Accounting Policies of Innova Captab Ltd. Company

Mar 31, 2025

NOTE 3 - MATERIAL ACCOUNTING POLICIES

The Company has consistently applied the following
accounting policies to all periods presented in these
standalone financial statements, except if mentioned
otherwise.

Set out below are the material accounting policies:

(a) Financial instrument

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 assets

Initial recognition and measurement

Trade receivables are initially recognized when they
are originated. All other financial assets and financial
liabilities are initially recognized when the Company
becomes a party to the contractual provisions of the
instrument.

A financial asset (except trade receivable, that do
not contain a significant financing component are
measured at transaction price) is recognized initially
at fair value plus or minus transaction cost that are
directly attributable to the acquisition or issue of
financial assets (other than financial assets at fair
value through profit and loss). Transaction costs
directly attributable to the acquisition of financial
assets or financial liabilities at fair value through
profit or loss (''FVTPL'') are recognized immediately in
the Statement of Profit and Loss. A trade receivable
without a significant financing component is initially
measured at the transaction price.

On initial recognition, a financial asset is classified as
measured at:

â¢ amortized cost

â¢ fair value through other comprehensive income
(FVOCI)

â¢ fair value through profit or loss (FVTPL)

Financial asset at amortized cost

A financial asset is measured at amortized cost if
it meets both of the following conditions and is not
designated as at FVTPL:

- The asset is held within a business model whose
objective is to hold assets 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.

Equity investments

All equity investments in scope of Ind AS 109 are
measured at fair value. Equity instruments which
are held for trading and contingent consideration
recognized by an acquirer in a business combination
to which Ind AS 103 applies are classified as at
FVTPL. For all other equity instruments, the Company
may make an irrevocable election to present in other
comprehensive income subsequent changes in the
fair value. The Company makes such election on an
instrument-by-instrument basis. The classification is
made on initial recognition and is irrevocable.

If the Company decides to classify an equity
instrument as at FVOCI, then all fair value changes on
the instrument, excluding dividends, are recognized in
the OCI. There is no recycling of the amounts from OCI
to the Statement of Profit and Loss, even on sale of
investment. However, the Company may transfer the
cumulative gain or loss to retained earnings.

Equity instruments included within the FVTPL
category are measured at fair value with all changes
recognized in the Statement of Profit and Loss.

All financial assets not classified as measured at
amortised cost or FVOCI as described above are
measured at FVTPL. The transaction costs directly
attributable to the acquisition of financial assets
and liabilities at fair value through profit or loss are
immediately recognised in statement of profit and
loss.

Investments in subsidiaries

Investments in equity instruments of subsidiaries are
carried at cost less accumulated impairment losses,
if any. Where an indication of impairment exists, the
carrying amount of the investment is assessed and
written down immediately to its recoverable amount.
On disposal of investments in subsidiaries, associates,
the difference between net disposal proceeds and the
carrying amounts are recognized in the Standalone
Statement of Profit and Loss.

Financial assets: Business model assessment

The Company makes an assessment of the objective
of the business model in which a financial asset is
held at a portfolio level because this best reflects
the way the business is managed and information is
provided to management. The information considered
includes:

- The stated policies and objectives for the portfolio
and the operation of those policies in practice.
These include whether management''s strategy
focuses on earning contractual interest income,
maintaining a particular interest rate profile,
matching the duration of the financial assets to the
duration of any related liabilities or expected cash
outflows or realizing cash flows through the sale of
the assets;

- How the performance of the portfolio is evaluated
and reported to the Company''s management;

- The risks that affect the performance of the
business model (and the financial assets held
within that business model) and how those risks
are managed;

- How managers of the business are compensated
- e.g. whether compensation is based on the fair
value of the assets managed or the contractual
cash flows collected; and

- The frequency, volume and timing of sales of
financial assets in prior periods, the reasons for
such sales and expectations about future sales
activity.

Financial assets that are held for trading or are
managed and whose performance is evaluated on a
fair value basis are measured at FVTPL.

Financial assets: Assessment whether contractual
cash flows are solely payments of principal and
interest

For the purposes of this assessment, ''principal'' is
defined as the fair value of the financial asset on initial
recognition. ''Interest'' is defined as consideration
for the time value of money and for the credit risk
associated with the principal amount outstanding
during a particular period of time and for other
basic lending risks and costs (e.g. liquidity risk and
administrative costs), as well as a profit margin.

In assessing whether the contractual cash flows
are solely payments of principal and interest, the
Company considers the contractual terms of the
instrument. This includes assessing whether the
financial asset contains a contractual term that could
change the timing or amount of contractual cash
flows such that it would not meet this condition. In
making this assessment, the Company considers:

- contingent events that would change the amount
or timing of cash flows;

- terms that may adjust the contractual coupon rate,
including variable interest rate features;

- prepayment and extension features; and

- terms that limit the Company''s claim to cash flows
from specified assets (e.g. non-recourse features).

Financial assets - Subsequent measurement and
gains and losses

a) Financial assets at FVTPL: These assets are
subsequently measured at fair value. Net gains
and losses, including any interest or dividend
income, are recognized in profit or loss.

b) Financial assets at amortized cost: These
assets are subsequently measured at amortized
cost using the effective interest method. The
amortized cost is reduced by impairment losses.
Interest income, foreign exchange gains and
losses and impairment are recognized in profit
or loss. Any gain or loss on derecognition is
recognized in profit or loss.

Derecognition of financial assets

A financial asset (or, where applicable, a part of a
financial asset or part of a Company of similar financial
assets) is primarily derecognized (i.e., removed from
the Company''s Balance Sheet) 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 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 recognize the transferred
asset to the extent of the Company''s continuing
involvement. In that case, the Company also
recognizes 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.

Financial liabilities: Classification, subsequent
measurement and gains and losses

Financial liabilities are classified as measured
at amortized cost or FVTPL. A financial liability
is classified as at FVTPL if it is classified as
held-for-trading, or it is a derivative or it is designated
as such on initial recognition. Financial liabilities at
FVTPL are measured at fair value and net gains and
losses, including any interest expense, are recognized
in Statement of Profit and Loss. Other financial
liabilities are subsequently measured at amortized
cost using the effective interest method. Interest

expense and foreign exchange gains and losses
are recognized in Statement of Profit and Loss. Any
gain or loss on derecognition is also recognized in
Statement of Profit and Loss.

Derecognition of financial liabilities

A financial liability is derecognized 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
recognized in the Statement of Profit and Loss.

Offsetting

Financial assets and financial liabilities are offset and
the net amount presented in the Balance Sheet when,
and only when, the Company currently has a legally
enforceable right to set off the amounts and it intends
either to settle them on a net basis or to realize the
asset and settle the liability simultaneously.

Derivative financial instruments

The Company holds derivative financial instruments
in form of compulsorily convertible preference shares.
Embedded derivatives are separated from the host
contract and accounted for separately if the host
contract is not a financial asset and certain criteria
are met.

Derivatives are initially measured at fair value.
Subsequent to initial recognition, derivatives are
measured at fair value, and changes therein are
generally recognized in profit or loss.

(b) Financial Guarantee

A financial guarantee contract requires the Company
to make specified payments to reimburse the holder
for a loss it incurs because a specified debtor fails
to make payments when due in accordance with the
terms of a debt instrument.

Financial guarantee contracts issued by the Company
are initially measured at their fair values, adjusted
for transaction costs that are directly attributable to
the issuance of the guarantee and not arising from
a transfer of a financial asset, are subsequently
measured at the higher of:

â¢ the amount of the loss allowance determined in
accordance with Ind AS 109; and

â¢ the amount initially recognized less, where
appropriate, cumulative amount of income

recognized in accordance with the Company''s
revenue recognition policies.

The Company has not designated any financial
guarantee contracts as FVTPL.

The Company estimates the loss allowance on
financial guarantee contracts based on the present
value of the expected payments to reimburse the
holder for a credit loss that it incurs. The shortfalls
are discounted by the interest rate relevant to the
exposure.

c) Property, plant and equipment (''PPE'')

Recognition and measurement

Items of PPE are stated at cost, which includes
capitalized borrowing costs, less accumulated
depreciation and or accumulated impairment loss, if
any. Freehold land is carried at historical cost less any
accumulated impairment losses.

Cost of an item of a PPE comprises its purchase price
including import duty, and other non-refundable taxes
after deducting any trade discounts and rebates and
any directly attributable cost of bringing the item to its
working condition for its intended use and estimated
costs of dismantling and removing the item and
restoring the site on which it is located.

The cost of a self-constructed item of PPE comprises
the cost of materials and direct labour, any other costs
directly attributable to bringing the item to working
condition for its intended use, and estimated costs of
dismantling and removing the item and restoring the site
on which it is located. Expenditure incurred on startup
and commissioning of the project and/or substantial
expansion, including the expenditure incurred on trial
runs (net of trial run receipts, if any) up to the date
of commencement of commercial production are
capitalized. If significant parts of an item of PPE have
different useful lives, then they are accounted for as
separate items (major components) of PPE.

The cost of an item of property, plant and equipment
shall be recognized as an asset if, and only if it is
probable that future economic benefits associated

with the item will flow to the Company and the cost of
the item can be measured reliably.

Advances paid towards acquisition of PPE
outstanding at each reporting date, are shown under
other non-current assets and cost of assets not ready
for intended use before the period end, are shown as
capital work-in-progress.

Any gain or loss on disposal of an item of PPE is
recognized in the Statement of Profit and Loss.

