ಕಂಪನಿಯ ಅಕೌಂಟಿಗ್ ಪಾಲಿಸಿ Indiqube Spaces Ltd.

Mar 31, 2026

3 Material accounting policy
information

The accounting policies set out below have been
applied consistently to all periods presented in
these financial information.

(a) Property, plant and equipment

i. Recognition and measurement

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.

If significant parts of an item of property,
plant and equipment have different useful
lives, then they are accounted for as
separate items (major components) of
property, plant and equipments.

Property, plant and equipment are carried
at cost less accumulated depreciation
and impairment losses, if any. The cost of
property, plant and equipment comprises
its purchase price/acquisition cost, net
of any trade discounts and rebates, any
import duties and other taxes (other than
those subsequently recoverable from the
tax authorities), any directly attributable
expenditure on making the asset ready
for its intended use, other incidental
expenses, plant and equipment up to the
date the asset is ready for its intended
use. Subsequent expenditure on property,
plant and equipment after its purchase/
completion is capitalised only if the cost of
item can be measured reliably.

An item of property, plant and equipment
is derecognised upon disposal or when
no future economic benefits are expected
to arise from continued use of the asset.
Any gain or loss arising on the disposal
or retirement of an item of property, plant

and equipment is determined as the
difference between the sales proceeds
and the carrying amount of the asset and
is recognised in the statement of profit and
loss. Repairs and maintenance costs are
recognised in the statement of profit and
loss when incurred.

Advances paid towards acquisition of
property, plant and equipment outstanding
at each balance sheet date is classified as
capital advances and the cost of assets not
put to use before such date are disclosed
under ''Capital work-in-progress''.

ii. Subsequent Expenditure

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.

iii. Depreciation

Depreciation on property, plant and
equipment is provided on the straight¬
line method over the useful life and in the
manner prescribed in Schedule II to the
Act. However, where the management''s
estimate of the remaining useful life of the
assets on a review subsequent to the time
of acquisition is different, then depreciation
is provided over the remaining useful life
based on the revised useful life.

The Company believes the useful lives
as given above best represent the useful
life of these assets based on internal
assessment, which is different from the

useful lives as prescribed under Schedule
II of the Companies Act, 2013.

The useful lives and methods of
depreciation of property, plant and
equipment are reviewed at each reporting
date and adjusted, if appropriate.

iv. Capital work-in-progress includes cost
of property, plant and equipment under
installation / under development as at the
balance sheet date.

(b) Intangible Assets

i. Recognition and measurement and
amortisation

Intangible Assets:

Intangible assets are stated at cost
less accumulated amortisation and
accumulated impairment losses. Intangible
assets are amortised over their respective
estimated useful lives on a straight line
basis, from the date that they are available
for use. The estimated useful life of an
identifiable intangible assets is based on
a number of factors including the effects
of obsolescence, demand, competition
and other economic factors (such as
the stability of the industry and known
technological advances) and the level of
maintenance expenditures required to
obtain the expected future cash flows from
the asset.

Amortisation method and useful lives are
reviewed at the end of each financial year
and adjusted if appropriate.

Intangible assets under development:

Development expenditure is capitalised as
part of the cost of the resulting intangible
asset only if the expenditure can be
measured reliably, the product or process
is technically and commercially feasible,
future economic benefits are probable and
the Company intends to and has sufficient
resources to complete development and
to use or sell the asset. Otherwise, it is
recognised in profit or loss as incurred.

ii. Subsequent Expenditure

Subsequent expenditure is capitalised
only when it increases the future economic
benefits and cost can be measured reliably
embodied in the specific asset to which
it relates.

(c) Impairment

i. Financial Assets

The Company recognises loss allowances
using the expected credit loss (ECL)
model for the financial assets which are
not fair valued through profit or loss.
Loss allowance for trade receivables
with no significant financing component
is measured at an amount equal to
lifetime ECL. For all other financial assets,
expected credit losses are measured at an
amount equal to the 12-month ECL, unless
there has been a significant increase in
credit risk from initial recognition in which
case those are measured at lifetime ECL.
The amount of expected credit losses
(or reversal) that is required to adjust the
loss allowance at the reporting date to the
amount that is required to be recognised is
recognised as an impairment gain or loss in
profit or loss.

A financial asset is ''credit impaired'' when
one or more events that have a detrimental
impact on the estimated future cash flows
of the financial asset have occurred.

Evid ence that a financial asset is
credit-impaired includes the following
observable data:

- Significant financial difficulty of
the debtor;

- A breach of contract such as a default
or being more than 365 days past
due or

- It is probable that the debtor will
enter into bankruptcy or other
financial reorganisation.

Write off

The gross carrying amount of a financial
asset is written off (either partially or in
full) to the extent that there is no realistic
prospect of recovery. This is generally the
case when the Company determines that
the debtor does not have assets or sources

of income that could generate sufficient
cash flows to repay the amounts subject to
the write-off.

Company considers a financial asset to be
in default when:

The debtor is unlikely to pay its credit
obligations to the Company in full, without
full recourse by the Company to action
such as realising security (if any is held).

