2. Material accounting policy information

2.1 Basis of preparation

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

The standalone financial statements have been prepared
on a historical cost convention, except for the following
assets and liabilities:

i ) Certain financial assets and liabilities measured at

fair value (refer accounting policy regarding financial
instruments).

ii) Equity settled employee share-based payment plan
measured at fair value.

i ii) Defined benefit liabilities are measured at present
value of defined benefit obligation

iv) Certain financial assets and liabilities at amortised
cost.

The financial statements have been prepared on accrual
and going concern basis

The financial statements are presented in INR "(Indian
Rupees)" or "V. All values are rounded to the nearest
million, and two decimals thereof, except when otherwise
indicated.

2.2 Current versus non-current classification

The Company presents assets and liabilities in the balance
sheet based on current/ non-current classification. An
asset as current when it is:

i. Expected to be realised or intended to sold or
consumed in normal operating cycle

ii. Held primarily for the purpose of trading

iii. Expected to be realised within twelve months after
the reporting period, or

iv. Cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least
twelve months after the reporting period

All other assets are classified as non-current.

A liability is current when:

i. It is expected to be settled in normal operating cycle

ii. It is held primarily for the purpose of trading

iii. It is due to be settled within twelve months after the
reporting period, or

iv. There is no unconditional right to defer the
settlement of liability for at least twelve months after
the reporting period.

The Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non¬
current assets and liabilities.

The operating cycle is the time between the acquisition of
assets for processing and their realisation in cash and cash
equivalents. The Company has identified twelve months as
its operating cycle.

2.3 Fair value measurement

The Company measures certain financial instruments and
equity settled employee share based payment plan at fair
value at each reporting 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 economic best interest.

A fair value measurement of a non-financial asset takes
into account a market participant's ability to generate
economic benefits by using the asset in its highest and
best use or by selling it to another market participant that
would use the asset in its highest and best use.

The Company uses valuation techniques that are
appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximising the
use of relevant observable inputs and minimising the use
of unobservable inputs.

All assets and liabilities for which fair value is measured
or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based
on the lowest level input that is significant to the fair value
measurement as a whole:

• Level 1 — Quoted (unadjusted) market prices in
active markets for identical assets or liabilities

• Tevel 2 — Valuation techniques for which the
lowest level input that is significant to the fair value
measurement is directly or indirectly observable

• Tevel 3 — Valuation techniques for which the
lowest level input that is significant to the fair value
measurement is unobservable.

Tor assets and liabilities that are recognised in the
financial statements on a recurring basis, the Company
determines whether transfers have occurred between
levels in the hierarchy by re-assessing categorisation
(based on the lowest level input that is significant to the
fair value measurement as a whole) at the end of each
reporting period.

External valuers are involved for valuation of significant
assets, unquoted financial assets, and significant
liabilities, such as valuation of unquoted investments
and equity settled employee share based payment plan.
Involvement of external valuers is decided upon annually
by the Company's management. Selection criteria include
market knowledge, reputation, independence and
whether professional standards are maintained.

At each reporting date, the Company's management
analyses the movements in the values of assets and
liabilities which are required to be re-measured or re¬
assessed as per the Company's accounting policies. For
this analysis, the Company's management verifies the
major inputs applied in the latest valuation by agreeing
the information in the valuation computation to contracts
and other relevant documents.

The Company's management, in conjunction with the
Company's external valuers, also compares the change
in the fair value of each asset and liability with relevant
external sources to determine whether the change is
reasonable.

For the purpose of fair value disclosures, the Company has
determined classes of assets and liabilities on the basis of
the nature, characteristics and risks of the asset or liability
and the level of the fair value hierarchy as explained above.

This note summarises accounting policy for fair value.
Other fair value related disclosures are given in the
relevant notes.

i. Disclosures for significant estimates and assumptions

(refer note 2.18B)

i i. Disclosures of fair value measurement hierarchy

(refer note 46)

i ii. I nvestment in unquoted and quoted equity shares
(refer note 8 and 14)

iv. Equity settled employee share based payment plan
(refer note 43)

2.4 Revenue from contract with customer

Revenue from contracts with customers is recognised
when control of the goods or services are transferred to
the customer at an amount that reflects the consideration
to which the Company expects to be entitled in exchange
for those goods or services.

To determine whether to recognize revenue, the Company
follows a 5-step process:

1. Identifying the contract with a customer

2. Identifying the performance obligations

3. Determining the transaction price

4. Allocating the transaction price to the performance
obligations

5. Recognising revenue when/as performance
obligation(s) are satisfied

Sale of goods

Revenue from sale of books is recognised at the point
in time when control of the asset is transferred to the
customer, i.e. upon delivery of the goods to the transporter
or to the customer whichever is earlier.

