Accounting Policies of ACME Solar Holdings Ltd. Company

Mar 31, 2025

2.1 Material accounting policies

a) Basis of preparation

"The standalone financial statements have
been prepared in accordance with Indian
Accounting Standards (Ind AS) notified under
Section 133 read with Companies (Indian
Accounting Standards) (Amendment) Rules,
2016 and the relevant provisions of the Act.
Accounting policies have been consistently
applied except where a newly issued accounting
standard is initially adopted or a revision to
an existing accounting standard requires a
change in the accounting policy hitherto in use.
The financial statements are presented in INR
and all values are rounded to the nearest million
except where otherwise indicated. "

Historical cost convention

The standalone financial statements have
been prepared on a historical cost convention
on a going concern basis except for certain
financial assets and financial liabilities which are
measured at fair value.

b) Use of estimates

The preparation of financial statement in
conformity with Ind AS requires the management
to make judgements, estimates and assumptions
that affect the reported amounts of revenues,
expenses, assets and liabilities and the disclosure
of contingent liabilities, at the end of the reporting
period. Although these estimates are based on
the management''s best knowledge of current
events and actions, uncertainty about these
assumptions and estimates could result in the
outcomes requiring a material adjustment to
the carrying amounts of assets or liabilities in
future periods.

c) Operating cycle

Based on the nature of the operations and
the time between the acquisition of assets for
processing and their realisation in cash or cash
equivalents, the Company has ascertained its
operating cycle as twelve months for the purpose
of current/non-current classification of assets
and liabilities.

d) Revenue from contracts with customers

Revenue from contracts with customers is
recognised when control of the goods or services
are transferred to the customer at an amount
that reflects the consideration to which the
company expects to be entitled in exchange for
those goods or services. Revenue excludes taxes
collected on behalf of government.

(i) Rendering of services

The Company generates revenue from
rendering of services including engineering,
procurement and construction services,
operation and maintenance and
management services. Consideration
received for services is recognised as revenue
in the year when the service is performed
by reference to the stage of competition
at the reporting date, when outcome can
be assessed reliably. A contract''s stage of
completion is assessed by management
by comparing the work completed with the
scope of work.

(ii) Engineering, procurement and
construction contract

Construction revenue and costs are
recognised by reference to the stage of
completion of the construction activity at
the balance sheet date, as measured by the
proportion that contract costs incurred for
work performed to date bear to the estimated
total contract costs. Where the outcome
of the construction cannot be estimated
reliably, revenue is recognised to the extent
of the construction costs incurred if it is
probable that they will be recoverable. When
the outcome of the contract is ascertained
reliably, contract revenue is recognised at
cost of work performed on the contract plus
proportionate margin, using the percentage
of completion method i.e. over the period of
time. The estimated outcome of a contract
is considered reliable when all the following
conditions are satisfied:

i. The amount of revenue can be
measured reliably,

ii. It is probable that the economic benefits
associated with the contract will flow to
the Company,

iii. The stage of completion of the contract
at the end of the reporting period can
be measured reliably,

iv. The costs incurred or to be incurred
in respect of the contract can be
measured reliably Provision is made for
all losses incurred to the balance sheet
date. Variations in contract work, claims
and incentive payments are recognised
to the extent that it is probable that
they will result in revenue and they are
capable of being reliably measured.
Expected loss, if any, on a contract is
recognised as expense in the period in
which it is foreseen, irrespective of the
stage of completion of the contract.
For contracts where progress billing
exceeds the aggregate of contract costs
incurred to-date and recognised profits
(or recognised losses, as the case may
be), the surplus is shown as the amount
due to customers. Amount received
before the related work is performed
are disclosed in the financial statement
as a liability towards advance received.
Amounts billed for work performed but
yet to be paid by the customers are
disclosed in the financial statement

as trade receivables. Work performed
but yet not billed to the Customer are
disclosed as unbilled revenue."

