Accounting Policies of Glottis Ltd. Company

2.6 Material Accounting Policy Information

a) Current versus non-current

classification

The Company presents assets and liabilities

in the balance sheet based on current/ non¬
current classification.

An asset is treated as current when it is:

i) Expected to be realised or intended
to be sold or consumed in normal
operating cycle

ii) Held primarily for the purpose of trading

iii) Expected to be realised within twelve
months after the reporting period, or

iv) Cash or cash equivalent unless restricted
from being exchanged or used to settle
a liability for at least twelve months after
the reporting period

All other assets are classified as non-current.

A liability is treated as current when:

i) I t is expected to be settled in normal
operating cycle

ii) It is held primarily for the purpose
of trading

iii) It is due to be settled within twelve
months after the reporting period, or

iv) There is no unconditional right to defer
the settlement of the liability for at least
twelve months after the reporting period

All other liabilities are classified as non¬
current.

Deferred tax assets and liabilities are classified
as non-current assets and liabilities.

The operating cycle is the time between the
acquisition of assets for processing and their
realisation in cash and cash equivalents. The
Company has identified 12 months as its
operating cycle.

b) Fair value measurement

The Company has applied the fair value
measurement wherever necessitated 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:

i) In the principal market for the asset
or liability;

ii) I n 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 fair value of an asset or 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 the 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 minimising the use of
unobservable inputs.

All assets and liabilities for which fair value
is measured or disclosed in the audited
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: Level 1 hierarchy includes financial
instruments measured using quoted prices.
This includes listed equity instruments, traded
bonds and mutual funds that have quoted
price. The fair value of all equity instruments
(including bonds) which are traded in the
stock exchanges is valued using the closing
price as at the reporting period. The mutual
funds are valued using the closing NAV.

Level 2: The fair value of financial instruments
that are not traded in an active market (for
example, traded bonds, over-the-counter
derivatives) is determined using valuation
techniques which maximise the use of
observable market data and rely as little as
possible on entity-specific estimates. If all
significant inputs required to fair value an
instrument are observable, the instrument is
included in level 2.

Level 3: If one or more of the significant inputs
is not based on observable market data, the
instrument is included in level 3. This is the
case for unlisted equity securities, contingent
consideration and indemnification asset
included in level 3.

For assets and liabilities that are recognized
in the audited 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.

The Company has designated the respective
team leads to determine the policies and
procedures for both recurring and non -
recurring fair value measurement. External
valuers are involved, wherever necessary with
the approval of Company''s board of directors.
Selection criteria include market knowledge,
reputation, independence and whether
professional standards are maintained.

For the purpose of fair value disclosure, the
Company has determined classes of assets

and liabilities on the basis of the nature,
characteristics and risk of the asset or liability
and the level of the fair value hierarchy as
explained above. The component wise
fair value measurement is disclosed in the
relevant notes.

c) Revenue Recognition

1. Operating Revenue:

1.1 Basis of Revenue Recognition

The Company, being primarily engaged
in the business of Freight Forwarding,
recognizes revenue in accordance with
Ind AS 115 — "Revenue from Contracts
with Customers”, wherein it acts as a
principal in providing freight forwarding
services. The Company assumes control
over the freight forwarding process and
assumes full responsibility for fulfilling
transportation obligations. It also bears
risks associated with these services,
including pricing risk, non-performance,
delays, and liability for damages, prior to
transferring the service to the customer.

As evidence of assuming these risks,
the Company issues a House Bill of
Lading (HBL) to customers, confirming
its contractual obligation in the freight
forwarding arrangement. Additionally,
the Company books freight slots in
advance, thereby assuming inventory
risk, and independently negotiates
pricing with customers. Unlike in an
agent relationship, the Company does
not earn commission but instead
generates revenue from direct service
provision.

1.2 Gross Revenue Recognition as
Principal

In accordance with Ind AS 115, the
Company recognizes revenue on a gross
basis as it qualifies as a principal under
the following conditions:

1.2.1 The Company has discretion in
determining the price charged
to customers.

1.2.2 The Company assumes inventory
risk, such as pre-booking
freight slots without confirmed
customer bookings.

1.2.3 The Company is primaiiIy

responsible for fulfilling the

performance obligation, ensuring
that shipments are transported
as contracted.

