1.2.1. BASIS OF PREPARATION OF STANDALONE FINANCIAL STATEMENTS
a) Statement of compliance
The standalone financial statements of the Company have been prepared and presented in accordance with Indian
Accounting Standards (Ind AS) as per Companies (Indian Accounting Standards) Rules, 2015 and Companies
(Indian Accounting Standard) Amendment Rules, 2016 as notified under section 133 of Companies Act, 2013 (the
"Act") and other relevant provisions of the Act.
The standalone financial statements were approved for issue by the Board of directors on 24th May, 2025.
The standalone financial statements of the Company are prepared in accordance with Indian Accounting Standards
(Ind AS) under the historical cost convention on accrual basis except for certain financial assets and financial
liabilities that have been measured at fair value.
b) Functional and presentation currency
The standalone financial statements are presented in Indian Rupees (INR), which is also the Company's functional
currency. All amounts have been rounded-off to the nearest lacs unless otherwise indicated.
c) 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 and other criteria set out in Schedule III to the Act. Based on the nature of products and the time between the
acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained
its operating cycle up to twelve months for the purpose of current - noncurrent classification of assets and liabilities.
e) Use of estimates and judgements
In preparing these standalone financial statements, management has made judgements, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.
Actual result may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised prospectively.
Judgements
Information about judgments made in applying accounting policies that have the most significant effect on the
amounts recognised in the standalone financial statements is included in the following notes:
Lease classification - Note 1.2.16
Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material
adjustment in the subsequent period financial statements is included in the following notes:
Ý Estimation of deferred tax expense and payable - Note 1.2.13
Ý Estimated useful life of property, plant and equipment and Intangible assets - Note 1.2.7
Ý Estimation of defined benefit obligations— Note 1.2.12
Ý Impairment of trade receivables- Note 1.2.18
f) Measurement of fair values
The Company's accounting policies and disclosures require the measurement of fair values, for both financial and
non-financial assets and liabilities.
The Company has an established control framework with respect to the measurement of fair values. This includes a
treasury team that has overall responsibility for overseeing all significant fair value measurements, including Level 3
fair values, and reports directly to the Chief Financial Officer.
The treasury team regularly reviews significant unobservable inputs and valuation adjustments. If third party
information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team
assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the
requirements of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified.
Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation
techniques as follows.
- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
- Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices).
- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
When measuring the fair value of an asset or a liability, the Company uses observable market data as far as
possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value
hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy
as the lowest level input that is significant to the entire measurement.
The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period
during which the change has occurred.
1.2.2. Revenue Recognition
1.2.2.1. Sale of goods:
Revenue is recognised upon transfer of control of promised goods to customers in an amount that reflects the
consideration which the Company expects to receive in exchange for those goods.
Revenue from the sale of goods is recognised at the point in time when control is transferred to the customer which
is usually on dispatch / delivery of goods, based on contracts with the customers.
Revenue is measured based on the transaction price, which is the consideration, adjusted for discounts, price
concessions, incentives, and returns, if any, as specified in the contracts with the customers. Revenue excludes taxes
collected from customers on behalf of the government. Accruals for discounts/incentives and returns are estimated
(using the most likely method) based on accumulated experience and underlying schemes and agreements with
customers. Due to the short nature of credit period given to customers, there is no financing component in the
contract.
Contract Assets
Trade Receivables
A receivable represents the Company's right to an amount of consideration that is unconditional (i.e., only the
passage of time is required before payment of the consideration is due).
Contract liabilities
A contract liability is the obligation to transfer goods to a customer for which the Company has received consideration
(or an amount of consideration is due) from the customer. If a customer pays consideration before the Company
transfers goods or services to the customer, a contract liability is recognised when the payment is made, or the
payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs
under the contract.
1.2.2.2. Rendering of Services
Revenue is recognized from rendering of services when the performance obligation is satisfied and the services are
rendered in accordance with the terms and conditions of customer contracts. Revenue is measured based on the
transaction price, which is the consideration, as specified in the contract with the customer. Revenue also excludes
taxes collected from customers.
1.2.2.3. Revenue from time and material and job contracts is recognised on output basis measured by units delivered,
efforts expended, number of transactions processed, etc. and as per terms & conditions under the contract with the
customers.
1.2.2.4. Deferred contract costs are upfront costs incurred for the contract and are amortized on a systematic basis that
is consistent with the transfer to the customer of the goods or services to which the asset relates.
1.2.2.5. Other Income
i) Profit on sale of investments is determined as the difference between the sales price and the carrying value of
the investment upon disposal of investments.
ii) Dividend income is recognised in Statement of Profit and Loss on the date on which the Company's right to
receive payment is established.
iii) Interest income or expense is recognised using the effective interest method.