Transition to Ind AS

The cost of property, plant and equipment as at 01
April 2019, the Company date of transitions to Ind AS,
was determined with reference to its carrying value
recognized as per the previous GAAP (deemed cost),
as at the date of transition to Ind AS.

Subsequent expenditure

Subsequent costs are included in the asset''s
carrying amount or recognized as a separate asset,
as appropriate, only when it is probable that future
economic benefits associated with the item will flow to
the Company and the cost of the item can be measured
reliably. The carrying amount of any component
accounted for as a separate asset is derecognized
when replaced. All other repairs and maintenance are
charged to Statement of Profit and Loss during the
reporting period in which they are incurred.

Depreciation

Depreciation is calculated on cost of items of PPE less
their estimated residual values over their estimated
useful lives using the straight-line method and is
recognized in the Statement of Profit and Loss.
Depreciation on items of PPE is provided as per
rates corresponding to the useful life specified in
Schedule II to the Companies Act, 2013 read with the
notification dated 29 August 2014 of the Ministry of
Corporate Affairs except for certain classes of PPE
which are depreciated based on the internal technical
assessment of the management. The estimated
useful lives of items of PPE for the current and
comparative year are as follows:

Depreciation method, useful lives and residual values
are reviewed at each reporting date and adjusted if
appropriate.

Depreciation on additions/(disposal) is provided on
a pro-rata basis i.e. from/ (upto) the date on which
asset is ready for use/ (disposed of).

Derecognition

An item of PPE is derecognized on disposal or when
no future economic benefits are expected from its
use and disposal. Losses arising from retirement and
gains or losses arising from disposal of a PPE are
measured as the difference between the net disposal
proceeds and the carrying amount of the asset and
are recognized in the Statement of Profit and Loss.

d) Leases

At inception of a contract, the Company assesses
whether a contract is, or contains, a lease. 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.

Leases in which the Company is a lessee

The Company''s lease asset classes primarily consist
of leases for buildings and leasehold land. The
Company, at the inception of a contract, assesses
whether the contract is a lease or not. A contract is,
or contains, a lease if the contract conveys the right
to control the use of an identified asset for a time in
exchange for a consideration.

The Company recognizes a right-of-use asset (âROU")
and a lease liability at the lease commencement
date. The right-of-use asset is initially measured at
cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or
before the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle
and remove the underlying asset or to restore the
underlying asset or the site on which it is located, less
any lease incentives received.

The right-of-use assets is subsequently measured at
cost less any accumulated depreciation, accumulated
impairment losses, if any and adjusted for any
remeasurement of the lease liability. The right-of-use
assets is depreciated using the straight-line method
from the commencement date over the shorter of
lease term or useful life of right-of-use asset. The
estimated useful lives of right-of-use assets are
determined on the same basis as those of property,
plant and equipment. Right-of-use assets are tested
for impairment whenever there is any indication
that their carrying amounts may not be recoverable.

Impairment loss, if any, is recognized in the Statement
of Profit and Loss.

The lease liability is initially measured at the
present value of the lease payments that are not
paid at the commencement date, discounted using
the Company''s incremental borrowing rate. The
Company determines its incremental borrowing rate
by obtaining interest rates from various external
financing sources and makes certain adjustments to
reflect the terms of the lease and type of the asset
leased The lease liability is subsequently remeasured
by increasing the carrying amount to reflect interest
on the lease liability, reducing the carrying amount
to reflect the lease payments made and remeasuring
the carrying amount to reflect any reassessment or
lease modifications or to reflect revised in-substance
fixed lease payments. The Company recognizes the
amount of the re-measurement of lease liability due
to modification as an adjustment to the right-of-use
asset and Statement of Profit and Loss depending
upon the nature of modification. Where the carrying
amount of the right-of-use asset is reduced to zero and
there is a further reduction in the measurement of the
lease liability, the Company recognizes any remaining
amount of the re-measurement in Statement of Profit
and Loss.

Lease payments included in the measurement of the
lease liability comprise the following:

- fixed payments, including in-substance fixed
payments;

- variable lease payments that depend on an index or
a rate, initially measured using the index or rate as
at the commencement date;

- amounts expected to be payable under a residual
value guarantee; and

- the exercise price under a purchase option that
the Company is reasonably certain to exercise,
lease payments in an optional renewal period if
the Company is reasonably certain to exercise an
extension option, and penalties for early termination
of a lease unless the Company is reasonably certain
not to terminate early.

When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying
amount of the right-of-use asset, or is recorded in
profit or loss if the carrying amount of the right-of-
use asset has been reduced to zero. The Company
presents right-of-use assets that do not meet the
definition of investment property in ''property, plant
and equipment'' and lease liabilities in ''financial
liabilities'' in the statement of financial position.

Short-term leases and leases of low-value assets

The Company has elected not to recognize right-of-
use assets and lease liabilities for short-term leases
that have a lease term of 12 months or less and leases
for which the underlying asset is of low value. The
Company recognizes the lease payments associated
with these leases as an expense in the Statement of
Profit or Loss over the lease term.

e) Intangible assets

Intangible assets are acquired (including
implementation of software system) are measured
initially at cost. Cost of an item of intangible asset
comprises its purchase price, including import duties
and non-refundable purchase taxes, after deducting
trade discounts and rebates, any directly attributable
cost of bringing the item to its working condition for
its intended use.

The cost of inventories includes expenditure incurred
in acquiring the inventories, production or conversion
costs and other costs incurred in bringing them to
their present location and condition.

Net realizable value is the estimated selling price in the
ordinary course of business, less the estimated costs
of completion and the estimated costs necessary to
make the sale. The net realizable value of work-inÂ¬
progress is determined with reference to the selling
prices of related finished products.

Advances paid towards acquisition of intangible
assets outstanding at each reporting date, are shown
under other non-current assets and cost of assets
not ready for intended use before the period end, are
shown as intangible assets under development.

After initial recognition, an intangible asset is carried
at its cost less accumulated amortisation and any
accumulated impairment loss.

Subsequent expenditure

Subsequent expenditure is capitalized only when
it increases the future economic benefits from the
specific asset to which it relates. All other expenditure
is recognized in Statement of Profit and Loss as
incurred.

Amortisation

Amortization is calculated to write off the cost of
intangible assets less their estimated residual values
using the straight-line method over their estimated
useful lives and is generally recognized in depreciation
and amortization in Statement of profit and loss.

The estimated useful life computer software for the
current and comparative year is 5 years.

Derecognition

Intangible assets is derecognized on disposal or when
no future economic benefits are expected from its use
and disposal.

Raw materials and other supplies held for use in the
production of finished products are not written down
below cost, except in cases where material prices
have declined and it is estimated that the cost of
the finished products will exceed their net realizable
value. The Company reviews the condition of its
inventories and makes provision against obsolete and
slow moving inventory items which are identified as
no longer suitable for sale or use.

The comparison of cost and net realizable value is
made on an item-by-item basis.

g) Impairment

Impairment of financial assets

The Company recognizes loss allowances for expected
credit loss on financial assets measured at amortized
cost and contract assets. At each reporting date, the
Company assesses whether financial assets carried
at amortized cost are credit- impaired. A financial
asset is ''credit-impaired'' when one or more events
that have detrimental impact on the estimated future
cash flows of the financial assets have occurred.
Evidence that the financial asset is credit-impaired
includes the following observable data:

- Significant financial difficulty of the borrower, debtor
or issuer;

- The breach of contract such as a default or being
past due for 2 years or more;

- The restructuring of a loan or advance by the
Company on terms that the Company would not
consider otherwise;

- It is probable that the borrower will enter bankruptcy
or other financial re-organization; or

- The disappearance of active market for a security
because of financial difficulties.

The Company measures loss allowances at an amount
equal to lifetime expected credit losses, except for the
following, which are measured as 12 month expected
credit losses:

- Bank balances and other financial assets for which
credit risk (i.e. the risk of default occurring over the
expected life of the financial instrument) has not
increased significantly since initial recognition.

Loss allowances for trade receivables are always
measured at an amount equal to lifetime expected
credit losses. Lifetime expected credit losses are the
expected credit losses that result from all possible
default events over the expected life of a financial
instrument.

12-month expected credit losses are the portion of
expected credit losses that result from default events
that are possible within 12 months after the reporting
date (or a shorter period if the expected life of the
instrument is less than 12 months). In all cases,
the maximum period considered when estimating
expected credit losses is the maximum contractual
period over which the Company is exposed to credit
risk.

The Company does not have any trade receivables with
significant credit risk. The Company uses simplified
approach to calculate impairment of trade receivables
and has not accessed credit risk individually.

When determining whether the credit risk of a
financial asset has increased significantly since
initial recognition and when estimating expected
credit losses, the Company considers reasonable and
supportable information that is relevant and available
without undue cost or effort. This includes both
quantitative and qualitative information and analysis,
based on the Company''s historical experience and
informed credit assessment and including forward
looking information.

Measurement of expected credit losses

Expected credit losses are a probability-weighted
estimate of credit losses. Credit losses are measured
as the present value of all cash shortfalls (i.e.
difference between the cash flow due to the Company
in accordance with the contract and the cash flow
that the Company expects to receive).

Expected credit losses are discounted at the effective
interest rate of the financial asset.

Presentation of allowance for expected credit losses

Loss allowance for financial assets measured at the
amortized cost is deducted from the gross carrying
amount of the assets.

