3.7.2 Financial Liabilitiesa) Initial Recognition and Measurement
Financial liabilities are measured at amortised cost using Effective
Interest Rate (EIR) method. For trade and other payable maturing
within one year from the Balance Sheet date, the carrying value
approximates fair value due to short maturity.
b) Subsequent Measurement
Financial liabilities are carried at amortized cost using the EIR 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.
c) Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are
subsequently measured at amortised cost using the EIR method. Gains
and losses are recognised in profit or loss when the liabilities are de¬
recognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an integral part of the
EIR.
The EIR amortisation is included as finance costs in the Statement of
Profit and Loss. This category generally applies to borrowings.
d) Derecognition of Financial Liabilities
A financial liability is derecognised when the obligation under the
liability is discharged or cancelled or expires. When an existing financial
liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new
liability. The difference in the respective carrying amounts is recognised
in the Statement of Profit and Loss.
f) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is
reported in the balance sheet only if there is a currently enforceable
legal right to offset the recognised amounts and there is an intention to
settle on a net basis, to realise the assets and settle the liabilities
simultaneously.
g) Equity instruments
An equity instrument is any contract that evidences a residual interest in
the assets of an entity after deducting all of its liabilities. Equity
instruments issued by the Company are recognized at the proceeds
received, net of direct issue costs.
Repurchase of the Company's own equity instruments is recognized
and deducted directly in equity. No gain or loss is recognized in
Statement of Profit and Loss on the purchase, sale, issue or
cancellation of the Company's own equity instruments.sp
3.8 Fair Value measurement
The Company measures financial instruments, such as, derivatives at
fair value at each balance sheet date on a portfolio basis.
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.
A fair value measurement of a non-financial asset takes into account a market
participant's ability to generate economic benefits by using the asset in its
highest and best use or by selling it to another market participant that would
use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair
value, maximizing the use of relevant observable inputs and minimizing 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.
For the purpose of fair value disclosures, the Company has determined
classes of assets and liabilities on the basis of the nature,
characteristics and risks of the asset or liability and the level of the fair
value hierarchy as explained above.
This note summaries accounting policy for fair value. Other fair value
related disclosures are given in the relevant notes.
- Quantitative disclosures of fair value measurement hierarchy
- Financial instruments (including those carried at amortised cost)
3.9 Leases and ROUCompany as Lessee
Lease contracts entered by the Company majorly pertains for buildings
taken on lease to conduct its business in the ordinary course.
The Company applies a single recognition and measurement approach
for all leases, except for short-term leases and leases of low-value
assets. The Company recognises lease liabilities to make lease
payments and right-of-use assets representing the right to use the
underlying assets.
The Company determines the lease term as the non-cancellable period
of a lease, together with both periods covered by an option to extend
the lease if the Company is reasonably certain to exercise that option;
and periods covered by an option to terminate the lease if the Company
is reasonably certain not to exercise that option. In assessing whether
the Company is reasonably certain to exercise an option to extend a
lease, or not to exercise an option to terminate a lease, it considers all
relevant facts and circumstances that create an economic incentive for
the Company to exercise the option to extend the lease, or not to
exercise the option to terminate the lease. The Company revises the
lease term if there is a change in the non-cancellable period of a lease.
The Company used the following practical expedients when applying Ind AS
116 :
• Applied a single discount rate to a portfolio of leases with similar
characteristics.
• Applied the exemption not to recognise right-of-use assets and
liabilities for leases with less than 12 months of lease term and leases of
low value.
• Excluded initial direct costs from measuring the right-of-use asset at
the date of initial application.
• Used hindsight when determining the lease term if the contract
contains options to extend or terminate the lease.
(i) . Right-of-use assets
The Company recognises right-of-use assets at the commencement
date of the lease (i.e., the date the underlying asset is available for use).
Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use assets
includes the amount of lease liabilities recognised, initial direct costs
incurred, and lease payments made at or before the commencement
date less any lease incentives received. Right-of-use assets are
depreciated on a straight-line basis over the shorter of the lease term
and the estimated useful lives of the assets.
