3. Material accounting policies

3.1 Revenue from operations

Revenue (other than for those items to which Ind AS 109
Financial Instruments are applicable) is measured at fair
value of the consideration received or receivable.

The Company recognises revenue from contracts with
customers based on a five-step model as set out in Ind
AS115:

Step 1: Identify contract(s) with a customer: A contract is
defined as an agreement between two or more parties that
creates enforceable rights and obligations and sets out the
criteria for every contract that must be met.

Step 2: Identify performance obligations in the contract: A
performance obligation is a promise in a contract with a
customer to transfer a good or a service to the customer.

Step 3: Determine the transaction price: The transaction
price is the amount of consideration to which the Company
expects to be entitled in exchange for transferring promised
goods or services to a customer, excluding amounts
collected on behalf of third parties.

Step 4: Allocate the transaction price to the performance
obligations in the contract: For a contract that has more
than one performance obligation, the Company allocates
the transaction price to each performance obligation in
an amount that depicts the amount of consideration to
which the Company expects to be entitled in exchange for
satisfying each performance obligation.

Step 5: Recognise revenue when (or as) the Company
satisfies a performance obligation.

Revenue includes the following:

(i) Brokerage fee income

Revenue from contracts with customers is recognised at
a point in time when performance obligation is satisfied
(when the trade is executed i.e., trade date). This includes
brokerage fees which is charged per transaction executed
on behalf of the customers.

(ii) Fee & commission income

This includes:

a) Income from investment banking activities, research,
and other fees:

Income from investment banking activities and other fees
is recognized as and when such services are completed /
performed and as per terms of agreement with the client (i.e.
when the performance obligation is completed). Research
fees income is recognised when the entity satisfies the
performance obligation by providing the service to the
client.

b) Income from depository operations:

Revenue from depository services on account of annual
maintenance charges have been accounted for over
the period of the performance obligation. Revenue from

depository services on account of transaction charges
is recognised at a point in time when the performance
obligation is completed.

c) Income from wealth management services:

Commission income (net of taxes and other statutory
charges) from distribution of financial products is recognized
based on mobilization and intimation received from clients/
intermediaries or over the period of service after deducting
claw back as per the agreed terms.

(iii) Interest income

Interest income on a financial asset at amortised cost
is recognised on a time proportion basis taking into
account the amount outstanding and the effective interest
rate (‘EIR’). The EIR is the rate that exactly discounts
estimated future cash flows of the financial assets
through the expected life of the financial asset or, where
appropriate, a shorter period, to the net carrying amount
of the financial instrument. The internal rate of return on
financial assets after netting off the fees received, and cost
incurred approximates the effective interest rate method
of return for the financial asset. The future cash flows are
estimated taking into account all the contractual terms of
the instrument.

The interest income is calculated by applying the EIR to
the gross carrying amount of non-credit impaired financial
assets (i.e. at the amortised cost of the financial asset
before adjusting for any expected credit loss allowance).
For credit-impaired financial assets the interest income
is calculated by applying the EIR to the amortised cost of
the credit-impaired financial assets (i.e. the gross carrying
amount less the allowance for ECLs).

(iv) Dividend income

Dividend income is recognized when the right to receive
the payment is established, it is probable that the economic
benefits associated with the dividend will flow to the entity
and the amount of the dividend can be measured reliably.
This is generally when the shareholders approves the
dividend.

(v) Net gain on fair value changes

Any realised gain or loss on sale of financial assets
(including investments, derivatives and stock in trade)
being classified as fair value through profit or loss
(“FVTPL”) is recognised as “Net gain or loss on fair value
changes” under “Revenue from operations” or “Expenses”
respectively in the statement of profit and loss.

Similarly, any differences between the fair values of
financial assets (including investments, derivatives and
stock in trade) being classified as fair value through profit or
loss (“FVTPL”), held by the Company on the balance sheet
date is recognised as an unrealised gain / loss. In cases
there is a net gain in the aggregate, the same is recognised
as “Net gain on fair value changes” under “Revenue from
operations” and if there is a net loss the same is disclosed
as “Net loss on fair value changes” under “Expenses” in the
statement of Profit and Loss.

(vi) Delayed payment charges

The same are accounted at a point in time of default.

(vii) Other income

In respect of other heads of Income it is accounted to the
extent it is probable that the economic benefits will flow
and the revenue can be reliably measured, regardless of
when the payment is being made. An entity shall recognise
a refund liability if the entity receives consideration from
a customer and expects to refund some or all of that
consideration to the customer.