The 'effective interest rate' is the rate that exactly discounts estimated future cash payments or receipts through the
expected life of the financial instrument to:
- the gross carrying amount of the financial asset ;
or
- the amortised cost of the financial liability
In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the
asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets
that have become credit- impaired subsequent to initial recognition, interest income is calculated by applying the
effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the
calculation of interest income reverts to the gross basis.
iv) Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent
that the amount recoverable can be measured reliably and it is reasonable to expect ultimate collection.
v) Interest on Refund from Income Tax Department / GST department / Environment agencies are accounted for
on receipt basis.
1.2.3. Expenditure Recognition
Expenses are accounted on the accrual basis and on crystallisation of such expenses. And provisions for all known
losses and liabilities are made.
1.2.4. Recent pronouncements
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. Management anticipates that all relevant
pronouncements will be adopted for the first period beginning on or after the effective date of the pronouncement
given below:
a) Ind AS 116- Leases
The amendments require an entity to recognize lease liability including variable lease payments which are not
linked to index or a rate in a way it does not result into gain on Right of Use asset it retains. The Company has
evaluated the amendment and concluded that there is no impact on its standalone financial statements.
b) Ind AS 117- Insurance contracts
MCA notified Ind AS 117, a comprehensive standard that prescribe, recognition, measurement and disclosure
requirements, to avoid diversities in practice for accounting insurance contracts and it applies to all companies
i.e., to all “insurance contracts” regardless of the issuer. The effective date for adoption of this amendment
is annual Company has evaluated the amendment and concluded that there is no impact on its standalone
financial statements.
c) Ind AS 21- The Effects of Changes in Foreign Exchange Rates
Ministry of Corporate Affairs (MCA), via notification dated 7th May 2025, announced amendments to the
Companies (Indian Accounting Standards) Rules, 2015 which come into effect from the date of publication.
The key amendments include the definition of whether a currency is exchangeable, and the process by which
an entity should assess this exchangeability, guidance on how an entity should estimate a spot exchange
rate in cases where a currency is not exchangeable and additional disclosures in cases where an entity has
estimated a spot exchange rate due to a lack of exchangeability. The Company has evaluated the amendment
and concluded that there is no impact on its standalone financial statements.
1.2.5. Cash and cash equivalents
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances, (with
original maturity of three months or less from the date of acquisition), highly liquid investments that are readily
convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
1.2.6. Cash flow statement
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is
adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts
or payments. The cash flows from operating, investing and financing activities of the Company are segregated
based on the available information.
1.2.7. Property, plant and equipment
Buildings and other equipment
Buildings and other equipment (comprising plant and machinery, furniture and fittings, electrical equipment, office
equipment, computers and vehicles) are initially recognized at acquisition cost, including any costs directly attributable
to bringing the assets to the location and condition necessary for them to be capable of operating in the manner
intended by the management. Buildings and other equipment are subsequently measured at cost less accumulated
depreciation and any impairment losses. Cost of property, plant and equipment not ready for the intended use before
reporting date is disclosed as capital work in progress.
Subsequent expenditure incurred on an item of property, plant and equipment is added to the book value of that
asset only if this increases the future benefits from the existing asset beyond its previously assessed standard of
performance.
Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between
the disposal proceeds and the carrying amount of the assets and are recognized in the statement of profit and loss
within other income or other expenses.
The components of assets are capitalized only if the life of the components vary significantly and whose cost is
significant in relation to the cost of respective asset. The life of components in assets are determined based on
technical assessment and past history of replacement of such components in the assets.
Tangible assets are carried at the cost of acquisition or construction less accumulated depreciation and accumulated
impairment, if any. The cost of tangible assets includes non-refundable taxes, duties, freight and other incidental
expenses related to the acquisition and installation of the respective assets. Assets which are retired from active
use and are held for disposal are stated at the lower of their net book value or net realizable value. Cost of tangible
assets not ready for the intended use as at balance sheet date are disclosed as “capital work in progress”.
Impairment testing of intangible assets and property, plant and equipment
For the purpose of impairment assessment, assets are grouped at the lowest levels for which there are largely
independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment
and some are tested at cash-generating unit level. All individual assets or cash-generating units are tested for
impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognized for the amount by which the asset's (or cash-generating unit's) carrying amount
exceeds its recoverable amount, which is the higher of fair value less costs of disposal and value-in-use. To determine
the value-in-use, management estimates expected future cash flows from each cash-generating unit and determines
a suitable discount rate in order to calculate the present value of those cash flows. The data used for impairment
testing procedures are directly linked to the Group's latest approved budget, adjusted as necessary to exclude the
effects of future reorganizations and asset enhancements. Discount factors are determined individually for each
cash generating unit and reflect current market assessments of the time value of money and asset-specific risk
factors.
Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to that cash
generating unit. Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit.
With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss
previously recognized may no longer exist. An impairment loss is reversed if the asset's or cash-generating unit's
recoverable amount exceeds its carrying amount.
