2. Material accounting policies2A. Basis of preparation

i) Statement of compliance:

The financial statements have been prepared in
accordance with the Indian Accounting Standards
(referred to as “Ind AS") prescribed under Section
133 of the Companies Act, 2013 (the Act) read with
Companies (Indian Accounting Standards) Rules,
2015, and presentation requirements of Division II of
Schedule III to the Companies Act, 2013 (as amended
from time to time), (Ind AS compliant Schedule III), as
applicable to these financial statements.

ii) Historical cost convention:

The Financial Statements have been prepared on a
historical cost basis, except for the following which
are measured at fair value:

• Certain financial assets and liabilities (including
derivative instruments) are measured at

fair value

• Defined benefit plans

• Equity settled ESOP at grant date fair value

iii) New and amended standards adopted by the Company

The Ministry of Corporate Affairs has notified Companies
(Indian Accounting Standards) Amendment Rules,
2025 which amended certain accounting standards
that are effective from the date of notification. These
amendments did not have any material impact on
the amounts recognized in prior periods and are not
expected to significantly affect the current or future
periods.

iv) New and amended standards issued but not effective

There are no standards that are notified and not yet
effective as on the date.

2B. Summary of material accounting policiesa) Current versus non-current classification

The Company segregates assets and liabilities into
current and non-current categories for presentation
in the balance sheet after considering its normal
operating cycle and other criteria set out in Ind AS
1, “Presentation of Financial Statements". For this
purpose, current assets and liabilities include the
current portion of non-current assets and liabilities
respectively. Deferred tax assets and liabilities are
always classified as non-current.

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
period up to twelve months as its operating cycle.

b) Property plant & equipment

Property, plant and equipment are stated at cost,
net of accumulated depreciation and accumulated
impairment losses, if any. The cost comprises purchase
price, borrowing costs if capitalisation criteria are met
and directly attributable cost of bringing the qualifying
asset to its working condition for the intended use. Any
trade discounts and rebates are deducted in arriving at
the purchase price.

Subsequent expenditure related to an item of
property, plant and equipment is included in asset's
carrying amount or recognised 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 cost of the item can be measured
reliably. All other repairs and maintenance are charged
to the Statement of Profit and Loss for the period
during which they are incurred. The present value of
the expected cost for the decommissioning of an asset
after its use is included in the cost of the respective
asset if the recognition criteria for a provision are met.

Cost incurred on property, plant and equipment
not ready for their intended use is disclosed as
Capital Work-in-Progress and is stated at cost, net
of accumulated impairment loss, if any. Advances
paid towards the acquisition of property, plant and
equipment outstanding at each balance sheet date are
classified as capital advances under other non-current
assets.

An item of property, plant and equipment and any
significant part initially recognised is derecognised
upon disposal or when no future economic benefits
are expected from its use or disposal. Gains or losses
arising from derecognition of property, plant and
equipment are measured as the difference between
the net disposal proceeds and the carrying amount of

The assets' residual values, useful lives and methods
of depreciation are reviewed at each reporting period
and adjusted prospectively for any change in estimate,
if appropriate. Changes in expected useful lives are
treated as change in accounting estimate.

c) Intangible assets

Intangible assets acquired separately are measured on
initial recognition at cost. The useful lives of intangible
assets are assessed as either finite or indefinite.

Following, initial recognition, intangible assets with
finite lives are carried at cost less accumulated
amortisation and accumulated impairment losses, if
any. Internally generated intangible assets, excluding
capitalised development costs, are not capitalised and
expenditure is reflected in the Statement of Profit
and Loss in the period/year in which the expenditure
is incurred.

Intangible assets with finite lives are amortised over
the useful economic life and assessed for impairment
whenever there is an indication that the intangible
asset may be impaired. The amortisation period and
the amortisation method for an intangible asset with
a finite useful life are reviewed at least at the end
of each reporting period. Changes in the expected
useful life or the expected pattern of consumption
of future economic benefits embodied in the asset
are considered to modify the amortisation period or
method, as appropriate, and are treated as changes in
accounting estimates. The amortisation expense on
intangible assets with finite lives is recognised in the
Statement of Profit and Loss unless such expenditure
forms part of carrying value of another asset.

Intangible assets with indefinite useful lives are not
amortised, but are tested for impairment annually,
either individually or at the cash-generating unit level.

Research and development costs

Research costs are expensed as incurred. Development
expenditures on an individual project are recognised
as an intangible asset when the Company can
demonstrate:

- The technical feasibility of completing the
intangible asset so that the asset will be
available for use or sale

- Its intention to complete and its ability and
intention to use or sell the asset

- How the asset will generate future economic
benefits

- The availability of resources to complete the
asset

- The ability to measure reliably the expenditure
during development

Following initial recognition of the development
expenditure as an asset, the asset is carried at cost
less any accumulated amortisation and accumulated
impairment losses. Amortisation of the asset begins
when development is complete, and the asset is
available for use. It is amortised over the period of
expected future benefit. Amortisation expense is
recognised in the Statement of Profit and Loss unless
such expenditure forms part of carrying value of

another asset. During the period of development, the
asset is tested for impairment annually.

d) Impairment of non-financial 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 recognised, i.e. wherever the
carrying amount of an asset exceeds its recoverable
amount. The recoverable amount is the greater of the
assets net fair value and value in use. A 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 groups of
assets. When the carrying amount of an asset or Cash
Generating Unit (CGU) exceeds its recoverable amount,
the asset is considered impaired and is written down to
its recoverable amount.

