2.1 Material accounting policies
This note provides a list of the material accounting
policies adopted in the preparation of these
standalone financial statements. These policies
have been consistently applied to all the years
presented, unless otherwise stated.
(a) Basis of preparation
These standalone financial statements for the
year ended 31 March 2025 have been prepared
in accordance with the Indian Accounting
Standards (hereinafter referred to as the ‘Ind
AS’) as notified by Ministry of Corporate Affairs
pursuant to section 133 of the Companies Act,
2013 read with Rule 3 of the Companies (Indian
Accounting Standards) Rules, 2015 and other
relevant provisions of the Companies Act, 2013
as amended from time to time and guidelines
issued by Securities and Exchange Board of India
(SEBI) to the extent applicable.
The standalone financials statements are based
on the classification provisions contained in Ind
AS 1, "Presentation of Financial Statements”
and division II of Schedule III of the Act.
Further, for the purpose of clarity, various
items are dis-aggregated separately in the
notes to the financial statements, where
applicable or required.
The standalone financial statements for the year
ended 31 March 2025 were approved for issue
by the Board of Directors on 26 May 2025.
(b) Basis of measurement
The standalone financial statements have been
prepared on accrual and going concern basis
under historical cost convention except for
certain financial assets and financial liabilities
that are measured at fair value or amortized
cost, defined benefit obligations and share
based payments.
(c) Critical accounting estimates and
judgements
The preparation of standalone financial
statements in conformity with Ind AS requires
management to make judgements, estimates
and assumptions that affect the reported
amounts of revenues, expenses, assets and
liabilities and disclosure of contingent liabilities at
the end of the reporting period. Although these
estimates are based upon management’s
best knowledge of current events and actions,
uncertainty about these assumptions and
estimates could result in the outcomes requiring
a material adjustment to the carrying amounts of
assets or liabilities in future periods. Changes in
estimates are reflected in the standalone financial
statements in the period in which changes are
made and if material, their effects are disclosed in
the notes to the standalone financial statements.
Information about significant areas of
estimation /uncertainty and judgements in
applying accounting policies that have the most
significant effect on the standalone financial
statements are as follows: -
Significant management judgements
Recognition of deferred tax assets - The extent
to which deferred tax assets can be recognized is
based on an assessment of the probability of the
Company’s future taxable income against which
the deferred tax assets can be utilized.
Evaluation of indicators for impairment
of assets - The evaluation of applicability of
indicators of impairment of assets requires
assessment of several external and internal
factors which could result in deterioration of
recoverable amount of the assets.
Contingent liabilities - At each balance sheet
date basis the management judgment, changes
in facts and legal aspects, the Company assesses
the requirement of provisions against the
outstanding contingent liabilities. However, the
actual future outcome may be different from
this judgement.
Leases - Judgment required to ascertain lease
classification, lease term, incremental borrowing
rate, lease and non-lease component, and
impairment of ROU.
Significant estimates
Defined benefit obligation (DBO) -
Management’s estimate of the DBO is based
on a number of underlying assumptions such
as standard rates of inflation, mortality, discount
rate and anticipation of future salary increases.
Variation in these assumptions may significantly
impact the DBO amount and the annual defined
benefit expenses.
Allowance for expected credit losses -
The allowance for doubtful debts reflects
management’s estimate of losses inherent
in its credit portfolio. This allowance is based
on Company’s estimate of the losses to be
incurred, which derives from past experience
with similar receivables, current and historical
past due amounts, write-offs and collections,
the careful monitoring of portfolio credit quality
and current and projected economic and market
conditions. Should the present economic and
financial situation persist or even worsen, there
could be a further deterioration in the financial
situation of the Company’s debtors compared
to that already taken into consideration in
calculating the allowances recognised in the
financial statements.
Share based payments - Measurement of
share based payments; measurement of
financial guarantee contracts, provisions and
contingent liabilities.
There are no assumptions and estimation
uncertainties that have a significant risk of
resulting in a material adjustment within the
next financial year except for as disclosed in
these standalone financial statements.
(d) Fair value measurement
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. The fair value
measurement is based on the presumption that
the transaction to sell the asset or transfer the
liability takes place either:
• In the principal market for the asset
or liability, or
• In the absence of a principal market, in
the most advantageous market for the
asset or liability.
The principal or the most advantageous market
must be accessible to / by the Company.
All assets and liabilities for which fair value
is measured or disclosed in the standalone
financial statements are categorized within fair
value hierarchy, described as follows, based on
the lowest level of input that is significant to the
fair value measurement as a whole.
