2 >16 Provisions audGlbntiorgcdcie^ ,

Provisions arc recognised when the Company has a pLosojii obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits w ill be required to settle ihe obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, foe example; under an insurance contract ihe reimbursement is recognised as a separate asset, hut only when the reimbursement is virtually certain.

The expense relating to ei provision is presented in the statement of profit and loss net of any reimbursement. If the effect of the lime value of money is material, provisions arc 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.

A provision for onerous contracts is recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at ihe present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contrast.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or iinn-occurrence of one or more uncertain future events beyond tile control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will he required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability hut discloses its existence in the standalone financial statements.

Provisions and contingent liability are reviewed at each balance sheet.

2.17 Burrowing rusts

Borrow ing costs eonsi si of interest and other costs that an entity incurs in connect ion with the borrowing of funds including interest expense calculated using the effective interest method, finance charges in respect of assets acquired on IInance lease. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready lor its intended use or sale are capitalised as pari of the cost of the asset until such Lime as Ihe assets arc substantially ready for the intended use or sale. All other borrowing costs are expensed in Ihe year In which they occur,

2.18 Related party transactions

The transactions with related parties are made on terms equivalent to those that prevail in arm's length transactions. Outstanding balances at the period-end are unsecured and settlement occurs in cash or credit as per the terms of the arrangement. Impair merit nssessmeni is undertaken each financial year through examining the financial position of the .related party and ihe market in which Ihe related party operates,

2.19 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.

Kiri linedal assets

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value 111 rough profit or loss, transaction costs that are attributable to Ihe acquisition of the financial asset Subsequent measurement nf financial assets: All recognised financial assets are subsequently measured in their entirely at either amortized cost or fair value, depending on the classification financial assets.

f ollowing are the categories of financial instrument:

a) Financial assets at amortized cost.

b) “Financial assets at fair value through other comprehensive income (FVTOC1)"

c) f inancial assets at fair value through profit or loss (FVTPL) ft) Financial assets at amortized cost

Financial assetsare subsequently measured at amortized cost using the effective interest rale method if' these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and (he contractual terms of the financial asset give rise on spec filed dates to cash flows that are solely payments of principal and interest on the principal amount outstanding, b) 1'rnancial assets at lair value through oilier comprehensive income (FVTCJC1) "

Debt financial assels measured al FVOCI:

Debt instruments are subsequently measured at fair value through olher comprehensive income if it 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 llie financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on I he principal amount outstanding.

Equity Instruments designated at FVOCfi

On Initial recognition, the C ompany makes an irrevocable election on an insmiment-by-insimmeru basis to present the subsequent changes in fair value in other comprehensive income pertaining to investments in equity instruments, other than equity investment which arc held for trading. Subsequently, they arc measured at fair value with gains and losses arising from changes In fair value recognised in other comprehensive income and accumulated in the ‘Reserve for equity instruments through other comprehensive income’. The cum illative gain or loss is not reclassified to profit or loss on disposal of the investments.

cl financial assets at fair value through profit or loss (f'V'fPL)

Investments in equity instruments are classified as at FVTPL. unless the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading. Oilier financial assets such as unquoted Mutual funds arc measured tit fair value through profit or loss unless it is measured at amortized cost or ut fair value through oilier comprehensive income on initial recognition.

I >o recognition

& fin^c ial asset (ory where appli^a bio, a part of a financi al assbt oir part of a grou p of simi lajjj* financial assets) is primarily derecognized (i.e.. removed from the Company’s balance sheet) when:

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

h) the Company has transferred its rights to receive cash flows from the asset, and

i. the Company has transferred substantially all (he risks and rewards of the asset, or

ii. the Company has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-Lh rough arm n gem cut, it evaluates if’and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards, of the asset, nor transferred control of the asset, the Company continues to recognize the transferred asset to (lie extent of the Company’s continuing involvement. In that case, the Company also recognises an associated liability. The transferred assets and the associated liability arc meastired on a basis that reflects the rights and obligations that the Company has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured al the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

1 m pair m cn t oflinaniial iisst-ts

Jn accordance with Ind AS 109. the Company applies expected credit loss (‘ECL) model for measurerr^iu and recognition of j&nfratnnem loss on the following financial assets and credit risk exposure:

a) f inancial assets (hat are deb! instruments, and arc measured at amortized cost e.g., loans,

deposils, trade receivables and bank balance

b) financial assels that are debt instalments and arepleasured at I V IOCS, e) financial guarantee contracts which arc no! measured as at FVTPL,

"The Company follows 'simplified approach’ for recognition of impairment loss allowance on trade receivables. The application of simplified approach docs not require (lie Company lo track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime f CLs at each reporting date, right from its initial recognition. ”