In assessing value in use, the estimated future cash
flows are discounted to their present value using a
pre-tax discount rate that reflects current market
assessments of the time value of money and the risks
specific to the asset. After impairment, depreciation is
provided on the revised carrying amount of the asset
over its remaining useful life.

The Company bases its impairment calculation on
most recent budgets and forecast calculations, which
are prepared for the Company's CGUs to which the
individual assets are allocated. These budgets and
forecast calculations generally cover a period of five
years. A long-term growth rate is calculated and
applied to project future cash flows after the fifth year.

Impairment losses are recognised in the Statement of
Profit and Loss.

An assessment is made at each reporting date to
determine whether there is an indication that previously
recognised impairment losses no longer exist or have
decreased. If such indication exists, the Company
estimates the asset's or CGU's recoverable amount. A
previously recognised impairment loss is reversed only
if there has been a change in the assumptions used to
determine the asset's recoverable amount since the
last impairment loss was recognised. The reversal is
limited so that the carrying amount of the asset does
not exceed its recoverable amount, nor exceed the
carrying amount that would have been determined,
net of depreciation, had no impairment loss been
recognised for the asset in prior years. Such reversal
is recognised in the Statement of Profit or Loss unless
the asset is carried at a revalued amount, in which case,
the reversal is treated as a revaluation increase.

e) Inventories

Inventories are valued at the lower of cost and net
realisable value.

Costs incurred in bringing each product to its present
location and condition are accounted for as follows:

- Raw materials: Cost includes cost of purchase
and other costs incurred in bringing the
inventories to their present location and
condition. Cost is determined on first in, first out
basis.

- Finished goods and work in progress
(Manufactured Goods): Cost includes cost of
direct materials and labour, and a proportion of
manufacturing overheads based on the normal
operating capacity but excluding borrowing
costs. Cost is determined on first in, first out
basis.

- Stock in trade (Traded Goods): Cost includes
cost of purchase and other costs incurred in
bringing the inventories to their present location
and condition. Cost is determined on first in,
first out basis.

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

An inventory provision is recognised for cases where
the net realisable value is estimated to be lower than
the inventory carrying value. The net realisable value
is estimated taking into account various factors,
including obsolescence of material due to design
change, process change etc., unserviceable items

i.e. items which cannot be used due to deterioration
in quality or due to shelf life or damaged in storage
and ageing of material i.e. slow moving/non-moving
prevailing sales prices of inventory.

f) Leases

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

Company as a lessee:

The Company applies a single recognition and
measurement approach for all leases, except for
short-term leases and leases of low-value assets. The
Company recognises lease liabilities to make lease
payments and right-of-use assets representing the
right to use the underlying assets.

i. Right-of-use assets (ROU asset)

The Company recognises right-of-use assets at the
commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use
assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for
any remeasurement of lease liabilities.

The cost of right-of-use assets includes the amount
of lease liabilities recognised, initial direct costs
incurred, and lease payments made at or before
the commencement date less any lease incentives
received.

Right-of-use assets are depreciated on a straight-line
basis over the primary lease term.

The right-of-use assets are also subject to impairment.
Refer to the accounting policies in section (e)
impairment of non-financial assets.

If ownership of the leased asset transfers to the
Company at the end of the lease term or the cost
reflects the exercise of a purchase option, depreciation
is calculated using the estimated useful life of the
asset.

ii. Lease liabilities:

At the commencement date of the lease, the Company
recognises lease liabilities measured at the present
value of lease payments to be made over the lease term.
The lease payments include fixed payments (including
in-substance fixed payments) less any lease incentives
receivable, variable lease payments that depend on
an index or a rate, and amounts expected to be paid
under residual value guarantees. The lease payments
also include the exercise price of a purchase option
reasonably certain to be exercised by the Company and
payments of penalties for terminating the lease, if the
lease term reflects the Company exercising the option
to terminate. Variable lease payments that do not
depend on an index or a rate are recognised as expenses
(unless they are incurred to produce inventories) in the
period in which the event or condition that triggers the
payment occurs.

In calculating the present value of lease payments, the
Company uses its incremental borrowing rate at the
lease commencement date because the interest rate
implicit in the lease is not readily determinable. After
the commencement date, the amount of lease liabilities
is increased to reflect the accretion of interest and
reduced for the lease payments made. In addition,
the carrying amount of lease liabilities is remeasured
if there is a modification, a change in the lease term,
a change in the lease payments (e.g., changes to
future payments resulting from a change in an index
or rate used to determine such lease payments) or a

change in the assessment of an option to purchase the
underlying asset.

iii. Short term leases and leases of low value assets:

The Company applies the short-term lease recognition
exemption to its short-term leases of property (i.e.,
those leases that have a lease term of 12 months or
less from the commencement date and do not contain
a purchase option). It also applies the lease of low-value
assets recognition exemption to leases where the
underlying asset is considered to be low value.

Lease payments on short-term leases and leases of
low-value assets are recognised as expense on a
straight-line basis over the lease term.

