2 Material accounting policies i

(i) Basis of preparation

The standalone financial statements have been
prepared in accordance with Indian Accounting
Standards (‘Ind AS’) notified under Section 133 of
the Companies Act, 2013 read with the Companies
(Indian Accounting Standards) Rules, 2015 and other
relevant provisions of the Act, as amended from time
to time.

The standalone financial statements have been
prepared on a historical cost basis, except for fair
value through other comprehensive income (FVOCI)
instruments, derivative financial instruments, other
financial assets held for trading and financial assets
and liabilities designated at fair value through profit or
loss (FVTPL), defined benefit plan asset/ liability, share
based payments, all of which have been measured at
fair value.

Accounting policies have been consistently applied
except where newly issued accounting standard is
adopted during the current year or a revision to an
existing accounting standard requires a change in the
accounting policy hitherto in use.

The Company’s financial statements are presented in
Indian Rupees (=?), which is also its functional currency
and the currency of the primary economic environment
in which the Company operates and all values are
rounded to the nearest million, except when otherwise
indicated.

The standalone financial statements for the year
ended March 31, 2025 are being authorised for issue in
accordance with a resolution of the Board of Directors
passed on April 15, 2025.

(ii) Presentation of financial statements

The Company presents its balance sheet in order
of liquidity in compliance with the Division III of the
Schedule III to The Companies Act, 2013. An analysis
regarding recovery or settlement within 12 months
after the reporting date (current) and more than 12
months after the reporting date (non-current) is
presented in Note 45.

Financial assets and financial liabilities are generally
reported on gross basis in the balance sheet. They
are offset and reported net only when, in addition
to having an unconditional legally enforceable right
to offset the recognised amounts without being
contingent on a future event, the parties also intend
to settle simultaneously on a net basis in all of the
following circumstances:

a. The normal course of business

b. The event of default

c. The event of insolvency or bankruptcy of the
Group and/or its counterparties

(iii) Use of estimates and judgements

The preparation of the financial statements in
conformity with Ind AS requires that management
make judgments, estimates and assumptions that
affect the application of accounting policies and the
reported amounts of assets, liabilities and disclosures
of contingent assets and liabilities as of the date of
the financial statements and the income and expense
for the reporting period. The actual results could
differ from these estimates. Estimates and underlying
assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in
the period in which the estimate is revised and in any
future periods affected.

The Company makes certain judgments and estimates
for valuation and impairment of financial instruments,
fair valuation of employee stock options, incentive
plans, useful life of property, plant and equipment,
deferred tax assets, provision and contingencies,
leases and defined benefit obligations. Management
believes that the estimates used in the preparation of
the financial statements are prudent and reasonable.

Changes in estimates are reflected in the financial
statements in the period in which changes are made
and, if material, their effects are disclosed in the notes
to the financial statements.

a) Determination of the estimated useful lives
of tangible assets: Useful lives of property, plant
and equipment are taken as prescribed in Schedule
II of the Act. In cases, where the useful lives are
different from that prescribed in Schedule II and
in case of intangible assets, they are estimated by
management based on technical advice, taking
into account the nature of the asset, the estimated
usage of the asset, the operating conditions of the
asset, past history of replacement, anticipated
technological changes, manufacturers’ warranties
and maintenance support.

b) Recognition and measurement of defined
benefit obligations: The obligation arising from
defined benefit plan is determined on the basis of
actuarial assumptions. Key actuarial assumptions
include discount rate, trends in salary escalation,
actuarial rates and life expectancy. The discount
rate is determined by reference to market yields
at the end of the reporting period on government
bonds. The period to maturity of the underlying
bonds correspond to the probable maturity of
the post-employment benefit obligations. Due to
complexities involved in the valuation and its long
term nature, defined benefit obligation is sensitive
to changes in these assumptions. Further details
are disclosed in note 42.

c) Recognition of deferred tax assets / liabilities:

Deferred tax assets and liabilities are recognized
for the future tax consequences of temporary

differences between the carrying values of assets
and liabilities and their respective tax bases.
Deferred tax assets are recognized to the extent
that it is probable that future taxable income
will be available against which the deductible
temporary differences could be utilized. Further
details are disclosed in note 40.

