2. Material Accounting Policies
This note provides a list of the material accounting policies adopted in the preparation of the standalone
financial statements. These policies have been consistently applied in all material respect for all the years
presented, unless otherwise started.
2.1. Basis of Preparation of standalone financial statements
The Company's Financial Statement for the year ended March 31, 2025 have been prepared in accordance
with provisions of the Indian AccountingStandards("Ind AS") notified under the Companies (Indian
Accounting Standards) Rules, 2015 and as amended from time to time.All assets and liabilities are classified
as current or non-current as per the company's normal operating cycle and other criteria set out in Schedule
III to theCompanies Act, 2013. Based on the nature of products and the time between the acquisition of assets
for processing and their realisation in cash and cashequivalents, the company has ascertained its operating
cycle as 12 months for the purpose of current/ non- current classification of assets and liabilities.
These financial statements include the Balance Sheet, the Statement of Changes in Equity, the Statement of
Profit and Loss, the Statement of Cash flows andNotes, comprising a summary of significant accounting
policies and other explanatory information and comparative information in respect of the precedingperiod.
Accounting policies have been consistently applied except where a newly-issued Indian accounting
standard is initially adopted or a revision to an existing Indianaccounting standard requires a change in the
Indian accounting policy hitherto in use.
The Ind AS financial statements are presented in INR and all values are rounded to the nearest lakhs (INR
1,00,000), except when otherwise indicated. Earnings per share data are presented in Indian Rupees up to
two decimal places.
2.2. Revenue recognition
Revenue from sale of goods is recognised when the significant risks and reward of ownership and effective
control on goods have been transferred to the buyer. Sales revenue is measured at fair value net of returns,
trade discounts, volume rebates and taxes or duties. Revenue from services rendered is recognised as and
when the services are rendered and related costs are incurred in accordance with the contractual agreement.
Interest income 8
Interest income is accrued on time proportion basis, by reference to the principal outstanding and effective
interest rate applicable.
Other Income
Other income is recognised when no significant uncertainty as to its determination or realisation exists.
Dividend
Dividend income is recognised when to right to receive payment has been established.
Commission Income
Commission Income is accounted when it becomes due as per contract.
2.3. Property, Plant and Equipment
Property, Plant and Equipment is recognised when it is probable that future economic benefits associated
with the item will flow to the Company and thecost of the item can be measured reliably. PPE is stated at
original cost, net of tax/duty credits availed, if any, less accumulated depreciation and
cumulativeimpairment. Cost comprises the purchase price and any attributable costs of bringing the asset to
its working condition for its intended use as estimated bythe management. Any trade discounts and rebates
are deducted in arriving at the purchase price.
PPE not ready for the intended use, on the date of the Balance Sheet are disclosed as “Capital
Work-in-Progress”. Advances paid towards the acquisition of property, plant and equipment outstanding at
each balance sheet date is classified as capital advances under other non-current assets.
An item of property, plant and equipment and any significant part initially recognised is de-recognised upon
disposal or when no future economic benefitsare expected from its use or disposal. Any gain or loss arising
on de-recognition of the asset (calculated as the difference between the net disposal proceedsand the
carrying amount of the asset) is included in the income statement when the property, plant and equipment is
de-recognised.Borrowing cost relating to acquisition/construction of fixed assets which take substantial
period of time to get ready for its intended use are also included tothe extent they relate to the period till such
assets are ready to be put to use.
Depreciation is calculated on WDV basis over the estimated useful life of the assets as prescribed under Part
C of Schedule II of the Companies Act, 2013. The identified component of fixed assets are depreciated over
the useful lives and the remaining components are depreciated over the life of the principal assets.
Subsequent expenditures relating to PPE is capitalized only when it is probable that future economic benefit!
associated with these will flow to the Company and the cost can be measured reliably.
2.4. Depreciation
Depreciation is provided to the extent of depreciable amount on the Written down Value (WDV) Method.
Depreciation is provided based on useful life ofthe assets as prescribed in Schedule II to the Companies Act,
2013.
Depreciation on assets acquired/sold during the year is recognised on a pro-rata basis to the statement of
profit and loss till the date of acquisition/sale. Thecarrying amount of assets is reviewed at each balance
sheet date if there is any indication of impairment based on internal/external factors. An impairmentloss is
recognised wherever the carrying amount of an asset exceeds its recoverable amount.
The recoverable amount is the greater of the assets, net selling price and value in use. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
refects current market assessments of the time value of money and risks specific to the asset.
2.5. Intangible Assets 90
Intangible assets acquired are measured on initial recognition at cost. Following initial recognition, intangible
assets are carried at cost less any accumulated amortization and accumulated impairment losses, if any
Intangible assets Under Development
The costs incurred by the company during the research phase are charged to profit or loss in the year in
which they are incurred. Development phase expenses are initially recognised as intangible assets under
development until the development phase is complete, upon which the amount is capitalised as intangible
asset.