Sub-lease

At the commencement date, the Company recognises
assets held under a sub-lease in its Balance Sheet and
present them as a receivable at an amount equal to
the net investment in the lease. The Company uses
the interest rate implicit in the lease to measure the
net investment in the lease. In case if the interest rate
implicit in the sublease cannot be readily determined,
the Company being an intermediate lessor uses the
discount rate used for the head lease (adjusted for any
initial direct costs associated with the sublease) to
measure the net investment in the sublease.

At the commencement date, the lease payments
included in the measurement of the net investment in
the lease comprise the following payments for the right
to use the underlying asset during the lease term that
are not received at the commencement date:

• fixed payments less any lease
incentives payable;

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

• any residual value guarantees provided to the
lessor by the lessee, a party related to the lessee
or a third party unrelated to the lessor that is
financially capable of discharging the obligations
under the guarantee;

• the exercise price of a purchase option if the
lessee is reasonably certain to exercise that
option; and

• payments of penalties, if any, for terminating
the lease, if the lease term reflects the lessee
exercising an option to terminate the lease

The Company recognises finance income over the lease
term, based on a pattern reflecting a constant periodic
rate of return on net investment in the lease.

Net investment in the lease is subject to the
derecognition and impairment requirements in Ind
AS 109. The Company regularly reviews estimated
unguaranteed residual values, if any, used in computing
the gross investment in the lease and adjusts the
income allocation accordingly.

g) 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.

I. Initial recognition and measurement:

All Financial assets and liabilities are classified, at initial
recognition, as subsequently measured at amortised
cost, fair value through other comprehensive income
(OCI), and fair value through profit or loss.

Financial Assets

The classification of financial assets at initial recognition
depends on the financial asset's contractual cash flow
characteristics and the Company's business model
for managing them. With the exception of trade
receivables that do not contain a significant financing
component or for which the Company has applied the
practical expedient, the Company initially measures
a financial asset at its fair value plus, in the case of a
financial asset not at fair value through profit or loss,
transaction costs.

Trade receivables that do not contain a significant
financing component or for which the Company has
applied the practical expedient are measured at the
transaction price as disclosed in section 2B(i) Revenue
from contracts with customers.

In order for a financial asset to be classified and
measured at amortised cost or fair value through OCI, it
needs to give rise to cash flows that are 'solely payments
of principal and interest (SPPI)' on the principal amount
outstanding. This assessment is referred to as the SPPI
test and is performed at an instrument level. Financial
assets with cash flows that are not SPPI are classified
and measured at fair value through profit or loss,
irrespective of the business model.

The Company's business model for managing financial
assets refers to how it manages its financial assets
in order to generate cash flows. The business model
determines whether cash flows will result from
collecting contractual cash flows, selling the financial
assets, or both. Financial assets classified and measured
at amortised cost are held within a business model with
the objective to hold financial assets in order to collect

contractual cash flows while financial assets classified
and measured at fair value through OCI are held within
a business model with the objective of both holding to
collect contractual cash flows and selling.

Purchases or sales of financial assets that require
delivery of assets within a time frame established by
regulation or convention in the marketplace (regular
way trades) are recognised on the trade date, i.e., the
date that the Company commits to purchase or sell
the asset.

Financial Liabilities

Financial liabilities are classified, at initial recognition,
as financial liabilities at fair value through profit or
loss, loans and borrowings, payables, or as derivatives
designated as hedging instruments in an effective
hedge, as appropriate.

All financial liabilities are recognised initially at fair value
and, in the case of loans and borrowings and payables,
net of directly attributable transaction costs.

Subsequent measurement:
i. Financial assets

For purposes of subsequent measurement, financial
assets are classified in four categories:

• Financial assets at amortised cost (debt
instruments)

• Financial assets at fair value through other
comprehensive income (FVTOCI) with
recycling of cumulative gains and losses (debt
instruments)

• Financial assets designated at fair value through
OCI with no recycling of cumulative gains and
losses upon derecognition (equity instruments)

• Financial assets at fair value though profit
or loss

Financial assets at amortised cost (debt instruments)

A 'financial asset' is measured at the amortised cost if
both the following conditions are met:

a) The asset is held within a business model
whose objective is to hold assets for collecting

contractual cash flows, and

b) Contractual terms of the asset give rise on
specified dates to cash flows that are solely
payments of principal and interest (SPPI) on the
principal amount outstanding.

Financial assets at amortised cost are subsequently
measured using the effective interest (EIR) method

and are subject to impairment. Gains and losses
are recognised in profit or loss when the asset is
derecognised, modified, or impaired.

The Company's financial assets at amortised cost
includes trade and other receivables, loans to
employees and loan to subsidiaries.

Financial assets at fair value through other
comprehensive income (FVTOCI) (debt instruments)

A 'financial asset' is classified as at the FVTOCI if both
of the following criteria are met:

a) The objective of the business model is achieved

both by collecting contractual cash flows and
selling the financial assets, and

b) The asset's contractual cash flows represent SPPI.

Debt instruments included within the FVTOCI category
are measured initially as well as at each reporting date
at fair value. For debt instruments, at fair value through
OCI, interest income, foreign exchange revaluation and
impairment losses or reversals are recognised in the
profit or loss and computed in the same manner as
for financial assets measured at amortised cost. The
remaining fair value changes are recognised in OCI.

Upon derecognition, the cumulative fair value changes
recognised in OCI is reclassified from the equity to
profit or loss.

