Provisions, Contingent Liabilities and Contingent Assets

i) Provision

Provisions are recognised in the balance sheet when the
Company has a present obligation (legal or constructive)
as a result of a past event, which is expected to result in
an outflow of resources embodying economic benefits
which can be reliably estimated. Each provision is
based on the best estimate of the expenditure required
to settle the present obligation at the balance sheet
date. When appropriate, provisions are measured on
a discounted basis. Provisions are not recognised for
future operating losses.

Constructive obligation is an obligation that derives from
an entity's actions where:

(a) by an established pattern of past practice,
published policies or a sufficiently specific current
statement, the entity has indicated to other parties
that it will accept certain responsibilities and

(b) as a result, the entity has created a valid expectation
on the part of those other parties that it will
discharge those responsibilities.

ii) Contingent Liabilities and Assets

Contingent liability is a possible obligation that arises
from past events and the existence of which will be
confirmed only by the occurrence or non-occurrence of
one or more uncertain future events not wholly within
the control of the company, or is a present obligation that
arises from past events but is not recognised because
either it is not probable that an outflow of resources
embodying economic benefits will be required to settle
the obligation, or a reliable estimate of the amount of the
obligation cannot be made. These are reviewed at each
balance sheet date and adjusted to reflect the current
best estimates. Contingent liabilities are disclosed
in the Notes. "

Contingent assets usually arise from unplanned or other
unexpected events that give rise to the possibility of an
inflow of economic benefits to the entity. Contingent
assets are not recognised in financial statements since
this may result in the recognition of income that may
never be realised. However, when the realisation of
income is virtually certain, then the related asset is not a
contingent asset and its recognition is appropriate.

2.13 Leases

Company as a Lessee

The Company assesses whether a contract is or contains a
lease, at inception of a contract. A contract is, or contains,
a lease if the contract conveys the right to control the use
of an identified asset for a period of time in exchange for
consideration.

The Company recognises a right-of-use asset ("ROU") and
a corresponding lease liability with respect to all lease
arrangements in which it is the lessee at the date at which
the leases asset is available for use by the Company, except
for leases with a term of twelve months or less (short-term
leases) and leases of low-value assets. Contracts may contain
both lease and non-lease components. The Company
allocates the consideration in the contract to the lease and
non-lease components based on their relative stand-alone
prices. Payments associated with short term leases and all
leases of low-value assets are recognised on a straight-line
basis as an expense in the Statement of Profit and Loss over
the term of the lease unless another systematic basis is more
representative of the time pattern in which economic benefits
from the leased asset are consumed.

Assets and liabilities arising from a lease are initially measured
on a present value basis. Lease liabilities include the net
present value of the following lease payments:

(i) fixed payments (including in-substance fixed payments),
less any lease incentives receivable,

(ii) variable lease payment that are based on an index or a
rate, initially measured using the index or rate as at the
commencement date,

(iii) amounts expected to be payable by the Company under
residual value guarantees,

(iv) the exercise price of a purchase option if the Company is
reasonably certain to exercise that option, and

(v) payments of penalties for terminating the lease, if the
lease term reflects the Company exercising that option.

The lease payments are discounted using the interest rate
implicit in the lease. If that rate can not be readily determined,
which is generally the case for leases in the Company, the
lessee's incremental borrowing rate is used, being the rate that
the individual lessee would have to pay to borrow the funds
necessary to obtain an asset of similar value to the right-of-use
asset in a similar economic environment with similar terms,
security and conditions.

The Company is exposed to potential future increase in
variable lease payments based on an index or rate, which
are not included in the lease liability until they take effect.
The lease liability will be reassessed and adjusted against the
right-of-use of asset as and when such changes takes effect.
Each lease payment is allocated between the liability and
finance cost. The finance cost is charged to the profit or loss
over the lease period so as to produce a constant periodic rate
of interest on the remaining balance of the liability for each
period. Lease liabilities are remeasured with a corresponding
adjustment to the related right-of-use asset if the company
changes its assessment of whether it will exercise an extension
or a termination option.

