2.2 Material accounting policies

a. Foreign currencies
Transactions and Balances

Transactions in foreign currencies are initially
recorded by the Company at its functional currency
spot rates at the date the transaction first qualifies
for recognition. However, for practical reasons,
the Company uses average rate if the average
approximates the actual rate at the date of
the transaction. Monetary assets and liabilities
denominated in foreign currencies are translated
at the functional currency spot rates of exchange
at the reporting date. Exchange differences arising
on settlement or translation of monetary items are
recognised in the standalone statement of profit
and loss.

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

b. Property, plant and equipment

The cost of an item of property, plant and
equipment shall be recognised as an asset if, and
only if it is probable that future economic benefits
associated with the item will flow to the Company
and the cost of the item can be measured reliably.

Property, plant and equipment are stated at cost
less accumulated depreciation and accumulated
impairment losses, if any. Cost of an item of
property, plant and equipment comprises its
purchase price, including import duties and non¬
refundable purchase taxes, after deducting trade
discounts and rebates, any directly attributable
cost of bringing the item to its working condition for
its intended use and estimated costs of dismantling
and removing the item and restoring the site on
which it is located.

The cost of property, plant and equipment not
ready for intended use before such date is
disclosed as capital work-in-progress.

All other expenses on existing property, plant
and equipment, including day-to-day repair and
maintenance expenditure, are charged to the
statement of profit and loss for the period during
which such expenses are incurred when recognition
criteria are not met.

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.
Gains or losses arising from de-recognition of
property, plant and equipment are measured as
the difference between the net disposal proceeds
and the carrying amount of the asset and are
recognized in the statement of profit and loss when
the asset is derecognized.

Subsequent expenditure is capitalised only if it
is probable that the future economic benefits
associated with the expenditure will flow to the
Company and the cost of the item can be measured
reliably.

Depreciation

The Company, based on technical assessment
made by experts and management estimates,
depreciates certain items of property, plant and
equipment over estimated useful lives which are
different from the useful life prescribed in Schedule
II to the Companies Act, 2013 based on the
pattern of consumption of such assets and having
regard to the nature of assets in this industry. 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.

Depreciation is calculated on a straight line basis
that closely reflects the expected pattern of
consumption of future economic benefits embodied
in the respective assets over the estimated useful
lives of the assets.

The residual values, useful lives and methods of
depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted
prospectively, if appropriate. Depreciation on
additions/(disposals) is provided on a pro-rata
basis i.e. from/ (upto) the date on which asset is
ready for use/ (disposed off).

The Company has charged depreciation on
property, plant & equipment (PPE) based on
Written Down Value ("WDV") method upto
December 31, 2023. With effect from January 1,
2024, the Company has changed its method of
depreciation from WDV to Straight Line Method
("SLM") based upon the technical assessment of
expected pattern of consumption of the future
economic benefits embodied in the assets.

c. Impairment of non-financial assets

The Company assesses, at each reporting date,
whether there is an indication that a non-financial
asset (other than inventories, contract assets
and deferred tax assets) may be impaired. If
any indication exists, the Company estimates
the asset's recoverable amount. An asset's
recoverable amount is the higher of an asset's or
cash-generating units (CGU) fair value less cost
of disposal and its value in use. The recoverable
amount is determined for an individual asset,
unless the asset does not generate cash inflows
that are largely independent of those from other
assets or group of assets. 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 cost of disposal, recent market
transactions are taken into account, if available.
If no such transactions can be identified, an
appropriate valuation model is used.

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

Impairment losses including impairment on
inventories, are recognized in the statement of
profit and loss. After impairment, depreciation /
amortization is provided on the revised carrying
amount of the asset over its remaining useful life.

