ACCEL Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2025

3 Material accounting policies

3.1 Foreign currency transactions

Transactions in foreign currencies are
translated into the functional currency of the
Company, at the exchange rates at the dates
of the transactions or an average rate, if the
average rate approximates the actual rate at
the date of the transaction. These financial
statements are presented in Indian Rupees
(rounded off to nearest lakhs).

Foreign currency denominated monetary
assets and liabilities are translated into the
relevant functional currency at exchange rates
in effect at the Balance sheet date. The gains
or losses resulting from such transactions are
included in net profit in the Statement of Profit
and Loss.

Non-monetary assets and non-monetary
liabilities denominated in a foreign currency
and measured at fair value are translated
at the exchange rates prevalent at the date
when the fair value was determined. Non¬
monetary assets and non-monetary liabilities
denominated in a foreign currency and
measured at historical cost are translated at
the exchange rates prevalent at the date of
transaction.

Transaction gains or losses realized upon
settlement of foreign currency translations are
included in determining net profit for the period
in which the transaction is settled. Revenue,
expense and cash-flow items denominated
in foreign currencies are translated into the
relevant functional currencies using the
exchange rate in effect on the date of the
transaction.

Foreign exchange differences regarded as an
adjustment to borrowing costs are presented in
the Statement of Profit and Loss, within finance
costs. All other foreign exchange gains and
losses are presented in the Statement of Profit
and Loss on a net basis within other gains/
(losses).

3.2 Financial instruments

i. Recognition and initial measurement

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

ii. Classification and subsequent
measurement

Financial assets

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

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

- The asset is held within a business model
whose objective is to hold assets to collect
contractual cash flows; and

- The contractual terms of the financial asset
give rise on specified dates to cash flows that
are solely payments of principal and interest
on the principal amount outstanding.

All financial assets not classified as measured
at amortised cost as described above are
measured at FVTPL. This includes all derivative
financial assets. On initial recognition, the

Company may irrevocably designate a financial
asset that otherwise meets the requirements to
be measured at amortised cost as at FVTPL, if
doing so eliminates or significantly reduces an
accounting mismatch that would otherwise
arise.

Financial liabilities: Classification, subsequent
measurement and gains and losses

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

iii. Derecognition
Financial assets

The Company derecognises a financial
asset when the contractual rights to
the cash flows from the financial asset
expire. 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'' arrangement; and either (i)
the Company has transferred substantially
all the risks and rewards of the asset, or
(ii) the Company has neither transferred
nor retained substantially all the risks and
rewards of the asset, but has transferred
control of the asset.

I f the Company enters into transactions
whereby it transfers assets recognised on
its balance sheet, but retains either all or
substantially all of the risks and rewards
of the transferred assets, the transferred
assets are not derecognised.

Financial liabilities

The Company derecognises a financial liability
when its contractual obligations are discharged
or cancelled, or expired.

The Company also derecognises a financial
liability when its terms are modified and the
cash flows under the modified terms are
substantially different. In this case, a new
financial liability based on the modified terms is
recognised at fair value. The difference between
the carrying amount of the financial liability
extinguished and the new financial liability with
modified terms is recognised in the Statement
of Profit and Loss.

iv. Offsetting

Financial assets and financial liabilities are
offset and the net amount is presented in
the balance sheet when, and only when,
the Company currently has a legally
enforceable right to set off the amounts
and it intends either to settle them on a net
basis or to realise the asset and settle the
liability simultaneously.

v. Derivative financial instruments

The Company shall use foreign currency
forward contracts to hedge its risks associated
with foreign currency fluctuations relating to
certain firm commitments and highly probable
forecast transactions if any. The Company
does not hold derivative financial instruments
for speculative purposes. Forward contracts if
any are recognised at fair value on the date the
contract is entered into and are subsequently
remeasured at fair value.

3.3 Property, plant and equipment

i. Recognition and measurement

Items of Property, plant and equipment
are measured at cost less accumulated
depreciation and accumulated impairment
losses, if any.

Cost of an item of Property, plant and
equipment comprises its purchase
price, including import duties and non¬
refundable purchase taxes, after deducting
trade discounts and rebates, any directly
attributable cost of bringing the item to its
working condition for its intended use.

If significant parts of an item of property,
plant and equipment have different useful
lives, then they are accounted for as
separate items (major components) of
Property, plant and equipment.

Any gain or loss on disposal of an item
of Property, plant and equipment is
recognised in the Statement of Profit and
Loss.

Advances paid towards the acquisition of
property, plant and equipment outstanding
at each balance sheet date is classified as
capital advances under other non-current
assets and the cost of assets not put to

use before such date are disclosed under
''Capital work-in-progress''.

ii. Subsequent expenditure

Subsequent expenditure is capitalised only
if it is probable that the future economic
benefits associated with the expenditure
will flow to the Company.

Repairs and maintenance costs are
recognized in the Statement of Profit and
Loss when incurred.

iii. Depreciation and amortisation

Depreciation is calculated on cost of
items of Property, plant and equipment
less their estimated residual values over
their estimated useful lives using the
straight-line method, in case of leasehold
improvements, the shorter lease term and
is generally recognised in the Statement of
Profit and Loss.

Depreciation method, useful lives and residual
values are reviewed at each financial year
end and adjusted if appropriate. Based on
technical evaluation and consequent advice,
the management believes that its estimates
of useful lives as given above best represent
the period over which management expects to
use these assets and are different from those
prescribed in Schedule II of the Companies Act,
2013.

Individual Property, Plant and Equipment whose
cost does not exceed INR 5,000/- are fully
depreciated in the year of acquisition.

Depreciation on additions (disposals) is
provided from the month of additions (up to) the
date on which asset is ready for use (disposed
off).

Leasehold improvements are depreciated over
shorter of their useful life or the lease term,
unless the entity expects to use the assets
beyond the lease term.

The asset''s residual values and useful lives are
reviewed and adjusted if appropriate, at the end
of the reporting period.

An Asset''s carrying amount is written down
immediately to its recoverable amount if the
asset''s carrying amount is greater than its
estimated recoverable amount .

The cost and related accumulated depreciation
are eliminated from the financial statements

upon sale or retirement of the asset and the
resultant gains/ losses are recognised in the
Statement of Profit and Loss. Assets to be
disposed off are reported at the lower of the
carrying value or the fair value less cost to sell.

Transition to Ind AS

On transition to Ind AS, the Company has
elected to continue with the carrying value of all
of its property, plant and equipment recognized
as at 1st April, 2016 measured as per the the
previous GAAP and use that carrying value as
the deemed cost of such property, plant and
equipment.

Leased assets

A Lease is classified at the inception date
as a Finance Lease or an Operating Lease .
A Lease that transfers Substantially all the
risks and rewards incidental to ownership to
the Company is classified as Finance Lease.
Fixed assets acquired on finance lease have
been capitalized at lower of present value of
minimum lease payments or fair value. These
assets have been depreciated over the useful
life of the asset as technically ascertained by
the Company.

3.4 Other Intangible assets

i. Recognition and measurement

Other Intangible assets acquired by the
Company are initially measured at cost.
Such intangible assets are subsequently
measured at cost less accumulated
amortisation and any accumulated
impairment losses.

Other Intangible assets in the nature
of digital assets are capitalized as and
when it is completed and ready for
commercialization and amortized over
a period of revenue earning potential as

estimated by the management. Cost of
own / co production of animation products
and not ready for commercialization as at
the year end is carried forward as capital
work in progress in the balance sheet
as at the year end, if the management
is convinced of the commercial viability
of the same. Development expenses of
animation products that are not considered
to be commercially viable are expensed.

Gains or losses arising from derecognition
of Other 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.

ii. Subsequent expenditure

Subsequent expenditure is capitalised only
when it increases the future economic
benefits embodied in the specific asset
to which it relates. All other expenditure is
recognised in the Statement of Profit and
Loss as incurred.

iii. Amortisation

Amortisation is calculated to write off
the cost of Other Intangible assets less
their estimated residual values over their
estimated useful lives using the straight¬
line method, and is included in depreciation
and amortisation in Statement of Profit
and Loss.

Amortisation method, useful lives and
residual values are reviewed at the end
of each financial year and adjusted if
appropriate.

3.5 Intangible assets under development

An intangible asset arising from development
(or from the development phase of an internal
project) is being recognised after evaulation of
the following factors:

(a) The technical feasibility of completing the
intangible asset so that it will be available
for use or sale.

(b) Its intention to complete the intangible
asset and use or sell it.

(c) Its ability to use or sell the intangible asset.

(d) How the intangible asset will generate
probable future economic benefits. Among
other things, the entity can demonstrate
the existence of a market for the output of
the intangible asset or the intangible asset
itself or, if it is to be used internally, the
usefulness of the intangible asset.

(e) The availability of adequate technical,
financial and other resources to complete
the development and to use or sell the
intangible asset.

(f) Its ability to measure reliably the
expenditure attributable to the intangible
asset during its development.

3.6 Capital work- in- Progress

Projects under which assets are not ready
for their intended use and other capital work-
in-progress are carried at cost, comprising
direct cost and attributable interest. Once it
has becomes available for use, their cost is re¬
classified to appropriate caption and subjected
to depreciation.

3.7 Investment Property

Investment Property comprises Building that
are held for long-term lease rental yields and/or
for capital appreciation. Investment properties
are initially recognised at cost including
transaction costs. Subsequently Investment
property comprising Building are carried at
cost less accumulated depreciation.

Depreciation on Building is provided over
the estimated useful lives (refer note 3.3) as
specified in Schedule II to the Companies Act,
2013.

Investment property is de-recognised when
either they have been disposed off or doesn''t
meet the criteria of Investment Property
when the Investment Property is permanently
withdrawn from use and no future economic
benefit is expected from its disposal.

The difference between the net disposal
proceeds and the carrying amount of the asset
is recognised in the Statement of Profit and
Loss in the period of de-recognition.

3.8 Inventories

Inventories include components , stock in trade,
stores , spares & Stand by Units.

The Company is maintaining inventory in two
heads i.e. own stock and customer stock.

Inventories of raw material , stock in trade are
measured at the lower of cost and net realisable
value. Costs of inventory is determined using
the weighted average method and cost of
inventories comprise all cost of purchase and
other cost incurred in bringing them to the
present location and condition, net of discounts.

When the stocks are used from the provision
made, then the provision is being reversed.

I nventories of stores and spares are valued at

lower of cost, net of provision for diminution
in the value. Cost is determined on weighted
average cost basis.

Net realisable value is the estimated selling
price in the ordinary course of business, less
the estimated costs of completion and selling
expenses.

The Company has changed the policy of
providing for Inventory as given below from FY
2021-22 with effect from 1st October 2021.

a) Stock-in-Trade: If materials held as stock
for more than 365 days, 50% provision and
more than 730 days, 100% Provision will be
created on the value of the stock.

b) Components and Spares used for Repairs
& maintenance Services: 20% provision
will be created on the value of total holding
at the end of every year.

c) Backup computers / Accessories/ Printers
given at customer locations: These
Assets are considered under Inventory in
a separate category with a 20% Provision
on the value of total holding at the end of
every year.

d) Consumables: Consumables are charged
as and when issued from the stores. In
case of assets given on rent under MPS
Division, Consumables will be charged
off as and when replaced in the Machine
(Against the receipt of the defective item).

e) Principal''s stock / FOC materials: Only
quantitative count is maintained and not
forming part of the Inventory .

3.9 Impairment

i. Impairment of financial instruments

Evidence that a financial asset is credit -
impaired includes the following observable

data:

- significant financial difficulty of the
borrower or issuer;

- a breach of contract such as a default;

- the restructuring of a loan or advance by
the Company on terms that the Company
would not consider otherwise;

- it is probable that the counter party
will enter bankruptcy or other financial
reorganisation; or

- t he disappearance of an active market
for a security because of financial
difficulties.

The Company measures loss allowance at
an amount equal to lifetime expected credit
losses, except for the following, which are
measured as 12 month expected credit
losses:

- Bank balances for which credit risk (i.e.
the risk of default occurring over the
expected life of the financial instrument)
has not increased significantly since
initial recognition.

