Accounting Policies of Vinyas Innovative Technologies Ltd. Company

Mar 31, 2025

1.0 Corporate information

Vinyas Innovative Technologies Limited (“Vinyas”
or “the Company”) is a public limited company
incorporated in 2001. The Company’s Identification
Number (CIN) is L26104KA2001PLC028959.

Vinyas is a provider of design, engineering and
electronics manufacturing services catering to
global Original Equipment Manufacturers and
Original Design Manufacturers in Electronic
Industry.

The Company’s shares are listed on SME Platform
(EMERGE) of National Stock Exchange of India
Limited (“NSE”). The registered office of the
Company is located at Plot No. 19, Survey No. 26 &
273-P, 3rd Phase, Koorgalli Industrial Area, Ilawala
Hobali, Mysore 570 018, Karnataka, India.

The Company has been registered under the
provisions of Micro, Small and Medium Enterprise
Development Act (“MSMED”) Act, 2006 and has
obtained the Udyam registration number (“URN”)
UDYAM - KR- 22-0009039 on July 02, 2021.

The standalone IND-AS financial statements for the
year ended March 31, 2025, were approved by the
Board of Directors and authorised for issue with a
resolution of the directors on May 29, 2025.

2.0 Material Accounting Policy Information

The material accounting policies applied by the
Company in the preparation of its standalone Ind
AS financial statements are listed below. Such
accounting policies have been applied consistently
to all the periods presented in these standalone Ind
AS financial statements, unless otherwise indicated.

2.1 Basis of preparation of Financial Statements

a) Statement of compliance with Ind AS

The financial statements of the Company
have been prepared in accordance with Indian
Accounting Standards (‘Ind AS’) notified under
the Companies (Indian Accounting Standards)
Rules, 2015 (as amended from time to time)
and presentation requirements of Division II of
Schedule III to the Companies Act, 2013, (Ind
AS compliant Schedule III), as applicable to the
financial statements.

The financial statements of the Company
comprises of the balance sheet as at March
March 31, 2025, the statement of profit and
loss (including other comprehensive income),
the statement of changes in equity and the
statement of cash flows for the year ended
March 31, 2025, and the statement of significant
accounting policies, and other explanatory
information relating to such financial periods.

The Company has prepared the standalone IND-
AS financial statements on the basis that it will
continue to operate as a going concern. The
accounting policies are applied consistently to all
the periods presented in the financial statements
except where a newly issued accounting
standard is initially adopted or a revision to an
existing accounting standard requires change in
accounting policy hit hereto in use.

b) Functional and presentation currency

The functional and presentation currency of
the Company is Indian Rupee (“?”) which is the
currency of the primary economic environment
in which the Company operates.

Allamountsdisclosed inthe financialstatements
and notes have been rounded off to the nearest
“Lakh” with two decimals, unless otherwise
stated. Transactions and balances with values
below the rounding off norm adopted by the
group have been reflected as “0” in the relevant
notes to the financial statements.

c) Basis of Measurement

The Financial statements have been prepared
on accrual basis and under historical cost
convention, except for certain financial assets
and liabilities which are measured at fair value.
(refer accounting policy regarding financial
instruments), which are measured at fair values
at the end of each reporting period, as explained
in the accounting policies below.

Historical cost is generally based on the fair
value of the consideration given in exchange for
goods and services as at the date of respective
transactions.

2.2 Use of Estimates

The preparation of the financial statements in
conformity with Ind AS requires management to
make estimates, judgements and assumptions.
These estimates, judgements and assumptions
affect the application of accounting policies and
the reported amounts of assets and liabilities, the
disclosures of contingent assets and liabilities at
the date of the financial statements and reported
amounts of revenues and expenses during the
period. Application of accounting policies that
require critical accounting estimates involving
complex and subjective judgements and the use
of assumptions in these financial statements.
Accounting estimates could change from period
to period. Actual results could differ from those
estimates. Appropriate changes in estimates are
made as management becomes aware of changes
in circumstances surrounding the estimates.
Changes in estimates are reflected in the financial

statements in the period in which changes are
made and, if material, their effects are disclosed in
the notes to the financial statements.