An assessment for assets excluding goodwill
is made at each reporting date as to whether
there is any indication that previously recognized
impairment losses may no longer exist or may have
decreased. If such indication exists, the Company
estimates the asset's or cash-generating units
recoverable amount. A previously recognized
impairment loss is reversed only if there has been
a change in the assumptions used to determine

the recoverable amount since the last impairment
loss was recognized. 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 / amortization, had no impairment
loss been recognized for the asset in prior years.
Such reversal is recognized in the statement of
profit and loss.

d. Revenue from contracts with
customers

The Company derives revenue primarily from
Integrated Facility Management services ('IFM')
Revenues from contracts with customers are
considered for recognition and measurement when
the contract has been approved by the parties to
the contract, the parties to contract are committed
to perform their respective obligations under the
contract, and the contract is legally enforceable.

Revenue from contracts with customers is
recognised when control of the goods or services
("performance obligations") 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.
Revenue is measured at the Transaction price of
the consideration received or receivable, taking into
account contractually defined terms of payment
and excluding taxes or duties collected on behalf of
the government. The Company has concluded that
it is the principal in all of its revenue arrangements
since it is the primary obligor in all the revenue
arrangements as it has pricing latitude and is also
exposed to credit risks. Revenue is recognised
to the extent that it is highly probable that a
significant reversal in the amount of cumulative
revenue recognised will not occur. When there is
uncertainty as to collectability, revenue recognition
is postponed until such uncertainty is resolved.

The contract with customers for IFM services
generally contains a single performance obligation.
The company's contracts may include variable
consideration including discounts and penalties
which are reduced from revenues and recognised
based on an estimate of the expected pay out
relating to these considerations (expected price
concessions). Revenue is adjusted for expected
price concessions based on the management
estimates.

Goods and Service Tax (GST) is not received by

the Company or Company on its own account.
Rather, it is the tax collected on value added on the
services and commodity by the seller on behalf of
the government. Accordingly, it is excluded from
revenue.

If contractual unconditional right to consideration is
dependent on completion of contractual obligations
including right to receive the reimbursement of
gratuity cost from the customers, then such assets
are classified as contract assets.

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

e. Income from facility management
services

Revenues from facility management service
contracts are recognised over a period of time
in accordance with the requirements of Ind-AS
115, "Revenue from Contracts with customers"
as and when the Company satisfies performance
obligations by rendering the promised services
to its customers, and are net of discounts. The
performance obligations in the contracts are
fulfilled based on customer acceptances for
delivery of work/ attendance of resources, where
applicable, or as per terms of arrangements
entered with the customers

Contract balances

Contract assets

A contract asset is the right to consideration in
exchange for services transferred to the customer.
If the Company renders 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. Upon
completion of the service period and acceptance
by the customer (generally by confirming the
attendance records), the amount recognised as
contract assets is reclassified to trade receivables.

Contract assets are subject to impairment
assessment. Refer to accounting policies on
impairment of financial assets in section "Financial
instruments - initial recognition and subsequent
measurement". Refer section (i)

Trade receivables

A receivable represents the Company's right to
an amount of consideration that is unconditional
(i.e., only the passage of time is required before
payment of the consideration is due).

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.

f. Recognition of dividend income and
interest income

Dividend income on investments is recognised
when the unconditional right to receive dividend
is established. Interest income is recognized using
the effective interest rate method.

The 'effective interest rate' is the rate that exactly
discounts estimated future cash payments or
receipts through the expected life of the financial
instrument to:

• the gross carrying amount of the financial
asset; or

• the amortised cost of the financial liability.

In calculating interest income and expense, the
effective interest rate is applied to the gross
carrying amount of the asset (when the asset
is not credit-impaired) or to the amortised cost
of the liability. However, for financial assets that
have become credit-impaired subsequent to initial
recognition, interest income is calculated by
applying the effective interest rate to the amortised
cost of the financial asset. If the asset is no longer
credit-impaired, then the calculation of interest
income reverts to the gross basis.

g. Investment in subsidiaries

Investments in subsidiaries are carried at cost
less accumulated impairment losses, if any. Where
an indication of impairment exists, the carrying
amount of investment is assessed and written
down immediately to its recoverable amount.

h. 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

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

A financial asset (unless it is a trade receivable
without a significant financing component) are
recognised initially at fair value plus or minus, in
the case of financial assets not recorded at fair
value through profit or loss, transaction costs that
are attributable to the acquisition of the financial
asset. A trade receivable without a significant
financing component is initially measured at the
transaction price.