(iii) Interest income

Interest income is recorded using the
effective interest rate (EIR). EIR is the rate that
exactly discounts the estimated future cash
payments or receipts over the expected
life of the financial instrument or a shorter
period, where appropriate, to the gross
carrying amount of the financial asset or to
the amortised cost of the financial liability.
When calculating the effective interest rate,
the Company estimates the expected cash
flows by considering all the contractual
terms of the financial instrument but does
not consider the expected credit losses.
Interest income is included in other income
in the Statement of Profit and Loss.

(iv) Income from services (O&M solar)

Revenue from O&M service contracts
are recognised on monthly basis, after
completion of project on pro rata basis, over
the period of contract.

e) Borrowing costs

Borrowing costs directly attributable to the
acquisitions, construction or production of a
qualifying asset are capitalised during the
period of time that is necessary to complete
and prepare the asset for its intended use or
sale. Other borrowing costs are expensed in the
period in which they are incurred and reported in
finance costs.

f) Impairment of non-financial assets

For impairment assessment purposes, assets
are grouped at the lowest levels for which there
are largely independent cash inflows (cash¬
generating units). As a result, some assets are
tested individually for impairment and some are
tested at cash-generating unit level. All individual
assets or cash-generating units are tested for
impairment whenever events or changes in
circumstances indicate that the carrying amount
may not be recoverable.

An impairment loss is recognised for the amount
by which the asset''s (or cash-generating unit''s)
carrying amount exceeds its recoverable
amount, which is the higher of fair value less costs
of disposal and value-in-use. To determine the
value-in-use, management estimates expected
future cash flows from each cash-generating
unit and determines a suitable discount rate
in order to calculate the present value of those

cash flows. The date used for impairment testing
procedures are directly linked to the Company''s
latest approved budget, adjusted as necessary
to exclude the effects of future reorganisations
and asset enhancements. Discount factors
are determined individually for each cash¬
generating unit and reflect current market
assessments of the time value of money and
asset-specific risk factors.

Impairment losses are charged in the Statement
of Profit and Loss. Further, impairment loss is
reversed if the asset''s or cash-generating unit''s
recoverable amount exceeds its carrying amount.
The reversal is limited so that the carrying of the
asset does not exceed its recoverable amount,
nor exceed the carrying amount that would have
been determined, net of depreciation, had no
impairment loss been recognised for the asset
in prior years. Such reversal is recognised in the
Statement of Profit and Loss unless the asset is
carried at a revalued amount, in which case, the
reversal is treated as an increase in revaluation.

g) Financial instruments

Recognition, initial measurement and
derecognition

Financial assets and financial liabilities are
recognised when the Company becomes a party
to the contractual provisions of the financial
instrument, and, except for trade receivables
which do not contain a significant financing
component, these are measured initially at:

a) fair value, in case of financial instruments
subsequently carried at fair value through
profit or loss (FVTPL);

b) fair value adjusted for transaction costs, in
case of all other financial instruments.

Trade receivables that do not contain a significant
financing component or for which the Company
has applied the practical expedient are measured
at the transaction price determined under Ind AS
115. Refer to the accounting policies in section (d)
Revenue from contracts with customers.

Financial assets are derecognised when the
contractual rights to the cash flows from the
financial asset expire, or when the financial asset
and substantially all the risks and rewards are
transferred. A financial liability is derecognised
when the underlying obligation specified in the
contract is discharged, cancelled or expires.

Classification and subsequent measurement
of financial assets

Different criteria to determine impairment are
applied for each category of financial assets,
which are described below.

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

• Financial assets at amortised cost

• Financial assets at fair value through other
comprehensive income (FVOCI)

• Financial assets, derivatives and equity
instruments at FVTPL

(l) Financial assets at amortised cost

Classification and subsequent measurement
of financial liabilities

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

Financial liabilities are measured subsequently
at amortised cost using the effective interest
method except for derivatives and financial
liabilities designated at FVTPL, which are carried
subsequently at fair value with gains or losses
recognised in profit or loss.