Depreciation
Depreciation on tangible assets is provided on straight line method and in the manner prescribed in Schedule II to
the Companies Act, 2013, over its useful life specified in the Act, or based on the useful life of the assets as estimated
by Management based on technical evaluation and advice. The residual value is 5% of the acquisition cost which is
considered to be the amount recoverable at the end of the asset's useful life. The residual values, useful lives and
method of depreciation of property, plant and equipment is reviewed at each financial year end.
Assets costing less than ' 5,000 individually have been fully depreciated in the year of purchase.
The estimated useful life of the intangible assets and the amortisation period are reviewed at the end of each
financial year and the amortisation period is revised to reflect the changed pattern, if any.
1.2.8. Research & Development Expenditure
Revenue expenditure pertaining to research is charged to the standalone statement of profit and loss. Development
costs of products are also charged to the Statement of Profit and Loss unless a product's technical feasibility has
been established, in which case such expenditure is capitalized. The amount capitalized comprises expenditure that
can be directly attributed or allocated on a reasonable and consistent basis to creating, producing and making the
asset ready for its intended use. Property, Plant and equipment utilized for research and development are capitalized
and depreciated in accordance with the policies stated for property, plant and equipment.
1.2.9. Inventories
Inventories are valued at the lower of the cost and the net realizable value. Net realisable value is the estimated
selling price in the ordinary course of business, less estimated costs of completion and to make the sale. Cost is
determined on a First in First out basis. A periodic review is made of slow-moving stock and appropriate provisions
are made for anticipated losses, if any.
1.2.10. Investments
Investments that are readily realisable and are intended to be held for not more than one year from the date on
which such investments are made are classified as current investments. All other investments are classified as
long-term investments. Long-term investments other than investment in subsidiaries are valued at fair market value.
Provision is made for diminution in value to recognize a decline, if any, other than that of temporary in nature.
Current investments are valued at lower of cost and fair market value. Gains or losses that arise on disposal of an
investment are measured as the difference between disposal proceeds and the carrying value and are recognised
in the statement of profit and loss.
1.2.11. Foreign Currency transactions
Reporting and presentation currency
The standalone financial statements are presented in Lakhs of Indian Rupees, which is also the functional currency
of the Company.
Foreign currency transactions and balances
i) Initial Recognition: Transactions in foreign currencies are recorded at the exchange rates prevailing on the date
of the transaction.
ii) Conversion: At the year-end, monetary items in foreign currencies are converted into rupee equivalents at the
year end exchange rates.
1.2.12. Retirement Benefits to employees
i. Post-employment benefit plans
Defined contribution plan
Payment to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Defined Benefit plan
For defined benefit schemes, the cost of providing benefits is determined using Projected Unit Credit
method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains/losses
are recognized in the period of occurrence under Other Comprehensive Income (OCI). Past service cost
is recognized to the extent the benefits are already vested, and otherwise is amortized on a Straight¬
Line method over the average period until the benefits become vested. The retirement benefit obligation
recognized in the balance sheet represents the present value of the defined benefit obligations as adjusted
for unrecognized past service cost.
ii. Short-term employee benefits
The undiscounted amount of short-term employee benefits expected to be paid in exchange of services
rendered by employees is recognized during the period when the employee renders the service. These
benefits include performance incentives, paid annual leave, medical allowance, etc.
1.2.13. Income Tax
Tax expense recognized in the statement of profit or loss comprises the sum of deferred tax and current tax not
recognized in other comprehensive income or directly in equity. Calculation of current tax is based on tax rates
in accordance with tax laws that have been enacted or substantively enacted by the end of the reporting period.
Deferred income taxes are calculated using the liability method on temporary differences between tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes at reporting date. Deferred taxes
pertaining to items recognized in other comprehensive income are also disclosed under the same head. Deferred tax
assets are recognized to the extent that it is probable that the underlying tax loss or deductible temporary difference
will be utilized against future taxable income. This is assessed based on the respective entity's forecast of future
operating results, adjusted for significant non-taxable income and expenses and specific limits on the use of any
unused tax loss or credit.
Deferred tax liabilities are generally recognized in full, although Ind AS 12 'Income Taxes' specifies limited exemptions.
As a result of these exemptions the Group does not recognize deferred tax liability on temporary differences relating
to goodwill, or to its investments in subsidiaries. Changes in deferred tax assets or liabilities are recognized as a
component of tax income or expense in the statement of profit and loss, except where they relate to items that are
recognized in other comprehensive income (such as the re-measurement of defined benefit plans) or directly in equity,
in which case the related deferred tax is also recognized in other comprehensive income or equity, respectively.
1.2.14. Borrowing Costs
Borrowing Costs that are directly attributable to the acquisition of qualifying assets are capitalised for the period until
the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time
to get ready for its intended use. Other borrowing costs are recognised as an expense in the period in which they are
incurred.
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