Provisions and contingencies Provisions

Provisions are recognised when the Company has a present
obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. If the
effect of the time value of money is material, provisions are
discounted using equivalent period government securities
interest rate. Unwinding of the discount is recognised in the
Statement of Profit and Loss as a finance cost. Provisions
are reviewed at each balance sheet date and are adjusted to
reflect the current best estimate.

Contingencies

Contingent liabilities are disclosed when there is a possible
obligation arising from past events, the existence of which
will be confirmed only by the occurrence or non-occurrence
of one or more uncertain future events not wholly within
the control of the Company or a present obligation that
arises from past events where it is either not probable that
an outflow of resources will be required to settle or a reliable
estimate of the amount cannot be made. Information on
contingent liability is disclosed in the Notes to the Financial
Statements. Contingent assets are not recognised. However,
when the realisation of income is virtually certain, then
the related asset is no longer a contingent asset, but it is
recognised as an asset.

3.15 Lease

The Company, as a lessee, recognises a right-of-use asset and
a lease liability for its leasing arrangements, if the contract
conveys the right to control the use of an identified asset.

The contract conveys the right to control the use of an
identified asset, if it involves the use of an identified asset
and the Company has substantially all of the economic
benefits from use of the asset and has right to direct the use
of the identified asset. The cost of the right-of-use asset shall
comprise of the amount of the initial measurement of the lease
liability adjusted for any lease payments made at or before
the commencement date plus any initial direct costs incurred.
The right-of-use assets is subsequently measured at cost less

any accumulated depreciation, accumulated impairment
losses, if any and adjusted for any re-measurement of the
lease liability. The right-of-use assets is depreciated using
the straight-line method the commencement date over the
shorter of lease term or useful life of right-of-use asset.

The Company measures the lease liability at the present value
of the lease payments that are not paid at the commencement
date of the lease. The lease payments are discounted using
the interest rate implicit in the lease, if that rate can be readily
determined. If that rate cannot be readily determined, the
Company uses incremental borrowing rate.

The lease liability is subsequently remeasured by increasing
the carrying amount to reflect interest on the lease liability,
reducing the carrying amount to reflect the lease payments
made and remeasuring the carrying amount to reflect
any reassessment or lease modifications. The Company
recognises the amount of the re-measurement of lease
liability as an adjustment to the right-of-use asset. Where
the carrying amount of the right-of-use asset is reduced to
zero and there is a further reduction in the measurement of
the lease liability, the Company recognises any remaining
amount of the re-measurement in statement of profit and
loss.

For short-term and low value leases, the Company recognises
the lease payments as an operating expense on a straight-line
basis over the lease term.

For a lease modification or termination, the lessee shall
account for the remeasurement of lease liability by

a) Decreasing the carrying amount of the right of use
assets to reflect the partial or full termination for
lease modification or lease termination. The lessee
shall recognise any profit and loss on the partial or full
termination of the lease in the statement of profit and
loss account.

b) Making a corresponding adjustment to the right of use
assets for all other modifications.

3.16 Current /non-current classification

The Company presents assets and liabilities in statement
of financial position based on current/non-current
classification.

The Company has presented non-current assets and current
assets before equity, non-current liabilities and current

liabilities in accordance with Schedule III, Division II of
Companies Act, 2013 notified by MCA.

An asset is classified as current when it is:

a) Expected to be realised or intended to be sold or
consumed in normal operating cycle,

b) Held primarily for the purpose of trading,

c) Expected to be realised within twelve months after the
reporting period, or

d) 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 classified as current when:

a) It is expected to be settled in normal operating cycle,

b) It is held primarily for the purpose of trading,

c) It is due to be settled within twelve months after the
reporting period, or

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

All other liabilities are classified as non-current.

The operating cycle is the time between the acquisition of
assets for processing and their realisation in cash or cash
equivalents.

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

3.17 Government Grant

Government Grant Government grants with a condition to
purchase, construct or otherwise acquire long-term assets
are initially measured based on grant receivable under the
scheme. Such grants are recognised in the Statement of
Profit and Loss on a systematic basis over the useful life of
the asset. Amount of benefits receivable in excess of grant
income accrued based on usage of the assets is accounted as
Government grant received in advance. Changes in estimates
are recognised prospectively over the remaining life
of the assets.

