Summary of basis of compliance, basis of preparation and presentation, critical accounting estimates,
assumptions and judgements and significant accounting policies
Statement of compliance:
Standalone Financial Statements 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 relevant provisions of the Companies Act, 2013.
Accordingly, the Company has prepared these Standalone Financial Statements which comprise the Balance Sheet
as at 31 March, 2025, the Statement of Profit and Loss for the year ended 31 March 2025, the Statement of Cash
Flows for the year ended 31 March 2025 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').
2.1 Basis of preparation of financial statements
The Standalone financial statements of the company are prepared in accordance with Indian Accounting Standards
(Ind AS), under the historical cost convention on the accrual basis as per the provisions of the Companies Act, 2013
("the Act"), except for:
> Financial instruments - measured at fair value;
> Quoted Investments - measured at fair value;
> Plan assets under defined benefit plans - measured at fair value
> In addition, the carrying values of recognized assets and liabilities, designated as hedged items in fair value
hedges that would otherwise be carried at cost, are adjusted to record changes in the fair values attributable
to the risks that are being hedged in effective hedge relationship.
> The functional currency of the company is Indian Rupee. Foreign currency transactions are recorded at
exchange rates prevailing on the date of transaction. Foreign Currency denominated monetary assets and
liabilities are retranslated at the exchange rate prevailing on the balance sheet dates and exchange gains
and losses arising on settlement and restatement are recognised in the statement of profit and loss. Non¬
monetary assets and liabilities that are measured in terms of historical cost in foreign currencies are not
retranslated
2.2 Current and non-current classification
The Company presents assets and liabilities in the balance sheet based on current / non-current classification.
An asset is classified as current when it satisfies any of the following criteria:
> It is expected to be realised in, or is intended for sale or consumption in, the Company's normal operating
cycle.
> It is held primarily for the purpose of being traded;
> It is expected to be realised within 12 months after the reporting date; or
> It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least
12 months after the reporting date.
> All other assets are classified as non-current.
A liability is classified as current when it satisfies any of the following criteria:
> It is expected to be settled in the Company's normal operating cycle;
> It is held primarily for the purpose of being traded
> It is due to be settled within 12 months after the reporting date; or the Company does not have an unconditional
right to defer settlement of the liability for at least 12 months after the reporting date. Terms of liability that
could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not
affect its classification.
> All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current only.
The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting
Standards) Rules, 2015 and relevant amendment rules issued thereafter. Accounting policies have been consistently
applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting
standard requires a change in the accounting policy hitherto in use.
The statement of cash flows has been prepared under indirect method, whereby profit or loss is adjusted for the
effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or
payments and items of income or expense associated with investing or financing cash flows. The cash flows from
operating, investing and financing activities of the Company are segregated. The Company considers all highly
liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of
changes in value to be cash equivalents.
The Standalone Financial Statements have been presented in Indian Rupees (INR), which is the Company's functional
currency. All financial information presented in INR has been rounded off to the nearest rupee in lakhs, unless
otherwise stated.
!.3 Use of estimates and judgments
The preparation of the financial statements in conformity with Ind AS requires the Management to make estimates,
judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting
policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the
date of the financial statements and reported amounts of revenues and expenses during the period. Actual results
could differ from those estimates.
This note provides an overview of the areas where there is a higher degree of judgment or complexity. Detailed
information about each of these estimates and judgments is included in relevant notes together with information
about the basis of calculation.
Estimates and judgments are regularly revisited. Estimates are based on historical experience and other factors,
including futuristic reasonable information that may have a financial impact on the company.
Following are the areas involving critical estimates and judgements:
• Measurement of defined benefit obligations - Note 43
• Recognition of Deferred tax assets/liabilities - Note 22 and Note 41
• Current Tax Expenses and Current Tax Payable - Note 41 and Note 29
• Measurement and Valuation of Inventory - Note 10
!.4 Significant accounting policies
A summary of the significant accounting policies applied in the preparation of the financial statements is as given
below. These accounting policies have been applied consistently to all the periods presented in the financial
statements.
(A) Property, Plant and Equipment
The cost of property, plant and equipment comprises its purchase price net of any trade discounts and rebates,
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. Expenditure incurred after the
property, plant and equipment have been put into operation, such as repairs and maintenance, are charged
to the Statement of Profit and Loss in the year in which the costs are incurred. Major shut-down and overhaul
expenditure is capitalized as the activities undertaken improve the economic benefits expected to arise from
the asset.
It includes professional fees and, for qualifying assets, borrowing costs capitalized in accordance with the
Company's accounting policy based on Ind AS 23 - Borrowing costs. Such properties are classified to the
appropriate categories of PPE when completed and ready for intended use. Property, plant and equipment
except freehold land held for use in the production, supply or administrative purposes, are stated in the
balance sheet at cost less accumulated depreciation and accumulated impairment losses, if any.