Loss allowance for trade receivables are
always measured at an amount equal to
lifetime expected credit losses. Lifetime
expected credit losses are the expected
credit losses that result from all possible
default events over the expected life of a
financial instrument. 12 month expected
credit losses are the portion of expected
credit losses that result from default
events that are possible within 12 months
after the reporting date (or a shorter period
if the expected life of the instrument
is less than 12 months). In all cases,
the maximum period considered when
estimating expected credit losses is the
maximum contractual period over which
the Company is exposed to credit risk.

When determining whether the credit
risk of a financial asset has increased
significantly since initial recognition and
when estimating expected credit losses,
the Company considers reasonable and
supportable information that is relevant
and available without undue cost or
effort. This includes both quantitative and
qualitative information and analysis, based
on the Company''s historical experience
and informed credit assessment and
including forward - looking information.”

The Company assumes that the credit
risk on a financial asset has increased
significantly if it is more than 365 days past
due.

The Company considers a financial asset
to be in default when:

- the borrower is unlikely to pay its credit
obligations to the Company in full,
without recourse by the Company to
actions such as realising security (if any
is held).

- the financial asset is 730 days or more
and due.

Measurement of expected credit losses

Expected credit losses are a
probability-weighted estimate of credit
losses. Credit losses are measured as the
present value of all cash shortfalls (i.e.
the difference between the cash flows
due to the Company in accordance with
the contract and the cash flows that the
Company expects to receive).

Presentation of allowance for expected
credit losses in the Balance Sheet

Loss allowance for financial assets
measured at amortised cost are deducted
from the gross carrying amount of the
assets.

Write-off

The gross carrying amount of a financial
asset is written off (either partially or in
full) to the extent that there is no realistic
prospect of recovery. This is generally
the case when the Company determines
that the debtor does not have assets or
sources of income that could generate
sufficient cash flows to repay the amounts
subject to the write-off. However, financial
assets that are written off could still be
subject to enforcement activities in order
to comply with the Company''s procedures
for recovery of amounts due.

ii. Impairment of non-financial assets

The Company''s non-financial assets, other
than inventories and deferred tax assets,
are reviewed at each reporting date to
determine whether there is any indication
of impairment. If any such indication
exists, then the asset''s recoverable amount
is estimated. For impairment testing,
assets that do not generate independent
cash inflows are grouped together into
cash-generating units (CGUs). Each CGU
represents the smallest group of assets
that generates cash inflows that are largely
independent of the cash inflows of other
assets or CGUs.

The recoverable amount of a CGU (or an
individual asset) is the higher of its value
in use and its fair value less costs to sell.

Value in use is based on the estimated
future cash flows, discounted to their
present value using a pre-tax discount rate
that reflects current market assessments
of the time value of money and the risks
specific to the CGU (or the asset).

The Company''s corporate assets do not
generate independent cash inflows. To
determine impairment of a corporate
asset, recoverable amount is determined
for the CGUs to which the corporate asset
belongs.

An impairment loss is recognised if the
carrying amount of an asset or CGU
exceeds its estimated recoverable amount.
Impairment losses are recognised in the
statement of profit and loss. Impairment
loss recognised in respect of a CGU is
allocated first to reduce the carrying
amount of any goodwill allocated to the
CGU, and then to reduce the carrying
amounts of the other assets of the CGU (or
group of CGUs) on a pro rata basis.

3.10 Employee benefits

Expenses and liabilities in respect of employee

benefits are recorded in accordance with Ind

AS 19- Employee Benefits.

i. Short-term employee benefits

Short-term employee benefit obligations
are measured on an undiscounted basis
and are expensed as the related service
is provided. A liability is recognised for the
amount expected to be paid e.g., under
short-term bonus, if the Company has a
present legal or constructive obligation to
pay this amount as a result of past service
provided by the employee, and the amount
of obligation can be estimated reliably.

ii. Share-based payment transactions

The grant date fair value of equity settled
share-based payment awards granted to
employees is recognised as an employee
expense, with a corresponding increase in
equity, over the period that the employees
unconditionally become entitled to the
awards. The amount recognised as
expense is based on the estimate of the
number of awards for which the related
service and non-market vesting conditions
are expected to be met, such that the
amount ultimately recognised as an
expense is based on the number of awards
that do meet the related service and non¬
market vesting conditions at the vesting
date.

iii. Defined contribution plans

A defined contribution plan is a post¬
employment benefit plan under which
an entity pays fixed contributions into
a separate entity and will have no
legal or constructive obligation to pay
further amounts. The Company makes
specified monthly contributions towards
Government administered provident fund
scheme and Employees State Insurance
Scheme. Obligations for contributions to
defined contribution plans are recognised
as an employee benefit expense in profit or
loss in the periods during which the related
services are rendered by employees.

iv. Defined benefit plans

A defined benefit plan is a post¬
employment benefit plan other than a
defined contribution plan. The Company''s
net obligation in respect of defined benefit
plans is calculated separately for each plan
by estimating the amount of future benefit

that employees have earned in the current
and prior periods.

The Company''s gratuity plan is partly
funded, defined benefit obligation is
performed annually by a qualified actuary
using the projected unit credit method
at each balance sheet date. The defined
benefit obligation is determined as the
present value of the estimated future
cash flows expected to be made by the
Company in respect of services rendered
by its employees up to the reporting date.

Remeasurements of the net defined benefit
liability, which comprise actuarial gains
and losses are recognised in OCI. The
Company determines the interest expense
on the defined benefit liability for the
period by applying the discount rate used
to measure the defined benefit obligation
at the beginning of the annual period to
the then defined benefit liability. Interest
expense and other expenses related to
defined benefit plans are recognised in
profit or loss under finance costs and
employee benefit expenses respectively.

When the benefits of a plan are changed
or when a plan is curtailed, the resulting
change in benefit that relates to past
service (''past service cost'' or ''past service
gain'') or the gain or loss on curtailment is
recognised immediately in profit or loss.
The Company recognises gains and losses
on the settlement of a defined benefit plan
when the settlement occurs.

v. Other long-term employee benefits

The Company''s net obligation in respect
of long-term employee benefits other than
post-employment benefits is the amount of
future benefit that employees have earned

in return for their service in the current and
prior periods; that benefit is discounted to
determine its present value, and the fair
value of any related assets is deducted.
The obligation is measured on the basis of
an annual independent actuarial valuation
using the projected unit credit method.
Remeasurements gains or losses are
recognised in the statement of profit and
loss in the period in which they arise.

3.H Revenue recognition

Revenue is recognised to the extent that it is
probable that the economic benefits will flow to
the Company and the revenue can be reliably
measured, regardless of when the payment is
being made. Revenue is measured at the fair
value of the consideration received or receivable,
taking into account contractually defined terms
of payment and excluding taxes and duties
collected on behalf of the government. The
Company has concluded that it is the principal
in all of its revenue arrangements since it is the
primary obligor in all the revenue arrangements
as it has pricing latitude and is also exposed to
inventory and credit risks.

The following specific recognition criteria
must also be met before revenue is recognised:

IT Services

The Company earns revenue primarily from
providing warranty and post warranty services,
annual maintenance contract services, on-site
support services and other related services.
The Company has applied Ind AS 115 which
establishes a comprehensive framework for
determining whether, how much and when
revenue is to be recognised.

Revenue is recognised upon transfer of control
of promised services to customers in an

amount that reflects the consideration which
the Company expects to receive in exchange
for those services.

- Revenue from warranty services is recognised
on output basis, measured by number of calls
processed.

- Revenue from annual maintenance service
where the Company is standing ready to
provide services is recognised based on time
elapsed mode and revenue is straight lined
over the period of performance.

- Revenue from others comprises of sale of
spares and outsourced manpower supply.
The Company recognises the revenue on sale
of spares at the point in time when control is
transferred to the customer. Revenue in case
of outsourced manpower is based on output
basis, measured by efforts expended (hours).

- Revenue from scrap sales is recognised at the
point in time when control is transferred to the
customer.

Contract assets are recognised when there
is excess of revenue earned over billings on
contracts. Contract assets are classified as
unbilled receivables (only act of invoicing is
pending) when there is unconditional right
to receive cash, and only passage of time is
required, as per contractual terms.

Unearned and deferred revenue ("contract
liability”) is recognised when there is billings in
excess of revenues.

I n accordance with Ind AS 37, the Company
recognises an onerous contract provision
when the unavoidable costs of meeting the
obligations under a contract exceed the
economic benefits to be received.

Disaggregation of revenue

The Company disaggregates revenue from
contracts with customers by the geographic
location of the customers. The Company
believes that this disaggregation best depicts
how the nature, amount, timing and uncertainty
of our revenues and cash flows are affected by
industry, market and other economic factors.

Performance obligations and revenue
recognition policies

The following details provides information
about the nature and timing of the satisfaction
of performance obligations in contracts with
customers, including significant payment
terms, and the related revenue recognition
policies.

Revenue recognition under Ind AS 115

a. Sale of Goods

Sale is recognised upon transfer of
control of promised delivery of goods to
the customers, being the point of time
when the product / software is delivered
and acknowledged by the customer in an
amount that reflects the considerations
expected to receive in exchange for those
products . Revenue is measured based
on the transaction price, which is the
consideration as specified in the contract
with the customer. Revenue also excludes
taxes collected from customers.

b. Sale of Services

Revenue is recognisd upon transfer
of control of promised services to the
customers in an amount that reflects
the considerations expected to receive
in exchange for those products or
services. Revenue is measured based
on the transaction price, which is the

consideration as specified in the contract
with the customer. Revenue also excludes
taxes collected from customers.

Under fixed price maintenance and support
services, the performance obligations
relating to the service are satisfied over
a period of time and the revenue is
recognised on a straight line basis over
the period of contract, net of expected
liquidated damages or deductions.

1) Rental Income

Revenue from renting out of movable
and immovable properties are
recognised on an accrual basis.

2) Interest Income

I nterest Income reported on accrual
basis using the effective interest
method and is included under the
head " Other Income” in the statement
of Profit and loss .

3) Unbilled Revenue

The Company has contracts with
customers ranging from 1 year to
5 years and the billing is done as
per billing cycle based on contract
terms. Revenue is recognised by
the Company on annuity basis. So
wherever bills have not been raised
revenue is recognised based on the
basis of service provided. However,
these estimates are reviewed regularly
and figures are revised based on
subsequent billing .

4) Deferred Income

Billing is made as per billing cycles
agreed with the customers. Wherever
billing is made as per contract and the

period of such billing has not expired,
such revenue for the unexpired
period of contract as on the date of
recognition is treated as deferred
revenue.

3.12 Leases

i) Company as a lessee:

The Company accounts for each lease
component within the contract as a lease
separately from non-lease components of the
contract and allocates the consideration in the
contract to each lease component on the basis
of the relative stand-alone price of the lease
component and the aggregate stand-alone
price of the non-lease components.

The Company recognises a right-of-use
asset and a lease liability at the lease
commencement date. The right-of-use asset
is initially measured at cost, which comprises
the initial amount of the lease liability adjusted
for any lease payments made at or before the
commencement date, plus any initial direct
costs incurred and an estimate of costs to
dismantle and remove the underlying asset or
to restore the underlying asset or the site on
which it is located, less any lease incentives
received.

The right-of-use asset is subsequently
depreciated using the straight-line method from
the commencement date to the end of the lease
term, unless the lease transfers ownership of
the underlying asset to the Company by the end
of the lease term or the cost of the right-of-use
asset reflects that the Company will exercise a
purchase option. In that case the right-of-use
asset will be depreciated over the useful life of
the underlying asset, which is determined on
the same basis as those of property, plant and
equipment. In addition, the right-of-use asset is

periodically reduced by impairment losses, if
any, and adjusted for certain remeasurements
of the lease liability.

The lease liability is initially measured at the
present value of the lease payments that are not
paid at the commencement date, discounted
using the Company''s incremental borrowing
rate. The Company determines its incremental
borrowing rate by obtaining interest rates from
various external financing sources that reflects
the terms of the lease and type of the asset
leased.

The lease payments: included in the
measurements of the lease liability comprise
the following

- fixed payments, including in-substance fixed
payments;

- variable lease payments that depend on an
index or rate, initially measured using the
index or rate as at the commencement date

- amounts expected to be payable under a
residual value guarantee; and

- t he exercise price under a purchase option
that the Company is reasonably certain
to exercise, lease payments in an optional
renewal period if the Company is reasonably
certain to exercise an extension option, and
penalties for early termination of a lease
unless the Company is reasonably certain not
to terminate early.