"For recognition of impairment loss on oilier financial assets and risk exposure, the Company determines that whether there lias been a significant increase in the credit risk since initial recognition. IT credit risk lias not increased significantly, 12-month ECL is used to provide lor impairmenf loss. Ho we vet, iT credit risk has increased significantly, lifetime ECL is used, If, in a subsequent period, credit quality of the instrument improves such that ihere is no longer a significant increase in credit risk since initial recognition, then the entity reverts lo recognising impairment loss a I Iowa nee based on 12-month ECL,

Lifetime ECL are (he expected credit losses resulting from ail possible default events over the expected life of a financial inshli ment. The 12-month EC i is a portion pf the I i I el i me ECL which rcsulls from do raid I events that are possible within 12 months after the reporting date. "

ECL is the difference between all contractual cash flows that arc due lo the Company in accordance with ilic contract and all the cash llous that the cntilv expects to receive (i.e., all cash shortfalls), discounted at the original LIE. When estimating (he cash Mows, an cnlity is required lo consider:

i} All contractual terms of the financial i n strum ent (including prepayment, extension, call

and similar options) over the expected fife of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument

ii) ii) Cash flows from the sale of collateral held or other credit enhancements that are integral lo the contractual terms.

ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in tine Statement of Profit and Loss. 1 his amount is reflected under the head "other expenses’ in the Statement of Profit and Loss. In the balance sheet. ECL is presented as an allowance, i.e., as an integral part of (lie measurement of those assets in the balance sheet. The allowance reduces (he net carrying amount. UnfiJ the asset meets write-off criteria, the Company docs not reduce impairment allowance from the gross canying amount.

Offsetting:

Financial assets and financial liabilities arc offset and the net amount is reported in the standalone balance sheet if there is a currently enforceable legal right to offset l be recognised amounts and there is an intention tosetiloon a not basis, to realize the assets and settle the liabilities simultaneously

Financial Liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables. All financial liabilities arc recognised initially at lair value and, in the ease oMoans and borrowings and payables, net oI' directly attributable transaction costs. I hc Company's financial liabilities include trade and other payables, loans and borrowings.

So bseq uent niea su tern e n <

"The measurement of financial liabilities depends on their classification, as described bekm:" Financial liabilities at lair value through profit or loss

Financial liabilities at fair value through profit or loss include 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 Joss are designated as such at the initial date of recognition and only iff lie criteria in Ind AS 109 arc satisfied. For liabilities designated as FV I’PL. lair value gains/ losses attributable to changes in own credit risk arc recognized in OCI. These gains/ losses are net subsequently transferred to P&L. However, the Company may transfer the cumulative gain or loss within equity. All other changes in the fair value of such liability are recognised ill the statement of profit or loss. The Company has not designated any financial liability as at fair value through profit and loss,

Gains or losses on liabilities held for trading are recognised in Ihc profit or loss.

l-’iuancial liabilities designated upon initial recognition at fair value through profit or loss arc designated as such at the initial dale of‘recognition, and only if the criteria in Ind AS 109 arc satisfied. For liabilities designated as IVTPL. fair value gains/ losses attributable to changes in own credit risk are recognized in OCI, These gains/ loss arc not subsequently transferred to P&L. I lowcver. the Group may transfer the cumulative gain or loss within equity. All other changes in the lair value of such liability are recognised in the statement of profit or loss.

Loans and borrowings

'Hiis is the category most relevant to the Company, After initial recognition, interest’bearing loans and borrowings arc subsequently measured at amortized cost using the EIR method. Gains and losses arc recognised in profit or loss when the liabilities are derecognized as well as through the L1R amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the MIR. The Fill amortization is included as finance costs in (lie statement of profit and loss.

Dorecugnilinn

"A financial liability is derecognized when the obligation wider 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 de-recognition of the original liability and the recognition of a new liability. Hie difference in I he respective carrying amounts is recognised in I lie statement of profit and loss,

"financial guarantee con! me Is issued by ihc Company ate those contracts that require a payment to be made to reimburse the holder fora 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 con! racts are recognised initially as a liability at fair value, adjusted for transaction eosi.s that arc directly Attributable to the issuance of the guarantee. Subsequently, the liability is measured at I lie higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised less cumulative amortization.

Reclassification of financial assels

The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assels which are equity instruments and financial [labilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in Ihc business model for managing those assets. Changes to the business model are expected to be infrequent. '1'hc Company's senior management determines change in Ihc business model as a result of external or internal changes which are significant to the Company's operations. Such changes arc 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 ils 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 docs not restate any previously recognised gains, losses (including impairment gains or losses) or interest.