The Company considers whether there are other promises
in the contract that are separate performance obligations
to which a portion of the transaction price needs to be
allocated. In determining the transaction price for the sale
of books, the Company considers the effects of variable
consideration, the existence of significant financing
components, non-cash consideration, and consideration
payable to the customer (if any).

Job work

Revenue from job work services is recognised at the
point in time when control of the asset is transferred to
the customer, i.e. at the time of handing over goods to the
carrier for transportation or to the customer as per the
terms of the contract.

Variable consideration

I f the consideration in a contract includes a variable
amount, the Company estimates the amount of
consideration to which it will be entitled in exchange
for transferring the goods to the customer. The variable
consideration is estimated at contract inception and
constrained until it is highly probable that a significant
revenue reversal in the amount of cumulative revenue
recognised will not occur when the associated uncertainty
with the variable consideration is subsequently resolved.

• Rights of return

Certain contracts provide a customer with a right
to return the goods within a specified period. The
provision for anticipated returns is made primarily
on the basis of historical return rates as this method
best predicts the amount of variable consideration to
which the Company will be entitled. The requirements
in Ind AS 115 on constraining estimates of variable
consideration are also applied in order to determine
the amount of variable consideration that can be
included in the transaction price.

• Turnover discounts

The Company provides turnover discounts to certain
customers once the value of products purchased
during the period exceeds a threshold specified in
the contract. Discounts are offset against amounts
payable by the customer. To estimate the variable
consideration for the expected future discounts, the
Company applies the most likely amount method for
contracts with a single-turnover threshold and the
expected value method for contracts with more than
one turnover threshold. The selected method that
best predicts the amount of variable consideration
is primarily driven by the number of turnover
thresholds contained in the contract. The Company
then applies the requirements on constraining
estimates of variable consideration and recognises a
refund liability for the expected future discounts.

• Cash discounts

The Company provides cash discounts to certain
customers if customers make the payment within the
stipulated time given in the contract. The provision
for cash discount is made on estimated basis based
on historical trends. The Company then applies the
requirements on constraining estimates of variable
consideration and recognises a refund liability for
the expected future discounts.

• Other discounts

Further, at the time of annual settlement with
customers, which may not coincide with the
financial year, additional discounts are offered
based on the negotiations agreed with respective
customers. The provision for additional discount is
made on estimated basis based on historical trends.
The Company then applies the requirements on
constraining estimates of variable consideration and
recognises a refund liability for the expected future
discounts.

Contract balances
Contract assets

A contract asset is the right to consideration in exchange
for goods or services transferred to the customer. If the
Company performs by transferring goods or services to
a customer before the customer pays consideration or
before payment is due, a contract asset is recognised for
the earned consideration that is conditional.

Contract liabilities

A contract liability is the obligation to transfer goods or
services to a customer for which the Company has received
consideration (or an amount of consideration is due) from
the customer. If a customer pays consideration before the
Company transfers goods or services to the customer, a
contract liability is recognised when the payment is made
or the payment is due (whichever is earlier). Contract
liabilities are recognised as revenue when the Company
performs under the contract.

Other income
Interest income

I nterest income is recognized on time proportion basis
taking into account the amount outstanding and the
rate applicable for all financial instruments measured at
amortised cost and other interest-bearing financial assets,
interest income is recorded using the effective interest rate
(EIR). EIR is the rate that exactly discounts the estimated
future cash receipts over the expected life of the financial
instrument or a shorter period, where appropriate, to
the gross carrying amount of the financial asset. When
calculating the effective interest rate, the Company
estimates the expected cash flows by considering all the
contractual terms of the financial instrument (for example,
prepayment, extension, call and similar options) but does
not consider the expected credit losses. Interest income
is included in other income in the statement of profit and
loss.

Management fees for shared services

The Company provides various administrative and
management services through shared resources to its
subsidiary companies to facilitate day to day operations.
The Company recognises revenue over time, because the
subsidiaries receive and consume the service provided by
the Company over that period.

2.5 Taxes

Current income tax

Current income tax assets and liabilities are measured
at the amount expected to be recovered from or paid to
the tax authorities in accordance with the Indian Income
Tax Act, 1961. The tax rates and tax laws used to compute
the amount are those that are enacted or substantively
enacted at the reporting date in the countries where the
Company operates and generates taxable income.