Effective interest method

The effective interest method (EIR) is a method
of calculating the amortised cost of a financial
instrument and of allocating interest income or
expense over the relevant period. The effective
interest rate is the rate that exactly discounts
future cash receipts or payments through the
expected life of the financial instrument, or where
appropriate, a shorter period. In calculating
interest income and expense, the effective interest
rate is applied to the gross carrying amount of the
asset (when the asset is not credit-impaired) or
to the amortised cost of the liability. However, for
financial assets that have become credit-impaired
subsequent to initial recognition, interest income
is calculated by applying the effective interest
rate to the amortised cost of the financial asset.
If the asset is no longer credit- impaired, then
the calculation of interest income reverts to the
gross basis.

Subsequent measurement

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

• Financial assets at amortised cost

• Financial assets at fair value through other
comprehensive income (FVTOCI)

• Financial assets, derivatives and equity
instruments at fair value through profit or
loss (FVTPL)

• Equity instruments measured at fair value
through other comprehensive income
(FVTOCI)

Financial assets at amortised cost

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

b) 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.

This category is the most relevant to the Company.
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
amortisation is included in finance income in the
profit or loss. The losses arising from impairment
are recognised in the profit or loss. This category
generally applies to trade and other receivables.
For more information on receivables, refer to Note
10 (Trade Receivables).

Financial asset at FVTOCI

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

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

b) The asset's contractual cash flows represent
SPPI.

Financial 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 P&L. On derecognition
of the asset, cumulative gain or loss previously
recognised in OCI is reclassified from the equity
to P&L. Interest earned whilst FVTOCI debt
instrument is reported as interest income using

the EIR method. The Company does not have any
debt instrument at FVTOCI.

Financial asset at FVTPL

FVTPL is a residual category for financial
instruments. Any financial instrument, which
does not meet the criteria for categorization as
at amortized cost or as FVTOCI, is classified as
at FVTPL.

In addition, the Company may elect to designate
a financial instrument, which otherwise meets
amortized cost or FVTOCI criteria, as at FVTPL.
However, such election is allowed only if doing
so reduces or eliminates a measurement or
recognition inconsistency (referred to as 'accounting
mismatch') The Company has not designated any
financial instrument as at FVTPL.

Financial instruments included within the FVTPL
category are measured at fair value with all
changes recognized in the statement of profit
and loss. Contingent consideration classified as
financial liability recognised by an acquirer in a
business combination to which Ind AS103 applies
are classified as at FVTPL. The Company does not
have any debt instrument at FVTPL.

The Company makes an assessment of the
objective of the business model in which a financial
asset is held at a portfolio level because this best
reflects the way the business is managed and
information is provided to management. The
information considered includes:

• the stated policies and objectives for
the portfolio and the operation of those
policies in practice. These include whether
management's strategy focuses on earning
contractual interest income, maintaining
a particular interest rate profile, matching
the duration of the financial assets to the
duration of any related liabilities or expected
cash outflows or realizing cash flows through
the sale of the assets;

• how the performance of the portfolio is
evaluated and reported to the Company's
management;

• the risks that affect the performance of the
business model (and the financial assets
held within that business model) and how
those risks are managed;

• how managers of the business are

compensated - e.g. whether compensation
is based on the fair value of the assets
managed or the contractual cash flows
collected; and

• the frequency, volume and timing of sales of
financial assets in prior periods, the reasons
for such sales and expectations about future
sales activity.

Transfers of financial assets to third parties in
transactions that do not qualify for derecognition
are not considered sales for this purpose, consistent
with the company's continuing recognition of the
assest.

Financial assets that are held for trading or are
managed and whose performance is evaluated on
a fair value basis are measured at FVTPL.