Measurement of ECLs

Credit losses are measured as the
present value of all cash shortfalls (i.e. the
difference between the cash flows due to
the entity in accordance with the contract
and the cash flows that the Company
expects to receive). Loss allowances for
financial assets measured at amortised
cost are deducted from the gross carrying
amount of the assets, if any.

Loss allowances for trade receivables are
always measured at an amount equal to
lifetime expected credit losses. Lifetime
expected credit losses are the expected
credit losses that result from all possible
default events over the expected life
of a financial instrument. In all cases,
the maximum period considered when
estimating expected credit losses is the
maximum contractual period over which
the Company is exposed to credit risk.

ii. Non - financial assets

Intangible assets and property, plant and
equipment, Capital work-in-progress and
Intangible assets under development are
evaluated for recoverability whenever events
or changes in circumstances indicate that their
carrying amounts may not be recoverable.
For the purpose of impairment testing, the
recoverable amount (i.e. the higher of the
fair value less cost to sell and the value-in¬
use) is determined on an individual asset
basis unless the asset does not generate
cash inflows that are largely independent of
those from other assets. In such cases, the
recoverable amount is determined for the CGU
to which the asset belongs. If such assets are
considered to be impaired, the impairment to
be recognised in the Statement of Profit and
Loss is measured by the amount by which
the carrying value of the assets exceeds the
estimated recoverable amount of the asset.

An impairment loss is reversed (except for
goodwill) in the Statement of Profit and Loss
if there has been a change in the estimates
used to determine the recoverable amount. The
carrying amount of the asset is increased to its
revised recoverable amount, provided that this
amount does not exceed the carrying amount
that would have been determined (net of any
accumulated amortisation or depreciation) had
no impairment loss been recognised for the
asset in prior years.

(d) Leases

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

As a lessee

The Company applies a single recognition and
measurement approach for all leases except
for short-term leases and low-value leases.
The Company recognises lease liabilities to
make lease payments and right-of-use assets
representing the right to use the underlying
assets. The nature of expenses related to those
leases has changed from lease rent in previous
periods to (i) amortisation for the right-to-use
asset, and (ii) interest accrued on lease liability.

i) Right-of-use assets:

The Company recognises a right-of-use
asset and a lease liability at the lease
commencement date. The right-of-use
asset is initially measured at cost, which
comprises the initial amount of the lease
liability adjusted for any lease payments
made at or before the commencement
date, plus any initial direct costs incurred
and an estimate of costs to dismantle
and remove the underlying asset or to
restore the underlying asset or the site
on which it is located, less any lease
incentives received.

The right-of-use asset is subsequently
depreciated using the straight-line method
from the commencement date to the
earlier of the end of the useful life of the
right-of-use asset or the end of the lease
term, unless the lease transfers ownership
of the underlying asset to the Company
by the end of the lease term or the cost

of the right-of-use asset reflects that the
Company will exercise a purchase option.
In that case the right-of-use asset will
be depreciated over the useful life of the
underlying asset, which is determined on
the same basis as those of property and
equipment. In addition, the right-of-use
asset is periodically reduced by impairment
losses, if any, and adjusted for certain
remeasurements of the lease liability.

ii) Lease Liabilities:

The lease liability is initially measured at
the present value of the lease payments
that are not paid at the commencement
date, discounted using the interest rate
implicit in the lease or, if that rate cannot
be readily determined, the Company''s
incremental borrowing rate. Generally, the
Company uses its incremental borrowing
rate as the discount rate. Lease payments
included in the measurement of the lease
liability comprise fixed payments.

The Company determines its incremental
borrowing rate by obtaining interest rates
from various external financing sources
and makes certain adjustments to reflect
the terms of the lease and type of the
asset leased.

The lease liability is measured at amortised
cost using the effective interest method.
It is remeasured when there is a change
in future lease payments arising from
a change in an index or rate, if there is a
change in the Company''s estimate of the
amount expected to be payable under a
residual value guarantee, if the Company
changes its assessment of whether it
will exercise a purchase, extension or
termination option or if there is a revised
in-substance fixed lease payment.

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 or change in
the assessment of an option to purchase
the underlying asset.

iii) Short-term leases and leases of low-
value assets:

The Company elects not to recognise
right-of-use assets and lease liabilities
for leases of low-value assets and short¬
term leases, including IT equipment. The
company recognised the lease payments
associated with these leases as an
expense in profit or loss on a straight-line
basis over the lease term.

iv) Modifications to a lease

A lessee accounts for a lease modification
as a separate lease if both of the following
conditions exist:

- the modification increases the scope
of the lease by adding the right to use
one or more underlying assets; and

- the consideration for the lease
increases by an amount commensurate
with the stand-alone price for the
increase in scope and any appropriate
adjustments to that stand-alone price
to reflect the circumstances of the
particular contract.

In this case, the lessee accounts for the
separate lease in the same way as any
new lease and makes no adjustment to the
accounting for the initial lease. The lessee
uses a revised discount rate to account
for the separate lease. The new rate is
determined at the effective date of the
modification. The lessee uses the interest
rate implicit in the lease if it is readily
determinable; otherwise the lessee uses
its incremental borrowing rate.

