23. Provisions

A. 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. When the Company expects
some or all of a provision to be reimbursed, for example,
under an insurance contract, the reimbursement is
recognised as a separate asset, but only when the
reimbursement is virtually certain. The expense relating
to a provision is presented in the Statement of profit and
loss net of any reimbursement.

A provision for onerous contracts is recognised when
the expected benefits to be derived by the Company
from a contract are lower than the unavoidable cost
of meeting its obligations under the contract. The
provision is measured at the present value of the lower
of the expected cost of terminating the contract and the
expected net cost of continuing with the contract. Before
a provision is established, the Company recognises
any impairment loss on the assets associated with
that contract.

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.

B. Contingent Liabilities/Assets

Contingent Liabilities/Assets to the extent the
Management is aware, are disclosed by way of notes to
the financial statements.

24. Cash Flow Statement

Cash flow statement has been prepared in accordance
with the indirect method prescribed in Ind AS 7 -
Statement of Cash Flows.

25. Fair value Measurement

The Company measures certain financial instruments,
such as derivatives and other items in it's financial
statements at fair value at each reporting date.

All assets and liabilities for which fair value is measured
or disclosed in the financial statements are categorised
within the fair value hierarchy based on the lowest level
input that is significant to the fair value measurement as
a whole:

Level 1 - Quoted prices (unadjusted) in active markets
for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from
prices).

Level 3 - Inputs for the assets or liabilities that are not
based on observable market data (unobservable inputs).

For the purpose of fair value disclosures, the Company
has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the asset
or liability and the level of the fair value hierarchy.

26. Financial Assets

(i) Initial Recognition and Measurement

All financial assets are recognised initially at fair value.
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 are
included in the cost of the asset.

(ii) Subsequent Measurement

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

• Debt instruments measured at amortised cost,

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

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

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

(iii) Derecognition

A financial asset or part of a financial asset is derecognised
when the rights to receive cash flows from the asset
have expired.

(iv) Trade and Other Receivables

Receivables are initially recognised at fair value, which
in most cases approximates the nominal value. If there
is any subsequent indication that those assets may be
impaired, they are reviewed for impairment.

27. Forward Contracts

The Company uses derivative financial instruments
such as forward currency 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. Derivatives are carried as
financial assets when the fair value is positive and as
financial liabilities when the fair value is negative.

28. Embedded Derivative

The embedded derivative, if required, is separated from
host contract and measured at fair value.

29. Cash and Cash Equivalents

Cash comprises of cash on hand and demand deposits.
Cash equivalents are short-term highly liquid investments
with original maturities of three months or less that are
readily convertible to known amounts of cash, which are
subject to an insignificant risk of change in value.

Bank overdrafts, if any, are classified as borrowings under
current liabilities in the balance sheet.

30. Impairment of Financial Assets

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

a. Time barred dues from the government /
government departments / government companies

are generally not considered as increase in credit
risk of such financial asset.

b. Where dues are disputed in legal proceedings,
provision is made if any decision is given against
the Company even if the same is taken up on appeal
to higher authorities / courts.

c. Dues outstanding for significant period of time
are reviewed and provision is made on a case to
case basis.

Impairment loss allowance (or reversal) is recognised as
expense / income in the statement of profit and loss.

31. Financial Liabilities

(i) Initial Recognition and Measurement

Financial liabilities are classified, at initial recognition,
at fair value through profit or loss as loans, borrowings,
payables, or derivatives, as appropriate.

Loans, borrowings and payables, are stated net of
transaction costs that are directly attributable to them.

(ii) 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
in 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.

(iii) Loans and Borrowings

After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortised
cost using the Effective Interest Rate method (EIR).

Gains and losses are recognised as profit or loss when
the liabilities are derecognised as well as through the EIR
amortisation process.

A financial liability is derecognised when the obligation
under the liability is discharged or cancelled or expires.

(iv) Trade and Other Payables

Liabilities are recognised for amounts to be paid in future
for goods or services received, whether billed by the
supplier or not.

32. Reclassification of Financial Instruments

The Company determines classification of financial
assets and liabilities on initial recognition. After initial
recognition, no reclassification is made for financial
assets which are equity instruments and financial
liabilities. For financial assets which are debt instruments,
a reclassification is made only if there is a change in
the business model for managing those assets. If the
Company reclassifies financial assets, it applies the
reclassification prospectively.

33. 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.

34. Cash Dividend and Non-Cash distribution to
Equity Holders

The Company recognises a liability to make cash or non¬
cash distributions to equity holders when the distribution
is authorised and the distribution is no longer at the
discretion of the Company.

35. Errors and Estimates

The Company revises it's accounting policies if the change
is required due to a change in Ind AS or if the change
will provide more relevant and reliable information
to the users of the financial statements. Changes in
accounting policies are applied retrospectively, unless it
is impracticable to apply.

A change in an accounting estimate that results in
changes in the carrying amounts of recognised assets
or liabilities or to statement of profit and loss is applied
prospectively in the period(s) of change.

Discovery of material errors results in revisions
retrospectively by restating the comparative amounts of
assets, liabilities and equity of the earliest prior period
in which the error is discovered. The opening balances
of the earliest period presented are also restated.

36. Earnings Per Share

The Company presents basic and diluted earnings
per share data for its ordinary shares. Basic earnings
per share is calculated by dividing the profit or loss
attributable to ordinary equity holders of the Company
by the weighted average number of ordinary shares

outstanding during the period, adjusted for own shares
held. Diluted earnings per share is determined by
adjusting the profit or loss attributable to ordinary equity
holders and the weighted average number of ordinary
shares outstanding, adjusted for own shares held, for the
effects of all dilutive potential ordinary shares.

37. Events after the Reporting Period

Adjusting events are events that provide further evidence
of conditions that existed at the end of the reporting
period. The financial statements are adjusted for such
events before authorisation for issue.

Non-adjusting events are events that are indicative of
conditions that arose after the end of the reporting
period. Non-adjusting events after the reporting date
are not accounted, but disclosed.