The lease liability is measured at amortised
cost using the effective interest method.
It is remeasured when there is a change in
future lease payments arising from a change
in an index or rate, if there is a change in the
Company''s estimate of the amount expected
to be payable under a residual value guarantee,
if the Company changes its assessment of

whether it will exercise a purchase, extension
or termination option or if there is a revised in¬
substance fixed lease payment.

When the lease liability is remeasured in this
way, a corresponding adjustment is made to
the carrying amount of the right-of-use asset,
or is recorded in Statement of Profit and loss
if the carrying amount of the right-of-use
asset has been reduced to zero. The Company
presents right-of-use assets and lease liabilities
separately on the face of the balance sheet.

ii) Short-term leases and low value assets:

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
recognized as an expense on a straight-line
basis over the lease term .

iii) Operating leases:

Leases, where the lessor effectively retains
substantially all the risks and rewards incidental
to ownership of the leased item are classified
as operating leases. Payments under operating
leases are recognized in the Statement of
Profit and Loss on a straight line basis over
the term of the lease unless such payments
are structured to increase in line with expected
general inflation to compensate for the lessor
inflationary cost increase.

3.13 Recognition of dividend income, interest
income or expense

Dividend income is recognised in the statement
of profit and loss on the date on which
the Company''s right to receive payment is
established.

Interest income or expense is recognised using
the effective interest method.

The ''effective interest rate'' is the rate that
exactly discounts estimated future cash
payments or receipts through the expected life
of the financial instrument to:

- the gross carrying amount of the financial
asset; or

- the amortised cost of the financial liability.

In calculating interest income and expense, the
effective interest rate is applied to the gross
carrying amount of the asset (when the asset
is not credit-impaired) or to the amortised cost
of the liability. However, for financial assets that
have become credit-impaired subsequent to
initial recognition, interest income is calculated
by applying the effective interest rate to the
amortised cost of the financial asset. If the
asset is no longer credit-impaired, then the
calculation of interest income reverts to the
gross basis.

3.14 Income tax

Income tax comprises current and deferred
tax. It is recognised in the statement of profit
and loss except to the extent that it relates to a
business combination or to an item recognised
directly in equity or in other comprehensive
income respectively.

i. Current tax

Current tax comprises the expected tax
payable or receivable on the taxable income
or loss for the year and any adjustment to
the tax payable or receivable in respect
of previous years. The amount of current
tax reflects the best estimate of the tax
amount expected to be paid or received
after considering the uncertainty, if any,

related to income taxes. It is measured
using tax rates (and tax laws) enacted
or substantively enacted by the Balance
sheet date.

Current tax assets and current tax
liabilities are offset only if there is a legally
enforceable right to set off the recognised
amounts, and it is intended to realise the
asset and settle the liability on a net basis
or simultaneously.

ii. Deferred tax

Deferred tax is recognised in respect
of temporary differences between the
carrying amounts of assets and liabilities
for financial reporting purposes and the
corresponding amounts used for taxation
purposes. Deferred tax is also recognised
in respect of carried forward tax losses
and tax credits, if any. Deferred tax is not
recognised for:

- temporary differences arising on the
initial recognition of assets or liabilities
in a transaction that is not a business
combination and that affects neither
accounting nor taxable profit or loss at
the time of the transaction;

- temporary differences related to
investments in subsidiaries, associates
and joint arrangements to the extent
that the Company is able to control the
timing of the reversal of the temporary
differences and it is probable that they
will not reverse in the foreseeable future.

- taxable temporary differences arising on
the initial recognition of goodwill.

Unrecognised deferred tax assets are re¬
assessed at each reporting date and are

recognised to the extent that it is probable
that future taxable profits will be available
against which they can be used. Deferred
tax assets are reviewed at each reporting
date and are recognised/ reduced to
the extent that it is probable/ no longer
probable respectively that the related tax
benefit will be realised.

Deferred tax is measured at the tax rates
that are expected to apply to the period
when the asset is realised or the liability is
settled, based on the laws that have been
enacted or substantively enacted by the
reporting date.

The measurement of deferred tax reflects
the tax consequences that would follow
from the manner in which the Company
expects, at the reporting date, to recover
or settle the carrying amount of its assets
and liabilities.

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 realised simultaneously.

Deferred tax assets include Minimum
Alternative Tax (MAT) paid in accordance
with the tax laws in India, to the extent it
would be available for set off against future
current income tax liability. Accordingly,
MAT is recognised as deferred tax asset in
the balance sheet when the asset can be
measured reliably and it is probable that
the future economic benefit associated
with the asset will be realised.

3.15 Earnings per share

Basic Earnings per share is computed by
dividing profit or loss attributable to equity
shareholders of the Company by the Weighted
average number of equity shares outstanding
during the year.

Diluted EPS amounts are calculated by dividing
the profit attributable to equity holders of the
Company (after adjusting for interest on the
convertible preference shares, if any) by the
weighted average number of equity shares
outstanding during the year plus the weighted
average number of equity shares that would be
issued on conversion of all the dilutive potential
equity shares into equity shares. Dilutive
potential equity shares are deemed converted
as of the beginning of the period, unless issued
at a later date. Dilutive potential equity shares
are determined independently for each period
presented.

3.16 Cash and cash equivalents

Cash and cash equivalents comprise of cash
on hand and balance with Bank including
short-term deposits with an original maturity
of three months or less, which are subject to
an insignificant risk of changes in value. Other
Bank deposits which are not in the nature of
cash and cash equivalents with a maturity
period of more than three months are classified
as other Bank balances.

3.17 Cash flows

Cash flows are reported using the indirect
method, whereby profit before tax is adjusted
for the effects of transactions of a non-cash
nature and any deferrals or accruals of past
or future cash receipts or payments. The
cash flows from regular revenue generating,
financing and investing activities of the
Company are segregated. Cash flows in foreign

currencies are accounted at average monthly
exchange rates that approximate the actual
rates of exchange prevailing at the dates of
the transactions. In the cash flow statement,
cash and cash equivalents includes cash in
hand, cheques on hand, balances with banks
in current accounts and other short-term highly
liquid investments with original maturities of 3
months or less, as applicable.

3.18 Borrowing costs

Borrowing costs are interest and other costs
(including exchange differences relating to
foreign currency borrowings to the extent
that they are regarded as an adjustment to
interest costs) incurred in connection with the
borrowing of funds. Borrowing costs directly
attributable to acquisition or construction of
an asset which necessarily take a substantial
period of time to get ready for their intended use
or sale are capitalised as part of the cost of that
asset. Other borrowing costs are recognised
as an expense in the period in which they are
incurred.

3.19 Dividend to share holders

Final dividend distributed to Equity share
holders is recognised in the period in which it
is approved by the members of the Company in
the Annual General Meeting. Final dividend net
of divided distribution tax are recognised in the
Statement of Changes in Equity.

3.20 Business combinations

In accordance with Ind AS 101 provisions
related to first time adoption, the Company has
elected to apply Ind AS accounting for business
combinations prospectively from 1 April 2015.
As such, Indian GAAP balances relating to
business combinations entered into before that
date, have been carried forward.

Business combinations involving entities under
the common control are accounted for using
the pooling of interest method. The assets and
liabilities of the combining entities are reflected
at their carrying amounts. No adjustments are
made to reflect fair values, or recognise any
new assets or liabilities. The only adjustments
that are made are to harmonise accounting
policies.

The identity of the reserves shall be preserved
and shall appear in the financial statements of
the transferee in the same form in which they
appeared in the financial statements of the
transferor. Any consideration in excess of the
net worth of the acquire Company is adjusted
against the reserves of the acquiring Company.

Previous year''s figure have been regrouped,
recasted and rearranged wherever necessary,
to suit the current period layout.

---

Mar 31, 2024

1 Background

Accel Limited was incorporated as Transmatic Systems Limited on 19.05.1986. The name of the Company got changed to Accel Limited conseguent to the merger of Accel limited w.e.f. April 01,2014 . The Company is engaged in the business of Information Technology Services (Infrastructure Management services, Warranty and Logistics Management Services, Managed Print Services, System Integration and Enterprise IT solutions, Cyber Security Managed Services and Software Services) including Real Estate related to IT infrastructure. The Company is domiciled in India and its shares are listed on BSE . The registered office of the Company is located at 3rd Floor, SFI Complex, No.178, Valluvarkottam High Road, Nungambakkam, Chennai- 600 034.

The Standalone financial statements were approved by the Board of Directors and authorized for issue on 28 May 2024.

2 Summary of Material accounting policiesBasis of preparation and presentation of Standalone financial statements2.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time,

notified under Section 133 of Companies Act, 2013, (the Act'') and other relevant provisions of the Act.

The historical cost convention applied on accrual basis except for certain financial instruments which are measured at fair values as per the provisions of the Companies Act, 2013 ("the Act”) (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules,2015 and relevant amendments rules issued thereafter. Based on the nature of services rendered to customers and time elapsed between deployment of resources and the realisation in cash and cash eguivalents of the consideration for such services rendered, the Company has considered an operating cycle of 12 months. Figures for the previous years have been regrouped/rearranged wherever considered necessary to conform to the current year classification.

Details of the Company''s accounting policies are included in Note 3.

2.2 Functional and presentation currency

These financial statements are presented in Indian Rupees (INR), which is also the Company''s functional currency. All amounts are in Indian rupees and have been rounded-off to the nearest lakhs, unless otherwise stated

2.3 Basis of measurement

The financial statements have been prepared on the historical cost basis except for the following items;

Items	Measurement basis
- Certain financial assets	Fair value
and liabilities
- Net defined benefit	Present value of
liability	defined benefit
	obligations

2.4 Use ofjudgments, estimates and Assumptions:

The preparation of these financial statements in conformity with recognition and measurement principles of Ind AS requires the management to make Judgments, estimates and assumptions that affect the application of accounting policies and the reported balances of assets, liabilities, disclosures relating to contingent liability as at the date of the financial statements and the reported amounts of income and expenses for the periods presented. Actual results may differ from these estimates. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively. Existing circumstances and assumptions about future developments,

however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

A. Assumptions and estimation uncertainties

The following are significant management Judgements in applying the accounting policies of the Company that have the most significant effect on the financial statements in the year ended 31 March 2024.

B. Critical judgements and estimates1 Useful lives of property, plant and equipment (PPE) & Other Intangible Assets

As described at Note 3.3 & 3.4 below, the charge in respect of periodic depreciation for the year is derived after determining an estimate of an PPE''s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Company''s PPE are determined by the management at the time the PPE is acquired and reviewed annually. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technical or commercial obsolescence arising from changes or improvements in production or from a change in market demand of the product or service output of the asset.

2 Employee benefits

The cost of defined benefit plans are determined using actuarial valuation, which involves making assumptions about discount rates, expected rates of return on assets, future salary increases, and mortality rates. Due to the long-term nature of these plans, such estimates are subject to significant uncertainty. The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. Future salary increases and gratuity increases are based on expected future inflation rates. Further details about gratuity obligations are given in Note No 49.

3 Provisions and contingencies

Critical Judgements are involved in measurement of provisions and contingencies including those relating to Tax/other statutory litigations and estimation of the likelihood of occurrence thereof based on factors such as expert opinion, past experience etc.

4 Classification of leases

I nd AS 116 reguires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The Company makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the Company considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to the Company operations taking into account the location of the underlying asset and the availability of suitable alternatives. The lease term in future periods is reassessed to ensure that the lease term reflects the current economic circumstances. After considering current and future economic conditions, the Company has concluded that no changes are reguired to lease period relating to the existing lease contracts.

5 Recognition of deferred tax assets and income tax treatments

Significant judgments are involved in determining the provision for income taxes, including amount expected to be paid/ recovered for uncertain tax positions. The extent to which deferred tax assets can

be recognised is based on an assessment of the probability that future taxable income will be available against which the deductible temporary differences and tax loss carry forward can be utilised. In addition, significant judgement is required in assessing the impact of any legal or economic limits or uncertainties in various tax Jurisdictions.

6 Capitalisation of internally developed intangible assets

Distinguishing the research and development phases of a new customised proJect and determining whether the recognition reguirements for the capitalisation of development costs are met reguires Judgement. After capitalisation, management monitors whether the recognition reguirements continue to be met and whether there any indicators that capitalised costs may be impaired.