Financial Assets designated at fair value through OCI
(equity instruments)

Upon initial recognition, the Company can elect to
classify irrevocably its equity investments as equity

instruments designated at fair value through OCI
when they meet the definition of equity under Ind AS
32 Financial Instruments: Presentation and are not
held for trading. The classification is determined on
an instrument-by-instrument basis. Gains and losses
on these financial assets are never recycled to profit
or loss. Dividends are recognised as other income
in the Statement of Profit and Loss when the right
of payment has been established, except when the
Company benefits from such proceeds as a recovery
of part of the cost of the financial asset, in which case,
such gains are recorded in OCI. Equity instruments
designated at fair value through OCI are not subject to
impairment assessment. The Company has elected to
classify irrevocably its non-listed equity investments
under this category.

Financial assets at fair value through profit or loss
(FVTPL)

Financial assets are measured at fair value through
profit or loss unless it is measured at amortised cost
or fair value through other comprehensive income

on initial recognition. The transaction cost directly
attributable to the acquisition of financial assets
and liabilities at fair value through profit or loss are
immediately recognised in the Statement of Profit
and Loss.

ii. Financial liabilitiesFinancial liabilities at fair value through Profit or
Loss

Financial liabilities at fair value through profit or
loss include financial liabilities held for trading
and financial liabilities designated upon initial
recognition as at fair value through profit or loss.

Financial liabilities designated upon initial
recognition at fair value through profit or loss
are designated as such at the initial date of
recognition, and only if the criteria in Ind AS 109
are satisfied. For liabilities designated as FVTPL,
fair value gains/ losses attributable to changes
in own credit risk are recognised in OCI. These
gains/ losses are not subsequently transferred
to P&L. However, the Company may transfer
the cumulative gain or loss within equity. All
other changes in fair value of such liability are
recognised in the Statement of Profit and Loss.

Financial liabilities at amortised cost (loans and
borrowings)

Financial liabilities are measured at amortised
cost at the end of subsequent accounting periods.
The carrying amounts of financial liabilities that
are subsequently measured at amortised cost
are determined based on the effective interest
method.

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 guarantee contracts issued by the
Company are those contracts that require a
payment to be made to reimburse the holder for a
loss it incurs because the specified debtor fails to
make a payment when due in accordance with the
terms of a debt instrument. Financial guarantee
contracts are recognised initially as a liability at
fair value, adjusted for transaction costs that

are directly attributable to the issuance of the
guarantee. Subsequently, the liability is measured
at the higher of the amount of loss allowance
determined as per impairment requirements of
Ind AS 109 and the amount recognised less when
appropriate, the cumulative amount of income
recognised in accordance with the principles of
Ind AS 115.

The Company's financial liabilities include
trade and other payables, loans and borrowings
including bank overdrafts, and derivative financial
instruments.

DerecognitionFinancial Assets

A financial asset (or, where applicable, a part
of a financial asset or part of a group of similar
financial assets) is primarily derecognised (i.e.,
removed from the Company's statement of
financial position) 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.

On derecognition of a financial asset, 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.

Financial Liabilities

A financial liability is derecognised when the
obligation under the liability is discharged or
cancelled or expires. When an existing financial
liability is replaced by another from the 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
recognised in the Statement of Profit or Loss.

II. Impairment of financial assets:

In accordance with Ind AS 109, the Company
applies simplified Expected Credit Loss (ECL)
model for measurement and recognition of
impairment loss for trade receivables or any
contractual right to receive cash or another
financial asset that result from transactions that
are within the scope of Ind-AS 115 and do not
contain significant financing components.

The Company applies general approach for
recognition of expected credit losses on all other
financial assets.

The Company assesses on a forward-looking
basis the expected credit losses associated with
its assets carried at amortised cost and FVOCI
debt instruments. The impairment methodology
applied depends on whether there has been a
significant increase in credit risk.

Trade receivables are written off when there is no
reasonable expectation of recovery.

III. Offsetting of financial instruments

Financial assets and financial liabilities are offset
and the net amount is reported in the Balance
Sheet if there is a currently enforceable legal right
to offset the recognised amounts and there is an
intention to settle on a net basis, to realize the
assets and settle the liabilities simultaneously.

Reclassification of financial assets

The Company determines classification
of financial assets and liabilities on initial
recognition. After initial recognition, no
reclassification is made for financial assets which
are equity instruments and financial liabilities.
For financial assets which are debt instruments,
a reclassification is made only if there is a change
in the business model for managing those assets.
Changes to the business model are expected to be
infrequent. The Company's senior management
determines change in the business model as
a result of external or internal changes which
are significant to the Company's operations.
Such changes are evident to external parties. A
change in the business model occurs when the
Company either begins or ceases to perform an
activity that is significant to its operations. If the
Company reclassifies financial assets, it applies

the reclassification prospectively from the
reclassification date which is the first day of the
immediately next reporting period following the
change in business model. The Company does not
restate any previously recognised gains, losses
(including impairment gains or losses) or interest.

