2. MATERIAL ACCOUNTING POLICIES INFORMATION
2.1 Statement of compliance
These Standalone financial statements have been prepared in accordance with Indian Accounting Standards ("Ind AS") as per the Companies (Indian
Accounting Standards) Rules, 2015 as amended and notified under Section 133 of the Companies Act, 2013 (the 'Act') and other relevant provisions of
the Act.
The Standalone financial statements for the year ended March 31, 2025 (including comparatives) are duly adopted by the Board of Directors in the
meeting held on May 16, 2025 for consideration of approval by the shareholders.
2.2 Functional and presentation currency
These standalone financial statements have been prepared and presented in Indian Rupees and all amounts have been presented in crore with two
decimals, except share data and as otherwise stated.
2.3 Basis of preparation and presentation
These financial statements have been prepared and presented under accrual basis of accounting and as a going concern on historical cost convention or
fair values, wherever applicable, as per the requirements of Ind AS prescribed under section 133 of the Act and relevant provisions thereon.
Disclosures under Ind AS are made only in respect of material items and in respect of the items that will be useful to the users of financial statements in
making economic decisions.
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. In estimating the fair value of an asset or a liability, the
company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing
the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on
such basis and measurements that have some similarities to fair value but are not fair value, such as net realisable value in Ind AS 2 or value in use in
Ind AS 36.
Current and Non-Current Classification
All assets and liabilities have been classified as current or non-current as per the company's normal operating cycle or 12 months or other criteria as
set out in the Schedule III to the Companies Act, 2013. Based on the nature of its business, the Board has ascertained its operating cycle to be 12
months for the purpose of current and non-current classification of assets and liabilities.
2.4 Revenue recognition
2.4.1 Sale of products
Revenue is recognised on fulfilment of performance obligation. In other words, revenue is recognised when a promise in a customer contract
(performance obligation) has been satisfied by transferring control over the promised goods to the customer.
Revenue is measured at the fair value of the consideration received and receivable. Revenue is recognised based on the consideration received and
receivable net of discounts, rebates, returns, taxes and duties on sales when the products are delivered to a carrier for sale, which is when control of
goods are transferred to the customer or directly to the customer, as the case may be.
2.4.2 Dividend and interest income
Dividend income from investments is recognised when the shareholder's right to receive payment has been established.
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the company and the amount of income
can be measured reliably.
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that
exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial
recognition. Interest income is recognised on time proportion basis.
2.4.3 Rental income
Rental income from operating leases (of company's investment properties) is recognised on straight-line basis over the term of the relevant lease,
except where rentals are structured to increase in line with expected general inflation. Initial direct cost, if any, incurred in negotiating and arranging
an operating lease are added to the carrying amount of the asset leased out and recognised on straight-line basis over the lease term.
2.4.4 Other Income
Other income is recognised on accrual basis provided that it is probable that the economic benefits will flow to the company and the amount of income
can be measured reliably.
2.5 Property, Plant and Equipment
2.5.1 Recognition and measurement
The cost of Property, Plant and Equipment comprises of its purchase price, any import duties and other taxes (other than those subsequently
recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, including relevant
borrowing costs for qualifying assets and any expected costs of decommissioning, net of any trade discounts and rebates.
2.5.2 Subsequent expenditure
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. All other repairs and
maintenance are charged to the Statement of Profit and Loss during the reporting period in which they are incurred.
Property, Plant and Equipment are stated in the balance sheet at cost less accumulated depreciation / amortisation and impairment, if any.
2.5.3 Disposal of Property, Plant and Equipment
An item of Property, Plant and Equipment is derecognised upon disposal or on retirement, when no future economic benefits are expected to arise from
the continued use of the asset.
Gains or losses on disposal are determined by comparing proceeds with the carrying amount. These are included in the Statement of Profit and Loss
within other gains / (losses).
2.5.4 Depreciation
Depreciation commences when the assets are ready for their intended use. Depreciable amount for assets is the cost of an asset, or other amount
substituted for cost, less its estimated residual value. Depreciation is recognised so as to write off the cost of Property, Plant & Equipment (other than
capital work in progress) less their residual values over their useful lives, using straight-line method as per the useful life prescribed in Schedule II to
the Companies Act, 2013.
Management has re-assessed the useful lives of the Property, Plant and Equipment and on the basis of technical evaluation, management is of the view
that useful lives assessed by management, as above, are indicative of the estimated economic useful lives of the Property, Plant and Equipment. In
respect of additions to Property, Plant and Equipment, depreciation has been charged on pro rata basis. Individual assets costing less than Rs. 0.0005
crore (Rs. 5,000/-) are depreciated fully during the year of purchase.
The company reviews the residual value, useful lives and depreciation method annually and, if current estimates differ from previous estimates, the
change is accounted for as a change in accounting estimate on a prospective basis.
