f) Provisions
At each reporting date basis, the management judgement, changes in facts and legal aspects, the
Company assess the requirement of the provisions. However, the actual future outcome may be
different from this judgement.
g) Leases
The Company determines the lease term as the non-cancellable term of the lease, together with any
periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any
periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The
Company has several lease contracts that include extension and termination options. The Company
applies judgement in evaluating whether it is reasonably certain or not to exercise the option to renew or
terminate the lease. The Company considers all relevant factors that create an economic incentive for it
to exercise either the renewal or termination. After the commencement date, the Company reassesses
the lease term if there is a significant event or change in circumstances that is within its control and
affects its ability to exercise or not to exercise the option to renew or to terminate.
3.3 Recent Pronouncements
Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued from time to time. On 7th May 2025, MCA notifies
the Companies (Indian Accounting Standards) Amendment Rules, 2025, applicable from 1st April 2025 as
below:
Ind AS 21 The Effects of Changes in Foreign Exchange Rates
The amendment provides guidance on determining the exchange rate when a currency is not exchangeable
into another currency. Where exchangeability is lacking, entities are required to estimate the spot exchange
rate that would be used in an orderly transaction under prevailing economic conditions and disclose the
estimation process, key inputs, and associated risks
The Company does not expect this amendment to have any significant impact on its Financial Statements.
The Company has not early adopted any amendment that have been notified but are not yet effective.
4. Material Accounting Policies
4.1 Property, Plant and Equipment and Depreciation
Initial Recognition
All items of property, plant and equipment are initially measured at cost. The cost of an item of plant and
equipment is recognized as an asset if, and only if, it is probable that future economic benefits associated
with the item will flow to the Company and the cost of the item can be measured reliably.
Cost includes its purchase price (after deducting trade discounts and rebates), import duties & non-refundable
purchase taxes, any costs directly attributable to bringing the asset to the location & condition necessary for
it to be capable of operating in the manner intended by management, borrowing costs on qualifying assets
and asset retirement costs.
The cost of replacing a part of an item of property, plant and equipment is capitalized if it is probable that the
future economic benefits of the part will flow to the Company and that its cost can be measured reliably. The
carrying amount of the replaced part is derecognized.
Costs of day-to-day repairs and maintenance costs are recognized into the Statement of Profit and Loss as
incurred.
Subsequent measurement
Subsequent to recognition, property, plant and equipment are measured at cost less accumulated
depreciation and any accumulated impairment losses.
The carrying values of property, plant and equipment are reviewed for impairment when events or changes
in circumstances indicate that the carrying value may not be recoverable.
The residual values estimated useful lives and depreciation method are reviewed at each financial year-end,
and adjusted prospectively, if appropriate.
Depreciation
Depreciation is provided on Straight Line Method, as per the provisions of Schedule II of the Companies
Act, 2013 or based on useful life estimated on the technical assessment. Asset class wise useful lives are
as under:
In respect of additions / deletions to the fixed assets / leasehold improvements, depreciation is charged from
the date the asset is ready to use / up to the date of deletion.
De-recognition
An item of plant and equipment is derecognized upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss arising on de recognition of the asset is recognized in the
Statement of Profit and Loss in the year the asset is derecognized.
i.2 Intangible Assets & Amortization
Initial Recognition
Intangible assets acquired separately are initially measured at cost. Intangible assets are recognized if, it is
probable that the future economic benefits that are attributable to the asset will flow to the Company and the
cost of the asset can be measured reliably.
Cost of separately acquired intangible asset includes its purchase price (after deducting trade discounts
and rebates), import duties & non-refundable purchase taxes, any costs directly attributable to preparing the
asset for its intended use.
Intangible assets acquired in a business combination are recognized at fair value at the acquisition date.
Subsequently, intangible assets are carried at cost less any accumulated amortization and accumulated
impairment losses, if any.
Subsequent measurement and amortization
Intangible assets are stated at cost of acquisition less accumulated amortization and accumulated impairment
losses, if any. Subsequent expenditure related to an item of intangible assets are added to its book value
only if they increase the future benefits from the existing asset beyond its previously assessed standard of
performance.
The carrying values of intangible assets are reviewed for impairment when events or changes in circumstances
indicate that the carrying value may not be recoverable.
