B. MATERIAL ACCOUNTING POLICIES
(i) Basis of Preparation of Financial Statements:
These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the 'Ind AS')
as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 ('the Act') read with the Companies (Indian
Accounting Standards) Rules, 2015 as amended from time to time and other related provisions of the Act.
The financial statements of the Company are prepared on the accrual basis of accounting and historical cost convention except for the following
material items that have been measured at fair value as required by the relevant Ind AS:
(i) Certain financial assets and liabilities are measured at Fair value - Refer note no.1(B)(viii)
(ii) Defined benefit employee plan - Refer note no.1(B)(xiii)
(iii) Derivative Financial instruments - Refer note no.1(B)(vii)
The accounting policies are applied consistently to all the periods presented in the financial statements. All assets and liabilities have been
classified as current or non current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Act.
The financial statements are presented in INR, the functional currency of the Company. All amounts disclosed in the financial statements and
notes have been rounded off to the nearest lakhs as per the requirement of Schedule III, unless otherwise stated.
(ii) Use of Estimates and judgments:
The preparation of the financial statements requires the Management to make, judgments, estimates and assumptions that affect the reported
amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. The recognition, measurement, classification or disclosure of an item or information in the
financial statements is made relying on these estimates. The estimates and judgements used in the preparation of the financial statements
are continuously evaluated by the management and are based on historical experience and various other assumptions and factors (including
expectations of future events) that the management believes to be reasonable under the existing circumstances. Actual results may differ from
those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.
Critical accounting judgements and key source of estimation uncertainty
The Company is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not
readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are
considered to be relevant. The estimates and underlying assumptions are reviewed on an on-going basis.
(a) Recognition and measurement of defined benefit obligations, key actuarial assumptions - Refer Note no. 1(B)(xiii)
(b) Estimation of deferred tax expenses - Refer note no. 1B(xiv)
(iii) Property, plant and equipment (PPE)
Property, plant and equipment is stated at acquisition cost net of accumulated depreciation and impairment losses, if any.
The 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 costs of bringing the asset 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.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major
components) of property, plant and equipment. Subsequent expenditure are included in the assets carrying amount or recognized as a separate
asset, as appropriate only if it is probable that the future economic benefits associated with the item will flow to the Company and that the cost
of the item can be reliably measured.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of Profit and
Loss.
Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as "Capital work-in-progress”
(iv) Intangible assets
Intangible assets are stated at cost less accumulated amortisation and impairment loss, if any.
Intangible assets under development comprises of capitalisation of Payroll costs of those employees directly associated with Software
Development.
(v) Impairment
Property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying
amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell
and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of
those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs. If
such assets are considered to be impaired, the impairment to be recognized in the Statement of Profit and Loss, is measured by the amount by
which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the Statement
of Profit and Loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is
increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined
(net of any accumulated depreciation), had no impairment loss been recognized for the asset in prior years.
(vi) Depreciation and Amortization:
(a) Property plant and equipment (PPE)
Depreciation is provided on a pro-rata basis on the straight line method based on estimated useful life prescribed under Schedule II to the
Companies Act, 2013.
The residual values, useful lives and method of depreciation of property, plant and equipment are reviewed at each financial year end and
adjusted prospectively, if appropriate.
(b) Intangible assets
The useful lives of intangible assets are assessed as either finite or indefinite. Finite-life intangible assets are amortised on a straight-line basis
over the period of their expected useful lives.
The amortisation period and the amortisation method for finite life intangible assets is reviewed at each financial year end and adjusted
prospectively, if appropriate. For indefinite life intangible assets, the assessment of indefinite life is reviewed annually to determine whether it
continues, if not, it is impaired or changed prospectively based on revised estimates.
Intangible assets are amortised over their estimated useful life on a straight line basis as follows:
Type of Asset : Computer software
Useful life: 4 years
(vii) Financial Instruments:
Financial assets - Initial recognition:
Financial assets are recognised when the Company becomes a party to the contractual provisions of the instruments. On initial recognition, a
financial asset is recognised at fair value, except for trade receivables in case of Financial assets which are recognised at fair value through profit
and loss (FVTPL), its transaction costs are recognised in the statement of profit and loss. In other cases, the transaction costs are attributed to the
acquisition value of the financial asset.
Subsequent measurement:
Financial assets are subsequently classified as measured at:
- amortised cost
- fair value through profit & loss (FVTPL)
- fair value through other comprehensive income (FVTOCI)
The above classification is being determined considering the:
(a) the entity's business model for managing the financial assets and
(b) the contractual cash flow characteristics of the financial assets.
Financial assets are not reclassified subsequent to their recognition, except if and in the period the Company changes its business model for
managing financial assets.