Given these factors, the Company invoices
custoimers for the full freight forwarding
charges and recognizes the corresponding
revenue on a gross basis rather than as
commission-based earnings.

1.3 Timing of Revenue Recognition

Revenue from freight forwarding services is
recognized either at a point in time or over
time, depending on the contractual terms
with the customer:

• If control over the service is transferred
progressively and the customer benefits
as the service is performed, revenue is
recognized over time.

• If control is transferred only upon
completion of transportation (e.g., upon
delivery of goods), revenue is recognized
at a point in time.

• Revenue is recognized only to the
extent that it is highly probable that a
significant reversal will not occur. The
freight costs incurred for slot bookings
are recognized as an expense in the
period in which the corresponding
freight service is provided.

1.4 Measurement of Revenue

1. Revenue is measured at the transaction
price agreed upon in the contract,
considering the contractual terms of
payment. The invoice value consists of the
transaction price for the services rendered
after adjusting for discounts, volume
rebates, and other price concessions,
deducting for reimbursements of
expenses, to the extent they are received
at actuals, exclusions of applicable
taxes, which are recoverable from
the relevant government authorities.
This policy ensures compliance with Ind
AS 115 and appropriately reflects the
financial performance of''the Company
in its capacity as a principal in freight
forwarding services.”

2. Revenue from vessel chartering
services is recognised over time as the

performance obligations are satisfied
in accordance with the terms of the
respective charter party agreements.
Revenue is measured based on the
consideration specified in the contract
and is recognised on a straight-line
basis over the charter period or based
on the completion of voyage services,
as applicable.

3. 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 perlod, where appropriate,
to the gross carrying amount of the
financial asset or to the amortised cost
of a 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 (for example,
prepayment, extension, call and similar
options) but does not consider the
expected credit losses.

4. ''Unbilled revenues'' included in other
current financial assets represent the
portion of revenue which is yet to be
billed to the customer

d) Property, plant and equipment and
capital work in progress

Presentation

Property, plant and equipment and capital
work in progress are stated at cost, net of
accumulated depreciation and accumulated
impairment losses, if any. Such cost includes
the cost of replacing part of the plant
and equipment and borrowing costs of a
qualifying asset, if the recognition criteria
are met. When significant parts of plant and
equipment 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.

Advances paid towards the acquisition of
tangible assets outstanding at each balance
sheet date, are disclosed as capital advances
under long term loans and advances and the
cost of the tangible assets not ready for their
intended use before such date, are disclosed
as capital work in progress.

Transition to Ind AS

On transition to IndAS, the Company has
elected to continue with the carrying value
of all its property, plant and equipment as at
April 1, 2023 (the date of transition) as per
previous GAAP and use that carrying value as
the deemed cost of intangible assets.

Component Cost

All material/ significant components have
been identified for the plant and have been
accounted separately. The useful life of such
component are analysed independently and
wherever components are having different
useful life other than plant they are part of,
useful life of components are considered for
calculation of depreciation.

The cost of replacing part of an item of
property, plant and equipment is recognised
in the carrying amount of the item if it is
probable that the future economic benefits
embodied within the part will flow to the
Company and its cost can be measured
reliably. The costs of repairs and maintenance
are recognised in the statement of profit and
loss as incurred.

Machinery spares/ insurance spares that can
be issued only in connection with an item
of fixed assets are capitalised. Replacement
of such spares is charged to revenue. Other
spares are charged as revenue expenditure as
and when consumed.

Derecognition

Gains or losses arising from derecognition of
property, plant and equipment are measured
as the difference between the net disposal
proceeds and the carrying amount of the
asset and are recognized in the statement of
profit and loss when the asset is derecognized.

e) Depreciation on property, plant and
equipment

Depreciation is the systematic allocation
of the depreciable amount of an asset over
its useful life. The depreciable amount
for assets is the cost of an asset, or other
amount substituted for cost, less 5% being its
residual value.

Depreciation is provided on straight line
method, over the useful lives of the assets as
follows :-

Depreciation for PPE on additions is
calculated on pro-rata basis from the date
of such additions. For deletion/ disposals,
the depreciation is calculated on pro-rata
basis up to the date on which such assets
have been discarded/ sold. Additions to fixed
assets, costing Rs.0.10 Lakhs each or less are
fully depreciated.