Current income tax relating to items recognised outside
profit or loss is recognised outside profit or loss (either in
other comprehensive income or in equity) 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. The Company offsets current tax assets and
current tax liabilities, where it has a legally enforceable
right to set off the recognised amounts and where it
intends either to settle on a net basis, or to realise the
asset and liability simultaneously.

Deferred tax

Deferred tax is provided using the liability method on
temporary differences between the tax bases of assets
and liabilities and their carrying amounts for financial
reporting purposes at the reporting date.

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

• When the deferred tax liability arises from the initial
recognition of goodwill or an asset or liability in a
transaction that is not a business combination and,
at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss

i In respect of taxable temporary differences

associated with investments in subsidiaries and
associates, when the timing of the reversal of the
temporary differences can be controlled and it is
probable that the temporary differences will not
reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible
temporary differences, the carry forward of unused
tax credits and any unused tax losses. Deferred tax
assets are recognised to the extent that it is probable
that taxable profit will be available against which
the deductible temporary differences, and the carry
forward of unused tax credits and unused tax losses
can be utilised, except:

• When the deferred tax asset relating to the deductible
temporary difference arises from the initial
recognition of an asset or liability in a transaction
that is not a business combination and, at the time of
the transaction, affects neither the accounting profit
nor taxable profit or loss

• In respect of deductible temporary differences
associated with investments in subsidiaries and
associates , 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 assets and liabilities are measured at the tax
rates that are expected to apply in the year when the asset
is realised or the liability is settled, based on tax rates (and
tax laws) that have been enacted or substantively enacted
at the reporting date.

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

Deferred tax assets and deferred tax liabilities are offset
if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred taxes
relate to the same taxable entity and the same taxation
authority.

Minimum Alternate Tax (MAT)

Minimum Alternate Tax (MAT) credit is recognised as
an asset only when and to the extent that it is probable
that the Company will pay normal income tax during the
specified period. Such asset is reviewed at each Balance
Sheet date and the carrying amount of the MAT credit
asset is written down to the extent that it is no longer
probable that the Company will pay normal income tax
during the specified period.

2.6 Property, plant and equipment

Plant and equipments are stated at cost, net of accumulated
depreciation and accumulated impairment losses, if
any. Such cost includes the cost of replacing parts of the
property, plant and equipment and borrowing costs for
long-term construction projects if the recognition criteria
are met. When significant parts of property, plant and
equipment are required to be replaced at intervals, the
Company recognises such parts as individual assets with
specific useful lives and depreciates them accordingly.
Likewise, when a major inspection is performed, its cost
is recognised in the carrying amount of the plant and
equipment as a replacement if the recognition criteria
are satisfied. All other repair and maintenance costs are
recognised in the statement of profit and loss as incurred.

Property, plant and equipments which are not ready for
intended use as on the date of balance sheet are disclosed
as capital work-in-progress.

Depreciation

Depreciation on property, plant and equipment, other than
leasehold improvements, have been provided on pro-rata
basis, on the straight line method, using rates determined
based on management's technical assessment of useful
economic lives of the asset.

The Company, based on technical assessment made by
technical expert and management estimate, depreciates
certain items of buildings, plant and equipments, vehicles
and computers over estimated useful lives which are
different from useful life prescribed in Schedule II to the
Companies Act, 2013. The management believes that
these estimated useful lives are realistic and reflect fair
approximation of the period over which the assets are
likely to be used.

Leasehold improvements are amortised over economic
useful life or unexpired period of lease whichever is less.

An item of property, plant and equipment and any
significant part initially recognised is derecognised
upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss arising
on de-recognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying
amount of the asset) is included in the statement of profit
and loss when the asset is derecognised.

T he 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.

2.7 Intangible assets

Recognition and measurement

I ntangible assets acquired separately are measured on
initial recognition at cost. The cost of intangible assets
acquired in a business combination is their fair value as
at the date of acquisition. Following initial recognition,
intangible assets are carried at cost less accumulated
amortisation and accumulated impairment losses, if
any. Internally generated intangible assets, excluding
capitalised development costs, are not capitalised and
expenditure is recognised in the statement of profit and
loss when it is incurred.

Amortisation and useful lives

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

I ntangible assets with finite lives are amortised over
their useful economic lives and assessed for impairment
whenever there is an indication that the intangible
asset may be impaired. The amortisation period and the
amortisation method for an intangible asset with a finite
useful life are reviewed at least at the end of each reporting
period. Changes in the expected useful life or the expected
pattern of consumption of future economic benefits
embodied in the asset are accounted for by changing
the amortisation period or method, as appropriate, and
are treated as changes in accounting estimates. The
amortisation expense on intangible assets with finite
lives is recognised in the statement of profit and loss in
the expense category consistent with the function of the
intangible assets.