Financial assets - Assessment whether contractual
cash flows are solely payments of principal and

interest

For the purposes of this assessment, Principal is
defined as the fair value of the financial asset on
initial recognition. is defined as consideration for
the time value of money and for the credit risk
associated with the principal amount outstanding
during a particular period of time and for other
basic lending risks and costs (e.g. liquidity risk and
administrative costs), as well as a profit margin.

In assessing whether the contractual cash flows
are solely payments of principal and interest,
the Company considers the contractual terms of
the instrument. This includes assessing whether
the financial asset contains a contractual term
that could change the timing or amount of
contractual cash flows such that it would not meet
this condition. In making this assessment, the
Company considers:

• contingent events that would change the
amount or timing of cash flows;

• terms that may adjust the contractual coupon
rate, including variable-rate features;

• prepayment and extension features; and

• terms that limit the Company's claim to
cash flows from specified assets (e.g. non¬
recourse features).

A prepayment feature is consistent with the solely
payments of principal and interest criterion if the
prepayment amount substantially represents

unpaid amounts of principal and interest on the
principal amount outstanding, which may include
reasonable compensation for early termination
of the contract. Additionally, for a financial asset
acquired at a discount or premium to its contractual
par amount, a feature that permits or requires
prepayment at an amount that substantially
represents the contractual par amount plus
accrued (but unpaid) contractual interest (which
may also include reasonable compensation for
early termination) is treated as consistent with this
criterion if the fair value of the prepayment feature
is insignificant at initial recognition.

Derecognition

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

The Company performs impairment testing of its
investment in subsidiaries when any impairment
indicator exists, based on internal or external
sources of information. The recoverable amount
of the investment in subsidiary, which is based on
the higher of the value in use or fair value less
costs to sell has been derived using a discounted
cash flow model. These models use several key
assumptions, concerning estimates of future cash
flow forecasts, near and long-term growth rate and
the discount rate.

The Company applies expected credit loss model
for recognising impairment loss on financial
assets measured at amortised cost. The Company
measures the loss allowance for trade receivables
at an amount equal to lifetime expected credit loss
(ECL). The Company has used a practical expedient
by computing the expected credit loss allowance
for trade receivables based on a provision matrix
under simplified approach. The provision matrix
takes into account historical credit loss experience
and adjusted for forward looking information. The
expected credit loss allowance is based on the
ageing of the days the receivables are due.

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.
Provision for ECL is recognised for financial assets
measured at amortised cost and fair value through
other comprehensive income. It is the Company's
policy to measure ECLs on financial assets on a
12-month basis. However, when there has been a
significant increase in credit risk since origination,
the allowance will be based on the lifetime ECL.

For recognition of impairment loss on other
financial assets, the Company determines 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 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 Company reverts to
recognising impairment loss allowance based on
12-month ECL.

ECL impairment loss allowance (or reversal)
recognized during the period is recognized as
expenses in the statement of profit and loss (P&L).
This amount is

reflected under the head 'Impairment losses on
financial instrument and contract assets' in the
P&L.

Write-off

The gross carrying amount of a financial asset is
written off when the Company has no reasonable
expectations of recovering a financial asset in its
entirety or a portion thereof. Financial assets that
are written off could still be subject to enforcement
activities in order to comply with the company's
procedures for recovery of amounts due.

Reclassification 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.
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.

Financial liabilities:

Initial recognition and measurement

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

The company's financial liabilities include trade
and other payables, borrowings including bank
overdrafts, redemption liability and financial
guarantee contracts.

Subsequent measurement

All financial liabilities except derivatives are
subsequently measured at amortised cost using
the effective interest rate method or at Fair Value
through profit and loss.

The effective interest method is a method of
calculating the amortised cost of a financial liability
and of allocating interest expense over the relevant
period. The effective interest rate is the rate that
exactly discounts estimated future cash payments
(including all fees and points paid or received that
form an integral part of the effective interest rate,
transaction costs and other premiums or discounts)
through the expected life of the financial liability,
or (where appropriate) a shorter period, to the net
carrying amount on initial recognition.