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"
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"
Subsequent expenditure and component accounting
Parts of an item of PPE having different useful lives and significant value and subsequent expenditure on
Property, Plant and Equipment arising on account of capital improvement or other factors are accounted for
as separate components 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. The carrying amount of any component
accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are
charged to profit or loss during the reporting period in which they are incurred.
Depreciation and useful life
Depreciation is provided on a pro-rata basis on the WDV method based on estimated useful life prescribed
under Schedule II to the Companies Act, 2013 Depreciation is provided based on useful life of the assets as
prescribed in Schedule II to the Companies Act, 2013.
Freehold land is not depreciated.
The Company reviews the residual value, useful lives and depreciation method annually and, if expectations
differ from previous estimates, the change is accounted for as a change in accounting estimate on a prospective
basis.
Leasehold improvements are depreciated over the period of the lease agreement.
The Company has elected to continue with the carrying value for all of its property, plant and equipment as
recognized in the financial statements on transition to Ind AS, measured as per the previous GAAP and use
that as its deemed cost as at the date of transition.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying
amount is greater than its estimated recoverable amount.
Derecognition
An item of PPE is de-recognized upon disposal or when no future economic benefits are expected to arise
from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of
property, plant and equipment is determined as the difference between the sales proceeds and the carrying
amount of the asset and is recognized in Statement of Profit and Loss.
(B) 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 on WDV basis over their
estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each
reporting year, with the effect of any changes in estimate being accounted for on a prospective basis.
Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated
impairment losses.
Directly attributable costs that are capitalized as part of the intangible asset include employee costs and an
appropriate portion of relevant overheads. Capitalized development costs are recorded as intangible assets
and amortized from the point at which the asset is available for use.
Useful life and amortization
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated
amortization and impairment losses. Intangible assets are amortized on a WDV basis over the period of
estimated useful Lives of 10 years. The estimated useful life is reviewed at the end of each reporting period
and the effect of any changes in estimate is accounted for prospectively.
Derecognition
Intangible assets are derecognized on disposal, or when no future economic benefits are expected from use
or disposal. Gains or losses arising from derecognition of an intangible asset are determined as the difference
between the net disposal proceeds and the carrying amount.
The Company has elected to continue with carrying value of all its intangible assets recognised as on transition
date, measured as per the previous GAAP and use that carrying value as its deemed cost as of transition date.
(C) Capital Work in progress ('CWIP') and Intangible assets under development
Projects under commissioning and other CWIP/ intangible assets under development are carried at cost,
comprising direct cost, related incidental expenses and attributable borrowing cost.
Subsequent expenditures relating to property, plant and equipment/intangible Assets are capitalised only
when it is probable that future economic benefit associated with these will flow to the Company and the cost
of the item can be measured reliably.
Advances given to acquire property, plant and equipment are recorded as non-current assets and subsequently
transferred to CWIP on acquisition of related assets.
(D) Investment property
Investment properties are land and buildings that are held for long term lease rental yields and/ or for capital
appreciation. Investment properties are initially recognised at cost including transaction costs. Subsequently
investment properties comprising buildings are carried at cost less accumulated depreciation and accumulated
impairment losses, if any.
An investment property is de-recognised when either the investment property has been disposed of or do not
meet the criteria of investment property i.e. when the investment property is permanently withdrawn from
use and no future economic benefit is expected from its disposal. The difference between the net disposal
proceeds and the carrying amount of the asset is recognised in the Standalone Statement of Profit and Loss
in the period of de-recognition.
(E) Impairment
At the end of each reporting year, the Company 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 at least annually, and whenever there is an indication, 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 recognized immediately in the Statement of Profit and Loss.
Goodwill and intangible assets that do not have definite useful life are not amortized and are tested at least
annually for impairment. If events or changes in circumstances indicate that they might be impaired, they are
tested for impairment once again.
When there is indication that an impairment loss recognized for an asset in earlier accounting periods no
longer exists or may have decreased, such reversal of impairment loss is recognized in the statement of
profit and loss, to the extent the amount was previously charged to the statement of profit and loss.
(F) Inventories
Raw materials
Raw materials, work in progress, traded stock and finished goods are stated at the lower of cost and net
realizable value. Cost of raw materials and traded goods comprises cost of purchases.
Work in progress and finished goods
Cost of work-in-progress and finished goods comprises direct materials, direct labour and an appropriate
proportion of variable and fixed overhead expenditure. Fixed overheads are allocated on the basis of
production of finished goods. Cost of inventories also include all other costs incurred in bringing the inventories
to their present location and condition. Costs of purchased inventory are determined after deducting rebates
and discounts. Net realizable value is the estimated selling price in the ordinary course of business less the
estimated costs of completion and the estimated costs necessary to make the sale.
