3.1 Statement of compliance with Indian
Accounting Standards (Ind AS)
The financial statements of the Company have
been prepared in accordance with Ind AS notified
by the Companies (Indian Accounting Standards)
Rules, 2015 and Companies (Indian Accounting
Standards) Amendment Rules, 2016 (as amended)
and presentation requirement of Division II of the
Schedule III of the Companies Act 2013. Accordingly,
the financial statements for the year ended 31 March
2026 are prepared complying applicable Ind AS.
3.2 Historical cost convention
These financial statements have been prepared on
a historical cost convention except where certain
financial assets and liabilities have been measured
at fair value. (refer accounting policy of financial
instruments)
3.3 Business combinations
Business combinations involving entities under
common control are accounted for using the pooling
of interest's method. The net assets of the transferor
entity or business are accounted at their carrying
amounts on the date of the acquisition subject
to necessary adjustments required to harmonise
accounting policies. Any excess or shortfall of the
consideration paid over the share capital of transferor
entity or business is recognised as capital reserve
under equity.
3.4 Goodwill
Goodwill represents the future economic benefits
arising from a business combination that are not
individually identified and separately recognised.
Goodwill is carried at cost less accumulated
impairment losses.
3.5 Revenue recognition
Revenue from contracts with customers are
recognised when the performance obligation towards
customer have been made i.e. on transfer of control
of promised goods or services to a customer at an
amount that reflects the consideration to which the
Company is expected to be entitled to in exchange for
those goods or services.
Revenue towards satisfaction of a performance
obligation is measured at the amount of transaction
price (net of variable consideration) allocated to that
performance obligation. Revenue is recognised
net of sales reductions such as discounts and sales
incentives granted. This variable consideration is
estimated based on the expected value of outflow.
Sale of products:
Revenue from the sale of products is recognised when
the Company has transferred control of the goods
to the buyer and the buyer obtains the benefits from
the goods, the potential cash flows and the amount
of revenue (the transaction price) can be measured
reliably, and it is probable that the Company will collect
the consideration to which it is entitled to in exchange
for the goods.
Sales-related warranties associated with the goods
are integral to sales price and cannot be purchased
separately, hence they serve as an assurance that the
products sold comply with agreed-upon specifications.
Accordingly, the Company accounts for warranties
in accordance with Ind AS 37 Provisions, Contingent
Liabilities and Contingent Assets.
Rendering of services:
Revenue from services is recognised over time
by measuring progress towards satisfaction of
performance obligation for the services rendered.
Revenue in respect of rental services is recognised
on an accrual basis, in accordance with the terms of
the respective contract as and when the Company
satisfies performance obligations by delivering the
services as per contractual agreed terms.
Interest and dividends:
Interest income and expenses are reported on an
accrual basis using the effective interest method.
Dividends are recognised at the time the right to
receive payment is established.
3.6 Leases
The Company's lease asset classes primarily consist of
leases for Land and Buildings. The Company assesses
whether a contract is or contains a lease, at inception
of a contract. A contract is, or contains, a lease if the
contract conveys the right to control 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 of an identified asset, the
Company assesses whether:
(i) The contract involves the use of an identified
asset
(ii) The Company has substantially all of the
economic 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 recognises a right-of-use asset ("ROU") and a
corresponding lease liability for all lease arrangements
in which it is a lessee, except for leases with a term of
twelve months or less (short term leases) and leases
of low value assets. For these short term and leases of
low value assets, the Company recognises the lease
payments as an operating expense on a straight line
basis over the term of the lease.
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 of the lease plus
any initial direct costs less any lease incentives. 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 shorter of the
lease term and useful life of the underlying asset.
The lease liability is initially measured at the present
value of the future lease payments. The lease
payments are discounted using the interest rate
implicit in the lease or, if not readily determinable,
using the incremental borrowing rates. The lease
liability is subsequently re-measured by increasing
the carrying amount to reflect interest on the lease
liability, reducing the carrying amount to reflect the
lease payments made.
A lease liability is re-measured upon the occurrence of
certain events such as a change in the lease term or
a change in an index or rate used to determine lease
payments. The re-measurement normally also adjusts
the leased assets.
Lease liability and ROU asset have been separately
presented in the Balance Sheet and lease payments
have been classified as financing cash flows.
3.7 Foreign currency transactions and
translations
Initial recognition
The Company's financial statements are presented in
INR, which is also the Company's functional currency.
Transactions in foreign currencies are recorded on initial
recognition in the functional currency at the exchange
rates prevailing on the date of the transaction.
Measurement at the balance sheet date
Foreign currency monetary items of the Company,
outstanding at the balance sheet date are restated
at the year-end rates. Non-monetary items which
are carried at historical cost denominated in a foreign
currency are reported using the exchange rate at
the date of the transaction. Non-monetary items
measured at fair value in a foreign currency are
translated using the exchange rates at the date when
the fair value is determined.