d) Recognition and measurement of provision
and contingencies: The recognition and
measurement of other provisions are based on
the assessment of the probability of an outflow
of resources, and on past experience and
circumstances known at the reporting date. The
actual outflow of resources at a future date may
therefore, vary from the amount included in other
provisions.

e) Fair valuation of employee share options:

The fair valuation of the employee share options
is based on the Black-Scholes model used for
valuation of options - risk free interest rate,
expected life of options, expected volatility and
expected dividend yield. Further details are
discussed in note 38.

f) Determining whether an arrangement
contains a lease: In determining whether an
arrangement is, or contains a lease is based
on the substance of the arrangement at the
inception of the lease. The arrangement is, or
contains, a lease if fulfilment of the arrangement
is dependent on the use of a specific asset or
assets and the arrangement conveys a right to
use the asset, even if that right is not explicitly
specified in the arrangement.

g) Impairment of financial assets: The Company
recognizes loss allowances for expected credit
losses on its financial assets measured at
amortized cost. At each reporting date, the
Company assesses whether financial assets
carried at amortized cost are credit- impaired.
A financial asset is ‘credit impaired’ when one or
more events that have a detrimental impact on
the estimated future cash flows of the financial
asset have occurred.

(iv) Revenue from Contracts with Customers

Revenue towards satisfaction of a performance obligation is
measured at the amount of transaction price (net of variable
consideration) allocated to that performance obligation.
The transaction price of services rendered is net of variable
consideration on account of various discounts and schemes
offered by the Company as a part of contract.

The Company recognises revenue from contracts with
customers based on a five step model as set out in Ind AS
115:

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 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
Ý 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.

The Company recognises revenue from the following
sources:

a. Income from services rendered as a broker is recognised
upon rendering of the services on trade date basis, in
accordance with the terms of contract.

b. Fee income including investment banking, advisory
fees, debt syndication, financial advisory services,
etc., is recognised based on the stage of completion of
assignments and terms of agreement with the client.

c. Commissions from distribution of financial products
are recognised upon allotment of the securities to the
applicant.

d. Interest income is recognized using the effective
interest rate method. Interest is earned on delayed
payments from customers and is recognised on
a time proportion basis taking into account the
amount outstanding from customers and the rates
applicable.

e. Dividend income is recognised when the right to
receive payment of the dividend is established, it is
probable that the economic benefits associated with
the dividend will flow to the Company and the amount
of the dividend can be measured reliably.

f. Subscription based income is recognised when the
performance obligation has been satisfied. Lifetime
subscriptions based revenue are recognised at a point
in time and other subscriptions are recognised over
period of time based on subscription period.

(v) Property, Plant and Equipment (PPE)

Recognition and Measurement:

Property, plant and equipment are stated at acquisition
cost less accumulated depreciation and accumulated
impairment losses, if any. Subsequent costs are included in
the asset’s carrying amount.

Items of property, plant and equipment are initially recorded
at cost. Cost comprises acquisition cost, borrowing cost
if capitalization criteria are met, and directly attributable
cost of bringing the asset to its working condition for the
intended use. Subsequent expenditure relating to property,
plant and equipment is capitalized only when it is probable
that future economic benefit associated with these will flow
with the Company and the cost of the item can be measured
reliably.

The assets individually costing up to ^ 5,000/- are
depreciated fully in the year of acquisition.

Items of Property, plant and equipment that have been
retired from active use and are held for disposal are stated
at the lower of their net book value or net realisable value
and are shown separately in the financial statements, if
any.

Depreciation:

Depreciation provided on property, plant and equipment
is calculated on a straight-line basis using the rates
arrived at based on the useful lives estimated by
management.

process is technically and commercially feasible, future
economic benefits are probable, and the Company intends
to and has sufficient resources to complete development
and to use or sell the asset. Otherwise it is recognized in the
profit or loss as incurred. Subsequent to initial recognition,
the asset is measured at cost less accumulated amortization
and any accumulated impairment losses.

Amortisation

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 and is included in
the depreciation and amortization in the statement of profit
and loss. The amortisation period and the amortisation
method are reviewed at each reporting date.

*Based on technical evaluation, the management believes
that the useful lives as given above best represent the
period over which management expects to use these assets.
Hence, the useful lives for these assets is different from the
useful lives as prescribed under Part C of Schedule II of The
Companies Act 2013.