7 Evaluation of indicators for impairment of assets

The evaluation of applicability of indicators of impairment of assets reguires assessment of several external and internal factors which could result in deterioration of recoverable amount of the 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.

8 Recoverability of advances / receivables

At each balance sheet date, based on historical default rates observed over expected life, the management assesses the expected credit loss on outstanding receivables and advances.

9 Inventory

Management estimates the net realizable values of inventories, taking into account the most reliable evidence available at each reporting date. The future realization of these inventories may be affected by future technology or other market-driven changes that may reduce future selling prices.

10 Fair value measurements

When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on guoted prices in active markets, their fair value is measured using valuation technigues 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 reguired 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.

2.5 Changes in accounting policies

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.

2.6 Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on current / noncurrent classification.

An asset is treated as current when it is:

- Expected to be realized or intended to be sold or consumed in normal operating cycle;

- Held primarily for the purpose of trading;

- Expected to be realized within twelve months after the reporting period, or

- 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 current when:

- It is expected to be settled in normal operating cycle;

- It is held primarily for the purpose of trading;

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

- 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 noncurrent.

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

3 Material accounting policies3.1 Foreign currency transactions

Transactions in foreign currencies are translated into the functional currency of the Company, at the exchange rates at the dates of the transactions or an average rate, if the average rate approximates the actual rate at the date of the transaction. These financial statements are presented in Indian Rupees (rounded off to nearest lakhs).

Foreign currency denominated monetary assets and liabilities are translated into the relevant functional currency at exchange rates in effect at the Balance sheet date. The gains or losses resulting from such transactions are included in net profit in the Statement of Profit and Loss.

Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rates prevalent at the date when the fair value was determined. Nonmonetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rates prevalent at the date of transaction.

Transaction gains or losses realized upon settlement of foreign currency translations are included in determining net profit for the period in which the transaction is settled. Revenue, expense and cash-flow items denominated in foreign currencies are translated into the relevant functional currencies using the exchange rate in effect on the date of the transaction.

Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the Statement of Profit and Loss, within finance costs. All other foreign exchange gains and losses are presented in the Statement of Profit and Loss on a net basis within other gains/ (losses).

3.2 Financial instrumentsi. Recognition and initial measurement

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

ii. Classification and subsequent measurement Financial assets

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

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

- The asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and

- The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

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

Financial assets : Subsequent measurement and gains and losses

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

Financial liabilities: Classification, subsequent measurement and gains and losses

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in the Statement of Profit and Loss. Other financial liabilities are subseguently measured at amortised cost using the effective interest method.

Interest expense and foreign exchange gains and losses are recognised in Statement of profit and loss. Any gain or loss on derecognition is also recognised in the Statement of profit and loss.

iii. Derecognition Financial assets

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire. 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'' arrangement; and either (i) the Company has transferred substantially all the risks and rewards of the asset, or (ii) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

I f the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.

Financial liabilities

The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expired.

The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in the Statement of Profit and Loss.

iv. Offsetting

Financial assets and financial liabilities are offset and the net amount is presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

v. Derivative financial instruments

The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and highly probable forecast transactions. The Company does not hold derivative financial instruments for speculative purposes. Forward contracts are recognised at fair value on the date the contract is entered into and are subseguently remeasured at fair value.

3.3 Property, plant and equipmenti. Recognition and measurement

Items of Property, plant and eguipment are measured at cost less accumulated depreciation and accumulated impairment losses, if any.

Cost of an item of Property, plant and eguipment comprises its purchase price, including import duties and nonrefundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use.

If significant parts of an item of property, plant and eguipment have different useful lives, then they are accounted for as separate items (major components) of Property, plant and eguipment.

Any gain or loss on disposal of an item of Property, plant and eguipment is recognised in the Statement of Profit and Loss.

Advances paid towards the acguisition of property, plant and eguipment outstanding at each balance sheet date is classified as capital advances under other non-current assets and the cost of assets not put to use before such date are disclosed under ''Capital work-in-progress''.

ii. Subsequent expenditure

Subseguent expenditure is capitalised only if it is probable that the future economic

benefits associated with the expenditure will flow to the Company,

Repairs and maintenance costs are recognized in the Statement of Profit and Loss when incurred,

iii. Depreciation and amortisation

Depreciation is calculated on cost of items of Property, plant and equipment less their estimated residual values over their estimated useful lives using the straight-line method, in case of leasehold improvements, the shorter lease term and is generally recognised in the Statement of Profit and Loss.

The estimated useful lives of PPE are as follows:

Asset	Management estimate of useful life (Years)	Useful life as per Schedule II (Years)
Leasehold Land	99	NA
Buildings	30	30
Building at KINFRA	40	30
Film and Video Park
Plant and Machinery	15	15
Plant and Machinery	5	5
(Ricoh Printers )
Computer and	3	3
accessories

Furniture and office	10	10
equipment''s
Vehicles	5	8
Lease Hold	3	3
Improvement
Tools	3	3

Depreciation method, useful lives and residual values are reviewed at each financial year end and adjusted if appropriate, Based on technical evaluation and consequent advice, the management believes that its estimates of useful lives as given above best represent the period over which management expects to use these assets and are different from those prescribed in Schedule II of the Companies Act, 2013.

Individual Property, Plant and Equipment whose cost does not exceed INR 5,000/- are fully depreciated in the year of acquisition,

Depreciation on additions (disposals) is provided from the month of additions (up to) the date on which asset is ready for use (disposed off),

Leasehold improvements are depreciated over shorter of their useful life or the lease term, unless the entity expects to use the assets beyond the lease term,

The asset''s residual values and useful lives are reviewed and adjusted if appropriate, at the end of the reporting period,

An Asset''s carrying amount is written down immediately to its recoverable amount if the asset''s

carrying amount is greater than its estimated recoverable amount.

The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains/ losses are recognised in the Statement of Profit and Loss. Assets to be disposed off are reported at the lower of the carrying value or the fair value less cost to sell.

Transition to Ind AS

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and eguipment recognized as at 1st April, 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of such property, plant and eguipment.

Leased assets

A Lease is classified at the inception date as a Finance Lease or an Operating Lease . A Lease that transfers Substantially all the risks and rewards incidental to ownership to the Company is classified as Finance Lease. Fixed assets acquired on finance lease have been capitalized at lower of present value of minimum lease payments or fair value. These assets have been depreciated over the useful life of the asset as technically ascertained by the Company.

3.4 Other Intangible assetsi. Recognition and measurement

Other Intangible assets acguired by the Company are initially measured at cost.

Such intangible assets are subseguently measured at cost less accumulated amortisation and any accumulated impairment losses.

Other Intangible assets in the nature of digital assets are capitalized as and when it is completed and ready for commercialization and amortized over a period of revenue earning potential as estimated by the management. Cost of own / co production of animation products and not ready for commercialization as at the year end is carried forward as capital work in progress in the balance sheet as at the year end, if the management is convinced of the commercial viability of the same. Development expenses of animation products that are not considered to be commercially viable are expensed.

Gains or losses arising from derecognition of Other 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.

ii. Subsequent expenditure

Subseguent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in the Statement of Profit and Loss as incurred.

iii. Amortisation

Amortisation is calculated to write off the cost of Other intangible assets less their estimated residual values over their estimated useful lives using the straightline method, and is included in depreciation and amortisation in Statement of Profit and Loss.

The estimated useful lives are as follows:

Asset	Useful life
	(Years)
Software	3
intellectual Property Rights	12

Amortisation method, useful lives and residual values are reviewed at the end of each financial year and adjusted if appropriate.

3.5 Intangible assets under development

An intangible asset arising from development (or from the development phase of an internal project) is being recognised after evaulation of the following factors:

(a) The technical feasibility of completing the intangible asset so that it will be available for use or sale.

(b) its intention to complete the intangible asset and use or sell it.

(c) its ability to use or sell the intangible asset.

(d) How the intangible asset will generate probable future economic benefits. Among other things, the entity can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset.

(e) The availability of adeguate technical, financial and other resources to complete the development and to use or sell the intangible asset.

(f) its ability to measure reliably the expenditure attributable to the intangible asset during its development.

3.6 Capital work-in-Progress

Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost and attributable interest. Once it has becomes available for use, their cost is reclassified to appropriate caption and subjected to depreciation.

3.7 Investment Property

I nvestment Property comprises Building that are held for long-term lease rental yields and/or for capital appreciation. investment properties are initially recognised at cost including transaction costs. Subseguently investment property comprising Building are carried at cost less accumulated depreciation.

Depreciation on Building is provided over the estimated useful lives (refer note 3.3) as

specified in Schedule II to the Companies Act, 2013.

I nvestment property is de-recognised when either they have been disposed off or doesn''t meet the criteria of Investment Property when the Investment Property is permanently withdrawn from use and no future economic benefit is expected from its disposal.

The difference between the net disposal proceeds and the carrying amount of the asset is recognised in the Statement of Profit and Loss in the period of de-recognition.

3.8 Inventories

Inventories include components , stock in trade, stores , spares & Stand by Units.

The Company is maintaining inventory in two heads i.e. own stock and customer stock.

I nventories of raw material, stock in trade are measured at the lower of cost and net realisable value. Costs of inventory is determined using the weighted average method and cost of inventories comprise all cost of purchase and other cost incurred in bringing them to the present location and condition, net of discounts.

When the stocks are used from the provision made, then the provision is being reversed.

Inventories of stores and spares are valued at lower of cost, net of provision for diminution in the value. Cost is determined on weighted average cost basis.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

The Company has changed the policy of providing for Inventory as given below from FY 2021-22 with effect from 1st October 2021.

a) Stock-in-Trade: If materials held as stock for more than 365 days, 50% provision and more than 730 days, 100% Provision will be created on the value of the stock.

b) Components and Spares used for Repairs & maintenance Services: 20% provision will be created on the value of total holding at the end of every year.

c) Backup computers / Accessories/ Printers given at customer locations: These Assets are considered under Inventory in a separate category with a 20% Provision on the value of total holding at the end of every year.

d) Consumables: Consumables are charged as and when issued from the stores. In case of assets given on rent under MPS Division, Consumables will be charged off as and when replaced in the Machine (Against the receipt of the defective item).

e) Principal''s stock / FOC materials: Only Quantitative count is maintained and not forming part of the Inventory .

3.9 Impairmenti. Impairment of financial instruments

Evidence that a financial asset is credit -impaired includes the following observable data;

- significant financial difficulty of the borrower or issuer;

- a breach of contract such as a default;

- the restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise;

- it is probable that the counter party will enter bankruptcy or other financial reorganisation; or

- the disappearance of an active market for a security because of financial difficulties.

The Company measures loss allowance at an amount egual to lifetime expected credit losses, except for the following, which are measured as 12 month expected credit losses;

- Bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for trade receivables are always measured at an amount egual to lifetime expected credit losses. Lifetime expected credit losses are the expected

credit losses that result from all possible default events over the expected life of a financial instrument. 12 month expected credit losses are the portion of expected credit losses that result from default events that are possible within 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months). In all cases, the maximum period considered when estimating expected credit losses is the maximum contractual period over which the Company is exposed to credit risk.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both guantitative and Qualitative information and analysis, based on the Company''s historical experience and informed credit assessment and including forward - looking information.

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 365 days past due.

The Company considers a financial asset to be in default when;

- the borrower is unlikely to pay its credit obligations to the Company in full,

without recourse by the Company to actions such as realising security (if any is held),

- the financial asset is 365 days or more and due,

Measurement of expected credit losses

Expected credit losses are a probability-weighted estimate of credit losses, Credit losses are measured as the present value of all cash shortfalls (i,e, the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive),

Presentation of allowance for expected credit losses in the Balance Sheet

Loss allowance for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets,

Write-off

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery, This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be

subject to enforcement activities in order to comply with the Company''s procedures for recovery of amounts due,

ii. Impairment of non-financial assets

The Company''s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment, If any such indication exists, then the asset''s recoverable amount is estimated, For impairment testing, assets that do not generate independent cash inflows are grouped together into cash-generating units (CGUs), Each CGU represents the smallest group of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs,

The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell, Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the CGU (or the asset).

The Company''s corporate assets do not generate independent cash inflows, To determine impairment of a corporate asset, recoverable amount is determined for the CGUs to which the corporate asset belongs,

An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognised in the statement of profit and loss. Impairment loss recognised in respect of a CGU is allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets of the CGU (or group of CGUs) on a pro rata basis.