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/ losses are
not subsequently transferred to P&L. 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.

Derecognition

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

Offsetting of financial instruments:

Financial assets and financial liabilities are offset
and the net amount is reported in the balance
sheet if there is a currently enforceable legal right
to offset the recognised amounts and there is an
intention to settle on a net basis, to realise the
assets and settle the liabilities simultaneously.

Derivative Financial Instruments:

The Company uses derivative financial instruments,
such as forward currency contracts, interest rate
swaps and forward commodity contracts, to hedge
its foreign currency risks, interest rate risks and
commodity price risks, respectively. Embedded
derivatives are separated from the host contract
and accounted for separately if the host contract
is not a financial asset and certain criteria are met.
Derivatives are initially recognised at fair value on
the date on which a derivative contract is entered
into and are subsequently re-measured at fair
value. Derivatives are carried as financial assets
when the fair value is positive and as financial
liabilities when the fair value is negative.

The purchase contracts that meet the definition of
a derivative under Ind AS 109 are recognised in the
statement of profit and loss. Commodity contracts
that are entered into and continue to be held for
the purpose of the receipt or delivery of a non¬
financial item in accordance with the company's
expected purchase, sale or usage requirements
are held at cost.

Any gains or losses arising from changes in the
fair value of derivatives are taken directly to profit
or loss, except for the effective portion of cash
flow hedges, which is recognised in OCI and later
reclassified to profit or loss when the hedge item
affects profit or loss or treated as basis adjustment
if a hedged forecast transaction subsequently
results in the recognition of a non-financial asset
or non-financial liability.

For the purpose of hedge accounting, hedges are
classified as:

• Fair value hedges when hedging the exposure
to changes in the fair value of a recognised
asset or liability or an unrecognised firm
commitment

• Cash flow hedges when hedging the exposure

to variability in cash flows that is either
attributable to a particular risk associated
with a recognised asset or liability or a
highly probable forecast transaction or the
foreign currency risk in an unrecognised firm
commitment

• Hedges of a net investment in a foreign

operation

At the inception of a hedge relationship, the
Company formally designates and documents the
hedge relationship to which the Company wishes to

apply hedge accounting and the risk management
objective and strategy for undertaking the hedge.

The documentation includes identification of the
hedging instrument, the hedged item, the nature
of the risk being hedged, and how the Company
will assess whether the hedging relationship meets
the hedge effectiveness requirements (including
the analysis of sources of hedge ineffectiveness
and how the hedge ratio is determined). A
hedging relationship qualifies for hedge accounting
if it meets all of the following effectiveness
requirements:

• There is an economic relationship' between
the hedged item and the hedging instrument.

• The effect of credit risk does not 'dominate
the value changes' that result from that
economic relationship.

• The hedge ratio of the hedging relationship is
the same as that resulting from the quantity
of the hedged item that the Company actually
hedges and the quantity of the hedging
instrument that the Company actually uses
to hedge that quantity of hedged item.

Hedges that meet the strict criteria for hedge
accounting are accounted for, as described below:

Fair value hedges

The change in the fair value of a hedging
instrument is recognised in the statement of profit
and loss as finance costs. The change in the fair
value of the hedged item attributable to the risk
hedged is recorded as part of the carrying value
of the hedged item and is also recognised in the
statement of profit and loss as finance costs.

For fair value hedges relating to items carried at
amortised cost, any adjustment to carrying value is
amortised through profit or loss over the remaining
term of the hedge using the EIR method. EIR
amortisation may begin as soon as an adjustment
exists and no later than when the hedged item
ceases to be adjusted for changes in its fair value
attributable to the risk being hedged.

If the hedged item is derecognised, the
unamortised fair value is recognised immediately
in profit or loss.

When an unrecognised firm commitment is
designated as a hedged item, the subsequent
cumulative change in the fair value of the firm

commitment attributable to the hedged risk
is recognised as an asset or liability with a
corresponding gain or loss recognised in profit
or loss.