For a lease modification that is not
accounted for as a separate lease, at the
effective date of the lease modification a
lessee shall:

- allocate the consideration in the
modified contract

- determine the lease term of the
modified lease

- remeasure the lease liability by
discounting the revised lease
payments using a revised discount
rate. The revised discount rate is
determined as the interest rate
implicit in the lease for the remainder
of the lease term, if that rate can be
readily determined, or the lessee''s
incremental borrowing rate at the
effective date of the modification, if
the interest rate implicit in the lease
cannot be readily determined.

As a lessor

At inception or on modification of a
contract that contains a lease component,
the Company allocates the consideration
in the contract to each lease component on
the basis of their relative standalone prices.

When the Company acts as a lessor, it
determines at lease inception whether
each lease is a finance lease or an
operating lease.

The Company recognises lease payments
received under operating leases as income
on a straight-line basis over the lease term
as part of ''Rental income''.

To classify each lease, the Company
makes an overall assessment of whether
the lease transfers substantially all of the
risks and rewards incidental to ownership
of the underlying asset. If this is the case,
then the lease is a finance lease; if not,
then it is an operating lease. As part of
this assessment, the Company considers
certain indicators such as whether the
lease is for the major part of the economic
life of the asset.

When the Company is an intermediate
lessor, it accounts for its interests in the
head lease and the sub-lease separately. It
assesses the lease classification of a sub¬
lease with reference to the right-of-use
asset arising from the head lease, not with
reference to the underlying asset. If a head
lease is a short-term lease to which the
Company applies the exemption described
above, then it classifies the sub-lease as
an operating lease.

When the Company as an intermediate
lessor enters into an intermediate finance
lease, it derecognises the right-of-use
asset under the head lease which it
transfers to the sub lessee, recognises the
net investment in the sublease as an asset,
recognises the difference between the
right-of-use asset and the net investment
as a gain or loss and continue to recognise
the lease liability, i.e., the lease payments
owed to the head lessor, for the head lease.
Over the sublease term, the intermediate
lessor recognises the interest income from
the sublease and the interest expense for
the head lease.

(e) Financial instruments

i Recognition and initial measurement

Trade receivables are initially recognised
when they are originated. All other financial
assets and financial liabilities are initially
recognised when it becomes a party to the
contractual provisions of the instrument.
All financial assets (unless it is a trade
receivable without a significant financing
component) and liabilities are measured at
fair value on initial recognition. Transaction
costs that are directly attributable to the
acquisition or issue of financial assets
and financial liabilities, that are not at fair
value through profit or loss, are added to
the fair value on initial recognition. A trade
receivable without a significant financing
component is initially measured at the
transaction price.

ii Classification and subsequent
measurement

Financial Assets

On initial recognition, a financial asset is
classified as measured at:

- amortised cost;

- FVOCI - debt investment;

- FVOCI - equity investment; or

- FVTPL

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

Financial assets carried at amortised cost

A financial asset is subsequently measured
at amortised cost if it is held within a
business model whose objective is to hold
the asset in order to collect contractual
cash flows and the contractual terms of the
financial asset give rise on specified dates
to cash flows that are solely payments
of principal and interest on the principal
amount outstanding.

Financial assets at fair value through
other comprehensive income

A financial asset is subsequently measured
at fair value through other comprehensive
income if it is held within a business model
whose objective is achieved by both
collecting contractual cash flows and
selling financial assets and the contractual
terms of the financial asset give rise on
specified dates to cash flows that are
solely payments of principal and interest
on the principal amount outstanding.

Financial assets at fair value through
profit or loss

A financial asset which is not classified
in any of the above categories are
subsequently fair valued through profit
or loss.

Financial liabilities

Financial liabilities are subsequently
carried at amortised cost using the
effective interest method. For trade and
other payables maturing within one year
from the Balance Sheet date, the carrying
amounts approximate fair value due to the
short maturity of these instruments.

iii Derecognition
Financial assets

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

If the Company enters into transactions
whereby the transfers assets recognised
on its balance sheet, but retains either all or
substantially all of the risks and rewards of the
transferred assets, the transferred assets are
not derecognised.

Financial liabilities

The Company derecognises a financial liability
when its contractual obligations are discharged
or cancelled, or expire.

The Company also derecognises a financial
liability when its terms are modified and the
cash flows under the modified terms are
substantially different. In this case, a new
financial liability based on the modified terms
is recognised at fair value. The difference
between the carrying amount of the financial
liability extinguished and a new financial
liability with modified terms is recognised in the
Statement of Profit and Loss.

iv Offsetting

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

v Compound Financial Instrument

On initial recognition, the liability component
of the compound financial instrument is
first measured at its fair value. The equity
component is measured as the residual
amount that results from deducting the fair
value of the liability component from the initial
carrying amount of the instrument as a whole.
Any directly attributable transaction costs are
allocated to the liability and equity components
in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability
component of the compound financial
instruments is re-measured at fair value at each
reporting period end. The difference in the
fair value of liability component is recognised
in the statement of profit and loss. The
equity component of the compound financial
instrument is remeasured subsequently.

(f) Revenue Recognition

Revenue from contracts with customers

Revenue is recognised on the basis of approved
contracts regarding the transfer of goods or
services to a customer for an amount that
reflects the consideration to which the entity
expects to be entitled in exchange for those
goods and services.