2.5. Leases
The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or
contains, a lease if the contract conveys the right tocontrol the use of an identified asset for a period of time in
exchange for consideration. To assess whether a contract conveys the right to control the use ofan identified
asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company
has substantially all of theeconomic benefits from use of the asset through the period of the lease and (iii) the
Company has the right to direct the use of the asset.At the date of commencement of the lease, the Company
recognizes a right-of-use asset (“ROU”) and a corresponding lease liability for all leasearrangements in which
it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases.
For these short-term andlow value leases, the Company recognizes the lease payments as an operating
expense on a straight-line basis over the term of the lease.A lease contract is modified and the lease
modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on
thelease term of the modified lease by discounting the revised lease payments using a revised discount rate
at the effective date of the modification. Theeffective date of the modification is the date when both the
parties agree to the lease modification and is accounted for in that point in time.Right-of-use assets are
depreciated from the commencement date on a straight-line basis over the shorter of the lease term and
useful life of the underlyingasset. Right of use assets are evaluated for recoverability whenever events or
changes in circumstances indicate that their carrying amounts may not berecoverable. For the purpose of
impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the
value-in-use) isdetermined on an individual asset basis unless the asset does not generate cash flows that
are largely independent of those from other assets. In such cases,the recoverable amount is determined for
the Cash Generating Unit (CGU) to which the asset belongs.
2.6. Employee Benefit Expenses
All employee benefits payable within a period of twelve months of rendering service are classified as short
term employee benefits. Benefits such as salaries, allowances, advances and similar payments paid to the
employees of the Company are recognized during the period in which the employee renders such related
services.
Defined Contribution plans
Provident Fund
The Company is a member of the Government Provident Fund which is operated by the office of the Regional
Provident Fund Commissioner (RPFC) and the contribution thereof is paid /provided for during the period in
which the employee renders the related service.
Defined Benefits plans
Gratuity
In accordance with the Payment of Gratuity Act, 1972, the Company provides for gratuity, covering eligible
employees. Employees who are in continuous service for a period of five years are eligible for gratuity.
The amount of gratuity payable on retirement/ termination is the employees last drawn basic salary per
month computed proportionately for 15 days salary multiplied by number of years of service.
Gratuity is provided as per actuarial valuation as at the Balance Sheet date, carried out by an independent
actuary. The present value of the obligation under such defined benefit plans is determined based on
actuarial valuation using the Projected Unit Credit Method.
The obligation is measured at the present value of the estimated future cash flows. The discount rate used for
determining the present value of the obligation under defined benefit plans, is based on the market yield on
government securities of a maturity period equivalent to the weighted average maturity profile of the related
obligations at the Balance Sheet date.
Re-measurement, comprising actuarial gains and losses, the return on plan Assets (excluding net interest)
and any change in the effect of asset ceiling (if applicable) are recognised in other comprehensive income
and is refected immediately in retained earnings and is reclassified to Profit and Loss.
2.7. Accounting for Taxes of Income
Current Taxes
Current Tax is determined as the amount of tax payable in respect of taxable income for the year. The
Company's current tax is calculated using tax rates that have been enacted or substantively exacted by the
end of the reporting period.
Deferred Taxes
Deferred tax assets and liabilities are recognised for the future tax consequences of temporary differences
between the carrying values of assets and liabilitiesand their respective tax bases. Deferred tax assets and
liabilities are measured at the tax rates that are expected to apply in the period in which the liability issettled
or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by
the end of the reporting period. Themeasurement of deferred tax liabilities and assets refects the tax
consequences that would follow from the manner in which the Company expects, at the endof the reporting
period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets including that on unused tax losses and unused tax credits are recognised to the extent
that it is probable that future taxable income will be available against which the deductible temporary
differences could be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset
to be recovered.
Current and Deferred Tax for the Year
Current and deferred tax are recognised in the profit or loss, except when they relate to items that are
recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax
are also recognised in other comprehensive income or directly in equity respectively.
2.8. 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 readyfor 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.
Borrowingcosts consist of interest and other costs that an entity incurs in connection with the borrowing of
funds. Borrowing cost also includes exchange differences tothe extent regarded as an adjustment to the
borrowing costs.
General borrowing costs are capitalised at the weighted average of such borrowings outstanding during the
year.
Investments and other financial assets
ii. Classification and Measurement
At initial recognition, the Company measures a financial asset at its fair value. Transaction costs of financial
assets carried at fair value through the Profit and Loss are expensed in the Statement of Profit and Loss.
