2. STATEMENT OF SIGNIFICANT ACCOUNTING
POLICIES
The Company has prepared financial statements for
the year ended March 31, 2026 in accordance with
Indian Accounting Standards (Ind AS) notified under
the Companies (Indian Accounting Standards) Rules,
2015 (as amended) read with Section 133 of the
Companies Act, 2013, (the 'Act') and other relevant
provision of the act together with the comparative
data as at and for the year ended March 31, 2026.
The accounting policies are applied consistently to
all the periods presented in the standalone financial
statements. These financial statements have been
prepared on a going concern basis.
The financial statements are presented in Indian
Rupees which is the functional currency of the
company. All the financials information is presented
in Indian rupees and are rounded to the nearest rupees
in million except when otherwise indicated.
2.1 Basis of preparation
The financial statements have been prepared on the
historical cost basis, except for:
(i) certain financial instruments that are measured
at fair values at the end of each reporting period;
(ii) defined benefit plans - plan assets that are
measured at fair values at the end of each
reporting period, as explained in the accounting
policies below. Historical cost is generally based
on the fair value of the consideration given in
exchange for goods and services.
The Company has consistently applied the following
accounting policies to all periods presented in these
financial statements.
a) Use of estimates and judgements
The preparation of Company's financial
statements in conformity with the recognition
and measurement principles of Ind AS requires
management of the Company to make estimates
and judgements that affect the reported balances
of assets and liabilities, disclosures of contingent
liabilities as at the date of company financial
statements and the reported amounts of income
and expenses for the periods presented. Estimates
and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which
the estimates are revised and future periods
are affected. The Company uses the following
critical accounting estimates in preparation of
its standalone financial statements:
b) Current versus non-current classification
Assets and Liabilities are classified as current or
non - current, inter-alia considering the normal
operating cycle of the company's operations
and the expected realization/settlement thereof
within 12 months after the Balance Sheet date.
Deferred tax assets and liabilities are classified as
non-current assets and liabilities.
c) 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 by the Company.
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.
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 assets and liabilities for which fair value is
measured or disclosed in the financial statements
are categorised within the fair value hierarchy,
described as follows, based on the lowest
level input that is significant to the fair value
measurement as a whole:
• Level 1 — Quoted (unadjusted) market
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 recognised in
the financial statements on a recurring basis, the
Company determines whether transfers have
occurred between levels in the hierarchy by re¬
assessing categorisation (based on the lowest
level input that is significant to the fair value
measurement as a whole) at the end of each
reporting period.
d) Revenue recognition
Revenue from contracts with customers is
recognised when control of the goods or services
are transferred to the customer at an amount that
reflects the consideration to which the Company
expects to be entitled in exchange for those
goods or services.
The Company has generally concluded that it
is the principal in its revenue arrangements,
since it is the primary obligor in all of its revenue
arrangement, as it has pricing latitude and is
exposed to inventory and credit risks.
Revenue is stated net of goods and service tax
and net of returns, chargebacks, rebates and
other similar allowances. These are calculated on
the basis of historical experience and the specific
terms in the individual contracts.
In determining the transaction price, the
Company considers the effects of variable
consideration, the existence of significant
financing components, noncash consideration,
and consideration payable to the customer (if
any).
The Company estimates variable consideration
at contract inception until it is highly probable
that a significant revenue reversal in the amount
of cumulative revenue recognised will not occur
when the associated uncertainty with the variable
consideration is subsequently resolved.
Royalties: Royalty revenue is recognised on an
accrual basis in accordance with the substance
of the relevant agreement (provided that it is
probable that economic benefits will flow to
the Company and the amount of revenue can
be measured reliably). Royalty arrangements
that are based on production, sales and other
measures are recognised by reference to the
underlying arrangement.
Interest: Interest income is recognised on a
time proportion basis taking into account the
amount outstanding and the applicable interest
applicable. Interest income is included under the
head “Other income” in the statement of profit &
loss account.
Dividends: Dividend income is recognised when
the Company's right to receive dividend is
established by the balance sheet date.
e) Cash flow statement
Cash flows are reported using the indirect
method, whereby profit for the period 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 expenses associated with investing
or financing cash flows. The cash flows from
operating, investing and financing activities of
the Company are segregated.
f) Income Tax.
Income tax expense consists of current and
deferred tax. Income tax expense is recognised
in profit or loss except to the extent that it relates
to items recognised in OCI or directly in equity,
in which case it is recognised in OCI or directly in
equity respectively
i. Current income tax
Current tax is the expected tax payable on
the taxable profit for the year, using tax rates
enacted or substantively enacted by the end
of the reporting period, and any adjustment
to tax payable in respect of previous years.