Cash flow hedges

The effective portion of the gain or loss on the
hedging instrument is recognised in OCI in the
Effective portion of cash flow hedges, while any
ineffective portion is recognised immediately in the
statement of profit and loss. The Effective portion
of cash flow hedges is adjusted to the lower of the
cumulative gain or loss on the hedging instrument
and the cumulative change in fair value of the
hedged item.

The Company uses forward currency contracts as
hedges of its exposure to foreign currency risk
in forecast transactions and firm commitments,
as well as forward commodity contracts for its
exposure to volatility in the commodity prices.
The ineffective portion relating to foreign currency
contracts is recognised in finance costs and the
ineffective portion relating to commodity contracts
is recognised in other income or expenses.

The Company designates only the spot element of
a forward contract as a hedging instrument. The
forward element is recognised in OCI.

The amounts accumulated in OCI are accounted
for, depending on the nature of the underlying
hedged transaction. If the hedged transaction
subsequently results in the recognition of a
non-financial item, the amount accumulated in
equity is removed from the separate component
of equity and included in the initial cost or other
carrying amount of the hedged asset or liability.
This is not a reclassification adjustment and will
not be recognised in OCI for the period. This also
applies where the hedged forecast transaction
of a non-financial asset or non-financial liability
subsequently becomes a firm commitment for
which fair value hedge accounting is applied.

For any other cash flow hedges, the amount
accumulated in OCI is reclassified to profit or loss
as reclassification adjustment in the same period
or periods during which the hedged cash flows
affect profit or loss.

If cash flow hedge accounting is discontinued, the
amount that has been accumulated in OCI must
remain in accumulated OCI if the hedged future
cash flows are still expected to occur. Otherwise,

the amount will be immediately reclassified to
profit or loss as a reclassification adjustment. After
discontinuation, once the hedged cash flow occurs,
any amount remaining in accumulated OCI must
be accounted for depending on the nature of the
underlying transaction as described above.

Hedges of a net investment

Hedges of a net investment in a foreign operation,
including a hedge of a monetary item that is
accounted for as part of the net investment, are
accounted for in a way similar to cash flow hedges.
Gains or losses on the hedging instrument relating
to the effective portion of the hedge are recognised
as OCI while any gains or losses relating to the
ineffective portion are recognised in the statement
of profit or loss. On disposal of the foreign
operation, the cumulative value of any such gains
or losses recorded in equity is reclassified to the
statement of profit and loss (as a reclassification
adjustment).

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.

i. 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

The Company applies a single recognition and
measurement approach for all leases, except for
short-term leases and leases of low-value assets.

a) Right-of-use assets

The Company recognises right-of-use assets at the

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

as follows-

If ownership of the leased asset transfers to the
Company at the end of the lease term or the
cost reflects the exercise of a purchase option,
depreciation is calculated using the estimated
useful life of the asset.

The right-of-use assets are also subject to
impairment. Refer to the accounting policies in
section (f) Impairment of non-financial assets.

b) Lease liabilities

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

In calculating the present value of lease payments,
the Company uses its incremental borrowing rate
at the lease commencement date because the
interest rate implicit in the lease is not readily
determinable. After the commencement date, the

amount of lease liabilities is increased to reflect
the accretion of interest and reduced for the lease
payments made. In addition, the carrying amount
of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change
in the lease payments (e.g., changes to future
payments resulting from a change in an index or
rate used to determine such lease payments) or a
change in the assessment of an option to purchase
the underlying asset. (Refer Note 29)

c) Short-term leases and leases of low-
value assets

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

j. Retirement and other employee benefits

a) Short-term employment benefits

Liabilities for wages and salaries, including non¬
monetary benefits that are expected to be settled
wholly within 12 months after the end of the
period in which the employees render the related
service are recognised in respect of employee's
services up to the end of the reporting period and
are measured at the amounts expected to be paid
when the liabilities are settled.

b) Compensated absences

Accumulated leave, which is expected to be utilized
within the next 12 months, is treated as short-term
employee benefit. The Company measures the
expected cost of such absences as the additional
amount that it expects to pay as a result of the
unused entitlement that has accumulated at the
reporting date.