Financial Assets:
Subsequent measurement of financial assets depends on the Company’s business model for managing the
asset and the cash flow characteristics of the asset. The Company classifies its financial assets into following
categories:
1. Amortised cost
Financial assets that are held for collection of contractual cash flows where those cash flows represent solely
payments of principal and interest are measured at amortised cost. Interest income from these financial
assets is included in other income using the effective interest rate method.
2 . Fair value through other comprehensive Income
Financial assets with a business model:
(A) Whose objective is achieved by both collecting contractual cash flows and selling financial assets and the
contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding and
(B) where the Company has exercised the option to classify the investment as at fair value through other
comprehensive income, all fair value changes on the assets are recognised in OCI. The accumulated gains or
losses recognised in OCI are reclassified to retained earnings on sale of such investments.
3. Fair value through Profit and Loss:
Financial assets which are not classified in any of the categories above are fair value through profit or loss.
Equity instruments:
The Company measures its equity investment other than in subsidiaries, joint ventures and associates at fair
value through profit and loss. The investment in subsidiaries, associates and joint ventures are measured at
cost.
iii. De-recognition
Current and deferred tax are recognised in the profit or loss, except when they relate to items that are
recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax
are also recognised in other comprehensive income or directly in equity respectively.
Financial liabilities:
i. Measurement
Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the
instrument. Financial liabilities are initially measured at the amortised cost unless at initial recognition, they
are classified as fair value through profit and loss. Other financial liabilities (including borrowings and trade
and other payables) are subsequently measured at amortised cost using the effective interest method.
ii. De-recognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liabilityis replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such anexchange or
modification is treated as the derecognition of the original liability and the recognition of a new liability. The
difference in the respectivecarrying amounts is recognised in the statement of profit or loss.
Derivative financial Instrument 92
A derivative is a financial instrument which changes in value in response to changes in an underlying asset
and is settled at a future date. Derivativesare initially recognised at fair value on the date a derivative contract
is entered into and are subsequently re-measured at their fair value. The methodof recognising the resulting
gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of
the itembeing hedged. The Company designates certain derivatives as either:
(a) Hedges of the fair value of recognised assets or liabilities (fair value hedge); or
(b) Hedges of a particular risk associated with a firm commitment or a highly probable forecast transaction
(cash flow hedge);
The Company documents at the inception of the transaction the relationship between hedging instruments
and hedged items, as well as its riskmanagement objectives and strategy for undertaking various hedging
transactions. The Company also documents its assessment, both at hedgeinception and on an on-going
basis, of whether the derivatives that are used in hedging transactions are effective in offsetting changes in
cash flowsof hedged items. Movements in the hedging reserve are accounted in other comprehensive
income and are shown within the statement of changes inequity. The full fair value of a hedging derivative is
classified as a noncurrent asset or liability when the remaining maturity of hedged item is morethan 12
months, and as a current asset or liability when the remaining maturity of the hedged item is less than 12
months. Trading derivatives areclassified as a current asset or liability.
i . Fair value hedge
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in
the Statement of Profit and Loss, together with any changes in the fair value of the hedged asset or liability
that are attributable to the hedged risk. The Company only applies fair value hedge accounting for hedging
foreign exchange risk on recognised assets and liabilities.
ii. Cash Flow Hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow
hedges is recognised in other comprehensive income. The ineffective portion of changes in the fair value of
the derivative is recognised in the Statement of Profit and Loss. Gains or losses accumulated in equity are
reclassified to the statement of profit and loss in the periods when the hedged item affects the Statement of
Profit and Loss.
When a hedging instrument expires or is swapped or unwound, or when a hedge no longer meets the criteria
for hedge accounting, any accumulated gain or loss in other equity remains there and is reclassified to
Statement of Profit and Loss when the forecasted cash flows affect profit or loss. When a forecasted
transaction is no longer expected to occur, the cumulative gains/losses that were reported in equity are
immediately transferred to the Statement of Profit and Loss.
2.10. Impairment of financial assets & non-fnancial assets
a. Financial assets
The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets
which are not fair valued through profitor loss. Loss allowance for trade receivables with no significant
financing component is measured at an amount equal to lifetime ECL. For all otherfinancial assets, ECLs are
measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk
from initialrecognition in which case those are measured at lifetime ECL. The amount of ECL (or reversal) that
is required to adjust the loss allowance at thereporting date to the amount that is required to be recognized is
recognized as an impairment gain or loss in the Statement of Profit and Loss.
b. Non-fnancial assets
Intangible assets and Property, Plant and Equipment are evaluated for recoverability whenever events or
changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of
impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in
use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely
independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to
which the asset belongs.