The residual values estimated useful lives and amortization method are reviewed at each financial year-end,
and adjusted prospectively, if appropriate.
The useful lives of intangible assets are assessed as either finite or indefinite. Finite-life intangible assets are
amortized on a straight-line basis over the period of their estimated useful lives. Estimated useful lives by
major class of finite-life intangible assets are as follows:
The amortization expense is recognized in the Statement of Profit and Loss unless such expenditure forms
part of carrying value of another asset.
Indefinite-life intangible assets comprises of those assets for which there is no foreseeable limit to the period
over which they are expected to generate net cash inflows. These are considered to have an indefinite life,
given the strength and durability of the Company and the level of marketing support.
De-recognition
An item of Intangible Assets is derecognized upon disposal or when no future economic benefits are expected
from its use or disposal. Any gain or loss arising on derecognition of the asset is recognized in the profit or
loss in the year the asset is derecognized.
For indefinite life intangible assets, the assessment of indefinite life is reviewed annually to determine
whether it continues, if not, it is impaired or changed prospectively based on revised estimates.
4.3 Inventories
Inventories are valued at lower of cost and net realizable value. Cost of inventory includes cost of purchase
and other costs incurred in bringing them to their present location and condition. Net Realizable Value in
respect of consumables is the estimated current procurement price in the ordinary course of the business.
4.4 Impairment of Non - Financial Assets
At each reporting date, the Company assesses whether there is any indication that an asset may be impaired.
Where an indicator of impairment exists, the Company makes a formal estimate of recoverable amount.
Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired
and is written down to its recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an
individual asset, unless the asset does not generate cash inflows that are largely independent of those
from other assets or group of assets, in which case, the recoverable amount is determined for the Cash
Generating Unit(“CGU”) to which the asset belongs.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre¬
tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset.
Impairment losses of continuing operations, including impairment on inventories, are recognized in the
Statement of Profit and Loss, except for properties previously revalued with the revaluation surplus taken to
Other Comprehensive Income (“OCI”). For such properties, the impairment is recognized in OCI up to the
amount of any previous revaluation surplus.
After impairment, depreciation or amortization is provided on the revised carrying amount of the asset over
its remaining useful life.
The impairment assessment for all assets is made at each reporting date to determine whether there is
an indication that previously recognized impairment losses no longer exist or have decreased. If such
indication exists, the Company estimates the asset's or CGU's recoverable amount. A previously recognized
impairment loss is reversed only if there has been a change in the assumptions used to determine the
asset's recoverable amount since the last impairment loss was recognized. 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 recognized for the asset in
prior years. Such reversal is recognized in the Statement of Profit and Loss.
4.5 Financial Assets
Financial assets comprise of investments in equity and debt securities, mutual funds, loans, trade receivables,
cash and cash equivalents and other financial assets.
Initial recognition
All financial assets except investments in subsidiaries, associates and jointly controlled entities are recognized
initially at fair value. However, trade receivables that do not contain a significant financing component are
measured at transaction price. Purchases or sales of financial asset that require delivery of assets within a
time frame established by regulation or convention in the market place (regular way trades) are recognized
on the trade date, i.e., the date that the Company commits to purchase or sell the assets.
Subsequent Measurement
a) Financial assets measured at amortized cost:
Financial assets held within a business model whose objective is to hold financial assets in order to
collect contractual cash flows and the contractual terms of the financial assets give rise on specified
dates to cash flows that are solely payments of principal and interest on the principal amount outstanding
are measured at amortized cost using effective interest rate (EIR) method. The EIR amortization is
recognized as finance income in the Statement of Profit and Loss.
The Company while applying above criteria has classified the following at amortized cost:
a. Loans
b. Trade Receivable
c. Cash and Cash Equivalents
d. Other Financial Assets
b) Financial assets at Fair Value through Other Comprehensive Income (FVTOCI):
Financial assets held within a business model whose objective is to hold financial assets in order to
collect contractual cash flows, selling the financial assets and the contractual terms of the financial
assets give rise on specified dates to cash flows that are solely payments of principal and interest on
the principal amount outstanding are measured at FVTOCI. Fair Value movements in financial assets
at FVTOCI are recognized in other comprehensive income. Equity instruments held for trading are
classified at Fair Value through Profit or Loss (FVTPL). For other equity instruments the Company
classifies the same either at FVTOCI or FVTPL on instrument to instrument basis. The classification
is made on initial recognition and is irrevocable. Fair value changes on equity investments at FVTOCI,
excluding dividends are recognized in other comprehensive income (OCI).
c) Financial assets at Fair Value through Profit or Loss (FVTPL)
Financial asset are measured at FVTPL if it does not meet the criteria for classification as measured at
amortized cost or at FVTOCI. All fair value changes are recognized in the Statement of Profit and Loss.
