2. Material accounting policy information
a) Basis of preparation
i) Statement of compliance
The standalone financial statements of the
Company have been prepared in accordance
with the accounting principles generally
accepted in India including Indian Accounting
Standards (Ind AS) prescribed under the
Section 133 of the Companies Act, 2013 read
with rule 3 of the Companies (Indian Accounting
Standards) Rules, 2015 (as amended from time
to time) and presentation requirement of
Division II of Schedule III of the Companies Act,
2013, (Ind AS Compliant Schedule III), as
applicable to standalone financial statements.
Accordingly, the Company has prepared these
Standalone Financial Statements which
comprise the Balance Sheet as at 31st March
2026, the Statement of Profit and Loss, the
Statement of Cash Flows and the Statement of
Changes in Equity for the year ended as on that
date, and accounting policies and other
explanatory information (together hereinafter
referred to as “Standalone Financial
Statements” or “financial statements”).
ii) Going Concern
The financial statements have been prepared
on a going concern basis, which assumes that
the Company will be able to realize its assets at
least at the recorded amounts and discharge its
liabilities in the usual course of business. The
Company has recognized comprehensive
income for the year after tax of Rs. 41.96 crore
for the year ended 31st March 2026. In view of
the positive net worth, the assessment of
future cash flow projections, availability of
liquid funds and unused credit facilities, the
management considers that it is appropriate to
prepare these financial statements on a going
concern basis.
The financial statements were authorized for
issue by the Company’s Board of Directors on
26th May 2026.
iii) Functional and presentation currency
The functional currency of the Company is the
Indian rupee. These financial statements are
presented in Indian rupees. All amounts have been
rounded-off to the nearest crore, up to two places
of decimal, unless otherwise indicated.
iv) Basis of measurement
The financial statements have been prepared
on the historical cost basis except for the
following items:
v) Use of estimates and judgments
The preparation of financial statements in
conformity with Generally Accepted Accounting
Principles (GAAP) requires management to make
judgments, estimates and assumptions that impact
the application of accounting policies and the
reported amounts of assets, liabilities, income and
expenses and the disclosure of contingent liabilities
on the date of the financial statements. Actual
results could differ from those estimates. Estimates
and underlying assumptions are reviewed on an
ongoing basis. Any revision to accounting
estimates is recognised prospectively in current and
future periods.
In particular, information about significant areas
of estimation uncertainty and critical judgements in
applying accounting policies that have the most
significant effects on the amounts recognised in the
financial statements is included in the following
areas:
- Note 39 - Measurement of defined benefit
obligations: key actuarial assumptions
- Note 20 and 38 - Recognition and
measurement of provision and contingencies,
key assumptions about the likelihood and
magnitude of an outflow of resources
- Note 2(p) - Impairment of financial assets
- Note 2(q) - Impairment test of non-financial
assets: key assumptions underlying
recoverable amounts
- Note 2(a)(vi) - Fair value measurement
- Note 2(c) and 3 - Assessment of useful life
of Property, plant and equipment
- Note 2(c) and 4 - Assessment of useful life
of Intangible assets
- Note 2(f): Valuation of inventories
- Note 2(k): Accounting for government
grants
- Note 2(n), 21 and 34 - Recognition of tax
expense including deferred tax;
vi) Measurement of fair values
A number of the Company's accounting policies
and disclosures require measurement of fair
values, for both financial and non-financial
assets and liabilities. The Company has an
established control framework with respect to
measurement of fair values. This includes the
top management division which is responsible
for overseeing all significant fair value
measurements, including Level 3 fair values.
The top management division regularly reviews
significant unobservable inputs and valuation
adjustments. If third party information is used to
measure fair values, then the top management
division assesses the evidence obtained from
the third parties to support the conclusion that
these valuations meet the requirement of Ind-
AS, including the level in the fair value hierarchy
in which the valuations should be classified.
Fair values are categorized into different levels
in a fair value hierarchy based on the inputs
used in the valuation techniques as follows:
- Level 1: quoted prices (unadjusted) in
active markets for identical assets and
liabilities.
- Level 2: inputs other than quoted prices
included in Level 1 that are observable for
the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from
prices)
- Level 3: inputs for the asset or liability that
are not based on observable market data
(unobservable inputs)
When measuring the fair value of an asset or
liability, the Company uses observable market
data as far as possible. If the inputs used to
measure the fair value of an asset or liability fall
into different levels of the fair value hierarchy,
then the fair value measurement is categorized in its
entirely in the same level of the fair value hierarchy
as the lowest level input that is significant to the
entire measurement.
