2.[ MATERIAL ACCOUNTING POLICIES
This note provides a list of the material accounting policies
adopted in the presentation of these standalone financial
statements.
2.1 Basis of Preparation
i. Compliance with Ind AS
The standalone financial statements of the
Company have been prepared in accordance with
Indian Accounting Standards ("Ind AS") as per the
Companies (Indian Accounting Standards) Rules,
2015 as amended and notified under Section 133 of
the Companies Act 2013 (the "Act") and other relevant
provisions of the Act. In accordance with proviso
to Rule 4A of The Companies (Accounts) Rules,
2014, the terms used in these financial statements
are in accordance with the definition and other
requirements specified in the applicable Accounting
Standards.
ii. Authorization of standalone financial statements
The authorization of standalone financial statements
(hereinafter referred as "Financial Statements") of
the Company for the year ended March 31, 2025
were authorized for issue by the Board of Directors at
their meeting held on May 19, 2025.
iii. Accrual Basis of Accounting
These standalone financial statements have been
prepared on an accrual basis under the historical
cost convention or amortization cost basis except for
the following assets and liabilities, which have been
measured at fair value:
a. Certain financial assets and liabilities (including
derivative instruments) that are measured at
fair value.
b. Defined benefits plans-plan assets measured at
fair value.
2.2 Functional and presentation currency
These standalone financial statements are presented in
Indian Rupees ('), which is also the Company’s functional
currency and all amounts disclosed in the standalone
financial statements and notes have been rounded off to
the nearest Lakhs (' '00,000) upto two decimals, except
when otherwise indicated.
2.3 Current versus non-current classification
The Company presents its assets and liabilities in
the Balance Sheet based on current or non-current
classification.
An asset is treated as current if it is:
a) expected to be realized or intended to be sold or
consumed in normal operating cycle;
b) held primarily for the purpose of trading;
c) expected to be realized within twelve months after
the reporting period; or
d) the cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for at
least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is treated as current when:
a) it is expected to be settled in normal operating cycle;
b) it is held primarily for the purpose of trading;
c) it is due to be settled within twelve months after the
reporting period; or
d) there is no unconditional right to defer the settlement
of the liability for at least twelve months after the
reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non¬
current on net basis.
All assets and liabilities have been classified as current
or non-current as per Company’s normal operating
cycle. Based on the nature of operations, the Company
has ascertained its operating cycle as twelve months for
the purpose of current and non-current classification of
assets and liabilities.
2.4 Property, Plant and Equipment
Recognition and Measurement
Property, Plant and Equipment is recognized when 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.
Property, Plant and Equipment stated at cost less
accumulated depreciation and accumulated impairment
losses, if any. The initial cost of an asset comprises its
purchase price, non-refundable purchase taxes and any
costs directly attributable to bringing the asset into the
location and condition necessary for it to be capable of
operating in the manner intended by management, the
initial estimate of any decommissioning obligation, if any,
and, for assets that necessarily take a substantial period
of time to get ready for their intended use, finance costs.
The purchase price is the aggregate amount paid and the
fair value of any other consideration given to acquire the
asset.
If significant parts of an item of Property, Plant and
Equipment have different useful lives, then those are
accounted as separate items (major components) of
Property, Plant and Equipment. The carrying amount
of any component accounted as a separate asset is
derecognized when replaced. All other repairs and
maintenance are charged to Statement of Profit or Loss
during the reporting period in which they are incurred.
Store and spares which meets the definition of Property,
Plant and Equipment and satisfy the recognition criteria
as per Ind AS 16 are capitalized as Property, Plant and
Equipment.
Freehold land is carried at historical cost less impairment
loss, if any.
Derecognition
The carrying amount of an item of Property, Plant and
Equipment is de-recognized upon disposal or when
no future economic benefit is expected to arise from
its continued use. Any gain or loss arising on the de¬
recognition of an item of Property, Plant and Equipment
is determined as the difference between the net disposal
proceeds and the carrying amount of the item and is
recognized in Statement of Profit or Loss. Gain or loss
arising from de-recognition of an intangible are recognized
in Statement of Profit or Loss when asset is derecognized.
Property, plant and equipment which are not ready for
intended use on the date of Balance Sheet are disclosed
as capital work-in-progress. It is carried at cost, less
any recognized impairment loss. Such properties are
classified and capitalized to the appropriate categories of
Property, Plant and Equipment when completed and ready
for intended use. Depreciation of these assets, on the
same basis as other property assets, commences when
the assets are ready for their intended use.
