Contingent liabilities and contingent assets

A disclosure for a contingent liability is made when there
is a possible obligation or a present obligation that may,
but probably will not, require an outflow of resources.
Where there is a possible obligation or a present
obligation in respect of which the likelihood of outflow of
resources is remote, no provision or disclosure is made.

Contingent assets are not recognised in the financial
statements. However, contingent assets are assessed
continually and if it is virtually certain that an inflow
of economic benefits will arise, the asset and related
income are recognised in the period in which the change
occurs.

3.16 Financial instruments

a. Recognition and initial recognition

The Company recognizes financial assets and
financial liabilities when it becomes a party to
the contractual provisions of the instrument.
All financial assets and liabilities are recognized
at fair value on initial recognition, except for
trade receivables which are initially measured
at transaction price. Transaction costs that are
directly attributable to the acquisition or issues
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 financial asset or financial liability is initially
measured at fair value plus, for an item not
at fair value through profit and loss (FVTPL),
transaction costs that are directly attributable to
its acquisition or issue.

b. Classification and Subsequent measurement
Financial assets

On initial recognition, a financial asset is classified
as measured at amortised cost;

Financial assets are not reclassified subsequent
to their initial recognition, except if and in the
period the Company changes its business model
for managing financial assets.

A financial asset is measured at amortised cost
if it meets both of the following conditions and is
not designated as at FVTPL:

- the asset is held within a business model
whose objective is to hold assets 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.

All financial assets not classified as measured at
amortised cost as described above are measured
at FVTPL. On initial recognition, the Company may
irrevocably designate a financial asset that otherwise
meets the requirements to be measured at amortised
cost at FVTPL if doing so eliminates or significantly
reduces an accounting mismatch that would otherwise
arise.

Financial assets: Business model assessment

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

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

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

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

- how managers of the business are compensated

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

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

3.17 Financial instruments

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

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

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

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

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

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

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

- prepayment and extension features; and

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

A prepayment feature is consistent with the solely
payments of principal and interest criterion if the
prepayment amount substantially represents unpaid
amounts of principal and interest on the principal
amount outstanding, which may include reasonable
additional compensation for early termination of the
contract. Additionally, for a financial asset acquired at

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

Financial assets: Subsequent measurement and gains
and losses

Financial assets at FVTPL: These assets are
subsequently measured at fair value. Net gains and
losses, including any interest or dividend income, are
recognised in profit or loss.

Financial assets at amortised cost: These assets
are subsequently measured at amortised cost using
the effective interest method. The amortised cost
is reduced by impairment losses. Interest income,
foreign exchange gains and losses and impairment
are recognised in profit or loss. Any gain or loss on
derecognition is recognised in profit or loss.

Financial liabilities: Classification, Subsequent
measurement and gains and losses

Financial liabilities are classified as measured at
amortised cost or FVTPL. A financial liability is classified
as at FVTPL if it is classified as held- for- trading, or
it is a derivative or it is designated as such on initial
recognition. Financial liabilities at FVTPL are measured
at fair value and net gains and losses, including any
interest expense, are recognised in profit or loss.
Other financial liabilities are subsequently measured
at amortised cost using the effective interest method.
Interest expense and foreign exchange gains and losses
are recognised in profit or loss. Any gain or loss on
derecognition is also recognised in profit or loss.

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 rights to receive
the contractual cash flows in a transaction in which
substantially all of the risks and rewards of ownership
of the financial asset 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 it
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 the new financial liability with modified terms is
recognised in profit and loss statement.

3.18 Recent pronouncements

Ministry of Corporate Affairs ("MCA") notifies new
standard or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules
as issued from time to time. On 31 March 2023, MCA

amended the Companies (Indian Accounting Standards)
Amendment Rules, 2023, as below:

Ind AS 1- Presentation of financial statements: This
amendment required the entities to disclosure their
material accounting policies rather than thir significant
accounting policies. The effective date for adoption of
this amendment in annual periods beginning on or after
1 April 2023.

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 amendment in annual periods beginning on or
after 1 April 2023.

Ind AS 12- Income taxes: The amendment has
narrowed the scope of the 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 its
annual periods beginning on or after 1 April 2023.

The Company evaluated the aforementioned
amendments and there is no impact on its standalone
financial statements.