Current tax assets and tax liabilities are offset
where the Company has a legally enforceable
right to offset and intends either to settle on a
net basis, or to realise the asset and settle the
liability simultaneously. Current income tax
assets and liabilities are measured at the amount
expected to be recovered from or paid to the
taxation authorities.
Current income tax relating to items recognised
outside profit or loss is recognised outside profit
or loss (either in other comprehensive income or
in equity). Current tax items are recognised in
correlation to the underlying transaction either in
OCI or directly in equity. Management periodically
evaluates positions taken in the tax returns with
respect to situations in which applicable tax
regulations are subject to interpretation and
establishes provisions where appropriate.
The Govt. of India had issued the Taxation Laws
(Amendment) Act 2019 which provides Domestic
Companies an option to pay corporate tax at
reduced rates from April 1, 2019 subject to
certain conditions. The company intends to opt
for lower tax regime. No tax provision has been
made for the year in view of losses. The company
has recognised consequential impact by reversing
deferred tax assets.
ii. Deferred tax
Deferred tax is provided using the liability method
on temporary differences between the tax
bases of assets and liabilities and their carrying
amounts for financial reporting purposes at the
reporting date.
Deferred tax liabilities are recognised for all
taxable temporary differences, except:
• When the deferred tax liability arises
from the initial recognition of an asset
or liability in a transaction that is not a
business combination and, at the time of the
transaction, affects neither the accounting
profit nor taxable profit or loss
• In respect of taxable temporary differences
associated with investments in subsidiaries
and interests in joint ventures when the
timing of the reversal of the temporary
differences can be controlled and it is
probable that the temporary differences will
not reverse in the foreseeable future
Deferred tax assets are recognised for all
deductible temporary differences and the carry
forward of any unused tax losses. Deferred
tax assets are recognised to the extent that it
is probable that taxable profit will be available
against which the deductible temporary
differences, and the carry forward of unused tax
losses can be utilised, except:
• When the deferred tax asset relating to
the deductible temporary difference arises
from the initial recognition of an asset
or liability in a transaction that is not a
business combination and, at the time of the
transaction, affects neither the accounting
profit nor taxable profit or loss
• In respect of deductible temporary
differences associated with investments in
subsidiaries and interests in joint ventures
deferred tax assets are recognised only
to the extent that it is probable that the
temporary differences will reverse in the
foreseeable future and taxable profit will
be available against which the temporary
differences can be utilised.
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 utilised.
Unrecognised deferred tax assets are re-assessed
at each reporting date and are recognised 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 realised 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 recognised outside
profit or loss is recognised outside profit or loss
(either in other comprehensive income or in
equity). Deferred tax items are recognised in
correlation to the underlying transaction either
in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are
offset 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.
g) Defined benefit plans (gratuity benefits)
The Company's obligation on account of gratuity
is determined based on actuarial valuations.
An actuarial valuation involves making various
assumptions that may differ from actual
developments in the future. These include
the determination of the discount rate, future
salary increases and mortality rates. Due to
the complexities involved in the valuation and
its long-term nature, these liabilities are highly
sensitive to changes in these assumptions. All
assumptions are reviewed at each reporting date.
The parameter most subject to change is the
discount rate. In determining the appropriate
discount rate, the management considers the
interest rates of government bonds in currencies
consistent with the currencies of the post¬
employment benefit obligation.
The mortality rate is based on publicly available
mortality tables for the specific countries.
Those mortality tables tend to change only at
interval in response to demographic changes.
Future salary increases and gratuity increases
are based on expected future inflation rates for
the respective countries. Further details about
gratuity obligations are given in Refer Note 38.
h) Property, plant and equipment
Plant and equipment is stated at cost of acquisition
or constructions including attributable borrowing
cost till such assets are ready for their intended
use, less of accumulated depreciation and
accumulated impairment losses, if any. Cost of
acquisition for the aforesaid purpose comprises
its purchase price, including import duties and
other non-refundable taxes or levies and any
directly attributable cost of bringing the asset
to its working condition for its intended use, net
of trade discounts, rebates and credits received
if any.
Such cost includes the cost of replacing part of
the plant and equipment and borrowing costs for
long-term construction projects if the recognition
criteria are met. When significant parts of plant
and equipment are required to be replaced
at intervals, the Company depreciates them
separately based on their specific useful lives.
Likewise, when a major inspection is performed,
its cost is recognised in the carrying amount of
the plant and equipment as a replacement if the
recognition criteria are satisfied. All other repair
and maintenance costs are recognised in profit or
loss as incurred.