Revenue towards satisfaction of a performance
obligation is measured at the amount of
transaction price (net of variable consideration)
allocated to that performance obligation. The
transaction price of goods sold and services

rendered is net of variable consideration. Any
amounts receivable from the customer are
recognised as revenue after the control over
the goods sold and services rendered are
transferred to the customer.

Variable consideration includes incentives,
rebates, discounts etc. which is estimated
at contract inception considering the terms
of various schemes with customers 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. It is reassessed at the end of each
reporting period.

Satisfaction of performance obligation

Revenue is recognised when (or as) the
Company satisfies a performance obligation
by transferring a promised good or service
(i.e. an asset) to a customer. An asset is
transferred when (or as) the customer obtains
control of that asset. For each performance
obligation identified, the Company determine
at contract inception whether it satisfies the
performance obligation over time or satisfies
the performance obligation at a point in time.

Where performance obligation is satisfied
over time, the Company recognises revenue
over the contract period. Where performance
obligation is satisfied at a point in time,
Company recognises revenue when customer
obtains control of promised goods and services
in the contract.

Rental income

Service revenue includes rental revenue for
use of leased premises and related ancillary
services. Revenue from leased out premises
under an operating lease is recognised on a
straight line basis over the non- cancellable
period (''lease term for revenue''), except where
there is an uncertainty of ultimate collection.
After lease term for revenue or where there is
no non-cancellable period, rental revenue is
recognised as and when services are rendered
on a monthly basis as per the contractual
terms prescribed under agreement entered
with customers.

Electricity and maintenance services

Revenue from electricity and maintenance
services are recognised monthly, on accrual
basis, in accordance with the terms of the
respective agreement as and when the services
are rendered.

Other ancillary service

Revenue from others ancillary services mainly
includes IT support services and other value
added services. It is recognised as and when
the services are rendered in accordance with
the terms of respective agreements.

Contract liability

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.

Sale of goods

Revenue from sale of goods is recognised on
transfer of control of ownership of goods to
the buyer and when no significant uncertainty
exists regarding the amount of consideration
that will be delivered.

(g) Recognition of interest income

Interest income is recognised using the
effective interest method (''EIR'').

(h) Income Tax

Income tax comprises of current tax and
deferred tax. It is recognised in profit or loss
except to the extent that it relates to a business
combination or to an item recognised directly in
equity or in other comprehensive income.

i Current Tax

Current tax comprises the expected tax
payable or receivable on the taxable
income or loss for the year and any
adjustment to the tax payable or receivable
in respect of previous years. The amount
of current tax reflects the best estimate
of the tax amount expected to be paid or

received after considering the uncertainty,
if any related to income taxes. It is
measured using tax rates (and tax laws)
enacted or substantively enacted by the
reporting date.

ii Deferred Tax

Deferred tax is recognised in respect
of temporary differences between the
carrying amounts of assets and liabilities
for financial reporting purposes and the
corresponding amounts used for taxation
purposes. Deferred tax is also recognised
in respect of carried forward tax losses
and tax credits.

Deferred tax assets are recognised for
unused tax losses, unused tax credits
and deductible temporary differences to
the extent that it is probable that future
taxable profits will be available against
which they can be used. Deferred tax
assets recognised or unrecognised are
reviewed at each reporting date and are
recognised / reduced to the extent that it is
probable / no longer probable respectively
that the related tax benefit will be realised.
Deferred tax is measured at the tax rates
that are expected to apply to the period
when the asset is realised or the liability
is settled, based on the laws that have
been enacted or substantively enacted by
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.

The Company offsets, the current tax
assets and liabilities (on a year on year
basis) and deferred tax assets and
liabilities, where it has a legally enforceable
right and where it intends to settle such
assets and liabilities on a net basis.

The Company recognises deferred tax
related to assets and liabilities separately
arising from a single transaction that give
rise to equal and off-setting differences.

MAT payable for a year is charged to the
Statement of Profit and Loss as current
tax. The Company recognises 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 recognises MAT credit as
an asset in accordance with the Guidance
Note on Accounting for Credit Available in
respect of Minimum Alternative Tax under
the Income-tax Act, 1961, the said asset is
created by way of credit to the Statement
of Profit and Loss and shown as ''MAT
Credit Entitlement'' under Deferred Tax.
The Company reviews the same at each
reporting date and writes down the asset
to the extent the Company does not have
convincing evidence that it will pay normal
tax during the specified period.

(i) Borrowing costs

Borrowing costs are interest and other costs
incurred in connection with the borrowing of
funds. All borrowing costs are expensed in the
period in which they incur in the Statement of
profit and loss.

---

Mar 31, 2025

1    Reporting Entity

Indiqube Spaces Limited (formerly known as Indiqube Spaces Private Limited, Innovent Spaces Private Limited) (“the Company”) was incorporated on 14 January 2015 as a private limited company. The Company has its registered office at Bengaluru, Karnataka. The Company is primarily engaged in the business of leasing of network of shared work spaces of fully or partly equipped premises and other related activities.