Depreciation is provided on a straight-line basis from the
date the asset is ready for its intended use. In respect of
assets sold, depreciation is provided up to the date of
disposal.

The residual values, estimated useful lives and methods of
depreciation of property, plant and equipment are reviewed
at the end of each financial year and changes if any, are
accounted for on a prospective basis.

Capital work-in-progress and Capital advances:

Capital work-in-progress are property, plant and equipment
which are not yet ready for their intended use. Advances
given towards acquisition of fixed assets outstanding
at each reporting date are shown as other non-financial
assets.

Depreciation is not recorded on capital work-in-progress
until construction and installation is completed and assets
are ready for its intended use.

De-recognition:

The carrying amount of an item of property, plant and
equipment is derecognized on disposal or when no future
economic benefits are expected from its use or disposal.
Gains or losses arising from de-recognition, disposal or
retirement of an item of property, plant and equipment
are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are
recognised net, within “Other Income” or “Other Expenses”,
as the case maybe, in the Statement of Profit and Loss in the
year of de-recognition, disposal or retirement.

(vi) Intangible Assets

Intangible assets acquired separately are measured on
initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less accumulated
amortization. Cost of an intangible asset includes purchase
price, non-refundable taxes and duties and any other
directly attributable expenditure on making the asset ready
for its intended use and net of any trade discounts and
rebates.

Development expenditure on software is capitalized as
part of the cost of the resulting intangible asset only if
the expenditure can be measured reliably, the product or

The carrying amount of an item of intangible assets is
derecognized on disposal or when no future economic
benefits are expected from its use or disposal. Gains or
losses arising from de-recognition, disposal or retirement of
an item of intangible assets are measured as the difference
between the net disposal proceeds and the carrying amount
of the asset and are recognised net, within “Other Income”
or “Other Expenses”, as the case maybe, in the Statement
of Profit and Loss in the year of de-recognition, disposal or Ý
retirement.

(vii) Financial instruments

Recognition and Initial Measurement

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

The Company recognizes all the financial assets and
liabilities at its fair value on initial recognition; In the case
of financial assets not valued at fair value through profit
or loss, transaction costs that are directly attributable to
the acquisition or issue of the financial asset are added to
the fair value on initial recognition. The financial assets are
accounted on a trade date basis.

Classification and subsequent measurement of financial
asset: For subsequent measurement, financial assets are
categorised into:

a. Amortised cost: The Company classifies the financial
assets at amortised cost if the contractual cash flows
represent solely payments of principal and interest on
the principal amount outstanding and the assets are
held under a business model to collect contractual cash

„ Iflows. The gains and losses resulting from fluctuations

in fair value are not recognised for financial assets
classified in amortised cost measurement category.

b. Fair value through other comprehensive income
(FVOCI): The Company classifies the financial assets
as FVOCI if the contractual cash flows represent solely
payments of principal and interest on the principal
amount outstanding and the Company’s business
model is achieved by both collecting contractual
cash flow and selling financial assets. In case of
debt instruments measured at FVOCI, changes in fair
value are recognised in other comprehensive income.
Other net gains and losses are recognized in other
comprehensive income (OCI). The impairment gains or
losses, foreign exchange gains or losses and interest
calculated using the effective interest method are
recognised in profit or loss. On de-recognition, the

cumulative gain or loss previously recognised in other
comprehensive income is re-classified from equity to
profit or loss as a reclassification adjustment. In case
of equity instruments irrevocably designated at FVOCI,
gains / losses including relating to foreign exchange,
are recognised through other comprehensive income.
Further, cumulative gains or losses previously
recognised in other comprehensive income remain
permanently in equity and are not subsequently
transferred to profit or loss on derecognition.

c. Fair value through profit or loss (FVTPL): The

financial assets are classified as FVTPL if these do
not meet the criteria for classifying at amortised
cost or FVOCI. Further, in certain cases to eliminate
or significantly reduce a measurement or recognition
, ¹ inconsistency (accounting mismatch), the Company
irrevocably designates certain financial instruments
at FVTPL at initial recognition. In case of financial
assets measured at FVTPL, changes in fair value are
recognised in profit or loss.

Profit or loss on sale of investments is determined on
the basis of first-in-first-out (FIFO) basis.

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:

- In the principal market for the asset or liability, or

- 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.

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.

