M. Provisions, Contingent Liabilities and Contingent Assets

The Company recognises a provision when it has a present obligation as a result of a past event that
probably requires an outflow of the Company's resources embodying economic benefits at the time of
settlement and a reliable estimate can be made of the amount of the obligation. The provisions are
measured at the best estimate of the amounts required to settle the present obligation as at the
balance sheet date and are not discounted to its present value.

Contingent liabilities is a possible obligation arising from past events, the existence of which will be
confirmed only on the occurrence or non-occurrence of one or more future uncertain events not wholly
or substantially within the control of the Company or a present obligation that arises from the past
events where it is either not probable that an outflow of resources will be required to settle the
obligation or a reliable estimate of the amount cannot be made. The company does not recognize a
contingent liability but discloses its existence in the standalone financial statements.

When demand notices are issued by the Government Authorities and demand is disputed by the
company and it is probable that the company will not be required to settle/pay such demands then
these are classified as disputed obligations.

Contingent Assets, if any, are not recognised in the financial statements. If it becomes certain that
inflow of economic benefit will arise then such asset and the relative income are recognised in financial
statements.

N. Current/Non-Current Classifications:

The Company presents assets and liabilities in the balance sheet on the basis of their classifications into
current and non-current based on the assessment made by the management of the company.

Assets:

An asset is treated as current when it is:

• Expected to be realised or intended to be sold or consumed in normal operating cycle

• Held primarily for the purpose of trading

• Expected to be realised within twelve months after the reporting period

• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for
at least twelve months after the reporting period.

All other assets are classified as non-current.

Liabilities:

A liability is treated as current when it is:

• Expected to be settled in normal operating cycle

• Held primarily for the purpose of trading

• Due to be settled within twelve months after the reporting period

• No unconditional right to defer the settlement of the liability for at least twelve months after
the reporting period.

All other liabilities are classified as non-current.

O. Financial Instruments, Financial Assets, Financial liabilities and Equity Instruments

The financial assets and financial liabilities are recognised when the Company becomes a party to the
contractual provisions of the relevant instrument and are initially measured at fair value. Transaction
costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities
(other than financial assets and financial liabilities measured at fair value through profit or loss) are
added to or deducted from the fair value on initial recognition of financial assets or financial liabilities.

A. Financial Assets:

Initial Recognition:

Financial Assets include Investments, Cash and Cash Equivalents and eligible current and non-current
assets. The financial assets are initially recognized at the transaction price when the Company becomes
party to contractual obligations. The transaction price includes transaction costs unless the asset is

Subsequent Measurement:

The subsequent measurement of financial assets depends upon the initial classification of financial
assets. For the purpose of subsequent measurement, financial assets are classified as under:

i. Financial Assets at Amortized Cost where the financial assets are held solely for collection of
cash flows and contractual terms of the assets give rise on specified dates to cash flows that are
solely payments of principal and interest on principal amount outstanding.

ii. Fair value through profit or loss (FVTPL), where the assets are managed in accordance with an
approved investment strategy that triggers purchase and sale decisions based on the fair value
of such assets. Such assets are subsequently measured at fair value, with unrealised gains and
losses arising from changes in the fair value being recognised in the Statement of Profit and Loss
in the period in which they arise.

iii. Financial Assets measured at Fair Value Through Other Comprehensive Income (FVTOCI): A
Financial Asset is measured at FVTOCI if it is held within a business model whose objective is
achieved by both collecting contractual cash flows and selling Financial Assets and the
contractual terms of the Financial Asset give rise on specified dates to cash flows that
represents solely payments of principal and interest on the principal amount outstanding.

Security Deposits, Loans and Advances, Cash and Cash Equivalents where reliable data for fair value is
not available then such eligible current and non-current assets are classified for measurement at
amortized cost.

Impairment:

If the recoverable amount of an asset (or cash-generating unit/Fixed Assets) is estimated to be less than
its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognized immediately in profit or loss, unless the relevant
asset is carried at a re-valued amount if any, in which case the impairment loss is treated as a
revaluation decrease.

Expected Credit Losses are measured through a loss allowance at an amount equal to:

• The 12-months expected credit losses (expected credit losses that result from those default events on
the financial instrument that are possible within 12 months after the reporting date); or

• Full lifetime expected credit losses (expected credit losses that result from all possible default events
over the life of the financial instrument).

