2 Significant accounting policies
This Note provides a list of the significant accounting policies adopted by the Company in preparation of these Standalone Financial Statements.
These policies have been consistently applied to all the years presented, unless otherwise stated
a) Basis of preparation
i) Statement of Compliance:
The Financial Statements comply in all material respects with Indian Accounting Standards (Ind AS) notified under Section 133 of the
Companies Act, 2013 (the Act) read with the Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the
Act, as amended.
ii) Historical cost convention:
The standalone financial statements have been prepared on a historical cost basis except for certain financial assets and liabilities
measured at fair value.
iii) The Standalone Financial Statements have been prepared on accrual and going concern basis.
iv) The accounting policies are applied consistently to all the periods presented in the Standalone Financial Statements. All assets and liabilities
have been classified as current or non-current as per the normal operating cycle of the Company and other criteria as set out in the Division 11 of
Schedule III to the Companies Act, 2013. Based on the nature of products and the time between acquisition of assets for processing and their
realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non¬
current classification of assets and liabilities. (Incase of fixed deposit, marked as lien for Overdraft facility, is considered as non current asset
though it is having maturity date below 12 months)
v) Recent accounting pronouncements:
Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies (Indian Accounting
Standards) Rules as issued from time to time. For the year ended March 31, 2025, MCA has notified Ind AS - 117 Insurance Contracts and
amendments to Ind AS 116 - Leases, relating to sale and leaseback transactions, applicable to the Company w.e.f. April 1, 2024. The Company
has reviewed the new pronouncements and based on its evaluation has determined that it does not have any significant impact in its financial
statements.
Ind AS 1 - Presentation of Financial Statements
This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective
date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company has evaluated the amendment and the
impact of the amendment is insignificant in the standalone financial statements.
Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors
This amendment has introduced a definition of 'accounting estimates’ and included amendments to Ind AS 8 to help entities distinguish changes
in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on
or after April 1, 2023. The Company has evaluated the amendment and there is no impact on its standalone financial statements.
Ind AS 12 - Income Taxes
This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and
offsetting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The
Company has evaluated the amendment and there is no impact on its standalone financial statement.
vi) The standalone financial statements are presented in Indian Rupees and all values are rounded to the nearest Lakhs. Any discrepancies in
any table between totals and sums of the amounts listed are due to rounding off.
b) Foreign currency transactions:
i) Functional and presentation currency:
Items included in the Standalone Financial Statements of the Company are measured using the currency of the primary economic environment
in which the Company operates ('functional currency’). The Standalone Financial Statements of the Company are presented in Indian currency
which is also the functional currency of the Company.
ii) Transactions and balances:
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign
exchange gain/(loss) resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in
foreign currencies at year end exchange rates are generally recognised in the Standalone Statement of Profit and Loss except that they are
deferred in other equity if they relate to qualifying cash flow hedges. All other foreign exchange gain/(loss) presented in the Standalone
Statement of Profit and Loss are on a net basis within other income/(expense).
Non-monetary items that are measured at fair value that are denominated in a foreign currency are translated using the exchange rates at the
date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair
value gain/(loss). Non-monetary items that are measured in terms of historical cost in a foreign currency are not revalued.
c) Revenue recognition
i) Revenue from contracts with customers:
The Company is engaged in the manufacturing and supply of industrial and medical gases, while also offering digital software solutions.
Revenue is recognized by when control of the goods is transferred to the customer. A receivable is recognized at the point of delivery, as this
represents the moment when the right to consideration becomes unconditional, with only the passage of time remaining before payment is due.
Revenue is measured at the fair value of the consideration received or receivable, taking into account defined terms of payment and excluding
taxes or duties collected on behalf of the government.
ii) Other Income:
Interest Income from financial assets is recognized using the effective interest rate method. The effective interest rate is the rate that dicounts
estimated future cash receipts through the expected life of the financial assets to the gross carrying amount of a financial asset. When
calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial
instruments (for example, prepayment, extension, call and similar options) but does not consider the expected credit losses.
Dividends are recognized in the Standalone Statement of Profit and Loss only when the right to receive payment is established; it is probable
that the economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.
Lease rental income is recognized on accrual basis.
d) Taxes
Income tax expense comprises current tax and deferred tax. Current tax is the tax payable on the taxable income of the current period based
on the applicable income tax rates. Deferred tax reflects changes in deferred tax assets and liabilities attributable to temporary differences and
unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period.
The Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, on temporary differences arising between the tax bases of assets and liabilities and their carrying
amounts. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not
accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the
transaction affects neither accounting profit nor taxable profit | (tax loss). Deferred income tax is determined using tax rates (and laws) that
have been enacted or substantively enacted by the Standalone Balance Sheet date and are expected to apply when the related deferred
income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that future taxable
amounts will be available to utilise those temporary differences and losses.