Write-off

The gross carrying amount of a financial asset is
written off (either partially or in full) to the extent
that there is no realistic prospect of recovery. This is
generally the case when the Company determines that
the debtors do not have assets or sources of income
that could generate sufficient cash flows to repay the
amount subject to the write-off. However, financial
assets that are written off could still be subject to
enforcement activities in order to comply with the
Company''s procedure for recovery of amounts due.

Impairment of non-financial assets

The Company''s non-financial assets other than
inventories, contract assets and deferred tax assets,
are reviewed at each reporting date to determine
whether there is any indication of impairment. If any
such indication exists, then the asset''s recoverable
amount is estimated.

For impairment testing, assets that do not generate
independent cash inflows (i.e. corporate assets) are
companied together into cash-generating units (CGUs).
Each CGU represents the smallest Company of assets
that generates cash inflows that are largely independent
of the cash inflows of other assets or CGUs.

The recoverable amount of a CGU (or an individual
asset) is the higher of its value in use and its fair

value less costs to sell. Value in use is based on
the estimated future cash flows, discounted to their
present value using a discount rate that reflects
current market assessments of the time value of
money and the risks specific to the CGU (or the asset).
The Company''s corporate assets (e.g. head office
building for providing support to CGU) do not generate
independent cash inflows. To determine impairment of
a corporate asset, recoverable amount is determined
for the CGUs to which the corporate asset belongs.
An impairment loss is recognized if the carrying
amount of an asset or CGU exceeds its estimated
recoverable amount. An impairment loss in respect
of assets for which impairment loss has been
recognized in prior periods, the Company reviews at
each reporting date whether there is any indication
that the loss has decreased or no longer exists. An
impairment loss is reversed if there has been a change
in the estimates used to determine the recoverable
amount. Such a reversal is made only to the extent
that the asset''s carrying amount does not exceed the
carrying amount that would have been determined,
net of depreciation or amortization, if no impairment
loss had been recognized.

h) Revenue from contract with customers

Under Ind AS 115, the Company recognized revenue
when (or as) a performance obligation is satisfied, i.e.
when ''control'' of the goods underlying the particular
performance obligation is transferred to the customer.
Further, revenue from sale of goods is recognized
based on a 5-Step Methodology which is as follows:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligation in contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance
obligations in the contract

Step 5: Recognize revenue when (or as) the entity
satisfies a performance obligation
Contract assets are recognized when there is excess
of revenue earned over billings on contracts. Contract
assets are classified as unbilled receivables (only act
of invoicing is pending) when there is unconditional
right to receive cash, and only passage of time is
required, as per contractual terms.

Contract liability is recognized when billings are in
excess of revenues.

the transaction price could be allocated to a new
performance obligation, or transaction price of
an existing obligation could undergo a change. In
the event transaction price is revised for existing
obligation, a cumulative adjustment is accounted for.
The Company disaggregates revenue from contracts
with customers by geography.

Invoices are usually payable within a range of 45 to 90
days.

Use of significant judgments in revenue recognition:

The Company''s contracts with customers could
include promises to transfer multiple products and
services to a customer. The Company assesses
the products / services promised in a contract and
identifies distinct performance obligations in the
contract. Identification of distinct performance
obligation involves judgment to determine the
deliverables and the ability of the customer to benefit
independently from such deliverables.

(i) The Company uses judgment to determine an
appropriate selling price for a performance
obligation. The Company allocates the
transaction price to each performance obligation
on the basis of the relative selling price of each
distinct product or service promised in the
contract.

(ii) The Company exercises judgment in determining
whether the performance obligation is satisfied
at a point in time or over a period of time. The
Company considers indicators such as how
customer consumes benefits as services are
rendered or who controls the asset as it is being
created or existence of enforceable right to
payment for performance to date and alternate
use of such product or service, transfer of
significant risks and rewards to the customer,
acceptance of delivery by the customer, etc. In
case where performance obligation is satisfied
at a point in time, revenue is recognized when
significant risk and rewards of ownership of
goods is transferred to the customers, generally
ex-factory. In case where performance obligation
is satisfied over a period of time, revenue is
recognized on the basis of actual cost incurred
plus mark up as agreed with the customers
under each agreement.

i) Export incentives

Export incentive entitlements are recognized as
income when the right to receive credit as per the
terms of the scheme is established in respect of
the exports made, and where there is no significant

uncertainty regarding the ultimate collection of the
relevant export proceeds.

j) Recognition of interest income or expense

I nterest income or expense is recognized using the
effective interest method.

The ''effective interest rate'' is the rate that exactly
discounts the estimated future cash payments or
receipts through the expected life of the financial
instrument to:

- the gross carrying amount of the financial asset; or

- The amortized cost of the financial liability.

In calculating interest income and expense, the
effective interest rate is applied to the gross carrying
amount of the asset (when the asset is not credit-
impaired) or to the amortized cost of the liability.
However, for financial assets that have become credit-
impaired subsequent to initial recognition, interest
income is calculated by applying the effective interest
rate to the amortized cost of the financial asset. If the
asset is no longer credit-impaired, then the calculation
of interest income reverts to the gross basis.

k) Government grant

The Company recognizes government grants
only when there is reasonable assurance that the
conditions attached to them will be complied with,
and the grants will be received. Government grants
related to capital assets are recognized initially as
deferred income at fair value when there is reasonable
assurance that they will be received and the Company
will comply with the conditions associated with the
grant; they are then recognized in Statement of Profit
and Loss as other income on a systematic basis.
Grants related to income are recognised as income on
a systematic basis in the Statement of Profit and Loss
over the periods necessary to match them with the
related costs, which they are intended to compensate
and are presented as ''other operating revenues''.
Grants that compensate the Company for expenses
incurred are recognised in profit or loss by deduction
in the related expense on a systematic basis in the
periods in which the expenses are recognised, unless
the conditions for receiving the grant are met after the
related expenses have been recognised. In this case,
the grant is recognised when it becomes receivable.
Further, where loans or similar assistance are
provided by Government or related institutions, with
an interest rate below the current applicable market
rate, the effect of this favorable interest is regarded
as a government grant. The loan or assistance is
initially recognised and measured at fair value and
the government grant is measured as the difference
between the initial carrying value of the loan and the
proceeds received. The grant related to capitalised
finance costs is deducted from the related property,
plant and equipment.

Export entitlements from government authorities are
recognized in the statement of profit and loss when
the right to receive credit as per the terms of the
scheme is established in respect of the exports made
by the Company, and where there is no significant
uncertainty regarding the ultimate collection of the
relevant export proceeds.

l) Employee benefits

Short-term employee benefits

All employee benefits falling due within twelve months
of the end of the period in which the employees
render the related services are classified as shortÂ¬
term employee benefits, which include benefits like
salaries, wages, short term compensated absences,
performance incentives, etc. and are recognized as
expenses in the period in which the employee renders
the related service and measured on an undiscounted
basis. A liability is recognized for the amount
expected to be paid e.g., salaries, wages and bonus,
if the Company has a present legal or constructive
obligation to pay this amount as a result of past
service provided by the employee, and the amount of
obligation can be estimated reliably.

Post-employment benefits

Post-employment benefit plans are classified into
defined benefits plans and defined contribution plans
as under:

Defined contribution plans

A defined contribution plan is a post-employment
benefit plan under which an entity pays specified
contributions to a separate entity and will have no legal
or constructive obligation to pay further amounts.
The Company makes specified monthly contributions
towards employee provident fund and employee state
insurance scheme (''ESI'') to Government administered
scheme which is a defined contribution plan. The
Company''s contribution is recognized as an expense
in the Statement of Profit and Loss during the period
in which the employee renders the related service.

Defined benefit plans

A defined benefit plan is a post-employment
benefit plan other than a defined contribution plan.
Gratuity is a defined benefit plan. The Company has

an obligation towards gratuity, a defined benefit
retirement plan covering eligible employees. The
plan provides for a lump sum payment to vested
employees at retirement, death while in employment
or on termination of employment of an amount based
on the respective employee''s salary and the tenure of
employment. The Company''s net obligation in respect
of gratuity is calculated separately by estimating the
amount of future benefit that employees have earned
in the current and prior periods and discounting that
amount. The calculation of defined benefit obligation
is performed annually by a qualified actuary using the
projected unit credit method.

Other long-term employee benefits
Compensated absences

As per the Company''s policy, eligible leaves can be
accumulated by the employees and carried forward
to future periods to either be utilized during the
service, or encased. Encashment can be made during
service, on early retirement, on withdrawal of scheme,
at resignation and upon death of the employee.
Accumulated compensated absences are treated as
other long-term employee benefits. The Company''s
obligation in respect of long-term employee benefits
other than post-employment benefits is the amount
of future benefit that employees have earned in return
for their service in the current and prior periods;
that benefit is discounted to determine its present
value. Such obligation such as those related to
compensate absences is measured on the basis of an
actuarial valuation performed annually by a qualified
actuary using the projected unit credit method. The
obligations are presented as current liabilities in
the balance sheet if the Company does not have an
unconditional right to defer the settlement for at least
twelve months after the reporting date.

Termination benefits

Termination benefits are recognised as an expense
when, as a result of a past event, the Company has a
present obligation that can be estimated reliably, and
it is probable that an outflow of economic benefits will
be required to settle the obligation.