A ''Financial asset'' is measured at the amortised
cost if both the following conditions are met:

(i) The asset is held within a business model
whose objective is to hold assets for
collecting contractual cash flows, and

(ii) Contractual terms of the asset give rise on
specified dates to cash flows that are solely
payments of principal and interest (SPPI) on
the principal amount outstanding.

After initial measurement, such financial assets
are subsequently measured at amortised cost
using the effective interest rate (EIR) method.
Amortised cost is calculated by taking into
account any discount or premium on acquisition
and fees or costs that are an integral part of the
EIR. The EIR amortisation is included in finance
income in the profit or loss. The losses arising
from impairment are recognised in the profit or
loss. Amortised cost is calculated by taking into
account any discount or premium on acquisition
and fees or costs that are an integral part of
the EIR.

Impairment of financial assets

In accordance with Ind-AS 109, the Company
applies expected credit loss (ECL) model for

measurement and recognition of impairment
loss for financial assets carried at amortised cost.

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 Company expects to receive.
When estimating the cash flows, the Company is
required to consider :

- All contractual terms of the financial assets
(including prepayment and extension) over
the expected life of the assets.

Cash flows from the sale of collateral held or
other credit enhancements that are integral to
the contractual terms.

Trade receivables

The Company applies simplified approach
permitted by Ind AS 109 Financial Instruments,
which requires expected lifetime losses to be
recognised from initial recognition of receivables.

Other financial assets

For recognition of impairment loss on other
financial assets and risk exposure, the Company
determines whether there has been a significant
increase in the credit risk since initial recognition
and if credit risk has increased significantly, life
time impairment loss is provided otherwise
provides for 12 month expected credit losses.

Classification and subsequent measurement
of financial liabilities

Financial liabilities are measured subsequently
at amortised cost using the effective interest
method except for derivatives and financial
liabilities designated at FVTPL, which are carried
subsequently at fair value with gains or losses
recognised in profit or loss. If the company
revises its estimates of payments, it shall adjust
the amortised cost of a financial liability to reflect
actual and revised estimated contractual cash
flows. The company recalculates the amortised
cost of the financial liability as the present value
of the estimated future contractual cash flows
that are discounted at the financial instrument''s
original effective interest rate. The adjustment is
recognised in the statement of profit and loss as
Income or Expense.

Offsetting of financial assets and financial
liabilities

Financial assets and financial liabilities are offset
and the net amount is reported in the balance
sheet if there is a currently enforceable legal right
to offset the recognised amounts and there is an

intention to settle on a net basis, to realise the
assets and settle the liabilities simultaneously.

Derivative financial instruments

Initial recognition and subsequent
measurement

The Company uses derivative financial
instruments, such as forward currency contracts,
cross currency rate swaps to hedge its foreign
currency risks. Such derivative financial
instruments are initially recognised at fair value
on the date on which a derivative contract is
entered into and are subsequently re-measured
at fair value. Derivatives are carried as financial
assets when the fair value is positive and as
financial liabilities when the fair value is negative.

Compound financial instruments

Compound financial instruments are separated
into liability and equity components based
on the terms of contract. On the issuance of
compound financial instruments, the fair value of
liability component is determined using a market
rate for an equivalent instrument. This amount
is classified as a financial liability measured at
amortised cost (net of transaction costs) until it
is extinguished on conversion or redemption. The
equity component is classified under other equity.

(2) Financial assets at fair value through other
comprehensive income (FVOCI)

Financial assets at fair value through other
comprehensive income (FVOCI). Financial
assets that meet the following conditions are
measured initially as well as at the end of each
reporting date at fair value, recognised in other
comprehensive income (OCI).

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

b) The contractual terms of the asset give rise on
specified dates to cash flows that represent
solely payment of principal and interest.