Treatment of exchange difference
Exchange differences that arise on settlement of
monetary items or on reporting at each balance sheet
date of the Company's monetary items at the closing
rate are recognised as income or expenses in the
period in which they arise.
3.8 Investment Property
Property that is held for long-term rental yields or for
capital appreciation or both, and that is not occupied
by the Company, is classified as investment property.
Investment property is measured initially at its
cost, including related transaction costs and where
applicable, borrowing costs. 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. When part of an investment property
is replaced, the carrying amount of the replaced part
is derecognised. Additionally, when a property given
on rent is vacated and the managements intention
is to use the vacated portion for the purpose of its
own business needs, Investment Properties are
reclassified as Buildings. Investment properties are
depreciated using the straight-line method over their
estimated useful lives which is consistent with the
useful lives followed for depreciating Property, Plant
and Equipment.
3.9 Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which
are assets that necessarily take a substantial period
of time to get ready for their intended use or sale, are
capitalised during the period of time that is necessary
to complete and prepare the asset for its intended use
or sale.
All other borrowing costs are expensed in the period in
which they are incurred and reported in finance cost.
3.10 Government grants
The Company received refundable government loans
at below market rate of interest which are accounted
in accordance with the recognition and measurement
principles of Ind AS 109, Financial Instruments. The
benefit of below- market rate of interest is measured
as the difference between the initial carrying value of
loan determined in accordance with Ind AS 109 and
the proceeds received. It is recognized as income
when there is reasonable assurance that the Company
will comply with all necessary conditions attached to
the loans. Income from such benefit is recognized on
a systematic basis over the period of the loan during
which the company recognizes interest expense
corresponding to such loans.
The company is entitled to subsidies from government
in respect of certain government schemes.
Subsidies are recognized as income on a systematic
basis over the periods in which the related costs for
which it is intended to be compensated are expensed.
3.11 Employee benefits
Employee benefits include provident fund, pension
fund, gratuity and compensated absences.
Defined contribution plans
The Company's contribution to provident fund and
pension fund is considered as defined contribution plan
and is charged as an expense as they fall due based on
the amount of contribution required to be made and
when services are rendered by the employees. The
Company has no legal or constructive obligation to
pay contribution in addition to its fixed contribution.
In respect of certain employee's contributions are
made to a trust administrated by the Company/
employees.
Defined benefit plans
For defined benefit plans in the form of gratuity,
the cost of providing benefits is determined using
'the Projected Unit Credit method', with actuarial
valuations being carried out at each Balance Sheet
date. Re-measurements, comprising of actuarial gains
and losses are recognised immediately in the balance
sheet with a corresponding debit or credit to retained
earnings through other comprehensive income in
the period in which they occur. Re-measurements
are not reclassified to the statement of profit and
loss in subsequent periods. The retirement benefit
obligation recognised in the Balance Sheet represents
the present value of the defined benefit obligation as
adjusted for unrecognised past service cost.
Short-term employee benefits
The undiscounted amount of short-term employee
benefits expected to be paid in exchange for the
services rendered by employees are recognised
during the year when the employees render the
service. These benefits include performance incentive
and compensated absences which are expected to
occur within twelve months after the end of the period
in which the employee renders the related service.
The cost of such compensated absences is accounted
as under:
(a) I n case of accumulated compensated absences,
when employees render the services that
increase their entitlement of future compensated
absences; and
(b) In case of non-accumulating compensated
absences, when the absences occur.
Long-term employee benefits
Compensated absences which are allowed to carried
forward over a period in excess of 12 months after
the end of the period in which the employee renders
the related service are recognised as a liability at the
present value of the defined benefit obligation as at
the Balance Sheet date out of which the obligations
are expected to be settled.
Taxation
Tax expense recognised in the statement of profit or
loss comprises the sum of deferred tax and current
tax not recognised in other comprehensive income or
directly in equity.
Current tax
Current income tax assets and/or liabilities comprise
those obligations to, or claims from, fiscal authorities
relating to the current or prior reporting periods, that
are unpaid at the reporting date. Current tax is payable
on taxable profit, which differs from profit or loss in
the financial statements. Calculation of current tax is
based on tax rates and tax laws that have been enacted
or substantively enacted by the end of the reporting
period. Deferred income taxes are calculated using the
liability method on temporary differences between
the carrying amounts of assets and liabilities and their
tax bases.
3.12 Deferred tax
Deferred tax assets are recognised to the extent
that it is probable that the underlying tax loss or
deductible temporary difference will be utilised
against future taxable income. This is assessed based
on the Company's forecast of future results, adjusted
for significant non-taxable income and expenses
and specific limits on the use of any unused tax loss
or credit.
Deferred tax liabilities are generally recognised in full,
although Ind AS 12, Income Taxes, specifies limited
exemptions.
