2. Material accounting policies

2.1 Statement of compliance and basis of preparation

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

The standalone financial statements have been prepared
on a historical cost basis, except for the following assets
and liabilities which have been measured at fair value:

Derivative financial instruments, Certain financial assets
and liabilities measured at fair value (refer accounting
policy regarding financial instruments), and Contingent
consideration arising from business combination

Equity settled ESOP at grant date fair value

The accounting policies and related notes further described
the specific measurements applied for each of the assets
and liabilities.

In addition, the carrying values of recognised assets and
liabilities designated as hedged items in fair value hedges

that would otherwise be carried at amortised cost are
adjusted to record changes in the fair values attributable
to the risks that are being hedged in effective hedge
relationships.

The financial statements are presented in INR and all
values are rounded to the nearest lakh (INR 00,000),
except when otherwise indicated.

The Company has prepared the financial statements
on the basis that it will continue to operate as a going
concern.

2.2 Summary of material accounting policies

a) Investment in subsidiaries and associates

A subsidiary is an entity that is controlled by another
entity.

An associate is an entity over which the Company has
significant influence. Significant influence is the power to
participate in the financial and operating policy decisions
of the investee but is not control or joint control over
those policies.

The Company's investments in its subsidiaries and
associates are accounted at cost less impairment.

Impairment of investments

The Company reviews its carrying value of investments
carried at cost annually, or more frequently when there
is indication for impairment. If the recoverable amount
is less than its carrying amount, the impairment loss is
recorded in the Statement of Profit and Loss.,

When an impairment loss subsequently reverses, the
carrying amount of the Investment is increased to the
revised estimate of its recoverable amount, so that the
increased carrying amount does not exceed the cost of the
Investment. A reversal of an impairment loss is recognised
immediately in Statement of Profit or Loss.

b) 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.

c) Property, plant and equipment

Capital work in progress is stated at cost, net of
accumulated impairment loss, if any. Plant and equipment
are stated at cost, net of accumulated depreciation and
accumulated impairment losses, if any. Such cost includes
the cost of replacing part of the plant and equipment and
borrowing costs for long-term construction projects if the
recognition criteria are met. Repair and maintenance costs
are recognised in profit or loss as 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.

Advances paid towards the acquisition of property, plant
and equipment outstanding at each balance sheet date
is classified as capital advances under other non-current
assets and the cost of assets not put to use before such
date are disclosed under 'Capital work-in-progress'.
Subsequent expenditures relating to property, plant and
equipment is capitalised only when it is probable that
future economic benefits associated with these will flow
to the Company and the cost of the item can be measured
reliably.

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. Any gain or loss arising
on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying
amount of the asset) is included in the statement of profit
and loss when the asset is derecognised.

c) Property, plant and equipment (Cont'd)

The Company depreciates property, plant and equipment
over their estimated useful lives using the straight-line
method. The estimated useful lives of assets are as follows:

to the Companies Act, 2013. The management believes
that these estimated useful lives are realistic and reflect
fair approximation of the period over which the assets are
likely to be used.

The Company has evaluated the applicability of component
accounting as prescribed under Ind AS 16, Property, plant
and equipment, and Schedule II of the Companies Act,
2013, the Management has not identified any significant
component having different useful lives. Schedule II
requires the Company to identify and depreciate significant
components with different useful lives separately.

The residual values, useful lives and methods of
depreciation of property, plant and equipment are reviewed
at each financial year end and adjusted prospectively, if
appropriate.

Leasehold improvements are depreciated over its lease
period including renewable period or estimated useful life,
whichever is shorter, on a straight-line basis.

d) Intangible assets

Intangible assets acquired separately are measured on
initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less any accumulated
amortisation and accumulated impairment losses.
Internally generated intangibles, excluding capitalised
development costs (refer below policy for R&D costs), are
not capitalised and the related expenditure is reflected
in profit or loss in the period in which the expenditure is
incurred

The useful lives of intangible assets are assessed as either
finite or indefinite.

Expenditure incurred towards development, if eligible
for capitalisation, is carried as 'intangible assets under
development' where such assets are not yet ready for their
intended use.

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.
The assessment of indefinite life is reviewed annually
to determine whether the indefinite life continues to
be supportable. If not, the change in useful life from
indefinite to finite is made on a prospective basis.

An intangible asset is derecognised upon disposal (i.e.,
at the date the recipient obtains control) or when no
future economic benefits are expected from its use or
disposal. Any gain or loss arising upon derecognition of
the asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset)
is included in the statement of profit and loss when the
asset is derecognised.

Process manuals are amortised over the remaining project
term or the useful life of the process manual, whichever
is shorter. Software's are amortised over the period of 6
years / over the period of the respective project.

The residual values, useful lives and methods of amortization
of intangible assets are reviewed at each financial year end
and adjusted prospectively, if appropriate.

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.

e) Impairment of non-financial assets

The Company assesses, at each reporting date, whether
there is an indication that an asset may be impaired. If any

indication exists, or when annual impairment testing for
an asset is required, the Company estimates the asset's
recoverable amount. An asset's recoverable amount is
the higher of an asset's or cash-generating unit's (CGU)
fair value less costs of disposal and its value in use. The
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 group
of assets. When the carrying amount of an asset or CGU
exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount.