2.3 Revenue Recognition

Revenue from Sale of Assembled Populated Circuit
Boards and Contract manufacturing is recognized
to the extent that it is probable that the economic
benefits will flow to the company and the revenue
can be reliably measured. The following specific
recognition criteria, must also be met before
revenue is recognized:

Sale of Goods/Services -

Revenue from the sale of goods is recognized when
all the significant risks and rewards of ownership
of the goods have been passed to the buyer on
Ex-works, CIF or delivery of the goods. In case of
Services, it is recognized on rendering of service.
Export sales include sale of goods to SEZ units/
EOU units. Revenue from Contract manufacturing
service is recognized on rendering of services.

Interest -

Interest income is recognized on a time proportion
basis taking into account the amount outstanding
and the applicable interest rate. Interest income
is included under the head “Other income” in the
Statement of Profit and Loss.

Other Income-

Revenue from sale of scripts has been included
under the head “Other income”. The interest income
is recognised on time proportionate basis.

2.4 Inventories

Inventories comprising of Raw materials,
consumables and spares are valued at the lower of
cost and net realisable value. Cost is ascertained on
a First in First out (FIFO) basis.

Work-in-progress is valued at cost of material
including assembly cost and overheads as
determined by the company.

Finished goods and semi-finished products are
valued at lower of cost and net realisable value.

Net realizable value is estimated on selling price
in the ordinary course of business, less estimated
costs of completion and estimated costs necessary
to make the sale.

2.5 Property, plant and equipment

Tangible assets are carried at cost of acquisition or
construction less accumulated depreciation and/
or accumulated impairment loss, if any. The cost of
an item of fixed asset comprises its purchase price,
including import duties and other non-refundable

taxes or levies and any directly attributable cost of
bringing the asset to its working condition for its
intended use; any trade discounts and rebates are
deducted in arriving at the purchase price.

Depreciation is provided on all assets on the
straight-line basis using the rates arrived at based
on the useful lives estimated by the management.
If the management’s estimate of the useful life of a
fixed asset at the time of acquisition of the asset or
of the remaining useful life on a subsequent review
is shorter than that envisaged in the aforesaid
schedule, depreciation is provided at a higher rate
based on the management’s estimate of the useful
life/remaining useful life.

In respect of accounting periods commencing on
or after 7th December, 2006, exchange differences
arising on reporting of the long-term foreign
currency monetary items at rates different from
those at which they were initially recorded during
the period are added to or deducted from the cost
of the asset and are depreciated over the balance
life of the asset, if these monetary items pertain to
the acquisition of a depreciable fixed asset.

Depreciation is provided on a pro-rata basis i.e.
from the date on which asset is ready for use.

PlantandMachineryisusedfor3shiftsanddepreciation
is calculated at the higher rate attributable to the use
of the asset as per Companies Act.

Amortization of tools and stencils

Stencils and tools have been classified as current
assets and amortization is provided as per the
amortization policy of the company. The rate of
amortization is at 20% considering useful life of 5
years and scrap value as Nil.

2.6 Impairment of Assets

The carrying amounts of assets are reviewed at
each balance sheet date if there is any indication of
impairment based on internal/external factors. An
impairment loss is recognized wherever the carrying

amount of an asset exceeds its recoverable amount.
The recoverable amount is the greater of the asset’s
net selling price and value in use. In assessing value
in use, the Company measures its ‘value in use’ on
the basis of discounted cash flows of next ten years
projections estimated based on current prices.

2.7 Borrowing Costs

Borrowing cost includes interest, amortization
of ancillary costs incurred in connection with the
arrangement of borrowing and exchange differences
arising from foreign currency borrowings to the
extent they are regarded as an adjustment to the
interest cost.

Borrowings costs directly attributable to the
acquisition, construction or production of an asset
that necessarily takes a substantial period of time to
get ready for its intended use or sale are capitalized
as a part of the cost of the respective asset. All other
borrowing costs are expenses in the period they
occur.

2.8 Employee benefits

(i) Provident Fund: Retirement benefit in the form of
provident fund is a defined contribution scheme. The
contributions to the provident fund are charged to
the Statement of Profit and Loss for the year when
the contributions are due.

Defined contribution plans:

The Company’s contribution in the form of provident
fund is considered as a defined contribution plan
and are charged as an expense based on the
amount of contribution required to be made and
when services are rendered by the employees.