Changes in deferred tax assets or liabilities are
recognised as a component of tax income or expense
in the statement of profit or loss, except where
they relate to items that are recognised in other
comprehensive income (such as the revaluation of
land) or directly in equity, in which case the related
deferred tax is also recognised in other comprehensive
income or equity, respectively.
3.13 Operating cycle
Based on the nature of products/activities of the
Company and the normal time between purchase
of raw materials and their realisation in cash or
cash equivalents, the Company has determined its
operation cycle as 12 months for the purpose of
classification of its assets and liabilities as current and
non-current.
3.14 Operating expenses
Operating expenses are recognised in statement
of profit or loss upon utilisation of the service or as
incurred. Expenditure for warranties is recognised
when the Company incurs an obligation, which is
usually when the related goods are sold.
3.15 (a) Property, plant and equipment
Freehold land is carried at historical cost except
for certain class of land which had been revalued
in financial year 2009-10 and 2011-12. All other
items of Property, plant and equipment are
stated at cost less accumulated depreciation and
impairment losses, if any.
Property, plant and equipment are stated at their
original cost including freight, duties, taxes and
other incidental expenses relating to acquisition
and installation.
The carrying amount of assets, including those
assets that are not yet available for use, are
reviewed at each balance sheet date to determine
whether there is any indication of impairment. If
any such indication exists, recoverable amount
of asset is determined. An impairment loss is
recognised in the statement of profit and loss
whenever the carrying amount of an asset
exceeds its recoverable amount. An impairment
loss is reversed only to the extent that the
carrying amount of asset does not exceed the net
book value that would have been determined if
no impairment loss had been recognised.
When significant parts of property, plant and
equipment are required to be replaced at
intervals, the Company recognises the new part
and is depreciated accordingly. Further, when
major overhauling/repair is performed, the cost
associated with this is capitalised, if the recognition
criteria are satisfied, and is then depreciated
over the remaining useful life of asset or over
the period of next overhauling due, whichever is
earlier. All other repair and maintenance costs are
recognised in the statement of profit and loss as
and when incurred.
The residual values, useful lives and methods of
depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted
prospectively, if appropriate.
(b) Intangible assets
Intangible Assets are recognised, if the future
economic benefits attributable to the assets
are expected to flow to the company and cost
of the asset can be measured reliably. All other
expenditure is expensed as incurred. The same
are amortised over the expected duration of
benefits. Such intangible assets are measured
at cost less any accumulated amortisation and
impairment losses, if any and are amortised over
their respective individual estimated useful life
on straight line method. The amortisation period
and the amortisation method for an intangible
asset with a finite useful life are reviewed at least
at the end of each reporting period and adjusted
prospectively, if appropriate.
(c) Capital work-in-progress
Expenditure incurred during the period of
construction, including all direct and indirect
expenses, incidental and related to construction,
is carried forward and on completion, the costs
are allocated to the respective property, plant and
equipment. Capital work-in-progress includes
capital inventory.
3.16 Depreciation and amortisation
Depreciation is charged on a pro-rata basis on the
straight line method at rates prescribed in Schedule
II to the Companies Act, 2013 and is charged to the
statement of profit and loss. Freehold land is not
depreciated.
3.17 Impairment of property, plant & equipment
and intangible assets
Assets are tested for impairment whenever events or
changes in circumstances indicate that the carrying
amount may not be recoverable and an impairment
loss is recognised for the amount by which the asset's
carrying amount exceeds its recoverable amount.
The recoverable amount is higher of an asset's fair
value less costs of disposal and value in use. For the
purpose of assessing impairment, assets are grouped
at the lowest levels for which there are separately
identifiable cash inflows which are largely independent
of the cash inflows from other assets or group of
assets (cash generating units). If at the balance sheet
date, there is an indication that a previously assessed
impairment loss no longer exists, the recoverable
amount is reassessed and the asset is reflected at
the recoverable amount subject to a maximum of
depreciated historical cost and the same is accordingly
reversed in the statement of profit and loss.
3.18 Cash and cash equivalents
Cash and cash equivalents comprise cash in hand &
at bank and demand deposits, together with other
short-term, highly liquid investments maturing within
90 days from the date of acquisition. Cash and cash
equivalent are readily convertible into known amounts
of cash and are subject to an insignificant risk of
changes in value.
3.19 Cash flow statement
Cash flows are reported using the indirect method,
whereby profit/loss before tax is adjusted for the
effects of transactions of non-cash nature and any
deferrals or accruals of past or future cash receipts or
payments. The cash flows from operating, investing
and financing activities of the Company are segregated
based on the available information.
3.20 Inventories
Inventories are stated at the lower of cost and net
realisable value. The cost of inventories comprises
of all costs of purchase (net of tax credits where
applicable), costs of conversion and other costs
incurred in bringing the inventories to their present
location and condition.
Costs of inventories are determined on weighted
average basis. Net realisable value is the estimated
selling price in the ordinary course of business less any
applicable selling expenses.
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