2.6 Depreciation
Depreciation on Property, Plant and Equipment is
provided on the Straight-Line Method in accordance with
requirements prescribed under Schedule II to the Act. The
Company has assessed the estimated useful lives of its
Property, Plant and Equipment and has adopted the useful
lives and residual value as prescribed.
Freehold land is not depreciated.
The estimated useful lives, residual values and depreciation
method are reviewed at the end of each reporting period,
and changes, if any, are accounted prospectively.
Depreciation is calculated on a straight line basis over the
estimated useful life of the assets as follows:
Items of Property, Plant and Equipment costing up to
' 5,000 are fully depreciated in the year of purchase or
capitalization.
Depreciation for assets purchased or sold during the
period is charged on a pro-rata basis.
The Company depreciates significant components of the
main asset (which have different useful lives as compared
to the main asset) based on the individual useful life of
those components. Useful life for such components of
Property, Plant and Equipment is assessed based on the
historical experience and internal technical inputs.
2.7 Investments in Subsidiary, Associates and Joint ventures
The Company’s investments in its subsidiaries, associates
and joint ventures are accounted at cost and reviewed for
impairment at each reporting date in accordance with the
policy described in note 2.9 below.
2.8 Intangible Assets
Recognition and Measurement
Intangible assets acquired separately are measured on
initial recognition at cost. Following initial recognition,
intangible assets are stated at acquisition cost, net of
accumulated amortization and accumulated impairment
losses, if any.
Amortization
Intangible assets with finite useful lives are amortized
on straight line basis over their economic useful life and
assessed for impairment whenever there is an indication
that the intangible asset may be impaired. The estimated
useful life and amortization method are reviewed at the
end of each reporting period, and any changes, if any, are
accounted prospectively.
Derecognition of intangible assets
An intangible asset is derecognized on disposal, or when
no future economic benefits are expected from use or
disposal. Gains or losses arising from derecognition of
an intangible asset, measured as the difference between
the net disposal proceeds and the carrying amount of the
asset, are recognized in statement of profit and loss when
the asset is derecognized.
Goodwill
Goodwill on acquisitions of subsidiaries is included in
intangible assets. Goodwill is not amortized but it is
tested for impairment annually, or more frequently if
events or changes in circumstances indicate that it might
be impaired, and is carried at cost less accumulated
impairment losses. Gains and losses on the disposal of
an entity include the carrying amount of goodwill relating
to the entity sold.
Goodwill is allocated to cash-generating units for the
purpose of impairment testing. The allocation is made to
those cash-generating units or groups of cash-generating
units that are expected to benefit from the business
combination in which the goodwill arose. The units or
groups of units are identified at the lowest level at which
goodwill is monitored for internal management purposes,
which in our case are the operating segments.
2.9 Impairment of assets
At the end of each reporting period, the Company reviews
the carrying amounts of its tangible, intangible assets
and investment in subsidiary, associate and joint-venture
to determine whether there is any indication that those
assets may be impaired and also whether there is any
indication of reversal of impairment loss recognized
in previous periods. If any such indication exists, the
recoverable amount is estimated, and impairment loss,
if any, is recognized and the carrying amount is reduced
to its recoverable amount. Recoverable amount is the
higher of the value in use or fair value less cost to sell,
of the asset or cash generating unit, as the case may be.
Recoverable amount is determined for individual assets,
unless asset does not generate cash inflows that are
largely independent of those from other assets or group of
assets. When it is not possible to estimate the recoverable
amount of an individual asset, the Company estimates the
recoverable amount of the cash generating unit to which
the asset belongs.
In assessing the 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
for which the estimates of future cash flows have not been
adjusted.
An impairment loss is recognized immediately in
the Statement of Profit or Loss. When impairment
subsequently reverses, the carrying amount of the asset is
increased to the revised estimate of its recoverable amount,
but upto the amount that would have been determined,
had no impairment loss been recognized for that asset or
cash generating unit. A reversal of an impairment loss is
recognized immediately in the Statement of Profit or Loss.
2.10 Inventories
Inventories are valued as follows:
Raw materials, components and stores and spares:
At lower of cost and net realizable value. Cost of inventory
comprises all costs of purchases, duties, taxes (other
than those subsequently recoverable from tax authorities)
and all other costs incurred in bringing the inventory to
their present location and condition and is determined
on a moving weighted average cost basis. However,
materials and other items held for use in the production of
inventories are not written down below cost if the finished
products in which they will be incorporated are expected
to be sold at or above cost.
