3.14 Provisions and contingencies

3.14.1 Provisions

Provisions are recognised when the Company has a present obligation as a result of a past event and 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.

The amount recognised as a provision is the best estimate of the consideration required to settle
the present obligation at the end of the reporting period, taking into account the risks and
uncertainties surrounding the obligation. When the effect of time value is material, the amount is
determined by discounting the expected future cash flows.

3.14.2 Contingent liabilities

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.

3.15 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.

3.15.1.1 Recognition and measurement

All financial assets are recognised initially at fair value plus (other than financial assets at fair value
through profit or loss) transaction costs that are attributable to the acquisition of the financial asset.
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.

All recognised financial assets are subsequently measured in their entirety at either amortised cost or
fair value, depending on the classification of the financial assets.

3.15.1.2 Classification of financial assets

Classification of financial assets depends on the nature and purpose of the financial assets and is
determined at the time of initial recognition. The Company classifies its financial assets in the
following measurement categories:

a) those measured at amortized cost,

b) those to be measured subsequently at fair value, either through other comprehensive income
(FVTOCI) or through profit or loss (FVTPL)

Financial assets at amortised cost:

A financial assets is measured at the amortised cost if both the following conditions are met:

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.

Financial assets at FVTOCI:

A financial asset is classified as at the FVTOCI if both of the following criteria are met unless the asset
is designated at fair value through profit or loss under fair value option.

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

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

Financial assets at FVTPL:

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

3.15.1.4 Derecognition

A financial asset is primarily derecognised when:

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

b) 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.

3.15.1.5 Impairment of financial assets

In 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

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

b) Any contractual right to receive cash or another financial asset that result from transactions that are
within the scope of Ind AS 18.

The Company believes that, considering their nature of business and past history, the expected credit
loss in relation to its financial assets is non-existent or grossly immaterial. Thus, the Company has not
recognised any provision for expected credit loss. The Company reviews this policy annually, if

3.15.2 Financial liabilities

3.15.2.1 Recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit
or loss, borrowings, payables, as appropriate.

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

The Company's financial liabilities include trade and other payables and borrowings.

All recognised financial liabilities are subsequently measured in their entirety at either amortised cost
or fair value, depending on the classification of the financial liabilities.

3.15.2.2 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

3.16 Offsetting financial instruments

Financial assets and liabilities are offset and the net amount is reported in the balance sheet where
there is a legally enforceable right to offset the recognised amounts and there is an intention to settle
on a net basis or realise the asset and settle the liability simultaneously.

3.17 Cash and cash equivalents

Cash and cash equivalents comprises cash on hand, cash at bank and short term deposits with an
original maturity of three months or less, which are subject to insignificant risk of changes in value.

3.18 Earnings per share (EPS)

Basic earnings per share has been computed by dividing the profit/(loss) after tax by the weighted
average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the profit/(loss) after tax and the weighted
average number of shares outstanding during the year are adjusted for the effects of all dilutive
potential equity share (if any).

4.1 The Company has elected to continue with the carrying value of all of its property,
plant and equipment as at the transition date of April 1, 2018 measured as per the
previous GAAP and use that carrying value as its deemed cost as of the transition date.

20.1 First time adoption of Ind AS

The Company adopted Ind AS effective from April 1, 2018, and has been preparing its financial
statements in accordance with these standards. The effects of the Company's transition to Ind

(i) Transition elections

(ii) Reconciliation of equity, total comprehensive income, balance sheet, profit and loss and cash
flows as reported as per Ind AS in this statement with as reported in previous years as per
previous GAAP.

20.2 Transition elections

The Company has prepared the opening balance sheet as per Ind AS as of April 1, 2017 (the
transition date) by recognising all assets and liabilities whose recognition is required by Ind AS,
not recognising items of assets or liabilities which are not permitted by Ind AS, by reclassifying
items from previous GAAP to Ind AS as required under Ind AS and applying Ind AS in
measurement of recognised assets and liabilities. However, this principle is subject to certain
exception and certain optional exemptions availed by the Company as detailed below.

20.3 Exemptions applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of
certain requirements under Ind AS. The Company has accordingly applied the following

20.4 Deemed cost of property, plant and equipment and other intangibles assets

The Company has opted to consider previous GAAP carrying value of property, plant and
equipment and other intangible assets as deemed cost on transition date.

20.5 Leases

The Company has opted to determine whether an arrangement existing at the date of transition
contains a lease, on the basis of facts and circumstances existing at the date of transition rather
than at the inception of the arrangement.

21 Significant accounting judgements, estimates and assumptions

The preparation of the financial statements requires management of the Company to make judgements,
estimates and assumptions that effect the reported amounts of revenues, expenses, assets and liabilities, and
the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions
and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or
liabilities affected in future periods.

In the process of applying the accounting policies, management has made the following judgements, which
have the most significant effect on the amounts recognised in the financial statements:

22 Deferred tax assets

The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the
Company's future taxable income against which the deferred tax assets can be utilized.

23 Defined benefit obligation (DBO)

Management's estimate of the DBO is based on a number of critical underlying assumptions such as standard
rates of inflation, medical cost trends, mortality, discount rate and anticipation of future salary increases.
Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit
expenses.

24 Useful lives of porperty, plant and equipment and intangible assets

The Company reviews the estimated useful lives at the end of each reporting period.

25 Contingent liabilities

The Company has ongoing litigations with various regulatory authorities and others. Where an outflow of funds
is believed to be probable and a reliable estimate of the outcome of the dispute can be made based on
management's assessment of specific circumstances of each dispute and relevant external advice,
management provides for its best estimate of the liability.