3 Material accounting policies

a. Foreign currency

Foreign currency transactions

Transactions in foreign currencies are translated
into the functional currency of the Company, at the
exchange rates at the dates of the transactions or
an average rate if the average rate approximates
the actual rate at the date of the transaction.

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

b. Financial instruments

(i) Recognition and initial measurement

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

A financial asset or financial liability is initially
measured at fair value plus, for an item not at fair
value through profit and loss (FVTPL), transaction
costs that are directly attributable to its acquisition
or issue.

(ii) Classification and subsequent measurement

Financial assets

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

- amortised cost;

- Fair value through OCI (FVOCI) - debt
investment;

- FVOCI - equity investment; or

- FVTPL

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

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

• the asset is held within a business model
whose objective is to hold assets to collect
contractual cash flows; and

• the contractual terms of the financial asset
give rise on specified dates to cash flows that
are solely payments of principal and interest
on the principal amount outstanding.

A debt investment is measured at FVOCI if it
meets both of the following conditions and is not
designated as at FVTPL:

• the asset is held within a business model
whose objective is achieved by both collecting
contractual cash flows and selling financial
assets; and

• the contractual terms of the financial asset
give rise on specified dates to cash flows that
are solely payments of principal and interest
on the principal amount outstanding.

On initial recognition of an equity investment that is
not held for trading, the Company may irrevocably
elect to present subsequent changes in the
investments fair value in OCI (designated as FVOCI
- equity investment). This election is made on an
investment by investment basis.

All financial assets not classified as measured at
amortised cost or FVOCI as described above are
measured at FVTPL. This includes all derivative
financial assets. On initial recognition, the Company
may irrevocably designate a financial asset that
otherwise meets the requirements to be measured
at amortised cost or at FVOCI as at FVTPL if doing
so eliminates or significantly reduces an accounting
mismatch that would otherwise arise.

Financial liabilities

The Company derecognises a financial liability
when its contractual obligations are discharged or
cancelled, or expire.

The Company also derecognises a financial
liability when its terms are modified and the cash
flows under the modified terms are substantially
different. In this case, a new financial liability based
on the modified terms is recognised at fair value.
The difference between the carrying amount of the
financial liability extinguished and the new financial
liability with modified terms is recognised in profit
or loss.

(iv) Offsetting

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

c. Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are
measured at cost, which includes capitalised
borrowing costs, less accumulated depreciation
and accumulated impairment losses, if any.

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

The cost of a self-constructed item of property, plant
and equipment comprises the cost of materials and
direct labour, any other costs directly attributable
to bringing the item to working condition for its
intended use, and estimated costs of dismantling
and removing the item and restoring the site on
which it is located.

Any gain or loss on disposal of an item of property,
plant and equipment is recognised in profit or loss.

(ii) Subsequent expenditure

Subsequent expenditure is capitalised only if it
is probable that the future economic benefits
associated with the expenditure will flow to the
Company.

(iii) Depreciation

Depreciation is provided on the straight-line
method over the useful life as prescribed under
Part C of Schedule II of the Companies Act 2013.
Freehold land is not depreciated.

The estimated useful lives of items of property, plant
and equipment for the current and comparative
period are as follows:

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

d. Intangible assets

(i) Recognition and measurement

Intangible assets that are acquired by the Company
and have finite useful lives are measured at cost
less accumulated amortisation and accumulated
impairment losses.

(ii) Subsequent expenditure

Subsequent expenditure is capitalised only if it
is probable that the future economic benefits
associated with the expenditure will flow to the
Company.

(iii) Amortisation

Amortisation is calculated to write off the cost of
intangible assets over their estimated useful lives
using the straight-line method, and is included in
depreciation and amortisation in statement of profit
and loss. Intangible assets comprise of softwares
purchased which are amortised over a period of 5
years.

e. Inventories

Inventories are measured at the lower of cost and
net realisable value. The cost of inventories is based
on the weighted average formula, and includes
expenditure incurred in acquiring the inventories,
production or conversion costs and other costs
incurred in bringing them to their present location
and condition. In the case of manufactured
inventories and work-in-progress, cost includes an
appropriate share of fixed production overheads
based on normal operating capacity.

Net realisable value is the estimated selling price in
the ordinary course of business, less the estimated
costs of completion and selling expenses.

The net realisable value of work-in-progress is
determined with reference to the selling prices of
related finished products.

Raw materials, components and other supplies held
for use in the production of finished products are
not written down below cost except in cases where
material prices have declined and it is estimated
that the cost of the finished products will exceed
their net realisable value.

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

Value of identified items of finished goods and
work-in-progress are written down if estimated
recoverable value of such item is lower than its
cost.

f. Impairment

(i) Impairment of financial instruments

The Company recognises loss allowances for
expected credit losses on financial assets measured
at amortised cost.

At each reporting date, the Company assesses
whether financial assets carried at amortised
cost are credit-impaired. A financial asset is
'credit-impaired' when one or more events that
have a detrimental impact on the estimated future
cash flows of the financial asset have occurred.