The residual values, useful lives and methods
of depreciation of property, plant and
equipment are reviewed at each financial
year end and adjusted prospectively,
if appropriate.

f) Intangible assets
Presentation

I ntangible assets are stated at cost, net of
accumulated depreciation and accumulated
impairment losses, if any.

Transition to Ind AS

On transition to IndAS, the Company has
elected to continue with the carrying value
of all its intangible assets recognised as at
April 1, 2023 as per previous GAAP and use
that carrying value as the deemed cost of
intangible assets.

Derecognition

Gains or losses arising from derecognition
of intangible assets are measured as the
difference between the net disposal proceeds
and the carrying amount of the asset and are

recognized in the statement of profit and loss
when the asset is derecognized.

Amortisation

The intangible assets are amortised on
straight line method, over their estimated
useful life of 3 years.

g) Financial Instruments

Financial assets and financial liabilities are
recognised when an entity becomes a party to
the contractual provisions of the instruments.

Financial assets

Initial recognition and measurement

All financial assets are recognised initially at
fair value plus, in the case of financial assets
not recorded at fair value through profit or loss,
transaction costs that are attributable to the
acquisition of the financial asset. Purchases or
sales of financial assets that require delivery
of assets within a time frame established by
regulation or convention in the market place
(regular way trades) are recognised on the
trade date, i.e., the date that the Company
commits to purchase or sell the asset.

Subsequent measurement

For purposes of subsequent measurement,
financial assets are classified on the basis of
their contractual cash flow characteristics
and the entity''s business model of
managing them.

Financial assets are classified into the
following categories:

• Financial instruments other than equity
instruments at amortised cost

• Financial instruments other than equity
instruments at fair value through other
comprehensive income (FVTOCI)

• Financial instruments other than equity
instruments, derivatives and equity
instruments at fair value through profit
or loss (FVTPL)

• Equity instruments measured at fair
value through other comprehensive
income (FVTOCI)

h) Financial instruments other than equity
instruments at amortised cost

The Company classifies a financial
instruments other than equity instruments
as at amortised cost, if both the following
conditions are met:

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

b) 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.

Such financial assets are subsequently
measured at amortised cost using the
effective i nterest 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.

Financial instruments other than equity
instruments at FVTOCI

The Company classifies a financial instrument
other than equity at FVTOCI, if both of the
following criteria are met:

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

b) The asset''s contractual cash flows
represent SPPI.

Financial instruments other than equity
instruments included within the FVTOCI
category are measured as at each reporting
date at fair value. Fair value movements are
recognized in the other comprehensive
income (OCI). However, the group recognizes
interest income, impairment losses and
reversals and foreign exchange gain or
loss in the profit and loss statement. On
derecognition of the asset, cumulative
gain or loss previously recognised in OCI is
reclassified from the equity to profit and loss.
Interest earned whilst holding FVTOCI debt
instrument is reported as interest income
using the EIR method.

Financial instruments other than equity
instruments at FVTPL

The Company classifies all financial
instruments other than equity instruments,
which do not meet the criteria for
categorization as at amortized cost or as
FVTOCI, as at FVTPL.

Financial instruments other than equity
instruments included within the FVTPL
category are measured at fair value with all
changes recognized in the profit and loss.

Equity investments

All equity investments in scope of Ind AS 109
are measured at fair value. Equity instruments
which are held for trading are classified as
at FVTPL. Where the Company makes an
irrevocable election of equity instruments at
FVTOCI, it recognises all subsequent changes
in the fair value in other comprehensive
income, without any recycling of the amounts
from OCI to profit and loss, even on sale of
such investments.

Equity instruments included within the
FVTPL category are measured at fair value
with all changes recognized in the profit
and loss.

Financial assets are measured at FVTPL
except for those financial assets whose
contractual terms give rise to cash flows
on specified dates that represents solely
payments of principal and interest thereon,
are measured as detailed below depending
on the business model:

Investment in Subsidiaries

Investments in subsidiaries are carried at
cost less accumulated impairment losses, if
any, in the standalone financial statements
in accordance with Ind AS 27, Separate
Financial Statements.

Cost includes transaction costs directly
attributable to acquisition of the investment.
The Company assesses investments for
impairment whenever events or changes
in circumstances indicate that the carrying
amount may not be recoverable.