3.10 Employee benefits

Expenses and liabilities in respect of employee benefits are recorded in accordance with Ind AS 19- Employee Benefits.

i. Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid e.g., under short-term bonus, if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.

ii. Share-based payment transactions

The grant date fair value of eguity settled share-based payment awards granted to employees is recognised as an employee expense, with a corresponding increase in eguity, over the period that the employees unconditionally become entitled to the

awards. The amount recognised as expense is based on the estimate of the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related service and nonmarket vesting conditions at the vesting date.

iii. Defined contribution plans

A defined contribution plan is a postemployment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. The Company makes specified monthly contributions towards Government administered provident fund scheme and Employees State Insurance Scheme. Obligations for contributions to defined contribution plans are recognised as an employee benefit expense in profit or loss in the periods during which the related services are rendered by employees.

iv. Defined benefit plans

A defined benefit plan is a postemployment benefit plan other than a defined contribution plan. The Company''s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods.

The Company''s gratuity plan is partly funded, defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method at each balance sheet date. The defined benefit obligation is determined as the present value of the estimated future cash flows expected to be made by the Company in respect of services rendered by its employees up to the reporting date.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses are recognised in OCI. The Company determines the interest expense on the defined benefit liability for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then defined benefit liability. Interest expense and other expenses related to defined benefit plans are recognised in profit or loss under finance costs and employee benefit expenses respectively.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service (''past service cost'' or ''past service gain'') or the gain or loss on curtailment is recognised immediately in profit or loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.

v. Other long-term employee benefits

The Company''s net obligation in respect of long-term employee benefits other than post-employment benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted. The obligation is measured on the basis of an annual independent actuarial valuation using the projected unit credit method. Remeasurements gains or losses are recognised in the statement of profit and loss in the period in which they arise.

3.H Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes and duties collected on behalf of the government. The Company has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks.

The following specific recognition criteria must also be met before revenue is recognised:IT Services

The Company earns revenue primarily from providing warranty and post warranty services, annual maintenance contract services, on-site support services and other related services. The Company has applied Ind AS 115 which establishes a comprehensive framework for determining whether, how much and when revenue is to be recognised.

Revenue is recognised upon transfer of control of promised services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those services.

- Revenue from warranty services is recognised on output basis, measured by number of calls processed.

- Revenue from annual maintenance service where the Company is standing ready to provide services is recognised based on time elapsed mode and revenue is straight lined over the period of performance.

- Revenue from others comprises of sale of spares and outsourced manpower supply. The Company recognises the revenue on sale of spares at the point in time when control is transferred to the customer. Revenue in case of outsourced manpower is based on output basis, measured by efforts expended (hours).

- Revenue from scrap sales is recognised at the point in time when control is transferred to the customer.

Contract assets are recognised when there is excess of revenue earned over billings on contracts. Contract assets are classified as unbilled receivables (only act of invoicing is pending) when there is unconditional right to receive cash, and only passage of time is required, as per contractual terms.

Unearned and deferred revenue ("contract liability”) is recognised when there is billings in excess of revenues.

I n accordance with Ind AS 37, the Company recognises an onerous contract provision when the unavoidable costs of meeting the obligations under a contract exceed the economic benefits to be received.

Disaggregation of revenue

The Company disaggregates revenue from contracts with customers by the geographic location of the customers. The Company believes that this disaggregation best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by industry, market and other economic factors.

Performance obligations and revenue recognition policies

The following details provides information about the nature and timing of the satisfaction of performance obligations in contracts with customers, including significant payment

terms, and the related revenue recognition policies.

Revenue recognition under Ind AS H5a. Sale of Goods

Sale is recognised upon transfer of control of promised delivery of goods to the customers, being the point of time when the product / software is delivered and acknowledged by the customer in an amount that reflects the considerations expected to receive in exchange for those products , Revenue is measured based on the transaction price, which is the consideration as specified in the contract with the customer, Revenue also excludes taxes collected from customers,

b. Sale of Services

Revenue is recognisd upon transfer of control of promised services to the customers in an amount that reflects the considerations expected to receive in exchange for those products or services, Revenue is measured based on the transaction price, which is the consideration as specified in the contract with the customer, Revenue also excludes taxes collected from customers,

Under fixed price maintenance and support services, the performance obligations relating to the service are satisfied over a period of time and the revenue is recognised on a straight line basis over

the period of contract, net of expected liquidated damages or deductions,

1) Rental Income

Revenue from renting out of movable and immovable properties are recognised on an accrual basis,

2) Interest Income

Interest Income reported on accrual basis using the effective interest method and is included under the head " Other Income" in the statement of Profit and loss.

3) Unbilled Revenue

The Company has contracts with customers ranging from 1 year to 5 years and the billing is done as per billing cycle based on contract terms, Revenue is recognised by the Company on annuity basis, So wherever bills have not been raised revenue is recognised based on the basis of service provided, However, these estimates are reviewed regularly and figures are revised based on subsequent billing,

4) Deferred Income.

Billing is made as per billing cycles agreed with the customers, Wherever billing is made as per contract and the period of such billing has not expired, such revenue for the unexpired period of contract as on the date of recognition is treated as deferred revenue,

3.12 Leases

i) Company as a lessee:

The Company accounts for each lease component within the contract as a lease separately from non-lease components of the contract and allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subseguently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Company by the end of the lease term or the cost of the right-of-use asset reflects that the Company will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of

the underlying asset, which is determined on the same basis as those of property, plant and eguipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the Company''s incremental borrowing rate. The Company determines its incremental borrowing rate by obtaining interest rates from various external financing sources that reflects the terms of the lease and type of the asset leased.

The lease payments: included in the measurements of the lease liability comprise the following:

- fixed payments, including in substance fixed payments;

- variable lease payments that depend on an index or rate, initially measured using the index or rate as at the commencement date

- amounts expected to be payable under a residual value guarantee; and

- the exercise price under a purchase option that the Company is reasonably certain to exercise, lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for

early termination of a lease unless the Company is reasonably certain not to terminate early."

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company''s estimate of the amount expected to be payable under a residual value guarantee, if the Company changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in Statement of Profit and loss if the carrying amount of the right-of-use asset has been reduced to zero. The Company presents right-of-use assets and lease liabilities separately on the face of the balance sheet.

ii) Short-term leases and low value assets:

The Company has elected not to apply the reguirements 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 recognized as an expense on a straight-line basis over the lease term.

iii) Operating leases:

Leases, where the lessor effectively retains substantially all the risks and rewards incidental to ownership of the leased item are classified as operating leases. Payments under operating leases are recognized in the Statement of Profit and Loss on a straight line basis over the term of the lease unless such payments are structured to increase in line with expected general inflation to compensate for the lessor inflationary cost increase.

3.13 Recognition of dividend income, interest income or expense

Dividend income is recognised in the statement of profit and loss on the date on which the Company''s right to receive payment is established.

Interest income or expense is recognised using the effective interest method.

The ''effective interest rate'' is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:

- the gross carrying amount of the financial asset; or

- the amortised cost of the financial liability.

In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that

have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

3.14 Income tax

Income tax comprises current and deferred tax. It is recognised in the statement of profit and loss except to the extent that it relates to a business combination or to an item recognised directly in equity or in other comprehensive income respectively.

i. Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the Balance sheet date.

Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.

ii. Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognised in respect of carried forward tax losses and tax credits, if any. Deferred tax is not recognised for:

- temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss at the time of the transaction;

- temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future.

- taxable temporary differences arising on the initial recognition of goodwill.

Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are recognised/ reduced to the extent that it is probable/ no longer probable respectively that the related tax benefit will be realised.

Deferred tax is measured at the tax rates that are expected to a

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Mar 31, 2023

1 Background

Accel Limited was incorporated as a Public Limited Group. The Company is engaged in the business of IT Service, Animation, Engineering, Real Estate and Academic Business. The Company is domiciled in India and its shares are listed on BSE . The registered office of the Company is located at Chennai.

2 Summary of significant accounting policiesBasis of preparation and presentation of Standalone financial statements2.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time, notified under Section 133 of Companies Act, 2013, (the ''Act'') and other relevant provisions of the Act.

These financial statements were authorised for issue by the Company''s Board of Directors on 25 May 2023.

Details of the Company''s accounting policies are included in Note 3.

2.2 Functional and presentation currency

These financial statements are presented in Indian Rupees (INR), which is also the Company''s functional currency. All amounts are in Indian rupees, unless otherwise stated.

2.3 Basis of measurement

The financial statements have been prepared on the historical cost basis except for the following items:

Items	Measurement basis
Certain financial assets and liabilities	Fair value
Net defined benefit	Present value of defined
liability	benefit obligations

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an

orderly transaction between market participants at the measurement date. All assets and liabilities have been classified as Current and Non-current as per the Company''s normal operating cycle.

2.4 Use of estimates and judgments

The preparation of these financial statements in conformity with recognition and measurement principles of Ind AS requires the management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported balances of assets, liabilities, disclosures relating to contingent liability as at the date of the financial statements and the reported amounts of income and expenses for the periods presented. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.

Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year ended 31 March 2023 is included in the following notes:

- Note 38- Impairment of financial assets.

2.5 Measurement of fair values

A number of the Company''s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.

The Company has an established framework with respect to the measurement of fair values. The Company regularly reviews significant unobservable inputs and valuation adjustments. If third party information, is used to measure fair values, then the Company assesses the evidence obtained from the third parties to support the conclusion that these valuation meet the requirements of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

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

- Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

- Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

When measuring the fair values of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognises transfer between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in the following notes:

2.6 Changes in accounting policies

The Company has consistently applied the accounting policies to all the periods present in these financial statements.

2.7 Recent Accounting developments

Ministry of Corporate Affairs ("MCA") Vide Notification dated 23rd March has made the followings amendments to Ind AS which are effective from 1 April 2022.

A. Ind AS 109 : Annual Improvement to Ind AS (2021)

B. Ind AS 103 : Reference to conceptual Framework

C. Ind AS 37 : Onerous Contract - Cost of fulfilling a contract

D. Ind AS 16 : Proceeds before intended use

Based on preliminary assessment , the Company does not expect these amendments to have any signifacant impact on its standalone financial statements.

3 Significant accounting policies3.1 Foreign currency transactions

Transactions in foreign currencies are translated into the functional currency of the Company, at the exchange rates at the dates of the transactions or an average rate, if the average rate approximates the actual rate at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Nonmonetary assets and liabilities that are measured at a fair value in a foreign currency are translated into the functional currency at the exchange rate ,when the fair value was determined. Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Exchange differences are recognised in the Statement of Profit and Loss.

3.2 Financial instruments

i. Recognition and initial measurement

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

A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.

ii. Classification and subsequent measurement Financial assets

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

- Amortised cost;

- Fair Value Through Profit and Loss (FVTPL)

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

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

- The asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and

- The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

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

Financial assets: Subsequent measurement and gains and losses

Financial assets at FVTPL	These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in the statement of profit and loss.
Financial assets at amortised cost	These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and the impairment is recognised in the statement of profit and loss. Any gain or loss on derecognition is recognised in the statement of profit and loss.

Financial liabilities: Classification, subsequent measurement and gains and losses

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

iii. Derecognition

Financial assets

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset.

If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.

Financial liabilities

The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire.

The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in the statement of profit and loss.

iv. Offsetting

Financial assets and financial liabilities are offset and the net amount is presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

v. Derivative financial instruments

The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and highly probable forecast transactions. The Company does not hold derivative financial instruments for speculative purposes. Forward contracts are recognised at fair value on the date the contract is entered into and are subsequently remeasured at fair value.

3.3 Property, plant and equipmenti. Recognition and measurement

Items of Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses, if any.

Cost of an item of Property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of Property, plant and equipment.

Any gain or loss on disposal of an item of Property, plant and equipment is recognised in the Statement of Profit and Loss.

ii. Subsequent expenditure

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

iii. Depreciation

Depreciation is calculated on cost of items of Property, plant and equipment less their estimated residual values over their estimated useful lives using the straight-line method, in case of leasehold improvements, the shorter lease term and is generally recognised in the Statement of Profit and Loss.