3.2 Financial instruments

(i) Initial measurement of financial instruments

The classification of financial instruments at initial
recognition depends on their contractual terms and the
business model for managing the instruments, as described
in Note 4.1. Financial instruments are initially measured at
their fair value (as defined in Note 4.3), except in the case of
financial assets and financial liabilities recorded at FVTPL,
transaction costs are added to, or subtracted from, this
amount. Trade receivables are measured at the transaction
price. When the fair value of financial instruments at initial
recognition differs from the transaction price, the company
accounts for the Day 1 profit or loss, as described below.

When the transaction price of the instrument differs from
the fair value at origination and the fair value is based on a
valuation technique using only inputs observable in market
transactions, the company recognizes the difference
between the transaction price and fair value in net gain on
fair value changes.

(ii) Classification of financial instruments

The Company classifies its financial assets into the
following measurement categories:

1. Financial assets to be measured at amortised cost

2. Financial assets to be measured at fair value through
other comprehensive income (FVOCI)

3. Financial assets to be measured at fair value through
statement of profit and loss (FVTPL)

The classification depends on the contractual terms of the
financial assets' cash flows and the Company's business
model for managing financial assets.

The Company determines its business model at the level
that best reflects how it manages groups of financial assets
to achieve its business objective. The business model is
assessed on the basis of aggregated portfolios based on
observable factors. These factors include:

• Reports reviewed by the entity's key management
personnel on the performance of the financial assets

• The risks impacting the performance of the business
model (and the financial assets held within that
business model) and its management thereof

• The compensation of the managing teams (for
example, whether the compensation is based on the
fair value of the assets managed or on the contractual
cash flows collected)

• The expected frequency, value and timing of trades.

The business model assessment is based on reasonably
expected scenarios without taking 'worst case' or 'stress
case' scenarios into account.

The Company also assesses the contractual terms of
financial assets on the basis of its contractual cash flow
characteristics that are solely for the payments of principal
and interest on the principal amount outstanding.

'Principal' is defined as the fair value of the financial asset
at initial recognition and may change over the life of the
financial asset (for example, if there are repayments of
principal or amortisation of the premium/discount).

In making this assessment, the Company considers
whether the contractual cash flows are consistent with
a basic lending arrangement i.e. interest includes only
consideration for the time value of money, credit risk, other
basic lending risks and a profit margin that is consistent with
a basic lending arrangement. Where the contractual terms
introduce exposure to risk or volatility that are inconsistent
with a basic lending arrangement, the related financial
asset is classified and measured at fair value through profit
or loss.

iii) Financial Assets and Liabilities

(a) Financial assets measured at amortized cost

These financial assets comprise bank balances, loans,
trade receivables and other financial assets.

Financial Assets with contractual terms that give rise to cash
flows on specified dates, and represent solely payments
of principal and interest (SPPI) on the principal amount
outstanding; and are held within a business model whose
objective is achieved by holding to collect contractual cash
flows are measured at amortized cost.

These financial assets are initially recognised at fair
value plus directly attributable transaction costs and
subsequently measured at amortized cost. Transaction
costs are incremental costs that are directly attributable to
the acquisition, issue or disposal of a financial asset or a
financial liability.

(b) Financial assets measured at fair value through
other comprehensive income (FVOCI)

Debt instruments

Investments in debt instruments are measured at fair value
through other comprehensive income where they have:

a) contractual terms that give rise to cash flows on
specified dates, that represent solely payments
of principal and interest on the principal amount
outstanding; and

b) are held within a business model whose objective is
achieved by both collecting contractual cash flows
and selling financial assets.

These debt instruments are initially recognised at fair
value plus directly attributable transaction costs and
subsequently measured at fair value. Gains and losses
arising from changes in fair value are included in other
comprehensive income(OCI) (a separate component of
equity). Impairment losses or reversals, interest revenue
and foreign exchange gains and losses are recognised in
statement of profit and loss. Upon disposal, the cumulative
gain or loss previously recognised in other comprehensive
income is reclassified from equity to the statement of profit
and loss. As at the reporting date the Company does not
have any financial instruments measured at fair value
through other comprehensive income.

Equity instruments

Investment in equity instruments are generally accounted
for as at fair value through the statement of profit and loss
account unless an irrevocable election has been made
by management to account for at fair value through other
comprehensive income such classification is determined
on an instrument-by-instrument basis.