IV. Investment in subsidiaries and associates

Investment in subsidiaries equity and preference
shares is recognised in the Company's financial
statements at cost in accordance with Ind
AS 27. Investment comprises other multiple
components, including loans, financial guarantees
and share-based payments, each component is
initially recognised at fair value in accordance
with the relevant standards (primarily Ind AS 109
and Ind AS 102), with any difference between
transaction value and fair value (including below-
market loans and financial guarantees issued on
behalf of subsidiaries) treated as part of the cost of
investment, representing a capital contribution to
the subsidiary. Loans are subsequently measured
at amortised cost using the effective interest rate
method and are subject to expected credit loss
assessment under Ind AS 109. Financial guarantee
contracts are initially recognised at fair value and
subsequently measured at the higher of the loss
allowance determined under the expected credit
loss model and the amount initially recognised
less, where appropriate, cumulative amortisation.
Share-based payments granted to employees of
subsidiaries are accounted for in accordance with
Ind AS 102, with the fair value of such awards
recognised over the vesting period as an increase
in investment in subsidiary with a corresponding
credit to equity. The carrying amount of
investment is assessed for impairment, where
indicators exist, in accordance with Ind AS 36.

h) Revenue recognition:I. Revenue from contracts with customers

Revenue from contracts with customers is
recognised when control of the goods or services
are transferred to the customer at an amount
that reflects the consideration to which an entity
expects to be entitled in exchange for transferring
goods or services to a customer.

Revenue towards satisfaction of a performance
obligation is measured at the amount of
transaction price (net of variable consideration)
allocated to that performance obligation. The
transaction price of goods sold, and services
rendered is net of variable consideration on
account of discounts offered by the Company as
part of the contract. This variable consideration
is estimated based on the expected value of
outflow. Revenue (net of variable consideration)
is recognised only to the extent that it is highly
probable that the amount will not be subject to
significant reversal when uncertainty relating to
its recognition is resolved.

The Company identifies the performance
obligations in its contracts with customers and
recognises revenue as and when the performance
obligations are satisfied. The specific recognition
criteria described below must also be met before
revenue is recognised.

Sale of products:

Revenue is recognised upon transfer of control of
promised products to customer in an amount that
reflects the consideration which the Company
expects to receive in exchange for products.
Revenue from the sale of products is recognised
when products are delivered to customer.
Revenue is measured based on the transaction
price, which is the consideration, adjusted for
volume discounts, rebates, scheme allowances,
price concessions, incentives, and returns, if any,
as specified in the contracts with the customers.

Contacts where the Company's obligation is to
arrange for the provision of goods and services by
another party, the Company recognises revenue
in the amount of the commission to which it
expects to be entitled in exchange for arranging
for the provision of goods and services.

Revenue excludes taxes collected from
customers on behalf of the government.
Accruals for discounts/incentives and returns are
estimated (using the most likely method) based on
accumulated experience and underlying schemes
and agreements with customers. Due to the short
nature of credit period given to customers, there
is no financing component in the contract.

ii. Contract balances:- Contract assets

A contract asset is the right to consideration in
exchange for products or services transferred
to the customer. If the Company performs by
transferring products or services to a customer
before the customer pays consideration or before
payment is due, a contract asset is recognised for
the earned consideration that is conditional.

- Trade receivables

A receivable represents the Company's right to
an amount of consideration that is unconditional
(i.e., only the passage of time is required before
payment of the consideration is due). Refer to
accounting policies of financial assets in section
- Financial instruments - initial recognition and
subsequent measurement.

- Contract liabilities

A contract liability is the obligation to transfer
goods or services to a customer for which
the Company has received consideration (or
an amount of consideration is due) from the
customer. If a customer pays consideration
before the Company transfers goods or services
to the customer, a contract liability is recognised
when the payment is made or the payment is
due (whichever is earlier). Contract liabilities
are recognised as revenue when the Company
performs under the contract.

II. Interest income:

Interest income is accrued on time basis, by
reference to the principle outstanding and using
the effective interest rate method. Interest
income is included under the head “Other income"
in the Statement of Profit and Loss.

Provisions

A provision is recognised when the Company has a
present legal or constructive obligation as a result
of past event and it is probable that an outflow
of resources embodying economic benefits will
be required to settle the obligation and a reliable
estimate can be made of the amount of the
obligation. The expense relating to a provision is
presented in the Statement of Profit and Loss.

If the effect of the time value of money is material,
provisions are discounted using a current pre-tax
rate that reflects, when appropriate, the risks
specific to the liability. When discounting is used,
the increase in the provision due to the passage
of time is recognised as a finance cost.

Provisions are reviewed at each Balance Sheet
date and adjusted to reflect the current best
estimates.

i) Foreign currency transactionsFunctional and presentation currency

Items included in the financial statements of the
company are measured using the currency of the
primary economic environment in which the company
operates ('the functional currency'). The financial
statements are presented in Indian rupee (INR) in crore
('Cr'), which is FSN E-Commerce Ventures Limited's
functional and presentation currency.

Foreign currency transactions and balances(i) 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.

(ii) Conversion

Foreign currency monetary items are retranslated
using the exchange rate prevailing at the reporting
date. Non-monetary items, which are measured in
terms of historical cost denominated in a foreign
currency, are reported using the exchange rate at the
date of the transaction. Non-monetary items, which
are measured at fair value or other similar valuation
denominated in a foreign currency, are translated using
the exchange rate at the date when such value was
determined.

(in) Exchange differences

Exchange differences arising on settlement or
translation of other monetary items or on reporting
monetary items at rates different from those at
which they were initially recorded during the period/
year, or reported in previous financial statements, are
recognised as income or as expenses in the Statement
of Profit and Loss in the period/year in which they arise.

j) Share based payments

Employees (including senior executives) of the
Company receive remuneration in the form of share-
based payment transactions, whereby employees
render services as consideration for equity instruments
(equity-settled transactions).

