2.13 Provisions, contingent assets and contingent

liabilities

a) Provisions

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. The amount
recognized as a provision is the best
estimate of the consideration required to
settle the present obligation at the end
of the reporting period, considering the
risk and uncertainties surrounding the
obligation.

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.

b) Warranties

Provisions for the expected liability of
warranty obligations under sale of goods
are recognised at the management's best
estimate if the claims of the customers
under warranty are probable and the
amount can be reasonably estimated.

c) Contingent liabilities

Contingent liabilities are disclosed when
there is a possible obligation or present
obligations that may but probably will not,
require an outflow of resources embodying
economic benefits or the amount of
such obligation cannot be measured
reliably. When there is possible obligation
or a present obligation in respect of
which likelihood of outflow of resources
embodying economic benefits is remote,
no provision or disclosure is made.

These are reviewed at each financial
reporting date and adjusted to reflect the
current best estimates.

Contingent assets are not recognized
though are disclosed, where an inflow of
economic benefits is probable.

2.14 Leases

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

a) Company as a lessee

The Company applies a single recognition
and measurement approach for all leases,
except for short- term leases and leases of
low-value assets. The Company recognizes
lease liabilities to make lease payments
and right-of-use assets representing the
right to use the underlying assets.

i) Right-of-use assets

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

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

Right-of-use assets are tested for
impairment whenever there is any
indication that their carrying amounts
may not be recoverable. Impairment
loss, if any, is recognized in the

Standalone Statement of Profit and
loss.

ii) Lease liabilities

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

In calculating the present value of
lease payments, the Company uses
its incremental borrowing rate at the
lease commencement date because
the interest rate implicit in the lease
is not readily determinable. After the
commencement date, the amount of
lease liabilities is increased to reflect
the accretion of interest and reduced
for the lease payments made. In
addition, the carrying amount of lease
liabilities is re-measured if there is a
modification, a change in the lease
term, a change in the lease payments
(e.g., changes to future payments
resulting from a change in an index
or rate used to determine such
lease payments) or a change in the
assessment of an option to purchase
the underlying asset. The Company's
lease liabilities are included in
financial liabilities

iii) Short term lease and leases of low
value assets

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

iv) Single discount rate

The Company has applied the
available practical expedient with
respect to single discount rate
wherein single discount rate is used
for portfolio of leases with reasonably
similar characteristics.

b) Company as a lessor

Leases in which the Company does not
transfer substantially all the risks and
rewards incidental to ownership of an
asset are classified as operating leases.
Rental income arising is accounted for on
a straight-line basis over the lease terms.
Initial direct costs incurred in negotiating
and arranging an operating lease are added
to the carrying amount of the leased asset
and recognised over the lease term on the
same basis as rental income. Contingent
rents are recognised as revenue in the
period in which they are earned.

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

a) Financial assets

Initial recognition and measurement

A financial asset (except trade receivable
and contract asset) is recognised initially
at fair value plus or minus s transaction
cost that are directly attributable to the
acquisition or issue of financial assets
(other than financial assets at fair value
through profit and loss). Transaction costs
directly attributable to the acquisition of
financial assets or financial liabilities at fair
value through profit or loss (‘FVTPL') are
recognised immediately in the Standalone
Statement of Profit and Loss.

Classification_and_subsequent

measurement

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

- amortised cost;

- FVOCI - equity investment; or

- FVTPL

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 equity investments in scope of Ind AS
109 are measured at fair value. Equity
instruments which are held for trading
classified as at FVTPL. For all other equity
instruments, the Company may make an
irrevocable election to present subsequent
changes in the fair value in other

comprehensive income (designated as
FVOCI - equity investment). The Company
makes such election on an instrument-
by-instrument basis. The classification
is made on initial recognition and is
irrevocable.

If the Company decides to classify an
equity instrument as at FVOCI, then all
fair value changes on the instrument,
excluding dividends, are recognized in the
other comprehensive income (‘OCI'). There
is no recycling of the amounts from OCI
to the Standalone Statement of Profit and
Loss, even on sale of investment. However,
the Company may transfer the cumulative
gain or loss within equity.

