Provisions

A provision is recognized when the Company has a present obligation as a result of past event; it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation,
in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not
discounted to its present value (unless the effect of time value of money is material) and are determined
based on the best estimate required to settle the obligation at the reporting date. These estimates are
reviewed at each balance sheet date and adjusted to reflect the current best estimates. If the effect of
the time value of money is material, provisions are discounted using a current pre-tax rate that reflects,
when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision
due to the passage of time is recognised as a finance cost.

Contingent liabilities and contingent assets, if any, are disclosed in the notes to accounts.

s. Post-employment and other employee benefits

Post-employment benefits are employee benefits (other than termination benefits and short-term
employee benefits) that are payable after the completion of employment.

Provident fund

Provident fund is a defined contribution plan covering eligible employees. The Company and the eligible
employees make a monthly contribution to the provident fund maintained by the Regional Provident Fund
Commissioner equal to the specified percentage of the basic salary of the eligible employees as per the
scheme. The contributions to the provident fund are charged to the statement of profit and loss for the
year when the contributions are due. The Company has no obligation, other than the contribution payable
to the provident fund.

Gratuity

Payment for present liability of future payment of gratuity is being made to approved gratuity fund,
which fully cover the same under cash accumulation policy of the Life Insurance Corporation of India. The
employee's gratuity is a defined benefit funded plan.

The present value of the obligation under such defined benefit plan is determined based on the actuarial
valuation using the Projected unit credit method.

Remeasurements, comprising of actuarial gains and losses, excluding amounts included in net interest on
the net defined benefit liability and the return on plan assets (excluding amounts included in net interest
on the net defined benefit liability), are recognised immediately in the balance sheet as asset/liability with
a corresponding debit or credit to retained earnings through OCI in the period in which they occur.

Remeasurements are not reclassified to profit or loss in subsequent periods.

Past service costs are recognised in statement of profit and loss on the earlier of:

• The date of the plan amendment or curtailment, and

• The date that the Company recognises related restructuring costs

• Net interest is calculated by applying the discount rate to the net defined benefit liability or asset.
The Company recognises the following changes in the net defined benefit obligation as an expense
in the statement of profit and loss:

• Service costs comprising of current service costs, past-service costs, gains and losses on curtailments
and non-routine settlements; and

• Net interest expense or income
Superannuation

Superannuation is a defined contribution plan covering eligible employees. The contribution to the
superannuation fund managed by the insurer is equal to the specified percentage of the basic salary of the

eligible employees as per the scheme. The contribution to this scheme is charged to the statement of
profit and loss on an accrual basis. There are no other contributions payable other than contribution
payable to the respective fund.

Compensated Absences

Accumulated leave, which is expected to be utilized within the next twelve months, is treated as short¬
term employee benefit. The Company measures the expected cost of such absences as the additional
amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting
date. The Company treats accumulated leave expected to be carried forward beyond twelve months, as
long-term employee benefit for measurement purposes. Such long-term compensated absences are
provided for based on the actuarial valuation using the projected unit credit method at the reporting date.

Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. The
Company presents the entire leave encashment liability as a current liability in the balance sheet, to the
extent it does not have an unconditional right to defer its settlement for twelve months after the reporting
date. Where the Company has the unconditional legal and contractual right to defer the settlement for a
period beyond twelve months, the same is presented as non-current liability.

t. Financial instruments

The Company has elected to apply following exceptions/exemptions prospectively at the time of transition.

• Classification and measurement of financial assets have been done based on facts and circumstances
existed on transition date.

• Elected to continue carrying value of equity instruments in subsidiaries, associates and jointly controlled
entities as deemed cost on transition date.

• De-recognition of financial assets and financial liabilities have been applied prospectively.

• Applied the requirements of relating to accounting for difference between fair value of financial
asset or financial liability from its transaction price of Ind-AS 109 prospectively.

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.

Financial assets

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at
fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial
asset. Purchases or sales of financial assets that require delivery of assets within a time frame established
by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e.,
the date that the Company commits to purchase or sell the asset.

Subsequent measurement

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

• Debt instruments at amortized cost

• Debt instruments at fair value through other comprehensive income (FVTOCI)

• Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)

• Equity instruments measured at fair value through other comprehensive income (FVTOCI)

Debt instruments at amortised cost

A 'debt instrument' is measured at the amortised cost if both the following conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual
cash flows, and

b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount outstanding.

This category is the most relevant to the Company. After initial measurement, such financial assets are
subsequently measured at amortised cost using the effective interest rate (EIR) method. 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 in other income in the statement of profit and
loss. The losses arising from impairment are recognised in the statement of profit and loss. This category
generally applies to trade and other receivables.