Property Plant and equipment are eliminated from
financial statements, either on disposal or when
retired from active use. Losses arising in case of
retirement of Property, Plant and equipment and
gains or losses arising from disposal of property,
plant and equipment are recognised in statement
of profit and loss in the year of occurrence.
The assets' residual values, useful lives and
methods of depreciation are reviewed at each
financial year and adjusted prospectively, if
appropriate,
Depreciation is calculated on a straight-line basis
over the estimated useful lives of the assets.
Useful lives used by the Company are same as
prescribed rates prescribed under Schedule II
of the Companies Act 2013. The range of useful
lives of the property, plant and equipment are
as follows:
i) Intangible Assets
Intangible assets acquired separately are
measured on initial recognition at cost. Following
initial recognition, intangible assets are carried
at cost less any accumulated amortisation and
accumulated impairment losses. Internally
generated intangibles are not capitalised and the
related expenditure is reflected in profit or loss in
the period in which the expenditure is incurred.
The useful lives of intangible assets are assessed
as either finite or indefinite. Intangible assets with
finite lives are amortised over the useful economic
life and assessed for impairment whenever there
is an indication that the intangible asset may
be impaired. Intangible assets are amortised
as follows:
> Software - 5 years
Software for internal use, which is primarily
acquired from third-party vendors and which
is an integral part of a tangible asset, including
consultancy charges for implementing
the software, is capitalised as part of the
related tangible asset. Subsequent costs
associated with maintaining such software
are recognised as expense as incurred. The
capitalised costs are amortised over the
lower of the estimated useful life of the
software and the remaining useful life of
the tangible fixed asset.
j) Investments in the nature of equity in
subsidiaries.
The Company has elected to recognise its
investments in equity instruments in subsidiaries
and associates at cost in the separate financial
statements in accordance with the option
available in Ind AS 27, ‘Separate Financial
Statements'.
k) Investment properties
Investment properties comprise portions of office
buildings and residential premises that are held
for long-term rental yields and/or for capital
appreciation. Investment properties are initially
recognised at cost. Subsequently investment
property comprising of building is carried at cost
less accumulated depreciation and accumulated
impairment losses.
The cost includes the cost of replacing parts
and borrowing costs for long-term construction
projects if the recognition criteria are met. When
significant parts of the investment property
are required to be replaced at intervals, the
Group depreciates them separately based on
their specific useful lives. All other repair and
maintenance costs are recognised in profit and
loss as incurred.
Depreciation on building is provided over the
estimated useful lives as specified in Schedule
II to the Companies Act, 2013. The residual
values, useful lives and depreciation method
of investment properties are reviewed, and
adjusted on prospective basis as appropriate,
at each financial year end. The effects of any
revision are included in the statement of profit
and loss when the changes arise.
Though the group measures investment property
using cost-based measurement, the fair value of
investment property is disclosed in the notes.
Investment properties are derecognised when
either they have been disposed of or 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 statement of profit and loss in
the period of de-recognition.
l) Impairment of non-financial assets
The Company assesses, at each reporting date,
whether there is an indication that an asset
may be impaired. If any indication exists, or
when annual impairment testing for an asset
is required, the Company estimates the asset's
recoverable amount. An asset's recoverable
amount is the higher of an asset's or cash¬
generating unit's (CGU) fair value less costs of
disposal and its value in use. Recoverable amount
is determined for an individual asset, unless the
asset does not generate cash inflows that are
largely independent of those from other assets or
Company's assets. When the carrying amount of
an asset or CGU exceeds its recoverable amount,
the asset is considered impaired and is written
down to its recoverable amount.
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. 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.
Impairment losses of continuing operations,
including impairment on inventories, are
recognised in the statement of profit and loss.
An assessment is made at each reporting date
to determine whether there is an indication that
previously recognised impairment losses no longer
exist or have decreased. If such indication exists,
the Company estimates the asset's or CGU's
recoverable amount. A previously recognised
impairment loss is reversed only if there has been
a change in the assumptions used to determine
the asset's recoverable amount since the last
impairment loss was recognised. The reversal is
limited so that the carrying amount of the asset
does not exceed its recoverable amount, nor
exceed the carrying amount that would have
been determined, net of depreciation, had no
impairment loss been recognised for the asset
in prior years. Such reversal is recognised in the
statement of profit or loss.
m) Non- current Asset held for sale.
Non-current assets and disposal groups are
classified as held for sale if their carrying amount
will be recovered principally through a sale
transaction rather than through continuing use.