The Company considers reversals of deferred income tax liabilities, projected future taxable income and tax planning strategies in making the
assessment of deferred tax liabilities and realizability of deferred tax assets. Based on the level of historical taxable income and projections for
future taxable income over the periods in which the deferred income tax assets are deductible, the Management believes that the Company will
realise the benefits of those deductible differences.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the
deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the Company has a legally
enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income
or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity.
e) Leases
As a lessee:
The Company assesses whether a contract is, or contains a lease, at inception of the 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 commencement date of the lease, the Company recognises a right of use asset and a corresponding lease liability for all lease
arrangements in which it is lessee, except for short-term leases (leases with a term of twelve months or less), leases of low value assets and,
for contract where the lessee and lessor has right to terminate a lease without permission from the other party with no more than an
insignificant penalty. The lease expense of such short-term leases, low value assets leases and cancellable leases, are recognised as an
operating expense on a straight-line basis over the term of the lease.
At commencement date, lease liability is measured at the present value of the lease payments to be paid during non-cancellable period of the
contract, discounted using the incremental borrowing rate. The right of use assets is initially recognised at the amount of the initial
measurement of the corresponding lease liability, lease payments made at or before commencement date less any lease incentives received
and any initial direct costs.
Subsequently the right of use asset is measured at cost less accumulated depreciation and any impairment losses. Lease liability is
subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using effective interest rate method) and
reducing the carrying amount to reflect the lease payments made. The right of use asset and lease liability are also adjusted to reflect any
lease modifications or revised in-substance fixed lease payments.
f) Current / non-current classification
The Company presents assets and liabilities in the balance sheet based on current and non-current classification. An asset is-treated as current
when it is:
a) expected to be realised or intended to be sold or consumed in normal operating cycle;
b) held primarily for the purpose of trading;
c) expected to be realised within twelve months after the reporting period; or
d) 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 it is:
a) expected to be settled in normal operating cycle;
b) held primarily for the purpose of trading;
c) 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 assets and liabilities.
Fixed Deposits held under lien against Bank Overdraft has been considered as non current investment.
g) Property, plant and equipment
All items of property, plant and equipment are stated at acquisition cost net of accumulated depreciation and accumulated impairment losses, if
any. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the carrying amount of asset or recognised as a separate asset, as appropriate, only 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. All other repairs
and maintenance expenses are charged to the Standalone Statement of Profit and Loss during the period in which they are incurred. Gains or
losses arising on retirement or disposal of assets are recognised in the Standalone Statement of Profit and Loss.
Spare parts, stand-by equipment and servicing equipment are recognised as property, plant and equipment if they are held for use in the
production or supply of goods or services, for rental to others, or for administrative purposes and are expected to be used during more than one
period.
Property, plant and equipment which are not ready for intended use as on the date of Standalone Balance Sheet are disclosed as ‘Capital work-
in-progress‘.
Depreciation methods, estimated useful lives and residual value:
The charge in respect of periodic depreciation is derived after determining an estimate of expected useful life and the expected residual value of
the assets at the end of its useful life. The lives are based on historical experience with similar assets as well as anticipation of future events,
which may impact their life.
Depreciation is provided on a pro-rata basis on the straight-line method from the date of acquisition/installation till the date the assets are sold or
disposed of:
The Company, based on technical evaluation carried out by internal technical experts, believes that the useful lives as given above best
represents the period over which the management expects to use these assets. The residual values, useful lives and method of depreciation of
property, plant and equipment are reviewed annually and adjusted prospectively, if appropriate.
The carrying amount of an asset is written down immediately to its recoverable amount if the carrying amount of the asset is greater than its
estimated recoverable amount.
h) Intangible assets
Intangible assets acquired separately are measured, on initial recognition, at cost. Following the initial recognition, intangible assets are carried
at cost less any accumulated amortisation and accumulated impairment losses.
The amortisation expense on intangible assets is recognised in the statement of profit and loss.
Intangible assets are derecognised either when they have been disposed of or when they are permanently withdrawn from use and no future
economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is
recognised in profit or loss in the period of derecognition.
i) Impairment of non-financial assets
The Company assesses, at each reporting date, whether there is any indication that an asset may be impaired. If any indication exists, or when
annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is
the higher of an asset’s or cash-generating unit’s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined
for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of
assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to
its recoverable amount.
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. In determining fair value less costs of disposal, recent market
transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are
corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators. The Company
bases its impairment calculation on detailed budgets and forecast calculations.
Impairment losses are recognised in the statement of profit or loss.
An assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses on
assets no longer exist or have decreased. If such indication exists, the Company estimates the asset’s or CGU’s recoverable amount. A
previously recognised 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 recognised. 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
recognised for the asset in prior years. Such reversal is recognised in the statement of profit or loss.
j) Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks, cash on hand and term deposits with an original maturity of three
months or less, which are subject to an insignificant risk of changes in value.
k) Trade receivables
Trade receivables are recognised when the right to consideration becomes unconditional. These assets are held at amortised cost, using the
effective interest rate (EIR) method where applicable, less provision for impairment based on expected credit loss.
l) Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. Trade
and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised
initially at their fair value and subsequently measured at amortised cost using the EIR method.
m) Inventories
Inventories are stated at cost or net realisable value whichever is lower.
Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to effect the
sale.
n) Investments and other financial assets
Classification:
The Company classifies its financial assets in the following measurement categories:
i) Those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss)
ii) Those measured at amortised cost
Debt instruments:
Initial recognition and measurement:
Financial asset is recognised when the Company becomes a party to the contractual provisions of the instrument. Financial asset is recognised
initially at fair value plus, in the case of financial asset not recorded at fair value through profit or loss, transaction costs that are attributable to the
acquisition of the financial asset. Transaction costs of financial asset carried at fair value through profit or loss are expensed in the Standalone
Statement of Profit and Loss.
Subsequent measurement:
Subsequent measurement of debt instruments depends on the business model of the Company for managing the asset and the cash flow
characteristics of the asset. There are three measurement categories into which the Company classifies its debt instruments:
Measured at amortised cost:
Financial assets that are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows that
are solely payments of principal and interest, are subsequently measured at amortised cost using the EIR method less impairment, if any, the
amortisation of EIR and loss arising from impairment, if any is recognised in the Standalone Statement of Profit and Loss.
Measured at fair value through other comprehensive income (FVOCI):
Financial assets that are held within a business model whose objective is achieved by both, selling financial assets and collecting contractual
cash flows that are solely payments of principal and interest, are subsequently measured at fair value through other comprehensive income. Fair
value movements are recognised in the OCI. Interest income measured using the EIR method and impairment losses, if any are recognised in
the Standalone Statement of Profit and Loss. On derecognition, cumulative gain | (loss) previously recognised in OCI is reclassified from the
equity to other income in the Standalone Statement of Profit and Loss.
Measured at fair value through profit or loss (FVPL):
A financial asset not classified as either amortised cost or FVOCI, is classified as FVPL. Such financial assets are measured at fair value with all
changes in fair value, including interest income and dividend income if any, recognised as other income in the Standalone Statement of Profit
and Loss.
Equity instruments:
The Company subsequently measures all investments in equity instruments other than subsidiary companies and associate company at fair
value. The Company has elected to present fair value gains and losses on such equity investments in other comprehensive income and there is
no subsequent reclassification of these fair value gains and losses to the Standalone Statement of Profit and Loss. Dividends from such
investments continue to be recognised in profit or loss as other income when the right to receive payment is established.
Changes in the fair value of financial assets at fair value through profit or loss are recognised in the Standalone Statement of Profit and Loss.
Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other
changes in fair value.
Impairment of financial assets:
The Company assesses on a forward looking basis the expected credit losses associated with its financial assets carried at amortised cost and
FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
The Company follows 'simplified approach’ for recognition of impairment loss allowance on trade receivables. The application of simplified
approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs
at each reporting date, right from its initial recognition.
Derecognition:
A financial asset is derecognised only when the Company has transferred the rights to receive cash flows from the financial asset, the asset
expires 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 Company has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership
of the financial asset. In such cases, the financial asset is derecognised through the Standalone Statement of Profit and Loss or other
comprehensive income as applicable. Where the Company has not transferred substantially all risks and rewards of ownership of the financial
asset, the financial asset is not derecognised.
Where the Company has neither transferred a financial asset nor retained substantially all risks and rewards of ownership of the financial asset,
the financial asset is derecognised if the Company has not retained control of the financial asset. Where the Company retains control of the
financial asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset.
Financial liabilities:
i) Classification as debt or equity:
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements
entered into and the definitions of a financial liability and an equity instrument.
ii) Initial recognition and 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 fair value.
iii) Subsequent measurement:
Financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Financial liabilities carried at fair value
through profit or loss are measured at fair value with all changes in fair value recognised in the Standalone Statement of Profit and Loss.
iv) Derecognition:
A financial liability is derecognised when the obligation specified in the contract is discharged, cancelled or expires.
o) Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the Standalone Balance Sheet where there is a legally enforceable
right to offset the recognised amounts and there is an intention to settle on a net basis or realise the assets and settle the liabilities
simultaneously.
p) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any
difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the
borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan
to the extent that it is probable that some or all of the facility will be drawn down.
Borrowings are removed from the Standalone Balance Sheet when the obligation specified in the contract is discharged, cancelled or expired.
The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the
consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income | (expense).
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12
months after the reporting period.
q) Borrowings Costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period
of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a
substantial period of time to get ready for their intended use or sale. Investment income earned on the temporary investment of specific
borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. Other borrowing costs
are expensed in the period in which they are incurred.
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