1.3.15 Provisions and contingent liabilities

A provision is recognized when the company has a present obligation resulting from past events
and it is probable that an outflow of resources will be required to settle the obligation for which a
reliable estimate can be made. Provisions are based on management’s best estimate of the
amount required to settle the obligation at the balance sheet date. Provisions are reviewed at
each balance sheet date and adjusted to reflect revision in estimates.

A contingent liability is a possible obligation that arises from past events whose existence will be
confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond
the control of the company or a present obligation that is not recognized because it is not probable
that an outflow of resources will be required to settle the obligation. A contingent liability also
arises in extremely rare cases where there is a liability that cannot be recognized because it
cannot be measured reliably. The Company does not recognize a contingent liability but discloses
its existence in the financial statements. Contingent assets are neither recognized nor disclosed
in the financial statements.

1.3.16 Exceptional Items

Certain occasions, the size, type or incidence of an item of income or expense, pertaining to the
ordinary activities of the company is such that its disclosure improves the understanding of the
performance of the company, such income or expense is classified as an exceptional item and
accordingly, disclosed in the notes accompanying to the financial statement.

1.3.17 Non-current assets held for sale/ distribution to owners and discontinued operations

The Company classifies non-current assets and disposal of group of assets as held for sale/
distribution to owners if their carrying amounts will be recovered principally through a sale/
distribution rather than through continuing use. Actions required to complete the sale/ distribution
should indicate that it is unlikely that significant changes to the sale/ distribution will be made or
that the decision to sell/ distribute will be withdrawn. Management must be committed to the
sale/distribution expected within one year from the date of classification.

Non-current assets held for sale/for distribution to owners and disposal of group of assets are
measured at the lower of their carrying amount and the fair value less costs to sell/ distribute.

Assets and liabilities classified as held for sale/distribution are presented separately in the balance
sheet.

Property, plant and equipment and intangible assets once classified as held for sale/ distribution
to owners are not depreciated or amortised.

A disposal of group of assets qualifies as discontinued operation if it is a component of an entity
that either has been disposed of, or is classified as held for sale, and:

• Represents a separate major line of business or geographical area of operations,

• Is part of a single co-ordinated plan to dispose of a separate major line of business or
geographical area of operations

Or

• Is a subsidiary acquired exclusively with a view to resale

Discontinued operations are excluded from the results of continuing operations and are presented
as a single amount as profit or loss after tax from discontinued operations in the statement of
profit and loss.

1.3.18 Financial Instrument

Financial assets and financial liabilities are recognized when the Company becomes a party to
the contractual provisions of the instruments.

Financial assets

A) Initial recognition and measurement

On initial recognition, financial assets are recognised at fair value except trade receivables
which are recognized at transaction price as they do not contain a significant financing
component. In case of financial assets which are recognised at fair value through profit and
loss (FVTPL), its transaction costs are recognised in the statement of profit and loss. In other
cases, the transaction costs are attributed to the acquisition value of the financial asset.
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities
at fair value through profit or loss are recognized immediately in profit or loss.

Financial assets are classified, at initial recognition, as financial assets measured at fair value
or as financial assets measured at amortised cost.

B) Subsequent Measurement

For purposes of subsequent measurement, financial assets are classified in the below
categories:

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 asset in order to collect contractual cash flows and the
contractual terms of the Financial Asset give rise to cash flows on specified dates that

represent solely payments of principal and interest on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised
cost using the Effective Interest Rate (EIR) method.

b) Financial Assets measured at Fair Value Through Other Comprehensive Income
(FVTOCI)

A Financial Asset is measured at FVTOCI if it is 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 represents 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 is measured at fair value through profit and loss unless it is measured at
amortised cost or at fair value through other comprehensive income on initial recognition.
The transaction costs directly attributable to the acquisition of financial assets at fair value
through profit and loss are immediately recognised in the Statement of Profit and Loss.

Financial assets are reclassified subsequent to their recognition, if the Company changes its
business model for managing those financial assets. Changes in business model are made
and applied prospectively from the reclassification date which is the first day of immediately
next reporting period following the changes in business model in accordance with principles
laid down under Ind AS 109 - Financial Instruments.

D) Other Equity Investments

All other equity investments are measured at fair value, with value changes recognised 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’. However, dividend
on such equity investments are recognised in Statement of Profit and loss when the Company’s
right to receive payment is established.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial
assets) is primarily derecognised (i.e. removed from the Company’s balance sheet) when:

• The rights to receive cash flows from the asset have expired, or

• The Company has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party under a
‘pass-through’ arrangement; and either (a) The Company has transferred substantially all the
risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially
all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered
into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and
rewards of ownership. When it has neither transferred nor retained substantially all of the risks
and rewards of the asset, nor transferred control of the asset, the Company continues to recognise

the transferred asset to the extent of the Company’s continuing involvement. In that case, the
Company also recognises an associated liability. The transferred asset and the associated liability
are measured on a basis that reflects the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured
at the lower of the original carrying amount of the asset and the maximum amount of consideration
that the Company could be required to repay.