The estimated useful lives of PPE are as follows:

Asset	Management estimate of useful life	Useful life as per Schedule II
Leasehold Land	99 years	NA
Buildings	30 years	30 years
Building at KINFRA Film and Video Park	40 years	30 years
Plant and Machinery	15 years	15 years
Plant and Machinery ( Ricoh Printers )	5 years	5 years
Computer and accessories	3 years	3 years
Furniture and office equipment''s	10 years	10 years
Vehicles	5 years	8 years

Depreciation method, useful lives and residual values are reviewed at each financial year end and adjusted if appropriate. Based on technical evaluation and consequent advice, the management believes that its estimates of useful lives as given above best represent the period over which management expects to use these assets and are different from those prescribed in Schedule II of the Companies Act, 2013.

Individual fixed assets whose cost does not exceed INR 5,000/- are fully depreciated in the year of acquisition.

Depreciation on additions (disposals) is provided from the month of additions (up to) the date on which asset is ready for use (disposed off).

Leasehold improvements are depreciated over shorter of their useful life or the lease term, unless the entity expects to use the assets beyond the lease term.

Gains or losses arising from derecognition of an Other 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.

ii. Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognised in the Statement of Profit and Loss as incurred.

iii. Amortisation

Amortisation is calculated to write off the cost of Other Intangible assets less their estimated residual values over their estimated useful lives using the straight-line method, and is included in depreciation and amortisation in Statement of Profit and Loss.

The estimated useful lives are as follows:

Asset	Useful life
Software	3 years
Intellectual Property Rights	12 years

The asset''s residual values and useful lives are reviewed and adjusted if appropriate, at the end of the reporting period.

An Asset''s carrying amount is written down immediately to its recoverable amount if the asset''s carrying amount is greater than its estimated recoverable amount.

Transition to Ind AS

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at 1st April, 2016 measured as per the the previous GAAP and use that carrying value as the deemed cost of such property, plant and equipment.

Leased assets

A Lease is classified at the inception date as a Finance Lease or an Operating Lease . A Lease that transfers Substantially all the risks and rewards incidental to ownership to the Company is classified as Finance Lease. Fixed assets acquired on finance lease have been capitalized at lower of present value of minimum lease payments or fair value. These assets have been depreciated over the useful life of the asset as technically ascertained by the Company.

3.4 Other Intangible assets

i. Recognition and measurement

Other Intangible assets acquired by the Company are initially measured at cost. Such intangible assets are subsequently measured at cost less accumulated amortisation and any accumulated impairment losses.

Other Intangible assets in the nature of digital assets are capitalized as and when it is completed and ready for commercialization and amortized over a period of revenue earning potential as estimated by the management. Cost of own / co production of animation products and not ready for commercialization as at the year end is carried forward as capital work in progress in the balance sheet as at the year end, if the management is convinced of the commercial viability of the same. Development expenses of animation products that are not considered to be commercially viable are expensed.

Amortisation method, useful lives and residual values are reviewed at the end of each financial year and adjusted if appropriate.

3.5 Intangible assets under development

An intangible asset arising from development (or from the development phase of an internal project) is being recognised after evaulation of the following factors:

(a) The technical feasibility of completing the intangible asset so that it will be available for use or sale.

(b) Its intention to complete the intangible asset and use or sell it.

(c) Its ability to use or sell the intangible asset.

(d) How the intangible asset will generate probable future economic benefits. Among other things, the entity can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset.

(e) The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset.

(f) Its ability to measure reliably the expenditure attributable to the intangible asset during its development.

3.6 Capital work- in- Progress

Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost and attributable interest. Once it has becomes available for use, their cost is re-classified to appropriate caption and subjected to depreciation.

3.7 Investment Property

Investment Property comprises Building that are held for long-term lease rental yields and/or for capital appreciation. Investment properties are initially recognised at cost including transaction costs. Subsequently Investment property comprising Building are carried at cost less accumulated depreciation.

Depreciation on Building is provided over the estimated useful lives (refer note 3.3) as specified in Schedule II to the Companies Act, 2013.

Investment property is de-recognised when either they have been disposed off or doesn''t meet the criteria of Investment Property when the Investment Property is permanently withdrawn from use and no future economic benefit is expected from its disposal.

The difference between the net disposal proceeds and the carrying amount of the asset is recognised in the Statement of Profit and Loss in the period of derecognition.

3.8 Inventories

Inventories include components , stock in trade, stores, spares & Stand by Units.

The Company is maintaining inventory in two heads i.e. own stock and customer stock.

Inventories of raw material , stock in trade are measured at the lower of cost and net realisable value. Costs of inventory is determined using the weighted average method and cost of inventories comprise all cost of purchase and other cost incurred in bringing them to the present location and condition, net of discounts.

When the stocks are used from the provision made, then the provision is being reversed.

Inventories of stores and spares are valued at lower of cost, net of provision for diminution in the value. Cost is determined on weighted average cost basis.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

The Company has changed the policy of providing for Inventory as given below from FY 2021-22 with effect from 1st October 2021

a) Stock-in-Trade: If materials held as stock for more than 365 days 50% provision and more than 730 days 100% Provision will be created on the value of the stock

b) Components and Spares used for Repairs & maintenance Services: 20% provision will be provided on the value of total holding at the end of every year.

c) Backup computers / Accessories/ Printers given at customer locations: These Assets are considered under Inventory in a separate category with a 20% Provision on the value of total holding at the end of every year.

d) Consumables : Consumables are charged as and when issued from the stores. In case of assets given on rent under MPS Division, Consumables will be charged off as and when replaced in the Machine (Against the receipt of the defective item)

e) Principal''s stock / FOC materials : Only quantitative count is maintained and not forming part of the Inventory.

3.9 Impairment

i. Impairment of financial instruments

The Company recognises loss allowance for expected credit losses on financial assets measured at amortised cost.

At each reporting date, the Company assesses whether financial assets carried at amortised cost are credit -impaired. A financial asset is ''credit - impaired'' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Evidence that a financial asset is credit - impaired includes the following observable data:

- significant financial difficulty of the borrower or issuer;

- a breach of contract such as a default;

- the restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise;

- it is probable that the counter party will enter bankruptcy or other financial reorganisation; or

- the disappearance of an active market for a security because of financial difficulties.

The Company measures loss allowance at an amount equal to lifetime expected credit losses, except for the following, which are measured as 12 month expected credit losses:

- Bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for trade receivables are always measured at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument. 12 month expected credit losses are the portion of expected credit losses that result from default events that are possible within 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months). In all cases, the maximum period considered when estimating expected credit losses is the maximum contractual period over which the Company is exposed to credit risk. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company''s historical experience and informed credit assessment and including forward -looking information.

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 365 days past due.

The Company considers a financial asset to be in default when:

- the borrower is unlikely to pay its credit obligations to the Company in full, without recourse by the Company to actions such as realising security (if any is held).

- the financial asset is 365 days or more and due

Measurement of expected credit losses

Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive).

Presentation of allowance for expected credit losses in the Balance Sheet.

Loss allowance for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

Write-off

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company''s procedures for recovery of amounts due.

ii. Impairment of non-financial assets

The Company''s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset''s recoverable amount is estimated. For impairment testing, assets that do not generate independent cash inflows are grouped together into cash-generating units (CGUs). Each CGU represents the smallest group of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs.

The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the CGU (or the asset).

The Company''s corporate assets do not generate independent cash inflows. To determine impairment of a corporate asset, recoverable amount is determined for the CGUs to which the corporate asset belongs.

An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated

recoverable amount. Impairment losses are recognised in the statement of profit and loss. Impairment loss recognised in respect of a CGU is allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets of the CGU (or group of CGUs) on a pro rata basis.

3.10 Employee benefitsi. Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid e.g., under short-term bonus, if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.

ii. Share-based payment transactions

The grant date fair value of equity settled share-based payment awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards. The amount recognised as expense is based on the estimate of the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related service and nonmarket vesting conditions at the vesting date.

iii. Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. The Company makes specified monthly contributions towards Government administered provident fund scheme and Employees State Insurance Scheme. Obligations for contributions to defined contribution plans are recognised as an employee benefit expense in profit or loss in the periods during which the related services are rendered by employees.

iv. Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company''s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods.

The Company''s gratuity plan is unfunded, defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method at each balance sheet date. The defined benefit obligation is determined as the present value of the estimated future cash flows expected to be made by the Company in respect of services rendered by its employees up to the reporting date. However some portion of liability has been funded at the time of slump sale initiated at the transaction date of 1 Aug 2020.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses are recognised in OCI. The Company determines the interest expense on the defined benefit liability for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then defined benefit liability. Interest expense and other expenses related to defined benefit plans are recognised in profit or loss under finance costs and employee benefit expenses respectively.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service (''past service cost'' or ''past service gain'') or the gain or loss on curtailment is recognised immediately in profit or loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.

v. Other long-term employee benefits

The Company''s net obligation in respect of long-term employee benefits other than post-employment benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted. The obligation is measured on the basis of an annual independent actuarial valuation using the projected unit credit method. Remeasurements gains or losses are recognised in the Statement of Profit and Loss in the period in which they arise.

3.11 Provisions (other than for employee benefits)

A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. Expected future operating losses are not provided for.

3.12 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes and duties collected on behalf of the government. The Company has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory

and credit risks.

The following specific recognition criteria must also be met before revenue is recognised:

1) IT Services

The Company earns revenue primarily from providing warranty and post warranty services, annual maintenance contract services, on-site support services and other related services. The Company has applied Ind AS 115 which establishes a comprehensive framework for determining whether, how much and when revenue is to be recognised.

Revenue is recognised upon transfer of control of promised services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those services.

- Revenue from warranty services is recognised on output basis, measured by number of calls processed.

- Revenue from annual maintenance service where the Company is standing ready to provide services is recognised based on time elapsed mode and revenue is straight lined over the period of performance.

- Revenue from others comprises of sale of spares and outsourced manpower supply. The Company recognises the revenue on sale of spares at the point in time when control is transferred to the customer. Revenue in case of outsourced manpower is based on output basis, measured by efforts expended (hours).

- Revenue from scrap sales is recognised at the point in time when control is transferred to the customer.

Contract assets are recognised when there is excess of revenue earned over billings on contracts. Contract assets are classified as unbilled receivables (only act of invoicing is pending) when there is unconditional right to receive cash, and only passage of time is required, as per contractual terms.

Unearned and deferred revenue ("contract liability")

is recognised when there is billings in excess of revenues.

In accordance with Ind AS 37, the Company recognises an onerous contract provision when the unavoidable costs of meeting the obligations under a contract exceed the economic benefits to be received.

Disaggregation of revenue

The Company disaggregates revenue from contracts with customers by the geographic location of the customers. The Company believes that this disaggregation best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by industry, market and other economic factors. Refer Note 27.

Performance obligations and revenue recognition policies

The following details provides information about the nature and timing of the satisfaction of performance obligations in contracts with customers, including significant payment terms, and the related revenue recognition policies.

Revenue recognition under Ind AS 115 ( Applicable from 1 April 2018)a. Sale of Goods

Sale is recognised upon transfer of control of promised delivery of goods to the customers in an amount that reflects the considerations expected to receive in exchange for those products . Revenue is measured based on the transaction price, which is the consideration as specified in the contract with the customer. Revenue also excludes taxes collected from customers.

b. Sale of Services

Revenue is recognisd upon transfer of control of promised services to the customers in an amount that reflects the considerations expected to receive in exchange for those products or services. Revenue is measured based on the transaction price, which is

the consideration as specified in the contract with the customer. Revenue also excludes taxes collected from customers.

Revenues in excess of invoicing are classified as contract assets (unbilled revenue) while invoicing in excess of revenues are classified as contract liabilities (deferred income). Refer Note 24 and Note 27 respectively.

1) Animation Division

In respect of Animation services for third parties, income is recognized based on milestone achieved as specified in the contracts. In case of own production of Animated content income is recognized on sale / licensing of such products. Share of surplus from co production ventures is recognized as and when the same accrues after recoupment of the production cost in full as per the terms of the agreement.

Revenue from services are usually recognised based on the service performed in accordance with contractual terms.

2) Rental Income

Revenue from renting out of movable and immovable properties are recognised on an accrual basis.

3) Interest Income

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. Interest income is included in ''Other Income'' in the Statement of Profit and Loss. For all debt instruments measured either at amortised cost or at fair value through other comprehensive 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 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 Revenue

The Company has have contracts with customers ranging from 1 year to 5 years and the billing is done as per billing cycle based on contract terms. Revenue is recognised by the Company on annuity basis. So wherever bills have not been raised revenue is recognised based on estimates based on service provided. However, these estimates are reviewed regularly and figures are revised based on bills raised subsequently.