• Level 1 — Quoted (unadjusted) prices in
active markets for identical assets or liabilities
• Level 2 — Valuation techniques for which
the lowest level input that is significant to
the fair value measurement is directly or
indirectly observable
• Level 3 — Valuation techniques for which
the lowest level input that is significant to
the fair value measurement is unobservable
For assets and liabilities that are recognized in the
standalone financial statements on a recurring
basis, the Company determines whether
transfers have occurred between levels in the
hierarchy by reassessing categorization (based
on the lowest level input that is significant to the
fair value measurement as a whole) at the end of
each reporting period.
For the purpose of fair value disclosures, the
Company has determined classes of assets and
liabilities on the basis of the nature, characteristics
and risks of the asset or liability and the level of
the fair value hierarchy as explained above.
2.2 Other material accounting policies
The accounting policies set out below have been
applied consistently to the periods presented in
the standalone financial statements.
(a) Property, plant equipment
Recognition and measurement
Items of property, plant and equipment are
measured at cost, less accumulated depreciation
and accumulated impairment losses.
The cost of an item of property, plant and
equipment comprises: (a) its purchase price
and non-refundable purchase taxes, after
deducting trade discounts and rebates; (b)
any costs directly attributable to bringing the
asset to the location and condition necessary
for it to be capable of operating in the manner
intended by management.
The cost of a self-constructed item of property,
plant and equipment comprises the cost of
materials and direct labour, any other cost
directly attributable to bringing the item to
working condition for its intended use.
The cost of improvements to leasehold
premises, if recognition criteria are met, are
capitalised and disclosed separately under
leasehold improvement.
An item of property, plant and equipment
and any significant part initially recognised
is derecognised upon disposal or when no
future economic benefits are expected from
its use or disposal. Any gain or loss arising on
derecognition of the asset (calculated as the
difference between the net disposal proceeds
and the carrying amount of the asset) is included
in the Statement of profit and loss when such
asset is derecognised.
Subsequent cost
Subsequent costs are included in the asset’s
carrying amount or recognised as a separate
asset, as appropriate, only when it is probable that
the future economic benefits associated with
expenditure will flow to the Company and the
cost of the item can be measured reliably. All other
subsequent cost are charged to Statement of
profit and loss at the time of incurrence.
Depreciation
Depreciation on PPE is provided on the
straight-line method computed on the basis
of useful life prescribed in Schedule II to the
Companies Act, 2013 (‘Schedule II’) on a pro-rata
basis from the date the asset is ready to put to use.
Leasehold improvements are depreciated
on a straight-line basis over the period of
the initial lease term or estimated useful life
whichever is shorter.
Depreciation is calculated on a pro rata basis for
assets purchased/sold during the year.
The residual values, useful lives and methods of
depreciation of property plant and equipment
are reviewed by management at each reporting
date and adjusted prospectively, as appropriate.
Capital work-in-progress
Cost of property, plant and equipment not ready
for use as at the reporting date are disclosed as
capital work-in-progress.
(b) Other intangible assets
Intangible assets that are acquired are
recognised only if it is probable that the
expected future economic benefits that are
attributable to the asset will flow to the Company
and the cost of assets can be measured reliably.
The other intangible assets are recorded at cost
of acquisition including incidental costs related
to acquisition and installation and are carried
at cost less accumulated amortisation and
impairment losses, if any.
Gain or losses arising from derecognition of other
intangible assets are measured as the difference
between the net disposal proceeds and the
carrying amount of the other intangible assets
and are recognised in the Statement of profit
and loss when the asset is derecognised.
Subsequent cost
Subsequent cost is capitalised only when
it increases the future economic benefits
embodied in the specific asset to which it
relates. All the subsequent expenditure on other
intangible assets is recognised in Statement of
profit and loss, as incurred.
Amortisation
Amortisation is calculated to write off the cost
of other intangible assets over their estimated
useful lives as stated below using straight-line
method. Amortisation is calculated on a
pro-rata basis for assets purchased /disposed
during the year.
The amortisation expense on intangible assets
with finite life is recognised in the statement of
profit and loss under the head Depreciation and
amortization expense.
Amortisation has been charged based on the
following useful lives:
Amortisation method, useful lives and residual
values are reviewed at each reporting date and
adjusted prospectively, if appropriate.
Derecognition of intangible asset
An intangible asset is derecognised upon
disposal (i.e., at the date the recipient obtains
control) or when no future economic benefits are
expected from its use or disposal.