Amounts presented in other comprehensive income for
equity instruments are not subsequently transferred to

statement of profit and loss. Dividends on such investments
are recognised in statement of profit and loss.

(c) Financial assets measured through statement of
profit and loss

The financial assets are classified as FVTPL if these do not
meet the criteria for classifying at amortized cost or FVOCI.

Items at fair value through statement of profit and loss
comprise:

• Investments (including equity shares) and stock in
trade held for trading;

• Items specifically designated as fair value through profit
or loss on initial recognition;

• Debt instruments with contractual terms that do not
represent solely payments of principal and interest; and

• Derivative transactions

Financial instruments held at fair value through profit or
loss are initially recognised at fair value, with transaction
costs recognised in the statement of profit and loss as
incurred. Subsequently, they are measured at fair value
and any gains or losses are recognised in the statement of
profit and loss as they arise.

Financial instruments held for trading

A financial instrument is classified as held for trading if it is
acquired or incurred principally for selling or repurchasing
in the near term, or forms part of a portfolio of financial
instruments that are managed together and for which there
is evidence of short-term profit taking, or it is a derivative
not designated in a qualifying hedge relationship.

The profit/(loss) earned on sale of investments and
securities held for trading are recognised on trade date
basis. Profit or loss on sale of investments is determined
on the basis of the weighted average cost method and
securities held for trading on FIFO method. On disposal
of an investment, the difference between carrying amount
and net disposal proceeds is charged to or credited to
statement of profit and loss.

Trading derivatives and trading securities are classified as
held for trading and recognised at fair value.

(d) Financial liabilities

The Company classifies its financial liabilities at amortized
costs unless it has designated liabilities at fair value through
the statement of profit and loss such as derivative liabilities.

Debt securities and other borrowed funds

After initial measurement, debt issued and other borrowed
funds are subsequently measured at amortized cost.
Amortized cost is calculated by taking into account any
discount or premium on issue funds, and costs that are an
integral part of the EIR.

(e) Undrawn loan commitments

Undrawn loan commitments are commitments under
which, over the duration of the commitment, the
Company is required to provide a loan with pre-specified
terms to the customer. Undrawn loan commitments are
in the scope of the ECL requirements.

The nominal contractual value of undrawn loan
commitments, where the loan agreed to be provided is
on market terms, are not recorded in the balance sheet.
The nominal values of these instruments together with the
corresponding ECLs are disclosed in Note 7.

(f) Derivatives

The Company enters into derivative transactions being
equity derivative transactions in the nature of Futures and
Options in Equity Stock/Index and currency derivative
transactions in the nature of Futures and Options in
foreign currencies both entered into for trading purposes.
Derivatives are recorded at fair value and carried as assets
when their fair value is positive and as liabilities when their
fair value is negative. The notional amount and fair value
of such derivatives are disclosed separately. Changes in
the fair value of derivatives are included in net gain on fair
value changes.

(g) Recognition and derecognition of financial assets
and liabilities

A financial assets or financial liabilities are recognised in
the balance sheet when the Company becomes a party
to the contractual provisions of the instruments, which
are generally on trade date. Loans and receivables are
recognised when cash is advanced (or settled) to the
borrowers. Financial assets at fair value through statement
of profit or loss are recognised initially at fair value. All other
financial assets are recognised initially at fair value plus
directly attributable transaction costs.

The Company derecognises its financial assets when the
contractual cash flows from the asset expire or it transfers
its rights to receive contractual cash flows on the financial
assets in a transaction in which substantially all the risks
and rewards of ownership are transferred. Any interest in

transferred financial assets that is created or retained by
the Company is recognised as a separate asset or liability.
A financial liabilities are derecognised from the balance
sheet when the Company has discharged its obligation or
the contract is cancelled or expires.

(h) Impairment of financial assets
Overview of the ECL principles

The Company recognises loss allowances (provisions) for
expected credit losses on its financial assets (including
non-fund exposures) that are measured at amortised costs.

The Company applies a three-stage approach to measuring
expected credit losses (ECLs) for the following categories
of financial assets that are not measured at fair value
through statement of profit and loss:

• debt instruments measured at amortised cost

• loan commitments; and

• financial guarantee contracts.

Equity instruments are not subject to impairment under Ind
AS 109.