I ntangible assets with indefinite useful lives are not
amortised, but are tested for impairment annually,
either individually or at the cash-generating unit level.
The assessment of indefinite life is reviewed annually
to determine whether the indefinite life continues to be
supportable. If not, the change in useful life from indefinite
to finite is made on a prospective basis.

Gains or losses arising from de-recognition of an
intangible asset are measured as the difference between
the net disposal proceeds and the carrying amount of the
asset and are recognised in the statement of profit and
loss when the asset is derecognised.

Research and development costs

Research costs are expensed as incurred. Development
expenditure incurred on an individual project are
recognised as an intangible asset when the Company can
demonstrate all the following:

• The technical feasibility of completing the intangible
asset so that it will be available for use or sale. Its
intention to complete the asset

• Its ability to use or sell the asset

• How the asset will generate future economic benefits

• The availability of adequate resources to complete
the development and to use or sell the asset

• The ability to measure reliably the expenditure
attributable to the intangible asset during
development

Fo llowing initial recognition of the development
expenditure as an asset, the cost model is applied requiring
the asset to be carried at cost less any accumulated
amortisation and accumulated impairment losses, if any.
Amortisation of the asset begins when development is
complete and the asset is available for use. It is amortised
over the period of expected future benefit.

2.8 Investment in subsidiaries and associates

Investments in subsidiaries and associates are carried at
cost less accumulated impairment losses, if any. Where an
indication of impairment exists, the carrying amount of the
investment is assessed and written down immediately to
its recoverable amount. On disposal of these investments,
the difference between net disposal proceeds and the
carrying amounts are recognised in the statement of profit
and loss.

2.9 Leases

The Company assesses at contract inception whether
a contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset
for a period of time in exchange for consideration.

Company as a lessee

Fhe Company applies a single recognition and
measurement approach for all leases, except for short¬
term leases and leases of low-value assets. The Company
recognises lease liabilities to make lease payments and
right-of-use assets representing the right to use the
underlying assets

Right-of-use assets

Fhe Company recognises right-of-use assets at the
commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use
assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use
assets includes the amount of lease liabilities recognised,
initial direct costs incurred, and lease payments made
at or before the commencement date less any lease
incentives received. Right-of-use assets are depreciated on
a straight-line basis over the shorter of the lease term and
the estimated useful lives of the assets.

Lease liabilities

At the commencement date of the lease, the Company
recognises lease liabilities measured at the present
value of lease payments to be made over the lease term.
The lease payments include fixed payments (including
in substance fixed payments) less any lease incentives
receivable, variable lease payments that depend on an
index or a rate, and amounts expected to be paid under
residual value guarantees. The lease payments also include
the exercise price of a purchase option reasonably certain
to be exercised by the Company and payments of penalties
for terminating the lease, if the lease term reflects the
Company exercising the option to terminate. Variable
lease payments that do not depend on an index or a rate
are recognised as expenses (unless they are incurred to
produce inventories) in the period in which the event or
condition that triggers the payment occurs.

I n calculating the present value of lease payments, the
Company uses its incremental borrowing rate at the

lease commencement date because the interest rate
implicit in the lease is not readily determinable. After the
commencement date, the amount of lease liabilities is
increased to reflect the accretion of interest and reduced
for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change in the
lease payments (e.g., changes to future payments resulting
from a change in an index or rate used to determine such
lease payments) or a change in the assessment of an
option to purchase the underlying asset.

Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition
exemption to its short-term leases (i.e., those leases
that have a lease term of 12 months or less from the
commencement date and do not contain a purchase
option). It also applies the lease of low-value assets
recognition exemption to leases of office equipment that
are considered to be low value. Lease payments on short¬
term leases and leases of low-value assets are recognised
as expense on a straight-line basis over the lease term.

2.10 Inventories

I nventories are valued at the lower of cost and net
realisable value.

Costs incurred in bringing each product to its present
location and condition is accounted for as follows:

• Raw materials: cost includes cost of purchase and
other costs incurred in bringing the inventories
to their present location and condition. Cost is
determined on first in first out basis.

• Finished goods: cost includes cost of direct materials
and labour and a proportion of manufacturing
overheads based on the normal operating capacity,
but excluding borrowing costs. Cost is determined on
first in, first out basis.