Debt instrument at FVTOCI

A 'debt instrument' is classified as at the FVTOCI if both of the following criteria are met:

a) The objective of the business model is achieved both by collecting contractual cash flows and selling
the financial assets, and

b) The asset's contractual cash flows represent SPPI.

Debt instruments included within the FVTOCI category are measured initially as well as at each reporting
date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However,
the Company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss
in the P&L. On de-recognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified
from the equity to P&L. Interest earned whilst holding FVTOCI debt instrument is reported as interest
income using the EIR method.

Debt instrument at FVTPL

FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria
for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.

In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized
cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates
a measurement or recognition inconsistency (referred to as 'accounting mismatch').

Debt instruments included within the FVTPL category are measured at fair value with all changes recognized
in the statement of profit and loss.

Equity investments

All equity investments in scope of Ind AS 109 are measured at fair value. For all equity instruments not
held for trading, the Company may make an irrevocable election to present in other comprehensive
income subsequent changes in the fair value. The Company makes such election on an instrument-by¬
instrument basis. The classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI
to statement of profit and loss, even on sale of investment. However, the Company may transfer the
cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes
recognized in the statement of profit and loss.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a Company 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) Trade receivables or any contractual right to receive cash or another financial asset that result from
transactions that are within the scope of Ind-AS11 and Ind-AS 18

d) Loan commitments which are not measured as at FVTPL

e) 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.

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

For recognition of impairment loss on other financial assets and risk exposure, the Company determines
that whether there has been a significant increase in the credit risk since initial recognition. If credit risk
has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk
has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument
improves such that there is no longer a significant increase in credit risk since initial recognition, then the
entity reverts to recognising impairment loss allowance based on 12-month ECL.

Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life
of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default
events that are possible within 12 months after the reporting date.

ECL is the difference between all contractual cash flows that are due to the Company in accordance with
the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at
the original EIR. When estimating the cash flows, an entity is required to consider:

• All contractual terms of the financial instrument (including prepayment, extension, call and similar
options) over the expected life of the financial instrument. However, in rare cases when the expected
life of the financial instrument cannot be estimated reliably, then the entity is required to use the
remaining contractual term of the financial instrument

• Cash flows from the sale of collateral held or other credit enhancements that are integral to the
contractual terms

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.

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

• The balance sheet presentation for various financial instruments is described below:

Financial assets measured as at amortised cost, contractual revenue receivables and lease receivables:

ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the
balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off
criteria, the Company does not reduce impairment allowance from the gross carrying amount.

• Debt instruments measured at FVTOCI:

Since financial assets are already reflected at fair value, impairment allowance is not further reduced
from its value. Rather, ECL amount is presented as 'accumulated impairment amount' in the OCI.

For assessing increase in credit risk and impairment loss, the Company combines financial instruments on
the basis of shared credit risk characteristics with the objective of facilitating an analysis that is designed
to enable significant increases in credit risk to be identified on a timely basis.

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.

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 and derivative financial instruments.

Subsequent measurement

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

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities designated upon initial
recognition as at fair value through profit or loss. 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. Gains or losses on liabilities held for trading are recognised
in the statement of 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 statement of profit and 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.

This category generally applies to borrowings. For more information refer Note 12.

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 de-recognition 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.

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.

u. Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short-term
deposits with an original maturity of three months or less, which are subject to an insignificant risk of
changes in value.

For the purpose of the statement of cash flows, cash and cash equivalents consists of cash and short-term
deposits, as defined above, net of outstanding bank overdrafts and cash credit facilities as they are
considered an integral part of the Company's cash management.

v. Cash Flow Statement

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the
effects of transactions of a non-cash nature and any deferral or accruals of past or future cash receipts or
payments. The cash flows from regular operating, investing and financing activities of the Group are
segregated.

w. Contingent liabilities

A contingent liability is a possible obligation that arises from past events and whose existence will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly

within the control of the entity; or a present obligation that arises from past events but is not recognised
because it is not probable that an outflow of resources embodying economic benefits will be required to
settle the obligation; or the amount of the obligation cannot be measured with sufficient reliability. The
Company does not recognize a contingent liability but discloses its existence in the financial statements.

x. Dividend to equity holders of the Company

The Company recognises a liability to make cash or non-cash distributions to equity holders of the Company
when the distribution is authorised and the distribution is no longer at the discretion of the Company. As
per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A
corresponding amount is recognised directly in equity.

y. Segment reporting

Ind AS 108 'Operating Segments' requires Management to determine the reportable segments for the
purpose of disclosure in financial statements based on the internal reporting reviewed by the Managing
Director, being Chief Operating Decision Maker (CODM) to assess performance and allocate resource. The
standard also required Management to make judgments with respect to recognition of segments.

z. Earnings per share

The Company reports basic and diluted earnings per share (EPS) in accordance with Indian Accounting
Standard 33 "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.