Pursuant to a special resolution passed in the extraordinary general meeting of the shareholders of the Company held on 09 October 2024, Company’s name has been changed from Innovent Spaces Private Limited to Indiqube Spaces Private Limited. Further, pursuant to a special resolution passed in the extraordinary general meeting of the shareholders of the Company held on 16 November 2024, Company has converted from Private Limited Company to Public Limited Company, and consequently the name of the Company has changed to ‘Indiqube Spaces Limited’ vide new certificate of incorporation obtained from the Registrar of Companies approved on 17 December 2024.

2    Basis of preparation

A.    Statement of compliance

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015, as amended, notified under Section 133 of the Companies Act, 2013, (the 'Act') and other relevant provisions of the Act. The accounting policies are applied consistently to all the years presented in the financial statements.

The financial statements were authorized for issue by the Company’s Board of Directors on 24 June 2025.

Details of the Company's material accounting policies are included in Note 3.

B.    Basis of measurement

The financial information have been prepared on a going concern basis, the historical cost convention and on an accrual basis, except for the following material items which have been measured at fair value as required by relevant Ind AS.

Items	Measurement Basis
Financial instruments at FVTPL	Fair Value
Share based payments Net defined benefit (asset) / liability	Fair Value Fair value of plan assets less present value of defined benefit obligations

C.    Functional and presentation currency

These financial information are presented in Indian Rupees (Rs.), which is also the Company’s functional currency. All amounts have been rounded-off to two decimal places to the nearest millions, unless otherwise indicated.

D.    Use of estimates and judgements

In preparing these financial information, management has made judgements and estimates that affect the application of the Company’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and assumptions are reviewed on a periodic basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Judgements

Information about judgements made in applying accounting policies that have the most significant effects on the amounts recognized in the financial information is included in the following notes:

-    Note 6 - Lease term: whether the Company is reasonably certain to exercise extension options.

Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment is included in the following notes:

-    Note 4, 7 and 3(a),(b) - useful life of property, plant and equipment and intangible assets and impairment assessment thereon

-    Note 6 and 3(d) - recognition of lease liabilities at present value requires determination of incremental borrowing rates

-    Note 29 and 3(h)(ii) - recognition of deferred tax assets: availability of future taxable profit against which tax losses carried forward can be used

-    Note 30 and 3(c) - measurement of ECL allowance for trade receivables: key assumptions in determining the weighted-average loss rate

-    Note 30 and 3(e) - Fair value measurement of financial instruments

^\- Note 33 and 3(k) - measurement of defined benefit obligations: key actuarial assumptions

-    Note 34 and 3(l)- measurement of share based payments: Fair value of option at the grant date

2    Basis of preparation (continued)

E.    Measurement of fair values

Certain accounting policies and disclosures of the Company require the measurement of fair values, for both financial and non financial assets and liabilities.

The Company has an established control framework with respect to the measurement of fair values. The company regularly reviews significant unobservable inputs and valuation adjustments. If third party information, is used to measure the fair values, then the company assess the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of the Ind AS, including the level in the fair value hierarchy in which the valuations should be classified.

Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

-    Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

-    Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

-    Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into a different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirely in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

Further information about the assumptions made in the measuring fair values is included in the following notes:

-    Note 34 - share-based payment; and

-    Note 30 - financial instruments

F.    Current/ non-current classification

An asset is classified as current asset when:

a)    it is expected to be realized in, or is intended for sale or consumption in, the entity’s normal operating cycle;

b)    it is held primarily for the purpose of being traded;

c)    it is expected to be realized within twelve months after the balance sheet date; or

d)    it is cash or a cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the balance sheet date.

All other assets are classified as non-current.

A liability is classified as current when:

a)    it is expected to be settled in, the entity’s normal operating cycle;

b)    it is held primarily for the purpose of being traded;

c)    it is due to be settled within twelve months after the balance sheet date; or

d)    the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the balance sheet date.

All other liabilities are classified as non-current.

All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out above.

Operating Cycle

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realization in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

3    Material accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these financial information.

(a) Property, plant and equipment

i.    Recognition and measurement

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.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipments.

Property, plant and equipment are carried at cost less accumulated depreciation and impairment losses, if any. The cost of property, plant and equipment comprises its purchase price/acquisition cost, net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, other incidental expenses, plant and equipment up to the date the asset is ready for its intended use. Subsequent expenditure on property, plant and equipment after its purchase/completion is capitalized only if the cost of item can be measured reliably.

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the statement of profit and loss. Repairs and maintenance costs are recognized in the statement of profit and loss when incurred.

Advances paid towards acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances and the cost of assets not put to use before such date are disclosed under 'Capital work-in-progress'.

ii.    Subsequent Expenditure

Subsequent expenditure is capitalized 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.

iii.    Depreciation

Depreciation on property, plant and equipment is provided on the straight-line method over the useful life and in the manner prescribed in Schedule II to the Act. However, where the management’s estimate of the remaining useful life of the assets on a review subsequent to the time of acquisition is different, then depreciation is provided over the remaining useful life based on the revised useful life.