Equity instruments included within the
FVTPL category are measured at fair
value with all changes recognized in the
Standalone Statement of Profit and Loss.

All financial assets not classified as
measured at amortised cost or FVOCI as
described above are measured at FVTPL.

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

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 the Standalone Statement of
Profit and Loss.

Financial assets at FVTPL

These assets are subsequently measured
at fair value. Net gains and losses, including
any interest income, are recognised in the
Standalone Statement of Profit and Loss.

Equity investments at FVOCI

These assets are subsequently measured
at fair value. Other net gains and losses are
recognised in OCI and are not reclassified
to profit or loss.

Expected credit loss (ECL) is the difference
between all contractual cash flows that are
due to the Company in accordance with
the contract and all the cash flows that
the entity expects to receive (i.e., all cash
shortfalls), discounted at the original EIR.

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 exposure:

(a) Financial assets that are measured
at amortized cost e.g., deposits, trade
receivables and bank balance.

(b) Financial assets that are measured as
at FVTOCI

(c) Lease receivables under Ind AS 116

(d) Trade receivables or any contractual
right to receive cash or another
financial asset that result from
transactions that are within the scope
of Ind AS 115

The Company follows ‘simplified approach'
for recognition of impairment loss
allowance on Trade receivables.

The application of simplified approach
does not require the Company to track
changes in credit risk. Rather, it recognizes
impairment loss allowance based on
lifetime ECLs at each reporting date, right
from its initial recognition.

For recognition of impairment loss on other
financial assets and risk exposure, the
Company determines that whether there
has been a significant increase in the credit
risk since initial recognition. If credit risk
has not increased significantly, 12-month
ECL is used to provide for impairment
loss. However, if credit risk has increased
significantly, lifetime ECL is used. If, in a
subsequent period, credit quality of the
instrument improves such that there is no
longer a significant increase in credit risk
since initial recognition, then the entity
reverts to recognizing impairment loss
allowance based on 12-month ECL.

Lifetime ECL are the expected credit losses
resulting from all possible default events
over the expected life of a financial asset.
The 12-month ECL is a portion of the
lifetime ECL which results from default
events that are possible within 12 months
after the reporting date.

ECL impairment loss allowance (or reversal)
recognized during the period is recognized
as income/ expense in the Standalone
Statement of Profit and loss. ECL for
financial assets measured as at amortized
cost and contractual revenue receivables
is presented as an allowance, i.e., as an
integral part of the measurement of those
assets in the Standalone statement of
assets and Liabilities. The allowance
reduces the net carrying amount. Until the
asset meets write-off criteria, the Company
does not reduce impairment allowance
from the gross carrying amount.

The Company does not have any
purchased or originated credit impaired
(POCI) financial assets, i.e., financial assets
which are credit impaired on purchase/
origination.

Derecognition of 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 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 recognized
on its Standalone statement of assets
and liabilities but retains either all or
substantially all of the risks and rewards
of the transferred assets, the transferred
assets are not derecognized.

b) Financial liabilities

Initial recognition and measurement

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

Subsequent measurement

The measurement of financial liabilities
depends on their classification, as
described below:

(i) Financial liabilities at fair value
through profit or loss

The Company has not designated any
financial liabilities at FVTPL

(ii) Financial liabilities at amortized cost

After initial recognition, Loans,
borrowings, trade payables and other
financial liabilities are subsequently
measured at amortized cost using
the EIR method. Interest expense
is recognized in the Standalone
Statement of Profit and loss. Any
gain or loss on derecognition is
also recognized in the Standalone
Statement of Profit and loss.