The cost of equity-settled transactions is determined
by the fair value at the date when the grant is made
using an appropriate valuation model. That cost is
recognised, together with a corresponding increase
in share options outstanding reserves in equity, over
the period in which the performance and/or service
conditions are fulfilled in employee benefits expense.
The cumulative expense recognised for equity-settled
transactions at each reporting date until the vesting
date reflects the extent to which the vesting period
has expired and the Company's best estimate of the
number of equity instruments that will ultimately vest.
The Statement of Profit and Loss expense or credit
for a period represents the movement in cumulative
expense recognised as at the beginning and end of that
period and is recognised in employee benefits expense.

When the terms of an equity-settled award are
modified, the minimum expense recognised is the
expense had the terms had not been modified, if the

original terms of the award are met. An additional
expense is recognised for any modification that
increases the total fair value of the share-based
payment transaction or is otherwise beneficial to the
employee as measured at the date of modification.
Where an award is cancelled by the entity or by the
counterparty, any remaining element of the fair value
of the award is expensed immediately through profit
or loss.

The dilutive effect of outstanding options is reflected
as additional share dilution in the computation of
diluted earnings per share.

k) Employee benefitsShort term employee benefits

All short term employee benefits such as salaries,
incentives, medical benefits which are expected to
be settled wholly within 12 months after the end of
the period in which the employee renders the related
services which entitles him to avail such benefits are
recognised on an undiscounted basis and charged to
the Statement of Profit and Loss.

Post-employment benefits

i. Defined Contribution Plans

Retirement benefit in the form of Provident
Fund is a defined contribution scheme and the
contributions are charged to the Statement
of Profit and Loss of the period/year when the
contribution to the funds is due. There are no
other obligations other than the contribution
payable to the fund. The Company recognises
contribution payable to the provident fund
scheme as expenditure, when an employee
renders the related service.

ii. Defined Benefit Plans
Gratuity

The Company has an obligation towards gratuity,
a defined benefit plan covering eligible employees
(including off role 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
equivalent to 15 days salary payable for each
completed year of service. Vesting occurs upon
completion of five years of service. The gratuity
benefits are unfunded.

Gratuity liability is provided for on the basis of an
actuarial valuation on projected unit credit method
made at the end of each financial period/year. The
present value of the defined benefit obligation is
determined by discounting the estimated future
cash outflows by reference to market yields at the

end of the reporting period on government bonds
that have terms approximating to the terms of
the related obligation.

Net interest is calculated by applying the discount
rate to the net defined benefit liability. The
Company recognises the following changes in the
net defined benefit obligation as an expense in the
Statement of Profit and Loss:

- Service costs comprising current service
costs, past-service costs, gains and losses on
curtailments and non-routine settlements;
and

- Net interest expense or income

Re-measurements, comprising of actuarial gains
and losses, excluding amounts included in net
interest on the net defined benefit liability, are
recognised immediately in the Balance Sheet
with a corresponding debit or credit to retained
earnings through 'Other comprehensive income' in
the period in which they occur. Re-measurements
are not reclassified to profit or loss in subsequent
periods.

Compensated absences

The Company provides for the encashment of
leave or leave with pay subject to certain rules.
The employees are entitled to accumulate leave
subject to certain limits, for future encashment.
The liability is provided based on the number of
days of unutilised leave at each Balance Sheet
date on the basis of an independent actuarial
valuation using the projected unit credit method
at the reporting date. Actuarial gains/losses are
immediately taken to the Statement of Profit
and Loss and are not deferred. The obligations
are presented as current liabilities in the Balance
Sheet if the entity does not have an unconditional
right to defer the settlement for at least 12
months after the reporting date, regardless of
when the actual settlement.

I Fair value measurement

Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly
transaction between market participants at the
measurement date. The fair value measurement is
based on the presumption that the transaction to sell
the asset or transfer the liability takes place either:

• In the principal market for the asset or liability or

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

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

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

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

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

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

• Level 2 — Valuation techniques for which
the lowest level input that is significant to

the fair value measurement is directly or
indirectly observable

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

For assets and liabilities that are recognised in the
financial statements on a recurring basis, the Company
determines whether transfers have occurred between
levels in the hierarchy by re-assessing categorization
(based on the lowest level input that is significant to
the fair value measurement as a whole) at the end of
each reporting period. The management assessed
that cash and cash equivalents, trade receivables,
advances, trade payables, bank overdraft and other
financial liabilities approximate their carrying amounts
largely due to the short-term maturities of these
instruments. The management selects appropriate
valuation techniques using discounted cash flow model
when the fair value of the financial assets and liabilities
recorded in the Balance Sheet cannot be measured
based on quoted prices in active markets. The inputs
to these models are taken from observable markets
where possible, but where this is not feasible, a degree
of judgement is required in establishing fair values.
External valuers are involved for valuation of significant
assets and liabilities. The management selects external
valuer on various criteria such as market knowledge,
reputation, independence and whether professional
standards are maintained by valuer. The management
decides, after discussions with the Company's external

valuers, which valuation techniques and inputs to use
for each case.