Asset category	Management estimate of useful life	Useful life as per Schedule II
Leasehold improvements	10 years or lease term whichever is lower	Lease term
Plant and machinery	10 years	10 years
Furniture and fixtures	10 years	10 years
Computers	3 years	3 years
Vehicles	8 years	8 years
Office equipments	5 years	5 years

The Company believes the useful lives as given above best represent the useful life of these assets based on internal assessment, which is different from the useful lives as prescribed under Schedule II of the Companies Act, 2013.

The useful lives and methods of depreciation of property, plant and equipment are reviewed at each reporting date and adjusted, if appropriate.

^iv. Capital work-in-progress includes cost of property, plant and equipment under installation / under development as at the balance sheet date.

3 Material accounting policies (continued)

(b) Intangible Assets (continued)

i. Recognition and measurement and amortization Intangible Assets:

Intangible assets are stated at cost less accumulated amortization and accumulated impairment losses. Intangible assets are amortized over their respective estimated useful lives on a straight line basis, from the date that they are available for use. The estimated useful life of an identifiable intangible assets is based on a number of factors including the effects of obsolescence, demand, competition and other economic factors (such as the stability of the industry and known technological advances) and the level of maintenance expenditures required to obtain the expected future cash flows from the asset.

The estimated useful lives are as follows:

Asset	Â	Useful Life
Computer Software	Â	3 years
Trademarks and copyri	ghts	3 years

Amortization method and useful lives are reviewed at the end of each financial year and adjusted if appropriate.

Intangible assets under development:

Development expenditure is capitalized as part of the cost of the resulting intangible asset only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Company intends to and has sufficient resources to complete development and to use or sell the asset. Otherwise, it is recognized in profit or loss as incurred.

ii. Subsequent Expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits and cost can be measured reliably embodied in the specific asset to which it relates.

(c)    Impairment

i.    Financial Assets

The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in profit or loss.

A financial asset is ‘credit impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Evidence that a financial asset is credit-impaired includes the following observable data:

-    Significant financial difficulty of the debtor;

-    A breach of contract such as a default or being more than 365 days past due or

-    It is probable that the debtor will enter into bankruptcy or other financial reorganisation.

Write off

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off.

Company considers a financial asset to be in default when:

The debtor is unlikely to pay its credit obligations to the Company in full, without full recourse by the Company to action such as realizing security (if any is held).

Measurement ofECLs

Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Company expects to receive). Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets, if any.

Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument. In all cases, the maximum period considered when estimating expected credit losses is the maximum contractual period over which the Company is exposed to credit risk.

ii.    Non - financial assets

Intangible assets and property, plant and equipment, Capital work-in-progress and Intangible assets under development are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash inflows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs. If such assets are considered to be impaired, the impairment to be recognized in the Statement of Profit and Loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed (except for goodwill) in the Statement of Profit and Loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.

(d)    Leases

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

As a lessee

The Company applies a single recognition and measurement approach for all leases except for short-term leases and low-value leases. The Company recognizes lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. The nature of expenses related to those leases has changed from lease rent in previous periods to (i) amortization for the right-to-use asset, and (ii) interest accrued on lease liability.

i) Right-of-use assets:

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term, unless the lease transfers ownership of the underlying asset to the Company by the end of the lease term or the cost of the right-of-use asset reflects that the Company will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

(d)    Leases (continued)

ii)    Lease Liabilities:

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate. Lease payments included in the measurement of the lease liability comprise fixed payments.

The Company determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee, if the Company changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

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 or change in the assessment of an option to purchase the underlying asset.

iii)    Short-term leases and leases of low-value assets:

The Company elects not to recognize right-of-use assets and lease liabilities for leases of low-value assets and short-term leases, including IT equipment. The company recognized the lease payments associated with these leases as an expense in profit or loss on a straight-line basis over the lease term.

iv)    Modifications to a lease

A lessee accounts for a lease modification as a separate lease if both of the following conditions exist:

-    the modification increases the scope of the lease by adding the right to use one or more underlying assets; and

-    the consideration for the lease increases by an amount commensurate with the stand-alone price for the increase in scope and any appropriate adjustments to that stand-alone price to reflect the circumstances of the particular contract.

In this case, the lessee accounts for the separate lease in the same way as any new lease and makes no adjustment to the accounting for the initial lease. The lessee uses a revised discount rate to account for the separate lease. The new rate is determined at the effective date of the modification. The lessee uses the interest rate implicit in the lease if it is readily determinable; otherwise the lessee uses its incremental borrowing rate.

For a lease modification that is not accounted for as a separate lease, at the effective date of the lease modification a lessee shall:

-    allocate the consideration in the modified contract

-    determine the lease term of the modified lease

-    remeasure the lease liability by discounting the revised lease payments using a revised discount rate. The revised discount rate is determined as the interest rate implicit in the lease for the remainder of the lease term, if that rate can be readily determined, or the lessee’s incremental borrowing rate at the effective date of the modification, if the interest rate implicit in the lease cannot be readily determined.

As a lessor

At inception or on modification of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of their relative standalone prices.

When the Company acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease.

The Company recognises lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘other income'.

To classify each lease, the Company makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

When the Company as an intermediate lessor enters into an intermediate finance lease, it derecognises the right-of-use asset under the head lease which it transfers to the sub lessee, recognises the net investment in the sublease as an asset, recognises the difference between the right-of-use asset and the net investment as a gain or loss and continue to recognise the lease liability, i.e., the lease payments owed to the head lessor, for the head lease. Over the sublease term, the intermediate lessor recognises the interest income from the sublease and the interest expense for the head lease.