If such assets are considered to be impaired, the impairment to be recognized in the Statement of Profit and
Loss is measured by the amount by whichthe carrying value of the assets exceeds the estimated recoverable
amount of the asset. An impairment loss is reversed in the Statement of Profit andLoss if there has been a
change in the estimates used to determine the recoverable amount. The carrying amount of the asset is
increased to its revisedrecoverable amount, provided that this amount does not exceed the carrying amount
that would have been determined (net of any accumulatedamortization or depreciation) had no impairment
loss been recognized for the asset in prior year.
Intangible assets with indefinite useful lives are tested for impairment annually as at year end at the CGU
level, as appropriate and when circumstances indicate that the carrying value may be impaired.
2.10. Fair value measurement
The Company measures financial instruments, such as, derivatives and investments at fair value as per IND
AS 113 at each balance sheet date. All assets and liabilities for which fair value is measured or disclosed in the
standalone financial statements are categorised 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:
Level 1 — The fair value of financial instruments traded in active markets (such as publicly traded derivatives,
and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market
price used for financial assets held by the group is the current bid price. These instruments are included in
level 1.
Level 2 — The fair value of financial instruments that are not traded in an active market is determined using
valuation techniques which maximise the use of observable market data and rely as little as possible on
entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the
instrument is included in level 2.
Level 3 - If one or more of the significant inputs is not based on observable market data, the instrument is
included in level 3. This is the case for unlisted equity securities and investment in private equity funds, real
estate funds.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as
explained above.
2.10. Key Accounting Estimates And Judgments
The preparation of standalone financial statements requires management to make judgments, estimates and
assumptions in the application of accountingpolicies that affect the reported amounts of assets, liabilities,
income and expenses. Actual results may differ from these estimates. Estimates and underlyingassumptions
are reviewed on ongoing basis. Any changes to accounting estimates are recognized prospectively.
Information about critical judgments inapplying accounting policies, as well as estimates and assumptions
that have the most significant effect on the amounts recognised in the standalone financialstatements are
included in the following notes:
i. Useful lives of property, plant and equipment
The Company reviews the useful life of property, plant and equipment at the end of each reporting period.
This reassessment may result in change in depreciation expense in future periods.
ii. Impairment of non - financial assets 94
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 disposalcalculation is based on available data from binding sales transactions, conducted at arm’s length,
for similar assetsor observable market prices less incremental costs for disposing of the asset. The value in
use calculation is basedon a DCF model. The cash flows are derived from the budget for the next five years
and do not includerestructuring activities that the Company is not yet committed to or significant future
investments that will enhancethe asset’s performance of the CGU being tested. The recoverable amount is
sensitive to the discount rate used forthe DCF model as well as the expected future cash-inflows and the
growth rate used for extrapolation purposes.These estimates are most relevant to disclosure of fair value of
investment property recorded by the Company.
iii. Provision for Contingent Liabilities
On an ongoing basis, Company reviews pending cases, claims by third parties and other contingencies.
Forcontingent losses that are considered probable, an estimated loss is recorded as an accrual in standalone
financialstatements. Loss Contingencies that are considered possible are not provided for but disclosed as
Contingentliabilities in the standalone financial statements. Contingencies the likelihood of which is remote
are not disclosedin the standalone financial statements. Gain contingencies are not recognized until the
contingency has beenresolved and amounts are received or receivable.
iv. Valuation of deferred tax assets
The Company reviews the carrying amount of deferred tax assets at the end of each reporting period. The
policy for the same has been explained under note above.
v. Defined benefit plans
The cost of the defined benefit gratuity plan and other post-employment medical benefits and the present
value ofthe gratuity obligation are determined using actuarial valuations. An actuarial valuation involves
making variousassumptions that may differ from actual developments in the future. These include the
determination of thediscount rate, future salary increases and mortality rates. Due to the complexities
involved in the valuation and itslong-term nature, a defined benefit obligation is highly sensitive to changes in
these assumptions. All assumptionsare reviewed at each reporting date.
2.12. Foreign exchange transactions and translation
Transactions in foreign currencies i.e. other than the Company’s functional currency of Indian Rupees
arerecognised at the rates of exchange prevailing at the dates of the transactions. At the end of each
reporting period,monetary items denominated in foreign currencies are translated at the functional currency
using exchange ratesprevailing at that date. Non-monetary items carried at fair value that are denominated in
foreign currencies areretranslated at the rates prevailing at the date when the fair value is determined.
Non-monetary items that aremeasured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences on monetaryitems are recognised in profit or loss in the period in which they arise
except for exchange differences ontransactions entered into in order to hedge certain foreign currency risks
(refer policy on Derivative Financiallnstruments and Hedge Accounting).
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