(3) Financial assets, derivatives and equity
instruments at FVTPL

Financial assets at fair value through profit or
loss (FVTPL). Financial assets that do not meet
the amortised cost criteria or FVTOCI criteria are
measured at FVTPL. Financial assets at FVTPL
are measured at fair value at the end of each
reporting period, with any gains or losses arising
on remeasurement recognised in profit or loss.
The net gain or loss recognised in profit or loss
incorporates any dividend or interest earned on
the financial asset.

h) Income taxes

Tax expense recognised in profit or loss comprises
the sum of deferred tax and current tax. Current
and deferred tax is recognised in profit or loss,
except to the extent that it relates to items
recognised in other comprehensive income
or directly in equity. In this case, the tax is also
recognised in other comprehensive income or
directly in equity, respectively.

Current tax

Current tax is measured at the amount expected
to be paid using the tax laws that have been
enacted or substantively enacted by the end of
the reporting period and includes any adjustment
to tax payable in respect of previous years. The
carrying amounts of deferred tax are reviewed
at the end of each reporting period on the basis
of its most likely amount and adjusted if needed.
Assessing the most likely amount of current and
deferred tax in case of uncertainties (e.g. as a
result of the need to interpreting the requirements
of the applicable tax law), requires the Company
to apply judgements in considering whether
it is probable that the taxation authority will
accept the tax treatment retained. The Company
measures its tax balances either based on
the most likely amount or the expected value,
depending on which method provides a better
prediction of the resolution of the uncertainty."

Deferred tax

Deferred income taxes are calculated using the
liability method on temporary differences arising
between the tax bases of assets and liabilities
and their carrying amounts in the financial
statements. Deferred income tax is measured
using tax rates and tax laws that have been
enacted or substantively enacted by the end of
the reporting period and are expected to apply
when the related asset is realised or the liability
is settled. Deferred income tax is not accounted
for if it arises from initial recognition of an asset
or liability in a transaction other than a business
combination that at the time of the transaction
affects neither accounting profit nor taxable
profit (tax loss).

Deferred tax assets are recognised to the extent
it is probable that the underlying tax loss or
deductible temporary difference will be utilised
against future taxable income. This is assessed
based on the Company''s forecast of future
operating results, adjusted for significant non¬
taxable income and expenses and specific
limits on the use of any unused tax loss or credit.
The carrying amounts of deferred tax assets

(including minimum alternate tax( MAT) credit
entitlement) are reviewed at the end of each
reporting period and adjusted to the extent that it
is no longer probable that sufficient taxable profit
will be available to allow the benefit of part or all
of that deferred tax asset to be utilised.

Deferred tax liabilities are generally recognised
in full, although Ind AS 12 specifies limited
exemptions. As a result of these exemptions
the Company does not recognise deferred tax
on temporary differences relating to goodwill.
Deferred tax liabilities are recognised on taxable
temporary differences arising on investments
in subsidiaries, joint ventures and associates,
except where the Company is able to control
the reversal of the temporary difference and it is
probable that the temporary difference will not
reverse in the foreseeable future. The Company
does not offset deferred tax assets and liabilities
unless it has a legally enforceable right to set off
current tax assets against current tax liabilities
and the deferred tax relates to the same taxable
entity and levied by same taxation authority.

i) Cash and cash equivalents

Cash and cash equivalents comprise cash on
hand and demand deposits, together with other
short-term, highly liquid investments maturing
within 3 months from the date of acquisition.
Cash and cash equivalent are readily convertible
into known amounts of cash and are subject to
an insignificant risk of changes in value.

---

Mar 31, 2024

1. i) Corporate information

ACME Solar Holdings Limited "(the Company)" was incorporated as of 3 June 2015 under the Companies Act, 2013. The Company is domiciled in India with its registered office situated at Plot 152, Sector 44, Gurugram, Haryana - 122002, India.