Derecognition of financial liabilities

A financial liability is derecognized 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 recognized in the Standalone
Statement of Profit and loss.

c) Reclassification of financial assets and lia¬
bilities

The Company determines classification
of financial assets and liabilities on initial
recognition. After initial recognition, no

reclassification is made for financial assets
which are equity instruments and financial
liabilities. For financial assets which are
debt instruments, a reclassification is made
only if there is a change in the business
model for managing those assets.

d) Offsetting of financial instruments

Financial assets and financial liabilities
are offset, and the net amount is reported
in the Standalone statement of assets
and liabilities if there is a currently
enforceable contractual legal right to
offset the recognized amounts and there
is an intention to settle on a net basis, to
realize the assets and settle the liabilities
simultaneously.

2.16 Fair value measurement

The Company measures financial instruments
at fair value at each reporting period.

Fair value is the price that would be received to
sell an asset or paid to transfer a liability in an
orderly transaction between market participants
at the measurement date. The fair value
measurement is based on the presumption that
the transaction to sell the asset or transfer the
liability takes place either:

• In the principal market for the asset or
liability, or

• In the absence of a principal market, in
the most advantageous market for the
asset or liability, the principal or the most
advantageous market must be accessible
by the Company.

The principal or the most advantageous market
must be accessible by the Company.

The fair value of an asset or a liability is
measured using the assumptions that market
participants would use when pricing the asset
or liability, assuming that market participants
act in their economic best interest.

A fair value measurement of a non-financial
asset takes into account a market participant's
ability to generate economic benefits by using
the asset in its highest and best use or by selling
it to another market participant that would use
the asset in its highest and best use.

The Company uses valuation techniques that
are appropriate in the circumstances and for
which sufficient data are available to measure
fair value, maximizing the use of relevant
observable inputs and minimizing the use of
unobservable inputs.

All assets and liabilities for which fair value
is measured or disclosed in the Standalone
Financial Statements are categorized within the
fair value hierarchy, described as follows, based
on the lowest level input that is significant to the
fair value measurement as a whole:

• Level 1: quoted (unadjusted) market prices
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).

For assets and liabilities that are recognized
in the Standalone Financial Statements on
a recurring basis, the Company determines
whether transfers have occurred between levels
in the hierarchy by re-assessing categorization
(based on the lowest level input that is significant
to the fair value measurement as a whole) at the
end of each reporting period.

External valuers are involved for valuation of
significant assets and liabilities, if any. At each
reporting date, the Company analyses the
movements in the values of assets and liabilities
which are required to be remeasured or re¬
assessed as per the Company's accounting
policies.

For the purpose of fair value disclosures, the
Company has determined classes of assets
and liabilities on the basis of the nature,
characteristics and risks of the asset or
liability and the level of the fair value hierarchy
as explained above. This note summaries
accounting policy for the fair value. Other fair
value related disclosures are given in note 44.

2.17 GST Credit

The GST credit available on purchase of raw
materials, other eligible inputs and capital
goods is adjusted against taxes payable. The
unadjusted GST credit is shown under the head
"Other Current Assets".

2.18 Earnings per share

Basic earnings/(loss) per share are calculated
by dividing the net profit/(loss) for the year
attributable to equity shareholders by the
weighted average number of equity shares
outstanding during the year. The weighted
average number of equity shares outstanding
during the period is adjusted for events of
bonus issue and share split. For the purpose of
calculating diluted earnings/ (loss) per share,
the net profit or loss for the period attributable to
equity shareholders and the weighted average
number of shares outstanding during the
year are adjusted for the effects of all dilutive
potential equity shares. The dilutive potential
equity shares are adjusted for the proceeds
receivable had the equity shares been actually
issued at fair value (i.e. the average market
value of the outstanding equity shares). Dilutive
potential equity shares are deemed converted
as of the beginning of the period, unless issued
at a later date. Dilutive potential equity shares
are determined independently for each period
presented. The number of equity shares and
potential dilutive equity shares are adjusted
retrospectively for all periods presented for any
share splits and bonus shares issues including
for changes effected prior to the approval of the
Standalone Financial statements by the Board
of Directors.

