency translation
Transactions in foreign currencies are recognised at the prevailing exchange rates on the
transaction dates. Realised gains and losses on settlement of foreign currency transactions are
recognised in the Statement of Profit and Loss.
Monetary foreign currency assets and liabilities at the year-end are translated at the year-end
exchange rates and the resultant exchange differences are recognised in the Statement of Profit
and Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are
stated using the exchange rates at the dates of the initial transactions.
o) Taxes
The income tax expense or credit for the period is the tax payable on the current period's
taxable income based on the applicable income tax rate adjusted by changes in deferred tax
assets and liabilities attributable to temporary differences and to unused tax losses.
Deferred income tax is provided in full, using the liability method on temporary differences
arising between the tax bases of assets and liabilities and their carrying amount in the financial
statement. Deferred income tax is determined using tax rates (and laws) that have been enacted
or substantially enacted by the end of the reporting period and are excepted to apply when the
related deferred income tax assets is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for all deductible temporary differences and unused tax
losses, only if, it is probable that future taxable amounts will be available to utilise those
temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset
current tax assets and liabilities and when the deferred tax balances relate to the same taxation
authority. Current tax assets and tax liabilities are off set where the Company has a legally
enforceable right to offset and intends either to settle on a net basis, or to realize the asset and
settle the liability simultaneously.
Current and deferred tax is recognised in the Statement of Profit and Loss, except to the extent
that it relates to items recognised in other comprehensive income or directly in equity. In this
case, the tax is also recognised in other comprehensive income or directly in equity, respectively
Minimum Alternate Tax credit is recognised as deferred tax asset only when and to the extent
there is convincing evidence that the Company will pay normal income tax during the specified
period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT
credit asset is written down to the extent there is no longer a convincing evidence to the effect
that the Company will pay normal income tax during the specified period.
p) Earnings Per Share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
• the profit attributable to owners of the Company
• weighted average number of equity shares outstanding during the financial year,
adjusted for bonus elements in equity shares issued during the year and excluding
treasury shares.
Diluted earnings per share adjusts the figures used in the determination of basic earnings
per share to take into account:
• the after income tax effect of interest and other financing costs associated with dilutive
potential equity shares, and
• the weighted average number of additional equity shares that would have been
outstanding assuming the conversion of all dilutive potential equity shares.
q) Cash Flow Statement
The Cash Flow statement is prepared by the “Indirect method” set out in Ind AS-7 on “Cash
Flow Statement" and presents the cash flows by operating, investing and financing activities of
the Company.
r) Impairment of Assets:
The Company assesses at each reporting date whether there is an indication that a non¬
financial asset may be impaired based on internal/external factors. An asset is treated as
impaired when the carrying cost of asset exceeds its recoverable Value. An impairment loss 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 earlier accounting period is reversed if there has
been a change in the estimate of recoverable amount. After impairment, depreciation is provided
on the revised carrying amount of the asset over its remaining useful life.
s) Assets held for Sale:
Non-current assets held for sale are measured at the lower of its carrying value or fair value less
costs to sell. Non-current assets held for sale are not depreciated or amortized. Assets and
liabilities classified as held for sale are presented separately in the balance sheet.
[C] Recent Accounting Pronouncements
The below amendments to the existing standard which are notified by Ministry of Corporate affairs
but are not yet effective:
Amendment to Ind AS 1 'Presentation of Financial Statements'- Classification of Liabilities as
current or non-current and non-current liabilities with covenants. The amendment includes specific
provisions that will take effect for reporting periods beginning on or after 1 April 2026,
retrospectively, as outlined below:
a) Breach of material covenant for long-term loan arrangement on or before end of reporting
period with effect that liability becomes payable on demand as on reporting date, then it shall
be classified as current liability, if lender agreed after reporting period and before approval of
financial statements to not demand payment as a consequence of breach.
b) Classify as non-current liability, if lender agreed by end of reporting period to provide grace
period ending at least 12 months after reporting period within which entity can rectify the
breach provided lender does not demand immediate repayment.
c) Disclose information about the timing of settlement to understand the impact of the liability on
the financial statements.
The Company does not expect this amendment to have an impact on its operations or financial
statements.
16.8 Rights of shareholders
All equity shares carry equal rights with respect to voting and dividend. In the event of liquidation
of the Company, the equity shareholders shall be entitled to proportionate share of their holding in
the assets remaining after distribution of all preferential amounts.