The Company, together with its subsidiaries, are engaged in the business of establishing, commissioning, setting up, operating and maintaining power generation using solar, fossil and alternate source of energy and act as owners, manufacturers, engineers, procurers, buyers, sellers, distributors, dealers and contractors for setting up of power plant using glass bases mirrors, photo voltaic, boilers, turbines and/or other equipments for generating, distribution and supplying of electricity and other products using solar, fossil and alternate source of energy under conditions of direct ownership or through its affiliates, associates or subsidiaries. On 22 June 2024, the Company has been converted from Private Limited Company to Public Limited Company.

The financial statement have been authorised for issue by the Board of Directors on 22 June 2024.

ii) Amended Accounting Standards (Ind AS) and interpretations effective during the year Definition of Accounting Estimates - Amendments to Ind AS 8

The amendments clarify the distinction between changes in accounting estimates, changes in accounting policies and the correction of errors. It has also been clarified how entities use measurement techniques and inputs to develop accounting estimates.

The amendments had no impact on the company.

Disclosure of Accounting Policies - Amendments to Ind AS 1

The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their ‘significant’ accounting policies with a requirement to disclose their ‘material’ accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.

The amendments have had an impact on the Company’s disclosures of accounting policies, but not on the measurement, recognition or presentation of any items in the Company’s financial statements.

Deferred T ax related to Assets and Liabilities arising from a Single T ransaction - Amendments to Ind AS 12

The amendments narrow the scope of the initial recognition exception under Ind AS 12, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences such as leases.

This amendment had no impact on the company.

2.1 Material accounting policies

a) Basis of preparation

The standalone financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 read with Companies (Indian Accounting Standards) (Amendment) Rules, 2016 and the relevant provisions of the Act. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. Refer 1 (ii) above for certain amendments to the standards which have become effective for annual periods beginning on or after 1 April 2023.

The financial statements are presented in INR and all values are rounded to the nearest million except where otherwise indicated.

Historical cost convention

The standalone financial statements have been prepared on a historical cost convention on a going concern basis except for certain financial assets and financial liabilities which are measured at fair value.

b) Use of estimates

The preparation of financial statement in conformity with Ind AS requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

c) Operating cycle

Based on the nature of the operations and the time between the acquisition of assets for processing and their realisation in cash or cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current/non-current classification of assets and liabilities.

d) Revenue from contracts with customers

Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Revenue excludes taxes collected on behalf of government.

(i) Rendering of services

The Company generates revenue from rendering of services including engineering, procurement and construction services, operation and maintenance and management services. Consideration received for services is recognised as revenue in the year when the service is performed by reference to the stage of competition at the reporting date, when outcome can be assessed reliably. A contract’s stage of completion is assessed by management by comparing the work completed with the scope of work.

(ii) Engineering, procurement and construction contract

Construction revenue and costs are recognised by reference to the stage of completion of the construction activity at the balance sheet date, as measured by the proportion that contract costs incurred for work performed to date bear to the estimated total contract costs. Where the outcome of the construction cannot be estimated reliably, revenue is recognised to the extent of the construction costs incurred if it is probable that they will be recoverable. When the outcome of the contract is ascertained reliably, contract revenue is recognised at cost of work performed on the contract plus proportionate margin, using the percentage of completion method i.e. over the period of time. The estimated outcome of a contract is considered reliable when all the following conditions are satisfied:

i. The amount of revenue can be measured reliably,

ii. It is probable that the economic benefits associated with the contract will flow to the Company,

iii. The stage of completion of the contract at the end of the reporting period can be measured reliably,

iv. The costs incurred or to be incurred in respect of the contract can be measured reliably Provision is made for all losses incurred to the balance sheet date. Variations in contract work, claims and incentive payments are recognised to the extent that it is probable that they will result in revenue and they are capable of being reliably measured. Expected loss, if any, on a contract is recognised as expense in the period in which it is foreseen, irrespective of the stage of completion of the contract. For contracts where progress billing exceeds the aggregate of contract costs incurred to-date and recognised profits (or recognised losses, as the case may be), the surplus is shown as the amount due to customers. Amount received before the related work is performed are disclosed in the financial statement as a liability towards advance received. Amounts billed for work performed but yet to be paid by the customers are disclosed in the financial statement as trade receivables. Work performed but yet not billed to the Customer are disclosed as unbilled revenue.