• Stock-in-trade: cost includes cost of purchase and
other costs incurred in bringing the inventories
to their present location and condition. Cost is
determined on first in first out basis.

Net realisable value is the estimated selling price in the
ordinary course of business, less estimated costs of
completion and the estimated costs necessary to make the
sale

2.11 Impairment of non-financial assets

The Company assesses, at each reporting date, whether
there is an indication that an asset may be impaired. If any
indication exists, or when annual impairment testing for
an asset is required, the Company estimates the asset's
recoverable amount. An asset's recoverable amount is
the higher of an asset's or cash-generating unit’s (CGU)
fair value less costs of disposal and its value in use.
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. When the carrying amount of an asset or CGU
exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset.
In determining fair value less costs of disposal, recent
market transactions are taken into account. If no such
transactions can be identified, an appropriate valuation
model is used. These calculations are corroborated by
valuation multiples, quoted share prices for publicly
traded companies or other available fair value indicators.

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

I mpairment losses of continuing operations, including
impairment on inventories, are recognised in the
statement of profit and loss.

For assets excluding goodwill, an assessment is made
at each reporting date to determine whether there is an
indication that previously recognised impairment losses
no longer exist or have decreased. If such indication
exists, the Company estimates the asset's or CGU's
recoverable amount. A previously recognised impairment
loss is reversed only if there has been a change in the
assumptions used to determine the asset's recoverable
amount since the last impairment loss was recognised.
The reversal is limited so that the carrying amount of the
asset does not exceed its recoverable amount, nor exceed
the carrying amount that would have been determined, net
of depreciation, had no impairment loss been recognised
for the asset in prior years. Such reversal is recognised in
the statement of profit and loss.

Goodwill is tested for impairment annually and when
circumstances indicate that the carrying value may be
impaired.

Impairment is determined for goodwill by assessing the
recoverable amount of each CGU (or group of CGUs) to
which the goodwill relates. When the recoverable amount
of the CGU is less than its carrying amount, an impairment
loss is recognised. Impairment losses relating to goodwill
cannot be reversed in future periods.

2.12 Financial instruments

A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity.

Financial assets

Initial recognition and measurement

The classification of financial assets at initial recognition
depends on the financial asset's contractual cash flow
characteristics and the Company's business model for
managing them. With the exception of trade receivables
that do not contain a significant financing component or
for which the Company has applied the practical expedient,
the Company initially measures a financial asset at its fair

value plus, in the case of a financial asset not at fair value
through profit or loss, transaction costs. Trade receivables
that do not contain a significant financing component or
for which the Company has applied the practical expedient
are measured at the transaction price determined under
Ind AS 115. The general terms of the payment is between
180-270 days. Refer to the accounting policies in section
Revenue from contracts with customers.

In order for a financial asset to be classified and measured
at amortised cost or fair value through OCI, it needs to give
rise to cash flows that are 'solely payments of principal and
interest (SPPI)' on the principal amount outstanding. This
assessment is referred to as the SPPI test and is performed
at an instrument level. Financial assets with cash flows
that are not SPPI are classified and measured at fair value
through profit or loss, irrespective of the business model.

The Company’s business model for managing financial
assets refers to how it manages its financial assets in order
to generate cash flows. The business model determines
whether cash flows will result from collecting contractual
cash flows, selling the financial assets, or both. Financial
assets classified and measured at amortised cost are
held within a business model with the objective to hold
financial assets in order to collect contractual cash flows
while financial assets classified and measured at fair value
through OCI are held within a business model with the
objective of both holding to collect contractual cash flows
and selling.

Purchases or sales of financial assets that require delivery
of assets within a time frame established by regulation
or convention in the market place (regular way trades)
are recognised on the trade date, i.e., the date that the
Company commits to purchase or sell the asset.

Subsequent measurement

For purposes of subsequent measurement, financial assets
are classified in four categories:

• Financial assets at amortised cost (debt instruments)

i Financial assets at fair value through other
comprehensive income (FVTOCI) with recycling of
cumulative gains and losses (debt instruments)

• Financial assets designated at fair value through
OCI with no recycling of cumulative gains and losses
upon derecognition (equity instruments)

• Financial assets at fair value through profit or loss

Financial assets at amortised cost (debt instruments)

A 'financial asset” is measured at the amortised cost if
both the following conditions are met:

• The asset is held within a business model whose
objective is to hold assets for collecting contractual
cash flows, and

• Contractual terms of the asset give rise on specified
dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount
outstanding.

After initial measurement, such financial assets are
subsequently measured at amortised cost using the
effective interest rate (EIR) method. Amortised cost
is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortization is included
in finance income in the profit or loss. The losses arising
from impairment are recognised in the profit or loss.