5) Deferred Income.

Billing is made as per billing cycles agreed with the customers. Wherever billing is made as per contract and the period of such billing has not expired, such revenue for the unexpired period of contract as on the date of recognition is treated as deferred revenue.

3.13 Leases

A. Policy applicable from 1 April 2019

At the inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange of an identified asset, the Group uses the definition of a lease in Ind AS 116. This policy is applied to contracts entered into, on or after 1 April 2019.

i) Company as a lessee:

The Company accounts for each lease component within the contract as a lease separately from nonlease components of the contract and allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct

costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Company by the end of the lease term or the cost of the right-of-use asset reflects that the Company will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property, plant and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the Company''s incremental borrowing rate. The Company determines its incremental borrowing rate by obtaining interest rates from various external financing sources that reflects the terms of the lease and type of the asset leased.

The lease payments shall include:

- fixed payments, including in substance fixed payments;

- variable lease payments that depend on an index or rate, initially measured using the index or rate as at the commencement date

- amounts expected to be payable under a residual value guarantee; and

- the exercise price under a purchase option that the Company is reasonably certain to exercise, lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Company is reasonably certain not to terminate early.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company''s estimate of the amount expected to be payable under a residual value guarantee, if the Company changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in -substance fixed lease payment.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in Statement of Profit and loss if the carrying amount of the right-of-use asset has been reduced to zero. The Company presents right-of-use assets and lease liabilities separately on the face of the balance sheet.

ii) Short-term leases and low value assets:

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 recognized as an expense on a straight-line basis over the lease term.

B. Policy applicable before 1 April 2019

At the inception of an arrangement, it is determined whether the arrangement is or contains a lease.

At the inception or on reassessment of the arrangement that contains a lease, the payments and other consideration required by such an arrangement are separated into those for the lease and those for other elements on the basis of their relative fair values. If it is concluded for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability are recognised at an amount equal to the fair value of the underlying asset. The liability is reduced as payments are made and an imputed finance cost on the liability is recognised using the incremental borrowing rate.

Operating leases :

Leases, where the lessor effectively retains substantially all the risks and rewards incidental to ownership of the leased item are classified as operating leases. Payments under operating leases are recognized in the Statement of Profit and Loss on a straight line basis over the term of the lease unless such payments are structured to increase in line with expected general inflation to compensate for the lessor inflationary cost increase.

3.14 Recognition of dividend income, interest income or expense

Dividend income is recognised in the Statement of Profit and Loss on the date on which the Company''s right to receive payment is established.

Interest income or expense is recognised using the effective interest method.

The ''effective interest rate'' is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:

- the gross carrying amount of the financial asset; or

- the amortised cost of the financial liability.

In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

3.15 Income tax

Income tax comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business combination or to an item recognised directly in equity or in other comprehensive income respectively.

i. Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.

Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.

ii. Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognised in respect of carried forward tax losses and tax credits, if any. Deferred tax is not recognised for:

- temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss at the time of the transaction;

- temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future.

- taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are recognised/ reduced to the extent that it is probable/ no longer probable respectively that the related tax benefit will be realised.

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

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 realised simultaneously.

3.16 Earnings per share

Basic Earnings per share is computed by dividing profit or loss attributable to equity shareholders of the Company by the Weighted avarage number of equity shares outstanding during the year.

3.17 Cash and cash equivalents

Cash and cash equivalents comprise of cash on hand and balance with Bank including short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value. Other Bank deposits which are not in the nature of cash and cash equivalents with a maturity period of more than three months are classified as other Bank balances.

3.18 Cash flows

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, financing and investing activities of the Company are segregated. Cash flows in foreign currencies are accounted at average monthly exchange rates that approximate the actual rates of exchange prevailing at the dates of the transactions.

3.19 Borrowing costs

Borrowing costs are interest and other costs (including exchange differences relating to foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of funds. Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a substantial period of time to get ready for their intended use are capitalised as part of the cost of that asset. Other borrowing costs are recognised as an expense in the period in which they are incurred.

3.20 Dividend to share holders

Final dividend distributed to Equity share holders is recognised in the period in which it is approved by the members of the Company in the Annual General Meeting. Final dividend net of divided distribution tax are recognised in the Statement of Changes in Equity.

3.21 Business combinations

In accordance with Ind AS 101 provisions related to first time adoption, the Company has elected to apply Ind AS accounting for business combinations prospectively from 1 April 2015. As such, Indian GAAP balances relating to business combinations entered into before that date, have been carried forward.

Business combinations involving entities under the common control are accounted for using the pooling of interest method. The assets and liabilities of the combining entities are reflected at their carrying amounts. No adjustments are made to reflect fair values, or recognise any new assets or liabilities. The only adjustments that are made are to harmonise accounting policies.

The identity of the reserves shall be preserved and shall appear in the financial statements of the transferee in the same form in which they appeared in the financial statements of the transferor. Any consideration in excess of the net worth of the acquire Company is adjusted against the reserves of the acquiring Company.

Previous year''s figure have been regrouped, recasted and rearranged wherever necessary, to suite the current period layout.

3.22 Provisions and Contingencies

A provision is recognized when the Company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the management estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current management estimates.

Contingent liabilities are disclosed by way of notes to the financial statement. Provi

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Mar 31, 2018

1. Statement of significant accounting policies and practices

1.1 Basis of preparation

The standalone financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Company Rules, 2015 notified under section 133 of the Companies Act, 2013. For all period upto and including 31st March, 2017 the financial statements were prepared in accordance with accounting standards specified under section 133 of the Companies Act, 2013. First time adoption of Ind AS applied during the current year.

The standalone financial statement have been prepared on the basis of historical cost and are presented in Indian Rupees (INR) which is also the functional currency of the Company. All amounts are rounded of to nearest rupee unless otherwise indicated

All the assets and liabilities have been classified as current or non current as per the Company''s normal operating cycle . Based on the nature of Products and Services and the time between the acquisition of assets for operations and their realization in cash and cash equivalent, the Company has ascertained its operating cycle to be 12 months, for the purpose of current - non current classification of assets and liabilities.

Exceptional items

By way of a Settlement Agreement and Release dated 15.03.2017, signed by and between the company, Accel Limited and other Promoters namely M/s. CAC Holdings Corporation, Japan and Accel Frontline Limited, a settlement has been arrived at wherein all the parties have withdrawn their disputes and the litigation and as a part of the settlement, the company had transferred its holding in Accel Frontline Limited to a Trust without any consideration, the beneficiary of which will be Accel Frontline Limited. The accounts includes loss on transfer of shares amounting to Rs.7,38,33,247/-has been shown under Exceptional Items

Scheme of Amalgamation

National Company Law Tribunal (NCLT) Single Bench, Chennai has passed an order dated 5th March 2018 approving the merger proposal of its holding company M/s. Accel Limited (unlisted company) with the Company with effect from 01st April 2014. The company is in the process of completing other compliances under merger. The company has also taken initiative to change the name of the Compnay to Accel Limited as per merger order issued by NCLT. The accounts have been prepared in accordance with the Companies Indian Accounting standards Rules,2015 (Ind AS) prescribed under Section 133 of the Companies Act 2013 and other recognized accounting practices and policies to the extent applicable.

Composite Scheme of Arrangement / Amalgamation - "The Scheme"

Pursuant to the scheme approved by the Members in the Court Convened General Meeting held on 27th November 2015, and sanctioned by the National Company Law Tribunal, (Chennai Bench) the entire business and all assets and liabilities of the following company / operations stand transferred and vested with the Company w.e.f. 01.04.2014 (the transfer date), as detailed below:

The Scheme, accordingly have been given effect to in the accounts. In terms of the scheme, the business of transferor company is deemed to have been carried on by the Company with effect from the transfer date, namely 1st April 2014. The current years accounts includes the Assets and Liabilities of the transferor company taken over at book value and Income and Expenditure of the said company from the transfer date till 31st March 2015. As per the Scheme all the assets and Liabilities are consolidated under the pooling of Interest Method of Amalgamation as prescribed under AS-14 issued by the Institute of Chartered Accountants of India.

As per the scheme of amalgamation, the Authorised capital of the company has been increased to Rs. 26 Crores, representing 10,50,00,000 equity shares of Rs. 2/- each and 50,00,000 redeemable cumulative preference shares of Rs.10/- each.

Further, as per the Scheme, the face value of a share of the company has been reduced to Rs.2/- from Rs.10/- and all equity shareholders of the Company (TRANSFEREE Company ( except the shares held by the transferor company )will receive 1 share of Rs. 2/- each for every share held by them in the company, prior to the merger, and such entitlement will be after considering the reduction as above and ascertained as on the record date.

The shareholders of the transferor company will receive 16 shares of Rs. 2/- each of the company for every share held by them in the transferor company as on the record date. The details of shares to be issued to the shareholders of both the companies as per the scheme of amalgamation are given below.

Effect on account of Amalgamation

As per the Scheme of Amalgamation all the above liabilities of the Transferor Company business shall also be transferred to and / or deemed to be transferred without any further act, instrument or deed to the Transferee company pursuant to the provisions of Section 394 and other applicable provisions of the Act so as to become as and from the Transfer Date 01.04.2014 the debts, liabilities dues and obligations of the company. The transfer / vesting as aforesaid shall be subject to existing charges/hypothecation / mortgages (if any as may be subsisting) over or in respect of the Assets or any part thereof, provide however, if any reference in any security documents or arrangements to which the respective Transferor Companies to the Assets of the respective Transferor company offered or agreed to be offered as security for any financial assistance or obligations.

The difference in value amounting to Rs.70,950,000/-towards shares allotted in the company to the shareholders of the transferor company as above, representing the purchase consideration thereof, over and above the Share capital of the transferor company, have been credited to the Reserves and Surplus under Capital Reserve Account of the merged company.

An amount of Rs.3,16,96,900/- being cancellation of Equity shares and Preference shares held by the transferor company in the company net of cost of investment in the transferor company in these shares has been credited to the capital reserve account of the merged company.

Income and expenses of the transferor company has been considered in statement of profit and loss account of the merged company as per the details given below:

Fresh issue of shares to the shareholders of the company and the transferor company as per the scheme as above is in the process of being completed.

The Name of the Company is being changed to Accel Limited

1.2. Use of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known / materialized.

1.3 Revenue recognition:

(i) Animation division

In respect of Animation services for third parties, income is recognized based on milestone achieved as specified in the contracts. In case of own production of Animated content income is recognized on sale / licensing of such products. Share of surplus from co production ventures is recognized as and when the same accrues after recoupment of the production cost in full as per the terms of the agreement.

(ii) Engineering division

(a) Revenue from sale of products are recognized when significant risk and reward is passed on to the buyer, usually on delivery of the goods. The company collects value added taxes (VAT upto June 17 & GST From July 17 ) on behalf of the government and, therefore, these are not economic benefits flowing to the company. Hence they are excluded from revenue.

(b) Revenue from services are usually recognized based on the service performed in accordance with contractual terms.

(iii) Rental income

Revenue from renting out of moveable and immoveable properties are recognized on accrual basis.

(iv) Interest

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head "Other Income" in the statement of profit and loss.

1.4 Fixed assets and depreciation:

Fixed assets:

(i) Property, Plant & Equipment

Property, Plant & Equipment are stated at cost less accumulated depreciation and impairment, if any, in the value of the assets. Cost of fixed assets includes all incidental expenses and interest cost on borrowings where applicable, attributable to the acquisition of assets, up to the date of commissioning of the assets.

Transition to Ind AS

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at 1st April, 2016 measured as per the the previous GAAP and use that carrying value as the deemed cost of such property, plant and equipment.

(ii) Leased assets

A Lease is classified at the inception date as a Finance Lease or an Operating Lease . A Lease that transfers Substantially all the risks and rewards incidental to ownership to the company is classified as Finance Lease. Fixed assets acquired on finance lease have been capitalized at lower of present value of minimum lease payments or fair value. These assets have been depreciated over the useful life of the asset as technically ascertained by the company.

(iii) Intangible assets

Intangible assets in the nature of software licenses are stated at cost and are amortized over the estimated useful life of one to five years, using straight line method as technically assessed.