(iii) Interest income

Interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortized cost of the financial liability. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses. Interest income is included in other income in the Statement of Profit and Loss.

e) Borrowing costs

Borrowing costs directly attributable to the acquisitions, construction or production of a qualifying asset are capitalised during the period of time that is necessary to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed in the period in which they are incurred and reported in finance costs.

f) Impairment of non-financial assets

For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level. All individual assets or cashgenerating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the asset’s (or cash-generating unit’s) carrying amount exceeds its recoverable amount, which is the higher of fair value less costs of disposal and value-in-use. To determine the value-in-use, management estimates expected future cash flows from each cash-generating unit and determines a suitable discount rate in order to calculate the present value of those cash flows. The date used for impairment testing procedures are directly linked to the Company’s latest approved budget, adjusted as necessary to exclude the effects of future reorganisations and asset enhancements. Discount factors are determined individually for each cash-generating unit and reflect current market assessments of the time value of money and asset-specific risk factors.

Impairment losses are charged in the Statement of Profit and Loss. Further, impairment loss is reversed if the asset’s or cash-generating unit’s recoverable amount exceeds its carrying amount. The reversal is limited so that the carrying of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the Statement of Profit and Loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as an increase in revaluation.

g) Financial instruments

Recognition, initial measurement and derecognition

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the financial instrument, and, except for trade receivables which do not contain a significant financing component, these are measured initially at:

a) fair value, in case of financial instruments subsequently carried at fair value through profit or loss (FVTPL);

b) fair value adjusted for transaction costs, in case of all other financial instruments.

Trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient are measured at the transaction price determined under Ind AS 115. Refer to the accounting policies in section (d) Revenue from contracts with customers.

Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when the underlying obligation specified in the contract is discharged, cancelled or expires.

Classification and subsequent measurement of financial assets

Different criteria to determine impairment are applied for each category of financial assets, which are described below.

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

• Financial assets at amortised cost

• Financial assets at fair value through other comprehensive income (FVOCI)

• Financial assets, derivatives and equity instruments at FVTPL (1) Financial assets at amortised cost

Classification and subsequent measurement of financial liabilities

The Company’s financial liabilities include borrowings, trade and other payables and derivative financial instruments.

Financial liabilities are measured subsequently at amortised cost using the effective interest method except for derivatives and financial liabilities designated at FVTPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss.

A ‘Financial asset’ is measured at the amortised cost if both the following conditions are met:

(i) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

(ii) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR.

Impairment of financial assets

In accordance with Ind-AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss for financial assets carried at amortised cost.

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 Company expects to receive. When estimating the cash flows, the Company is required to consider :

- All contractual terms of the financial assets (including prepayment and extension) over the expected life of the assets.

Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

Trade receivables

The Company applies simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of receivables.

Other financial assets

For recognition of impairment loss on other financial assets and risk exposure, the Company determines whether there has been a significant increase in the credit risk since initial recognition and if credit risk has increased significantly, life time impairment loss is provided otherwise provides for 12 month expected credit losses.

Classification and subsequent measurement of financial liabilities

Financial liabilities are measured subsequently at amortised cost using the effective interest method except for derivatives and financial liabilities designated at FVTPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss.