(a) Securities Premium
The amount received in excess of face value of the equity shares is recognised in Securities
Premium Reserve. The reserve can be utilised in accordance with the specific provisions of the
Companies Act, 2013.
(b) Capital Redemption Reserve
Capital Redemption Reserve is created out of profit available for distribution towards
redemption of preference shares. This reserve can be utilised in accordance with the specific
provisions of the Companies Act, 2013.
(c) Warrants Forfeited Account
Warrants Forfeited Account is created out of paid amount of forfeited warrants.
(d) General Reserve
General Reserve has been created by transfer out of profit generated by the Company and is
available for distribution to shareholders. Under the erstwhile Companies Act, 1956, a general
reserve was created through an annual transfer of net profit at a specified percentage in
accordance with applicable regulations. Consequent to the introduction of the Companies Act,
2013, the requirement to mandatory transfer a specified percentage of net profit to general
reserve has been withdrawn.
(e) Capital reserve
The Company had issued equity shares in the earlier years. This reserve is created on account
of forfeiture of share application money received on account of issuance of equity shares as the
shareholders did not exercise their options.
(f) Retained Earning
Retained earnings are the profits that the Company has earned till date including effect of
remeasurement of defined benefit obligations less any transfers to general reserve, dividends
or other distributions paid to shareholders. Retained Earnings is a free reserve available to the
Company.
36. In view of carried forward business losses and depreciation in the books, the company is not liable
for Income Tax Liability under section 115JB for Minimum Alternative Tax.
37. The company has made investment of ? 13.06 lakhs into equity shares and ? 18.60 lakhs in share
application money in Shree Rama (Mauritius) Limited, its wholly owned subsidiary company. The
resident directors & key managerial personnel of the said WOS had resigned in the year 2005-06
and audited accounts for the year ended 30th September 2003 and onwards could not be prepared.
The WOS became defunct since 2005 under the respective law and its present staus is also shown
as 'defunct'. The company has made full provision for diminution in the value of investment in equity
and share application money in earlier years.
In view of the above, it was not possible to prepare consolidated financial statements as required by
Ind AS 110 issued by ICAI, and other provisions of the Companies Act, 2013.
40. Financial Instruments - Fair Values & Risk Management
Accounting Classifications & Fair Value Measurements
The fair values of the financial assets and liabilities are measured at the amount at which the
instrument could be exchanged in a current transaction between willing parties, other than in a
forced or liquidation sale.
The fair value of investment in quoted equity shares is measured at quoted price.
Fair values of cash and short term deposits, trade and other short term receivables, trade payables,
other current liabilities, short term loans from banks and other financial institutions approximate their
carrying amounts largely due to short-term maturities of these instruments.
Financial instruments with fixed and variable interest rates are evaluated by the Company based on
parameters such as interest rates and individual credit worthiness of the counterparty. Based on the
evaluation, allowances are taken into account for the expected losses of these receivables.
The company uses the following hierarchy for determining and disclosing the fair values of financial
instruments by valuation technique:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than the quoted prices included within Level 1 that are observable for the asset
or liability, either directly or indirectly.
Level 3 : Input that is significant to the fair value measurement is unobservable.
As per Ind AS 109, we have adopted a policy for assessing credit risk as per expected credit loss
model for outstanding balances as on balance sheet date, based on the past performance and by
assessing overall credit worthiness of debtors, we arrived at the following rate to be provided on
closing debtors as per their ageing bucket:
Other Financial Assets
The company has limited credit risk arising from cash and cash equivalents as the balances are
maintained with banks with high credit rating. Hence, these are low risk items.
The company evaluates the recoverability of Other financial assets at each reporting date and the
same are written off when there is no reasonable expectation of recovery. Where recoveries are
made, these are recognised in the Statement of Profit and Loss.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and
the availability of funding through an adequate amount of committed credit facilities to meet
obligations when due and to close out market positions. Due to the dynamic nature of the
underlying businesses, company treasury maintains flexibility in funding by maintaining availability
under committed credit lines.
Management monitors rolling forecasts of the company's liquidity position and cash and cash
equivalents on the basis of expected cash flows. This is generally carried out at local level in the
operating companies of the company in accordance with practice and limits set by the company.
These limits vary by location to take into account the liquidity of the market in which the entity
operates. In addition, the company's liquidity management policy involves projecting cash flows in
major currencies and considering the level of liquid assets necessary to meet these, monitoring
balance sheet liquidity ratios against internal and external regulatory requirements and maintaining
debt financing plans.
