Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result
of a past event, it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.

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.

Contingent liability is disclosed in the case of:

• Present obligation arising from past event, when it is not probable that an outflow of resources will
be required to settle the obligation.

• A present obligation arising from past event, when no reliable estimate is possible.

• A possible obligation arising from past events, unless the probability of outflow of resources is
remote. Commitments include the amount of purchase order (net of advances) issued to parties for
completion of assets.

Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet
date.

(xiv) Cash and cash equivalents

Cash and cash equivalent 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.

(xv) Financial instruments(i) Financial assets:Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in case of financial asset not recorded at
fair value through profit or loss, transaction cost that are attributable to the acquisition of the financial
asset.

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

Subsequent measurement

For purposes of subsequent measurement financial assets are classified into two broad categories:

• Financial asset at fair value

• Financial asset at amortised cost

Where assets are measured at fair value, gains and losses are either recognised entirely in the
statement of profit or loss (i.e. fair value through profit or loss), or recognised in other comprehensive
income (i.e. fair value through other comprehensive income)

A financial asset that meet the following two conditions is measured at amortised cost (net of any
write down for impairment) unless the asset is designated at fair value through profit or loss under
the fair value option.

• Business model test: the objective of the Company’s model is to hold the financial asset to collect
the contractual cash flows (rather than to sell the instrument prior to its contractual maturity to
realise its fair value changes)

• Cash flow characteristics test: The contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payment of principal and interest on the principal amount
outstanding.

A financial asset that meet the following two conditions is measured at fair value through other
comprehensive income unless the asset is designated at fair value through profit or loss under
the fair value option.

• Business model test: the financial asset is held within a business model whose objective is
achieved both by collecting contractual cash flows and selling the financial assets

• Cash flow characteristics test: The contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payment of principal and interest on the principal amount
outstanding.

Debt Instruments included within the fair value through profit or loss (FVTPL) category are measured
at fair value with all changes recognized in the statement of profit or loss.

Equity Instruments: All equity instruments within scope of Ind AS 109 are measured at fair value.
Equity instruments which are classified as held for trading are measured at FVTPL. For all other
equity instruments, the company decides to measure the same either at fair value through other
comprehensive income (FVTOCI) or FVTPL. The Company makes such selection on an instrument-
by-instrument basis. The classification is made on initial recognition and is irrevocable.

For equity instruments measured at FVTOCI, all fair value changes on the instrument, excluding
dividends, are recognised in Other Comprehensive Income (OCI). There is no recycling of the
amounts from OCI to Statement of profit or loss, even on sale of such instruments.

The Investments are measured at Fair Market Value. The diminution in the market value of
investments is not considered unless such diminution is considered permanent and accordingly
provision for diminution is made in books of accounts.

All other financial asset is measured at fair value through profit or loss.

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 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 passthrough 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 Losses (ECL) model for
measurement and recognition of impairment loss on trade receivables and other advances. The
company follows “Simplified Approach” for recognition of impairment loss on these financial assets.
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.

(ii) Financial liabilities:

Initial recognition and measurement:

Financial Liabilities are classified at initial recognition as:

(i) Financial liabilities at fair value through profit or loss,

(ii) Loans and borrowings, payables, net of directly attributable transaction costs or

(iii) Derivatives designed as hedging instruments in an effective hedge, as appropriate.

The company’s financial liabilities include trade and other payables, loans and borrowings including
derivative financial instruments.

Subsequent measurement:

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

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference between the proceeds (net of transaction
costs) and the redemption amount is recognised in the Statement of Profit and Loss over the period
of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities
are recognised as transaction costs of the loan to the extent that it is probable that some or all of the
facility will be drawn down. In this case, the fee is deferred until the draw down occurs.

Borrowings are removed from the Balance Sheet when the obligation specified in the contract is
discharged, cancelled or expired. The difference between the carrying amount of a financial liability
that has been extinguished and the consideration paid is recognised in the Statement of Profit and
Loss as other gains / (losses).