Costs of inventories are valued at lower of cost or net realizable. Net realizable value represents the estimated
selling price for inventories less all estimated costs of completion and costs necessary to make the sale.
(G) Revenue recognition
Sale ofgoods
Revenue from sale of goods is recognized when control of the products being sold is transferred to the
customer and when there are no longer any unfulfilled obligations. The Company recognizes revenues on
sale of products, net of discounts, sales incentives, rebates granted, returns, sales taxes/GST and duties.
Export incentives are recognized as income as per the terms of the scheme in respect of the exports made
and included as part of other operating revenue.
Revenue from sales is recognized when control of the products has transferred, being when the products are
delivered to the customer, the customer has full discretion over the channel and price to sell / consume the
products, and there is no unfulfilled obligation that could affect the customer's acceptance of the products.
Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and
loss have been transferred to the customer, and either the customer has accepted the products in accordance
with the sales contract or the acceptance provisions have lapsed.
Sale of services
Income from services rendered is recognized based on agreements/arrangements with the customers as the
service is performed and there are no unfulfilled obligations.
Dividend and interest income
Dividend income from investments is recognized when the shareholder's right to receive payment has been
established (provided that it is probable that the economic benefits will flow to the Company and the amount
of income can be measured reliably). Interest income from a financial asset is recognized 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.
Foreign exchange translation
The functional currency of the Company is Indian Rupees which represents the currency of the primary
economic environment in which it operates.
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions
are generally recognized in profit or loss. Monetary balances arising from the transactions denominated in
foreign currency are translated to functional currency using the exchange rate as on the reporting date. Any
gains or loss on such translation, are generally recognized in profit or loss.
Exchange differences on monetary items are recognized in Statement of Profit and Loss in the year in which
they arise.
(H) Income taxes
The income tax expense or credit for the period is the tax payable on the current period's taxable income
based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences and to unused tax losses. The company has decided to opt for
lower income tax rate u/s 115BAA. Accordingly, tax expenses have been calculated considering provisions of
section 115BAA of the Income Tax Act, 1961.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from 'profit before
tax' as reported in the Statement of Profit and Loss because of items of income or expense that are taxable
or deductible in other years and items that are never taxable or deductible. The Company's current tax
is calculated using tax rates and laws that have been enacted or substantively enacted by the end of the
reporting period.
Deferred tax
Deferred tax is recognized 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 recognized for all taxable temporary differences. Deferred tax assets are generally
recognized 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 utilized. Such deferred tax assets
and liabilities are not recognized 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 recognized if the temporary difference arises
from the initial recognition of goodwill.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each reporting date and are
recognized to the extent that it has become probable that future taxable profits will allow the deferred tax
asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when
the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in
other comprehensive income or in equity). Deferred tax items are recognized in correlation to the underlying
transaction either in Other Comprehensive Income or directly in equity.
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 entity has a legally enforceable right to offset and intends either
to settle on a net basis, or to realize the asset and settle the liability simultaneously.
(I) Borrowing costs
Borrowing costs, general or specific, that are directly attributable to the acquisition or construction of qualifying
assets is capitalized as part of such assets. A qualifying asset is one that necessarily takes substantial period
to get ready for intended use. All other borrowing costs are charged to the Statement of Profit and Loss.
The Company determines the amount of borrowing costs eligible for capitalization as the actual borrowing
costs incurred on that borrowing during the year less any interest income earned on temporary investment
of specific borrowings pending their expenditure on qualifying assets, to the extent that an entity borrows
funds specifically for the purpose of obtaining a qualifying asset. In case if the Company borrows generally
and uses the funds for obtaining a qualifying asset, borrowing costs eligible for capitalization are determined
by applying a capitalization rate to the expenditures on that asset.
Borrowing cost includes exchange differences arising from foreign currency borrowings to the extent they are
regarded as an adjustment to the finance cost.
(J) Leases
As a Lessee
Leases of property, plant and equipment where the company, as lessee, has substantially all the risks and
rewards of ownership been classified as finance leases. Finance leases are capitalized at the lease's inception
at the fair value of the leased asset or, if lower, the present value of the minimum lease payments. The
corresponding rental obligations, net of finance charges, are included in borrowings or other financial
liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance
cost is charged to the statement of profit and loss over the lease period so as to produce a constant periodic
rate of interest on the remaining balance of the liability for each period. The gain/loss on derecognition of any
lease asset/liability is routed through the profit and loss account.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company
as lessee are classified as operating leases. Payments made under operating leases (net of any incentives
received from the lessor) are charged to the statement of profit and loss on a straight-line basis over the
period of the lease unless the payments are structured to increase in line with expected general inflation to
compensate for the lessor's expected inflationary cost increases.
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