43. Market Risk Management
(a) Foreign Currency Risk
The company operates internationally and is exposed to foreign exchange risk arising from
foreign currency transactions, primarily with respect to the US$, EUR, CHF and RUB. Foreign
exchange risk arises from future commercial transactions and recognized assets and liabilities
denominated in a currency that is not the company's functional currency (INR). The risk is
measured through a forecast of highly probable foreign currency cash flows.
(b) Cash flow and fair value interest rate risk
The company's main interest rate risk arises from long-term borrowings with variable rates,
which expose the company to cash flow interest rate risk. The Company policy is mainly to
maintain its borrowings at fixed rate. As on 31st March 2026 and 31st March 2025, the
company's borrowings at variable rate were denominated in INR.
The company's fixed rate borrowings are carried at amortized cost. They are therefore not
subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the
future cash flows will fluctuate because of a change in market interest rates.
(c) Price Risk
The company's exposure to equity securities price risk arises from investments held by the
company and classified in the balance sheet at fair value through profit or loss having carrying
amount of ? Nil and ? 0.62 Lakhs as on 31/03/2026 and 31/03/2025 respectively.
44. Capital Management
The company's objectives when managing capital are to:
a. safeguard their ability to continue as a going concern, so that they can continue to provide
returns for shareholders and benefits for other stakeholders, and
b. Maintain an optimal capital structure to reduce the cost of capital.
Consistent with others in the industry, the company monitors capital on the basis of the
following gearing ratio:
Net debt (total borrowings net of cash and cash equivalents) divided by total 'equity' (as shown
in the balance sheet, including non-controlling interests).
47.2 Andhra bank Ltd. has filed suit in Debt Recovery Tribunal against East West Polyart Ltd. as
Principal Debtor and the Company as a guarantor and Recovery Officer has demanded ? 933.34
lakhs (net of Recovery already made and including interest). Review Application filed by the
Company against Demand Notice has been admitted by Debt Recovery Tribunal, Ahmedabad.
The matter is pending before DRT.
47.3 Pursuant to the Order dated July 28, 2023 of the National Company Law Tribunal, Ahmedabad
Bench under Section 55(3) of the Companies Act, 2013, the Company issued and allotted
7,66,666 15% Cumulative Redeemable Preference Shares of ?100 each on September 11, 2023,
aggregating ? 766.66 lakhs, towards redemption of 6,66,666 unredeemed preference shares (?
666.66 lakhs) and unpaid dividend thereon (? 100 lakhs). The preference shares are redeemable
over five years in three equal instalments at the end of the third, fourth and fifth years from the
date of allotment. As at March 31, 2026, cumulative preference dividend of ? 345 lakhs (P.Y.: ?
230 lakhs) remained unpaid due to inadequate distributable profits and shall be paid as and when
distributable profits are available.
47.4 (a) In respect of Tax assessments for A.Y. 2002-03 to 2004-2005, the income tax department
has made additions or disallowances amounting to ? 2975.16 lakhs in respect of depreciation
on tangible assets which has resulted into reduction of carried forward losses under income
tax Act. The tribunal has granted relief against which the department has filed an appeal
before the High Court.
(b) In respect of Tax assessments for A.Y. 2012-13 & 2013-14, the income tax department had
made additions or disallowances amounting to ? 18358.24 lakhs in respect of treatment of
gain arising on settlement /waiver of loans and for other matters which has resulted into
reduction of carried forward losses under income tax Act. The tribunal had passed the
appellate order against which the department had filed appeal before the High Court.
Department's appeal was disposed off by the High Court vide order dated 14th July, 2025.
(c) With respect to the tax assessment for A.Y. 2012-13 & 2013-14, the Company has filed an
appeal before the high court against the order regarding reducing the OTS amount for
depreciation, which is pending. The Income Tax Department had preferred the appeal before
the Ld. CIT (A) on the matter of on disallowance of depreciation, which is pending.
47.5 (a) The Excise Department had raised demand for Accounting Year 2004-05 by denying
CENVAT Credit of ? 131.45 lakh plus interest in respect of Raw Material used for new Plant
in the Trial Run and also imposed the penalty of ? 131.45 lakhs against which the Company
has filed an Appeal before CESTAT and it has allowed the Company's Appeal. The
Department has filed an Appeal against the said Order in the High Court of Gujarat which is
pending for final order.