The ECL allowance provision is based on the credit losses
expected to arise over the life of the asset (the lifetime
expected credit loss), unless there has been no significant
increase in credit risk since origination, in which case,
the allowance is based on the 12 months expected credit
loss. Lifetime ECL are the expected credit losses resulting
from all possible default events over the expected life of
a financial instrument. The 12-month ECL is the portion
of Lifetime ECL that represent the ECLs that result from
default events on a financial instrument that are possible
within the 12 months after the reporting date.

Both Lifetime ECLs and 12-month ECLs are calculated on
either an individual basis or a collective basis, depending
on the nature of the underlying portfolio of financial
instruments. The Company has classified its loan portfolio
into Corporates / Firms, Individuals (HNIs) and Individuals
(Retail).

The Company has established a policy to perform an
assessment, at the end of each reporting period, of
whether a financial instrument's credit risk has increased
significantly since initial recognition, by considering the
change in the risk of default occurring over the remaining
life of the financial instrument. The Company does the
assessment of significant increase in credit risk at a
borrower level. If a borrower has various facilities having
different past due status, then the highest days past due

(DPD) is considered to be applicable for all the facilities of
that borrower.

Based on the above, the Company categorises its loans
into Stage 1, Stage 2 and Stage 3 as described below:

Stage 1

All exposures where there has not been a significant
increase in credit risk since initial recognition or that
has low credit risk at the reporting date and that are not
credit impaired upon origination are classified under this
stage. The Company classifies all standard advances and
advances upto 30 days default under this category. Stage
1 loans also include facilities where the credit risk has
improved and the loan has been reclassified from Stage 2.

Stage 2

All exposures where there has been a significant increase
in credit risk since initial recognition but are not credit
impaired are classified under this stage. 30 Days Past Due
is considered as significant increase in credit risk.

Stage 3

All exposures assessed as credit impaired when one
or more events that have a detrimental impact on the
estimated future cash flows of that asset have occurred are
classified in this stage. For exposures that have become
credit impaired, a lifetime ECL is recognised and interest
revenue is calculated by applying the effective interest
rate to the amortised cost (net of provision) rather than the
gross carrying amount. 90 Days Past Due is considered
as default for classifying a financial instrument as credit
impaired.

Credit-impaired financial assets

At each reporting date, the Company assesses whether
financial assets carried at amortised cost and debt financial
assets carried at FVOCI 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 assets have occurred.

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

a) Significant financial difficulty of the borrower or issuer;

b) A breach of contract such as a default or past due
event;

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

d) It is becoming probable that the borrower will enter
bankruptcy or other financial reorganisation; or

e) The disappearance of an active market for a security
because of financial difficulties.

Loan Commitments

When estimating lifetime ECL, for undrawn loan
commitments, the Company estimates the expected portion
of the loan commitment that will be drawn down over its
expected life. The ECL is then based on the present value
of the expected shortfalls in cash flows if the loan is drawn
down.

For margin funding facilities that include both a loan and an
undrawn commitment, ECL are calculated and presented
together with the loan. For loan commitments, the ECL is
recognised within Provisions. Margin trading facilities are
secured by collaterals. As per policy of the Company,
margin trading facilities to the extent covered by collateral
and servicing interest on a regular basis is not considered
as due/default.

Financial guarantee contracts

The Company's liability under financial guarantee is
measured at the higher of the amount initially recognised
less cumulative amortisation recognised in the statement
of profit and loss.

The mechanics of ECL

The Company calculates ECLs based on probability-
weighted scenarios to measure the expected cash
shortfalls, discounted at an approximation to the EIR.
A cash shortfall is the difference between the cash flows
that are due to the Company in accordance with the
contract and the cash flows that the Company expects to
receive.

The mechanics of the ECL calculations are outlined below
and the key elements are, as follows:

Probability of default (PD) - The Probability of Default is
an estimate of the likelihood of default over a given time
horizon. A default may only happen at a certain time over
the assessed period, if the facility has not been previously
derecognised and is still in the portfolio.

Exposure at default (EAD)- The Exposure at Default is an
estimate of the exposure at a future default date.

Loss given default (LGD) - The Loss Given Default is an
estimate of the loss arising in the case where a default

occurs at a given time. It is based on the difference between
the contractual cash flows due and those that the Company
would expect to receive, including from the realisation of
any collateral. It is usually expressed as a percentage of
the EAD.

