2. Summary of Material Accounting Policies2.1 Basis of Preparation of Financial Statement
The standalone financial statements have been
prepared in accordance with Indian Accounting
Standards ("Ind-AS”) notified under Section
133 of the Companies Act, 2013, read with the
Companies (Indian Accounting Standards) Rules,
2015.
Historical Cost Conventions and Fair Value
These standalone financial statements have been
prepared on a historical cost basis, except for
items required to be measured at fair value under
Ind AS.
Historical cost is generally based on the fair value
of the consideration given in exchange for goods
and services. Fair value is the price that would
be received to sell an asset or paid to transfer a
liability in an orderly transaction between market
participants at the measurement date, regardless
of whether that price is directly observable or
estimated using another valuation technique.
Reporting Presentation Currency
The standalone financial statements are
presented in Indian Rupees, which is the
Company’s functional and presentation currency.
All amounts are presented in Rupees in millions,
unless otherwise stated.
Current and non-current classification
The Company presents assets and liabilities in the
balance sheet based on current and non-current
classification.
An asset is classified as current when it is
expected to be realised, sold or consumed in the
Company’s normal operating cycle; held primarily
for trading; expected to be realised within twelve
months after the reporting period; or is cash or
cash equivalent unless restricted from being
exchanged or used to settle a liability for at least
twelve months after the reporting period. Current
assets include the current portion of non- current
financial assets All other assets are classified as
non-current.
A liability is classified as current when it is
expected to be settled in the Company’s normal
operating cycle; held primarily for trading; due
to be settled within twelve months after the
reporting period; or the Company does not have
an unconditional right to defer settlement for at
least twelve months after the reporting period.
Current liabilities include current portion of
noncurrent financial liabilities. All other liabilities
are classified as non-current. Deferred tax assets
and liabilities are classified as non-current.
Operating cycle
The Company has identified twelve months as its
operating cycle.
2.2 Use of Estimates and judgments
The preparation of the standalone financial
statement requires management to make
estimates, judgements and assumptions
that affect the reported amounts of assets
and liabilities, income and expenses and the
disclosures. Actual results could differ from those
estimates. Estimates and underlying assumptions
are reviewed on an ongoing basis, and appropriate
changes are made as management becomes
aware of the circumstances surrounding the
estimates. Changes in estimates are reflected in
the financial statement in the period in which
changes are made and if material, their effects
are disclosed in the notes to the standalone
Financial Statement. Areas involving significant
judgement or estimation include useful lives and
residual values of property, plant and equipment
and leased assets; impairment and expected
credit loss of financial assets; net realisable
value of inventories; fair value measurement of
financial instruments; recognition of deferred tax
assets; provisions including warranty obligations;
employee benefit obligations; and assessment
of lease terms. The area involving measurement,
estimates and judgements are as under:-
a) Fair value measurement
b) Deferred Tax
c) Rate of Depreciation
2.3 Revenue Recognition
Revenue from contracts with customers/
Income from services:
The Company recognises revenue when
‘control’ of the goods or services underlying the
particular performance obligation is transferred
to the customer at an amount that reflects the
consideration the Company expects to receive in
exchange for those products or services.
Revenue from sale of products is recognised
upon transfer of control of promised products
to customers, generally on delivery of the goods.
Revenue is measured at the transaction price,
which is the consideration, net of trade discounts
and volume discounts/incentives, if any. Revenue
also excludes taxes collected from customers.
Revenue from services is recognized, as per
contractual terms with the customer, over period
of time and in the accounting period in which the
services are rendered.
Revenue towards satisfaction of a performance
obligation is measured at the amount of
transaction price (net of variable consideration)
allocated to that performance obligation. The
transaction price of goods sold, and services
rendered is net of variable consideration on
account of various discounts and schemes offered
by the Company as part of the contract.
Export incentive has been recognized when the
right to receive credit as per the terms of the
scheme is established in respect of exports made
and when there is reasonable certainty regarding
the ultimate collection of the relevant export
proceeds.
Lease income from operating leases is recognized
in the statement of profit and loss on a straight¬
line basis over the lease term, unless another
systematic basis better represents the pattern
of benefit from the leased asset. It is more
representative of the time pattern in which
benefit derived from the use of the leased asset
is diminished. Costs including depreciation,
incurred in earning the lease income are
recognized as an expense. Lease income
(excluding receipts for services provided such
as insurance and maintenance) is recognized in
the statement of profit and loss on a straight¬
line basis over the lease term. The depreciation
of leased assets should be on a basis consistent
with the normal depreciation policy of the lessor
for similar assets, and the depreciation charge
should be calculated on the basis of leasing
period is 4 years and considering residual value
20% Depreciation amortized on leased assets in
the books of accounts is at the rate 20% over the 4
years as balance being the residual value of asset
leased.
2.4 Other Income
Interest income is recognized using the effective
interest rate.
Net gains or losses on financial instruments
measured at fair value through profit or loss and
foreign exchange differences not arising from
revenue transactions are presented under other
income/other gains and losses, as appropriate.
Corporate guarantee commission from
subsidiaries is recognised over the period for
which the guarantee is provided, based on
the terms of the arrangement. Unless such
activity forms part of ordinary operations, such
commission is classified as other income.
2.5 Retirement and other employee benefits:
The Code on Social Security, 2020, and the Code
on Wages, 2019, received Presidential assent and
were subsequently notified in the Official Gazette.
The Government of India has implemented these
Codes effective November 21, 2025, with final rules
being notified on April 1, 2026.