At lower of cost and net realizable value. Cost for this
purpose includes material, labour and appropriate
allocation of overheads including depreciation. Cost is
determined on a weighted average basis.
Finished goods:
At lower of cost and net realizable value. Cost for this
purpose includes material, labour, and appropriate
allocation of overheads. Cost is determined on a weighted
average basis.
Net realizable value is the estimated selling price in the
ordinary course of business, less estimated costs of
completion and estimated costs necessary to make the
sale. Provision for obsolescence is determined based
on management's assessment and is charged to the
Standalone Statement of Profit and Loss.
2.11 Financial Instruments
Financial assets and Financial liabilities are recognized
when the Company becomes a party to the contractual
provisions of the instruments.
Initial Recognition Financial Assets and Financial
Liabilities:
Financial assets and Financial liabilities are initially
measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial assets
and financial liabilities (other than financial assets and
financial liabilities at Fair Value through Profit or Loss
and ancillary costs related to borrowings) are added to
or deducted from the fair value of the financial assets or
financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of
financial assets or financial liabilities at fair value through
profit or loss are recognized in the Statement of Profit or
Loss. Since, trade receivables do not contain significant
financing component they are measured at transaction
price.
Classification and Subsequent Measurement: Financial
Assets
The Company classifies financial assets as subsequently
measured at amortized cost, fair value through other
comprehensive income (FVTOCI) or fair value through
profit or loss (FVTPL) on the basis of following:
• the entity's business model for managing the
financial assets; and
• the contractual cash flow characteristics of the
financial assets.
Amortized Cost:
A financial asset shall be classified and measured at
amortized cost, if both of the following conditions are met:
• the financial asset is 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 asset give
rise on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.
FVTOCI:
A financial asset is classified and measured at FVTOCI if
both of the following conditions are met: -
it is held within a business model whose objective is
achieved by both collecting contractual cash flows and
selling financial assets; and -
the contractual terms give rise on specified dates to cash
flows that are solely payments of principal and interest on
the principal amount outstanding.
Movements in the carrying amount are taken through
OCI, except for the recognition of impairment gains or
losses and interest revenue which are recognized in profit
and loss. When the financial asset is derecognized, the
cumulative gain or loss previously recognized in OCI is
reclassified from equity to profit or loss and recognized in
other gains/ (losses). Interest income from these financial
assets is included in other income using the effective
interest rate method.
FVTPL:
A financial asset shall be classified and measured at FVTPL
unless it is measured at amortized cost or at FVTOCI.
All recognized financial assets are subsequently measured
in their entirety at either amortized cost or fair value,
depending on the classification of the financial assets.
Trade receivables are recognized initially at fair value
and subsequently measured at amortized cost using the
effective interest method less provision/or impairment.
Classification and Subsequent Measurement: Financial
liabilities:
The Company’s financial liabilities include trade and other
payables, loans and borrowing including bank overdrafts,
financial guarantee contracts and derivative financial
instruments.
Financial Liabilities at FVTPL:
Financial liabilities are classified as at FVTPL when the
financial liability is held for trading or are designated upon
initial recognition as FVTPL.
Gains or Losses on liabilities held for trading are recognized
in the Statement of Profit or Loss.
Write-off:
The gross carrying amount of a financial asset is written
off when there no reasonable expectations of recovering
a financial asset in its entirety or a portion thereof. The
Company individually makes an assessment with
respect to the timing and amount of write-off based on
whether there is a reasonable expectation of recovery.
The Company expects no significant recovery from the
amount written off. However, financial assets that are
written off could still be subject to enforcement activities
in order to comply with the Company’s procedures for
recovery of amounts due.
2.12 Other Financial Liabilities:
Other financial liabilities (including borrowings and trade
and other payables) are subsequently measured at
amortized cost using the effective interest method.
The effective interest method is a method of calculating
the amortized cost of a financial liability and of allocating
interest expense over the relevant period. The effective
interest rate is the rate that exactly discounts estimated
future cash payments (including all fees and points paid or
received that form an integral part of the effective interest
rate, transaction costs and other premiums or discounts)
through the expected life of the financial liability, or (where
appropriate) a shorter period, to the net carrying amount
on initial recognition.
2.13 Impairment of financial assets:
The Company recognizes loss allowance using expected
credit loss model for financial assets which carried at
amortized cost. Expected credit losses are weighted
average of credit losses with the respective risks of default
occurring as the weights. Credit loss is the difference
between all contractual cash flows that are due to the
Company in accordance with the contract and all the cash
flows that the Company expects to receive, discounted at
original effective rate of interest.