Financial assets at fair value through OCI (FVTOCI)
(debt instruments)

A "financial asset" is classified as at the FVTOCI if both of
the following criteria are met:

• The objective of the business model is achieved both
by collecting contractual cash flows and selling the
financial assets, and

• The asset's contractual cash flows represent SPPI.

Debt instruments included within the FVTOCI category are
measured initially as well as at each reporting date at fair
value. Fair value movements are recognized in the other
comprehensive income (OCI). However, the Company
recognizes interest income, impairment losses & reversals
and foreign exchange gain or loss in the statement of profit
and loss. On de-recognition of the asset, cumulative gain
or loss previously recognised in OCI is reclassified from

the equity to the statement of profit and loss. Interest
earned whilst holding FVTOCI debt instrument is reported
as interest income using the EIR method.

Equity instruments at FVTOCI

All equity instruments in scope of Ind AS 109 are measured
at fair value. Equity instruments which are held for trading
and contingent consideration recognised by an acquirer in
a business combination to which Ind AS 103 applies are
classified as at FVTPL. For all other equity instruments,
the Company may make an irrevocable election to
present subsequent changes in the fair value in other
comprehensive income. The Company makes such election
on an instrument-by-instrument basis. The classification
is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as
at FVTOCI, then all fair value changes on the instrument,
excluding dividends, are recognized in the OCI. There is
no recycling of the amounts from OCI to the statement of
profit and loss, even on sale of investment. However, the
Company may transfer the cumulative gain or loss within
equity.

Equity instruments included within the FVTPL category
are measured at fair value with all changes recognized in
the statement of profit and loss.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are
carried in the balance sheet at fair value with net changes
in fair value recognised in the statement of profit and loss.

This category includes listed equity investments which
the Company had not irrevocably elected to classify at fair
value through OCI. Dividends on listed equity investments
are recognised in the statement of profit and loss when the
right of payment has been established.

De-recognition

A financial asset (or, where applicable, a part of a financial
asset or part of a Company of similar financial assets) is
primarily derecognised (i.e. removed from the Company's
standalone balance sheet) when:

• The rights to receive cash flows from the asset have
expired, or

• The Company has transferred its rights to receive
cash flows from the asset or has assumed an
obligation to pay the received cash flows in full
without material delay to a third party under a 'pass¬
through' arrangement; and either (a) the Company
has transferred substantially all the risks and
rewards of the asset, or (b) the Company has neither
transferred nor retained substantially all the risks
and rewards of the asset, but has transferred control
of the asset.

When the Company has transferred its rights to receive
cash flows from an asset or has entered into a pass¬
through arrangement, it evaluates if and to what extent it
has retained the risks and rewards of ownership. When
it has neither transferred nor retained substantially all
of the risks and rewards of the asset, nor transferred
control of the asset, the Company continues to recognise
the transferred asset to the extent of the Company’s
continuing involvement. In that case, the Company also
recognises an associated liability. The transferred asset
and the associated liability are measured on a basis that
reflects the rights and obligations that the Company has
retained.

Continuing involvement that takes the form of a guarantee
over the transferred asset is measured at the lower of the
original carrying amount of the asset and the maximum
amount of consideration that the Company could be
required to repay.

Impairment of financial assets

I n accordance with Ind-AS 109, the Company applies
expected credit loss (ECL) model for measurement and
recognition of impairment loss on the following financial
assets and credit risk exposure:

i Financial assets that are debt instruments, and
are measured at amortised cost e.g., loans, debt
securities, deposits, trade receivables and bank
balance

• Trade receivables under Ind-AS 115.

i Financial guarantee contracts which are not
measured as at FVTPL

The Company follows '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.

For recognition of impairment loss on other financial
assets and risk exposure, the Company determines
that whether there has been a significant increase in
the credit risk since initial recognition. If credit risk
has not increased significantly, 12-month ECL is used
to provide for impairment loss. However, if credit risk
has increased significantly, lifetime ECL is used. If, in
a subsequent period, credit quality of the instrument
improves such that there is no longer a significant
increase in credit risk since initial recognition, then
the entity reverts to recognising impairment loss
allowance based on 12-month ECL.

ECL is the difference between all contractual cash
flows that are due to the Company in accordance
with the contract and all the cash flows that the
entity expects to receive (i.e., all cash shortfalls),
discounted at the original EIR. When estimating the
cash flows, an entity is required to consider:

i All contractual terms of the financial instrument
(including prepayment extension, call and similar
options) over the expected life of the financial
instrument. However, in rare cases when the
expected life of the financial instrument cannot be
estimated reliably, then the entity is required to
use the remaining contractual term of the financial
instrument.