Impairment of financial assets

In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement
and recognition of impairment loss on the following financial assets and credit risk exposure:

a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt
securities, deposits, trade receivables and bank balance

b) Financial assets that are debt instruments and are measured as at FVTOCI

c) Lease receivables under Ind AS 116

d) Trade receivables or any contractual right to receive cash or another financial asset that result
from transactions that are within the scope of Ind AS 115

e) Loan commitments which are not measured as at FVTPL

f) Financial guarantee contracts which are not measured as at FVTPL

The Company follows ‘simplified approach’ for recognition of impairment loss allowance on:

• Trade receivables or contract revenue receivables; and

• All lease receivables resulting from transactions within the scope of Ind AS 116

The application of simplified approach does not require the Company to track changes in credit risk.
Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right
from its initial recognition.

As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance
on portfolio of its trade receivables. The provision matrix is based on its historically observed default
rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At
every reporting date, the historical observed default rates are updated and changes in the forward¬
looking estimates are analysed. On that basis, the company estimates the following provision matrix at
the reporting date:

ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/
expense in the statement of profit and loss (P&L). This amount is reflected under the head ‘other expenses’
in the P&L.

The Company does not have any purchased or originated credit-impaired (POCI) financial assets, i.e.,
financial assets which are credit impaired on purchase/ origination.

The fair value of financial assets denominated in a foreign currency is determined in that foreign currency
and translated at the spot rate at the end of each reporting period.

Financial liabilities

Classification as debt or equity

Debt and equity instru ments issued by a company are classified as either financial liabilities or as equity
in accordance with the substance of the contractual arrangements and the definitions of a financial
liability and an equity instrument.

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 a Company entity are recognised at the proceeds
received, net of direct issue costs. Repurchase of the Company’s own equity instruments is recognised
and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale,
issue or cancellation of the Company’s own equity instruments.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or
loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective
hedge, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.

The Company’s financial liabilities include trade and other payables, loans and borrowings including
bank overdrafts, financial guarantee contracts and derivative financial instruments.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

a) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading
and financial liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities are classified as held for trading if they are incurred for the purpose of
repurchasing in the near term. This category also includes derivative financial instruments entered
into by the Company that are not designated as hedging instruments in hedge relationships as
defined by Ind AS 109. Separated embedded derivatives are also classified as held for trading
unless they are designated as effective hedging instruments.

b) Gains or losses on liabilities held for trading are recognised in the profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are
designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are
satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in
own credit risk are recognized in OCI. These gains/ loss are not subsequently transferred to P&L.
However, the Company may transfer the cumulative gain or loss within equity. All other changes
in fair value of such liability are recognised in the statement of profit or loss. The Company has
not designated any financial liability as at fair value through profit and loss.

Loans and borrowings

This is the category most relevant to the Company. 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 derecognised 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.

Financial guarantee contracts

Financial guarantee contracts issued by the Company are those contracts that require a payment to be
made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment
when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised
initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance
of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance
determined as per impairment requirements of Ind AS 109 and the amount recognised less cumulative
amortisation.

Derecognition

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 or loss.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet 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.

Derivative financial instruments and hedge accounting
Initial recognition and subsequent measurement

The Company uses derivative financial instruments, such as forward currency contracts, interest rate
swaps and forward commodity contracts, to hedge its foreign currency risks, interest rate risks and
commodity price risks, respectively.

Such derivative financial instruments are initially recognised at fair value on the date on which a derivative
contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial
assets when the fair value is positive and as financial liabilities when the fair value is negative.

The purchase contracts that meet the definition of a derivative under Ind AS 109 are recognised in the
statement of profit and loss. Commodity contracts that are entered into and continue to be held for the
purpose of the receipt or delivery of a non-financial item in accordance with the Company’s expected
purchase, sale or usage requirements are held at cost.

Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss,
except for the effective portion of cash flow hedges, which is recognised in OCI and later reclassified to
profit or loss when the hedge item affects profit or loss or treated as basis adjustment if a hedged
forecast transaction subsequently results in the recognition of a non-financial asset or non-financial
liability.

1.3.19 Recent Accounting 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.
On March 31, 2025, MCA has not notified any new standards or amendments to the existing
standards applicable to the company.

1.4. Significant accounting judgements, estimates and assumptions

The preparation of the Company’s financial statements requires management to make judgements,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and
liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates could result in outcomes that require a material
adjustment to the carrying amount of assets or liabilities affected in future periods

Judgements

In the process of applying the Company’s accounting policies, management has made the following
judgements, which have the most significant effect on the amounts recognised in the financial statements:

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year, are described below.

The Company based its assumptions and estimates on parameters available when the financial statements
were prepared.

Existing circumstances and assumptions about future developments, however, may change due to market
changes or circumstances arising that are beyond the control of the Company.