(e)    Financial instruments

i    Recognition and initial measurement

Trade receivables are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when it becomes a party to the contractual provisions of the instrument. All financial assets (unless it is a trade receivable without a significant financing component) and liabilities are measured at fair value on initial recognition. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, that are not at fair value through profit or loss, are added to the fair value on initial recognition. A trade receivable without a significant financing component is initially measured at the transaction price.

ii    Classification and subsequent measurement Financial Assets

On initial recognition, a financial asset is classified as measured at:

-    amortised cost;

-    FVOCI - debt investment;

-    FVOCI - equity investment; or

-    FVTPL

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

Financial assets carried at amortized cost

A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at fair value through other comprehensive income

A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at fair value through profit or loss

A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.

Financial liabilities

Financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

(e)    Financial instruments (continued)

iii    Derecognition

Financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the right to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial assets are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.

If the Company enters into transactions whereby the transfers assets recognized on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognized.

Financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire.

The Company also derecognizes a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognized at fair value. The difference between the carrying amount of the financial liability extinguished and a new financial liability with modified terms is recognized in the Statement of Profit and Loss.

iv    Offsetting

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

^v    Compound Financial Instrument

On initial recognition, the liability component of the compound financial instrument is first measured at its fair value. The equity component is measured as the residual amount that results from deducting the fair value of the liability component from the initial carrying amount of the instrument as a whole. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component of the compound financial instruments is re-measured at fair value at each reporting period end. The difference in the fair value of liability component is recognized in the statement of profit and loss. The equity component of the compound financial instrument is remeasured subsequently.

(f)    Revenue Recognition

Revenue from contracts with customers

Revenue is recognised on the basis of approved contracts regarding the transfer of goods or services to a customer for an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services.

Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price of goods sold and services rendered is net of variable consideration. Any amounts receivable from the customer are recognised as revenue after the control over the goods sold and services rendered are transferred to the customer.

Variable consideration includes incentives, rebates, discounts etc. which is estimated at contract inception considering the terms of various schemes with customers 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. It is reassessed at the end of each reporting period.

Satisfaction of performance obligation

Revenue is recognised when (or as) the Company satisfies a performance obligation by transferring a promised good or service (i.e. an asset) to a customer. An asset is transferred when (or as) the customer obtains control of that asset. For each performance obligation identified, the Company determine at contract inception whether it satisfies the performance obligation over time or satisfies the performance obligation at a point in time.

Where performance obligation is satisfied over time, the Company recognizes revenue over the contract period. Where performance obligation is satisfied at a point in time, Company recognizes revenue when customer obtains control of promised goods and services in the contract.

Rental income

Service revenue includes rental revenue for use of leased premises and related ancillary services. Revenue from leased out premises under an operating lease is recognized on a straight line basis over the non- cancellable period ('lease term for revenue'), except where there is an uncertainty of ultimate collection. After lease term for revenue or where there is no noncancellable period, rental revenue is recognized as and when services are rendered on a monthly basis as per the contractual terms prescribed under agreement entered with customers.

Electricity and maintenance services

Revenue from electricity and maintenance services are recognised monthly, on accrual basis, in accordance with the terms of the respective agreement as and when the services are rendered.

Other ancillary services

Revenue from others ancillary services mainly includes IT support services and other value added services. It is recognised as and when the services are rendered in accordance with the terms of respective agreements.

Contract liability

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 recognized when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognized as revenue when the Company performs under the contract.

Sale of goods

Revenue from sale of goods is recognised on transfer of control of ownership of goods to the buyer and when no significant uncertainty exists regarding the amount of consideration that will be delivered.

(g) Recognition of interest income

Interest income is recognised using the effective interest method ('EIR').

(h)    Income Tax

Income tax comprises of current tax and deferred tax. It is recognized in profit or loss except to the extent that it relates to a business combination or to an item recognized directly in equity or in other comprehensive income.

i    Current Tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.

ii    Deferred Tax

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognized in respect of carried forward tax losses and tax credits.

Deferred tax assets are recognized for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets recognized or unrecognized are reviewed at each reporting date and are recognized / reduced to the extent that it is probable / no longer probable respectively that the related tax benefit will be realized. Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on the laws that have been enacted or substantively enacted by 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.

The Company offsets, the current tax assets and liabilities (on a year on year basis) and deferred tax assets and liabilities, where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis.

The Company recognizes deferred tax related to assets and liabilities separately arising from a single transaction that give rise to equal and off-setting differences.

MAT payable for 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 an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the Statement of Profit and Loss and shown as ‘MAT Credit Entitlement’ under Deferred Tax. The Company reviews the same at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.

(i)    Borrowing costs

Borrowing costs are interest and other costs incurred in connection with the borrowing of funds. All borrowing costs are expensed in the period in which they incur in the Statement of profit and loss.