If ownership of the leased asset transfers to the Company at the end of
the lease term or the cost reflects the exercise of a purchase option,
depreciation is calculated using the estimated useful life of the asset.
(ii) . Lease liabilities
At the commencement date of the lease, the Company recognises
lease liabilities measured at the present value of lease payments to be
made over the lease term. The lease payments include fixed payments
(including in-substance fixed payments) less any lease incentives
receivable, variable lease payments that depend on an index or a rate,
and amounts expected to be paid under residual value guarantees. The
lease payments also include the exercise price of a purchase option
reasonably certain to be exercised by the Company and payments of
penalties for terminating the lease, if the lease term reflects the
Company exercising the option to terminate. Variable lease payments
that do not depend on an index or a rate are recognised as expenses
(unless they are incurred to produce inventories) in the period in which
the event or condition that triggers the payment occurs.
3.10 Revenue Recognition:
The Company has adopted Ind AS 115 ‘Revenue from Contracts with
Customers' which introduces a five-step approach to measuring and
recognising revenue from contracts with customers. Under Ind AS 115,
revenue is recognised at an amount that reflects the consideration to
which an entity expects to be entitled in exchange for services to a
customer. The Company has elected to use the practical expedient that
there is no financing component involved when the credit period offered
to customers is less than 12 months (also refer Credit Risk).
Rendering of Services
Revenue from sale of services is recognised in accordance with the terms of
the relevant agreements as accepted and agreed with the customers.
Upfront non-refundable payments received are deferred and
recognised as revenue over which the related services are performed.
Revenue from minimum guarantee clauses, cost conversion
mechanisms, price escalation provisions, and other contractual
adjustments is treated as variable consideration. Such revenue is
recognized only to the extent that it is highly probable that a significant
reversal in the amount of cumulative revenue recognized will not occur
when the uncertainty associated with the consideration is subsequently
resolved.
Where the realization of such variable consideration is contingent upon
customer confirmation, negotiation, or other contractual uncertainties,
the Company constrains the recognition of such amounts and records
revenue only when there is sufficient objective evidence to support both
entitlement and recoverability.
Interest income
Interest on deposits is recognized on the time proportion method using
the underlying interest rates.
3.11 Taxation
Income tax expense comprises current tax expense and the net
change in the deferred tax asset or liability during the year. Current and
deferred tax are recognised in Statement of Profit and Loss, except
when they relate to items that are recognised in other comprehensive
income or directly in equity, in which case, the current and deferred tax
are also recognised in other comprehensive income or directly in
equity, respectively.
(i) Current tax:
Current Tax expenses are accounted in the same period to which the
revenue and expenses relate. Provision for current income tax is made
for the tax liability payable on taxable income after considering tax
allowances, deductions and exemptions determined in accordance
with the applicable tax rates and the prevailing tax laws.
Current tax assets and current tax liabilities are offset when there is a
legally enforceable right to set off the recognised amounts and there is
an intention to settle the asset and the liability on a net basis.
(ii) Deferred tax:
Deferred income tax is recognised using the Balance Sheet approach.
Deferred income tax assets and liabilities are recognised for deductible
and taxable temporary differences arising between the tax base of
assets and liabilities and their carrying amount in financial statements,
except when the deferred Income tax arises from the initial recognition
of goodwill, an asset or liability in a transaction that is not a business
combination and affects neither accounting nor taxable profits or loss at
the time of the transaction.
Deferred income 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
credits and unused tax losses can be utilised.
Deferred tax liabilities are generally recognized for all taxable
temporary differences.
The carrying amount of deferred tax assets is reviewed at each
Balance Sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or
part of the deferred income tax asset to be utilised.
Deferred tax liabilities and assets are measured at the tax rates that are
expected to apply in the period in which the liability is settled or the
asset realized, based on tax rates (and tax laws) that have been
enacted or substantively enacted by the Balance Sheet date.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same
taxation authority and the Company intends to settle its current tax
assets and liabilities on a net basis.
3.12 Cash Flow Statement
Cash flows are reported using the indirect method, whereby, profit
before tax 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 item of income or expenses associated with
investing or financing cash flows. The cash flows are segregated into
operating, investing and financing activities.