Actuarial valuation

final obligation. The obligation is measured at the
present value of estimated future cash flows. The
discount rates used for determining the present value
of obligation under defined benefit plans, is based on
the market yields on Government securities as at the
reporting date, having maturity periods approximating
to the terms of related obligations.

Remeasurement gains and losses in respect of
all defined benefit plans arising from experience
adjustments and changes in actuarial assumptions
are recognized in the period in which they occur,
directly in other comprehensive income. They are
included in other equity in the Statement of Changes
in Equity and in the Balance Sheet. Changes in
the present value of the defined benefit obligation
resulting from plan amendments or curtailments are
recognized immediately in Statement of Profit and
Loss as past service cost. Gains or losses on the
curtailment or settlement of any defined benefit plan
are recognized when the curtailment or settlement
occurs.

m) Borrowing costs

Borrowing costs are interest and other costs incurred
by the Company in connection with the borrowing
of funds. Borrowing costs directly attributable
to acquisition or construction of an asset which
necessarily take a substantial period of time to get
ready for their intended use are capitalized as a
part of cost of the asset. Other borrowing costs are
recognized as an expense in the Statement of Profit
and Loss in the period in which they are incurred.

n) Foreign currency transactions
Initial recognition

Transactions in foreign currencies are translated
into the functional currency of the Company at the
exchange rates at the dates of the transactions.

Measurement at the reporting date

Monetary assets and liabilities denominated in
foreign currencies are translated into the functional
currency at the exchange rate at the reporting date.
Non-monetary assets and liabilities that are measured
at fair value in a foreign currency are translated into
the functional currency at the exchange rate when the
fair value was determined. Non-monetary assets and
liabilities that are measured based on historical cost in
a foreign currency are translated at the exchange rate
at the date of the transaction. Exchange differences
on restatement/settlement of all monetary items are
recognized in the Statement of profit and loss.

o) Income tax

Income tax expense comprises current and deferred
tax. It is recognized in Statement of Profit and Loss.
The Company does not have any items recognized
directly in equity or in other comprehensive income.
The Company has determined that interest and
penalties related to income taxes, including uncertain
tax treatments, do not meet the definition of income
taxes, and therefore accounted for them under Ind AS
37 Provisions, Contingent Liabilities and Contingent
Assets.

Current tax

Current tax comprises the expected tax payable
or receivable on the taxable income or loss for the
period and any adjustment to the tax payable or
receivable in respect of previous years. The amount
of current tax payable or receivable is the best
estimate of the tax amount expected to be paid or
received after considering uncertainty related to
income taxes, if any. It is measured using tax rates
enacted or substantively enacted at the reporting
date. Management periodically evaluates positions
taken in tax returns with respect to situations in which
applicable tax regulations is subject to interpretation.
It establishes provisions or make reversals of
provisions made in earlier years, where appropriate,
on the basis of amounts expected to be paid to /
received from the tax authorities.

Current tax assets and liabilities are offset only if there
is a legally enforceable right to set off the recognized
amounts, and it is intended to realize the asset and
settle the liability on a net basis or simultaneously.

Deferred tax

Deferred tax is recognized in respect of temporary
differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the
amounts used for taxation purposes.

Deferred tax assets are recognized for unused tax
losses, unused tax credits and deductible temporary
differences to the extent that it is probable that
future taxable profits will be available against which
they can be used. Deferred tax assets, recognized or
unrecognized, are reviewed at each reporting date and
recognized / reduced to the extent that it has become
probable / no longer probable respectively that future
taxable profits will be available against which they
can be used.

Deferred tax is measured at the tax rates that are
expected to apply to the period when the asset is
realized or the liability is settled, based on the laws

that have been enacted or substantively enacted by
the reporting date.

The measurement of deferred tax reflects the tax
consequences that would follow from the manner in
which the Company expects, at the reporting date, to
recover or settle the carrying amount of its assets and
liabilities.

Deferred tax assets and liabilities are offset only
if there is a legally enforceable right to set off the
current tax liabilities and assets, and they relate to
income taxes levied by the same tax authorities.

Mar 31, 2024

NOTE 3. MATERIAL ACCOUNTING POLICIES

The Company has consistently applied the following accounting policies to all periods presented in these standalone financial statements, except if mentioned otherwise.

In addition, the Company adopted Disclosure of Accounting Policies (Amendments to Ind AS 1 - Presentation of Financial Statements) from 01 April 2023. The amendments require the disclosure of ''material'', rather than ''significant'', accounting policies. Although the amendments did not result in any changes to the accounting policies themselves, they impacted the accounting policy information disclosed in Note 3 in certain instances.

Set out below are the material accounting policies:

(a) Financial instrument

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 assets

Initial recognition and measurement Trade receivables are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument.

A financial asset (except trade receivable, that do not contain a significant financing component are

measured at transaction price) is recognized initially at fair value plus or minus transaction cost that are directly attributable to the acquisition or issue of financial assets (other than financial assets at fair value through profit and loss). Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss (''FVTPL) are recognized immediately in the Statement of Profit and Loss. A trade receivable without a significant financing component is initially measured at the transaction price.

On initial recognition, a financial asset is classified as measured at:

â¢ amortized cost

â¢ fair value through other comprehensive income (FVOCI)

â¢ fair value through profit or loss (FVTPL)

Financial asset at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

- The asset is held within a business model whose objective is to hold assets 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.

Equity investments

All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognized by an acquirer in a business combination to which Ind AS 103 applies are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as at FVOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to the Statement of Profit and Loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss to retained earnings.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss.

All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognized in statement of profit and loss.

Investments in subsidiaries

Investments in equity instruments of subsidiaries are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries, associates, the difference between net disposal proceeds and the carrying amounts are recognized in the Standalone Statement of Profit and Loss.

Financial assets: Business model assessment The Company makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

- The stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management''s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets;

- How the performance of the portfolio is evaluated and reported to the Company''s management;

- The risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;

- How managers of the business are compensated - e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and

- The frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Company''s continuing recognition of the assets. Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

Financial assets: Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, ''principal'' is defined as the fair value of the financial asset on initial recognition. ''Interest'' is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Company

considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Company considers:

- contingent events that would change the amount or timing of cash flows;

- terms that may adjust the contractual coupon rate, including variable interest rate features;

- prepayment and extension features; and

- terms that limit the Company''s claim to cash flows from specified assets (e.g. non-recourse features).

Financial assets - Subsequent measurement and gains and losses

a) Financial assets at FVTPL: These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

b) Financial assets at amortized cost: These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

Derecognition of financial assets A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognized (i.e., removed from the Company''s Balance Sheet) 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.

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 recognize the transferred asset to the extent of the Company''s continuing involvement. In that case, the Company also recognizes 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.

Financial liabilities: Classification, subsequent measurement and gains and losses Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in Statement of Profit and Loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in Statement of Profit and Loss. Any gain or loss on derecognition is also recognized in Statement of Profit and Loss.

Derecognition of financial liabilities A financial liability is derecognized 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 recognized in the Statement of Profit and Loss. Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the Balance Sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

Derivative financial instruments

The Company holds derivative financial instruments in form of compulsorily convertible preference shares. Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met.

Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognized in profit or loss.

b) Financial Guarantee

A financial guarantee contract requires the Company to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument.

Financial guarantee contracts issued by the Company are initially measured at their fair values, adjusted for transaction costs that are directly attributable to the issuance of the guarantee and not arising from a transfer of a financial asset, are subsequently measured at the higher of:

â¢ the amount of the loss allowance determined in accordance with Ind AS 109; and

â¢ the amount initially recognized less, where appropriate, cumulative amount of income recognized in accordance with the Company''s revenue recognition policies.

The Company has not designated any financial guarantee contracts as FVTPL.

The Company estimates the loss allowance on financial guarantee contracts based on the present value of the expected payments to reimburse the holder for a credit loss that it incurs. The shortfalls are discounted by the interest rate relevant to the exposure.

c) Property, plant and equipment (âPPE'')

Recognition and measurement Items of PPE are stated at cost, which includes capitalized borrowing costs, less accumulated depreciation and or accumulated impairment loss, if any. Freehold land is carried at historical cost less any accumulated impairment losses.

Cost of an item of a PPE comprises its purchase price including import duty, and other non-refundable taxes after deducting any trade discounts and rebates and any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is located.

The cost of a self-constructed item of PPE comprises the cost of materials and direct labor, any other costs directly attributable to bringing the item to working condition for its intended use, and estimated costs of dismantling and removing the item and restoring

the site on which it is located. Expenditure incurred on startup and commissioning of the project and/ or substantial expansion, including the expenditure incurred on trial runs (net of trial run receipts, if any) up to the date of commencement of commercial production are capitalized. If significant parts of an item of PPE have different useful lives, then they are accounted for as separate items (major components) of PPE.

The cost of an item of property, plant and equipment shall be recognized as an asset if, and only if it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

Advances paid towards acquisition of PPE outstanding at each reporting date, are shown under other noncurrent assets and cost of assets not ready for intended use before the period end, are shown as capital work-in-progress.

Any gain or loss on disposal of an item of PPE is recognized in the Statement of Profit and Loss.

Transition to Ind AS

The cost of property, plant and equipment as at 01 April 2019, the Group date of transitions to Ind AS, was determined with reference to its carrying value recognized as per the previous GAAP (deemed cost), as at the date of transition to Ind AS.

Subsequent expenditure

Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are charged to Statement of Profit and Loss during the reporting period in which they are incurred.