Impairment
Financial assets are tested for impairment based on the expected credit losses in accordance with Ind AS 109 on
the following financial assets:
a) Trade Receivables
An impairment analysis is performed at each reporting date. The expected credit losses over life time of
the asset are estimated by adopting the simplified approach using a provision matrix on its portfolio of
trade receivables, which is based on historical loss rates reflecting current condition and forecasts of future
economic conditions. In this approach assets are grouped on the basis of similar credit characteristics such
as customer segment, past due status and other factors which are relevant to estimate the expected cash
loss from these assets.
b) Other financial assets
Other financial assets are tested for impairment based on significant change in credit risk since initial
recognition and impairment is measured based on probability of default over the life time when there is
significant increase in credit risk.
De-recognition
A financial asset is derecognized only when:
• The Company has transferred the rights to receive cash flows from the financial asset, or
• The contractual right to receive cash flows from financial asset is expired, or
• Retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual
obligation to pay the cash flows to one or more recipients.
Where the entity has transferred an asset and transferred substantially all risks and rewards of ownership
of the financial asset, in such cases the financial asset is derecognized. Where the entity has neither
transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset,
the financial asset is also derecognized if the Company has not retained control of the financial asset.
4.6 Cash and Cash Equivalents
Cash and cash equivalents comprises cash at bank (including deposits with banks with original maturity of
three months or less) and cash in hand and short-term investments with an original maturity of three months
or less. Deposits with banks are subsequently measured at amortized cost and short term investments are
measured at fair value through statement of profit & loss.
4.7 Non-current Assets held for sale
Non-current assets or disposal groups comprising of assets and liabilities are classified as ‘held for sale'
when all the following criteria are met:
(i) decision has been made to sell,
(ii) the assets are available for immediate sale in its present condition,
(iii) the assets are being actively marketed and
(iv) sale has been agreed or is expected to be concluded within 12 months of the Balance Sheet date.
Subsequently, such non-current assets and disposal groups classified as ‘held for sale' are measured at the
lower of its carrying value and fair value less costs to sell. Non-current assets held for sale are no longer
depreciated or amortized.
4.8 Share Capital
Equity Shares are classified as equity.
4.9 Financial Liabilities
Initial Recognition
Financial liabilities are recognized when, and only when, the Company becomes a party to the contractual
provisions of the financial instrument. The Company determines the classification of its financial liabilities
at initial recognition. All financial liabilities are recognized initially at fair value plus any directly attributable
transaction costs, such as loan processing fees and issue expenses.
Subsequent Measurement - at Amortized Cost
After initial recognition, financial liabilities are subsequently measured at amortized cost using the effective
interest rate (EIR) method. Gains and losses are recognized in the Statement of Profit and Loss when the
liabilities are de recognized, and through the amortization process.
De-recognition
A financial liability is de-recognized when the obligation under the liability is discharged or cancelled or
expired. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or modification
is treated as a de-recognition of the original liability and the recognition of a new liability, and the difference
in the respective carrying amounts is recognized in Statement of Profit and Loss.
Offsetting of Financial Instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there
is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a
net basis, to realize the assets and settle the liabilities simultaneously.
4.10 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 capitalized as part of the
cost of the respective asset. Capitalisation of borrowing cost is suspended in the period during which the
active development is delayed due to other than temporary interruption. All other borrowing costs consist of
interest, exchange differences arising from foreign currency borrowings to the extent they are regarded as an
adjustment to the interest cost and other costs that an entity incurs in connection with the borrowing of funds.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalization.
4.11 Employee Benefits
Employee benefits are charged to the Statement of Profit and Loss for the year.