3.13 Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss
for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. Partly
paid equity shares are treated as a fraction of an equity share to the
extent that they are entitled to participate in dividends relative to a fully
paid equity share during the reporting period. The weighted average
number of equity shares outstanding during the period is adjusted for
events such as bonus issue, bonus element in a rights issue, share
split, and reverse share split (consolidation of shares) that have
changed the number of equity shares outstanding, without a
corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit
or loss for the period attributable to equity shareholders and the
weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
The Company has a single class of equity shares. Accordingly, all equity shares rank
equally with regard to dividends and share in the Company's residual assets. The equity
shares are entitled to receive dividend as declared from time to time. On winding up of the
Company, the holders of equity shares will be entitled to receive residual assets of the
Company, remaining after distribution of all preferential amounts in proportion to the
number of equity shares held by the shareholders.
(e) The Company has not allotted any fully paid equity shares by way of bonus shares nor has
bought back any class of equity shares during the period of five years immediately
preceding the balance sheet date nor has issued shares for consideration other than
cash.
Nature and purpose of each reserve
Securities premium - The amount received in excess of face value of the equity shares is
recognised in securities premium. It is utilised in accordance with the provisions of the
Companies Act, 2013
Capital Reserve - Reserve of capital nature taken to this head under the erstwhile GAAP
Retained Earnings -This reserve represents undistributed accumulated earnings of the company
as on balance sheet date.
b) Gratuity (Unfunded)
The Company has a defined benefit gratuity plan governed by the Payment of
Gratuity Act, 1972. Every employee who has completed 5 year or more of service is
entitled to gratuity on departure at 15 days last drawn salary for each completed
year of service or part thereof in excess of six months.
Certain operational bottlenecks and process inefficiencies during the current
quarter resulted in abnormal consumption of inventory amounting to Rs. 241
lakhs, which has been recognised under consumption of stores and
consumables for the year ended March 31,2026.
Basic EPS amounts are calculated by dividing the profit for the year attributable to
equity holders of the company by the weighted average number of Equity shares
outstanding during the year. Diluted EPS amounts are calculated by dividing the
profit attributable to equity holders of the company by the weighted average
number of Equity shares outstanding during the year plus the weighted average
number of Equity shares that would be issued on conversion of all the dilutive
potential Equity shares into Equity shares.
A) Credit Risk
Credit risk is the risk that the counterparty to a financial instrument or
customer contract will fail to discharge its contractual obligations, resulting in
a financial loss to the Company. The Company is exposed to credit risk
primarily from its financial assets and liabilities, such as trade receivables,
loans, and cash and cash equivalents and borrowings.
The Company's exposure to credit risk on trade receivables is mainly from its
customer Tata Consumer Products Limited (TCPL), which constitutes the
principal trade receivable. The Company continuously evaluates the
creditworthiness and past payment history of TCPL and has historically not
experienced any defaults. Based on management's assessment and past
experience, the credit risk associated with trade receivables is considered
low. Accordingly, the Company has assessed the expected credit loss (ECL)
on trade receivables and does not consider any provision necessary as at the
reporting date.
For cash and cash equivalents, the credit risk is limited as these balances are
maintained with reputed banks and financial institutions having high credit
ratings, thereby ensuring strong credit quality and negligible risk of default.
The Company has established internal control systems and periodic
monitoring mechanisms for review of trade receivables and other financial
assets. These include regular monitoring of recoverability and timely
identification of any significant credit deterioration, if any, to ensure
appropriate risk mitigation actions are taken.
Based on current assessment, the Company considers its overall exposure
to credit risk to be low.
B) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting its
financial obligations as and when they become due.
Maturities of financial liabilities
The tables below analyse the Company's financial liabilities into relevant
maturity groupings based on their contractual maturities for all non-derivative
financial liabilities.
There are no derivatives financial liabilities for the company.
The amounts disclosed in the table are the contractual undiscounted cash
flows. Balances due within 12 months equal their carrying balances as the
impact of discounting is not significant.
