1.17 Provisions, contingent liabilities and contingent assets
a. Provisions
A provision is recognised if, as a result of a past event, the Company has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be
required to settle the obligation. If the effect of the time value of money is material, provisions are
determined by discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risks specific to the liability. Where discounting is used, the
increase in the provision due to the passage of time is recognized as a finance cost.
b. Contingent liabilities
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that
may, but probably will not, require an outflow of resources. Where there is a possible obligation ora present
obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is
made.
c. Contingent assets
Contingent assets are not recognised in the financial statements. However, contingent assets are assessed
continually and if it is virtually certain that an inflow of economic benefits will arise, the asset and related
income are recognised in the period in which the change occurs.
1.18 Revenue Recognition
Revenue is measured at the fair value of consideration received or receivable. Amounts recognised as revenue are
net of returns, trade allowances, discounts, rebates, deductions by customers, service tax, value added tax, goods
and services tax and amounts collected on behalf of third parties.
At the inception of the new contractual arrangement with the customer, the Company identifies the performance
obligations inherent in the agreement. The terms of the contracts are such that the services to be rendered
represent a series of services that are substantially the same with the same pattern of the transfer to the customer.
Revenue is recognized when the control is transferred to the customer and when the Company has completed its
performance obligations under the contracts. Revenue is recognized in a manner that depicts the transfer of
goods and services to customers at an amount that reflects the consideration the Company expects to be
entitled to in exchange for those goods or services.
Revenue is recognized as follows:
(i) Revenue from services represents the amounts receivable for services rendered.
(ii) For non-contract-based business, revenue represents the value of goods delivered or services performed.
(iii) For contract-based business, revenue represents the sales value ot work carried out tor customers during
the period. Such revenues are recognized in the period in which the service is rendered.
(iv) Unbilled revenue (contract assets) net of expected deductions is recognised at the end of each period. Such
unbilled revenue is reversed in the subsequent period when actual invoice is raised.
(v) Unearned revenue (contract liabilities) represents revenue billed but for which services have not yet been
performed and is included under Advances from customers. The same is released to the statement of profit
and loss as and when the services are rendered.
a. Rendering of Services
In contracts involving the rendering of services, revenue is measured using the proportionate completion
method when no significant uncertainty exists regarding the amount of the consideration that will be derived
from rendering the service. When the contract outcome cannot be measured reliably, revenue is recognised only
to the extent that the expenses incurred are eligible to be recovered.
Estimates of revenue, costs or extent of progress towards completion are revised if circumstances change. Any
resulting increases or decreases in estimated revenue or costs are reflected in profit or loss in the period in which
the circumstances that give rise to the revision become known to the management.
Multiple-element arrangements
When a sales arrangement contains multiple elements, such as services, material and maintenance, revenue for
each element is determined based on each element's fair value.
Revenue recognition for delivered elements is limited to the amount that is not contingent on the future delivery
of products or services, future performance obligations or subject to customer-specified return or refund
privileges.
The undiscounted cash flows from the arrangement are periodically estimated and compared with the
unamortized costs. If the unamortized costs exceed the undiscounted cash flow, a loss is recognized.
Interest income
For all debt instruments measured either at amortised cost or at fair value through other comprehensive income,
interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the
estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period,
where appropriate, to the gross carrying amount of the financial asset or to the amortised cost of a financial
liability. When calculating the effective interest rate, the Company estimates the expected cash flows by
considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and
similar options) but does not consider the expected credit losses. Interest income is included in other income in
the statement of profit and loss.
b. Other Income
(i) Miscellaneous Income
Miscellaneous Income includes Rounding off and other non operating income these are recognized as and
when accrued.
1.19 Borrowing Costs
General and specific borrowing costs that are directly attributable to the acquisition, construction or production
of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset
for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get
ready fortheir intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalisation.
Other borrowing costs are expensed in the period in which they are incurred.
1.20 Leases
Company as a lessee
The Company's lease asset classes primarily consist of leases for buildings. For any new contracts entered into or
changed on or after April 1, 2019, the Company assesses 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'. To apply this definition the Company assesses whether the contract meets
three key evaluations which are whether:
(i) the contract contains an identified asset, which is either explicitly identified in the contract or implicitly
specified by being identified at the time the asset is made available to the Company
(ii) the Company has the right to obtain substantially all of the economic benefits from use of the identified
asset throughout the period of use, considering its rights within the defined scope of the contract
(iii) The Company has the right to direct the use of the identified asset throughout the period of use. the
Company assesses whether it has the right to direct 'how and for what purpose' the asset is used throughout
the period of use.
Measurement and recognition of leases as a lessee
At lease commencement date, the Company recognises a right-of-use asset ('ROU') and a corresponding lease
liability on the balance sheet. The right-of-use asset is measured at cost, which comprises 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, and any lease payments made in advance of the lease
commencement date (net of any incentives received).