(j)    Provision, contingent assets and contingent liabilities

i    General

Provisions are recognized 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. When the Company expects some or all of a provision to be reimbursed, the expense relating to a provision is presented in the Statement of Profit and Loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

ii    Contingent liabilities

A disclosure for contingent liabilities is made where there is a possible obligation or a present obligation that may probably not require an outflow of resources. When there is a possible or a present obligation where the likelihood of outflow of resources is remote, no provision or disclosure is made.

iii    Contingent assets

Contingent asset is not recognised in financial information since this may result in the recognition of income that may never be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and is recognized.

(k)    Employee benefits

i    Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. The Company makes specified monthly contributions towards government administered provident fund scheme. Obligations for contributions to defined contribution plans are recognized as an employee benefit expense in profit or loss in the periods during which the related services are rendered by employees.

Provident fund

Contribution towards provident fund for certain employees is made to the regulatory authorities, where the Company has no further obligations. Such benefits are classified as Defined Contribution Schemes as the Company does not carry any further obligations, apart from the contributions made on a monthly basis.

ii    Defined benefit plans

Gratuity

Gratuity liability is a defined benefit obligation and is provided on the basis of actuarial valuation, based on projected unit credit method at the balance sheet date, carried out by an independent actuary. Actuarial gains and losses comprise experience adjustments and the effect of changes in the actuarial assumptions and are recognised in full in the period in which they occur in the OCI. The Company determines the net interest expense / (income) on the net defined benefit liability / (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability/ (asset), taking into account any changes in the net defined benefit liability/ (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service (‘past service cost’ or ‘past service gain’) or the gain or loss on curtailment is recognised immediately in profit or loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.

iii Compensated leave

Benefits under the Company's compensated absences scheme constitute other long term employee benefits. The obligation in respect of compensated absences is provided on the basis of an actuarial valuation carried out by an independent actuary using the Projected Unit Credit Method, which recognizes each period of service as giving rise to an additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation is measured at the present value of estimated future cash flows. The discount rates used for determining the present value of obligation under defined benefit plan, is based on the market yields as at balance sheet date on Government securities, having maturity periods approximating to the terms of related obligations.

Actuarial gains and losses are recognized immediately in the statement of profit and loss. To the extent the Company does not have an unconditional right to defer the utilization or encashment of the accumulated compensated absences, the liability determined based on actuarial valuation is considered to be a current liabilities.

(l)    Share-based payments

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 recognized in the statement of profit and loss, together with a corresponding increase in share option outstanding account in other equity, over the period in which the performance and/or service conditions are fulfilled in employee benefits expense. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.

(m)    Segment reporting

The Company has the policy of reporting the segments in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM). The chief operating decision maker is considered to be the Board of Directors who makes strategic decisions and is responsible for allocating resources and assessing performance of the operating segments.

(n)    Cash and cash equivalents

Cash and cash equivalents includes cash on hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three months or less.

(o)    Earnings per share

Basic Earnings Per Share (‘EPS’) is computed by dividing the net profit attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the net profit by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the year, unless issued at a later date. In computing diluted earnings per share, only potential equity shares that are dilutive and that either reduces earnings per share or increases loss per share are included. The number of shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for the share splits.

(p)    Share capita1

i.    Equity shares - Incremental costs directly attributable to the issue of equity shares are recognised as a deduction from equity. Income tax relating to transaction costs of an equity transaction is accounted for in accordance with Ind AS 12.

ii.    Preference shares - The Company’s compulsorily convertible preference shares are classified as equity or financial liabilities, depending upon the terms of issue of the instruments and other rights and obligations of the parties in accordance with requirement of Ind AS 32. Non-discretionary dividends thereon are recognised accordingly as dividend or interest expense, as accrued.

(q)    Cash f1ow statement

Cash flows are reported using indirect method, whereby net profits before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments and items of income or expenses associated with investing or financing cash flows. The cash flows from regular revenue generating (operating activities), investing and financing activities of the Company are segregated.

Bank overdraft is considered as integral part of cash and cash equivalents in cash flow and the same is netted off against cash and cash equivalents in cash flow statement.

(r)    Recent accounting pronouncements

The Ministry of Corporate Affairs (“MCA”) notified new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules, as issued from time to time. The Company evaluated the following amendments for the first-time during the current year which are effective from 1 April, 2024.

Ind AS 116 - Lease liability in a sale and leaseback

On 9 September 2024, MCA notified amendments to Ind AS 116 via Companies (Indian Accounting Standards) Second Amendment Rules, 2024. The amendments require an entity to recognise lease liability including variable lease payments which are not linked to index or a rate in a way it does not result in gain on Right of Use asset it retains. The Company has evaluated the amendment and there is no impact on its financial statements.

Introduction of Ind AS 117 - Insurance contracts

On 12 August 2024 MCA notified the introduction of Ind AS 117 - Insurance contracts via Companies (Indian Accounting Standards) Amendment Rules, 2024. It is a comprehensive standard that prescribes, recognition, measurement and disclosure requirements, to avoid diversities in practice for accounting insurance contracts and it applies to all companies i.e., to all "insurance contracts" regardless of the issuer. However, Ind AS 117 is not applicable to the entities which are insurance companies registered with IRDAI. The Company has evaluated the amendments and there is no impact on its financial statements.