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.
In determining fair value less costs of disposal, recent
market transactions are taken into account. If no such
transactions can be identified, an appropriate valuation
model is used. These calculations are corroborated by
valuation multiples, quoted share prices for publicly traded
companies or other available fair value indicators.

The Company bases its impairment calculation on detailed
budgets and forecast calculations, which are prepared
separately for each of the Company's CGUs to which the
individual assets are allocated. These budgets and forecast
calculations generally cover a period of five years. For
longer periods, a long-term growth rate is calculated and
applied to project future cash flows after the fifth year.
To estimate cash flow projections beyond periods covered
by the most recent budgets/forecasts, the Company
extrapolates cash flow projections in the budget using
a steady or declining growth rate for subsequent years,
unless an increasing rate can be justified. In any case,
this growth rate does not exceed the long-term average
growth rate for the products, industries, or country or
countries in which the Company operates, or for the
market in which the asset is used.

Impairment losses are recognised in the statement of
profit and loss.

For assets excluding goodwill 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 and loss.

Intangible assets with indefinite useful lives are tested for
impairment annually at the CGU level, as appropriate, and
when circumstances indicate that the carrying value may
be impaired.

f) Revenue from operations

The specific recognition criteria described below must also
be met before revenue is recognized.

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 the Company expects to be entitled in exchange
for those goods or services and excludes amounts
collected on behalf of third parties. The Company has
generally concluded that it is the principal in its revenue
arrangements because it typically controls the goods or
services before transferring them to the customer.

Sale of services

The Company derives its revenues primarily from
engineering design services. Service income comprises of
income from time and material contracts. Revenue from
time and material contracts are recognised over time as
the related services are performed, which is pursued based
on the efforts spent and agreed rate with the customer.
Revenue from the end of last invoicing to the reporting
date is recognized as unbilled revenue.

Sale of products

Revenue from sale of products is recognized at the point in
time when control of the goods is passed to the customer.
The point at which control passes is determined based on
the terms and conditions by each customer arrangement,
but generally occurs on delivery to the customer. The
contracts that Company enters into relate to sales order
containing single performance obligations for the delivery
of goods as per Ind AS 115.

Finance income

For all financial instruments measured at amortised cost,
interest income is recorded using the effective interest rate
(EIR). EIR is the rate that exactly discounts the estimated
future cash payments or receipts over the expected life
of the financial instrument or a shorter period, where
appropriate, to the net carrying amount of the financial
asset or to the amortised cost of a financial liability. When
calculating EIR, the Company estimates the expected
cash flows by considering all the contractual terms of the
financial instrument but does not consider the expected

credit losses. Interest income is included in finance income
in the statement of profit and loss.

Contract balances

Contract assets

A contract asset is the right to consideration in exchange
for services transferred to the customer. If the Company
performs by providing 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.

Revenues in excess of invoicing are classified as contract
assets (which we refer to as Unbilled Revenue). Contract
assets are subject to impairment assessment. Refer to
accounting policies on impairment of financial assets in
section 2 (p) Impairment of financial assets.

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 2 (o) Financial instruments - initial recognition and
subsequent measurement.

Contract liabilities

A contract liability is recognised if a payment is received
or a payment is due (whichever is earlier) from a customer
before the Company transfers the related goods or
services. Contract liabilities are recognised as revenue
when the Company performs under the contract (i.e.,
transfers control of the related goods or services to the
customer).

g) Employee benefits

Expenses and liabilities in respect of employee benefits
are recorded in accordance with Ind AS 19, Employee
Benefits.

Defined contribution plan

Retirement benefit in the form of provident fund is a
defined contribution scheme. The Company has no
obligation, other than the contribution payable to the
provident fund. The Company recognises contribution
payable to the provident fund scheme as an expenditure,
when an employee renders the related service. Prepaid
contributions are recognised as an asset to the extent that
a cash refund or a reduction in the future payments is
available.

Overseas social security

The Company contributes to social security charges of

countries to which the Company deputes its employees
on employment or has permanent employees. The plans
are defined contribution plan and contributions paid or
payable is recognised as an expense in these periods in
which the employee renders services in those respective
countries.

Defined benefit plan
Gratuity

The liability or asset recognised in the balance sheet in
respect of defined benefit gratuity plans is the present
value of the defined benefit obligation at the end of the
reporting period less the fair value of plan assets (if any).
The cost of providing benefits under the defined benefit
plan is determined using the projected unit credit method.

Compensated absences

The Company provides benefit of compensated absences
under which unavailed leave are allowed to be accumulated
to be availed in future. The compensated absences
comprises of vesting as well as non vesting benefit. The
cost of short term compensated absences are provided
for based on estimates. Long term compensated absence
costs are provided for based on actuarial valuation using
the project unit credit method. The Company presents
the entire leave as a current liability in the balance sheet,
since it does not have an unconditional right to defer its
settlement for 12 months after the reporting date.