The right-of-use assets comprise the initial measurement of
the corresponding lease liability, lease payments made at or
before the commencement day, any initial direct costs and
restoration costs. They are subsequently measured at cost less
accumulated depreciation and impairment losses. Right-of-
use assets are depreciated from the commencement date on a
straight-line basis over the shorter of the lease term and useful
life of the underlying asset.

Lease liability and right-of-use asset (ROU) have been
separately presented in the Balance Sheet and lease payments
have been classified as financing cash flows.

Company as a Lessor

Leases for which the company is a lessor is classified either as a
finance or an operating lease. Whenever the terms of the lease
transfers substantially all the risks and rewards incidental to
ownership of an underlying asset to the lessee, the contract
is classified as a finance lease. All other leases are classified as
operating leases.

For operating leases, rental income is recognized on a straight
line basis over the term of the relevant lease.

The Company did not need to make any adjustment to the
accounting for assets held as lessor as a result of adopting the
new leasing standard

2.14 Employee BenefitsA. Short-term Employee Benefits

Liability in respect of short term employee benefit that
are expected to be settled wholly within 12 months after
the end of the period in which the employees render
the related service are recognised at the amount of
the benefits expected to be paid when the liabilities
are settled. The liabilities are presented as "Provisions
for employee benefits" within 'Current Provisions' in
the balance sheet.

B. Post Employment Benefit Plans
Defined Contribution Plans

Contributions under Defined Contribution Plans payable
in keeping with the related schemes are recognised
as expenses for the year in which the employee has
rendered the service.

Defined Benefit Plans

The present value of defined benefit obligations are
ascertained by an independent actuarial valuation using
Projected Unit Credit Method as per the requirement
of Ind AS 19 - Employee Benefits. The liability / (asset)
recognised in the Balance Sheet is the present value of
the defined benefit obligations on the balance sheet
date less the fair value of the plan assets (for funded
plans), together with adjustments for unrecognized
past service costs. Measurements, comprising of
actuarial gains and losses, the effect of the asset ceiling
(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 with a corresponding debit or credit to
retained earnings through OCI in the year in which they
occur. Measurements are not reclassified to profit or loss
in subsequent years.

C. Other Long-term Employment Benefits
(unfunded)

Long Service Award

The present value of obligation against long-term
employee benefits is ascertained by an independent
actuarial valuation using Projected Unit Credit Method
as per the requirement of Ind AS 19 - Employee Benefits.
All actuarial gains and losses and past service cost
are recognised in the Statement of Profit and Loss as
applicable in the year in which they occur.

Compensated Absences

Compensated absences which are not expected to be
settled within twelve months after the end of the year
in which the employee renders the related service are
recognised based on actuarial valuation at the present
value of the obligation as on the reporting date.

The benefits are discounted using the appropriate
market yields at the end of the reporting year that
have terms approximating to the terms of the related
obligation. Remeasurement as a result of experience
adjustment and changes in actuarial assumptions are
recognised in the statement of profit and loss.

2.15 Financial Instruments

Financial assets and financial liabilities are recognised when
the company become a party to the contractual provisions of
the instruments.

Financial assets and financial liabilities are initially measured
at fair value. Transaction cost that are directly attributable
to the acquisition or issue of financial assets and financial
liabilities (other than financial assets and financial
liabilities at fair value through profit or loss) are added to
or deducted from the fair value of the financial assets or
financial liabilities, as appropriate on initial recognition.
Transaction cost directly attributable to the acquisition of
financial assets or financial liabilities at fair value through
profit or loss are recognised immediately in the Statement
of Profit and Loss.

A Investments and Other Financial Assets

(i) Classification

The Company classifies its financial assets in the
following measurement categories:-

• Those to be measured subsequently at fair value
(either through comprehensive income or through
profit or loss), and

• Those to be measured at amortised cost

The classification depends on the company's business
model for managing financial assets and the contractual
terms of cash flows.

