o. Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized when there is a present legal or constructive obligation in respect of which a
reliable estimate can be made as a result of a past event and it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation. Provisions are measured at the
present value of best estimate of the expenditure required to settle the present obligation at the end of
the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects
current market assessments of the time value of money and the risks specific to the liability. The increase
in the provision due to the passage of time is recognized as interest expense.

Contingent liabilities and Contingent assets are not recognized but disclosed in the notes to the Financial
Statements.

p. 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. Financial assets and financial liabilities are recognized when the
Company becomes a party to the contractual provisions of the instrument.

A. Financial assets :-

i. Classification :-

The Company classifies financial assets as subsequently measured at amortized cost, fair
value through other comprehensive income or fair value through Statement of Profit and Loss
on the basis of its business model for managing the financial assets and the contractual cash
flows characteristics of the financial asset.

ii. Initial recognition and measurement

All financial assets are initially recognized at fair value. Transaction costs that are directly

attributable to the acquisition or issue of financial assets, which are not at fair value through

profit or loss, are adjusted to the fair value on initial recognition.

iii. Subsequent measurement :-

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

a) Financial assets carried at amortized cost (AC) : A financial asset is 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.

b) Financial assets at fair value through other comprehensive income (FVTOCI) : A

financial asset is measured at FVTOCI 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.

c) Financial assets at fair value through profit or loss (FVTPL) : A financial asset which
is not classified in any of the above categories are measured at FVTPL.

d) Other Equity Investments : All other equity investments are measured at fair value, with
value changes recognized in Statement of Profit and Loss.

iv. Derecognition :-

A financial asset is primarily derecognized when the rights to receive cash flows from the asset have
expired or the Company has transferred its rights to receive cash flows from the asset.

v. Investment in subsidiaries, joint ventures and associates :-

The company has accounted for its investment in subsidiaries, joint ventures and associates at cost.
The company assesses whether there is any indication that these investments may be impaired.
If any such indication exists, the investment is considered for impairment based on the fair value
thereof.

vi. Cash and cash equivalents :-

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

vii. Impairment of other financial assets :-

The Company assesses impairment based on expected credit losses (ECL) model for measurement
and recognition of impairment loss on the financial assets that are trade receivables or contract
revenue receivables etc.

viii. Reclassification of other financial assets :-

The company determines classification of financial assets and liabilities on initial recognition. For
financial assets which are debt instruments and equity instruments for which company has not
elected for irrevocable option of FVTOCI, a reclassification is made only if there is a change in the
business model for managing those assets. Changes to the business model are expected to be
infrequent. The company determines change in the business model as a result of external or internal
changes which are significant to the company’s operations.

B. Financial liabilities

i. Initial recognition and measurement :-

All financial liabilities are recognized at fair value and in case of loans, net of directly attributable
cost. Fees of recurring nature are directly recognized in the Statement of Profit and Loss as
finance cost.

ii. Subsequent measurement :-

Financial liabilities are 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.

iii. Derecognition :-

A financial liability is derecognized when the obligation specified in the contract is discharged,
cancelled or expires.

C. Offsetting Financial Instruments :-

Financial assets and liabilities are offset and the net amount is included in the Balance Sheet where
there is a legally enforceable right to offset the recognized amounts and there is an intention to settle
on a net basis or realize the asset and settle the liability simultaneously.

D. Fair Value Measurement :-

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. All assets and liabilities for which
fair value is measured or disclosed in the 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 :-

i. Level 1 : Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

ii. Level 2 : Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable.

iii. Level 3 : Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.

q. Events Occurring after the Reporting Period :-

The company adjusts the amount recognized in its financial statements to reflect adjusting material events
after the reporting period and does not adjust the amount to reflect non-adjusting events after the reporting
period. However where retrospective restatement is not practicable for a particular prior period then the
circumstances that lead to the existence of that condition and the description of how and from where the
error is corrected are disclosed in Notes on Accounts.

r. Prior Period Items :-

Errors of material amount relating to prior period(s) are disclosed by a note with nature of prior period
errors, amount of correction of each such prior period presented retrospectively, to the extent practicable
along with change in basic and diluted earnings per share. However where retrospective restatement is
not practicable for a particular period then the circumstances that lead to the existence of that condition
and the description of how and from where the error is corrected are disclosed in Notes on Accounts.

2B Recent Accounting Pronouncements

New and amended standards

Ministry of Corporate Affairs (“MCA”) has notified amendments to the existing standards Ind AS 117 -Insurance
Contracts and Ind As 116 - Leases, relating to sale and lease back transactions, applicable from April 1,2024. The
Company has assessed that there is no significant impact on its financial statements.