Defined benefit plans:

For defined benefit plans in the form of gratuity
benefits, the cost of providing benefits is
determined using the Projected Unit Credit method,
with actuarial valuations being carried out at
each balance Sheet date and the same is funded
with LIC of India. Re-measurement, comprising
actuarial gains or losses, the effect of the changes
to the asset ceiling (if applicable) and return on
plan assets (excluding net interest), is reflected
immediately in the Balance Sheet with a charge or
credit recognised in other comprehensive income
in the period in which they occur. Re-measurement
recognised in other comprehensive income is
reflected immediately in retained earnings and
is not reclassified to profit or loss. Past service
cost is recognised in profit or loss in the period of
a plan amendment. Net interest is calculated by
applying the discount rate at the beginning of the
period to the net defined benefit liability or asset.
Actuarial gains and losses and return on plan

assets are recognised in the Statement of Other
comprehensive income in the period in which they
occur. The retirement benefit obligation recognised
in the Balance Sheet represents the present value
of the defined benefit obligation, as reduced by
the fair value of plan assets. Any asset resulting
from this calculation is limited to past service cost,
plus the present value of available refunds and
reductions in future contributions to the schemes.
Defined benefit costs are categorised as follows:

• service cost (including current service cost,
past service cost, as well as gains and losses on
curtailments and settlements);

• net interest expense or income; and

• re-measurement

The Company presents the first two components of
defined benefit costs in profit or loss in the line item
‘Employee benefits expense’. Curtailments gains
and losses are accounted as past service costs.

The retirement benefit obligation recognised in
the Balance Sheet represents the actual deficit or
surplus in the Company’s defined benefit plans.
Any surplus resulting from this calculation is limited
to the present value of any economic benefits
available in the form of refunds from the plans or
reductions in future contributions to the plans.

A liability for a termination benefit is recognizes at
the earlier of when the entity can no longer withdraw
the offer of the termination benefit and when the
entity recognizes any related restructuring costs.

The company has also obtained an insurance
coverage as mandated by Karnataka Compulsory
Gratuity Insurance Rules, 2024 (‘Rules’) (No: LD
397 LET 2023) which prescribe the requirement for
employers to obtain a valid insurance policy for the
employer’s liability towards payment of gratuity to
eligible employees as per the Payment of Gratuity
Act 1972 (“Act”).

Short-term employee benefits:

A liability is recognised for benefits accruing to
employees in respect of wages and salaries, annual
leave and sick leave in the period the related service
is rendered at the undiscounted amount of the
benefits expected to be paid in exchange for that
service.

Liabilities recognised in respect of short¬
term employee benefits are measured at the
undiscounted amount of the benefits expected
to be paid in exchange for the related service.
These benefits include performance incentive and
compensated absences which are expected to occur
within twelve months after the end of the period in
which the employee renders the related service.

The cost of short-term compensated absences is
accounted as under:

(a) in case of accumulated compensated
absences, when employees render the services
that increase their entitlement of future
compensated absences; and

(b) in case of non-accumulating compensated
absences, when the absences occur.

Long-term employee benefits:

Liabilities recognised in respect of other long-term
employee benefits are measured at the present
value of the estimated future cash outflows
expected to be made by the Company in respect of
services provided by employees up to the reporting
date.

Compensated absences which are not expected
to occur within twelve months after the end of the
period in which the employee renders the related
service are recognised as a liability at the present
value of the defined benefit obligation as at the
Balance Sheet date, using the Projected Unit Credit
method, with actuarial valuations being carried out
at each Balance Sheet date.

2.9 Foreign exchange transactions

Initial recognition: Foreign currency transactions
are recorded in the reporting currency, by applying
to the foreign currency amount the exchange rate
between the reporting currency and the foreign
currency at the date of the transaction.

Conversion: Foreign currency monetary items are
reported using the closing rate. Non-monetary
items which are carried in terms of historical cost
denominated in a foreign currency are reported
using the exchange rate at the date of the
transaction.

Exchange differences arising on the settlement of
monetary items or on reporting Company’s monetary
items at rates different from those at which they
were initially recorded during the year, or reported
in previous financial statements, are recognised as
income or as expenses during the year.