Depreciation

Depreciation is calculated on cost of items of PPE less their estimated residual values over their estimated useful lives using the straight-line method and is recognized in the Statement of Profit and Loss. Depreciation on items of PPE is provided as per rates corresponding to the useful life specified in Schedule II to the Companies Act, 2013 read with the notification dated 29 August 2014 of the Ministry of Corporate Affairs except for certain classes of PPE

which are depreciated based on the internal technical assessment of the management.

The estimated useful lives of items of PPE for the current and comparative period/year are as follows:

Depreciation method, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

Depreciation on additions/(disposal) is provided on a pro-rata basis i.e. from/ (upto) the date on which asset is ready for use/ (disposed of).

Derecognition

An item of PPE is derecognized on disposal or when no future economic benefits are expected from its use and disposal. Losses arising from retirement and gains or losses arising from disposal of a PPE are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss.

d) Leases

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. 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.

Leases in which the Company is a lessee The Company''s lease asset classes primarily consist of leases for buildings and leasehold land. The Company, at the inception of a contract, assesses whether the contract is a lease or not. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a time in exchange for a consideration.

The Company recognizes a right-of-use asset ("ROU") and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or

before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognized in the Statement of Profit and Loss.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the Company''s incremental borrowing rate. The Company determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments. The Company recognizes the amount of the remeasurement of lease liability due to modification as an adjustment to the right-of-use asset and Statement of Profit and Loss depending upon the nature of modification. Where the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognizes any remaining amount of the remeasurement in Statement of Profit and Loss.

Lease payments included in the measurement of the lease liability comprise the following:

- fixed payments, including in-substance fixed payments;

- variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

- amounts expected to be payable under a residual value guarantee; and

- the exercise price under a purchase option that the Company is reasonably certain to exercise, lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Company is reasonably certain not to terminate early.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company''s estimate of the amount expected to be payable under a residual value guarantee, if the Company changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero. The Company presents right-of-use assets that do not meet the definition of investment property in ''property, plant and equipment'' and lease liabilities in ''financial liabilities'' in the statement of financial position.

Short-term leases and leases of low-value assets The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases for which the underlying asset is of low value. The Company recognizes the lease payments associated with these leases as an expense in the Statement of Profit or Loss over the lease term.

e) Intangible assets

Intangible assets are acquired (including implementation of software system) are measured initially at cost. Cost of an item of intangible asset comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use.

Advances paid towards acquisition of intangible assets outstanding at each reporting date, are shown under other non-current assets and cost of assets not ready for intended use before the period end, are shown as intangible assets under development.

After initial recognition, an intangible asset is carried at its cost less accumulated amortization and any

accumulated impairment loss.

Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits from the specific asset to which it relates. All other expenditure is recognized in Statement of Profit and Loss as incurred.

Amortization

Amortization is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line method over their estimated useful lives and is generally recognized in depreciation and amortization in Statement of profit and loss.

The estimated useful life computer software for the current and comparative period/year is 5 years.

Derecognition

Intangible assets is derecognized on disposal or when no future economic benefits are expected from its use and disposal.

f) Inventories

Inventories are valued at lower of cost or net realizable value. The method of determining cost of various categories of inventories are as follows:

The cost of inventories includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their present location and condition.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs

of completion and the estimated costs necessary to make the sale. The net realizable value of work-inprogress is determined with reference to the selling prices of related finished products.

Raw materials and other supplies held for use in the production of finished products are not written down below cost, except in cases where material prices have declined and it is estimated that the cost of the finished products will exceed their net realizable value. The Company reviews the condition of its inventories and makes provision against obsolete and slow moving inventory items which are identified as no longer suitable for sale or use.

The comparison of cost and net realizable value is made on an item-by-item basis.

g) Impairment

Impairment of financial assets The Company recognizes loss allowances for expected credit loss on financial assets measured at amortized cost and contract assets. At each reporting date, the Company assesses whether financial assets carried at amortized cost are credit- impaired. A financial asset is ''credit-impaired'' when one or more events that have detrimental impact on the estimated future cash flows of the financial assets have occurred.

Evidence that the financial asset is credit-impaired includes the following observable data:

- Significant financial difficulty of the borrower, debtor or issuer;

- The breach of contract such as a default or being past due for 90 days or more;

- The restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise;

- It is probable that the borrower will enter bankruptcy or other financial re-organization; or

- The disappearance of active market for a security because of financial difficulties.

The Company measures loss allowances at an amount equal to lifetime expected credit losses, except for the following, which are measured as 12 month expected credit losses:

- Bank balances and other financial assets for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument.

12-month expected credit losses are the portion of expected credit losses that result from default events that are possible within 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months). In all cases, the maximum period considered when estimating expected credit losses is the maximum contractual period over which the Company is exposed to credit risk.

The Company does not have any trade receivables with significant credit risk. The Company uses simplified approach to calculate impairment of trade receivables and has not accessed credit risk individually.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company''s historical experience and informed credit assessment and including forward looking information.

Measurement of expected credit losses Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. difference between the cash flow due to the Company in accordance with the contract and the cash flow that the Company expects to receive).

Expected credit losses are discounted at the effective interest rate of the financial asset.

Presentation of allowance for expected credit losses Loss allowance for financial assets measured at the amortized cost is deducted from the gross carrying amount of the assets.

Write-off

that could generate sufficient cash flows to repay the amount subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company''s procedure for recovery of amounts due. Impairment of non-financial assets The Company''s non-financial assets other than inventories, contract assets and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset''s recoverable amount is estimated.

For impairment testing, assets that do not generate independent cash inflows (i.e. corporate assets) are companied together into cash-generating units (CGUs). Each CGU represents the smallest Company of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs.

The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the CGU (or the asset).

The Company''s corporate assets (e.g. head office building for providing support to CGU) do not generate independent cash inflows. To determine impairment of a corporate asset, recoverable amount is determined for the CGUs to which the corporate asset belongs.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. An impairment loss in respect of assets for which impairment loss has been recognized in prior periods, the Company reviews at each reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a reversal is made only to the extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

h) Revenue from contract with customers

Further, revenue from sale of goods is recognized based on a 5-Step Methodology which is as follows: Step 1: Identify the contract(s) with a customer Step 2: Identify the performance obligation in contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation Contract assets are recognized when there is excess of revenue earned over billings on contracts. Contract assets are classified as unbilled receivables (only act of invoicing is pending) when there is unconditional right to receive cash, and only passage of time is required, as per contractual terms.

Contract liability is recognized when billings are in excess of revenues.

Contracts are subject to modification to account for changes in contract specification and requirements. The Company reviews modification to contract in conjunction with the original contract, basis which the transaction price could be allocated to a new performance obligation, or transaction price of an existing obligation could undergo a change. In the event transaction price is revised for existing obligation, a cumulative adjustment is accounted for.

The Company disaggregates revenue from contracts with customers by geography.

Invoices are usually payable within a range of 45 to 90 days.

Use of significant judgments in revenue recognition: The Company''s contracts with customers could include promises to transfer multiple products and services to a customer. The Company assesses the products / services promised in a contract and identifies distinct performance obligations in the contract. Identification of distinct performance obligation involves judgment to determine the deliverables and the ability of the customer to benefit independently from such deliverables.

(i) Judgment is also required to determine the transaction price for the contract. The transaction price could be either a fixed amount of customer consideration or variable consideration with elements such as price concessions. The transaction price is also adjusted for the effects of the time value of money if the contract includes a significant financing component. Any consideration payable to the customer is adjusted

to the transaction price, unless it is a payment for a distinct product or service from the customer. The estimated amount of variable consideration is adjusted in the transaction price only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur and is reassessed at the end of each reporting period. The Company allocates the elements of variable considerations to all the performance obligations of the contract unless there is observable evidence that they pertain to one or more distinct performance obligations.

(ii) The Company uses judgment to determine an appropriate selling price for a performance obligation. The Company allocates the transaction price to each performance obligation on the basis of the relative selling price of each distinct product or service promised in the contract.

(iii) The Company exercises judgment in determining whether the performance obligation is satisfied at a point in time or over a period of time. The Company considers indicators such as how customer consumes benefits as services are rendered or who controls the asset as it is being created or existence of enforceable right to payment for performance to date and alternate use of such product or service, transfer of significant risks and rewards to the customer, acceptance of delivery by the customer, etc. In case where performance obligation is satisfied at a point in time, revenue is recognized when significant risk and rewards of ownership of goods is transferred to the customers, generally ex-factory. In case where performance obligation is satisfied over a period of time, revenue is recognized on the basis of actual cost incurred plus mark up as agreed with the customers under each agreement.

(iv) Revenue for fixed-price contract is recognized using percentage-of-completion method. The Company uses judgment to estimate the future cost-to-completion of the contracts which is used to determine the degree of completion of the performance obligation.

(v) Contract fulfilment costs are generally expensed as incurred except for certain expenses which meet the criteria for capitalization. Such costs are amortized over the contractual period. The assessment of this criteria requires the application

of judgment, in particular when considering if costs generate or enhance resources to be used to satisfy future performance obligations and whether costs are expected to be recovered.

i) Export incentives

Export incentive entitlements are recognized as income when the right to receive credit as per the terms of the scheme is established in respect of the exports made, and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.

j) Recognition of interest income or expense

Interest income or expense is recognized using the effective interest method.

The ''effective interest rate'' is the rate that exactly discounts the estimated future cash payments or receipts through the expected life of the financial instrument to:

- the gross carrying amount of the financial asset; or

- The amortized cost of the financial liability.