The Company depreciates the right-of-use assets using the written down value method from the lease
commencement date to the earlier of the end of theuseful 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
Ind AS116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with an
option to extend or terminate the lease, if the use of such option is reasonably certain. The lease term in future
periods is reassessed to ensure that the lease term reflects the current economic circumstances
Extension and termination options are included in a number of leases of the Company. These are used to
maximise operational flexibility in terms of managing the assets used in the Company's operations. The majority
of extension and termination options held are exercisable only by the Company and not by the respective lessor.
At the commencement date, the Company measures the lease liability at the present value of the lease payments
unpaid at 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
comprises of fixed payments (including in substance fixed), variable payments based on an index or rate,
amounts expected to be payable under a residual value guarantee and payments arising from options
reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It
is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments.
When the lease liability is remeasured, the corresponding adjustment is reflected in the rightof-use asset, or
profit and loss if the right-of-use asset is already reduced to zero.
The Company has elected to account for short-term leases and leases of low-value assets using the practical
expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are
recognised as an expense in profit or loss on a straightline basis over the lease term.
1.21 Tax Expenses
Tax expense consists of current and deferred tax.
a. Income Tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any
adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the
best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related
to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting
date.
Management periodically evaluates positions taken in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretations and considers whether it is probable that a taxation
authority will accept an uncertain tax treatment.
b. Deferred Tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred
tax is not recognised for:
Temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit or loss at the time of the transaction; and
Deferred tax assets are recognised for deductible temporary differences, the carry forwards of unused tax credits
and unused tax losses. Deferred tax assets are recognised to the extent that it is probable that future taxable
profits will be available against which they can be used. The existence of unused tax losses is strong evidence that
future taxable profit may not be available. Therefore, in case of a history of recent losses, the Company recognises
a deferred tax asset only to the extent that it has sufficient taxable temporary differences or there is convincing
other evidence that sufficient taxable profit will be available against which such deferred tax asset can be realised.
Deferred tax assets - unrecognised or recognised, are reviewed at each reporting date and are recognised/
reduced to the extent that it is probable/ no longer probable respectively that the related tax benefit will be
realised.
Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the
liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the
Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
1.22 Earnings Per Share
The Company presents basic and diluted earnings per share ("EPS") data for its ordinary shares. Basic earnings
per share is computed by dividing the net profit after tax by the weighted average number of equity shares
outstanding during the period. Diluted earnings per share is computed by dividing the profit after tax by the
weighted average number of equity shares considered for deriving basic earnings per share and also the
weighted average number of equity shares that could have been issued upon conversion of all dilutive potential
equity shares.
1.23 Provisions, contingent liabilities and contingent assets
Provisions
A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the
obligation. Provisions are determined by discounting the expected future cash flows (representing the best
estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax rate
that reflects current market assessments of the time value of money and the risks specific to the liability. The
unwinding of the discount is recognised under finance costs. Expected future operating losses are not provided
for. Provision in respect of loss contingencies relating to claims, litigations, assessments, fines and penalties are
recognised when it is probable that a liability has been incurred and the amount can be estimated reliably.
Contingent liabilities
A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the
obligation. Provisions are determined by discounting the expected future cash flows (representing the best
estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax rate
that reflects current market assessments of the time value of money and the risks specific to the liability. The
unwinding of the discount is recognised under finance costs. Expected future operating losses are not provided
for. Provision in respect of loss contingencies relating to claims, litigations, assessments, fines and penalties are
recognised when it is probable that a liability has been incurred and the amount can be estimated reliably.
Contingent assets
A contingent liability exists when there is a possible but not probable obligation, or a present obligation that may,
but probably will not, require an outflow of resources, or a present obligation whose amount cannot be
estimated reliably. Contingent liabilities do not warrant provisions, but are disclosed unless the possibility of
outflow of resources is remote.
Contingent assets has to be recognised in the financial statements in the period in which if it is virtually certain
that an inflow of economic benefits will arise. Contingent assets are assessed continually and no such benefits
were found for the current financial year.
1.24 Cash flow Statements
Cash flows are reported using the indirect method, whereby net profit/ (loss) before tax is adjusted forthe effects
of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments and
item of income or expenses associated with investing or financing cash flows. The cash flows from regular
revenue generating (operating activities), investing and financing activities of the Company are segregated.
1.25 Trade receivables
Trade receivables are recognised initially at the amount of consideration that is unconditional unless they contain
significant financing components, in which case they are recognised at fair value. The Company's trade
receivables do not contain any significant financing component and hence are measured at the transaction price
measured under Ind AS 115 "Revenue from Contracts with Customers".
