10. Provisions, contingent liabilities, and contingent assets .

The Company creates a provision when there is a present obligation as a result of past
events and it is probable that there will be outflow of resources and a reliable estimate of
the obligation can be made of the amount of the obligation. Contingent liabilities are not
recognized but are disclosed in the notes to the financial statements. A disclosure for a
contingent liability is made when there is a possible obligation or a present obligation in
respect of which the likelihood of outflow of resources is remote.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best
estimate. If it is no longer probable that the outflow of resources would be required to
settle the obligation, the provision is reversed.

Contingent assets are neither recognized nor disclosed in the financial statements.

11. Fair Value Measurement

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 to 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, maximising the use of relevant
observable inputs and minimising 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 o.

• Level 2 - inputs other than quoted prices included within Level 1 that a
observable for the asset or liability, either dirptli^rindirectly.

• Level 3 - inputs that are unobservable for tji^^^^^iability.

For assets and liabilities that are recognized hpLpenVvel*

recurring basis, the Company determines occurred betwee . -

in the hierarchy by re-assessing categorization at the end of each reporting period and
discloses the same.

12. Financial Instruments

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 instruments also include
derivative contracts such as foreign currency foreign exchange forward contracts, interest
rate swaps and currency options, and embedded derivatives in the host contract.

a. Financial Assets

TheCompany shall classify financial assets and subsequently measured at amortised cost,
fair value through other comprehensive income (FVOCI) or fair value through profit or loss
(FVTPL) on the basis of its business model for managing the financial assets and l e
contractual cash flow characteristics of the financial asset.

Initial recognition and measurement: . , , _t „„

All financial assets are recognised initially at fair value plus transaction costs th
attributable to the acquisition of the financial asset, in the case of financial assets no
recorded at fair value through profit or loss. Purchases or sales of financial assets that
require delivery of assets within a time frame established by regulation or ^c°^^v®"^t‘^on
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.

Asse'ts't^aQ^Un0^ meet thCenteria for amortized cost or FVOCI are measured at fair value
through profit or loss. A gain or loss on a debt investment that is subsequently measured
at fai^value through profit or loss and is not part of a hedging relationship is recognized in
Statement of Prom and Loss in the period in which it arises, u.^
instruments that were designated at fair value or which are not held ^for ^^ad'^ng' f
income from these financial assets is included in 'Interest income using-the effective

interest rate method.

Fair value through other comprehensive income: the

Financial assets that are held for collection of contractual cash flows and or se !,ng the
assets where the assets' cash flows represent solely payments of principal and 'nte e ,
fnd that are not designated at FVPL are measured at fairvalue t,nrougt. »
comprehensive income. Movements in the carrying amount are taken through hvuep
except for the recognition of impairment gains or losses, interest revenue and foreig
eSnae aainsandlosses on the instrument’s amortized cost which are recognized in
profit or loss. When the financial asset is derecognized, the cumulatr'* ⁹r^a,n
nreviouslv recoqnized in OCI is reclassified from equity to profit or loss. Interest mco
from these financial assets is included in 'Interest income' using the effective interest rate

method.

Msetffhafat'e held for contractual cash flows where those cash <'°"⁵

payments of principal and interest CSPPI'). and that are "°^l *\Vu_StTby W

measured at amortized cost. The carrying amount of these assets ^ Rusted Dy^^y
expected credit loss allowance recognized and measured. Interest inco
financial assets is recognized using the effective interest rate method.

Interest income: . _lnz._rciI._t rP._Ye> to the cross carrying

Interest income is calculated by applying '

amount of financial assets.

Fguity instruments: Jilt ion of equity from the issuer's

oJfu.-aon to pay and

that evidence a residual interest in the issuer’s net assets. Ind AS 109 requires all
investments in equity instruments and contracts on those instruments to be measured at
fair value. -

The Company subsequently measures all quoted equity investments at fair value. Where
the company's management has elected to present fair value gains and losses on equity
investments in other comprehensive income, there is no subsequent reclassification for
fair value gains and losses to profit or loss following the de-recognition of the investment.

The Company subsequently measures all un-quoted equity investments at cost based on
the requirements of Ind AS 109, where in some limited circumstances cost is a more
appropriate estimate of fair value, that may be the case if insufficient more recent
information is available to measure the fair value or if there is a wide range of possible fair
value measurements and cost represents the best estimate of the fair value within that

range.