The Company treats accumulated leave expected
to be carried forward beyond twelve months, as
non-current employee benefit for measurement
purposes. Such non-current compensated absences
are provided for based on the actuarial valuation
using the projected unit credit method at the year-

end. Remeasurement actuarial gains/losses are
immediately taken to the statement of profit and
loss and are not deferred.

c) Termination benefits

Termination benefits are expensed at the earlier
of when the Company can no longer withdraw the
offer of those benefits and when the Company
recognises costs for a restructuring. If benefits are
not expected to be settled wholly within 12 months
of the reporting date, then they are discounted.
The liabilities are presented as provision for
employee benefits in the balance sheet.

d) Post-employment obligations

The Company operates the following post¬
employment schemes:

i. Gratuity obligations

Gratuity liability under the Payment of Gratuity
Act, 1972 is a defined benefit obligation. The
Plan provides payment to vested employees at
retirement, death or termination of employment,
of an amount based on the respective employee's
salary and the tenure of employment. The
Company provides the gratuity benefit through
annual contribution to a fund managed by the Life
Insurance Corporation of India (LIC). Under this
scheme the settlement obligation remains with the
Company although the LIC administers the scheme
and determines the contribution premium required
to be paid by the Company. The cost of providing
benefits under this plan is determined on the basis
of actuarial valuation at each year-end using the
projected unit credit method.

In addition to the above, the Company recognises
its liability in respect of gratuity for employees
(where customer reimburses gratuity) and its
right of

reimbursement as an asset. Employee benefits
expense in respect of gratuity to employees and
reimbursement right is presented in accordance
with Ind AS - 19.

Remeasurement, 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. Remeasurement is not reclassified to profit
or loss in subsequent periods.

Past service cost is 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
statement of profit and loss:

• Service costs comprising current Service
costs, past-Service costs and

• Net interest expense or income.
ii. Retirement benefits

Retirement benefit in the form of provident fund is
a defined contribution scheme. The Company has
no obligation, other than the contribution payable
to the provident fund. The Company recognizes
contribution payable to the provident fund scheme
as an expenditure, 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.

k. Taxes

Current tax

Income tax expense comprises current tax expense
and deferred tax charge or credit during the
year. Current income tax assets and liabilities are
measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax
rates and tax laws used to compute the amount are
those that are enacted or substantively enacted,
at the reporting date in the countries where the
Company operates and generates taxable income.
The Company has determined that interest and
penalties related to income taxes, including
uncertain tax treatments, do not meet the
definition of income taxes, and therefore accounted

for them under Ind AS 37 Provisions, Contingent
Liabilities and Contingent Assets.

Current income tax relating to items recognised
outside profit or loss is recognised outside profit
or loss (either in other comprehensive income or
in equity). Current tax items are recognised in
correlation to the underlying transaction either in
OCI or directly in equity. Management periodically
evaluates positions taken in the tax returns with
respect to situations in which applicable tax
regulations are subject to interpretation and
establishes provisions where appropriate.

The Company shall reflect the effect of uncertainty
for each uncertain tax treatment by using either
most likely method or expected value method,
depending on which method predicts better
resolution of the treatment.

Current tax assets and liabilities are offset only if
there is a legally enforceable right to set off the
recognised amounts, and it is intended to realise
the asset and settle the liability on a net basis or
simultaneously.

Deferred tax

Deferred tax is recognised 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.

• In respect of taxable temporary differences
associated with investments in subsidiaries
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
and at the time of the transaction, it does
not give rise to equal taxable and deductible
temporary differences.