Trade Receivables

The Company follows the Ind AS109 'simplified approach'
for recognition of impairment loss allowance on trade
receivables. The application of simplified approach does
not require the Company to track changes in credit risk.
Rather, it recognises impairment loss allowance based
on lifetime ECLs at each reporting date, right from its
initial recognition. The Company uses a provision matrix
to determine impairment loss allowance on portfolio of
its trade receivables. The provision matrix is based on its
historically observed default rates over the expected life of
the trade receivables and is adjusted for forward-looking
estimates. At every reporting date, the historical observed
default rates are updated for changes in the forward¬
looking estimates.

Company also writes off balances that are due generally
for more than one year and are not likely to be recovered.

Forward looking information

While estimating the expected credit losses, the Company
reviews macro-economic developments occurring in
the economy and market it operates in. On a periodic
basis, the Company analyses if there is any relationship
between key economic trends like GDP, unemployment
rates, benchmark rates set by the Reserve Bank of India,
inflation etc. with the estimate of PD, LGD determined by
the Company based on its internal data. While the internal
estimates of PD, LGD rates by the Company may not be
always reflective of such relationships, temporary overlays,
if any, are embedded in the methodology to reflect such
macro-economic trends reasonably.

Collateral Valuation

To mitigate its credit risks on financial assets, the Company
seeks to use collateral, wherever possible. The collateral
comes in various forms, such as equity shares, fixed
deposits, etc. However, the fair value of collateral affects the
calculation of ECLs. To the extent possible, the Company
uses active market data for valuing financial assets held as
collateral. Other financial assets which do not have readily
determinable market values are valued using models.

(i) Write-offs

The Company reduces the gross carrying amount of a
financial asset when the Company has no reasonable
expectations of recovering a financial asset in its entirety
or a portion thereof. This is generally the case when the
Company determines that the client or borrower does not
have assets or sources of income that could generate
sufficient cash flows to repay the amounts subjected to
write-offs. Any subsequent recoveries against such loans
are credited to the statement of profit and loss.

(j) Determination of fair value

On initial recognition, all the financial instruments are
measured at fair value. For subsequent measurement,
the Company measures certain categories of financial
instruments as explained in note 57 at fair value on 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:

i. In the principal market for the asset or liability, or

ii. 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 best economic 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.

In order to show how fair values have been derived,
financial instruments are classified based on a hierarchy of
valuation techniques, as summarised below:

Level 1 financial instruments - Those where the inputs
used in the valuation are unadjusted quoted prices from
active markets for identical assets or liabilities that the
Company has access to at the measurement date. The
Company considers markets as active only if there are
sufficient trading activities with regards to the volume and
liquidity of the identical assets or liabilities and when there
are binding and exercisable price quotes available on the
balance sheet date.

Level 2 financial instruments - Those where the inputs
that are used for valuation and are significant, are derived
from directly or indirectly observable market data available
over the entire period of the instrument's life. Such inputs
include quoted prices for similar assets or liabilities in
active markets, quoted prices for identical instruments in
inactive markets and observable inputs other than quoted
prices such as interest rates and yield curves, implied
volatilities, and credit spreads. In addition, adjustments
may be required for the condition or location of the asset or
the extent to which it relates to items that are comparable
to the valued instrument. However, if such adjustments
are based on unobservable inputs which are significant
to the entire measurement, the Company will classify the
instruments as Level 3.

Level 3 financial instruments - Those that include one
or more unobservable input that is significant to the
measurement as whole.

The Company recognises transfers between levels of the
fair value hierarchy at the end of the reporting period during
which the change has occurred.

Difference between transaction price and fair value at initial
recognition:

The best evidence of the fair value of a financial instrument
at initial recognition is the transaction price (i.e. the fair
value of the consideration given or received) unless the
fair value of that instrument is evidenced by comparison
with other observable current market transactions in the
same instrument (i.e. without modification or repackaging)
or based on a valuation technique whose variables include
only data from observable markets. When such evidence
exists, the Company recognises the difference between
the transaction price and the fair value in profit or loss on
initial recognition (i.e. on day one).

When the transaction price of the instrument differs from
the fair value at origination and the fair value is based on a
valuation technique using only inputs observable in market
transactions, the Company recognises the difference
between the transaction price and fair value in net gain on

fair value changes. In those cases where fair value is based
on models for which some of the inputs are not observable,
the difference between the transaction price and the fair
value is deferred and is only recognised in statement of
profit and loss when the inputs become observable, or
when the instrument is derecognised.