(i) Measured at amortised cost:
Financial assets are subsequently measured at amortised cost, if these financial assets are held within a business module whose objective
is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified date
to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(ii) Measured at fair value through other comprehensive income (FVTOCI):
Financial assets are measured at FVTOCI, if these financial assets are held within a business model whose objective is achieved by both
collecting contractual cash flows that give rise on specified dates to solely payments of principal and interest on the principal amount
outstanding and by selling financial assets. Fair value movements are recognized in the other comprehensive income (OCI). Interest
income measured using the EIR method and impairment losses, if any are recognised in the Statement of Profit and Loss. On derecognition
of financial instruments other than equity instruments, cumulative gain or loss previously recognised in OCI is reclassified from the equity
to 'other income' in the Statement of Profit and Loss.
(iii) Measured at fair value through profit or loss (FVTPL):
Financial assets other than equity instrument are measured at FVTPL unless it is measured at amortised cost or at FVTOCI on initial
recognition. Such financial assets are measured at fair value with all changes in fair value, including interest income and dividend income
if any, recognised in the Statement of Profit and Loss.
Equity instruments:
On initial recognition, the Company can make an irrevocable election (on an instrument-by instrument basis) to present the subsequent changes in
fair value in other comprehensive income pertaining to investments in equity instruments. This election is not permitted if the equity investment is
heldfortrading.Theseelectedinvestmentsareinitiallymeasuredatfairvalueplustransactioncosts.Subsequently,theyaremeasuredatfairvaluewith
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 cumulative gain or loss is not reclassified to Statement of Profit and Loss on disposal of the investments.
Dividends on these investments in equity instruments are recognised in Statement of Profit and Loss when the Company's right to receive the
dividends is established, it is probable that the economic benefits associated with the dividend will flow to the entity, the dividend does not
represent a recovery of part of cost of the investment and the amount of dividend can be measured reliably. Dividends recognised in Statement
of Profit and Loss are included in the 'Other income'.
Impairment
The Company recognises a loss allowance for Expected Credit Losses (ECL) on financial assets that are measured at amortised cost and at
FVTOCI. The credit loss is difference between all contractual cash flows that are due to an entity in accordance with the contract and all the cash
flows that the entity expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate. This is assessed on an individual
or collective basis after considering all reasonable and supportable including that which is forward looking.
The Company's trade receivables or contract revenue receivables do not contain significant financing component and loss allowance on trade
receivables is measured at an amount equal to life time expected losses i.e. expected cash shortfall, being simplified approach for recognition
of impairment loss allowance.
Under simplified approach, the Company does not track changes in credit risk. Rather it recognizes impairment loss allowance based on
the lifetime ECL at each reporting date right from its initial recognition. The Company uses a provision matrix to determine impairment loss
allowance on the portfolio of trade receivables. The provision matrix is based on its historically observed default rates over the expected life of
the trade receivable and is adjusted for forward looking estimates. At every reporting date, the historical observed default rates are updated and
changes in the forward-looking estimates are analysed.
For financial assets other than trade receivables, the Company recognises 12-months expected credit losses for all originated or acquired
financial assets if at the reporting date the credit risk of the financial asset has not increased significantly since its initial recognition. The
expected credit losses are measured as lifetime expected credit losses if the credit risk on financial asset increases significantly since its initial
recognition. If, in a subsequent period, credit quality of the instrument improves such that there is no longer significant increase in credit risks
since initial recognition, then the Company reverts to recognizing impairment loss allowance based on 12 months ECL. The impairment losses
and reversals are recognised in Statement of Profit and Loss.
For equity instruments and financial assets measured at FVTPL, there is no requirement of impairment testing.
De-recognition
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers rights
to receive cash flows from an asset, 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
recognise the transferred asset to the extent of the Company's continuing involvement.
In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that
reflects the rights and obligations that the Company has retained.
Financial Liabilities
Initial Recognition and measurement
Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments. Financial liabilities are
initially recognised at fair value net of transaction costs for all financial liabilities not carried at fair value through profit or loss.
The Company's financial liabilities includes trade and other payables, loans and borrowings including bank overdrafts.
Subsequent measurement
Financial liabilities measured at amortised cost are subsequently measured at using Effective Interest Rate (EIR) method. Financial liabilities
carried at fair value through profit or loss are measured at fair value with all changes in fair value recognised in the Statement of Profit and Loss.
Loans & Borrowings:
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using EIR method. Gains and losses
are recognized in statement of profit and loss when the liabilities are derecognized as well as through EIR amortization process.
Financial Guarantee Contracts
Financial guarantee contracts issued by the Company are those contracts that requires a payment to be made or to reimburse the holder for
a loss it incurs because the specified debtors fails to make payment when due in accordance with the term of a debt instrument. Financial
guarantee contracts are recognized initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance
of the guarantee.