Exchange differences, in respect of accounting
periods commencing on or after 7th December, 2006,
arising on reporting of long-term foreign currency
monetary items at rates different from those at
which they were initially recorded during the period,
or reported in previous financial statements, in so
far as they relate to the acquisition of a depreciable
capital asset, are added to or deducted from the
cost of the asset and are depreciated over the
balance life of the asset.

3.0 Taxation

Income-tax expense comprise current tax (i.e.

amount of tax for the period determined in
accordance with the income-tax law) and deferred
tax charge or credit (reflecting that tax effects of
timing differences between accounting income and
taxable income for the period).

The deferred tax charge or credit and the
corresponding deferred tax liabilities or assets are
recognised using the tax rates and tax laws that
have been enacted or substantively enacted by
the balance sheet date. Deferred tax assets are
recognised only to the extent there is a reasonable
certainty that the assets can be realized in future;
however, where there is unabsorbed depreciation
or carried forward loss under taxation laws,
deferred tax assets are recognised only if there
is a virtual certainty of realization of such assets.
Deferred tax assets are reviewed as at the balance
sheet date and written down or written up to reflect
the amount that is reasonably/virtually certain (as
the case may be) to be realized.

3.1 Earnings per share

Basic earnings per share amounts are computed by
dividing net profit or loss for the period attributable
to equity shareholders by the weighted average
number of shares outstanding during the year. For
the purpose of calculating diluted earnings per
share, the net profit for the year attributable to equity
shareholders and the weighted average number of
shares outstanding during the period are adjusted
for the effects of all dilutive potential equity shares.

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Mar 31, 2024

2.0 Material Accounting Policy Information

The material accounting policies applied by the Company in the preparation of its standalone Ind AS financial statements are listed below. Such accounting policies have been applied consistently to all the periods presented in these standalone Ind AS financial statements, unless otherwise indicated.

2.1 Basis of preparation of Financial Statements

a) Statement of compliance with Ind AS

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (‘Ind AS’) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule III), as applicable to the financial statements.

The financial statements of the Company comprises of the balance sheet as at March 31, 2024, the statement of profit and loss (including other comprehensive income), the statement of changes in equity and the statement of cash flows for the year ended March 31, 2024, and the statement of significant accounting policies, and other explanatory information relating to such financial periods.

The Company has prepared the standalone IND-AS financial statements on the basis that it will continue to operate as a going concern. The accounting policies are applied consistently to all the periods presented in the financial statements except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires change in accounting policy hit hereto in use.

b) Functional and presentation currency

The functional and presentation currency of the Company is Indian Rupee ("H") which is the currency of the primary economic environment in which the Company operates.

All amounts disclosed in the Financial statements and notes have been rounded off to the nearest "Lakh" with two decimals, unless otherwise stated. Transactions and balances with values below the rounding off norm adopted by the group have been reflected as "0" in the relevant notes to the financial statements.

c) Basis of Measurement

The Financial statements have been prepared on accrual basis and under historical cost convention, except for certain financial assets and liabilities which are measured at fair value. (refer accounting policy regarding financial instruments), which are measured at fair values at the end of each reporting period, as explained in the accounting policies below.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services as at the date of respective transactions.

2.2 Use of Estimates

The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgements and assumptions. These estimates, judgements and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts

of revenues and expenses during the period. Application of accounting policies that require critical accounting estimates involving complex and subjective judgements and the use of assumptions in these financial statements. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

2.3 Revenue Recognition

Revenue from Sale of Assembled Populated Circuit Boards and Contract manufacturing is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. The following specific recognition criteria, must also be met before revenue is recognized:

Sale of Goods/Services -

Revenue from the sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer on Ex-works, CIF or delivery of the goods. In case of Services, it is recognized on rendering of service. Export sales include sale of goods to SEZ units/EOU units. Revenue from Contract manufacturing service is recognized on rendering of services.

Interest -

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head "Other income" in the Statement of Profit and Loss.

Other Income-

Revenue from sale of scripts has been included under the head "Other income". The interest income is recognised on time proportionate basis.

2.4 Inventories

Inventories comprising of Raw materials, consumables and spares are valued at the lower of cost and net realisable value. Cost is ascertained on a First in First out (FIFO) basis.

