2.3 Material Accounting Policies:
A) Property, plant and equipment (PPE)
Property, plant and equipment other than freehold land, are stated at cost less accumulated depreciation and
accumulated impairment losses, if any. As stated above, w.e.f. 01 -04-2025, company has adopted fair value method
in respect of freehold land.
Cost of property, plant and equipment comprises its purchase price, including import duties and non-refundable
purchase taxes, specific borrowing cost and any other directly attributable costs of bringing an asset to working
condition and location for its intended use. It also includes the present value of the expected cost for the
decommissioning and removing of an asset and restoring the site after its use, if the recognition criteria for a
provision are met. Freehold land is carried at revalued model less any accumulated impairment losses, if any and is
not depreciated. During the year, company has revalued the Patiala Land and the surplus of Rs 3,197 Lakhs has
been credited to retained earnings instead of Revaluation Reserve.
When part(s) of an item of property, plant and equipment having significant cost have different useful lives, they are
accounted for as separate items (major components) of property, plant and equipment.
Expenditure incurred after the property, plant and equipment have been put into operation, such as repairs and
maintenance, are normally charged to the statements of profit and loss in the period in which the costs are incurred.
Major inspection and overhaul expenditure is capitalized if the recognition criteria are met. Subsequent costs are
included in the asset’s carrying amount 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.
Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed
as “Capital work-in-progress”. Assets in the course of construction are not depreciated.
When an item of property, plant and equipment is scrapped or where no future economic benefits are expected from
its use or otherwise disposed off, the carrying amount and related accumulated deprecation are removed from the
books of account and resultant profit or loss, if any, is reflected in statement of Profit & Loss.
Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is
classified as capital advances under “Other Non-Current Assets”.
Company depreciates property, plant and equipment over the estimated useful life as prescribed in schedule II of
the Companies Act 2013 on the straight-line method on pro rata basis from the date the assets are ready for
intended use.
The estimated useful lives of major components of PPE are as follows:
• Building 30-60 years
• Plant and equipment 35 years*(instead of 15 years as prescribed under schedule II)
• Furniture and Fixtures 8 -10 years
• Vehicles # (8-10 years as prescribed under schedule II)
• Office equipments 3 - 6 years (including computer software)
*The company has taken a view on the basis of technical advice that plant in the dairy industry use non-corrosive
raw materials, the expected life of the plant and machinery should be 35 years. This is in pursuance of proviso to
sub clause (c) of clause 3 of schedule II of the Companies Act 2013.
#The company during the year under audit has revised the economic useful life of vehicle from 6 to 8 years from FY
2019-20 onwards retrospectively instead of prospectively as required under Ind AS 8. This result in overstatement
of profit before tax to the extent of Rs 251 Lakhs during the year.
The Company has not revalued any of its property, plant and equipment during the year except Land at Patiala and
recognized the unrealized surplus of Rs 3,197 Lakhs through other income in statement of profit and loss instead of
other comprehensive income.
During the year, the company has written off Property, Plant and Equipment of Rs 17 Lakhs.
B) Biological Assets
Biological assets are recorded at a fair value less cost to sell. At each reporting date, Company remeasure this
value and record any gains or losses.
All expenses incurred in land preparation, planting and development of trees up to maturity are capitalised as
biological assets; all expenses subsequent to maturity are recognised directly in statement of profit and loss account.
Company has obtained the certificate of Agricultural Scientist with regard to fair valuation at the reporting date and
has accounted the gain of Rs. 106 lakhs (PY Rs 84 lakhs) on reinstatement during the year.
Biological assets are stated at revalued amount, which is the fair value at date of revaluation less any accumulated
impairment losses as certified by the Agricultural scientist.
C) Intangible Assets
Intangible assets acquired in a business combination are recognised at fair value at the acquisition date.
Subsequently, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment
losses, if any.
The useful lives of intangible assets are assessed as either finite or indefinite. Indefinite-life intangible assets comprises
brand, 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 brands and the level
of marketing support. 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 basis revised estimates.
The Company has not revalued any of its intangible assets during the year.
D) Capital work in progress
Capital work in progress is stated at cost, if any. Assets in the course of construction are capitalized in capital work
in progress account. At the point when an asset is capable of operating in the manner intended by management, the
cost of construction is transferred to the appropriate category of property, plant and equipment. Costs associated
with the commissioning of an asset are capitalised when the asset is available for use but incapable of operating at
normal levels until the period of commissioning has been completed. Cost includes direct costs, related incidental
expenses, other directly attributable costs and borrowing costs.