Changes in the fair value of financial assets at fair value through profit or loss are
recognized in net gain/ loss on fair value changes in the statement of profit and loss^.
Impairment losses (and reversal of impairment losses) on equity investments measured at
FVOCI are not reported separately from other changes in fair value.

Gains and losses on equity investments at FVTPL are included in the Statement of Profit
and Loss.

De-recognition: „ , ,

A financial asset (or, where applicable, a part of a financial asset or part of a company or
similar financial assets) is primarily derecognised (i.e. removed from the company s
balance sheet) when:

a. The rights to receive cash flows from the asset have expired, or

b 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. Ý

c. 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 ot
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,

d 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: for

in accordance with Ind-AS 109, the Company applies expected credit loss (ECU mode! tor
measurement and recognition of impairment loss on the following financial assets Ý

credit risk exposure:

a. Financial assets that are debt instruments, and are measured at amortised cost e.g.,
loans, debt securities, deposits, and bank balance:

The Company follows general approach for recognition of

for finances assets other than trade re^a^ In ^nera approach^ he financial
asset is divided into 3 stages and the is recognized depending on the .

stage of the financial asset into consi

The loss under this approach is either based on the 12 months ECL or lifetime ECL. All
financial assets falling in stage 1 is performing and requires 12 months ECL, whereas
financial assets in stage 2 where the credit risk has increased significantly post
recognition or financial assets in stage 3 which are credit impaired a lifetime ECL is
required.

b. Financial Liabilities

Classification: . .

The Company classifies all financial liabilities as subsequently measuredat amortised cost,
except for financial liabilities at fair value through profit or loss. Such liabilities, including
derivatives that are liabilities, shall be subsequently measured at fair value.

Initial recognition and measurement:

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value
through profit or loss or amortised costs.

Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured
at amortised cost using the EIR method. Gains and losses are recognised in profit or loss
when the liabilities are derecognised as well as through the EiR amortisation process.

De-recognition: , .

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
_sarne 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 or loss.

Offsetting , .

Financial assets and financial liabilities are offset and the net amount is presented in the
balance sheet when, and when the company has a legally enforceable right to set off the
amount and it intends either to settle them on net basis or to realize the asset and settle
the liability simultaneously.

Derivative financial instruments '

The company uses derivative financial instruments, such as forward currency contracts,
interest rate swaps and forward commodity contracts, to hedge its foreign currency risks
interest rate risks and commodity price risks, respectively. Such derivative financial
instruments are initially recognized 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.

13. 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 or less month, which are subject to
an insignificant risk of changes in value.

14. Cash Flow Statement

Cash flows are reported using the indirect method, where by profit before tax is adjusted
for the effects of transactions of a non-cash nature, any deferrals or accruals of past or
future operating cash receipts or payments and item of income or expenses associated .
with investing or financing cash flows. The cash flows from operating, investing and
financing activities of the Company are

15. Earnings per share

Bas^earnfngs¹ per-share ^calculated by thet profit d the

financ^al^year! - ^r. If any

and excluding treasury shares.

b. Diluted earnings per share , _iri t_ho Hot-pr-mi nation of basic earnings

Diluted earnings per share adjusted the ^f|9^ur®s us (^interest and other financing

per share to take into account the af er-.ncome tax effec of ^^{est a} _number of

3S.S?^1C‘S^Ws^^ the conversion of all

dilutive potential equity shares,

16. Events after reporting date

Where events occurring after the balance sheet

existed at the end of the reporting perio , P _{sheet date of} material size or

financial statements. Otherwise, events after the balance sneer oaie

nature are only disclosed.

17. Borrowing Costs

Borrowing costs, if any, directly attributable to Mae «quisltion constor^uction

use^r saha c"apSS "anj. AlXrSS’ing “ expensed in the penod in
which they are incurred.

18. Investment in subsidiaries and associates
' Investments In subsidy and

{deenned cost) as per lnd AS 101 and Ý . _am0unt of the investment is

n^hses^esedⁿa SnW^

betwee^ne^dirpcjsarproceed^amt'th^ca^ryi^g^atnounts^m^ecogt^ized in the Statement
of Profit and Loss,

=r.,-r=Krts;^s==“"-"-

"Financial Instruments’.

19. Recognition Of NPA

Non-Performing Assets (NPA), if any, is recognized as per the prudential norms of NBFC
Rules and Regulations of Reserve Bank of India.

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