Work-in-progress is valued at cost of material including assembly cost and overheads as determined by the company.

Finished goods and semi-finished products are valued at lower of cost and net realisable value.

Net realizable value is estimated on selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

2.5 Property, plant and equipment

Tangible assets are carried at cost of acquisition or construction less accumulated depreciation and/or accumulated impairment loss, if any. The cost of an item of fixed asset comprises its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use; any trade discounts and rebates are deducted in arriving at the purchase price.

Depreciation is provided on all assets on the straight-line basis using the rates arrived at based on the useful lives estimated by the management. If the management''s estimate of the useful life of a fixed asset at the time of acquisition of the asset or of the remaining useful life on a subsequent review is shorter than that envisaged in the aforesaid schedule, depreciation is provided at a higher rate based on the management’s estimate of the useful life/remaining useful life.

In respect of accounting periods commencing on or after 7^th December, 2006, exchange differences arising on reporting of the longterm foreign currency monetary items at rates different from those at which they were initially recorded during the period are added to or deducted from the cost of the asset and are depreciated over the balance life of the asset, if these monetary items pertain to the acquisition of a depreciable fixed asset.

Depreciation is provided on a pro-rata basis i.e. from the date on which asset is ready for use.

Plant and Machinery is used for 3 shifts and depreciation is calculated at the higher rate attributable to the use of the asset as per Companies Act.

Amortization of tools and stencils

Stencils and tools have been classified as current assets and amortization is provided as per the amortization policy of the company. The rate of amortization is at 20% considering useful life of 5 years and scrap value as Nil.

2.6 Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/ external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use. In assessing value in use, the Company measures its ‘value in use’ on the basis of discounted cash flows of next ten years projections estimated based on current prices.

2.7 Borrowing Costs

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowing and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

Borrowings costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as a part of the cost of the respective asset. All other borrowing costs are expenses in the period they occur.

2.8 Employee benefits

(i) Provident Fund: Retirement benefit in the form of provident fund is a defined contribution scheme. The contributions to the provident fund are charged to the Statement of Profit and Loss for the year when the contributions are due.

Defined contribution plans:

The Company’s contribution in the form of provident fund is considered as a defined contribution plan and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees.

Defined benefit plans:

For defined benefit plans in the form of gratuity benefits, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each balance Sheet date and the same is funded with LIC of India. Re-measurement, comprising actuarial gains or losses, the effect of the changes to the asset ceiling (if applicable) and return on plan assets (excluding net interest), is reflected immediately in the Balance Sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. Re-measurement recognised in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Past service cost is recognised in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Actuarial gains and losses and return on plan assets are recognised in the Statement of Other comprehensive income in the period in which they occur. The retirement benefit obligation recognised in the Balance Sheet represents the present value of the defined benefit obligation, as reduced by the fair value of plan assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes. Defined benefit costs are categorised as follows:

• service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);

• net interest expense or income; and

• re-measurement

The Company presents the first two components of defined benefit costs in profit or loss in the line item ‘Employee benefits expense’. Curtailments gains and losses are accounted as past service costs.

The retirement benefit obligation recognised in the Balance Sheet represents the actual deficit or surplus in the Company’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

A liability for a termination benefit is recognizes at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognizes any related restructuring costs.

The company has also obtained an insurance coverage as mandated by Karnataka Compulsory Gratuity Insurance Rules, 2024 (‘Rules’) (No: LD 397 LET 2023) which prescribe the requirement for employers to obtain a valid insurance policy for the employer’s liability towards payment of gratuity to eligible employees as per the Payment of Gratuity Act 1972 (“Act”).

Short-term employee benefits:

A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service.

The cost of short-term compensated absences is accounted as under:

(a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and

(b) in case of non-accumulating compensated absences, when the absences occur.

Long-term employee benefits:

Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date, using the Projected Unit Credit method, with actuarial valuations being carried out at each Balance Sheet date.

2.9 Foreign exchange transactions

Initial recognition: Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Conversion: Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

Exchange differences arising on the settlement of monetary items or on reporting Company’s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses during the year.