The Company recognizes transfers between
levels of the fair value hierarchy at the end of the
reporting period during which the changes have
occurred.
Further information about the assumptions made in
measuring fair values used in preparing these
financial statements is included in the respective
notes.
b) Property, plant and equipment ('PPE')
Recognition and measurement
Items of PPE are measured at cost of acquisition or
construction which includes capitalized finance
costs less accumulated depreciation and/or
accumulated impairment loss, if any.
Cost of an item of PPE comprises its purchase price,
including import duties and non-refundable
purchase taxes, after deducting trade discounts and
rebates, any directly attributable cost of bringing
the item to its working condition for its intended use.
The cost of a self-constructed item of property,
plant and equipment comprises the cost of materials
and direct labour, any other costs directly
attributable to bringing the item to working
condition for its intended use, and estimated costs
of dismantling and removing the item and restoring
the site on which it is located. If significant parts of
an item of property, plant and equipment have
different useful lives, then they are accounted for as
separate items (major components) of property,
plant and equipment.
Capital work-in-progress comprises the cost of
property, plant and equipment that are not ready for
their intended use at the reporting date. Advances
paid towards acquisition of PPE outstanding at each
Balance sheet date are shown under other non¬
current assets.
Any gain or loss on disposal of an item of property,
plant and equipment is recognized in the Statement
of Profit and Loss.
Subsequent expenditure
Subsequent expenditure is capitalized only if it is
probable that the future economic benefits
associated with the expenditure will flow to the
Company.
Depreciation
Depreciation is calculated on cost of items of PPE
(excluding freehold land) less their estimated residual
values over their estimated useful lives using the
straight-line method, except on second hand captive
power plant on which it is on written down value
method and is recognized in the Statement of Profit and
Loss. Freehold land is not depreciated.
Depreciation on items of PPE is provided as per rates
corresponding to the useful life specified in Schedule II
to the Companies Act, 2013 read with the notification
dated 29 August 2014 of the Ministry of Corporate
Affairs. Depreciation method, useful lives and residual
values are reviewed at each financial year-end and
adjusted if appropriate. Based on internal assessment
and consequent advice, the management believes that
its estimates of useful lives as given in Schedule II of
Companies Act, 2013 best represent the period over
which management expects to use these assets.
Depreciation on additions (disposal) is provided on a
pro-rata basis i.e. from (up to) the month on which asset
is ready for use (disposed of).
When the use of a property changes from owner-
occupied to investment property, the property is
reclassified as investment property at its carrying
amount on the date of reclassification.
Assets acquired under finance leases are depreciated
over the shorter of the lease term and their useful lives
unless it is reasonably certain that the Company will
obtain ownership by the end of the lease term.
Derecognition
A property, plant and equipment is derecognized on
disposal or when no future economic benefits are
expected from its use and disposal. Losses arising from
retirement and gains or losses arising from disposal of a
tangible asset are measured as the difference between
the net disposal proceeds and the carrying amount of
the asset and are recognized in the Statement of Profit
and Loss.
c) Other intangible assets
Acquired intangibles
Intangible assets that are acquired by the Company
are measured initially at cost. Cost of an item of
intangible asset comprises its purchase price,
including import duties and non-refundable
purchase taxes, after deducting trade discounts
and rebates, any directly attributable cost of
bringing the item to its working condition for its
intended use. After initial recognition, an intangible
asset is carried at its cost less any accumulated
amortisation and any accumulated impairment loss.
Subsequent expenditure
Subsequent expenditure is capitalised only when it
increases the future economic benefits embodied in
the specific asset to which it relates. All other
expenditure is recognised in Statement of Profit and
Loss as incurred.
Amortisation
Amortisation is calculated to write off the cost of
intangible assets over their estimated useful lives
using the straight-line method, and is included in
depreciation and amortisation expense in
Statement of Profit and Loss. The estimated useful
life of Computer software is 3 years.
Amortisation method, useful life and residual values
are reviewed at the end of each financial year and
adjusted if appropriate.