For the purpose of fair value disclosures, the Company
has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the
asset or liability and the level of the fair value hierarchy
as explained above.

m) Income taxes

Tax expense comprises current and deferred tax.
Current income tax

Current income-tax is measured at the amount
expected to be paid to the tax authorities in accordance
with the Income-tax Act, 1961 enacted in India.

Deferred tax

Deferred tax is provided using the liability method on
temporary differences between the tax bases of assets
and liabilities and their carrying amounts for financial
reporting purposes at the reporting date.

Deferred tax liabilities are recognized for all taxable
temporary differences, except:

• When the deferred tax liability arises from the
initial recognition of goodwill or an asset or
liability in a transaction that is not a business
combination and, at the time of the transaction,
affects neither the accounting profit nor taxable
profit or loss and does not give rise to equal
taxable and deductible temporary differences.

• In respect of taxable temporary differences
associated with investments in subsidiaries,
associates and interests in joint ventures, when
the timing of the reversal of the temporary
differences can be controlled and it is probable
that the temporary differences will not reverse
in the foreseeable future.

Deferred tax assets are recognised for all deductible
temporary differences and the carry forward of any
unused tax losses. Deferred tax assets are recognised
to the extent that it is probable that taxable profit will
be available against which the deductible temporary
differences, and the carry forward of unused tax losses
can be utilised except:

• When the deferred tax asset relating to the
deductible temporary difference arises from
the initial recognition of an asset or liability in a
transaction that is not a business combination
and, at the time of the transaction, affects
neither the accounting profit nor taxable profit
or loss and does not give rise to equal taxable
and deductible temporary differences.

• In respect of deductible temporary differences
associated with investments in subsidiaries,
associates and interests in joint ventures,
deferred tax assets are recognised only to the
extent that it is probable that the temporary
differences will reverse in the foreseeable future
and taxable profit will be available against which
the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed
at each reporting date and reduced to the extent that
it is no longer probable that sufficient taxable profit will
be available to allow all or part of the deferred tax asset
to be utilized. Unrecognised deferred tax assets are
re-assessed at each reporting date and are recognised
to the extent that it has become probable that future
taxable profits will allow the deferred tax asset to be
recovered.

Deferred tax assets and deferred tax liabilities are
offset, if a legally enforceable right exists to set-off
current tax assets against current tax liabilities and the
deferred tax assets and deferred taxes relate to the
same taxable entity and the same taxation authority.

Current tax and deferred tax are measured using
the tax rates and tax laws enacted or substantively
enacted, at the reporting date. Current income tax and
deferred tax relating to items recognized outside profit
and loss is recognized outside profit and loss (either in
OCI or in equity). The Company periodically evaluates
p ositions ta ken in the ta x return s with respect to
situations in which applicable tax regulations are
subject to interpretation and considers whether it
is probable that a taxation authority will accept an
uncertain tax treatment. The Company shall reflect the
effect of uncertainty for each uncertain tax treatment
by using either most likely method or expected value
method, depending on which method predicts better
resolution of the treatment.

n) Cash and cash equivalents

Cash and cash equivalents in the balance sheet
comprise cash at banks and on hand and short-term
deposits with an original maturity of three months or
less, and other short term highly liquid investments
which are subject to an insignificant risk of changes
in value.

For the purpose of the statement of cash flows, cash
and cash equivalents consist of cash and short-term
deposits, as defined above, net of outstanding bank
overdrafts as they are considered an integral part of
the Company's cash management.

o) Contingent Liabilities

A contingent liability is a possible obligation that arises

from past events whose existence will be confirmed
by the occurrence or non-occurrence of one or more
uncertain future events beyond the control of the
Company or a present obligation that is not recognised
because it is not probable that an outflow of resources
will be required to settle the obligation. A contingent
liability also arises in extremely rare cases where
there is a liability that cannot be recognised because
it cannot be measured reliably. The Company does
not recognise a contingent liability but discloses its
existence and other disclosures in the notes to the
financial statements unless the possibility of any
outflow in settlement is remote.

p) Earnings per share

Basic earnings per share is computed by dividing the
net profit or loss for the period attributable to equity
shareholders by the weighted average number of equity
shares outstanding during the period. The weighted
average number of equity shares outstanding during
the period is adjusted for events such as bonus issue,
bonus element in a rights issue, share split, and reverse
share split (consolidation of shares) that have changed
the number of equity shares outstanding, without a
corresponding change in resources.

For the purpose of calculating diluted earnings per
share, the net profit or loss for the period 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, except where the result would be anti-dilutive.

q) Segment reporting

In accordance with Ind AS 108 'Operating Segments',
segment information has been given in the consolidated
financial statements of the Group and therefore, no
separate disclosure on segment information is given
in standalone financial statements.

r) Business combination:

Business combinations involving entities or businesses
under common control are accounted for using the
pooling of interest method. Under pooling of interest
method, the assets and liabilities of the combining
entities or businesses are reflected at their carrying
amounts after making adjustments necessary to
harmonise the accounting policies. The financial
information in the financial statements in respect of
prior periods is restated as if the business combination
had occurred from the beginning of the preceding period
in the financial statements, irrespective of the actual
date of the combination. The identity of the reserves
is preserved in the same form in which they appeared
in the financial statements of the transferor and the
difference, if any, between the amount recorded as
share capital issued plus any additional consideration
in the form of cash or other assets and the amount of
share capital of the transferor is transferred to capital
reserve.