2.5.5 Capital work-in-progress
Capital work-in-progress includes cost of Property, Plant and Equipment under installation/under development as at the balance sheet date. Advances
paid towards the acquisition of Property, Plant and Equipment outstanding at each balance sheet date are classified as capital advances under other
non-current assets.
2.6 Investment properties
Property that is held for long-term rental yields or for capital appreciation or both, rather than for, use in the supply of goods or services or for
administrative purposes or sale in the ordinary course of business is classified as investment property. Investment property is measured initially at its
cost, including related transaction costs and where applicable, the borrowing costs. Subsequent expenditure is capitalised to the asset's carrying
amount only when it is probable that future economic benefits associated with the expenditure will flow to the company and the cost of the item can be
measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of investment property is replaced, the carrying
amount of the replaced part is derecognised.
Investment properties (except freehold land) are depreciated using straight-line method over their estimated useful lives. Investment properties
generally have a useful life of 60 years. The useful life has been determined based on technical evaluation by management.
2.7 Intangible assets
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment
losses. Amortisation is recognised in the income statement on a straight-line basis over their estimated useful lives of the intangible asset. Intangible
assets that are not available for use are amortised from the date they are available for use.
The estimated useful lives are as follows:
Software - 3 years
Brand - 3 years
The amortisation period and amortisation method for intangible assets are reviewed at the end of each reporting period, with the effect of any changes
in estimate being accounted for on a prospective basis.
An item of intangible asset 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 is included in the Statement of Profit or Loss when the asset is derecognised.
2.7.1 Intangible assets under development
An intangible asset is an identifiable non-monetary asset without physical substance. The cost of an internally generated intangible asset comprises all
directly attributable costs necessary to create, produce, and prepare the asset to be capable of operating in the manner intended by the Management.
An intangible asset arising from development shall be recognised if:
i) there is technical feasibility of completing it so that it will be available for use
ii) the entity intends to complete it and use or sell it
iii) the entity has ability to use or sell it
iv) technical, financial and other resources are available to the entity to complete it
v) the entity is able to measure reliably the expenditure attributable to the intangible asset during its development.
Intangible assets under development includes cost of services used and cost of licenses in generating the intangible asset under development as at the
balance sheet date.
2.8 Impairment of Property, Plant and Equipment and Intangible Assets
At the end of each reporting period, the Board reviews the carrying amounts of its tangible and intangible assets to determine whether there is any
indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company
estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be
identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash
generating units for which a reasonable and consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an
indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. 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 for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable amount.
An impairment loss is recognised immediately in the Statement of Profit and Loss, unless the relevant asset is carried at a revalued amount, in which case
the impairment loss is treated as a revaluation decrease.
Any reversal of the previously recognised impairment loss is limited to the extent that the asset's carrying amount does not exceed the carrying amount that
would have been determined if no impairment loss had previously been recognised.
2.9 Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.All other
leases are classified as operating leases.
Effective April 01, 2019, the company has adopted Ind AS 116 “Leases” and applied the standard to all lease contracts existing on April 01, 2019 using the
modified retrospective approach method. The company as a lessee has recognised the lease liability based on the remaining lease payments discounted
using the incremental borrowing rate as on the date of initial application (being 01st April, 2019).
The Right-of-Use (ROU) asset has been recognised at its carrying amount as if Ind AS 116 has been applied since the commencement date of the lease
arrangement by using the incremental borrowing rate as at the transaction date (being 01st April, 2019). The company has not restated the comparatives
information, instead, the cumulative effect of initially applying this standard has been recognised as an adjustment to the opening balance of retained
earnings as on 01st April, 2019.
Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if
the use of such option is reasonably certain.
The company makes an assessment of the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any
options to extend or terminate the contract will be exercised.
In evaluating the lease term, the company considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to
the termination of the lease and the importance of the underlying asset to the company's operations, taking into account the location of the underlying asset
and the availability of suitable alternatives. The lease term for future periods is reassessed to ensure that the lease term reflects the current economic
circumstances. In respect of such long-term contracts, Ind AS 116 is applied.
2.9.1 Where the company is lessor
As per terms of lease agreements, there is no substantial transfer of risk and reward of the property to the lessee. Accordingly, such leased out assets are
treated as belonging to the company. Rental income from operating leases is recognised on straight-line basis over the term of the relevant lease. Initial
direct cost, if any, incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on straight¬
line basis over the lease term.
2.9.2 Where the company is a lessee
The company's lease asset class primarily consist of leases for land and buildings. The company assesses whether a contract contains a lease, at the
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: (1) the contract involves the use of an
identified asset (2) the company has substantially all of the economic benefits from use of the asset through the period of the lease and (3) the company has
the right to direct the use of the asset.