Derecognition
Intangible assets are derecognised on disposal or
when no future economic benefits are expected
from its use and disposal.
d) Investment Property
Investment property is property held either to earn
rental income or for capital appreciation or for both,
but not for sale in the ordinary course of business,
use in the production or supply of goods or services
or for administrative purposes. Upon initial
recognition, an investment property is measured at
cost. Subsequent to initial recognition, investment
property is measured at cost less accumulated
depreciation and accumulated impairment losses, if
any.
Based on technical evaluation and consequent
advice, the management believes a period of 60
years as representing the best estimate of the
period over which investment properties (which are
quite similar) are expected to be used. Accordingly,
the company depreciates investment properties
over a period of 60 years on a straight-line basis.
The useful life estimate of 60 years is same as the
indicative useful life of relevant type of buildings
mentioned in Part C of Schedule II to the Act i.e. 60
years.
Any gain or loss on disposal of an investment
property is recognized in profit or loss.
The fair value of investment property is disclosed in
the notes. Fair value is determined by an
independent valuer who holds a recognized and
relevant professional qualification and has recent
experience in the location and category of the
investment property being valued.
Inventories are measured at the lower of cost and
net realizable value. The methods of determining
cost of various categories of inventories are as
follows:
The cost of inventories includes expenditure
incurred in acquiring the inventories, production or
conversion costs and other costs incurred in
bringing them to their present location and
condition.
Net realisable value is the estimated selling price in
the ordinary course of business, less the estimated
costs necessary to make the sale. The net realisable
value of work-in-progress is determined with
reference to the selling prices of related finished
products.
Raw materials, components and other supplies held
for use in the production of finished products are not
written down below cost except in cases where
material prices have declined and it is estimated that
the cost of the finished products will exceed their
net realisable value.
The comparison of cost and net realisable value is
made on an item-by-item basis.
f) Employee benefits
Short-term employee benefits
Short-term employee benefit obligations are
measured on an undiscounted basis and are
expensed as the related service is provided. A
liability is recognised for the amount expected to be
paid e.g., salaries and wages and bonus etc., if the
Company has a present legal or constructive
obligation to pay this amount as a result of past
service provided by the employee, and the amount
of obligation can be estimated reliably.
- Defined contribution plans
A defined contribution plan is a post¬
employment benefit plan under which an entity
pays specified contributions to a separate
entity and will have no legal or constructive
obligation to pay further amounts. The
Company makes specified monthly
contributions towards employee provident
fund and employee state insurance scheme
(‘ESI’) to Government administered scheme
which is a defined contribution plan. The
Company’s contribution is recognised as an
expense in the Statement of Profit and loss
during the period in which the employee
renders the related service.
- Defined benefit plans
A defined benefit plan is a post-employment
benefit plan other than a defined contribution
plan. Gratuity is a defined benefit plan. The
administration of the gratuity scheme has been
entrusted to the Life Insurance Corporation of
India (‘LIC’). The Company’s net obligation in
respect of gratuity is calculated separately by
estimating the amount of future benefit that
employees have earned in the current and prior
periods, discounting that amount and
deducting the fair value of any plan assets.
The calculation of defined benefit obligation is
performed annually by a qualified actuary using
the projected unit credit method.
Re-measurements of the net defined benefit
liability i.e. Gratuity, which comprise actuarial
gains and losses are recognised in Other
Comprehensive Income (OCI). The Company
determines the net interest expense (income)
on the net defined benefit liability for the
period by applying the discount rate used to
measure the defined benefit obligation at
the beginning of the annual period to the net
defined benefit liability, taking into account any
changes in the net defined benefit liability
during the period as a result of contributions
and benefit payments. Net interest expense
and other expenses related to defined benefit
plans are recognised in the Statement of Profit
and Loss.
When the benefits of a plan are changed or
when a plan is curtailed, the resulting change in
benefit that relates to past service (‘past
service cost’ or ‘past service gain’) or the gain or
loss on curtailment is recognised immediately in
the Statement of Profit and Loss. The Company
recognises gains and losses on the settlement
of a defined benefit plan when the
settlement occurs.
- Compensated absences
The Company’s net obligation in respect of long¬
term employee benefits other than post¬
employment benefits is the amount of future benefit
that employees have earned in return for their
service in the current and prior periods; that benefit
is discounted to determine its present value, and the
fair value of any related assets is deducted. Such
obligation such as those related to compensated
absences is measured on the basis of an annual
independent actuarial valuation using the projected
unit cost credit method. Remeasurements gains or
losses are recognised in profit or loss in the period in
which they arise.
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