2.19 Segment reporting

Operating segments are reported in a manner
consistent with the internal reporting provided
to the chief operating decision maker. The board
of directors of the Company has been identified
as being the chief operating decision maker by
the Management of the Company.

The business of the Company falls within a single
line of business i.e. electronics manufacturing
services. All other activities of the Company
revolve around its main business. Hence, no
separate reportable primary segment.

2.20 Government grants

Grants from the government are recognized
at their fair value where there is a reasonable
assurance that the grant will be received and
the Company will comply with all stipulated
conditions. Government grants relating to
income are deferred and recognized in the profit
or loss over the period necessary to match
them with the costs that they are intended
to compensate and presented within other
operating income. Grants related to assets are
reduced from the carrying amount of the asset.
Such grants are recognized in the Standalone
Statement of Profit and Loss over the useful
life of the related depreciable asset by way of
reduced depreciation charge.

2.21 Standalone Statement of Cash Flows

The Standalone statements of cash flows is made
using the indirect method, whereby profit before
tax is adjusted for the effects of transactions of
non-cash nature, any deferral accruals of past
or future cash receipts or payments and item of
income or expense associated with investing or
financing of cash flows. The cash flows from
operating, financing and investing activities of
the Company are segregated.

2.22 Significant accounting estimates and judgments

The estimates used in the preparation of the
Standalone Financial Statements of each period/
year presented are continuously evaluated by the
Company and are based on historical experience
and various other assumptions and factors
(including expectations of future events), that
the Company believes to be reasonable under
the existing circumstances. The said estimates
are based on the facts and events, that existed
as at the reporting date, or that occurred after
that date but provide additional evidence about
conditions existing as at the reporting date.
Although the Company regularly assesses these
estimates, actual results could differ materially
from these estimates - even if the assumptions
underlying such estimates were reasonable
when made, if these results differ from historical
experience or other assumptions do not turn
out to be substantially accurate. The changes
in estimates are recognized in the Standalone
Financial Statements in the period in which they
become known.

The key assumptions concerning the future and
other key sources of estimation uncertainty at
the reporting date, that have a significant risk of
causing a material adjustment to the carrying
amounts of assets and liabilities within the
next financial year, are described below. Actual
results could differ from these estimates.

Significant judgements

• Allowances for uncollected trade
receivables

Trade receivables do not carry interest
and are stated at their nominal values as
reduced by appropriate allowances for
estimated irrecoverable amount are based
on ageing of the receivable balances
and historical experiences. Individual
trade receivables are written off when
management deems not be collectible.

• Contingencies

In the normal course of business, contingent
liabilities may arise from litigation and
other claims against the Company.
There are certain obligations which
managements have concluded based on all
available facts and circumstances are not
probable of payment or difficult to quantify
reliably and such obligations are treated
as contingent liabilities and disclosed in
notes Although there can be no assurance
of the final outcome of legal proceedings
in which the Company is involved. it is not
expected that such contingencies will have
material effect on its financial position of
probability.

• Impairment of other financial assets

The impairment provision for financial
assets are based on assumptions about
risk of default and expected loss rates. The
Company uses judgement in making these
assumptions and selecting the inputs to
the impairment calculation., based on the
Company's past history, existing market
conditions as well as forward looking
estimates at the end of each reporting
period.

• Taxes

Uncertainties exist with respect to the
interpretation of complex tax regulations,

changes in tax laws, and the amount
and timing of future taxable income.
Given the nature of business differences
arising between the actual results and
the assumptions made, or future changes
to such assumptions, could necessitate
future adjustments to tax income and
expense already recorded. The Company
establishes current tax payable, based on
reasonable estimates. The amount of such
current tax payable is based on various
factors, such as experience of previous
tax audits and differing interpretations
of tax regulations by the taxable entity
and the responsible tax authority. Such
differences of interpretation may arise on
a wide variety of issues depending on the
conditions prevailing in the domicile of the
Company.