The Company has a net current liability position as at the reporting date, which
may indicate potential liquidity constraints in meeting its short-term obligations.
Management has assessed the situation and is confident of meeting its
liabilities through operational cash flows and by raising additional funds through
available financing arrangements.
C) Market Risk
Market risk is the risk that the fair value of future cash flows of a financial
instrument will fluctuate because of changes in market prices. Market risk
comprises three types of risk: interest rate risk, currency risk and other price
risk, such as equity price risk and commodity risk. Financial instruments
affected by market risk include loans and borrowings and derivative financial
instruments. The company is not affected by currency risk and other price risk
based on its nature of business.
(a) Interest rate risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in market interest rates.
The Company's exposure to the risk of changes in market interest rates relates
primarily to the Company's short-term debt obligations with fixed & floating
interest rates.
Sensitivity Analysis of the Interest Rate
Profit or loss is sensitive to higher/lower interest expense from borrowings as a
result of change in interest rates.
The assumed movement in basis points for the interest rate sensitivity analysis
is based on the currently observable market environment, showing a
significantly higher volatility than in prior years.
The company's objectives when managing capital are to:
> Safeguard their ability to continue as a going concern, so that they can
continue to provide returns for shareholders and benefits for other
stakeholders, and
> Maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the
amount of dividends paid to shareholders, return capital to shareholders, issue
new shares or sell assets to reduce debt.
The Company monitors its capital structure through gearing ratio to maintain an
optimal mix of debt and equity. The gearing ratio is calculated as net debt
divided by total equity. Net debt includes total borrowings less cash and cash
equivalents.
Note 35: Operating Segment Disclosure
Arunjyoti Bio Ventures Limited is engaged in a single business activity, namely
co-packing, and operates as a single operating segment. Accordingly, separate
segment information as required under Ind AS 108 “Operating Segments” is not
presented.
However, in accordance with the entity-wide disclosure requirements of Ind AS
108:
Geographical Information:
The Company's revenue is derived predominantly within India and all
non-current assets are located within India.
Major Customer Disclosure:
Revenue from one customer constitutes more than 10% of the Company's
total revenue. During the year, revenue derived from TCPL (Tata Consumer
Products Limited) accounted for a substantial portion of the Company's total
revenue.
The amount of revenue from this customer is Rs. 2,775.44 lakhs (previous
year: Rs. 2,778.41 lakhs).
Note 36: Interests in other entitiesa) Subsidiaries- Nilb) Interest in Associates and Joint Ventures- NilNote 37: Related party transactions
(A) Details of related parties:
Directors who held the office during the year:
Pabbathi Badari Narayana Murthy, Wholetime Director
Vishal Nadimpalli, Wholetime Director & CFO
Dathvik Pabbathi, Wholetime Director
Srikar Ranga, Independent Director
Vijaya Rama Lakshamana Murthy Mylavarapu, Independent Director
Dhanalakshmi Guntaka, Independent Director
Key Management Personnel (KMP):
Swati Jain, Company Secretary and Compliance officer
Entities in which Directors are interested with whom transactions were
carried out in current / previous year
MSRM International Trading Pvt. Ltd
Miryalguda Rice Industries Pvt. Ltd
Pasura Xpress LLP
Relative of Director
Pabbathi Siva Ratna Mahalakshmi Prasanna
* Long term benefits have not been disclosed since the liability for such benefits
have been derived by the actuary for entity as a whole.
**The Company has granted loan of Rs. 80.72 Lakhs (Amount outstanding as
on 31st March 2026 is Rs. 65.99 Lakhs) to LLP in which directors are interested,
which is subject to approval by the shareholders through special resolution
under Section 185 (2) and the management is proposing to place it before the
ensuing AGM for members approval.
# During the year, managerial remuneration exceeded the remuneration
approved by the shareholders by ?25.19 lakhs due to the approval being
granted on a net remuneration basis. The Company proposes to obtain
shareholders' approval/ratification for the excess remuneration at the ensuing
Annual General Meeting.
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 lease payments
associated with these leases are recognized as an expense on a straight-line
basis over the lease term except inflation adjustment.