Exchange differences, in respect of accounting periods commencing on or after 7^th December, 2006, arising on reporting of long-term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset, are added to or deducted from the cost of the asset and are depreciated over the balance life of the asset.

3.0 Taxation

Income-tax expense comprise current tax (i.e. amount of tax for the period determined in accordance with the income-tax law) and deferred tax charge or credit (reflecting that tax effects of timing differences between accounting income and taxable income for the period).

The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognised only to the extent there is a reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carried forward

loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed as at the balance sheet date and written down or written up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realized.

3.1 Earnings per share

Basic earnings per share amounts are computed by dividing net profit or loss for the period attributable to equity shareholders by the weighted average number of shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit for the year attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

3.2 Provisions

A provision is recognized if, as a result of a past event; and that 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 obligations. Provisions are recognized at the best estimate of the expenditure required to settle the present obligation at the balance sheet date. The provisions are measured on an undiscounted basis.

Provision in respect of loss contingencies relating to claims, litigation, assessment, fines, penalties, etc. are recognized when it is probable that a liability has been incurred, and the amount can be estimated reliably.

3.3 Impairment

a. Financial assets:

Financial assets (other than at fair value) The Company assesses at each date of balance sheet whether a financial asset or a Company of financial assets is impaired. Ind AS 109 (‘Financial Instruments'') requires expected credit losses to be measured through a loss allowance. The Company recognises lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on trade receivables (net of billing in excess) and Contract assets. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. The Company provides for impairment upon the occurrence of the triggering event.

b. Non-financial assets

Intangible assets and property, plant and equipment

The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset''s recoverable amount is the higher of an assets or cash-generating unit''s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or Company''s of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-inuse) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs.

If such assets are considered to be impaired, the impairment to be recognized in the statement of profit and loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.

3.4 Events after the reporting period

Adjusting events are events that provide further evidence of conditions that existed at the end of the reporting period. The financial statements are adjusted for such events before authorization for issue. Non-adjusting events are events that are indicative of conditions that arose after the end of the reporting period. Non-adjusting events after the reporting date are not accounted, but disclosed.

3.5 Financial instruments

A Financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments.

Financial Assets: Company''s financial assets broadly comprise the following:

(a) Current financial assets: Investments, trade receivables, cash and cash equivalents, loans and advances, other short term receivables

(b) Non-current financial assets:

Investments, other long-term receivables and deposits.

Initial recognition and measurement:

Financial assets are initially measured at fair value. Transaction costs that are directly attributable to the acquisition of financial assets (other than financial assets at fair value through Profit and loss) are added to the fair value of the financial assets, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets at fair value through Profit and loss are recognised immediately in statement of profit and loss.

Subsequent measurement:

For the purpose of subsequent measurement, financial assets are classified into following categories:

(a) Financial assets at amortised cost Financial assets are subsequently measured at amortised cost, if both the below conditions are met:

(b) 1. These financial assets are held within a business model whose objective is to hold these assets in order to collect

contractual cash flows

2. Contractual terms of financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. After initial recognition, these financial assets are subsequently measured using the effective interest rate (EIR) method, less impairment, if any. The amortisation of EIR and loss arising from impairment, if any, recognised in the statement of Profit and loss. This category generally applies to trade and other receivables.

3. (b) Financial Assets at fair value through other comprehensive Income (FVTOCI) Financial assets are measured at fair

value through other comprehensive income if both the below conditions are met:

1. These financial assets are held within business model whose objective is achieved by both collecting contractual cash flows on specified dates and selling financial assets

2. These assets contractual cash flows represent solely payments of principal and interest on the principal amount outstanding The Company does not own any financial asset classified at FVTOCI.

(c) Financial assets at fair value through Profit and loss (FVTPL) This is a residual category. Any financial assets which do not fall under the category of financial assets measured at amortised cost or FVTOCI are classified as FVTPL.

Financial assets at FVTPL are measured at fair value at the end of each reporting period, with gain or loss arising on remeasurement recognised in statement of Profit and loss incorporates any dividend or interest earned on the financial assets and is included in other Income line item.