• C ash flows from the sale of collateral held or
other credit enhancements that are integral to the
contractual terms.

As a practical expedient, 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 and changes
in the forward-looking estimates are analysed.

ECL impairment loss allowance (or reversal) recognised
during the period is recognised as income/expense in
the statement of profit and loss. This amount is reflected
under the head 'other expenses' in the statement of profit
and loss.

The balance sheet presentation for various financial
instruments is described below:-

a) For financial assets measured as at amortised
cost: ECL is presented as an allowance, i.e. as an
integral part of the measurement of those assets in
the balance sheet. The allowance reduces the net
carrying amount. Until the asset meets write-off
criteria, the Company does not reduce impairment
allowance from the gross carrying amount.

b) Financial guarantee contracts: ECL is presented as a
provision in the balance sheet, i.e. as a liability.

F Febt instruments measured at FVTOCI: Since,
financial assets are already reflected at fair value,
impairment allowance is not further reduced
from its value. Rather, ECL amount is presented as
'accumulated impairment amount' in the OCI.

For assessing increase in credit risk and impairment loss,
the Company combines financial instruments on the basis
of shared credit risk characteristics with the objective of
facilitating an analysis that is designed to enable significant
increases in credit risk to be identified on a timely basis.

The Company does not have any purchased or originated
credit-impaired (POCI) financial assets, i.e., financial
assets which are credit impaired on purchase/ origination.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as
financial liabilities at fair value through profit or loss, loans
and borrowings, payables, or as derivatives designated as
hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognised initially at fair value
and, in the case of loans and borrowings and payables, net
of directly attributable transaction costs.

The Company's financial liabilities include trade and
other payables and loans and borrowings including bank
overdrafts.

Subsequent measurement

The measurement of financial liabilities depends on their
classification, as described below:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss
include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair
value through profit or loss. Financial liabilities are
classified as held for trading if they are incurred for the
purpose of repurchasing in the near term. Gains or losses
on liabilities held for trading are recognised in the profit
or loss.

Financial liabilities designated upon initial recognition
at fair value through profit or loss are designated as such
at the initial date of recognition, and only if the criteria
in Ind-AS 109 are satisfied. For liabilities designated as
FVTPL, fair value gains/ losses attributable to changes
in own credit risk are recognized in OCI. These gains/
loss are not subsequently transferred to the statement of
profit and loss. However, the Company may transfer the
cumulative gain or loss within equity. All other changes in
fair value of such liability are recognised in the statement
of profit and loss.

Loans and borrowings

after initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortised cost
using the EIR method. Gains and losses are recognised in
profit or loss when the liabilities are derecognised as well
as through the EIR amortisation process. Amortised cost is
calculated by taking into account any discount or premium
on acquisition and fees or costs that are an integral part of
the EIR. The EIR amortisation is included as finance costs
in the statement of profit and loss. This category generally
applies to borrowings.

Financial guarantee contracts

Financial guarantee contracts issued by the Company
are those contracts that require a payment to be made
to reimburse the holder for a loss it incurs because the

specified debtor fails to make a payment when due in
accordance with the terms of a debt instrument. Financial
guarantee contracts are recognised initially as a liability
at fair value, adjusted for transaction costs that are
directly attributable to the issuance of the guarantee.
Subsequently, the liability is measured at the higher of the
amount of loss allowance determined as per impairment
requirements of Ind-AS 109 and the amount recognised
less cumulative amortisation.

De-recognition

A financial liability is derecognised when the obligation
under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another
from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified,
such an exchange or modification is treated as the de¬
recognition of the original liability and the recognition of
a new liability. The difference in the respective carrying
amounts is recognised in the statement of profit and loss.

Re-classification of financial assets
The Company determines classification of financial
assets and liabilities on initial recognition. After initial
recognition, no reclassification is made for financial assets
which are equity instruments and financial liabilities.
For financial assets which are debt instruments, a
reclassification is made only if there is a change in the
business model for managing those assets. Changes to
the business model are expected to be infrequent. The
Company's senior management determines change in the
business model as a result of external or internal changes
which are significant to the Company’s operations. Such
changes are evident to external parties. A change in the
business model occurs when the Company either begins
or ceases to perform an activity that is significant to
its operations. If the Company reclassifies financial
assets, it applies the reclassification prospectively from
the reclassification date which is the first day of the
immediately next reporting period following the change
in business model. The Company does not restate any
previously recognised gains, losses (including impairment
gains or losses) or interest.