3. Significant accounting judgements, estimates and
assumptions

The preparation of financial statements in conformity
with Ind AS requires the management to make
judgments, estimates and assumptions that affect
the reported amounts of revenues, expenses, assets
and liabilities and the accompanying disclosures, and
the disclosure of contingent liabilities, at the end of
the reporting period. Such judgments, estimates
and associated assumptions are evaluated based
on historical experience and various other factors,
including estimation of the effects of uncertain future
events, which are believed to be reasonable under the
circumstances. Actual results may differ from these
estimates. The estimates and underlying assumptions
are reviewed on an on-going basis. Revisions to
accounting estimates are recognised in the period in
which the estimate is revised if the revision affects
only that period or in the period of the revision and
future periods if the revision affects both current and
future periods.

Uncertainty about these assumptions and estimates
could result in outcomes that require a material
adjustment to the carrying amount of assets or
liabilities affected in future periods.

The following are the critical judgements and estimates
that have been made by the management in the
process of applying the Company's accounting policies
and that have the most significant effect on the
amount recognised in the financial statements and/or
key sources of estimation uncertainty that may have
a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within
the next financial year.

I. Judgements:• Determining the lease term of contracts with renewal

and termination options — the Company as lessee

The Company determines the lease term as the
non-cancellable term of the lease, together with any
periods covered by an option to extend the lease if it
is reasonably certain to be exercised, or any periods
covered by an option to terminate the lease, if it is
reasonably certain not to be exercised. It considers all
relevant factors that create an economic incentive for
it to exercise either the renewal or termination.

The Company determines the lease term as the
non-cancellable term of the lease, together with any
periods covered by an option to extend the lease if it
is reasonably certain to be exercised, or any periods
covered by an option to terminate the lease, if it is
reasonably certain not to be exercised.

The Company has several lease contracts that include
extension and termination options. The Company
applies judgement in evaluating whether it is reasonably
certain whether or not to exercise the option to renew
or terminate the lease. That is, it considers all relevant
factors that create an economic incentive for it to
exercise either the renewal or termination.

The Company included the renewal period as part of
the lease term for leases of property with shorter non¬
cancellable period (i.e., 3 to 5 years). The Company
typically exercises its option to renew for these leases
because there will be a significant negative effect on
business if a replacement alternate property is not
readily available. The renewal periods for leases of
property with longer non-cancellable periods (i.e., 6
to 10 years) are not included as part of the lease term
as these are not reasonably certain to be exercised.
Furthermore, the periods covered by termination
options are included as part of the lease term only
when they are reasonably certain not to be exercised.

II. Estimates and assumptions:

a. Estimation of useful life of property, plant and
equipment and intangible asset

Property, plant and equipment and intangible
assets represent a significant proportion of
the asset base of the Company. The charge in
respect of periodic depreciation is derived after
determining an estimate of an asset's expected
useful life and the expected residual value at
the end of its life. The useful lives and residual
values of assets are determined by management
at the time the asset is acquired and reviewed
periodically, including at each financial period/year
end. The lives are based on historical experience
with similar assets.

b. Fair Value measurement of financial instruments

When the fair values of financial assets and
financial liabilities recorded in the Balance Sheet
cannot be measured based on quoted prices in
active markets, their fair value is measured using
valuation techniques including the discounted
cash flow model. The inputs to these models are
taken from observable markets where possible,
but where this is not feasible, a degree of
judgement is required in establishing fair values.
Judgements include considerations of inputs such

as liquidity risk, credit risk and volatility. Changes
in assumptions about these factors could affect
the reported fair value of financial instruments.

c. Estimation of defined benefit obligation and
compensated absences

The cost of the defined benefit gratuity plan,
compensated absences and the present value
of the gratuity obligation are determined using
actuarial valuations. An actuarial valuation
involves making various assumptions that may
differ from actual developments in the future.
These include the determination of the discount
rate, future salary increases and mortality rates.
All assumptions are reviewed at each reporting
date.

The parameter most subject to change is the
discount rate. In determining the appropriate
discount rate for plans operated in India, the
management considers the interest rates of
government bonds in currencies consistent with
the currencies of the post-employment benefit
obligation.

Future salary increases are based on expected
future inflation rates. The mortality rate is based
on publicly available mortality tables for the
country. Those mortality tables tend to change
only at interval in response to demographic
changes.

d. Income taxes

Significant judgments are involved in determining
the provision for income taxes including judgment
on whether tax positions are probable of being
sustained in tax assessments. A tax assessment
can involve complex issues, which can only be
resolved over extended time periods.

e. Deferred Taxes

Deferred tax assets are recognised for unused tax
losses to the extent that it is probable that future
taxable profit will be available against which the
losses can be utilised. In assessing the probability,
the Company considers whether the entity
has sufficient taxable temporary differences
relating to the same taxation authority and the
same taxable entity, which will result in taxable
amounts against which the unused tax losses or
unused tax credits can be utilised before they
expire. Significant management judgement is
required to determine the amount of deferred tax
assets that can be recognised, based upon the
likely timing and the level of future taxable profits
together with future tax planning strategies. The

Company has recognised deferred tax assets
on the unused tax losses and other deductible
temporary differences since the management is
of the view that it is probable the deferred tax
assets will be recoverable using the estimated
future taxable income based on the approved
business plans and budgets.