11. Provisions & Contingent liabilities and assets
a. Provisions are recognized only when there is a present obligation, because of past events and when a
reliable estimate of the amount of obligation can be made at the reporting date. These estimates are
reviewed at each reporting date and adjusted to reflect the current best estimates. Provisions are
discounted to their present values, where the time value of money is material.
b. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by future events
not wholly within the control of the Company or (ii) Present obligations arising from the past events
where it is probable that an outflow of resources will be required to settle the obligation or a reliable
estimate of the amount of obligation cannot be made.
c. Contingent assets are neither recognized nor disclosed except when realization of income is virtually
certain, related asset is disclosed.
12. Taxation
Tax expense recognized in Standalone Statement of Profit and Loss comprises the sum of deferred tax
and current tax except the ones recognized in other comprehensive income or directly in equity.
Current tax is determined as the tax payable in respect of taxable income for the year and is computed in
accordance with relevant tax regulations. Current income tax relating to items recognized outside profit or
loss is recognized outside profit or loss (either in other comprehensive income or in equity).
Minimum Alternate Tax (‘MAT’) credit entitlement is recognized as an asset only when and to the extent
there is convincing evidence that normal income tax will be paid during the specified period. In the year
in which MAT credit becomes eligible to be recognized as an asset, the said asset is created by way of a
credit to the Standalone Statement of Profit and Loss and shown as MAT credit entitlement. This is
reviewed at each balance sheet date and the carrying amount of MAT credit entitlement is written down to
the extent it is not reasonably certain that normal income tax will be paid during the specified period.
Deferred tax is recognized on temporary differences between the carrying amount of assets and liabilities
in the financial statement and the corresponding tax bases used in computation of taxable profit under
Income Tax Act, 1961.
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 Standalone
Statement of Profit and Loss is recognized outside Standalone Statement of Profit and Loss (either in
other comprehensive income or in equity).
13. Financial Instruments
i) Financial Assets
A. Initial Recognition and Measurement
All Financial Assets are initially recognized atfair value. Transaction costs that are directly
attributable to the acquisition orissue of Financial Assets, which are not at Fair Value Through
Profit or Loss, are adjusted to the fair value on initialrecognition. Purchase and sale of Financial
Assets are recognised using trade date accounting.
B. Subsequent measurement
a) Financial Assets measured at Amortised Cost(AC)
A Financial Asset is measured at Amortised Cost if it is held within a business model whose
objective is to hold the assetto collect contractual cash flows and the contractualterms of the
Financial Asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
b) Financial Assets measured at Fair Value Through Other Comprehensive Income (FVTOCI)
A Financial Assetis measured at FVTOCI if itis held within a business model whose objective is
achieved by both collecting contractual cash flows and selling Financial Assets and the
contractual terms of the Financial Asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
c) Financial Assets measured at Fair Value Through Profit or Loss (FVTPL)
A Financial Asset which is not classified in any ofthe above categories are measured at FVTPL.
C. Investments in subsidiaries, associates, and joint ventures
Investments in subsidiaries, associates and joint ventures are carried at cost/deemed cost less
accumulated impairmentlosses, if any. Where an indication of impairment exists, the carrying
amount of investment is assessed and an impairment provision is recognized, if required
immediately to its recoverable amount. On disposal of such investments, difference between the
net disposal proceeds and carrying amount is recognized in the statement of profit and loss.
D. Other Equity Investments
All other equity investments are measured at fair value, with value changes recognized in
Statement of Profit and Loss, except for those equity investments for which the Company has
elected to present the value changes in ‘Other Comprehensive Income’.
E. Impairment of Financial Assets
The Company measures the expected credit loss associated with its assets based on historical
trend, industry practices and the business environment in which the entity operates or any other
appropriate basis. The impairment methodology applied dependson whether there has been a
significant increase in credit risk.
ii) Financial Liabilities
A. Initial Recognition and Measurement
All Financial Liabilities are recognized at fair value and in case of borrowings, net of directly
attributable cost. Fees of recurring nature are directly recognised in the Statement of Profit and
Loss as finance cost.
B. Subsequent Measurement
Financial Liabilities are carried at amortized cost using the effective interest method.
For trade and other payables maturing within one year from the balance sheet date, the carrying
amounts approximate fair value due to the short maturity of these instruments.
iii) Derecognition of Financial Instruments
The Company derecognizes a Financial Asset when the contractual rights to the cash flows from the
Financial Asset expire or it transfers the Financial Asset, and the transfer qualifies for derecognition
under Ind AS 109. A Financial liability (or a part of a financial liability) is derecognized from the
Company’s Balance Sheet when the obligation specified in the contract is discharged or cancelled or
expires.
iv) Offsetting
Financial Assets and Financial Liabilitiesare offset, and the net amountis presented in the balance sheet
when, and only when,the Company has a legally enforceable rightto set off the amount and itintends,
eitherto settle them on a net basis or to realise the asset and settle the liability simultaneously
14. Earnings Per Share
Basic earnings per share have been computed by dividing profit or loss for the year by the weighted
average number of shares outstanding during the year. Partly paid-up shares are included as fully paid
equivalents according to the fraction paid up.
Diluted earnings per share have been computed using the weighted average number of shares and dilutive
potential shares except where the result would be anti-dilutive.
15. Government Grants
Grants from the government are recognised at their fair value where there is reasonable assurance that the
grant will be received and the Company will comply with all attached conditions.