E) Leased Assets (Right of Use Assets)
The Company’s lease asset classes consist of leases for land and buildings for the purpose of having offices/
various branches. The Company assesses whether a contract 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 the date of commencement of the lease, the Company recognizes a right-of-use (ROU) asset and a corresponding
lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less
(short-term leases) and low value leases.
The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred adjusted
by lease payments made at or before the commencement date less any lease incentives received. They are
subsequently measured at cost less accumulated depreciation and impairment losses, if any.
Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated
useful lives of the underlying asset.
The Company has not revalued any of its right-of-use assets during the year.
Short term Leases and leases of low value of assets
The Company applies the short-term lease recognition exemption to its short-term leases. It also applies the lease
of low value assets recognition exemption that are considered to be low value. In case of short term leases/ leases
of low value, the Company recognizes the lease payments as an operating expense on a straight-line basis over the
term of the lease. The Company incurred Rs 92 lakhs for the year ended 31st March, 2026 (31st March, 2025: Rs
78 Lakhs) towards expenses relating to short-term leases and leases of low-value assets.
Lease Liabilities
Company recognises lease liabilities initially measured at the present value of lease payments to be made over the
lease term. In calculating the present value of lease payments, the Company uses its incremental borrowing rate at
the lease commencement date if the discount rate implicit in the lease is not readily determinable.
After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and
reduced for the lease payments made. The carrying amount is remeasured when there is a change in future lease
payments arising from a change in index or rate. In addition, the carrying amount of lease liabilities is remeasured
if there is a modification, a change in the lease term, a change in the lease payments or a change in the assessment
of an option to purchase the underlying asset. The incremental borrowing rate applied to lease liabilities is 12% per
annum.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been
classified as financing cash flows.
F) Impairment of Non Financial Assets
Assessment for impairment generally is done annually as to whether there is any indication that any Non Financial
Asset or a group of assets (cash generating unit) other than inventory and deffered tax may be impaired. Indefinite
life intangible assets are subject to review for impairment annually or more frequently if events or circumstances
indicate that it is necessary If any such indication exists, the recoverable amount of the asset or group of assets
(cash generating unit) is estimated in order to determine the extent of impairment loss (if any). If it is not possible to
estimate the recoverable amount of an individual asset, the entity determines the recoverable amount of the Cash
Generated Unit (CGU) to which the asset belongs.
Recoverable amount is the higher of fair value less cost of disposal and value in use. In assessing the value in use,
the estimated future cash flow are discounted at their present value using the appropriate discount rate that reflects
current market assessment of time value of money and the risks specific to the assets for which the estimates of
future cash flow have not been adjusted.
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.
If the recoverable amount of an assets (or cash generating unit) is estimated to be less than its carrying amount, the
carrying amount of the assets (or cash generating unit) is reduced to its recoverable amount.
An impairment loss is recognised immediately in the statement of Profit & Loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash generating unit) is
increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss recognized originally in the statement
of Profit & Loss.
No Impairment was identified in FY 2025-26 and in previous FY 2024-25.
G) Financial instruments
A financial instrument is any contact that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity. Financial assets and financial liabilities are recognized when a Company becomes a
party to the contractual provisions of the instruments.
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 and loss) 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 immediately in
the statement of profit and Loss.
(i) Financial Assets
(a) Initial recognition and measurement:
Financial assets, except for trade receivables, are recognized when the Company becomes a party to
the contractual provisions of the instrument.
T rade receivables are initially recognised at transaction price as they do not contain a significant financing
component. This implies that the effective interest rate for these receivables is zero.
(b) Subsequent measurement and classification of financial assets:
All recognised financial assets are subsequently measured in their entirety at either amortised cost or
fair value, depending on the classification of the financial assets and are classified in four categories:
• Amortised cost
• Fair value through other comprehensive income (FVTOCI) with recycling of cumulative gains and
losses (debt instruments)
• Fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity
instruments)
• Fair value through profit or loss
The classification of financial assets at initial recognition depends on the financial asset’s contractual
cash flow characteristics and the Company’s business model for managing them.
In order for a financial asset to be classified and measured at amortized cost or fair value through OCI,
it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the
principal amount outstanding. This assessment is referred to as the SpPI test and is performed at an
instrument level.
Financial assets with cash flows that are not SPPI are classified and measured at fair value through
profit or loss, irrespective of the business model. The Company’s business model for managing financial
assets refers to how it manages its financial assets in order to generate cash flows. The business model
determines whether cash flows will result from collecting contractual cash flows, selling the financial
assets, or both.