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

Based on the Company’s , business model for
managing the investments, the Company has

classified its investments and securities for trade at
FVTPL.

Financial liabilities are carried at amortised cost using
the effective interest rate method. For trade and other
payables, the carrying amount approximates the fair
value due to short maturity of these instruments.

d. Derecognition: The Company derecognises a financial
asset when the contractual rights to the cash flows
from the financial asset expire, or it transfers the rights
to receive the contractual cash flows in a transaction
in which substantially all of the risks and rewards of
ownership of the financial asset are transferred or
in which the Company neither transfers nor retains
substantially all of the risks and rewards of ownership
and does not retain control of the financial asset. The
Company derecognises a financial liability when its
contractual obligations are discharged or cancelled, or
expire.

e. Impairment of financial assets: In accordance with
Ind AS 109, the Company applies expected credit
loss model (ECL) for measurement and recognition
of impairment loss. The Company recognises lifetime
expected losses for all contract assets and / or all
trade receivables that do not constitute a financing
transaction. At each reporting date, the Company
assesses whether the loans have been impaired. The
Company is exposed to credit risk when the customer
defaults on his contractual obligations. For the
computation of ECL, the loan receivables are classified
into three stages based on the default and the aging of
the outstanding. If the amount of an impairment loss
decreases in a subsequent period, and the decrease
can be related objectively to an event occurring after
the impairment was recognised, the excess is written
back by reducing the loan impairment allowance
account accordingly. The write-back is recognised
in the statement of profit and loss. The Company
recognises life time expected credit loss for trade
receivables and has adopted the simplified method
of computation as per Ind AS 109. The Company
considers outstanding overdue for more than 90 days
for calculation of expected credit loss. A financial asset
is written off when there is no reasonable expectation
of recovering the contractual cash flows.

f. Subsequent reclassification- Financial assets are
not reclassified subsequent to their initial recognition
unless the Group changes its business model for
managing financial assets, in which case all affected
financial assets are reclassified on the first day of
the first reporting period following the change in the
business model.

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

(viii) Employee benefits

a. Short term employee benefits

Short term employee benefits include salaries and
short term cash bonus. A liability is under short-term
cash bonus or target based incentives if the Company
has a present legal or constructive obligation to pay
this amount as a result of past service provided by
the employee, and the obligation can be estimated
reliably. These costs are recognised as an expense in
the Statement of Profit and Loss at the undiscounted
amount expected to be paid over the period of services
rendered by the employees to the Company.

b. Defined benefit plans
Gratuity

The Company pays gratuity, a defined benefit plan,
to its employees whose employment terminates after
a minimum period of five years of continuous service
on account of retirement or resignation. In the case of
employees at overseas locations, same will be paid
as per rules in force in the respective countries. The
Company makes contributions to the ICICI Securities
Employees Gratuity Fund which is managed by ICICI
Prudential Life Insurance Company Limited for the
settlement of gratuity liability.

A defined benefit plan is a post-employment benefit
plan other than a defined contribution plan. The
Company’s net obligation in respect of the defined
benefit plan is calculated by estimating the amount of
future benefit that employee has earned in exchange
of their service in the current and prior periods and
discounted back to the current valuation date to arrive
at the present value of the defined benefit obligation.
The defined benefit obligation is deducted from the
fair value of plan assets, to arrive at the net asset /
(liability), which need to be provided for in the books of
accounts of the Company.

As required by the Ind AS 19, the discount rate used
to arrive at the present value of the defined benefit
obligations is based on the Indian Government
security yields prevailing as at the balance sheet date
that have maturity date equivalent to the tenure of the
obligation.

The calculation is performed by an actuary using the
projected unit credit method. When the calculation
results in a net asset position, the recognized asset
is limited to the present value of economic benefits
available in form of reductions in future contributions.

Re-measurements arising from defined benefit plans
comprises of actuarial gains and losses on benefit
obligations, the return on plan assets in excess of what
has been estimated and the effect of asset ceiling,
if any, in case of over funded plans. The Company
recognizes these items of remeasurements in other
comprehensive income and all the other expenses
related to defined benefit plans as employee benefit
expenses in their profit and loss account.