3.3 Expenses

(i) Borrowing / finance costs
Borrowing costs

Expenses related to borrowing cost are accounted using
effective interest rate. Borrowing costs are interest and
other costs (including exchange differences relating to
foreign currency borrowings to the extent that they are
regarded as an adjustment to interest costs) incurred in
connection with the borrowing of funds. Borrowing costs
directly attributable to acquisition or construction of an
asset which necessarily take a substantial period of time
to get ready for their intended use are capitalised as part of
the cost of that asset. Other borrowing costs are recognised
as an expense in the period in which they are incurred.

Finance costs

Finance costs represents Interest expense recognised
by applying the Effective Interest Rate (EIR) to the gross
carrying amount of financial liabilities other than financial
liabilities classified as FVTPL.

The EIR in case of a financial liability is computed

a. As the rate that exactly discounts estimated future cash
payments through the expected life of the financial
liability to the gross carrying amount of the amortised
cost of a financial liability.

b. By considering all the contractual terms of the financial
instrument in estimating the cash flows

c. Including all fees paid between parties to the contract
that are an integral part of the effective interest rate,
transaction costs, and all other premiums or discounts.

Any subsequent changes in the estimation of the future
cash flows is recognised in in the statement of profit and
loss with the corresponding adjustment to the carrying
amount of the assets.

Interest expense includes issue costs that are initially
recognized as part of the carrying value of the financial
liability and amortized over the expected life using
the effective interest method. These include fees and

commissions payable to advisers and other expenses such
as external legal costs, rating fee etc, provided these are
incremental costs that are directly related to the issue of a
financial liability

(ii) Retirement and other employee benefits
Short term employee benefit

All employee benefits including statutory bonus /
performance bonus / incentives payable wholly within
twelve months of rendering the service are classified
as short term employee benefits and are charged to the
statement of profit and loss of the year.

Post-employment employee benefits

a) Defined contribution schemes

Retirement / Employee benefits in the form of Provident
Fund, Employees State Insurance Scheme and Labour
Welfare Fund are considered as defined contribution plan
and contributions to the respective funds administered by
the Government are charged to the statement of profit and
loss of the year when the contribution to the respective
funds are due

b) Defined benefit schemes

Retirement benefits in the form of gratuity is considered
as defined benefit obligation. The scheme is formed by
the Company and fund is managed by insurers to which
the Company makes periodic contributions. The present
value of the obligation under such defined benefit plan
is determined based on actuarial valuation, carried out
by an independent actuary at each Balance Sheet date,
using the Projected Unit Credit Method, which recognizes
each period of service as giving rise to an additional unit
of employee benefit entitlement and measures each unit
separately to build up the final obligation.

The obligation is measured at the present value of the
estimated future cash flows. The discount rates used
for determining the present value of the obligation under
defined benefit plan are based on the market yields on
Government Securities as at the Balance Sheet date.

Re-measurement, comprising of actuarial gains and
losses and the return on plan assets (excluding amounts
included in net interest on the net defined benefit liability),
are recognized immediately in the balance sheet with a
corresponding debit or credit to retained earnings through
Other Comprehensive Income in the period in which they
occur. Re-measurements are not reclassified to profit and
loss in subsequent periods.

Other Long Term Benefits
Compensated absences

The employees can carry forward a portion of the
unutilized accrued compensated absences and utilize
it in future service periods. The Company records an
obligation for such compensated absences in the period
in which the employee renders the services that increase
the entitlement. The obligation is measured based on
independent actuarial valuation using the projected unit
credit method.

(iii) Share-based payments

Equity-settled share-based payments to employees that
are granted are measured by reference to the fair value
of the equity instruments at the grant date. The fair value
determined at the grant date of the equity-settled share-
based payments is expensed on a straight-line basis over
the vesting period, based on the Company's estimate
of equity instruments that will eventually vest, with a
corresponding increase in equity. At the end of each period,
the entity revises its estimates of the number of options that
are expected to vest based on the vesting conditions. It
recognises the impact of the revision to original estimates,
if any, in statement of profit and loss, with a corresponding
adjustment to equity.

In respect of options granted to the employees of the
subsidiary companies, the amount equal to the expense
for the grant date fair value of the award is recognized as
a debit to investment in subsidiary as a capital contribution
and a credit to equity.

(iv) Other expenses

All other expenses are recognized in the period they
accrue/occur.

(v) Impairment of non financial assets

Intangible assets and 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 to which the asset belongs.

The carrying amount of assets is reviewed at each balance
sheet date whether there is any indication that an asset

may be impaired. 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
amortization or depreciation) had no impairment loss been
recognised for the asset in prior years.