Offsetting of financial instruments
Financial assets and financial liabilities are offset and the
net amount is reported in the standalone balance sheet
if there is a currently enforceable legal right to offset the

recognised amounts and there is an intention to settle on
a net basis, to realise the assets and settle the liabilities
simultaneously.

2.13 Employee benefits

Employee benefit in the form of provident fund is a defined
contribution scheme. The Company has no obligation,
other than the contribution payable to the provident fund,
National Pension Scheme (NPS) and Employee's State
Insurance Corporation (ESIC). The Company recognizes
contribution payable to the provident fund, NPS and ESIC
scheme as an expense, when an employee renders the
related service. If the contribution payable to the scheme
for service received before the balance sheet date exceeds
the contribution already paid, the deficit payable to the
scheme is recognized as a liability after deducting the
contribution already paid. If the contribution already paid
exceeds the contribution due for services received before
the balance sheet date, then excess is recognized as an
asset to the extent that the pre-payment will lead to, for
example, a reduction in future payment or a cash refund.

The Company operates a defined benefit gratuity plan
in India, which requires contributions to be made to a
separately administered fund.

The cost of providing benefits under the defined benefit
plan is determined using the projected unit credit method.

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

Past service costs are recognised in profit or loss on the
earlier of:

• The date of the plan amendment or curtailment, and

• The date that the Company recognises related
restructuring costs

Net interest is calculated by applying the discount rate
to the net defined benefit liability or asset. The Company

recognises the following changes in the net defined benefit
obligation as an expense in the standalone statement of
profit and loss:

• Service costs comprising current service costs, past-
service costs, gains and losses on curtailments and
non-routine settlements; and

• Net interest expense or income.

Compensated absences

Entitlements to annual leave are recognised when they
accrue to employees. Leave entitlements may be availed
while in service or encashed at the time of retirement/
termination of employment, subject to a restriction on
the maximum number of accumulation. The Company
determines the liability for such accumulated leave
entitlements on the basis of actuarial valuation carried out
by an independent actuary at the year end.

Short-term employee benefits

Short-term employee benefit obligations are measured
on an undiscounted basis and are expensed as the related
service is provided. A liability is recognised for the amount
expected to be paid e.g., under short-term cash bonus, 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 amount of obligation can be
estimated reliably.

2.14 Share based payments

Employees (including senior executives) of the Company
receive remuneration in the form of share based payments,
whereby employer render services as consideration for
equity instruments (equity-settled transactions).

Equity settled transactions

The cost of equity-settled transactions is determined by
the fair value at the date when the grant is made using an
appropriate valuation model.

That cost is recognised, together with a corresponding
increase in share-based payment (SBP) reserves in equity,
over the period in which the performance and/or service
conditions are fulfilled in employee benefits expense.
The cumulative expense recognised for equity-settled
transactions at each reporting date until the vesting date
reflects the extent to which the vesting period has expired
and the Company's best estimate of the number of equity
instruments that will ultimately vest. The statement of
profit and loss expense or credit for a period represents
the movement in cumulative expense recognised as at

the beginning and end of that period and is recognised in
employee benefits expense.

Service and non-market performance conditions are not
taken into account when determining the grant date fair
value of awards, but the likelihood of the conditions being
met is assessed as part of the Company's best estimate
of the number of equity instruments that will ultimately
vest. Market performance conditions are reflected within
the grant date fair value. Any other conditions attached to
an award, but without an associated service requirement,
are considered to be non-vesting conditions. Non-vesting
conditions are reflected in the fair value of an award and
lead to an immediate expensing of an award unless there
are also service and/or performance conditions.

No expense is recognised for awards that do not ultimately
vest because non-market performance and/or service
conditions have not been met. Where awards include a
market or non-vesting condition, the transactions are
treated as vested irrespective of whether the market or
non-vesting condition is satisfied, provided that all other
performance and/or service conditions are satisfied.

When the terms of an equity-settled award are modified,
the minimum expense recognised is the expense had
the terms had not been modified, if the original terms of
the award are met. An additional expense is recognised
for any modification that increases the total fair value
of the share-based payment transaction, or is otherwise
beneficial to the employee as measured at the date of
modification. Where an award is cancelled by the entity
or by the counterparty, any remaining element of the fair
value of the award is expensed immediately through profit
or loss.

The dilutive effect of outstanding options is reflected as
additional share dilution in the computation of diluted
earnings per share.