De-recognition
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 recognized in the statement of profit and loss.
Derivative financial instruments
The Company uses derivative financial instruments, such as forward foreign exchange contracts, to hedge its foreign currency risks. Such
derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are
subsequently remeasured at fair value, with changes in fair value recognised in Statement of Profit and Loss.
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 realise the assets and settle the liabilities simultaneously.
(viii) Fair Value Measurement
The Company measures financial instruments, such as, derivatives, investments at fair value at each balance sheet date. 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:
(a) In the principal market for the asset or liability, or
(b) 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.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the
asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Company
uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising
the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or
disclosed in the financial statements are categorised 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:
(i) Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
(ii) Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly
observable
(iii) 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 categorisation (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting period.
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
(ix) Investment in Subsidiary
Investment in Subsidiary has been carried at Cost less impairment, if any.
(x) Cash and Cash Equivalents:
Cash and Cash equivalents include cash and Cheque in hand, bank balances, demand deposits with banks and other short-term highly liquid
investments that are readily convertible to known amounts of cash & which are subject to an insignificant risk of changes in value where original
maturity is three months or less.
(xi) Foreign Currency Transactions:
a) Initial Recognition
Transactions in foreign currency are recorded at the exchange rate prevailing on the date of the transaction. Exchange differences arising on
foreign exchange transactions settled during the year are recognized in the Statement of Profit and Loss.
b) Measurement of Foreign Currency Items at the Balance Sheet Date
Foreign currency monetary items of the Company are restated at the closing exchange rates. Non monetary items are recorded at the
exchange rate prevailing on the date of the transaction. Exchange differences arising out of these transactions are charged to the Statement
of Profit and Loss.
(xii) Revenue Recognition:
The Company derives revenues primarily from information technology services comprising of software development, consulting and customer
support services, and from the licensing of software products and platforms.
Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration
expected to be received in exchange for those products or services.
Arrangements with customers for information technology services are either on a fixed-price, fixed-time frame or on a time-and-material basis.
Revenue on time-and-material contracts are recognized as the related services are performed and revenue from the end of the last invoicing
to the reporting date is recognized as unbilled revenue. Revenue from fixed-price, fixed-time frame contracts, where the performance
obligations are satisfied over time and where there is no uncertainty as to measurement or collectability of consideration, is recognized as
per the percentage-of-completion method. When there is uncertainty as to measurement or ultimate collectability, revenue recognition is
postponed until such uncertainty is resolved. Efforts or costs expended have been used to measure progress towards completion as there
is a direct relationship between input and productivity. Maintenance and support service revenue is recognized ratably over the term of the
underlying maintenance arrangement.
Revenues in excess of invoicing are classified as contract assets (which refer to as unbilled revenue) while invoicing in excess of revenues
are classified as contract liabilities (which refer to as Income billed in advance).Revenue from licenses where the customer obtains a "right to
use” the licenses is recognized at the time the license is made available to the customer. Revenue from licenses where the customer obtains
a "right to access” is recognized over the access period. Arrangements to deliver software products generally have three elements : license,
implementation and Annual Maintenance Services (AMS). The Company has applied the principles under Ind AS 115 to account for revenues
from these performance obligations. When implementation services are provided in conjunction with the licensing arrangement and the
license and implementation have been identified as two separate performance obligations, the transaction price for such contracts are allocated
to each performance obligation of the contract based on their relative standalone selling prices. In the absence of standalone selling price for
implementation, the performance obligation is estimated using the expected cost plus margin approach. Where the license is required to be
substantially customized as part of the implementation service, the entire arrangement fee for license and implementation is considered to be a
single performance obligation and the revenue is recognized using the percentage-of-completion method as the implementation is performed.
Revenue from client training, support and other services arising due to the sale of software products is recognized as the performance obligations
are satisfied. Annual Maintenance Service (AMS) revenue is recognized ratably over the period in which the services are rendered.
Contract modifications are accounted for when additions, deletions or changes are approved either to the contract scope or contract price. The
accounting for modifications of contracts involves assessing whether the services added to an existing contract are distinct and whether the
pricing is at the standalone selling price. Services added that are not distinct are accounted for on a cumulative catch-up basis, while those that
are distinct are accounted for prospectively, either as a separate contract, if the additional services are priced at the standalone selling price, or
as a termination of the existing contract and creation of a new contract if not priced at the standalone selling price.
The Company presents revenues net of indirect taxes in its Statement of Profit and Loss.
Interest
Revenue is recognised on a time proportion basis taking into account the amount outstanding and the interest rate applicable and based on
Effective interest rate method.
Dividend
Dividend Income is recognized when right to receive the same is established.