Such changes are reflected in the assumptions when they occur.

The key sources of estimation uncertainty at the end of the reporting period, that may have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year are given below :-

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be
measured based on quoted prices in active markets, their fair value is measured using valuation techniques
including the DCF model. The inputs to these models are taken from observable markets where possible,
but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements
include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions
about these factors could affect the reported fair value of financial instruments.

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 group of assets.

When the carrying amount of an asset 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.
These calculations are corroborated by valuation multiples, quoted share prices for publicly traded
companies or other available fair value indicators.

The Company bases its impairment calculation on detailed budgets and forecast calculations, which are
prepared separately for each of the Company’s CGUs to which the individual assets are allocated. These
budgets and forecast calculations generally cover a period of five years. For longer periods, a long-term
growth rate is calculated and applied to project future cash flows after the fifth year. To estimate cash flow
projections beyond periods covered by the most recent budgets/forecasts, the Company extrapolates
cash flow projections in the budget using a steady or declining growth rate for subsequent years, unless
an increasing rate can be justified. In any case, this growth rate does not exceed the long-term average
growth rate for the products, industries, or country or countries in which the entity operates, or for the
market in which the asset is used.

Impairment losses of continuing operations, including impairment on inventories, are recognised in the
statement of profit and loss, except for properties previously revalued with the revaluation surplus taken
to OCI. For such properties, the impairment is recognised in OCI up to the amount of any previous
revaluation surplus.

The preparation of financial statements involves estimates and assumptions that affect the reported
amount of assets, liabilities, disclosure of contingent liabilities at the date of financial statements and the
reported amount of revenues and expenses for the reporting period.

Employee benefit plans

Defined contribution plans

Contribution paid/ payable to defined contribution plans comprises provident fund for certain employees
governed under the scheme are recognised in the profit or loss each year when employees have rendered
services entitling them to the contributions. Under this plan, the Company makes Provident Fund
contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company
is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company
has recognised Rs.20.73 lakhs (Year ended 31 March, 2024 Rs.17.78 lakhs) for Provident Fund
contributions (including Pension fund / EDLI contributions) in the Statement of Profit and Loss. The
contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

i. Gratuity

The Company’s Gratuity Scheme for its employees is a defined benefit retirement plan. The cost
of providing benefits is determined using the projected unit credit method, with actuarial valuations
being carried out at the end of the year. Defined benefit costs are categorised as follows: 1)
service cost (including current service cost, 2) past service cost, as well as gains and losses on
curtailments and settlements); 3) net interest expense or income; 4) re-measurement

The Company presents the first 3 components of defined benefit costs in profit or loss in the line
item Note no 28 ‘Employee benefits expense’. Curtailment gains and losses are accounted for as
past service costs. Net interest is calculated by applying the discount rate at the beginning of the
period to the net defined benefit liability or asset. Re-measurement, comprising actuarial gains
and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan
assets (excluding net interest), is reflected immediately in the balance sheet with a charge or
credit recognised in other comprehensive income in the period in which they occur. Re¬
measurement recognised in other comprehensive income is reflected immediately in retained
earnings and is not reclassified to profit or loss.

ii. Leave encashment

The undiscounted amount of short-term employee benefits expected to be paid in exchange for
the services rendered by employees are recognised during the year when the employees render
the service. These benefits include performance incentive and compensated absences which
are expected to occur within twelve months after the end of the period in which the employee
renders the related service. The cost of such compensated absences is accounted as under:

Short term employee benefits:- The undiscounted amount of short-term employee benefits
expected to be paid in exchange for the services rendered by employees are recognised during
the year when the employees render the service. These benefits include compensated absences
which are expected to occur within twelve months after the end of the period in which the employee
renders the related service. The cost of such compensated absences is accounted as under: i) in
case of accumulated compensated absences, when employees render the services that increase
their entitlement of future compensated absences; and ii) in case of non-accumulating
compensated absences, when the absences occur.

Long term employee benefits:- Compensated absences which are not expected to occur within
twelve months after the end of the period in which the employee renders the related services are
recognised as an actuarially determined liability at the present value of the obligation at the
balance sheet date.

Gratuity

The following table sets out the funded status of the defined benefit schemes and the amount
recognised in the financial statements:

ii Leave Encashment:

The valuation is done as per the parameters and measurements suggested under Ind AS
19 (Ind AS 19) As per Para 158 of Ind AS 19, disclosure for other long term employee
benefits are not mandatory and hence the same has not been disclosed.

Leave encashment liability which are not expected to occur within 12 months after the
end of the period in which employee renders the related services are recognised as a
liability at the present value of the defined benefit obligation as at the balance sheet date
based on actuarial valuation by an independent actuary using the Projected Unit Credit
Method. Obligation is measured at the present value of estimated future cash flows using
a discounted rate that is determined by reference to market yields at the Balance Sheet
date on Government Bonds where the currency and terms of the Government bonds are
consistent with the currency and estimated terms.