The present value of the defined benefit obligation
denominated in ' 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.

Service cost on the Company's defined benefit plan
is included in employee benefits expense. Employee
contributions, all of which are independent of the number
of years of service, are treated as a reduction of service
cost. Net interest expense on the net defined benefit
liability is included in finance costs.

Gains and losses through re-measurements of the defined
benefit plans are recognized in other comprehensive
income, which are not reclassified to Statement of Profit
and Loss in a subsequent period. Further, as required under
Ind AS compliant Schedule III, the Company transfers
those amounts recognized in other comprehensive income
to retained earnings in the statement of changes in equity
and in the balance sheet.

Short-term employee benefits

Short-term employee benefits comprise of employee costs

such as salaries, bonus etc. is recognized on the basis of
the amount paid or payable for the period during which
services are rendered by the employee.

) Leases

The Company has lease contracts for buildings, plant and
machinery used in its operations. Lease terms generally
ranges between 3 and 9 years.

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

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 shorter of the lease term and the estimated
useful lives of the assets, as follows:

Buildings 3 to 9 years

Plant and machinery 3 years

If ownership of the right to use 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. The right-of-use assets are also
subject to impairment.

(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 machinery and
equipment (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 of office equipment that are 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.

i) Foreign currencies

The Company's Standalone financial statements are
presented in Indian Rupees (T or 'INR'), which is also the
Company's functional currency.

Transactions and balances

Transactions in foreign currencies are initially recorded by
the Company at functional currency spot rates at the date
the transaction first qualifies for recognition.

Monetary assets and liabilities denominated in foreign
currencies are translated at the functional currency spot
rates of exchange at the reporting date.

Exchange differences arising on settlement or translation
of monetary items are recognised in profit or loss.

Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated using
the exchange rates at the dates of the initial transactions.
Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the
date when the fair value is determined. The gain or loss
arising on translation of non-monetary items measured
at fair value is treated in line with the recognition of the
gain or loss on the change in fair value of the item (i.e.,
translation differences on items whose fair value gain or
loss is recognised in OCI or profit or loss are also recognised
in OCI or profit or loss, respectively).

In determining the spot exchange rate to use on initial
recognition of the related asset, expense or income (or
part of it) on the derecognition of a non-monetary
asset or non-monetary liability relating to advance
consideration, the date of the transaction is the date on
which the Company initially recognises the non-monetary
asset or non-monetary liability arising from the advance
consideration. If there are multiple payments or receipts
in advance, the Company determines the transaction date
for each payment or receipt of advance consideration.

j) 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 for its
intended use or sale are capitalised as part of the cost
of the asset. All other borrowing costs are expensed in
the period in which they occur. Borrowing costs consist of
interest and other costs that an entity incurs in connection
with the borrowing of funds. Borrowing cost also includes
exchange differences to the extent regarded as an
adjustment to the borrowing costs.

k) Investments in subsidiaries

The Company's investment in equity instruments in
subsidiaries are accounted for at cost. Where the carrying
amount of an investment in greater than its estimated
recoverable amount, it is written down immediately to its
recoverable amount and the difference is transferred to the
Statement of Profit and Loss. On disposal of investment,
the difference between the net disposal proceeds and the
carrying amount is charged or credited to the Statement
of Profit and Loss.

l) Taxes

Current income tax

Tax expense comprises current tax expense and deferred
tax.

Current income tax assets and liabilities are measured
at the amount expected to be recovered from or paid

to the taxation authorities. The tax rates and tax laws
used to compute the amount are those that are enacted
or substantively enacted, at the reporting date in the
countries where the Company operates and generates
taxable income.

Current income tax relating to items recognised
outside profit or loss is recognised outside profit or loss
(either in other comprehensive income or in equity).
Current tax items are recognised in correlation to the
underlying transaction either in OCI or directly in equity.
Management periodically evaluates positions taken in the
tax returns 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.

Deferred tax

Deferred tax is provided using the balance sheet approach
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 recognised 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, the carry forward of unused tax
credits and 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 credits and 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
utilised. 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.

In assessing the recoverability of deferred tax assets,
the Company relies on the same forecast assumptions
used elsewhere in the financial statements and in other
management reports.

Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply in the year when the asset
is realised, or the liability is settled, based on tax rates (and
tax laws) that have been enacted or substantively enacted
at the reporting date.

Deferred tax relating to items recognised outside profit
or loss is recognised outside profit or loss (either in other
comprehensive income or in equity). Deferred tax items
are recognised in correlation to the underlying transaction
either in OCI or directly in equity.

The Company offsets deferred tax assets and deferred tax
liabilities if and only if it has a legally enforceable right
to set off current tax assets and current tax liabilities and
the deferred tax assets and deferred tax liabilities relate
to income taxes levied by the same taxation authority on
either the same taxable entity which intends either to
settle current tax liabilities and assets on a net basis, or to
realise the assets and settle the liabilities simultaneously,
in each future period in which significant amounts of
deferred tax liabilities or assets are expected to be settled
or recovered.