(c) Leases
The Company as a lessee
The Company enters into an arrangement
for lease of buildings. Such arrangements are
generally for a fixed period but may have extension
or termination options. In accordance with Ind
AS 116 - Leases, at inception of the contract,
the Company assesses whether a contract is, or
contains a lease. A lease is defined as ‘a contract,
or part of a contract, that conveys the right to
control the use an asset (the underlying 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:
• The contract involves the use of an identified
asset - this may be specified explicitly or
implicitly, and should be physically distinct
or represent substantially all of the capacity
of a physically distinct asset. If the supplier
has a substantive substitution right, then
the asset is not identified;
• The Company has the right to obtain
substantially all of the economic benefits
from use of the asset throughout the
period of use; and
• The Company assesses whether it has the
right to direct ‘how and for what purpose’
the asset is used throughout the period of
use. At inception or on reassessment of a
contract that contains a lease component,
the Company allocates the consideration
in the contract to each lease component
on the basis of their relative stand-alone
prices. However, for the leases of land
and buildings in which it is a lessee, the
Company has elected not to separate
non-lease components and account for the
lease and non-lease components as a single
lease component.
Measurement and recognition of leases
as a lessee
The Company recognises a right-of-use asset
and a lease liability at the lease commencement
date. The right-of-use asset is initially measured
at cost, which comprises the initial amount of the
lease liability adjusted for any lease payments
made at or before the commencement date,
plus any initial direct costs incurred and an
estimate of costs to dismantle and remove the
underlying asset or to restore the underlying
asset or the site on which it is located, less any
lease incentives received.
The right-of-use assets is subsequently measured
at cost less any accumulated depreciation,
accumulated impairment losses.
The lease liability is initially measured at the
present value of the lease payments that are not
paid at the commencement date, discounted
using the interest rate implicit in the lease
or, if that rate cannot be readily determined,
the Company’s incremental borrowing rate.
Generally, the Company uses its incremental
borrowing rate as the discount rate.
Lease payments included in the measurement
of the lease liability comprise the following:
• fixed payments, including in-substance
fixed payments;
• variable lease payments that depend on an
index or a rate, initially measured using the
index or rate as at the commencement date;
• amounts expected to be payable under a
residual value guarantee; and
• the exercise price under a purchase option
that the Company is reasonably certain
to exercise, lease payments in an optional
renewal period if the Company is reasonably
certain to exercise an extension option, and
penalties for early termination of a lease
unless the Company is reasonably certain
not to terminate early.
The lease liability is measured at amortised
cost using the effective interest method. It is
remeasured when there is a change in future
lease payments arising from a change in an index
or rate, if there is a change in the Company’s
estimate of the amount expected to be payable
under a residual value guarantee, or if the
Company changes its assessment of whether it
will exercise a purchase, extension or termination
option. When the lease liability is remeasured in
this way, a corresponding adjustment is made to
the carrying amount of the right-of-use asset, or
is recorded in Statement of profit and loss if the
carrying amount of the right-of-use asset has
been reduced to zero, as the case may be.
The Company presents right-of-use assets that
do not meet the definition of investment property
on the face of balance sheet below ‘property,
plant and equipment’ and lease liabilities under
‘financial liabilities’ in the balance sheet.
(d) Impairment - non-financial assets
At each reporting date, the Company reviews
the carrying amounts of its non-financial assets
to determine whether there is any indication
of impairment. If any such indication of
impairment exists, then the asset’s recoverable
amount is estimated. For impairment testing,
assets are grouped together into the smallest
group of assets that generates cash inflows from
continuing use that are largely independent
of the cash inflows of other assets or cash
generating units (‘CGU’). Goodwill arising from
a business combination is allocated to a CGU or
groups of CGU that are expected to benefit from
the synergies of the combination.
The recoverable amount of an asset or CGU is
the greater of its value in use and its fair value
less costs to sell. Value in use is based on the
estimated future cash flows, discounted to their
present value using a discount rate that reflects
current market assessments of the time value of
money and the risks specific to the asset or CGU.
An impairment loss is recognised if the carrying
amount of an asset or CGU exceeds its estimated
recoverable amount.
Impairment losses are recognised in the
Statement of profit and loss. They are allocated
first to reduce the carrying amount of any
goodwill allocated to the CGU and then to reduce
the carrying amounts of the other assets in the
CGU on a pro-rata basis.
An impairment loss in respect of goodwill is not
reversed. For other assets, an impairment loss is
reversed only if there has been a change in the
estimates used to determine the recoverable
amount. Such a reversal is made only to the
extent that the asset’s carrying amount does
not exceed the carrying amount that would
have been determined, net of depreciation
or amortisation, if no impairment loss had
been recognised.
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