The Company has assessed the impact of these
Codes on its financial statements, particularly
concerning the revised definition of ‘Wages’ for
the calculation of gratuity, provident fund, and
leave encashment. Accordingly, the Company
has re-evaluated its employee benefit obligations
through an updated actuarial valuation as of
March 31, 2026.
i. Short-term employee benefits
Short-term employee benefits are recognised
as an expense at the undiscounted amount
expected to be paid as the related services
are rendered.
ii. Defined benefit plan
The Company’s gratuity plan is funded,
the defined benefit obligation of which is
determined annually by a qualified actuary
using the projected unit credit method as at
each balance sheet date. The liability or asset
recognised in the Balance Sheet is the present
value of the defined benefit obligation at
the end of the reporting period less the fair
value of plan assets. Re-measurement of
defined benefit obligation, which comprises
of actuarial gains and losses are recognised
in other comprehensive income in the
period in which they occur. The Company
determines the net interest expenses on
the net defined benefit obligation, taking
into account any changes in the net defined
benefit liability during the period as a result
of contribution and benefit payments. Net
interest expenses related to defined benefit
plan are recognized in employee benefit
expenses in the statement of profit and loss.
The benefit vests upon completion of five
years of continuous service and once vested
it is payable to employees on retirement or
on termination of employment. In case of
death while in service, the gratuity is payable
irrespective of vesting.
iii. Defined contribution plan
Defined contribution plans, including
provident fund and employee state
insurance, are recognised as expense when
employees render the related services and
the Company has no further obligation
beyond the contributions payable.
iv. Long-term employee benefits
The Company’s obligation in respect of
long term employee benefits other than
postemployment benefits is the amount of
future benefit that employees have earned
in return for their service in the current and
prior periods. The obligation is measured on
the basis of an annual independent actuarial
valuation using the projected unit credit
method as at each balance sheet date.
The tax expense comprises of income tax and
deferred tax. Tax is recognized in Statement
of Profit and Loss, except to the extent that it
relates to items recognized in the comprehensive
income or in equity.
i. Current Income taxes: Current income
tax for the current and prior periods are
measured at the amount expected to be
recovered from or paid to the taxation
authorities based on the taxable income for
the period. The tax rates and tax laws used to
compute the current tax amounts are those
that are enacted or substantively enacted
as at the reporting date and applicable for
the period. The Company offsets current
tax assets and current tax liabilities, where it
has a legally enforceable right to set off the
recognized amounts and where it intends
either to settle on a net basis, or to realize the
asset and liability simultaneously.
ii. Deferred taxes: Deferred income tax is
recognized using the balance sheet approach.
Deferred income tax assets and liabilities
are recognized for deductible and taxable
temporary differences arising between the
tax base of assets and liabilities and their
carrying amount in Financial Information,
except when the deferred income tax arises
from the initial recognition of goodwill or an
asset or liability in a transaction that is not
a business combination and affects neither
accounting nor taxable profits or loss at the
time of the transaction.
Deferred income tax assets are recognized to the
extent it is probable that taxable profit will be
available against which the deductible temporary
differences and the carry forward of unused tax
credits and unused tax losses can be utilized.
Deferred income tax liabilities are recognized
for all taxable temporary differences except in
respect of taxable temporary differences that is
expected to reverse within the tax holiday period.
The offsets deferred income tax assets and
liabilities, where it has a legally enforceable right
to offset current tax assets against current tax
liabilities, and they relate to taxes levied by the
same taxation authority on either the same taxable
entity, or on different taxable entities where there
is an intention to settle the current tax liabilities
and assets on a net basis or their tax assets and
liabilities will be realized simultaneously.
2.7 Property, Plant and Equipment
Recognition and measurement: Property,
plant and equipment are measured at cost less
accumulated depreciation and impairment
losses, if any.
Expenditure during construction / erection
period is included under capital work-in-progress
and is allocated to the respective property, plant
and equipment on completion of construction /
erection.
2.8 Depreciation and Amortization:
Depreciation on all assets of the Indian Company
has been provided on Written down value at the
rates and in the manner specified in schedule II of
the Companies Act, 2013. The useful lives of assets
would be reviewed by the management at each
financial year and revised, if appropriate. In case of
a revision the unamortized depreciable amount
is charged over the revised remaining useful life
of the asset.
Foreign currency transactions are recorded
at the exchange rate prevailing on the date
of the transaction. Monetary assets and
liabilities denominated in foreign currencies are
retranslated at the functional currency spot rate
of exchange at the reporting date. Exchange
differences arising on settlement or translation
of monetary items are taken to the statement of
profit and loss. Non-monetary items measured
at historical cost are translated at the exchange
rate on 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.
The gain or loss arising on retranslation of
non-monetary items is treated in line with the
recognition of gain or loss on change in fair value
of the item (i.e., translation differences on items
whose fair value gain or loss is recognized in
other comprehensive income or profit or loss is
also recognized in other comprehensive income
or profit or loss, respectively). The gain and loss
on retranslation of Property, Plant & Equipment
of Foreign Subsidiary has been routed through
Property, Plant & Equipment.
2.10Borrowing costs
Borrowing costs consist of interest and other
costs incurred in connection with the borrowing
of funds. Borrowing costs also include exchange
differences to the extent regarded as an
adjustment to the borrowing costs.
Borrowing costs that are attributable to the
acquisition or construction of qualifying assets
(i.e., an asset that necessarily takes a substantial
period of time to get ready for its intended use)
are capitalized as a part of the cost of such assets.
All other borrowing costs are charged to the
Statement of Profit and Loss.
2.11 Inventories
Inventories are stated at the lower of cost and
net realisable value. Costs of inventories are
determined on a first-in-first-out basis. Net
realisable value represents the estimated selling
price for inventories less all estimated costs of
completion and costs necessary to make the sale.
The cost includes cost of purchases, which are net
of discounts and rebates and other costs incurred
in bringing the inventories to their present
location and condition.
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