For Trade Receivables, the Company uses the simplified
approach permitted by Ind AS 109 Financial Instruments
which requires expected life time losses to be recognized
from initial recognition of receivables.
2.14 Derecognition of financial assets:
The Company derecognizes a financial asset when the
contractual rights to the cash flows from the asset expire,
or when it transfers the financial asset and substantially
all the risks and rewards of ownership of the asset to
another party. If the Company neither transfers nor retains
substantially all the risks and rewards of ownership and
continues to control the transferred asset, the Company
recognizes its retained interest in the asset and an
associated liability for amounts it may have to pay. If the
Company retains substantially all the risks and rewards of
ownership of a transferred financial asset, the Company
continues to recognize the financial asset and also
recognizes a collateralised borrowing for the proceeds
received.
On derecognition of a financial asset in its entirety, the
difference between the asset’s carrying amount and the
sum of the consideration received and receivable and
the cumulative gain or loss that had been recognized in
other comprehensive income and accumulated in equity is
recognized in profit or loss if such gain or loss would have
otherwise been recognized in profit or loss on disposal of
that financial asset.
On derecognition of a financial asset other than in its
entirety (e.g. when the Company retains an option to
repurchase part of a transferred asset), the Company
allocates the previous carrying amount of the financial
asset between the part it continues to recognize under
continuing involvement, and the part it no longer
recognizes on the basis of the relative fair values of those
parts on the date of the transfer. The difference between
the carrying amount allocated to the part that is no longer
recognized and the sum of the consideration received for
the part no longer recognized and any cumulative gain
or loss allocated to it that had been recognized in other
comprehensive income is recognized in profit or loss if
such gain or loss would have otherwise been recognized
in profit or loss on disposal of that financial asset. A
cumulative gain or loss that had been recognized in other
comprehensive income is allocated between the part that
continues to be recognized and the part that is no longer
recognized on the basis of the relative fair values of those
parts.
2.15 Financial liabilities and equity instruments:
• Classification as debt or equity:
Debt and equity instruments issued by the Company
are classified as either financial liabilities or as equity
in accordance with the substance of the contractual
arrangements and the definitions of a financial
liability and an equity instrument.
• Equity instruments:
An equity instrument is any contract that evidences
a residual interest in the assets of an entity after
deducting all of its liabilities.
Equity instruments issued by a Company are
recognized at the proceeds received.
2.16 Derecognition of financial liabilities:
The Company derecognizes a financial liability when
its contractual obligations are discharged or cancelled
or expired. The Company also derecognizes a financial
liability when its terms are modified and the cash flows
under the modified terms are substantially different.
2.17 Offsetting financial Instruments:
Financial assets and financial liabilities are offset and
the net amount is reported in the Balance Sheet where
there is a legally enforceable right to offset the recognized
amounts and there is an intention to settle on a net basis
or realize the asset and settle the liability simultaneously.
The legally enforceable right must not be contingent on
future events and must be enforceable in the normal
course of business and in the event of default, insolvency
or bankruptcy of the Company or the counter party.
2.18 Cash and Cash Equivalent
Cash and Cash Equivalent in the Balance Sheet Comprises
of cash at bank and on hand and short-term deposit with
an original deposit of three months or less, which are
subject to an insignificant risk of change in value.
For the purpose of presentation in the Statement of Cash
Flows, cash and cash equivalents include cash on hand,
cash at banks, other short-term deposits as defined above,
bank overdraft, and short term highly liquid investments
that are readily convertible into cash and which are subject
to an insignificant risk of changes in value.
2.19 Employee Stock Option Plan (ESOP)
Equity settled share-based payments to employees and
other providing similar services are measured at fair value
of the equity instruments at grant date.
The fair value determined at the grant date of the equity-
settled share-based payment is expensed on a straight¬
line basis over the vesting period, based on the Company’s
estimate of equity instruments that will eventually vest,
with a corresponding increase in equity.
At the end of each reporting period, the Company revises
its estimates of the number of equity instruments
expected to vest. The impact of the revision of the original
estimates, if any is, recognized in Statement of Profit
and Loss such that the cumulative expenses reflects the
revised estimate, with a corresponding adjustment to the
shared option outstanding account.
No expense is recognized for options that do not ultimately
vest because non market performance and/or service
conditions have not been met.
The dilutive effect of outstanding options is reflected as
additional share dilution in the computation of diluted
earnings per share.
2.20 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 asset. All other borrowing costs are expensed in
the period in which they are incurred. Borrowing costs
consist of interest and other costs that an entity incurs in
connection with the borrowing of funds.
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