(vi) Taxes
Current Tax

Current tax assets and liabilities for the current and prior
years are measured in accordance with Income Tax Act,
1961 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, by 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 establishes provisions where
appropriate.

Deferred tax

Deferred tax assets and liabilities are recognised for
temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts. Deferred
income tax is determined using tax rates (and laws)
that have been enacted or substantively enacted by the
reporting date and are expected to apply when the related
deferred income tax asset is realised or the deferred
income tax liability is settled.

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

- Where the deferred tax liability arises from the initial
recognition of goodwill or 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

- In respect of taxable temporary differences associated
with investments in subsidiaries, where 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

- 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.

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.

Deferred tax assets and liabilities are offset where there
is a legally enforceable right to offset current tax assets
and liabilities and they relate to income taxes levied by
the same tax authority on the same taxable entity, or on
different tax entities, but they intend to settle current tax
liabilities and assets on a net basis or their tax assets and
liabilities are realised simultaneously.

Minimum Alternate Tax (MAT)

Minimum alternate tax (MAT) paid in a year is charged to the
statement of profit and loss as current tax. The Company
recognizes MAT credit available as a deferred tax asset
only to the extent that it is probable that the Company will
pay normal income tax during the specified period, i.e., the
period for which MAT credit is allowed to be carried forward.
In the year in which the Company recognizes MAT credit
as a deferred tax asset in accordance with the Guidance
Note on Accounting for Credit Available in respect of
Minimum Alternative Tax under the Income-tax Act, 1961,
the said deferred tax asset is created by way of credit to the
statement of profit and loss and shown as “Deferred Tax
Assets.” in the Balance Sheet. The Company reviews such
deferred tax asset at each reporting date and writes down
the deferred tax asset to the extent the Company does not
have convincing evidence that it will pay normal tax during
the specified period.

Goods and services tax paid on acquisition of assets
or on incurring expenses

Expenses and assets are recognised net of the goods and
services tax paid, except:

i. When the tax incurred on a purchase of assets or
services is not recoverable from the taxation authority,
in which case, the tax paid is recognised as part of
the cost of acquisition of the asset or as part of the
expense item, as applicable

ii. When receivables and payables are stated with the
amount of tax included

The net amount of tax recoverable from, or payable to,
the taxation authority is included as part of receivables or
payables in the balance sheet.

3.4 Foreign currency translation
Initial recognition:

Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing at
the dates of the transactions.

Conversion:

Monetary assets and liabilities denominated in foreign
currency, which are outstanding as at the reporting date,
are translated at the reporting date at the closing exchange
rate and the resultant exchange differences are recognised
in the Statement of Profit and Loss.

Non-monetary items that are measured at historical cost in

a foreign currency are translated using the spot exchange
rates as at the date of recognition.

3.5 Cash and cash equivalents

Cash and cash equivalents comprise the net amount
of short-term, highly liquid investments that are readily
convertible to known amounts of cash (short-term deposits
with an original maturity of three months or less) and are
subject to an insignificant risk of change in value, cheques
on hand and balances with banks. They are held for the
purposes of meeting short-term cash commitments (rather
than for investment or other purposes).

For the purpose of the statement of cash flows, cash and
cash equivalents are as defined above.

3.6 Property, plant and equipment

Property, plant and equipment (PPE) are measured at
cost less accumulated depreciation and accumulated
impairment, (if any). The total cost of assets comprises
its purchase price, freight, duties, taxes and any other
incidental expenses directly attributable to bringing the
asset to the location and condition necessary for it to
be capable of operating in the manner intended by the
management. Changes in the expected useful life are
accounted for by changing the amortisation period or
methodology, as appropriate, and treated as changes in
accounting estimates.

Subsequent costs are included in the asset's carrying
amount or recognized as a separate asset, as appropriate,
only when it is probable that future economic benefits
associated with the item will flow to the Company and the
cost of the item can be measured reliably. The carrying
amount of any component accounted for as a separate
asset is derecognized when replaced. All other repairs and
maintenance are charged to the Statement of Profit and
Loss during the reporting period in which they are incurred.

Depreciation :

Depreciation is calculated using the WDV method to write
down the cost of property, plant and equipment to their
residual values over their estimated useful lives which is in
line with the estimated useful life as specified in Schedule
II of the Companies Act, 2013 except for Leasehold
Improvements which are amortised on a straight-line basis
over the period of lease or estimated period of useful life
of such improvement, subject to a maximum period of 36
months. Leasehold improvements include all expenditure
incurred on the leasehold premises that have future
economic benefits.