Ind AS 116 has resulted in an increase in cash inflows from operating activities
and an increase in cash outflows from financing activities on account of lease
payments.
During the year, the Company identified and corrected a prior period error relating to deferred
tax on depreciation differences and recognition of previously unavailed tax benefit on
unabsorbed depreciation. In accordance with Ind AS 8, the comparative figures have been
restated. The adjustment is non-cash in nature and has no impact on the Company’s
operating performance or cash flows.Following is the impact of the above in Statement of
Assets and Liabilities and Statement of Profit and loss.
The Government of India notified on November 21,2025, four Labour Codes -
the Code of Wages 2019, the Industrial Relations Code, 2020, the Code on
Social Security, 2020 and the Occupational Safety, Health and Working
Conditions Code, 2020 - consolidating existing labour laws. Based on
management's assessment, the Company's existing employee compensation
structures and benefit practices are largely aligned with the requirements of the
Labour Codes and hence there is no impact on the financial results for the
period under review. The Company will continue to monitor developments
relating to implementation of the Labour Codes and evaluate any impact, if any,
in future periods.
a) . No proceeding have been initiated or pending against the Company
under the Benami Transactions (Prohibitions) Act, 1988 (45 of 1988) and
the Rules made thereunder.
b) . The Company has not traded or invested in crypto currency or virtual
currency during the financial year.
c) . The Company does not have any transaction which is not recorded in the
books of accounts that has been surrendered or disclosed as income
during the year in the tax assessments under the Income Tax Act, 1961
(such as, search or survey or any other relevant provisions of the Income
Tax Act, 1961).
d) . The Company has not been declared wilful defaulter by any bank or
financial institution or government or any other government
authorities.
e) The company has not advanced or loaned or invested funds to any other
person(s) or entity(ies), including foreign entities (Intermediaries) with
the understanding that the Intermediary shall:
i) directly or indirectly lend or invest in other persons or entities identified in
any manner whatsoever by or on behalf of the company (Ultimate
Beneficiaries) or
ii) provide any guarantee, security or the like to or on behalf of the ultimate
beneficiaries.
f) . The company has not received any fund from any person(s) or
entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the
company shall:
i) directly or indirectly lend or invest in other persons or entities identified in
any manner whatsoever by or on behalf of the Funding Party (Ultimate
Beneficiaries) or
ii) provide any guarantee, security or the like on behalf of the ultimate
beneficiaries.
g) . The Company does not have any transactions with struck off
companies.
h) . The Company does not have any charges or satisfaction which is yet to be
registered with ROC beyond the statutory period.
i) . The Company has complied with the number of layers prescribed under
clause (87) of section 2 of the Act read with the Companies.
(Restriction on number of Layers) Rules, 2017
j) . For the year ended March 31, 2026, the company is not required to
transfer any amount into the Investor Education & Protection Fund.
k) . The differences between the quarterly return of inventories and receivables
submitted to the banks and the books of account, did not affect the
requiredsecurity cover computed in accordance with the sanctioned
terms.
l) . The Company has granted loans or advances in the nature of loans to
related parties (as defined under the Companies Act, 2013), which are
repayable on demand and/or without specifying any terms or period of
repayment. The details of such loans outstanding as at the balance sheet
date are as follows:
m) . No Scheme of Arrangements has been approved by the Competent
Authority in terms of sections 230 to 237 of the Companies Act,
2013.
n) . The company has not revalued its property, plant and equipment
(including right-of-use assets) or intangible assets or both during the
current or previous year.
o). All the title deeds of immovable properties included in property, plant and
equipment are held in the name of the Company.
Note 44:
The Company has used accounting software during the year which has the
audit trail feature enabled throughout the year. Post publication of ICAI
implementation guide in February 2024, direct database level changes were
also included in audit trail scope, which was not enabled for application used for
maintaining books of accounts.
Note 45:
Previous year's figures have been regrouped, wherever necessary, to confirm
to current year's grouping.
Note 46:
The financial statements were approved by the board of directors on May 13,
2026.
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