• Recoverability of deferred taxes

In assessing the recoverability of deferred
tax assets, management considers
whether it is probable that taxable profit
will be available against which the losses
can be utilized. The ultimate realization
of deferred tax assets is dependent upon
the generation of future taxable income
during the periods in which the temporary
differences become deductible.

Deferred tax assets are recognized for
unused tax losses to the extent that it is
probable that taxable profit will be available
against which the losses can be utilized.
Significant management judgement is
required to determine the amount of
deferred tax assets that can be recognized,
based upon the likely timing and the level of
future taxable profits together with future
tax planning strategies.

• Impairment of non-financial assets

Impairment exists when the carrying value
of an asset or cash generating unit exceeds
its recoverable amount, which is the higher
of its fair value less costs of disposal and
its value in use. The fair value less costs of
disposal calculation is based on available
data from binding sales transactions,
conducted at arm's length, for similar
assets or observable market prices less

incremental costs for disposing of the
asset. The value in use calculation is based
on a Discounted Cash Flow (‘DCF') model.

Significant estimates

• Defined benefit plans

The costs of post-retirement benefit
obligation are determined using actuarial
valuations. An actuarial valuation involves
making various assumptions that may
differ from actual developments in the
future. These include the determination of
the discount rate; future salary increases
and mortality rates. Due to the complexities
involved in the valuation and its long-term
nature, a defined benefit obligation is highly
sensitive to changes in these assumptions.
All assumptions are reviewed at each
reporting date.

• Useful lives of property, plant and
equipment and intangible assets

The Company reviews the estimated useful
lives of property, plant and equipment
and intangible assets at the end of
each reporting period. At the end of the
current reporting period, the management
determined that the useful lives of property,
plant and equipment and intangible
assets at which they are currently being
depreciated represent the correct estimate
of the lives and need no change.

• Leases - Estimating the incremental
borrowing rate

The Company cannot readily determine the
interest rate implicit in the lease, therefore,
it uses its incremental borrowing rate
(‘IBR') to measure lease liabilities. The IBR
is the rate of interest that the Company
would have to pay to borrow over a similar
term, and with a similar security, the funds
necessary to obtain an asset of a similar
value to the right-of-use asset in a similar
economic environment.

• Determining the lease term of contracts
with renewal and termination options -
Company as lessee

The Company determines the lease term
as the non-cancellable term of the lease,

together with any periods covered by an
option to extend the lease if it is reasonably
certain to be exercised, or any periods
covered by an option to terminate the
lease, if it is reasonably certain not to be
exercised.

The Company has lease contracts
that include extension and termination
options. The Company applies judgement
in evaluating whether it is reasonably
certain whether or not to exercise the
option to renew or terminate the lease.
That is, it considers all relevant factors
that create an economic incentive for it to
exercise either the renewal or termination.
After the commencement date, the
Company reassesses the lease term if
there is a significant event or change in
circumstances that is within its control
and affects its ability to exercise or not to
exercise the option to renew or to terminate
(e.g., construction of significant leasehold
improvements or significant customization
to the leased asset).

• Fair value measurement of financial
instruments

When the fair values of financial assets
and financial liabilities recorded in the
Standalone statement of assets and
liabilities cannot be measured based on
quoted prices in active markets, their
fair value is measured using valuation
techniques. The inputs to these models
are taken from observable markets where
possible, but where this is not feasible,
a degree of judgement is required in
establishing fair values. Judgements
include considerations of inputs such
as liquidity risk, credit risk and volatility.
Changes in assumptions about these
factors could affect the reported fair value
of financial instruments.

• Warranties

At each balance sheet date, basis the
management judgment, changes in facts
and legal aspects, the Company assesses
the requirement of provisions against
the outstanding warranties. However, the

2.23 Exceptional Items

Exceptional items refer to items of income or
expense within the statement of profit and loss
from ordinary activities, which are non-recurring
and are of such size, nature or incidence that their
separate disclosure is considered necessary to
explain the performance of the Company.