(b) The Central GST Division, Kalol has also raised Demand for ? 10.74 lakh plus interest for
audit of Excise for the period March, 2014 to March, 2016 and also imposed penalty of ?
10.74 lakhs against which the Company has filed an Appeal to the Commissioner and matter
is remanded back to the Assessing Officer for fresh Adjudication which is pending for order
from Assessing Officer.
(c) The State GST Division, Kalol Gujarat has raised a total demand of ? 16.86 Lakhs by issuing
an order in original for the period July 2017 to March 2018. The demand comprises GST of ?
7.58 lakh, interest at 18% and a penalty at 10% on tax demand . The company has filed an
appeal before the Commissioner (Appeal) against said order. The same is pending for the
appellate order.
47.6 The company had imported machinery which has been received and put to use in the financial
year 2023-24 to 2025-26. The company had saved import duty to the extent of ? 1084.90 lakhs
under the Export Promotion Capital Goods Scheme. The Company has an obligation of Export
Turnover of ? 17709.17 Lakhs to be achieved in next Five (5) years as on March 31,2026.
49.2 Defined Benefits Plan
(A) Leave encashment:
The leave encashment are payable to all eligible employees at the rate of daily salary for
each day of accumulated leave on death or on resignation or upon retirement on attaining
superannuation age.
(B) Gratuity
The Company has a defined benefit gratuity plan. Every employee who has completed five
years or more of service gets a gratuity on death or resignation or retirement at 15 days
salary [last drawn salary] for each completed year of service. The scheme is funded with an
insurance company in the form of a qualifying insurance policy.
49.3 The Government of India has notified the implementation of four new Labour Codes by
consolidating and rationalizing 29 existing labour laws. These Codes have been made effective
from November 21, 2025. The Company has estimated the financial implications thereof and has
made additional provision of ? 70.04 lakhs towards past service cost which has been included
under employee benefit expenses in the financial statements. The Company continues to monitor
the finalisation of Central/ State Rules and clarifications from the Government on all the aspects
of the Codes and would provide appropriate accounting effect, if any, on the basis of such
developments as needed.
50. The Company has certain dues to suppliers registered under Micro, Small and Medium
Enterprises Development Act, 2006 ('MSMED Act'). The disclosures pursuant to the said
MSMED Act are as follows:
53. Disclosure for struck off companies
The following table depicts the details of balances outstanding in respect of transactions undertaken
with a company struck off under section 248 of Companies Act, 2013:
54. The Company evaluates events and transactions that occur subsequent to the Balance Sheet date
prior to the approval of the financial statements to determine the necessity for recognition and/or
reporting of any of these events and transactions in the Financial Statements. As of May 09, 2026
there was no subsequent event to be recognised or reported that are not already disclosed
elsewhere in these Financial Statements.
55. The company does not hold any benami property as defined under the Benami Transactions
(Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder. No proceeding has been
initiated or pending against the company for holding any benami property under the Benami
Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.
56. The Company has not traded or invested in crypto currency or virtual currency during the financial
year.
57. The Company does not have any such transaction which is not recorded in the books of accounts
that has been surrendered or disclosed as income during the year in the tax assessments under the
Income Tax Act, 1961 (such as search or survey or any other relevant provisions of the Income Tax
Act, 1961).
58. The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies),
including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
59. The Company have not received any fund from any person(s) or entity(ies), including foreign
entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the
Company shall:
(a) 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
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
60. Segment Reporting
60.1 The company operates in a single segment and in line with Ind AS - 108 "Operating Segments",
the operations of the Company fall under "Manufacturing of Packaging Materials" business which is
considered to be the only reportable business segment.
60.2 Details of information about geographical areas for sales are as below:
60.3 There are no non-current assets other than in India.
60.4 There is a reputed customer accounted for more than 10 % of the revenue during the year 2025¬
26. Further, there are two customers having oustanding balance of more than 10 % of the total
receivable as on 31st March, 2026.
61. The company has used accounting software for maintaining its books of accout which has a feature
of recording audit trail (edit log) facility and the same has been operated throughout the year for all
relevant transactions recorded in the software. Further, there are no instances of audit trail being
tampered with. Additionally, the audit trail of prior year(s) has been preserved by the Company as
per the statutory requirements for record retention.
62. Previous year's figures have been regrouped/re-arranged/recasted, wherever necessary, so as to
make them comparable with current year's figures. The management believes that such
reclassification does not have any material impact on the information presented in the Financial
Statements.
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