Deferred tax assets are generally recognised for
all deductible temporary differences to the extent
that it is probable that taxable profits will be
available against which those deductible temporary

differences can be utilised. Such deferred tax
assets and liabilities are not recognised if the
temporary difference arises from the initial
recognition (other than in a business combination)
of assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting
profit and at the time of the transaction, it does
not give rise to equal taxable and deductible
temporary differences. In respect of deductible
temporary differences associated with investments
in subsidiaries, deferred tax assets shall be
recognised to the extent that, and only to the
extent that, it is probable that the temporary
difference will reverse in the foreseeable future
and taxable profit will be available against which
the temporary difference can be utilised.

Deferred tax asset is recognised for the carry
forward of unused tax losses and unused tax
credits to the extent that it is probable that future
taxable profit will be available against which the
unused tax losses and unused tax credits can be
utilised.

Minimum alternate tax (MAT) paid in a year is
charged to the statement of profit and loss as
current tax. The Company recognizes MAT credit
available as an asset only to the extent that there
is convincing evidence that the Company will pay
normal income tax during the specified period, i.e.,
the period for which MAT credit is allowed to be
carried forward. In the year in which the Company
recognizes MAT credit as a deferred tax asset. The
Company reviews the MAT credit entitlement asset
at each reporting date and writes down the asset
to the extent that it is no longer probable that it
will pay normal tax during the specified period.

The carrying amount of deferred tax assets is
reviewed at each reporting date and written off
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. 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 relating to items recognised outside
profit or loss is recognised outside profit or loss
(either in other comprehensive income or in
equity). Deferred tax items are recognised in
correlation to the underlying transaction either in
OCI or directly in equity.

Deferred tax assets and liabilities are offset if there
is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income
taxes levied by the same tax authority on the same
taxable entity, or on different tax entities, but they
intend to settle current tax liabilities and assets
on a net basis or their tax assets and liabilities will
be realised simultaneously in each future period in
which significant amounts of deferred tax liabilities
or assets are expected to be settled or recovered.

l. Government grants

Government grants are recognised where there is
reasonable assurance that the grant will be received
and all attached conditions will be complied with.
When the grant relates to an expense item, it is
recognised as income on a systematic basis over
the periods that the related costs, for which it
is intended to compensate, are expensed or is
deducted in the related expense. When the grant
relates to an asset, it is recognised as income in
equal amounts over the expected useful life of the
related asset.

When the Company receives grants of non¬
monetary assets, the asset and the grant are
recorded at fair value amounts and released
to profit or loss over the expected useful life in
a pattern of consumption of the benefit of the
underlying asset i.e. by equal annual instalments.
When loans or similar assistance are provided
by governments or related institutions, with an
interest rate below the current applicable market
rate, the effect of this favourable interest is
regarded as a government grant. The loan or
assistance is initially recognised and measured at
fair value and the government grant is measured
as the difference between the initial carrying value
of the loan and the proceeds received. The loan
is subsequently measured as per the accounting
policy applicable to financial liabilities.

m. Segment reporting

Segments are identified based on the manner in
which the Chief Operating Decision Maker (CODM)
decides about resource allocation and reviews
performance. Segment results that are reported
to the CODM include items directly attributable to
a segment as well as those that can be allocated
on a reasonable basis. The Managing Director
of the Company has been identified as being
the chief operating decision maker (CODM), he
evaluates the Company's performance, allocate
resources based on the analysis of the various
performance indicator of the Company. There is
only one reportable operating segment, viz, Facility
management services.

n. Earnings per share

Basic earnings per share is calculated by dividing
the net profit or loss attributable to equity holder
of parent company (after deducting preference
dividends and attributable taxes) by the weighted
average number of equity shares outstanding
during the period.

For the purpose of calculating diluted earnings
per share, the net profit or loss before OCI for the
period attributable to equity shareholders and the
weighted average number of shares outstanding
during the period are adjusted for the effects of
all dilutive potential equity shares.

o. Dividend

The Company recognises a liability to pay dividend
to equity holders of the parent when the distribution
is authorised, and the distribution is no longer at
the discretion of the Company. As per the corporate
laws in India, a distribution is authorised when it
is approved by the shareholders. A corresponding
amount is recognised directly in equity.