Government grants relating to the purchase of property, plant and equipment are included in non-current
liabilities as deferred income and are credited to Profit and Loss on a straight - line basis over the
expected lives of related assets and presented within other income.
16. Leases
For any new contracts entered on or after 1 April 2019, (the transition approach has been explained and
disclosed in Note 31) the Company considers whether a contract is or contains a lease. A lease is defined
as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a
period in exchange for consideration’.
Classification of leases
The Company enters leasing arrangements for various assets. The assessment of the lease is based on
several factors, including, but not limited to, transfer of ownership of leased asset at end of lease term,
lessee’s option to extend/purchase etc.
Recognition and initial measurement
At lease commencement date, the Company recognizes a right-of-use asset and a lease liability on the
balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of
the lease liability, any initial direct costs incurred by the Company, an estimate of any costs to dismantle
and remove the asset at the end of the lease (if any), and any lease payments made in advance of the lease
commencement date (net of any incentives received).
Subsequent measurement
The Company depreciates the right-of-use assets on a straight-line basis from the lease commencement
date to the earlier of the end of the useful life of the right-of use asset or the end of the lease term. The
Company also assesses the right of use asset for impairment when such indicators exist.
At lease commencement date, the Company measures the lease liability at the present value of the lease
payments unpaidat that date, discounted using the interest rate implicit in the lease if that rate is readily
available or the Company’s incremental borrowing rate. Lease payments included in the measurement of
the lease liability are made up of fixed payments (including in substance fixed payments) and variable
payments based on an index or rate. After initial measurement, the liability will be reduced for payments
made and increased for interest. It is re-measured to reflect any reassessment or modification, or if there
are changes in in-substance fixed payments. When the lease liability is re-measured, the corresponding
adjustment is reflected in the right-of-use asset.
The Company has elected to account for short-term leases and leases of low-value assets using the
practical expedients.
Instead of recognizing a right-of-use asset and lease liability, the payments in relation to these are
recognized as an expense in standalone statement of profit and loss on a straight-line basis over the lease
term.
17. Recent Accounting Pronouncements
The Ministry of Corporate Affairs (MCA) notifies new standards or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules, 2015 (as amended). For the year ended 31 March
2025, MCA has notified amendments to Ind AS 116 “Leases”, relating to sale and leaseback transactions,
which is applicable w.e.f. 01 April 2024. The Company has reviewed the new pronouncements and based
on its evaluation has determined that it is not likely to have any impact in its standalone financial
statements.
B. New standards and amendments issued but not effective -
New standards and amendments issued but not effective - On 7 May 2025, MCA notifies the amendments
to Ind AS 21 “Effects of Changes in Foreign Exchange Rates”. These amendments aim to provide
clearer guidance on assessing currency exchangeability and estimating exchange rates when currencies
are not readily exchangeable. The amendments are effective for annual periods beginning on or after 1
April 2025. The Company is currently assessing the probable impact of these amendments on its
standalone financial statements.
B. Critical estimates and judgements -
The preparation of financial statements requires the use of accounting estimates which will seldom equal
the actual results. Management also needs to exercise judgement in applying the Company’s accounting
policies.
This note provides an overview of the areas that involved a higher degree of judgement or complexity,
and items which are more likely to be materially adjusted due to estimates and assumptions turning out to
be different than those originally assessed. Detailed information about each of these estimates and
judgements is included in relevant notes together with information about the basis of calculation for each
affected line item in the financial statements.
The areas involving critical estimates or judgement are:
i. Estimation of current tax expenses and Payable and Recognition of deferred tax assets for carried forward tax
losses
The Company’s tax jurisdiction is India. Significant judgements are involved in estimating budgeted profits
for the purpose of paying advance tax, determining the provision for income taxes, including amount
expected to be paid / recovered for uncertain tax positions (refer note 28). The extent to which deferred tax
assets/minimum alternate tax credit can be recognized is based on management’s assessment of the
probability of the future taxable income against which the deferred tax assets/mirnmum alternate tax credit
can be utilized.
ii. Estimated Fair value of unlisted securities
Information about the valuation techniques and inputs used in determining the fair value of various assets,
liabilities and share based payments are disclosed in the notes to standalone financial statements. (Refer note
36)
iii. Probable outcome of matters included under Contingent Liabilities
Contingent liabilities may arise from the ordinary course of business in relation to claims against the
Company, (refer note 30). By their nature, contingencies will be resolved only when one or more uncertain
future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies
inherently involves the exercise of significant judgments by management and the use of estimates regarding
the outcome of future events.
iv. Recoverability of advances / receivables
At each balance sheet date, based on historical default rates observed over expected life, the management
assesses the expected credit losses on outstanding receivables and advances.
v. Classification of leases
The Company enters leasing arrangements for various premises. The assessment (including measurement) of
the lease is based on several factors, including, but not limited to, transfer of ownership of leased asset at end
of lease term, lessee’s option to extend/terminate etc. After the Commencement date, the Company
reassesses the lease term if there is a significant event or change in circumstances that is within its control
and affects its ability to exercise or not to exercise the option to extend or to terminate.
vi. Inventories
The Company estimates the net realizable values of inventories, considering the most reliable evidence
available at each reporting date. The future realization of these inventories may be affected by future demand
or other market-driven changes that may reduce future selling prices.
vii. Provisions
At each balance sheet date basis, the management judgment, changes in facts and legal aspects, the
Company assesses the requirement of provisions against the outstanding contingent liabilities. However, the
actual future outcome may be different from this judgement.
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