Derecognition

A financial asset is primarily
derecognised 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
or has assumed an obligation to pay
the received cash flows in full without
material delay to a third party under
a ''pass-through'' arrangements and
either (a) the Company has transferred
substantially all the risks and rewards of
the asset, or (b) the Company has neither
transferred nor retained substantially all
the risks and rewards of the asset, but
has transferred control of the asset.

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 on the following financial assets and
credit risk exposure:

a) Financial assets that are other than
equity instruments, and are measured
at amortised cost e.g., loans, debt
securities, deposits, trade receivables
and bank balance.

b) Financial assets that are other than
equity instruments and are measured
at FVTOCI

c) 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 or contract revenue
receivables; and

• All lease receivables resulting from
transactions within the scope of Ind
AS 116

The application of simplified approach does
not require the Company to track changes in
credit risk. Rather, it recognises impairment
loss allowance based on lifetime Expected
Credit Loss (ECL) 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 months 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 recognising 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 instrument.
The 12 months ECL is a portion of the lifetime
ECL which results from default events that
are possible within 12 months after the
reporting date.

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. When estimating the cash
flows, the Company considers all contractual
terms of the financial instrument (including
prepayment, extension, call and similar
options) over the expected life of the financial
instrument and Cash flows from the sale of
collateral held or other credit enhancements
that are integral to the contractual terms.

ECL allowance (or reversal) recognized during
the period is recognized as income/ expense
in the statement of profit and loss, net of
lien available on securities held against the
receivables. This amount is reflected under
the head ''other expenses'' in the profit and loss.
The balance sheet presentation for various
financial instruments is described below:

• Financial assets measured as at amortised

cost, contractual revenue receivables
and lease receivables: ECL is presented
as an allowance, which reduces the net
carrying amount. Until the asset meets
write-off criteria, the Company does not
reduce impairment allowance from the
gross carrying amount.

For assessing increase in credit risk and
impairment loss, the company combines
financial instruments on the basis of shared

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.

The Company''s financial liabilities include
trade and other payables, loans and
borrowings including bank overdrafts,
financial guarantee contracts.

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

Financial liabilities at FVTPL

Financial liabilities at FVTPL include financial
liabilities held for trading and financial
liabilities designated upon initial recognition
as at fair value through profit or loss. Financial
liabilities are classified as held for trading
if they are incurred for the purpose of
repurchasing in the near term. This category
also includes derivative financial instruments
entered into by the Company that are not
designated as hedging instruments in hedge
relationships as defined by Ind AS 109.
Separated embedded derivatives are also
classified as held for trading unless they are
designated as effective hedging instruments.

Gains or losses on liabilities held for trading
are recognised in the profit or loss.

For liabilities designated as FVTPL, fair value
gains/ losses attributable to changes in own
credit risk are recognized in OCI. These gains/
loss are not subsequently transferred to profit
and loss. However, the company may transfer
the cumulative gain or loss within equity. All
other changes in fair value of such liability
are recognised in the statement of profit or
loss. The company has not designated any
financial liability as at fair value through profit
and loss.

Loans and borrowings

After initial recognition, interest-bearing loans
and borrowings are subsequently measured
at amortised cost using the EIR method.

Gains and losses are recognised in profit or
loss when the liabilities are derecognised as
well as through the EIR amortisation process.

Derecognition of financial liabilities

A financial liability is derecognised 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 recognised in the
statement of profit or loss.

Reclassification of financial assets

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. Changes to the
business model are expected to be infrequent.
The Company''s senior management
determines change in the business model as
a result of external or internal changes which
are significant to the Company''s operations.
Such changes are evident to external parties.
A change in the business model occurs
when the Company either begins or ceases
to perform an activity that is significant to
its operations. If the Company reclassifies
financial assets, it applies the reclassification
prospectively from the reclassification date
which is the first day of the immediately
next reporting period following the change
in business model. The Company does not
restate any previously recognised gains,
losses (including impairment gains or losses)
or interest.

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.

Foreign currency transactions and translations

Transactions and balances

Transactions in currencies other than
the entity''s functional currency (foreign
currencies) are recognised at the rates of
exchange prevailing at the dates of the
transactions. However, for practical reasons,
the Company uses an average rate, if the
average approximates the actual rate at the
date of the transaction.