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

- significant financial difficulty of the customer;

- a breach of contract such as a default / being
significantly past due;

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

- it is probable that the customer will enter
bankruptcy or other financial reorganisation;
or

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

Loss allowances for trade receivables are always
measured at an amount equal to lifetime expected
credit losses. Lifetime expected credit losses are
the expected credit losses that result from all
possible default events over the expected life
of a financial instrument. The maximum period
considered when estimating expected credit losses
is the maximum contractual period over which the
Company is exposed to credit risk.

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

Measurement of expected credit losses

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

Presentation of allowance for expected credit
losses in the balance sheet

Loss allowances for financial assets measured
at amortised cost are deducted from the gross
carrying amount of the assets.

Write-off

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

(ii) Impairment of non-financial assets

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

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

The recoverable amount of a CGU (or an individual
asset) is the higher of its value in use and its fair
value less costs to sell. Value in use is based on
the estimated future cash flows, discounted to their
present value using a pre-tax discount rate that

reflects current market assessments of the time
value of money and the risks specific to the CGU
(or the asset).

The Company's corporate assets do not generate
independent cash inflows. To determine impairment
of a corporate asset, recoverable amount is
determined for the CGUs to which the corporate
asset belongs.

An impairment loss is recognised if the carrying
amount of an asset or CGU exceeds its estimated
recoverable amount. Impairment losses are
recognised in the statement of profit and loss.

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

g. Non-current assets held for sale

Non-current assets are classified as held for sale
if it is highly probable that they will be recovered
primarily through sale rather than through
continuing use.

Such assets are generally measured at the lower
of their carrying amount and fair value less costs
to sell. Losses on initial classification as held for
sale and subsequent gains and losses on re¬
measurement are recognised in profit or loss.

Once classified as held for sale, intangible assets
and property, plant and equipment are no longer
amortised or depreciated.

If the Company no longer satisfies the criteria
for classification of such assets as held for sale,
the assets are reclassified back to their original
classification at the lower of its carrying value
before the asset was classified as held for sale
adjusted for any depreciation, amortisation or
revaluations that would have been recognised
had the asset not been reclassified as held for
sale and its recoverable amount on the date of
reclassification.

h. Employee benefits

(i) Short-term employee benefits

Short-term employee benefit obligations are
measured on an undiscounted basis and are
expensed as the related service is provided. A

liability is recognised for the amount expected
to be paid e.g., under short-term cash bonus, if
the Company has a present legal or constructive
obligation to pay this amount as a result of past
service provided by the employee, and the amount
of obligation can be estimated reliably.

(ii) Defined contribution plans

A defined contribution plan is a post-employment
benefit plan under which an entity pays fixed
contributions into a separate entity and will
have no legal or constructive obligation to pay
further amounts. The Company makes specified
monthly contributions towards Government
administered provident fund scheme. Obligations
for contributions to defined contribution plans are
recognised as an employee benefit expense in
profit or loss in the periods during which the related
services are rendered by employees.

Prepaid contributions are recognised as an asset
to the extent that a cash refund or a reduction in
future payments is available.

(iii) Defined benefit plans

A defined benefit plan is a post-employment
benefit plan other than a defined contribution plan.
The Company's net obligation in respect of defined
benefit plans is calculated by estimating the amount
of future benefit that employees have earned in the
current and prior periods, discounting that amount
and deducting the fair value of any plan assets.

The calculation of defined benefit obligation is
performed annually by a qualified actuary using the
projected unit credit method. When the calculation
results in a potential asset for the Company, the
recognised asset is limited to the present value
of economic benefits available in the form of any
future refunds from the plan or reductions in future
contributions to the plan ('the asset ceiling'). In
order to calculate the present value of economic
benefits, consideration is given to any minimum
funding requirements.

Remeasurements of the net defined benefit liability,
which comprise actuarial gains and losses, the
return on plan assets (excluding interest) and the
effect of the asset ceiling (if any, excluding interest),
are recognised in OCI. The Company determines the
net interest expense (income) on the net defined
benefit liability (asset) for the period by applying
the discount rate used to measure the defined
benefit obligation at the beginning of the annual
period to the then-net defined benefit liability
(asset), taking into account any changes in the net
defined benefit liability (asset) during the period
as a result of contributions and benefit payments.
Net interest expense and other expenses related

to defined benefit plans are recognised in profit or
loss.

When the benefits of a plan are changed or
when a plan is curtailed, the resulting change in
benefit that relates to past service ('past service
cost' or 'past service gain') or the gain or loss on
curtailment is recognised immediately in profit or
loss. The Company recognises gains and losses on
the settlement of a defined benefit plan when the
settlement occurs.

(iv) Other long-term employee benefits

The Company's net obligation in respect of
long-term employee benefits other than post¬
employment benefits is the amount of future
benefit that employees have earned in return for
their service in the current and prior periods; that
benefit is discounted to determine its present
value, and the fair value of any related assets is
deducted. The obligation is measured on the basis
of an annual independent actuarial valuation using
the projected unit credit method. Remeasurements
gains or losses are recognised in profit or loss in the
period in which they arise.

(v) Termination benefits

Termination benefits are expensed at the earlier
of when the Company can no longer withdraw the
offer of those benefits and when the Company
recognises costs for a restructuring. If benefits are
not expected to be settled wholly within 12 months
of the reporting date, then they are discounted.