2. Material Accounting Policiesa) Basis of preparation
The financial statements of the Company have been prepared and presented in accordance with the Indian Accounting Standards (Ind
AS) as prescribed under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules 2015, as
amended from time to time and other relevant provisions of the Companies Act, 2013.
The financial statements have been prepared under the historical cost convention on accrual basis of accounting, except for certain items
of Assets and Liabilities that have been measured on fair value basis. Historical cost is generally based on the fair value of the
consideration given in exchange for goods and services. Accounting policies have been consistently applied except where a newly
issued accounting standard is initially adopted or revision to existing accounting standards requires a change in the accounting policy
hitherto in use. Management evaluates all recently issued or revised accounting standards on a periodic basis.
All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria
set out in Note 2(r). Based on the nature of products and services and the time between the acquisition of assets for processing and their
realization in cash and cash equivalent, the Company has ascertained its operating cycle as 12 months for the purpose of current and
non-current classification of assets and liabilities.
b) Statement of Compliance with Ind AS
The Financial Statements comprising Balance Sheet, Statement of Profit and Loss, Statement of Changes in Equity, Statement of Cash
Flow together with notes for the year ended March 31st, 2026, have been prepared in accordance with Ind AS as notified above.
c) Changes in Accounting policies effective from 1st April 2025
Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies (Indian
Accounting Standards) Rules as issued from time to time.
The Company has applied the following amendments to Indian Accounting Standards for the year ended 31st March 2026:
i. Ind AS 1 - Implementation of Amendments to Ind AS 1 - Classification of Liabilities
The Company has adopted amendments to Ind AS 1 relating to classification of liabilities as current or non-current. Classification is
based on the existence of a substantive right to defer settlement for at least twelve months as at the reporting date.
Only covenants required to be complied with on or before the reporting date affect classification; covenants applicable after the
reporting date require disclosure only. A liability may continue to be classified as non-current where a waiver for breach of covenant is
obtained after the reporting date but before approval of the financial statements, subject to the conditions of the amendment.
Conversion options are considered only where they are not classified as equity in accordance with Ind AS 32.
ii. Ind AS 12 - Income Taxes (International Tax Reform - Pillar Two)
The Company has applied the mandatory temporary exception from recognition and disclosure of deferred tax assets and liabilities
arising from the Pillar Two model rules introduced through amendments to Ind AS 12. The Company has assessed its exposure to
Pillar Two income taxes and does not expect a material impact on its financial statements.
iii. Ind AS 7 - Supplier Finance Arrangements
The amendments require disclosures to enhance transparency of supplier finance arrangements and their effects on an entity's
liabilities, cash flows and exposure to liquidity risk. The company has complied with the disclosure requirements, to the extent
applicable.
iv. Ind AS 21 - Lack of Exchangeability
The amendments provide guidance on assessing when a currency is exchangeable into another currency and on determining the
exchange rate when exchangeability is lacking. The Company has evaluated the impact of these amendments and concluded that they
do not have a material impact on its financial statements.
Overall impact:
The adoption of the above amendments did not have a material impact on the Company's financial statements for the current or prior
periods.
d) Changes in Accounting Standards that may affect the Company after 31st March 2026
The Ministry of Corporate Affairs (MCA), vide notification dated 13th August 2025, has issued amendments to Ind AS 1 - Presentation of
Financial Statements, relating to the classification of liabilities as current or non-current. The amendments clarify that classification is
based on rights that exist at the end of the reporting period, and that only covenants required to be complied with on or before the
reporting date affect such classification.
These amendments are applicable for annual reporting periods beginning on or after 1st April 2026.
The Company has performed a preliminary assessment of its loan arrangements and does not expect these amendments to have a
material impact on the classification of its financial liabilities.
e) Functional and Presentation Currency
Items included in financial statements of the Company are measured using the currency of the primary economic environment in which
the Company operates (“the functional currency”). Indian rupee is the functional currency of the Company.
The Financial Statements are presented in Indian Rupees which is the Company's presentation currency. All financial information
presented in Indian Rupees has been rounded to the nearest Crore (Cr) with two decimals except where otherwise indicated.
f) Critical Accounting Judgments, Assumptions and Key Sources of Estimation Uncertainty
The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets, liabilities, the disclosures of contingent assets and
contingent liabilities at the date of financial statements, income and expenses during the period. Actual results may differ from these
estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized
in the period in which the estimates are revised and in future periods which are affected.
Critical Judgments in applying accounting policiesi. Classification of investments in TVS Automobile Solutions Private Limited & TASL Automobile Solutions Private Limited
The Company holds investments in equity shares of TVS Automobile Solutions Private Limited ("TVS ASPL”) & TASL Automobile
Solutions Private Limited (“TASL”). In the opinion of the management, TVS ASPL & TASL are not considered to be associates of the
Company. Accordingly, the investments in their shares have been designated as investment at FVTOCI.
ii. Lease
The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease
requires significant judgment. The Company uses significant judgement in assessing the lease term (including anticipated renewals)
and the applicable discount rate.
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 on 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 Company's
operations taking into account the location of the underlying asset and the availability of suitable alternatives. The Company revises
the lease term if there is a change in the non-cancellable period of a lease.
The Company has elected not to apply the requirements of Ind AS 116 Leases to short-term leases of all assets that have a lease term
of 12 months or less and leases for which the underlying asset is of low value.
The discount rate is generally based on the incremental borrowing rate specific to the lease being evaluated or for a portfolio of leases
with similar characteristics.
Assumptions and Key Sources of Estimation Uncertainty
i. Fair value measurements and valuation processes
Some of the Company's assets and liabilities are measured at fair value for financial reporting purposes. In estimating the fair value of
an asset or a liability, the Company uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the
Company engages third party qualified valuers to perform the valuation. Management works closely with the qualified external valuers to
establish the appropriate valuation techniques and inputs to the model.
Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities are disclosed in
Note 2(q).
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