Monetary assets and liabilities denominated
in foreign currencies are translated at the
functional currency spot rates of exchange
at the reporting date. Exchange differences
arising on settlement or translation of
monetary items are recognised in profit
or loss.

Non-monetary items that are measured in
terms of historical cost in a foreign currency
are translated using the exchange rates at
the dates of the initial transactions. Non¬
monetary items measured at fair value
in a foreign currency are translated using
the exchange rates at the date when the
fair value is determined. The gain or loss
arising on translation of non-monetary
items measured at fair value is treated in
line with the recognition of the gain or loss
on the change in fair value of the item (i.e.,

translation differences on items whose fair
value gain or loss is recognised in OCI or profit
or loss are also recognised in OCI or profit or
loss, respectively).

The Company enters into forward exchange
contract to hedge its risk associated with
foreign currency fluctuations. The forward
contracts are marked to market and
recognised in the profit or loss. In case of
monetary items which are covered by forward
exchange contract, the difference between
the yearend rate and rate on the date of the
contract is recognized as exchange difference.
Any profit or loss arising on cancellation of a
forward exchange contract is recognized as
income or expense for that year.

i) Borrowing Costs

Borrowing cost include interest
computed using effective interest rate
method, amortisation of ancillary costs
incurred and exchange differences
arising from foreign currency borrowings
to the extent they are regarded as an
adjustment to the interest cost.

Borrowing costs that are directly
attributable to the acquisition,
construction, production of a qualifying
asset are capitalised as part of the cost of
that asset which takes substantial period
of time to get ready for its intended use.
The Company determines the amount of
borrowing cost eligible for capitalisation
by applying capitalisation rate to the
expenditure incurred on such cost. The
capitalisation rate is determined based on
the weighted average rate of borrowing
cost applicable to the borrowings of

the Company which are outstanding
during the period, other than borrowings
made specifically towards purchase
of the qualifying asset. The amount
of borrowing cost that the Company
capitalises during the period does not
exceed the amount of borrowing cost
incurred during that period. All other
borrowings costs are expensed in the
period in which they occur.

Interest income earned on the temporary
investment of specific borrowings
pending their expenditure on qualifying
assets is deducted from the borrowing
costs eligible for capitalisation. All other
borrowing costs are recognised in the
statement of profit and loss in the period
in which they are incurred.

j) Taxes

Current income tax

Current income tax assets and liabilities
are measured at the amount expected to
be recovered from or paid to the taxation
authorities. The tax rates and tax laws used
to compute the amount are those that are
enacted, at the reporting date in the countries
where the Company operates and generates
taxable income.

Current income tax relating to items
recognised outside profit or loss is recognised
outside profit or loss (either in other
comprehensive income or in equity). Current
tax items are recognised in correlation to
the underlying transaction either in OCI or
directly in equity. Management periodically
evaluates positions taken in the tax returns
with respect to situations in which applicable
tax regulations are subject to interpretation
and establishes provisions where appropriate.

k) Deferred tax

Deferred tax is provided using the liability
method on temporary differences between
the tax bases of assets and liabilities and
their carrying amounts for financial reporting
purposes at the reporting date.

Deferred tax liabilities are recognised for all
taxable temporary differences.

Deferred tax assets are recognised to the
extent that it is probable that taxable profit
will be available against which the deductible

temporary differences, and the carry forward
of unused tax credits and unused tax losses
can be utilised. Where there is deferred tax
assets arising from carry forward of unused
tax losses and unused tax credit, they
are recognised to the extent of deferred
tax liability.

The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced
to the extent that it is no longer probable that
sufficient taxable profit will be available to
allow all or part of the deferred tax asset to be
utilised. Unrecognised deferred tax assets are
re-assessed at each reporting date and are
recognised to the extent that it has become
probable that future taxable profits will allow
the deferred tax asset to be recovered.

Deferred tax assets and liabilities are
measured at the tax rates that are expected
to apply in the year when the asset is realised
or the liability is settled, based on tax rates
(and tax laws) that have been enacted or
substantively enacted at the reporting date.

Deferred tax relating to items recognised
outside profit or loss is recognised outside
profit or loss (either in other comprehensive
income or in equity). Deferred tax items are
recognised in correlation to the underlying
transaction either in OCI or directly in equity.

Deferred tax assets and deferred tax liabilities
are offset if a legally enforceable right exists
to set off current tax assets against current
tax liabilities and the deferred taxes relate
to the same taxable entity and the same
taxation authority.