When the benefits of the plan are changed, or when
a plan is curtailed or settlement occurs, the portion
of the changed benefit related to past service by
employees, or the gain or loss on curtailment or
settlement, is recognized immediately in the profit or
loss account when the plan amendment or when a
curtailment or settlement occurs.

c. Defined contribution plan
Provident fund

Retirement benefit in the form of provident fund
is a defined contribution scheme. The Company is
statutorily required to contribute a specified portion of
the basic salary of an employee to a provident fund
as part of retirement benefits to its employees. The
contributions during the year in which the services
are rendered by the employee are charged to the
statement of profit and loss.

d. Compensated absence

The employees can carry forward a portion of the
unutilized accrued compensated absences and utilize it
in future service periods or receive cash compensation
on termination of employment. 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

on the basis of independent actuarial valuation using
the projected unit credit method. Actuarial losses/
gains are recognized in the statement of profit and
loss as and when they are incurred.

e. Long term incentive

The Company has a long term incentive plan which is
paid in three annual tranches. The Company accounts
for the liability as per an actuarial valuation. The
actuarial valuation of the long term incentives liability
is calculated based on certain assumptions regarding
prevailing market yields of Indian government
securities and staff attrition as per the projected
unit credit method made at the end of each reporting
period. The actuarial losses/gains are recognised in
the statement of profit and loss in the period in which
they arise.

f. Share based payment arrangements

Equity-settled share-based payments to employees
are measured at 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.

ICICI Bank Limited, the parent company, also grants
options to eligible employees of the Company under
ICICI Bank Employee Stock Option Scheme. The Ý
options vest over a period of three years. The fair value
determined on the grant date is expensed on a straight
line basis over the vesting period with a corresponding
increase in the equity as a contribution from the parent
company.

g. Other defined contribution plans

The Defined contribution plans are the plans in which
the Company pays pre-defined amounts to separate
funds and does not have any legal or constrictive
obligation to pay additional sums. The Company makes
contributions towards National Pension Scheme
(“NPS”) which is a defined contribution retirement
benefit plans for employees who have opted for the
contribution towards NPS.

The Company also makes contribution towards
Employee State Insurance Scheme (“ESIC”) which is
a contributory scheme providing medical, sickness,
maternity, and disability benefits to the insured
employees under the Employees State Insurance Act,
1948 in respect of qualifying employees.

(ix) Borrowing costs

Borrowing costs include interest expense as per the effective
interest rate (EIR) and other costs incurred by the Company
in connection with the borrowing of funds. Borrowing costs
directly attributable to acquisition or construction of those
tangible assets which necessarily take a substantial period
of time to get ready for their intended use are capitalized.
Other borrowing costs are recognized as an expense in the
year in which they are incurred. The difference between
the discounted amount mobilized and redemption value
of commercial papers is recognized in the statement of
profit and loss over the life of the instrument using the
EIR

Repo transactions are treated as collateralized lending and
borrowing transactions, with an agreement to repurchase/
resale, on the agreed terms and accordingly disclosed in the
financial statements. The difference between consideration
amount of the first leg and the second leg of the repo
transaction is reckoned as Repo Interest. As regards repo/
reverse repo transactions outstanding on the balance sheet
date, only the accrued income/ expenditure till the balance

sheet date is taken to the Statement of Profit and Loss.
Any repo income/ expenditure for the remaining period is
recognised in the next accounting period.

(x) Foreign exchange transactions

The functional currency and the presentation currency
of the Company is Indian Rupees. Transactions in foreign
currency are recorded on initial recognition using the
exchange rate at the transaction date. Monetary assets and
liabilities denominated in foreign currencies are translated
at the functional currency closing rates of exchange at
the reporting date. Exchange differences arising on the
settlement or translation of monetary items are recognized
in the statement of profit and loss in the period in which
they arise.

Assets and liabilities of foreign operations are translated
at the closing rate at each reporting period. Income and
expenses of foreign operations are translated at monthly
average rates. The resultant exchange differences are
recognized in other comprehensive income in case of
foreign operation whose functional currency is different
from the presentation currency and in the statement of
profit and loss for other foreign operations. Non-monetary
items which are carried at historical cost denominated in a
foreign currency are reported using the exchange rate at
the date of the transaction.

(xi) Leases

The Company’s lease asset classes primarily consist of
leases for premises and leasehold improvements. The
Company assesses whether a contract contains a lease,
at inception of a contract. 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. The Company uses significant
judgement in assessing the lease term (including anticipated
renewals) and the applicable discount rate.