(ii) Measurement

At initial recognition, the Company measures a financial
asset (excluding trade receivables which do not contain a
significant financing component) at its fair value plus, in
the case of a financial asset not at fair value through profit
or loss, transaction costs that are directly attributable to
the acquisition of the financial asset. Transaction costs of
financial assets carried at fair value through profit or loss
are expensed in profit or loss.

Financial Assets measured at Amortized Cost

Financial assets are measured at amortized cost if these
financial assets are held with a business model to hold
these assets in order to collect contractual cash flows
and the contractual terms of the financial asset give
rise on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.

Financial Assets measured at Fair Value

Financial assets are measured at fair value through other
comprehensive income if these financial assets are held
within a business model to hold these assets in order to
collect contractual cash flows and to sell these financial
assets and the contractual terms of the financial asset
give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.

The Company in respect of equity investments which
are not held for trading has made an irrevocable election
to present in other comprehensive income. Such an
election is made by the Company on an instrument by
instrument basis at the time of initial recognition of fair
value changes of such equity investments. Subsequent
changes in the fair value of such equity instruments are
taken through other comprehensive income.

Financial asset not measured at amortized cost or at fair
value through other comprehensive income is carried
at fair value through profit or loss. A gain or loss on
such assets that is subsequently measured at fair value
through profit or loss is recognised in the statement of
profit and loss.

(iii) Impairment of Financial Assets

Loss allowance for expected credit losses, assessed on a
forward looking basis, is recognized for financial assets
measured at amortized cost and fair value through other
comprehensive income.

The Company recognises life time expected credit losses
for all trade receivables that do not constitute a financing
transaction. For financial assets whose credit risk has
not significantly increased since initial recognition,
loss allowance equal to twelve months expected credit
losses is recognised. Loss allowance equal to the lifetime
expected credit losses is recognised if the credit risk on
the financial instruments has significantly increased
since initial recognition.

(iv) De-Recognition of Financial Assets

A financial asset is derecognised only when

• The Company has transferred the rights to receive
cash flows from the financial asset or

• retains the contractual rights to receive the
cash flows of the financial asset, but assumes a
contractual obligation to pay the cash flows to one
or more recipients.

Where the Company has transferred an asset, the
Company evaluates whether it has transferred
substantially all risks and rewards of ownership of
the financial asset. In such cases, the financial asset is
derecognised. Where the Company has not transferred
substantially all risks and rewards of ownership
of the financial asset, the financial asset is not
derecognised.

Where the Company has neither transferred a financial
asset nor retains substantially all risks and rewards of
ownership of the financial asset, the financial asset is
derecognised if the Company has not retained control
of the financial asset.

Where the Company retains control of the financial asset,
the asset is continued to be recognised to the extent of
continuing involvement in the financial asset.

B Financial Liabilities and Equity Instruments

(i) Classification as Debt or Equity

Financial liabilities and equity instruments issued
by the company are classified according to the
substance of the contractual arrangements entered
into and the definitions of a financial liability and an
equity instruments.

(ii) Measurement
Equity Instruments

An equity instrument is any contract that evidences
a residual interest in the assets of an entity after
deducting all its liabilities. Equity instruments
are recognised at the proceed received, net of
direct issue cost.

Financial Liabilities

Trade and other payables represent liabilities for
goods and services provided to the Company
prior to the end of financial year which are unpaid.
Trade and other payables are presented as current
liabilities unless payment is not due within 12
months after the reporting year. Trade and other
payables are initially measured at fair value, net of
transaction costs, and are subsequently measured
at amortised cost, using the effective interest
rate method where the time value of money
is significant.

Interest-bearing bank loans, overdrafts and issued
debt are initially measured at fair value and are
subsequently measured at amortised cost using
the effective interest rate method. Any difference
between the proceeds (net of transaction costs)
and the settlement or redemption of borrowing is
recognised over the term of the borrowings in the
statement of profit and loss.

(iii) De-Recognition of Financial Liabilities

The company derecognised financial liabilities
when and only when the Company's obligation
are discharged, cancelled or they expire.

2.16 Foreign Currency Transactions

The financial statements of the Company are presented in
Indian Rupee, which is the functional currency of the company
and the presentation currency for the financial statements.