Retirement benefits in the form of Provident Fund are defined contribution scheme and such contributions
are recognized, when the contributions to the respective funds are due. There are no other obligation other
than the contribution payable to the respective funds.
Gratuity liability is defined benefit obligation and is provided for on the basis of actuarial valuation on projected
unit credit method made at the end of each financial year. Re measurement in case of defined benefit plans
gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized
in the period in which they occur, directly in other comprehensive income and they are included in the
Statement of Changes in Equity.
Compensated absences are provided for on the basis of actuarial valuation on projected unit credit method
made at the end of each financial year. Re-measurements as a result of experience adjustments and changes
in actuarial assumptions are recognized in Statement of Profit and Loss.
The amount of Non-current and Current portions of employee benefits is classified as per the actuarial
valuation at the end of each financial year.
4.12 Income Taxes
Income tax expense is comprised of current and deferred taxes. Current and deferred tax is recognized in net
income except to the extent that it relates to a business combination, or items recognized directly in equity
or in other comprehensive income. Current income tax relating to items recognized outside profit and loss is
recognized outside profit and loss (either in other comprehensive income or in equity). Current income taxes
for the current period, including any adjustments to tax payable in respect of previous years, are recognized
and measured at the amount expected to be recovered from or payable to the taxation authorities based on
the tax rates that are enacted or substantively enacted by the end of the reporting period.
Deferred income tax assets and liabilities are recognized for temporary differences between the Financial
Statement carrying amounts of existing assets and liabilities and their respective tax base using the tax rates
that are expected to apply in the period in which the deferred tax asset or liability is expected to settle, based
on the laws that have been enacted or substantively enacted by the end of reporting period.
Deferred tax assets and liabilities are not recognized if the temporary difference arises from goodwill or from
the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that
affects neither the taxable income nor the accounting income. Deferred tax assets are generally recognized
for all deductible temporary differences to the extent that it is probable that taxable income will be available
against which they can be utilized. Deferred tax assets are reviewed at each reporting date and reduced
accordingly to the extent that it is no longer probable that they can be utilized.
Deferred tax assets and liabilities are offset when there is legally enforceable right of offset current tax assets
and liabilities when the deferred tax balances relate to the same taxation authority. Current tax asset and
liabilities are offset where the entity has legally enforceable right to offset and intends either to settle on a net
basis, or to realize the asset and settle the liability simultaneously. Deferred Tax relating to items recognized
outside profit or loss is recognized outside profit and loss (either in other comprehensive income or in equity).
4.13 Leases
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.
Company as a lessee
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 date of commencement of leases, the Company recognizes a right of use asset (ROU) and a corresponding
lease liability for all the lease arrangements, except for those with a term of twelve month or less (short term
leases) and leases of low value assets. For these leases, the Company recognizes lease payments as an
operating expense on straight line basis over the lease term.
Initial Measurement
ROU assets are initially measured at cost that comprises of the initial amount of lease liability adjusted for
any lease payments made at or prior to the date of commencement, initial direct costs and lease incentives
(if any).
Lease Liability is initially measured at the present value of future lease payments that are not paid at that
date. The lease payments shall be discounted using the interest rate implicit in the lease or, if not readily
determinable, incremental borrowing rate.
Subsequent Measurement
ROU assets are subsequently measured at cost less accumulated depreciation and impairment loss, if any.
ROU is depreciated from the date of commencement on a straight line basis over the shorter of lease term
or useful life of the underlying asset.
Lease Liability is subsequently measured by increasing the carrying amount to reflect interest and reducing
the carrying amount to reflect the lease payments made.
The carrying amount of lease liability is remeasured to reflect any reassessment or lease modification such
as change in lease term.
ROU asset and lease liability are separately presented in the balance sheet and lease payments have been
classified as financing cash flows.
Company as a lessor
Leases for which the Company is a lessor is classified as finance or operating lease. Leases in which the
Company does not transfer substantially all the risks and rewards incidental to ownership of an asset are
classified as operating leases. Lease income from operating leases is recognized in Statement of Profit and
Loss on a straight line basis over the lease term unless the receipts are structured to increase in line with
expected general inflation to compensate for the expected inflationary cost increases. The respective leased
assets are included in the balance sheet based on their nature.
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