In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortized cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortized cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

k) Government grant

Grants that compensate the Company for expenses incurred are recognized in Statement of Profit and Loss as other income on a systematic basis in the periods in which such expenses are recognized. Grants related to income are deducted in reporting the related expense in the statement of profit and loss. Export entitlements from government authorities are

recognized in the statement of profit and loss when the right to receive credit as per the terms of the scheme is established in respect of the exports made by the Company, and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.

l) Employee benefits

Short-term employee benefits All employee benefits falling due within twelve months of the end of the period in which the employees render the related services are classified as shortterm employee benefits, which include benefits like salaries, wages, short term compensated absences, performance incentives, etc. and are recognized as expenses in the period in which the employee renders the related service and measured on an undiscounted basis. A liability is recognized for the amount expected to be paid e.g., salaries, wages and bonus, if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.

Post-employment benefits

Post-employment benefit plans are classified into defined benefits plans and defined contribution plans as under:

Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays specified contributions to a separate entity and will have no legal or constructive obligation to pay further amounts. The Company makes specified monthly contributions towards employee provident fund and employee state insurance scheme (''ESI'') to Government administered scheme which is a defined contribution plan. The Company''s contribution is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service. Defined benefit plans

is calculated separately by estimating the amount of future benefit that employees have earned in the current and prior periods and discounting that amount. The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method.

Other long-term employee benefits Compensated absences

As per the Company''s policy, eligible leaves can be accumulated by the employees and carried forward to future periods to either be utilized during the service, or encased. Encashment can be made during service, on early retirement, on withdrawal of scheme, at resignation and upon death of the employee. Accumulated compensated absences are treated as other long-term employee benefits. The Company''s obligation in respect of long-term employee benefits other than post-employment benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. Such obligation such as those related to compensate absences is measured on the basis of an actuarial valuation performed annually by a qualified actuary using the projected unit credit method. The obligations are presented as current liabilities in the balance sheet if the Company does not have an unconditional right to defer the settlement for at least twelve months after the reporting date.

Termination benefits

Termination benefits are recognized as an expense when, as a result of a past event, the Company has a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

Actuarial valuation

The liability in respect of all defined benefit plans is accrued in the books of account on the basis of actuarial valuation carried out by an independent actuary using the Projected Unit Credit Method, which recognizes each year of service as giving rise to additional unit of employee benefit entitlement and measure each unit separately to build up the final obligation. The obligation is measured at the present value of estimated future cash flows. The discount rates used for determining the present value of obligation under defined benefit plans, is based on the market yields on Government securities as at the reporting date, having maturity periods approximating to the terms of related obligations.

Remeasurement gains and losses in respect of all defined benefit plans arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in other equity in the Statement of Changes in Equity and in the Balance Sheet. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in Statement of Profit and Loss as past service cost. Gains or losses on the curtailment or settlement of any defined benefit plan are recognized when the curtailment or settlement occurs.

m) Borrowing costs

Borrowing costs are interest and other costs incurred by the Company in connection with the borrowing of funds. Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a substantial period of time to get ready for their intended use are capitalized as a part of cost of the asset. Other borrowing costs are recognized as an expense in the Statement of Profit and Loss in the period in which they are incurred.

n) Foreign currency transactions

Initial recognition

Transactions in foreign currencies are translated into the functional currency of the Company at the exchange rates at the dates of the transactions.

Measurement at the reporting date Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Nonmonetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Exchange differences on restatement/settlement of all monetary items are recognized in the Statement of profit and loss.

o) Income tax

tax treatments, do not meet the definition of income taxes, and therefore accounted for them under Ind AS 37 Provisions, Contingent Liabilities and Contingent Assets.

Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the period and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received after considering uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulations is subject to interpretation. It establishes provisions or make reversals of provisions made in earlier years, where appropriate, on the basis of amounts expected to be paid to / received from the tax authorities. Current tax assets and liabilities are offset only if there is a legally enforceable right to set off the recognized amounts, and it is intended to realize the asset and settle the liability on a net basis or simultaneously.

Deferred tax

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

Deferred tax assets are recognized for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets, recognized or unrecognized, are reviewed at each reporting date and recognized / reduced to the extent that it has become probable / no longer probable respectively that future taxable profits will be available against which they can be used.

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset only if there is a legally enforceable right to set off the current tax liabilities and assets, and they relate to income taxes levied by the same tax authorities.

The Company has adopted Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to Ind AS 12) from 01 April 2023. The amendments narrow the scope of the initial recognition exemption to exclude transactions that give rise to equal and offsetting temporary differences - e.g. leases and decommissioning liabilities. For leases and decommissioning liabilities, an entity is required to recognize the associated deferred tax assets and liabilities from the beginning of the earliest comparative period presented, with any cumulative effect recognized as an adjustment to retained earnings or other components of equity at that date. For all other transactions, an entity applies the amendments to transactions that occur on or after the beginning of the earliest period presented.

The Company previously accounted for deferred tax on leases and decommissioning liabilities by applying the ''integrally linked'' approach, resulting in a similar outcome as under the amendments, except that the deferred tax asset or liability was recognized on a net basis. Following the amendments, the Company has recognized a separate deferred tax asset in relation to its lease liabilities and a deferred tax liability in relation to its right-of-use assets. However, there was no impact on the statement of financial position because the balances qualify for offset under paragraph 74 of Ind AS 12. There was also no impact on the opening retained earnings as at 01 April 2022 as a result of the change. The key impact for the Company relates to disclosure of the deferred tax assets and liabilities recognized (refer note 38).

Mar 31, 2023

Note 1. Corporate Information

Innova Captab Limited (C1N: U24246MH2005PLC150371) (âthe Companyâ), a Company domiciled in India with its registered office situated at Office No. 606, Ratan Galaxie-6th Floor, J.N. Road, Plot No. 1, Mulund (W), Mumbai, MH 400080, India, was incorporated in Mumbai on 3 January 2005 as a private limited company. The Company was initially incorporated with the name of âHarun Healthcare Private Limited" and later the name was changed to âInnova Captab Private Limitedâ. The Company was converted to a Public Limited Company w.e.f 26 July 2018. After conversion, the name of the Company is âInnova Captab Limitedâ.

The Company is engaged in the business of manufacturing and trading of drugs and pharmaceuticals.

Note 2. Significant accounting policies

(a) Basis of preparation

(i) Statement of comp l iance

These standalone financial statements (âstandalone financial statementsâ) have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under section 133 of Companies Act, 2013, ("the Actâ) read with Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time and other relevant provisions of the Act.

The standalone financial statements have been prepared on a going concern basis. The accounting policies are applied consistently to all the years presented in the standalone financial statements.

These standalone financial statements were approved for issue by the Companyâs Board of Directors on 12 August 2023.

Functional and presentation currency

The functional currency of the Company is the Indian rupee. These standalone financial statements are presented in Indian rupees. All amounts have been rounded-off to the nearest millions, up to two places of decimal, unless otherwise indicated.

Basis of measurement

The standalone financial statements have been prepared on the historical cost basis except for the following items:

Items	Measurement basis
Financial assets and liabilities acquired under business combination	Fair value
Derivative financial instruments	Fair value
Defined benefits liability	Present value of defined benefits obligations

(ii) Current versus non-current classification

The Company presents assets and liabilities in the standalone financial statements based on current/non-current classification. An asset is treated as current when it is:

- Expected to be realized or intended to be sold or consumed in normal operating cycle.

- Held primarily for the purpose of trading.

- Expected to be realized within twelve months after the reporting period, or

- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve

months after the reporting period. /Ff ff

All other assets are classified as non-current.

A liability is current when:

- It is expected to be settled in normal operating cycle.

- It is held primarily for the purpose of trading.

- It is due to be settled within twelve months after the reporting period, or

- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The terms of the liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

The Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. The Company has identified twelve months as its operating cycle.

(Hi) Use of estimates andjudgments

In preparation of the standalone financial statements, management has made judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses and the disclosure of contingent liabilities on the date of the standalone financial statements. Actual results could differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognized prospectively in current and future periods.

Judgments

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the financial statements is included in the following notes:

- Note 2(h) and 27 - revenue recognition: whether revenue is recognized over time or at a point in time

- Note 2(d) and 4 - assessment of useful life of right-to-use asset Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties at the reporting date that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is included in the following notes

- Note 2 (a)(iv) - Fair value measurement (including fair value of consideration transferred on business combination and fair value of the assets acquired and liabilities assumed)

- Note 2(c) and 3a - Assessment of useful life and residual value of property, plant and equipment

- Note 2(d) and 4 - Lease Classification, discount rate

- Note 2(e) and 3b - Assessment of useful life of intangible assets

- Note 2(f) - Valuation of inventories

- Note 2(g) - Impairment of financial assets; impairment test of non-financial assets: key assumptions underlying recoverable amounts

- Note 2(k) and 39 - Measurement of defined benefit obligations: key actuarial assumptions

- Note 2(n) and 36 - Recognition and estimation of tax expense including deferred tax; recognition of deferred tax assets: availability of future taxable profit against which tax losses carried forward can be used, future recoverability been probable

- Note 2(o), 2(p), and 44 - Recognition and measurement of provision and contingencies, key assumptions about the likelihood and magnitude of an outflow of resources.