Borrowings are classified as current liabilities unless the Company has an unconditional right to
defer settlement of the liability for at least twelve months after the reporting period. Where there is a
breach of a material provision of a long-term loan arrangement on or before the end of the reporting
period with the effect that the liability becomes payable on demand on the reporting date, the entity
does not classify the liability as current, if the lender has agreed, after the reporting period and before
the approval of the financial statements for issue, not to demand payment as a consequence of the
breach.

Trade and other payables:

These amounts represent liabilities for goods and services provided to the Company prior to the end
of financial period which are unpaid. The amounts are unsecured and are usually paid within twelve
months of recognition. Trade and other payables are presented as current liabilities unless payment
is not due within twelve months after the reporting period. They are recognised initially at their fair
value and subsequently measured at amortised cost using the effective interest method.

Derivative financial instruments:

The Company uses derivative financial instruments, such as foreign exchange forward contracts to
hedge its foreign currency risks. 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 at the end of each reporting period. Derivatives are carried as financial assets when the
fair value is positive and as financial liabilities when the fair value is negative.

Loans and borrowings - subsequent measurement

After initial recognition, interest-bearing loans and borrowings are subsequently measured at
amortised cost using the Effective Interest Rate (EIR) method. Gains and losses are recognised in
profit or loss when the liabilities are derecognised as well as through the Effective Interest Rate (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 Effective Interest Rate (EIR). The Effective Interest Rate (EIR)
amortisation is included as finance costs in the statement of profit and loss.

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.

(xvi) Investment Property

Investment properties are properties held to earn rentals and / or for capital appreciation (including
property under construction for such purpose). Investment properties are measured initially at cost,
including transaction costs. Subsequent to initial recognition, investment properties are measured in
accordance with the requirements of Ind AS 16 for cost model.

An investment property is derecognized upon disposal or when the investment property is permanently
withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss
arising on derecongnition of the property is included in the Statement of Profit and Loss in the period in
which the property is derecognized.

(xvii) Borrowing Costs

Borrowing costs are charged to Statement of Profit and Loss except to the extent attributable to acquisition
/ construction of and asset that necessarily takes a substantial period of time to get ready for its intended
use or sale.

Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing
of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to
the borrowing costs.

(xviii) Impairment of Non-financial Assets

At each balance sheet date, an assessment is made of whether there is any indication of impairment.

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 groups of assets.

When the carrying amount of an asset or CGU 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.

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.

Recent accounting pronouncements

Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 23, 2023,
MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2022, applicable from
April 1st, 2023, as below:

Ind AS 103 - Reference to Conceptual Framework

The amendments specifiy that to qualify for recognition as part of applying the acquisition method, the
identifiable assets acquired and liabilities assumed must meet the definitions of assets and liabilities
in the Conceptual Framework for Financial Reporting under Indian Accounting Standards (Conceptual
Framework) issued by the Institute of Chartered Accountants of India at the acquisition date. These
changes do not significantly change the requirements of Ind AS 103. The Company does not expect the
amendment to have any significant impact in its financial statements.

Ind AS 16 - Proceeds before intended use

The amendments clarify the accounting of the proceeds before intended use wherein the amounts
received from selling items produced while the company is preparing the asset for its intended use
needs to be deducted from the cost of property, plant and equipment. The Company does not expect
the amendments to have any impact in its recognition of its property, plant and equipment in its financial
statements.

Ind AS 37 - Onerous Contracts - Costs of Fulfilling a Contract

The amendments specify that that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate directly
to the contract’. Costs that relate directly to a contract can either be incremental costs of fulfilling that
contract (examples would be direct labour, materials) or an allocation of other costs that relate directly
to fulfilling contracts. The amendment is essentially a clarification and the Company does not expect the
amendment to have any significant impact in its financial statements.

Ind AS 109 - Annual Improvements to Ind AS (2021)

The amendment clarifies which fees an entity includes when it applies the ‘10 percent’ test of Ind AS 109
in assessing whether to derecognise a financial liability. The Company does not expect the amendment
to have any significant impact in its financial statements.