Transactions in foreign currencies are initially recognised in
reporting currency i.e. Indian Rupees, by using the exchange
rates prevailing on the date of the transaction. Monetary assets
and liabilities denominated in foreign currencies are translated
at the rates of exchange prevailing at the reporting date.

The exchange differences arising on the settlement of
transactions and from the translation of monetary assets
& liabilities denominated in foreign currencies at year end
exchange rates are recognised in the Statement of Profit
and Loss. Foreign exchange gains and losses presented in
the Statement of Profit and Loss on a net basis within "Other
Income/ Other Expenses.

Non-monetary items that are measured at fair value in a
foreign currency are translated using the exchange rates at
the date when the fair value was determined. Translation
differences on assets and liabilities carried at fair value are
reported as part of the fair value gain or loss.

2.17 Derivative Financial Instruments

The Company uses derivative financial instruments such as
forward foreign exchange contracts, to safeguard its risks
associated with foreign exchange fluctuations. Such derivative
financial instruments are used as risk management tools and
not for speculative purposes. The Company enters into certain
derivative contracts to hedge risk which are not designated
as hedges. Derivatives are initially recognised at fair value
at the date of derivative contracts being entered into and
are subsequently measured at fair value at the end of each
reporting period, with changes included in "Other Income/
Other Expenses".

2.18 Trade Receivables

Trade receivables are amount receivable from customers
for goods sold or services rendered in the ordinary course
of business. Trade receivables are recognised initially at the
amount of considerations that is unconditional. The Company
holds the trade receivables with the objective of collecting
the contractual cash flows and therefore measures them
subsequently at amortised cost using the effective interest
method, less loss allowance.

2.19 Cash and Cash Equivalents

Cash and cash equivalents includes cash on hand/ deposits
held at call with banks and other short term deposits with
original maturities of three month or less which are readily
convertible into known amount of cash and are subject to
insignificant risk of change in value.

2.20 Earnings Per Share(i) Basic Earning per share

The basic earnings per share is computed by dividing
the net profit or loss attributable to the owners for
the year by the weighted average number of equity
shares outstanding during the year, adjusted for bonus
elements in equity shares, if any issued during the year.

(ii) Diluted earning per share

Diluted earnings per share adjusts the figures used in
the determination of basic earning per share to take
into account the after income tax effect of interest and
other financing costs associated with dilutive potential

equity shares and the weighted average number
of additional equity shares that would have been
outstanding assuming the conversion of all dilutive
potential equity shares.

2.21 Segment Reporting

Operating segments are reported in a manner consistent with
the internal reporting provided to the chief operating decision
maker. The chief operating decision maker is responsible
for allocating resources and assessing performance of the
operating segments and has been identified as the Managing
Director of the Company. The accounting policies adopted for
the segment reporting are in line with the accounting policies
of the Company. Refer Note 39.

2.22 Government Grants

Government grants are recognized at its fair value, when
there is a reasonable assurance that the company will comply
with the conditions attaching to them and that the grants
will be received.

Government grants relating to income are deferred and
recognised in the Statement of Profit and Loss over the year
necessary to match them with the costs that they are intended
to compensate and presented within Other Operating Income.

Government grants relating to the purchase of property, plant
and equipment are included in liabilities as deferred income
and are credited to the Statement of Profit and Loss on a
straight line basis over the expected lives of the related assets
or other systematic basis representative of the fulfillment of
obligation associated with the grant received and presented
within Other Operating Income.

2.23 Offsetting Financial Instruments

Financial assets and liabilities are offset and the net amount
is reported in the Balance Sheet where there is a legally
enforceable right to offset the recognised amounts and there
is an intention to settle on a net basis or realise the asset and
settle the liability simultaneously. The legally enforceable
right must not be contingent on future events and must
be enforceable in the normal course of business and in the
event of default, insolvency or bankruptcy of the company or
the counterparty.

2.24 Rounding of Amounts

All amounts disclosed in the financial statements and notes
have been rounded off to the nearest lakhs (with two places
of decimal) as per the requirement of Schedule III, unless
otherwise stated.