Financial assets classified and measured at amortized cost are held within a business model with the
objective to hold financial assets in order to collect contractual cash flows while financial assets classified
and measured at fair value through OCI are held within a business model with the objective of both
holding to collect contractual cash flows and selling.
(c) Derecognition of financial assets:
The Company derecognizes a financial asset when
- the contractual rights to receive the cash flows from the asset expire, or
- the Company has transferred its right to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party under a ‘pass¬
through’ arrangement; and either
a) It transfers the financial asset and substantially all the risks and rewards of ownership of the asset
to another party or
b) The company has neither transferred nor retained substantially all the risks and rewards of the
asset, but has transferred control of the asset.
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 the Statement of
Profit and Loss if such gain or loss would have otherwise been recognized in the Statement of Profit and
loss on disposal of that financial asset.
(d) Impairment of financial assets:
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement
and recognition of impairment loss on the financial assets that are debt instruments, and are measured
at amortised cost e.g., loans, deposits and trade receivables or any contractual right to receive cash or
another financial asset that result from transactions that are within the scope.
The Company follows ‘simplified approach’ for recognition of loss allowance on trade receivables. The
application of simplified approach does not require the Company to track changes in credit risk. Rather,
it recognizes loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
ECL allowance recognised (or reversed) during the period is recognised as expense (or income) in the
standalone statement of profit and loss.
(e) Write off
The gross carrying amount of a financial asset is written off when the Company has no reasonable
expectations of recovering the financial asset in its entirety or a portion thereof. A write-off constitutes a
derecognition event
(ii) Financial Liabilities
(a) Initial Recognition and Measurement
Financial liabilities are recognized when the Company becomes a party to the contractual provisions of
the instrument. Financial liabilities are initially measured at the amortized cost unless at initial recognition,
they are classified as fair value through profit and loss. The Company’s financial liabilities include trade
and other payables and loans and borrowings including bank overdrafts/cash credits.
(b) Subsequent measurement of financial liabilities:
All the financial liabilities are subsequently measured at amortized cost using the effective interest rate
method or at fair value through profit and loss. Financial liabilities carried at fair value through profit or
loss are measured at fair value with all changes in fair value recognized in the standalone statement of
profit and loss.
(c) Derecognition of financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or
expires. The difference in the carrying amounts and the consideration paid is recognized in the Statement
of Profit and Loss.
(d) 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.
(H) Inventories
Inventories are valued at the lower of cost and net realisable value except scrap and by products which are valued
at net realisable value. Costs comprises as follow:
(i) Raw materials and store and spares: Cost includes cost of purchase and other costs incurred in bringing the
inventories to their present location and condition. Cost is determined on weighted average basis. The aforesaid
items are valued at net realisable value if the finished products in which they are to be incorporated are
expected to be sold at a loss.
(ii) Finished goods and work in progress: Cost includes cost of direct materials and labour and a proportion of
manufacturing overheads based on the normal operating capacity, but excluding borrowing costs. Cost is
determined on weighted average basis. In pursuance of IND AS-2 indirect production overheads (estimated
by the Management) have been allocated for ascertainment of cost. Net realisable value is the estimated
selling price in the ordinary course of business, less estimated costs of completion and the estimated costs
necessary to make the sale.
Obsolete inventories are identified and written down to net realisable value. Inventories (including whey powder - by
product) are valued on lower of cost or net realizable value.
Non moving / slow moving stocks of packing material, stores and spares of Rs 78 Lakhs have been written off during
the year.(Refer note 24 (i) (c).
(I) Fair value measurement
The Company measures certain financial instruments, defined benefit liabilities and equity settled employee share
based payment plan at fair value at each reporting date.
Fair value is the price that would be received to sell an assets or paid to transfer a liabilities in an orderly transaction
between market participants at the measurement date.
The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability
takes place either:
i. in the principal market for the asset or liability, or
ii. in the absence of a principal market, in the most advantageous market for the asset or liability.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant that
would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
All financial assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the fair value hierarchy, which are described as follows; level I - III.
Level I input
Level I input are quoted price in active market for identical assets or liabilities that the entity can access at the
measurement date
Level II input
Level II input are input other than quoted market prices included within level I that are observable for the assets or
liabilities either directly or indirectly.
Level III input
Level III inputs are not based on observable market data
(J) Cash and Cash equivalent
Cash and cash equivalent in the balance sheet comprise cash on hand, balance with banks and short-term deposits
with an original maturity of three months or less, which are subject to an insignificant risk of changes in value. Cash
and cash equivalents include balances with banks which are unrestricted for withdrawal and usage.
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