Based on the level of historical taxable income
and projections for future taxable income over
the periods in which the deferred income tax
assets are deductible, management believes
that the Company will realize the benefits of
those deductible differences. The amount of
the deferred income tax assets considered
realizable, however, could be reduced in
the near term if estimates of future taxable
income during the carry forward period
are reduced.

l) Retirement and other employee
benefits

Short-term employee benefits

A liability is recognised for short-term
employee benefit in the period the related

service is rendered at the undiscounted
amount of the benefits expected to be paid
in exchange for that service.

Defined contribution plans

Retirement benefit in the form of provident
fund is a defined contribution scheme. The
Company has no obligation, other than
the contribution payable to the provident
fund. The Company recognizes contribution
payable to the provident fund scheme as
an expense, when an employee renders the
related service. If the contribution payable to
the scheme for service received before the
balance sheet date exceeds the contribution
already paid, the deficit payable to the scheme
is recognized as a liability after deducting the
contribution already paid. If the contribution
already paid exceeds the contribution due for
services received before the balance sheet
date, then excess is recognized as an asset to
the extent that the pre-payment will lead to,
for example, a reduction in future payment or
a cash refund.

Defined benefit plans

The Company operates a defined benefit
gratuity plan in India, which requires
contributions to be made to a separately
administered fund. The cost of providing
benefits under the defined benefit plan
is determined using the projected unit
credit method.

Remeasurements, comprising of actuarial
gains and losses, the effect of the asset ceiling,
excluding amounts included in net interest
on the net defined benefit liability and the
return on plan assets (excluding amounts
included in net interest on the net defined
benefit liability), are recognised immediately
in the balance sheet with a corresponding
debit or credit to retained earnings through
OCI in the period in which they occur.
Remeasurements are not reclassified to profit
or loss in subsequent periods.

Compensated absences

The Company has a policy on compensated
absences which are both accumulating and
non-accumulating in nature. The expected
cost of accumulating compensated absences
is determined by actuarial valuation
performed by an independent actuary at
each balance sheet date using projected

unit credit method on the additional amount
expected to be paid / availed as a result of the
unused entitlement that has accumulated
at the balance sheet date. Expense on non¬
accumulating compensated absences
is recognized in the period in which the
absences occur.

Other long term employee benefits

Liabilities recognised in respect of other
long-term employee benefits are measured
at the present value of the estimated future
cash outflows expected to be made by the
Company in respect of services provided by
the employees up to the reporting date.

m) Leases

The Company has adopted Ind AS 116
"Leases" as notified by MCA as on March
30, 2019. The MCA via this notification
requires all entities to apply Ind AS 116 from
Accounting period April 01, 2023. The entity
has elected the "modified retrospective"
approach for adopting Ind AS 116 and hence,
the comparative information relating to prior
years is not restated.

The Company has elected not to apply the
requirements of Ind AS 116 Leases to short
term leases of all assets that have a lease term
of 12 months or less and leases for which the
underlying asset is of low value. The lease
payments associated with these leases are
recognised as an expense on a straight-line
basis over the lease term.

a) Initial measurement

Lease liability is initially recognised
and measured at an amount equal to
the present value of minimum lease
payments during the lease term that
are not yet paid. Right-of-use asset
is recognized and measured at cost,
consisting of initial measurement of
lease liability plus any lease payments
made to the lessor at or before the
commencement date less any lease
incentives received, initial estimate of
restoration costs and any initial direct
costs incurred by the lessee.

b) Subsequent measurement

The lease liability is measured in
subsequent periods using the effective
interest rate method. Right-of-use

asset is depreciated in accordance with
requirements in Ind AS 16, Property,
Plant and equipment.

n) Impairment of non financial assets

The Company assesses, at each reporting
date, whether there is an indication that
an asset may be impaired. If any indication
exists, or when annual impairment testing for
an asset is required, the Company estimates
the asset''s recoverable amount. An asset''s
recoverable amount is the higher of an
asset''s or cash-generating unit''s (CGU) fair
value less costs of disposal and its value in
use. Recoverable amount is determined for
an individual asset, unless the asset does
not generate cash inflows that are largely
independent of those from other assets or
groups of assets. When the carrying amount
of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and
is written down to its recoverable amount.