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.

Property plant and equipment is derecognised on disposal
or when no future economic benefits are expected from
its use. 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
recognised in other income / expense in the statement of
profit and loss in the year the asset is derecognised. The
date of disposal of an item of property, plant and equipment
is the date the recipient obtains control of that item in
accordance with the requirements for determining when a
performance obligation is satisfied in Ind AS 115.

3.7 Intangible assets

An intangible asset is recognised only when its cost can
be measured reliably and it is probable that the expected
future economic benefits that are attributable to it will flow
to the Company.

Intangible assets acquired separately are measured on
initial recognition at cost. The cost of an intangible asset
comprises its purchase price and any directly attributable
expenditure on making the asset ready for its intended
use and net of any trade discounts and rebates. Following
initial recognition, intangible assets are carried at cost
less any accumulated amortisation and any accumulated
impairment losses.

The useful lives of intangible assets are assessed to be
either finite or indefinite. Intangible assets with finite
lives are amortised over the useful economic life. The
amortisation period and the amortisation method for an
intangible asset with a finite useful life are reviewed at
least at each financial year-end. Changes in the expected
useful life, or the expected pattern of consumption of future
economic benefits embodied in the asset, are accounted
for by changing the amortisation period or methodology,
as appropriate, which are then treated as changes in
accounting estimates. The amortisation expense on
intangible assets with finite lives is presented as a separate
line item in the statement of profit and loss. Amortisation
on assets acquired/sold during the year is recognised on
a pro-rata basis to the Statement of Profit and Loss from /
upto the date of acquisition/sale.

Amortisation is calculated using the straight-line method
to write down the cost of intangible assets to their residual
values over their estimated useful lives. Intangible assets
comprising of software are amortised on a straight-line
basis over a period of 3 years from the start of the year of
acquisition irrespective of the date of acquisition, unless it
has a shorter useful life.

The Company's intangible assets consist of computer
software with finite life.

Gains or losses from derecognition of intangible assets
are measured as the difference between the net disposal
proceeds and the carrying amount of the asset are
recognised in the Statement of Profit and Loss when the
asset is derecognised.

3.8 Leases (As a lessee)

(i) Identifying a lease

At the inception of the contract, the Company assesses
whether a contract is, or contain, a lease. 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. The Company assesses
whether:

- The contract involves the use of an identified asset, this
may be specified explicitly or implicitly.

- The Company has the right to obtain substantially all of
the economic benefits from use of the asset throughout
the period of use; and

- The Company has right to direct the use of the asset.

(ii) Recognition of right of use asset

The Company recognises a right of use asset at the lease
commencement date of lease and comprises of the initial
lease liability amount, plus any indirect costs incurred
and an estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset or site
on which it is located, less any lease incentives received.

(iii) Subsequent measurement of right of use asset

The right of use asset is subsequently amortized using the
straight-line method from the commencement date to the
earlier of the end of the useful life of the right of use asset or
the end of the lease term, whichever is lesser. In addition,
the right of use asset is periodically reduced by impairment
losses, if any, and adjusted for certain re-measurement of
the lease liability.

(iv) Recognition of lease liability

The lease liability is initially measured at the present value of
the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the
lease or, if that rate cannot be readily determined, the
Company's incremental borrowing rate. Lease payments
included in the measurement of the lease liability comprise
the fixed payments, including in-substance fixed payments
and lease payments in an optional renewal period if the
Company is reasonably certain to exercise an extension
option.

(v) Subsequent measurement of lease liability

The lease liability is measured at amortised cost using the
effective interest method. It is remeasured when there is
a change in future lease payments arising from a change
in rate, Whenever the lease liability is remeasured, a
corresponding adjustment is made to the carrying amount
of the ROU asset, or is recorded in profit or loss if the
carrying amount of the ROU asset has been reduced to
zero.

The lease payments are apportioned between the finance
charges and reduction of the lease liability using the
incremental borrowing rate implicit in the lease to achieve
a constant rate of interest on the remaining balance of the
liability.

(vi) Short-term leases and leases of low-value assets

The company has elected by class of underlying asset to
not recognise right of use assets and lease liabilities for
short term leases that have a lease term of 12 months or
less and leases for which the underlying asset is of low
value.