(iv) Measurement of fair values

A number of the Companyâs accounting policies and disclosures require measurement of fair values, for both financial and non-financial assets and liabilities. The Company has an established control framework with respect to measurement of fair values. This includes the top management division which is responsible for overseeing all significant fair value measurements, including Level 3 fair values. The top management division regularly reviews significant unobservable inputs and valuation adjustments. If third party information, is used to measure fair values, then the top management division assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirement of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified.

Significant valuation issues are reported to the Companyâs Audit Committee.

Fair values are categorized into different levels-in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

- Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities.

- Level 2: inputs other than quoted prices included in 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 asset or liability that are not based on observable market data (unobservable inputs)

When measuring the fair value of an asset or liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or liability fall into different levels of the fair value hierarchy, then the fair- value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the changes have occurred. Further information about the assumptions made in measuring fair values used in preparing the standalone financial statements is included in the Note 41.

(b) Financial instrument

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 assets

Initial recognition and measurement

Trade receivables are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument.

A financial asset (except trade receivable, that do not contain a significant financing component are measured at transaction price) is recognized initially at fair value plus or minus transaction cost that are directly attributable to the acquisition or issue of financial assets (other than financial assets at fair value through profit and loss). Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss (âFVTPLâ) are recognized immediately in the Statement of Profit and Loss.

Subsequent measurement

On initial recognition, a financial asset is classified as measured at:

, â¢ . . i^fwSFiWGARH] * |

o amortized cost l A J^J

o fair value through other comprehensive income (FVOC1)

Â® fair value through profit or loss (FVTPL)

Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.

Financial asset at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

- The asset is held within a business model whose objective is to hold assets 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.

Equity investments

All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognized by an acquirer in a business combination to which hid AS 103 applies are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as at FVOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCl. There is no recycling of the amounts from OCI to the Statement of Profit and Loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss to retained earnings.

Equity instruments included within the FVTPL categoiy are measured at fair value with all changes recognized in the Statement of Profit and Loss.

Financial assets: Business model assessment

The Company makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

- The stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether managementâs strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets;

- How the performance of the portfolio is evaluated and reported to the Companyâs management;

- The risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;

- How managers of the business are compensated - e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and

- The frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Companyâs continuing recognition of the assets.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL. & ^pT/\

Financial assets: Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, âprincipalâ is defined as the fair value of the financial asset on initial recognition. â Interestâ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Company considers:

- contingent events that would change the amount or timing of cash flows;

- terms that may adjust the contractual coupon rate, including variable interest rate features;

- prepayment and extension features; and

- terms that limit the Companyâs claim to cash flows from specified assets (e.g. non-recourse features). Financial assets - Subsequent measurement and gains and losses

a) Financial assets at FVTPL: These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

b) Financial assets at amortized cost: These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

Derecognition of financial assets

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognized (i.e., removed from the Companyâs Balance Sheet) 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 âpass-throughâ 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 recognize the transferred asset to the extent of the Companyâs continuing involvement. In that case, the Company also recognizes 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.

Financial liabilities: Classification, subsequent measurement and gains and losses

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in Statement of Profit and Loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in Statement of Profit and Loss. Any gain or loss on derecognition is also recognised in Statement of Profit and Loss.

Derecognition of financial liabilities

A financial liability is derecognized 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 recognized in the Statement of Profit and Loss.

Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the Balance Sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

Derivative financial instruments

The Company holds derivative financial instruments in form of compulsorily convertible preference shares. Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met.

Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognized in profit or loss.

Financial Guarantee

A financial guarantee contract requires the Company to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms of a debt instrument.

Financial guarantee contracts issued by the Company are initially measured at their fair values, adjusted for transaction costs that are directly attributable to the issuance of the guarantee and not arising from a transfer of a financial asset, are subsequently measured at the higher of:

â¢ the amount of the loss allowance determined in accordance with Ind AS 109; and

â¢ the amount initially recognized less, where appropriate, cumulative amount of income recognized in accordance with the Companyâs revenue recognition policies.

The Company has not designated any financial guarantee contracts as FVTPL.

The Company estimates the loss allowance on financial guarantee contracts based on the present value of the expected payments to reimburse the holder for a credit loss that it incurs. The shortfalls are discounted by the interest rate relevant to the exposure.

c) Property, plant and equipment (âPPEâ)

Recognition and measurement

Items of PPE are stated at cost, which includes capitalized borrowing costs, less accumulated depreciation and or accumulated impairment loss, if any. Freehold land is carried at historical cost less any accumulated impairment losses.

Cost of an item of a PPE comprises its purchase price including import duty, and other non-re fundable taxes after deducting any trade discounts and rebates and any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is located.

(net of trial run receipts, if any) up to the date of commencement of commercial production are capitalized. If significant parts of an item of PPE have different useful lives, then they are accounted for as separate items (major components) of PPE.

Advances paid towards acquisition of PPE outstanding at each year end date, are shown under other non-current assets and cost of assets not ready for intended use before the year end, are shown as capital work-in-progress.

Any gain or loss on disposal of an item of PPE is recognized in the Statement of Profit and Loss.

Subsequent, expenditure

Subsequent costs are included in the assetâs carrying amount or recognized as a sepaiate asset, as appiopiiate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the''item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are charged to Statement of Profit and Loss during the reporting period in which they are incurred.

Depreciation

Depreciation on items of PPE is provided as per rates corresponding to the useful life specified in Schedule II to the Companies Act, 2013 read with the notification dated 29 August 2014 of the Ministry of Corporate Affairs except for certain classes of PPE which are depreciated based on the internal technical assessment of the management. The estimated useful lives of items of PPE for the current and comparative year are as follows:

Particulars	Useful life as per Schedule II	Management estimate of useful life
Building - Factory	30 Years	30 Years
Office equipment	5 Years	3-5 Years
Plant and equipment	3-15 Years	3-15 Years
Lab equipments	10 Years	10 Years
Electrical installations	10 Years	10 Years
Vehicles	10 Years	10 Years
Furniture and fittings	10 Years	10 Years
Computer and printer	3 - 6 Years	3-6 Years

Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted it appropriate.

Depreciation on additions/(disposal) is provided on a pro-rata basis i.e. from/ (upto) the date on which asset is ready for use/ (disposed of).

Derecognition

An item of PPE is derecognized on disposal or when no future economic benefits are expected from its use and disposal. Losses arising from retirement and gains or losses arising from disposal of a PPE are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss.

(d) Leases

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. 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.

Leases in which the Company is a lessee

The Companyâs lease asset classes primarily consist of leases for buildings and leasehold land. The Company, at the inception of a contract, assesses whether the contract is a lease or not. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a time in exchange for a consideration.

The Company elected to use the following practical expedients on initial application:

1. Applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date.

2. Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term on the date of initial application.

3. Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application.

The Company recognizes a right-of-use asset (âROUâ) and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognized in the Statement of Profit and Loss.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the Companyâs incremental borrowing rate. The Company determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments. The Company recognizes the amount of the re-measurement of lease liability due to modification as an adjustment to the right-of-use asset and Statement of Profit and Loss depending upon the nature of modification. Where the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognizes any remaining amount of the re-measurement in Statement of Profit and Loss.

Lease payments included in the measurement ofthe lease liability comprise the following:

- fixed payments, including in-substance fixed payments;

- variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

- amounts expected to be payable under a residual value guarantee; and

- the exercise price under a purchase option that the Company is reasonably certain to exercise, lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Company is reasonably certain not to terminate early.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from, a change in an index 01 late, H theie is a change in the Companyâs estimate of the amount expected to be payable under a residual value guarantee, it the Company changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero. The Company presents right-of-use assets that do not meet the definition of investment property in âproperty, plant and equipmentâ and lease liabilities in âfinancial liabilities in the statement oi financial position.

Short-term leases and leases of low-value assets

The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases for which the underlying asset is of low value. The Company recognizes the lease payments associated with these leases as an expense in the Statement of Profit or Loss over the lease term.

(e) Intangible assets

Intangible assets are acquired (including implementation of software system) are measured initially at cost. Cost of an item of intangible asset comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use.

Advances paid towards acquisition of intangible assets outstanding at each year end date, are shown under other non-current assets and cost of assets not ready for intended use before the year end, are shown as intangible assets under development.

After initial recognition, an intangible asset is carried at its cost less accumulated amortisation and any accumulated impairment loss.

Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits horn the specific asset to which it relates. All other expenditure is recognized in Statement of Profit and Loss as incurred.

Amortisation

Amortisation is calculated to write off the cost of intangible assets over their estimated useful lives using the straight-line method and is included in depreciation and amortisation expense in Statement of Profit and Loss.

The estimated useful life computer software for the current and comparative year is 5 years.

Derecognition

Intangible assets is derecognized on disposal or when no future economic benefits are expected from its use and disposal.

(f) Inventories

Inventories are valued at lower of cost or net realizable value. The method of determining cost of various categories of inventories are as follows:

Raw materials (except goods in transit)	Weighted average method
Traded goods	Weighted average method
Packing material	Weighted average method
Stores and spares	Weighted average method
Work-in-progress and finished goods (manufactured)	Variable cost at weighted average including an appropriate share of variable and fixed production overheads. Fixed production overheads are included based on normal capacity of production facilities.
Goods in transit	Specifically identified purchase cost

The cost of inventories includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their present location and condition.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. The net realizable value of work-in-progress is determined with reference to the selling prices of related finished products.