Impairment of Financial Assets In accordance with Ind AS 109 “Financial Instruments”, the Company applies Expected Credit Loss (ECL) model for measurement and recognition of loss allowance on the following and the basis of its measurement:

Trade Receivable - For Trade receivable and other financial assets that results from transactions that are in scope of Ind AS 115, the Company applies the simplified approach required in Ind AS 109, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

Financial assets measured at amortised cost (other than trade receivable) - In case of other than trade receivable, the Company determines, if there is any significant increase in credit risk of the financial asset since initial recognition. Below methods are followed based on the credit risk changes:

If there are no significant changes in credit risk since initial recognition, twelve months ECL is used to provide the impairment loss.

If there is a significant change in credit risk, lifetime ECL is measured for making the impairment loss assessment. Subsequently if there is an improvement in credit risk, the Company reverts to recognition of impairment loss based on twelve months ECL.

To make the assessment whether there is any significant change in risk, the Company compares the risk of a default occurring on the financial instrument as at the reporting date with a risk of default occurring on the financial instrument as at the date of initial recognition and consider reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increase in credit risk since its initial recognition.

Lifetime ECL are the expected credit losses resulting from all possible default events, over the expected life of a financial assets. 12 months ECL is a portion of lifetime ECL which result from default events that are possible within 12 months from the reporting period.

As a practical expedient and as permitted under Ind AS 109, the Company uses a provision matrix to measure lifetime ECL on its portfolio of trade receivables. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking information available. At each reporting date, the historically observed default rates and changes in the forward-looking information are updated.

Derecognition of financial assets The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. On derecognition of a financial asset in its entirety, the difference between the asset''s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in statement of profit and loss if such gain or loss would have otherwise been recognised in statement of profit and loss on disposal of that financial asset.

On derecognition of a financial assets other than entirely, (when the Company retains an option to repurchase part of a transferred asset), the Company allocates previous carried over amount of financial asset between the part it continues to recognise under continuing involvement , and the part it no longer recognises on the basis of the relative fair values of those parts on the date of transfer. The difference between the carrying amount allocated to the part that is no longer recognised and the sum of consideration received for the part no longer recognised and any cumulative gain or loss allocated to it that had been recognised in Profit and loss on disposal of that financial asset. A cumulative gain or loss that had been recognised in other comprehensive income is allocated between the part that continues to be recognised and the part that is no longer recognised on the basis of the relative fair value of those parts.

Financial liabilities and Equity instruments issued by the Company:

Equity Instruments: An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.

Financial liabilities: Company’s financial liabilities broadly comprises, Short term borrowings, Trade payables, Liabilities for capital expenditure and Other long term/ short term obligations

Initial recognition and measurement: Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. All financial liabilities are recognised initially at Fair value.

In case of loans, borrowings and payables, net of directly attributable transaction costs. Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL or at amortised cost as appropriate.

Subsequent measurement: Financial Liabilities at amortised cost - The carrying amounts of financial liabilities that are subsequently measured at amortised cost using the effective interest method. All the financial liabilities of the Company fall under this category. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Financial Liabilities at FVTPL - Financial liabilities at fair value through Profit and loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through Profit and loss. The Company does not owe any financial liability which is classified at FVTPL.

Derecognition of financial liabilities- The Company de-recognises financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability de-recognised and the consideration paid and payable is recognised in statement of profit and loss.

3.6 Cash Flow Statement

Cash flows are reported using indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating (operating activities), investing and financing activities of the Company are segregated.

3.7 Leases

The Company as lessee

The Company’s lease asset classes primarily consist of leases for offices. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.

At the date of commencement of the lease, the Company recognizes a right-of-use (‘ROU’) asset and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of 12 months or less (short-term leases) and low value leases. For these short-term and low-value leases, the Company recognizes the lease payments in the statement of profit and loss systematically over the term of the lease.

The ROU assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated amortisation and impairment losses

ROU assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset.

If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases.

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

(a) Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;

(b) The amount expected to be payable by the lessee under residual value guarantees;

(c) Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

(a) The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

(b) A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.

Lease liability and ROU assets have been separately presented in the Statement of Assets and Liabilities and lease payments have been classified as financing cash flows

Variable rents that do not depend on an index or rate are not included in the measurement the lease liability and the right-of-use asset. The related payments are recognized as an expense in the Statement of Profit and Loss in the period in which the event or condition that triggers those payments occurs.