The company has option to present the government grant
related to fixed assets by deducting the grant from the
carrying value of the asset and to present the non-monetary
grant at a nominal amount. The company has not availed this
option in current financial year.

Grants from the government are recognised at their fair value
where there is a reasonable assurance that the grant will
be received and the company will comply with all attached
condition.

Government revenue grants relating to income are deferred
and recognised in the Statement of Profit and Loss over the
period necessary to match them with the costs that they are
intended to compensate.

3.18 Recent accounting pronouncements

Ministry of Corporate Affairs (“MCA”) notifies new standards
or amendments to the existing standards under Companies
(Indian Accounting Standard) Rules as issued from time
to time. On March 31, 2023, MCA amended the Companies
(Indian Accounting Standard) Amendments Rules, 2023, as
below:

Ind AS -1 Presentation of Financial Statements - This
amendment requires the entities to disclose their material
accounting policies rather than their significant accounting
policies. The effective date of adoption of this amendment
is annual periods beginning on or after April 1, 2023. The
Company has evaluated the amendments and the impact of
the amendment is insignificant in the standalone financial
statements.

Ind AS - 8 Accounting Policies, Changes in Accounting
Estimates and Errors - This amendment has introduced
a definition of 'Accounting Estimates’ and included
amendments to Ind AS 8 to help entities distinguish changes
in accounting policies from changes in accounting estimates.
The effective date for adoption of this amendments is annual
periods beginning on or after April 1, 2023. The Company has
evaluated the amendments and there is no impact on its
standalone financial statements.

Ind AS 12-Income Taxes-This amendment has narrowed the
scope of initial recognition exemption so that it does not
apply to transactions that give rise to equal and offsetting
temporary differences. The effective date for adoption of this
amendment is annual periods beginning on or after April 1,

2023.The Company has evaluated the amendment and there
is no impact on its standalone financial statement.

4. CRITICAL ACCOUNTING ESTIMATES, ASSUMPTIONS AND
JUDGEMENTS

In the process of applying the Company’s accounting policies,
management has made the following estimates,assumptions
and judgements, which have significant effect on the amounts
recognised in the financial statement:

(a) Property, plant and equipment

External adviser and internal technical team assess the
remaining useful lives and residual value of property,
plant and equipment. Management believes that the
assigned useful lives and residual value are reasonable,
the estimates and assumptions made to determine their
carrying value and related depreciation are critical to
the Company’s financial position and performance.

(b) Income taxes

Management judgment is required for the calculation
of provision for income taxes and deferred tax assets
and liabilities. The Company reviews at each balance
sheet date the carrying amount of deferred tax assets.
The factors used in estimates may differ from actual
outcome which could lead to significant adjustment to
the amounts reported in the financial statements.

(c) Contingencies

Management judgement is required for estimating
the possible outflow of resources, if any, in respect of
contingencies/claim/litigations against the Company
as it is not possible to predict the outcome of pending
matters with accuracy.

(d) Allowance for uncollected accounts receivable and
advances

Trade receivables do not carry any interest and are
stated at their normal value as reduced by appropriate
allowances for estimated irrecoverable amounts.
Individual trade receivables are written off when
management deems them not to be collectible.

Impairment is made on the expected credit losses,
which are the present value of the cash shortfall over the
expected life of the financial assets.

(e) Fair valuation of Financial Assets and Liabilities

When the fair value of financial assets and financial
liabilities recorded in the balance sheet cannot be
measured based on quoted prices in active markets,
their fair value is measured using valuation techniques
including the Discounted Cash Flow (DCF) model.
The input to these models are taken from observable
markets where possible, but where this is not feasible,
a degree of judgement is required in establishing fair
value. Judgements include consideration of input
such as liquidity risk, credit risk and volatility. Changes
in assumptions about these factors could affect the
reported fair value of financial instruments.

(f) Defined Benefit Plan

The cost of the defined benefit plan and other post¬
employment benefits and the present value of such
obligation are determined using actuarial valuations. An
actuarial valuation involves making various assumptions
that may differ from actual developments in future.
These includes the determination of the discount rate,
future salary increases, mortality rates and attrition
rate. Due to the complexities involved in the valuation
and its long-term nature, a defined benefit obligation
is highly sensitive to changes in these assumptions. All
assumptions are reviewed at each reporting date.