Raw materials and other supplies held for use in the production of finished products are not written down below cost, except in cases where material prices have declined and it is estimated that the cost of the finished products will exceed their net realizable value. The Company reviews the condition of its inventories and makes provision against obsolete and slow moving inventory items which are identified as no longer suitable for sale or use.

The comparison of cost and net realizable value is made on an item-by-item basis.

(g) Impairment

Impairment of financial assets

The Company recognizes loss allowances for expected credit loss on financial assets measured at amortized cost. At each reporting date, the Company assesses whether financial assets carried at amortized cost are credit-impaired. A financial asset is âcredit-impairedâ when one or more events that have detrimental impact on the estimated future cash flows of the financial assets have occurred.

Evidence that the financial asset is credit-impaired includes the following observable data:

- Significant financial difficulty of the borrower or issuer;

- The breach of contract such as a default or being past due for 90 days or more;

- The restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise;

- It is probable that the borrower will enter bankruptcy or other financial re-organization; or

- The disappearance of active market for a security because of financial difficulties.

The Company measures loss allowances at an amount equal to lifetime expected credit losses, except for the following, which are measured as 12 month expected credit losses:

- Bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial

instrument) has not increased significantly since initial recognition. _

Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument.

12-month expected credit losses are the portion of expected credit losses that result from default events that are possible within 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months). In all cases, the maximum period considered when estimating expected credit losses is the maximum contractual period over which the Company is exposed to credit risk.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Companyâs historical experience and informed credit assessment and including forward looking information.

Measurement of expected credit losses

Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. difference between the cash flow due to the Company in accordance with the contract and the cash flow that the Company expects to receive).

Expected credit losses are discounted at the effective interest rate of the financial asset.

Presentation of allowance for expected credit losses

Loss allowance for financial assets measured at the amortized cost is deducted from the gross carrying amount of the assets.

Write-off

The gross carrying amount of a financial asset is written off (either partially or in liill) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the debtors do not have assets or sources of income that could generate sufficient cash flows to repay the amount subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Companyâs procedure tor recovery of amounts due.

Impairment of non-financial assets

Intangible assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. The Companyâs non-fmancial assets other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset s recoverable amount is estimated.

For impairment testing, assets that do not generate independent cash inflows (i.e. corporate assets) are companied together into cash-generating units (CGUs). Each CGU represents the smallest Company of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs.

The Companyâs corporate assets (e.g. head office building for providing support to CGU) do not generate independent cash inflows. To determine impairment of a corporate asset, recoverable amount is determined for the CGUs to which the corporate asset belongs.

An impairment loss is recognized if the carrying amount ol an asset 01 CGU exceeds its estimated lecoveiable amount. An impairment loss in respect of assets for which impairment loss ha|sb^^^gnized in prip^t^d^

the Company reviews at each reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a reversal is made only to the extent that the assetâs carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(h) Revenue from contract with customers

Further, revenue from sale of goods is recognized based on a 5-Step Methodology which is as follows:

Step 1: Identify the contract(s) with a customer

Step 2: Identify the performance obligation in contract Â¦

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation

Contract assets are recognized when there is excess of revenue earned over billings on contracts. Contract assets are classified as unbilled receivables (only act of invoicing is pending) when there is unconditional right to receive cash, and only passage of time is required, as per contractual terms.

Contract liability is recognized when billings are in excess of revenues.

The Company disaggregates revenue from contracts with customers by geography.

Use of significant judgments in revenue recognition:

a) The Companyâs contracts with customers could include promises to transfer multiple products and services to a customer. The Company assesses the products / services promised in a contract and identities distinct performance obligations in the contract. Identification of distinct performance obligation involves judgment to determine the deliverables and the ability of the customer to benefit independently from such deliverables.

b) Judgment is also required to determine the transaction price for the contract. The transaction price could be either a fixed amount of customer consideration or variable consideration with elements such as volume discounts, service level credits, performance bonuses, price concessions and incentives. The transaction price is also adjusted for the effects of the time value of money if the contract includes a significant financing component. Any consideration payable to the customer is adjusted to the transaction price, unless it is a payment for a distinct product or service from the customer. The estimated amount of variable consideration is adjusted in the transaction price only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur and is reassessed at the end of each reporting period. The Company allocates the elements of variable considerations to all the performance obligations of the contract unless there is observable evidence that they pertain to one or more distinct performance^

^obligations-

c) The Company uses judgment to determine an appropriate selling price for a performance obligation. The Company allocates the transaction price to each performance obligation on the basis of the relative selling price of each distinct product or service promised in the contract.

d) The Company exercises judgment in determining whether the performance obligation is satisfied at a point in tune or over a period of time. The Company considers indicators such as how customer consumes benefits as services are rendered or who controls the asset as it is being created 01 existence ot enfoiceable light to payment for performance to date and alternate use of such product or service, transfer of significant risks and rewards to the customer, acceptance of delivery by the customer, etc.

e) Revenue for fixed-price contract is recognized using percentage-of-completion method. I''he Company uses judgment to estimate the future cost-to-completion of the contracts which is used to determine the degree of completion of the performance obligation.

f) Contract fulfilment costs are generally expensed as incurred except for certain expenses which meet the criteria for capitalization. Such costs are amortized over the contractual period. The assessment ot this criteria requires the application of judgment, in particular when considering if costs generate or enhance resources to be used to satisfy future performance obligations and whether costs are expected to be recovered.

g) Right of return - Company provides a customer with a right to return in case of any defects or on grounds of quality. The Company uses the expected value method to estimate the goods that will not be returned because this method best predicts the amount of variable consideration to which the Company will be entitled. The requirements in Ind AS 115 on constraining estimates of variable consideration are also applied in order to determine the amount of variable consideration that can be included in the tiansaction pi ice. Foi goods that are expected to be returned, instead of revenue, the Company recognizes a refund liability. A right of return asset and corresponding adjustment to change in inventory is also recognized ior the right to lecovei products from a customer.

Export incentives

(i) Recognition of interest income or expense

Interest income or expense is recognized using the effective interest method.

The âeffective interest rateâ is the rate that exactly discounts the estimated future cash payments or receipts through the expected life of the financial instrument to:

- the gross carrying amount of the financial asset; or

- The amortized cost of the financial liability.

In calculating interest income and expense, the effective interest rate is applied to the gioss canying amount of the asset (when the asset is not credit-impaired) or to the amortized cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortized cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

(j) Government grant

Grants that compensate the Company for expenses incurred are recognized in Statement of Profit and Loss as other income on a systematic basis in the periods in which such expenses are recognized.

Grants related to income are deducted in reporting the related expense in the statement of profit and loss. Export entitlements from government authorities are recognized in the statement of profit and loss when the right to receive credit as per the terms of the scheme is established in respect of the exports made by the Company, and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.

(k) Employee benefits

Short-term employee benefits

All employee benefits falling due within twelve months of the end of the period in which the employees render the related services are classified as short-tenn employee benefits, which include benefits like salaries, wages, short term compensated absences, performance incentives, etc. and are recognized as expenses in the period in which the employee renders the related service and measured on an undiscounted basis. A liability is recognized for the amount expected to be paid e.g., salaries, vVages and bonus, if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.

Post-employment benefits

Post-employment benefit plans are classified into defined benefits plans and defined contribution plans as under:

Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays specified contributions to a separate entity and will have no legal or constructive obligation to pay further amounts. The Company makes specified monthly contributions towards employee provident fund and employee state insurance scheme (âESIâ) to Government administered scheme which is a defined contribution plan. The Company''s contribution is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. Gratuity is a defined benefit plan. The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount based on the respective employee''s salary and the tenure of employment. The Companyâs net obligation in respect of gratuity is calculated separately by estimating the amount of future benefit that employees have earned in the current and prior periods and discounting that amount. The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method.

Other long-term employee benefits

Compensated absences

As per the Company''s policy, eligible leaves can be accumulated by the employees and carried forward to future periods to either be utilized during the service, or encased. Encashment can be made during service, on early retirement, on withdrawal of scheme, at resignation and upon death of the employee. Accumulated compensated absences are treated as other long-term employee benefits. The Company''s obligation in respect of long-term employee benefits other than post-employment benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted. Such obligation such as those related to compensate absences is measured on the basis of an actuarial valuation performed annually by a qualified actuary using the projected unit credit method. ..

Termination benefits

Termination benefits are recognised as an expense when, as a result of a past event, the Company has a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

Actuarial valuation

Remeasurement gains and losses in respect of all defined benefit plans arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in other equity in the Statement of Changes in Equity and in the Balance Sheet. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in Statement of Profit and Loss as past service cost. Gains or losses on the curtailment or settlement of any defined benefit plan are recognized when the curtailment or settlement occurs.

(l) Borrowing costs

Borrowing costs are interest and other costs incurred by the Company in connection with the borrowing of funds. Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a substantial period of time to get ready for their intended use are capitalized as a part of cost of the asset. Other borrowing costs are recognized as an expense in the Statement of Profit and Loss in the period in which they are incurred.

(m) Foreign currency transactions

Initial recognition

Transactions in foreign currencies are translated into the functional currency of the Company at the exchange rates at the dates of the transactions.

Measurement at the reporting date

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Exchange differences on restatement/settlement of all monetary items are recognized in the Statement of profit and loss.

(n) Income tax

Income tax expense comprises current and deferred tax. It is recognized in Statement of Profit and Loss except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.

Current tax //â¢$/ \cqA jU i2>Â£

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received after considering uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulations is subject to interpretation. It establishes provis

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