For Trade Receivables the Company applies ‘simplified approach’ which requires expected lifetime
losses to be recognized from initial recognition of the receivables. The Company uses historical default
rates to determine impairment loss on the portfolio of trade receivables. At every reporting date these
historical default rates are reviewed and changes in the forward looking estimates are analysed. For
other assets, the Company uses 12 month ECL to provide for impairment loss where there is no
significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used.

Financial assets, other than those at Fair Value through Profit and Loss (FVTPL), are assessed for
indicators of impairment at the end of each reporting period. Financial assets are considered to be
impaired when there is objective evidence that, as a result of one or more events that occurred after
the initial recognition of the financial asset, the estimated future cash flows of the investment have
been affected.

The company recognises impairment loss on trade receivables using expected credit loss model.

B. Financial Liabilities:

Financial liabilities, which include trade payables and eligible current and non-current liabilities. The
trade payables and other financial liabilities are recognised at the value of the respective contractual
obligations. Financial liabilities are derecognised when the liability is extinguished, that is, when the
contractual obligation is discharged, cancelled and on expiry of the terms.

Initial Recognition:

Financial Liabilities are initially recognized at fair value plus any transaction costs, (if any) which are
attributable to acquisition of the financial liabilities.

Subsequent measurement

Financial Liabilities are carried at amortised cost using the effective interest method. For trade and
other payables maturing within one year from the balance sheet date, the carrying amounts

Derecognition of Financial Instruments

The Company derecognises a Financial Asset when the contractual rights to the cash flows from the
Financial Asset expire or it transfers the Financial Asset and the transfer qualifies for derecognition
under Ind AS 109. A Financial liability (or a part of a Financial liability) is derecognized from the
Company’s Balance Sheet when the obligation specified in the contract is discharged or cancelled or
expires.

Offsetting

Financial Assets and Financial Liabilities are offset and the net amount is presented in the balance sheet
when, and only when, the Company has a legally enforceable right to set off the amount and it intends,
either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

P. Fair Value Measurement:

The Company measures financial instruments, such as investments at fair value at each balance sheet
date. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date.

The fair value measurement is based on the presumption that the transaction to sell the asset or
transfer the liability takes place either:

• In the principal market for the asset or liability, or in the absence of a principal market, in the
most advantageous market for the asset or liability.

• The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants
would use when pricing the asset or liability, assuming that market participants act in their economic
best interest. 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.

The company uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximizing the use of relevant observable inputs

and minimizing the use of unobservable inputs.

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

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

Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable.

Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.

For assets and liabilities that are recognized in the financial statements on a recurring basis, the
Company determines whether transfers have occurred between levels in the hierarchy by re-assessing
categorization (based on the lowest level input that is significant to the fair value measurement as a
whole) at the end of each reporting period.

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 as explained above.

Q. Cash and Cash Equivalents-For the Purpose of Cash Flow Statements:

Cash and cash equivalent in the balance sheet comprise cash at banks and in 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.

R. Operating Cycle:

Based on the activities of the company and normal time between incurring of liabilities and their
settlement in cash or cash equivalents and acquisition/right to assets and their realization in cash or
cash equivalents, the company has considered its operating cycle as 12 months for the purpose of
classification of its liabilities and assets as current and non-current.

S. Events Subsequent to Financial Statements Period:

Events after the reporting period are those events, both favourable and unfavourable that have
occurred between the end of the reported financial statements year and the date when financial
statements are approved for issue by the Board of Directors of the company.

Events after the reporting period can be identified as those that provide evidence of conditions that
existed as at the end of the financial year i.e. adjusting events after the financial year end and those
are indicative of conditions that arose after the financial year end i.e. non-adjusting events after the
financial year end.

The company adjusts the amounts of assets, liabilities, incomes and expenses recognised in the financial
statements of the reporting period to reflect the effects of adjusting events to the respective assets,
liabilities, incomes and expenses of the reporting period.

The non-adjusting events are not recognised in the financial statement of the reporting period but the
nature of event and an estimate of its financial effect are disclosed in the notes of accounts.

T. Earnings Per Share:

The Company presents basic and diluted earnings per share details for its ordinary shares. Basic earning
per share is calculated by dividing the total comprehensive income after tax for the year attributable to
the ordinary shareholders of the company by weighted number of ordinary shares outstanding for
applicable period during the year.

Diluted earning per share is calculated considering the effect of dilution if any to ordinary share during
the year.