Offsetting of financial assets and financial liabilities

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

Derivative financial instruments

Initial recognition and subsequent measurement

The Company uses derivative financial instruments, such as forward currency contracts, cross currency rate swaps to hedge its foreign currency risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

Compound financial instruments

Compound financial instruments are separated into liability and equity components based on the terms of contract. On the issuance of compound financial instruments, the fair value of liability component is determined using a market rate for an equivalent instrument. This amount is classified as a financial liability measured at amortised cost (net of transaction costs) until it is extinguished on conversion or redemption. The equity component is classified under other equity.

(2) Financial assets at fair value through other comprehensive income (FVOCI)

Financial assets at fair value through other comprehensive income (FVOCI). Financial assets that meet the following conditions are measured initially as well as at the end of each reporting date at fair value, recognised in other comprehensive income (OCI).

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

b) The contractual terms of the asset give rise on specified dates to cash flows that represent solely payment of principal and interest.

(3) Financial assets, derivatives and equity instruments at FVTPL

Financial assets at fair value through profit or loss (FVTPL). Financial assets that do not meet the amortised cost criteria or FVTOCI criteria are measured at FVTPL. Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset.

h) Income taxes

Tax expense comprises current and deferred tax. Tax expense is recognised in profit or loss except to the extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised in equity or in other comprehensive income.

Current tax

Current tax comprises the expected tax payable on the taxable income for the year. The amount of current tax payable is the best estimate of the tax amount expected to be paid that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax assets and liabilities are offset only if certain criteria is met. Current Income tax related to items recognised in other comprehensive income or directly in equity is recognised in other comprehensive income or in equity as the case may be.

Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and tax base i.e. amounts used for taxation purposes.

A deferred tax asset is recognised for unused tax losses, unabsorbed depreciation, deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. A deferred tax liability is recognised in respect of taxable temporary differences.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets and they relate to income taxes levied by the same tax authority on the same taxable entity or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously. Deferred tax relating to items recognised outside the statement of profit and loss is recognised outside the statement of profit and loss either in comprehensive income or in equity. Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

i) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments maturing within 3 months from the date of acquisition. Cash and cash equivalent are readily convertible into known amounts of cash and are subject to an insignificant risk of changes in value.

j) Provisions, contingent assets and contingent liabilities

Provisions are recognized only when there is a present obligation, as a result of past events, and measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date, including the risks and uncertainties associated with the present obligations as a whole. Provisions are discounted to their present values, where the time value of money is material. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost. The expense relating to any provision is presented in the Statement of Profit and Loss net of any reimbursement.

Any reimbursement that the Company is virtually certain to collect from a third party with respect to the obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related provision.

No liability is recognised if an outflow of economic resources as a result of present obligations is not probable. Such situations are disclosed as contingent liabilities unless the outflow of resource is remote.

Contingent liabilities are disclosed by way of note unless the possibility of outflow is remote. Contingent assets are neither recognized nor disclosed. However, when realization of income is virtually certain, related asset is recognized

k) Employee benefits Short-term employee benefits

Liabilities for salaries and wages, including nonmonetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are classified as short-term employee benefits. These benefits include salaries and wages, shortterm bonus, pension, incentives etc. These are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.

Post-employment benefits plans

The Company provides post-employment benefits through various defined contribution and defined benefit plans.

Defined contribution plans

The Company pays fixed contribution into independent entities in relation to several state plans and insurances for individual employees. The Company has no legal or constructive obligations to pay contributions in addition to its fixed contributions, which are recognised as an expense in the period that related employee services are received.

Defined benefit plans

Under the Company’s defined benefit plans, the amount of pension benefit that an employee will receive on retirement is defined by reference to the employee’s length of service and final salary. The legal obligation for any benefits remains with the Company, even if plan assets for funding the defined benefit plan have been set aside. Plan assets may include assets specifically designated to a long-term benefit fund as well as qualifying insurance policies.

The liability recognised in the balance sheet for defined benefit plans is the present value of the defined benefit obligation (DBO) at the reporting date less the fair value of plan assets.

Management estimates the DBO annually with the assistance of independent actuaries. Actuarial gains/losses resulting from re-measurements of the liability/asset are included in other comprehensive income.