At the date of commencement of the lease, the company recognises a Right-of- Use asset (“ROU”) and a corresponding lease liability for all lease
arrangements in which it is a lessee. The company has elected to use the exemptions provided by the standard on lease contracts for which the lease term
ends within 12 months as of the date of initial application, and lease contracts for which the underlying asset is of low value.
For these short-term and low value leases, the company recognises the lease payments as an operating expense on a straight-line basis over the term of the
lease. Right-of-use assets are depreciated from the commencement date on a straight-line basis over the lease term or useful life of the underlying asset
whichever shorter. Right-of-use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts
may not be recoverable.
For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an
individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable
amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
The lease liability is initially measured at amortised cost at the present value of the future lease payments. The lease payments are discounted using
the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of the leases.
Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the company changes its assessment if whether it
will exercise an extension or a termination option.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
2.10 Inventories
Inventories are stated at lower of cost and net realisable value.
Cost comprises of purchase price, freight, other attributable costs, applicable taxes not eligible for credit, less rebates and discounts, which is
determined on First-in, First-out ('FIFO') basis.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and selling expenses.
Stores and spares which do not meet the definition of Property, Plant and Equipment are accounted as inventories.
All items of inventories which are considered to be damaged, unmarketable or unserviceable and have become otherwise obsolete are valued at the
estimated net realisable value.
2.10.1 Raw materials
Raw materials are valued at cost of purchase, net of duties and taxes and include all expenses incurred in bringing such materials to the location and
condition of its use.
2.10.2 Finished goods
Finished goods include conversion costs in addition to the landed cost of raw materials.
2.10.3 Stock in Trade
Cost of stock-in-trade includes the purchase price, freight, other attributable costs, applicable taxes not eligible for credit, less rebates and discounts.
2.10.4 Stores, spares and tools
Cost of stores, spares and tools includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition.
2.11 Employee benefits
In respect of defined contribution plan, the company makes the stipulated contributions to provident fund, employees' state insurance and pension
fund, in respect of employees to the respective authorities under which the liability of the company is limited to the extent of the contribution.
The liability for gratuity, considered as defined benefit, is determined actuarially using the projected unit credit method, with actuarial valuations
being carried out at the end of each annual reporting period.
Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets
(excluding interest), is reflected immediately in the statement of financial position with a charge or credit recognised in other comprehensive income
in the period in which they occur. Re- measurement gains and losses recognised in other comprehensive income is reflected immediately in retained
earnings and will not be reclassified to profit or loss. Past service cost is recognised in profit or loss in the period of a plan amendment. Net interest is
calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset.
Defined benefit costs are categorised as follows:
- service cost (including current service cost, past service cost, as well as gains
and losses on curtailments and settlements);
- net interest expense or income; and
- re-measurement.
The company presents the first two components of defined benefit costs in profit or loss under the head 'Employee benefits expense'. Curtailment
gains and losses are accounted for as past service costs.
The retirement benefit obligation recognised in the statement of financial position represents the actual deficit or surplus in the company's defined
benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from
the plans or reductions in future contributions to the plans. A liability for a termination benefit is recognised at the earlier of when the entity can no
longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs.
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service
is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service. Liabilities recognised in respect of short-term
employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
The company recognises a liability and an expense for bonus. The company recognises a provision where contractually obligated or where there is a
past practice that has created a constructive obligation.
2.12 Income taxes
Tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business combination or to an
item recognised directly in equity or in other comprehensive income.
2.12.1 Current tax
Current tax is the amount of tax payable based on the taxable profit for the year as determined in accordance with the applicable tax rates and the
provisions of the Indian Income Tax Act, 1961.
2.12.2 Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the
corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary
differences.
Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be
available against which those deductible temporary differences can be utilised.
Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business
combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities
are not recognised if the temporary difference arises from the initial recognition of goodwill.
The carrying amount of deferred tax assets is reviewed at the end of each annual reporting period and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is
realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax assets and deferred tax liabilities are netted against each other if a legally enforceable right exists to set off current tax assets against
current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Current and deferred tax are recognised in the statement of profit and loss, except when they are related to items that are recognised in other
comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly
in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the
accounting for the business combination.
The company has exercised option to pay income tax u/s. 115BAA of the Income Tax Act, 1961 from the financial year 2019-2020. Hence the provisions
relating to minimum alternate tax (MAT) are not applicable to the company.
2.13 Foreign currency translation
The functional currency of the company is determined on the basis of the primary economic environment in which it operates. The functional currency
of the company is Indian National Rupee (INR).
The transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the
dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates
prevailing at that date. Non- monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at
the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not
retranslated.
Exchange differences on monetary items are recognised in Statement of Profit and Loss in the period in which they arise except for:
- exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of
those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;
- exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur
(therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified
from equity to Statement of Profit and Loss on repayment of the monetary items.
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