1.26 Determination of fair values
The Company's accounting policies and disclosures require the determination of fair value, for certain financial
and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure
purposes based on the following methods. When applicable, further information about the assumptions made in
determining fair values is disclosed in the notes specific to that asset or liability. 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.
a. Property, plant and equipment
Property, plant and equipment, if acquired in a business combination or through an exchange of non¬
monetary assets, is measured at fair value on the acquisition date. For this purpose, fair value is based on
appraised market values and replacement cost.
b. Intangible assets
The fair value of brands, technology related intangibles, and patents and trademarks acquired in a business
combination is based on the discounted estimated royalty payments that have been avoided as a result of
these brands, technology related intangibles, patents or trademarks being owned (the "relief of royalty
method"). The fair value of customer related, product related and other intangibles acquired in a business
combination has been determined using the multi-period excess earnings method after deduction of a fair
return on other assets that are part of creating the related cash flows.
c. Inventories
The fair value of inventories acquired in a business combination is determined based on its estimated selling
price in the ordinary course of business less the estimated costs of completion and sale, and a reasonable
profit margin based on the effort required to complete and sell the inventories.
d. Derivatives
The fair value of foreign exchange forward contracts is estimated by discounting the difference between the
contractual forward price and the current forward price for the residual maturity of the contract using a risk¬
free interest rate (based on government bonds). The fair value of foreign currency option and swap
contracts and interest rate swap contracts is determined based on the appropriate valuation techniques,
considering the terms of the contract.
e. Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future
principal and interest cash flows, discounted at the market rate of interest at the reporting date. For finance
leases the market rate of interest is determined by reference to similar lease agreements. In respect of the
Company's borrowings that have floating rates of interest, their fair value approximates carrying value.
Ind AS 1 - Presentation of Restated financial information
The amendments require companies to disclose their material accounting policies rather than their significant
accounting policies. Accounting policy information, together with other information, is material when it can
reasonably be expected to influence decisions of primary users of general purpose financial statements. The
Company does not expect this amendment to have any significant impact in its financial statement.
Ind AS 12-lncomeTaxes
The amendments clarify how companies account for deferred tax on transactions such as leases and
decommissioning obligations. The amendments narrowed the scope of the recognition exemption in
paragraphs 15 and 24 of Ind AS 12 (recognition exemption) so that it no longer applies to transactions that, on
initial recognition, give rise to equal taxable and deductible temporary differences. The Company does not
expect this amendment to have any significant impact in its financial statements.
Ind AS8-Accounting Policies, Changes in Accounting Estimatesand Errors
The amendments will help entities to distinguish between accounting policies and accounting estimates. The
definition of a change in accounting estimates has been replaced with a definition of accounting estimates.
Under the new definition, accounting estimates are "monetary amounts in financial statements that are subject
to measurement uncertainty". Entities develop accounting estimates if accounting policies require items in
Restated financial information to be measured in a way that involves measurement uncertainty. The company
does not expect this amendment to have any significant impact in its financial statements.
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. For the year ended March 31,2025,
MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
A) Credit Risk
Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to
the contractual terms or obligations. Credit risk encompasses both the direct risk of default and the risk of
deterioration of creditworthiness as well as concentration risks. Financial instruments that are subject to
concentrations of credit risk, principally consist of trade receivables, loans and advances and financial
instruments. The group strives to promptly identify and reduce concerns about collection due to a
deterioration in the financial conditions and others of its main counterparties by regularly monitoring their
situation based on their financial condition. None of the financial instruments of the Group result in material
concentrations of credit risks.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to
credit risk was Rs 19,122.27 Lakhs and Rs. 15,333.16 Lakhs as at 31 March 2025 and 31 March 2024 respectively,
being the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables,
margin money and other financial assets.
a. Trade Receivables
The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer.
The demographics of the customer, including the default risk of the industry and country in which the
customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit
approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to
which the group grants credit terms in the normal course of business.
The total Trade Receivable as on 31 March 2025 is Rs. 16,383.42 Lakhs and Rs.12,677.35 lakhs as on 31 March
2024.
None of the Company's cash equivalents, including deposits with banks, were past due or impaired as at 31
March 2025.
On account of adoption of Ind AS 109, the Company uses Expected Credit Loss (ECL) model for assessing the
impairment loss. For this purpose, it is weighted average of credit losses with the respective risks of default
occurring as weights. The credit loss is the difference between all contractual cash flows that are due to an entity
as per the contract and all the contractual cash flows that the entity expects to receive, discounted to the effective
interest rate.
Credit quality of financial assets and impairment loss
The ageing of trade receivables as of balance sheet date is given in Note No 10. The age analysis has been
considered from the due date.
B) Liquidity Risks
Liquidity risk is the risk that the Company will encounter difficulty in meeting its obligations associated with
financial liabilities. The Company consistently generates sufficient cash flows from operations and has access to
multiple sources of funding to meet its financial obligations and maintain adequate liquidity for use. The
Company's objective is to maintain a balance between continuity of funding and flexibility through the use of
bank overdrafts, bank loans, debentures, shareholder equity, and finance leases.
The below table summarises company's long-term debt that will mature in less than one year based on the
carrying value of borrowings reflected in the financial statements.
The maturity analysis of lease liabilities is disclosed in Note 42. The following are the amounts recognized in the
statement of profit or loss:
The Company had total cash outflows for leases of Rs 211.16 Lakhs.
The Company has several lease contracts that include extension and termination options. These options are
negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the
Company's business needs. Management exercises significant judgement in determining whether these
extension and termination options are reasonably certain to be exercised. The effective interest rate for lease
liabilities is 9.75%, with maturity between 2029-30.
47. Other statutory information:
a. The Company does not have any Benami property, where any proceeding has been initiated or pending
against the Company for holding any Benami property.
b. The Company does not have any transactions with struck off companies.
c. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.
d. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
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.
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