Service cost of the Company’s defined benefit plan is included in employee benefits expense. Employee contributions, all of which are independent of the number of years of service, are treated as a reduction of service cost. Net interest expense on the net defined benefit liability is included in the statement of profit and loss. Gains and losses resulting from re-measurements of the net defined benefit liability are included in other comprehensive income.

Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date. The Company recognizes expected cost of short-term employee benefit as an expense, when an employee renders the related service. The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the reporting date. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer the settlement for at least twelve months after the reporting date.

l) Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

m) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (‘CODM’) [Chairperson and Chief Financial Officer].

Identification of segments

In accordance with Ind AS 108 Operating Segment, the operating segments used to present segment information are identified on the basis of information reviewed by the Company’s CODM to allocate resources to the segments and assess their performance. An operating segment is a component of the Company that engages in business activities from which it earns revenues and incurs expenses, including revenues and expenses that relate to transactions with any of the Company’s other components. Results of the operating segments are reviewed regularly by the CODM [Chairperson and Chief Financial Officer, which has been identified as the CODM], to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available.

Allocation of common costs

Common allocable costs are allocated to each segment accordingly to the relative contribution of each segment to the total common costs. Unallocated items

Unallocated items include general corporate income and expense items which are not allocated to any business segment.

Segment accounting policies

The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the standalone financial statements of the Company as a whole.

n) Investment in subsidiaries

The Company has elected to recognize its investments in subsidiaries at cost in accordance with the option available in Ind AS 27, ‘Separate Financial Statements’, less accumulated impairment loss, if any. Cost represents amount paid for acquisition of the said investments.

The Company has elected to continue with the carrying value for all of its investments in subsidiaries as recognised in the financial statements. On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to profit or loss. Investment in equity shares of subsidiaries and in CCD''s which are entirely in the nature of equity, are carried at cost.

o) Investment Properties

Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any.

The cost includes the cost of replacing parts and borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of the investment properties are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. All other repair and maintenance costs are recognised in profit or loss as incurred.

Investment properties are derecognised either when they have been disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period of derecognition. In determining the amount of consideration from the derecognition of investment properties the Company considers the effects of variable consideration, existence of a significant financing component, non-cash consideration, and consideration payable to the buyer (if any).

Transfers are made to (or from) investment properties only when there is a change in use. Transfers between investment property, owner-occupied property and inventories do not change the carrying amount of the property transferred and they do not change the cost of that property for measurement or disclosure purposes.

p) Assets held for sale

Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such asset and its sale is highly probable. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification. As at each balance sheet date, the management reviews the appropriateness of such classification.

Non-current assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. The Company treats sale/distribution of the asset or disposal group to be highly probable when:

- the appropriate level of management is committed to a plan to sell the asset (or disposal group),

- an active programme to locate a buyer and complete the plan has been initiated (if applicable),

- the asset (or disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value,

- the sale is expected to qualify for recognition as a completed sale within one year from the date of classification, and

- actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Property, plant and equipment and intangible assets once classified as held for sale/distribution to owners are not depreciated or amortised.

q) Amendment to Accounting Standards (Ind AS) issued but not yet effective

Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. During the year ended 31 March, 2024 MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

2.2 Significant management judgement in applying accounting policies and estimation uncertainty

When preparing the financial statement, management makes a number of judgements, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses.

Deferred tax assets

A deferred tax asset is recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilised. Accordingly, the Company exercises its judgement to reassess the carrying amount of deferred tax assets at the end of each reporting period.

Impairment of non-financial assets

In assessing impairment, management estimates the recoverable amount of each asset or cash-generating units based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable discount rate.

Fair value measurement

When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow model. 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.

Revenue recognition

For performance obligation satisfied over time, the revenue recognition is done by measuring the progress towards complete satisfaction of performance obligation. The progress is measured in terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable to the performance obligation.