(xiii) Employee Benefits:
The Company provides following post-employment plans:
(a) Defined benefit plans such as gratuity
(b) Defined contribution plans such as Provident fund
a) Defined-benefit plan:
The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plan is the present value of defined benefit obligations
at the end of the reporting period less fair value of plan assets. The defined benefit obligations is calculated annually by actuaries through
actuarial valuation using the projected unit credit method.
The Company recognises the following changes in the net defined benefit obligation as an expense in the statement of profit and loss:
(a) Service costs comprising current service costs, past-service costs, gains and losses on curtailment and non-routine settlements; and
(b) Net interest expense or income
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and fair value of plan assets.
This cost is included in employee benefit expenses in the Statement of Profit & Loss.
Re-measurement comprising of actuarial gains and losses arising from
(a) Re-measurement of Actuarial(gains)/losses
(b) Return on plan assets, excluding amount recognized in effect of asset ceiling
(c) Re-measurement arising because of change in effect of asset ceiling are recognised in the period in which they occur directly in 'Other
comprehensive income'. Re-measurement are not reclassified to profit or loss in subsequent periods
Ind AS 19 requires the exercise ofjudgment in relation to various assumptions including future pay rises, inflation and discount rates and employee
and pensioner demographics. The Company determines the assumptions in conjunction with its actuaries, and believes these assumptions to
be in line with best practice, but the application of different assumptions could have a significant effect on the amounts reflected in the income
statement, other comprehensive income and balance sheet. There may be also interdependency between some of the assumptions.
b) Defined-contribution plan:
Under defined contribution plans, the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation
to pay additional sums. Defined Contribution plan comprise of contributions to the employees' provident fund with the government and certain
state plans like Employees' State Insurance and Employees' Pension Scheme. The Company's payments to the defined contribution plans are
recognised as expenses during the period in which the employees perform the services that the payment covers.
c) Other employee benefits:
(a) Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders
the related services are recognised as a liability at the present value of the obligation as at the Balance sheet date determined based on an
actuarial valuation.
(b) Undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are
recognised during the period when the employee renders the related services.
(xiv) Taxes on Income:
Income tax comprises current and deferred tax. Income tax expense is recognized in the statement of profit and loss except to the extent it
relates to items directly recognized in equity or in other comprehensive income.
Current tax is based on taxable profit for the year. Taxable profit is different from accounting profit due to temporary differences between
accounting and tax treatments, and due to items that are never taxable or tax deductible. Tax provisions are included in current liabilities.
Interest and penalties on tax liabilities are provided for in the tax charge. The Company offsets, the current tax assets and liabilities (on a year on
year basis) where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis or to realise the assets
and liabilities on net basis.
Deferred income tax is recognized using the balance sheet approach. Deferred income tax assets and liabilities are recognized for deductible
and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount in financial statements.
Deferred income tax asset are recognized 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 utilized. Deferred tax assets are not recognised
where it is more likely than not that the assets will not be realised in the future.
The carrying amount of deferred income 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 income tax asset to be utilized. Deferred income tax assets and
liabilities are measured at the tax rates that are expected to apply in the period when the asset is realized 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 items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
(xv) Borrowing Costs:
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are
capitalized as a part of Cost of that assets, during the period till all the activities necessary to prepare the Qualifying assets for its intended use
or sale are complete during the period of time that is required to complete and prepare the assets for its intended use or sale. Qualifying assets
are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Other borrowing costs are recognized as an expense in the period in which they are incurred.
(xvi) Earnings Per Share:
Basic earnings per shares are calculated by dividing the net profit or loss after tax for the period attributable to equity shareholders by the
weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to the equity shareholders and the weighted average number of shares outstanding during the period
is adjusted for the effects of all dilutive potential equity shares.
(xvii) Leases:
Where the Company is Lessee
The Company's lease asset classes primarily consist of leases for land and buildings . The Company assesses whether a contract contains a lease,
at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period
of time in exchange for consideration.
To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:
(i) the contract involves the use of an identified asset;
(ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease; and
(iii) the Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use asset ("ROU”) and a corresponding lease liability for all lease
arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these
short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of
the lease.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments
made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured
at cost less accumulated depreciation and impairment losses.
Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease
liabilities includes these options when it is reasonably certain that they will be exercised.
Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the
underlying asset. Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying
amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to
sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent
of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted
using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile
of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company changes its
assessment if whether it will exercise an extension or a termination option.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash
flows.
Where the Company is Lessor
Leases in which the Company does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases.
Assets subject to operating leases are included in property, plant and equipment. The Company recognizes lease rentals from the property
leased out, on accrual basis as per the terms of agreements entered with the counter parties. Costs, including depreciation, are recognized as an
expense in the Statement of Profit and Loss.
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