The Company determines the lease term as the non¬
cancellable period of a lease, together with both periods
covered by an option to extend the lease if the Company
is reasonably certain to exercise that option; and periods
covered by an option to terminate the lease if the Company
is reasonably certain not to exercise that option. In
assessing whether the Company is reasonably certain to
exercise an option to extend a lease, or not to exercise an
option to terminate a lease, it considers all relevant facts
and circumstances that create an economic incentive for
the Company to exercise the option to extend the lease,
or not to exercise the option to terminate the lease. The
Company revises the lease term if there is a change in the
non-cancellable period of a lease.

The discount rate is generally based on the incremental
borrowing rate of the Company, specific to the lease
being evaluated or for a portfolio of leases with similar
characteristics.

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 (underlying
asset of less than ^ 1,50,000). 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.

Certain lease arrangements include the option 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.

The right-of-use assets are initially recognized at cost,
which comprises the initial amount of the lease liability
adjusted for any prepaid lease plus any initial direct costs.
They are subsequently measured at cost less accumulated
depreciation.

Right-of-use assets are depreciated from the
commencement date on a straight-line basis over the lease
term.

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 incremental borrowing
rate of the company. Lease liabilities are re-measured with
a corresponding adjustment to the related right of use asset
if the Company changes its assessment on 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 of
have been classified as cash flow generated from financing
activity.

(xii) Income tax

The income tax expense comprises current and deferred tax
incurred by the Company. Income tax expense is recognised
in the income statement except to the extent that it relates
to items recognised directly in equity or OCI, in which case
the tax effect is recognised in equity or OCI. Income tax
payable on profits is based on the applicable tax laws in
each tax jurisdiction and is recognised as an expense in the
period in which profit arises.

a) Current tax

Current tax is the expected tax payable/receivable
on the taxable income or loss for the period, using
tax rates enacted for the reporting period and any
adjustment to tax payable/receivable in respect of
previous years. Current tax assets and liabilities are
offset only if, the Company has a legally enforceable
right to set off the recognised amounts; and intends
either to settle on a net basis, or to realise the asset
and settle the liability simultaneously.

b) Deferred tax

Deferred tax is recognised in respect of temporary
differences between the carrying amounts of assets
and liabilities for financial reporting purpose and
the amounts for tax purposes. The measurement of
deferred tax reflects the tax consequences that would
follow from the manner in which the Company expects,
at the reporting date, to recover or settle the carrying
amount of its assets and liabilities.

Deferred tax liabilities are generally recognised for
all taxable temporary differences and deferred tax
assets are recognised, for all deductible temporary
differences, to the extent it is probable that future
taxable profits will be available against which
deductible temporary differences can be utilised.
Deferred tax is measured at the tax rates that are
expected to be applied to the temporary differences
when they reverse, based on the laws that have been
enacted or substantively enacted by the reporting
date. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it
is no longer probable that the related tax benefit will
be realized, such reductions are reversed when the
probability of future taxable profits improves.

An entity shall offset deferred tax assets and deferred
tax liabilities if, and only if the entity has a legally
enforceable right to set off current tax assets against
current tax liabilities; and the deferred tax assets and
the deferred tax liabilities relate to income taxes levied
by the same taxation authority on either: the same
taxable entity; or different taxable entities which

intend 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.

The tax effects of income tax losses, available for
carry forward, are recognised as deferred tax asset,
when it is probable that future taxable profits will be
available against which these losses can be set-off.

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.

(xiii) Cash and cash equivalents

Cash and cash equivalents for the purpose of cash flow
statement include cash in hand, balances with the banks
and demand deposits with bank with an original maturity
of three months or less, and accrued interest thereon.

(xiv) Trade Receivables

Trade receivables are amounts due from customers for
services performed in the ordinary course of business.
Trade receivables are recognised initially at the amount
of consideration that is unconditional unless they contain
significant financing components, when they are recognised
at fair value.

(xv) Impairment of non-financial assets

The Company assesses at the reporting date whether there
is an indication that an asset may be impaired, other than
deferred tax assets. 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 groups of assets. Where 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 available.
If no such transactions can be identified, an appropriate
valuation model is used. Impairment losses are recognised
in statement of profit and loss.