This condition is regarded as met only when the
asset (or disposal group) is available for immediate
sale in its present condition subject only to terms
that are usual and customary for sales of such
asset (or disposal group) and its sale is highly
probable. Management must be committed to
the sale, which should be expected to qualify
for recognition as a completed sale within one
year from the date of classification. Non-current
assets (and disposal groups) classified as held for
sale are measured at the lower of their carrying
amount and fair value less costs to sell. Non¬
current assets are not depreciated or amortised.
n) Borrowing costs:
a. Borrowing costs that are attributable to the
acquisition, construction, or production of
a qualifying asset are capitalised as a part
of the cost of such asset till such time the
asset is ready for its intended use or sale. A
qualifying asset is an asset that necessarily
requires a substantial period of time
(generally over twelve months) to get ready
for its intended use or sale.
b. All other borrowing costs are recognised
as expense in the period in which they
are incurred.
o) Leases
The Company evaluates each contract or
arrangement, whether it qualifies as lease as
defined under Ind AS 116.
The Company as a lessee:
The Company enters into an arrangement for
lease of land, buildings, plant and machinery
including computer equipment and vehicles. Such
arrangements are generally for a fixed period but
may have extension or termination options. The
Company assesses, whether the contract is, or
contains, a lease, at its inception. A contract is,
or contains, a lease if the contract conveys the
right to
a) control the use of an identified asset,
b) obtain substantially all the economic
benefits from use of the identified asset, and
c) direct the use of the identified asset.
The Company determines the lease term as the
non-cancellable period of a lease, together with
periods covered by an option to extend the lease,
where the Company is reasonably certain to
exercise that option.
The Company at the commencement of the
lease contract recognizes a Right-of-Use (RoU)
asset at cost and corresponding lease liability,
except for leases with term of less than twelve
months (short term leases) and low-value assets.
For these short term and low value leases, the
Company recognizes the lease payments as an
operating expense on a straight-line basis over
the lease term.
The cost of the right-of-use asset comprises
the amount of the initial measurement of the
lease liability, any lease payments made at or
before the inception date of the lease, plus any
initial direct costs, less any lease incentives
received. Subsequently, the right-of-use assets
are measured at cost less any accumulated
depreciation and accumulated impairment
losses, if any. The right-of-use assets are
depreciated using the straight-line method from
the commencement date over the shorter of
lease term or useful life of right-of-use asset.
The estimated useful lives of right-of-use assets
are determined on the same basis as those of
property, plant and equipment.
The Company applies Ind AS 36 to determine
whether an RoU asset is impaired and accounts
for any identified impairment loss as described in
the impairment of non-financial assets below.
For lease liabilities at the commencement of the
lease, the Company measures the lease liability
at the present value of the lease payments that
are not paid at that date. The lease payments
are discounted using the interest rate implicit in
the lease, if that rate can be readily determined,
if that rate is not readily determined, the lease
payments are discounted using the incremental
borrowing rate that the Company would have to
pay to borrow funds, including the consideration
of factors such as the nature of the asset and
location, collateral, market terms and conditions,
as applicable in a similar economic environment.
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 Company recognizes the
amount of the re-measurement of lease liability as
an adjustment to the right-of-use assets. Where
the carrying amount of the right-of-use asset is
reduced to zero and there is a further reduction
in the measurement of the lease liability, the
Company recognizes any remaining amount of
the re-measurement in statement of profit and
loss. Lease liability payments are classified as
cash used in financing activities in the statement
of cash flows.
The Company as a lessor
Leases under which the Company is a lessor are
classified as finance or operating leases. Lease
contracts where all the risks and rewards are
substantially transferred to the lessee, the lease
contracts are classified as finance leases. All other
leases are classified as operating leases. For leases
under which the Company is an intermediate
lessor, the Company accounts for the head-lease
and the sub-lease as two separate contracts. The
sub-lease is further classified either as a finance
lease or an operating lease by reference to the
RoU asset arising from the head-lease.
p) Corporate Social Responsibility (CSR)
Expenditure
The Companies Act, 2013, read with the
Companies (Corporate Social Responsibility
Policy) Rules, 2014 (the “CSR Rules”), requires
that companies meet certain thresholds of net
worth, turnover or net profits to constitute a CSR
Committee and to spend 2% of the company's
average profits, before taxes for the previous
three fiscal years, on certain identified areas of
CSR. This requirement became effective April 1,
2014. We have complied with this requirement,
and a detailed report on CSR will form part of
the Annual Report of the Company for fiscal
year 2026.
CSR spend are charged to the statement of
profit and loss as an expense in the period they
are incurred.
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