Intangible assets in the nature of digital assets are capitalized as and when it is completed and ready for commercialization and amortized over a period of revenue earning potential as estimated by the management. Cost of own / co production of animation products and not ready for commercialization as at the year end is carried forward as capital work in progress in the balance sheet as at the year end, if the management is convinced of the commercial viability of the same. Development expenses of animation products that are not considered to be commercially viable are expensed.

Gains or losses arising from derecognition of an intangible asset 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.

Transition to Ind AS

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its intangible assets recognized as at 1st April, 2016 measured as per the the previous GAAP and use that carrying value as the deemed cost of such intangible assets.

(iv) Depreciation / amortization

Depreciation on Property, Plant and Equipment is provided on straight line basis based on useful life of the asset as prescribed in Schedule II to the Companies Act, 2013, except in case of case of computer software for which life is technically estimated by the management as three years. Fixed assets individually costing Rs 5,000 or less are fully depreciated on purchase during the relevant year. Capital Work-in-progress represents the spend for assets that are in the process of being developed. No depreciation is charged on these assets.

Depreciation methods, useful lives and residual values are reviewed at each financial year end.

1.5 Employee Benefits:

i) Defined contribution plan:

Provident Fund / Employee State Insurance Scheme

Contribution to Provident fund scheme and Employee State Insurance Scheme are charged to Profit and Loss account in the year of contribution. There are no other obligations other than such contribution payable to the respective fund / scheme.

ii) Defined benefit plan:

Gratuity

Gratuity has been covered under group gratuity cum assurance scheme of Life Insurance Corporation of India. Accrued liability for gratuity as at the balance sheet date is ascertained on actuarial basis using projected unit credit method and balance in excess of fair value of the plan assets as at the year end is duly provided for.

iii) Compensated absences

Short term compensated absences are provided for based on estimates at gross undiscounted values. Long term compensated absences are provided for based on actuarial valuation.

Provisions (Other Than Employee benefits)

Provisions are recognised by the company when the Company has a present obligation legal or contractive as a result of a past event. When the Company expects some or all of a provision to be reimbursed the expense relating to a provision is presented in the financial statements net of any reimbursement.

1.6 Provision for taxes:

Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current taxes and liabilities are offset where there is a legally enforceable right to set off the recognized amounts and there is a intention to settle the asset and the liability on a net basis.

Deferred Tax is recognized on timing differences between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. In respect of undertakings the income of which is exempt under section 10B of the Income Tax Act, 1961, deferred tax liability on account of timing differences arising but getting reversed during the tax holiday period has not been recognized.

Deferred tax assets are recognized and carried forward to the extent that there is a virtual certainty as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The carrying amount of deferred tax assets are reviewed at each reporting date. The company writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set-off current tax assets against current tax liabilities and where deferred tax assets and deferred tax liabilities relate to taxes on income levied by the same governing laws and same taxable entity.

1.7 Accounting for provisions, contingent liabilities and contingent assets:

A provision is recognized when the company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the management estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current management estimates.

Contingent liabilities are disclosed by way of notes to the Balance Sheet. Provision is made in the accounts in respect of those liabilities which are likely to materialize after the yearend, till the finalization of accounts and have material effect on the position stated in the Balance sheet. Contingent assets are not recognized in the financial statements as a matter of prudence.

1.8 Borrowing costs

Borrowing costs that are attributable to the acquisition or construction or production of qualifying assets that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of such assets. All other borrowing costs are charged to revenue, during the period in which they are incurred. Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

1.9 Impairment of Property, Plant & Equipment and Intangible 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. Where 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. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

The company bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the company''s cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of seven years.

Impairment losses of continuing operations, including impairment on inventories, are recognized in the statement of profit and loss, except for previously revalued tangible fixed assets, where the revaluation was taken to revaluation reserve. In this case, the impairment is also recognized in the revaluation reserve up to the amount of any previous revaluation.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the company estimates the asset''s or cash-generating unit''s recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset''s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount 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 recognized for the asset in prior years. Such reversal is recognized in the statement of profit and loss unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase

1.10 Investments

Investments that are readily realizable and intended to be held for not more than a year, if any are classified as current investments. All other investments are classified as long term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost. Provision is made where there is a fall in value of such long-term investments, which are other than temporary in nature. Investments outside India in subsidiary companies are carried in the Balance Sheet at historical cost.

1.11 Cash Flow statement

Cash flows from operating activities are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the company are segregated.

1.12 Inventories

a) Engineering Services:

Inventories include raw materials, components , stock in trade, finished goods, stores and spares and work-in-progress

Inventories of raw material, stock-in-trade are valued at the lower of cost and the net realisable value after providing for obsolescence and other losses, where considered necessary. However materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost includes all changes in brining the goods to the point of sale. Cost is determined on weighted average cost basis.

Inventories of stores and spares are valued at lower of cost, net of provision for diminution in the value. Cost is determined on weighted average cost basis.

Work-in-progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a portion of the manufacturing overheads. Cost of finished goods includes excise duty and is determined on a weighted average basis.

Net realizable value is the estimated selling prize in the ordinary course of the business, less estimated costs of completion and estimated cost necessary to make the sale.

1.13 Foreign currency transactions

i. Initial recognition - foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency approximately at the date of the transaction.

ii. Conversion - Foreign currency monetary items are reported using the closing rate at the yearend. Non monetary items, which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.

iii. Exchange differences - exchange differences arising on the settlement or conversion of monetary items are recognized as income or as expenses in the period in which they arise.

1.14 Cash & Cash equivalents

Cash & Cash equivalents in the balance sheet comprise Cash at banks , cash on hand & Cheques on hand, which are subject to an in significant risk of changes in value.

1.15 Cash Dividend and non-cash distribution to equity holders

The company recognises a liability to make Cash contribution to equity holders when the distribution is authorised and the distribution is no longer at the discretion of the company.

1.16 Interest Expense

Interest expense is recognised using effective interest method. In Calculating interest expense , the effective interest rate is applied to the amortised cost of the liability.

1.17 Earnings Per Share

The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share and also the weighted average number of shares, if any, which would have been issued on the conversion of all dilutive potential equity shares.

1.18 First time adoption of Ind AS

As stated in Note 2, these are the Company''s first financial statements prepared in accordance with Ind AS.

The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended 31 March 2018, including the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS Balance Sheet as at 01 April 2016 (the Company''s date of transition).

In preparing its Ind AS balance sheet as at 01 April 2016 and in presenting the comparative information for the year ended 31 March 2017, the Company has adjusted amounts reported previously in financial statements prepared in accordance with previous GAAP. An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flows is set out in the following tables and notes.

A. Ind AS optional exemptions

1. Deemed cost for property, plant and equipment and intangible assets

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the Previous GAAP and use that as its deemed cost as at the date of transition. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets. Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their Previous GAAP carrying value.

Determining whether an arrangement contains a lease

Appendix C to the Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with the Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material. The Company has elected to avail of the above exemption.

2. Deemed cost for investments in subsidiary and associates

The Company has elected to continue with the carrying value of all of its investments in subsidiary and associates recognised as of 01 April 2016 (transition date) measured as per the Previous GAAP as its deemed cost as at the date of transition.

B. Ind AS mandatory exceptions

1. Estimates

The estimates at 1 April 2016 and 31 March 2017 are consistent with those made for the same dates in accordance with previous GAAP (after adjustments to refflect any differences in accounting policies) apart from the following items where applications of Indian GAAP did not require estimation :

- Fare valuation of financial instruments carried at FVTPL and /or FVOCI.

- Impairment of financial assets based on the expected credit loss model.

- Determination of the discounted value for financial instruments carried at amortised cost.

The estimates used by the Company to present these amount in accordance with Ind-AS reflect condition at 1 April 2016, the date of transaction to Ind-AS and as of 31 March 2017.

2. Classification and measurement of financial assets and liabilities

Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortised cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable. Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of financial assets accounted at amortised cost has been done retrospectively except where the same is impracticable

3. De-recognition of financial assets and liabilities

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transaction to Ind AS. However, Ind AS 101 allows a first time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from the date of the entity''s choosing, provided that the information needed to apply Ind AS 109 to financials assets and liabilities derecognised as a result of past transaction was obtained at the time of initially accounting for those transactions.

The Company has elected to apply the de-recognition provisions of Ind-AS 109 prospectively from the date of transition to Ind-AS.

4. Other comprehensive income

Items of income and expense that are not recognised in profit and loss are shown in the Statement of Profit and Loss as ''other comprehensive income'' includes re-measurements of defined benefit plans, foreign exchange differences arising on translation of foreign operations etc. The concept of other comprehensive income did not exist under previous GAAP.

1.19 Consequent to the merger of M/s Accel Ltd, with the Company as approved by NCLT vide its order dated 05.03.2018 effective from 01.04.2014 the previous year figures represents the figures of the merged entity as at 31st March, 2017.

1.20 Previous year''s figure have been regrouped, recasted and rearranged wherever necessary, to suite the current period layout.

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Mar 31, 2015

Company Information:

Accel Transmatic Limited (the company) is a public limited company domiciled in India and is listed in the Bombay stock exchange (BSE). The company presently offers animation services from its studios in Chennai and Trivandrum.

Note : 01: Statement of significant accounting policies and practices

1.1 Basis of preparation

The financial statements are prepared under historical cost convention in accordance with the Generally Accepted Accounting Principles in India and comply in ail material respects with the Accounting Standards specified under the Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules, 2014. The Financial Statements have been prepared under the historical cost convention on accrual basis. The accounting policies have been consistently applied by the company and except as disclosed, are consistent with those used during the previous year.

All the assets and liabilities have been classified as current or non current as per the Company's normal operating cycle . Based on the nature of Products and Services and the time between the acquisition of assets for operations and their realization in cash and cash equivalent, the Company has ascertained its operating cycle to be 12 months, for the purpose of current - non current classification of assets and liabilities.

1.2 Use of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known /materialized.

1.3 Revenue recognition:

(i) Animation services

In respect of Animation services for third parties, income is recognized based on milestone achieved as specified in the contracts. In case of own production of Animated content income is recognized on sale / licensing of such products. Share of surplus from co production ventures is recognized as and when the same accrues after recoupment of the production cost in full as per the terms of the agreement.

(ii) Rental income

Revenue from renting out of moveable and immoveable properties are recognized on accrual basis.

1.4 Fixed assets and depreciation:

Fixed assets:

(i) Tangible assets

Fixed assets are stated at cost or at replacement cost, in case of revaluation, less accumulated depreciation and impairment, If any, in the value of the assets. Cost of fixed assets includes ail incidental expenses and interest cost on borrowings where applicable, attributable to the acquisition of assets, up to the date of commissioning of the assets.

(ii) Leased assets

Fixed assets acquired on finance lease have been capitalized at lower of present value of minimum lease payments or fair value. These assets have been depredated over the useful life of the asset as technically ascertained by the company.

(iii) Intangible assets

Intangible assets in the nature of software licenses are stated at cost and are amortized over the estimated useful life of one to five years, using straight line method as technically assessed,

Intangible assets in the nature of digital assets are capitalized as and when it is completed and ready for commercialization and amortized over a period of revenue earning potential as estimated by the management. Cost of own / co production of animation products and not ready for commercialization as at the year end is carried forward as capita! work in progress in the balance sheet as at the year end, if the management is convinced of the commercial viability of the same. Development expenses of animation products that are not: considered to be commercially viable are expensed.

Gains or losses arising from derecognition of an intangible asset 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.

(iv) Depreciation / amortization

Depreciation on fixed assests is provided on straight line basis based on useful life of the asset as prescribed in Schedule El to the Companies Act, 2013, except in case of case of computer software for which life is technically estimated by the management as five years,Fixed assets individually costing Rs 5,000 or less are fully depreciated on purchase during the relevant year. Assets installed in leased premises are amortized over the lease period of the premises

Digital assets (Intangible) are amortized over the estimated life (revenue earning potential) of such assets under written down value method,

1.5 Employee Benefits:

i) Defined contribution plan;

Provident Fund / Employee State Insurance Scheme

Contribution to Provident fund scheme and Employee State Insurance Scheme are charged to Profit and Loss account in the year of contribution. There are no other obligations other than such contribution payable to the respective fund / scheme,

ii) Defined benefit plan:

Gratuity

Gratuity has been covered under group gratuity cum assurance scheme of Life Insurance Corporation of India, Accrued liability for gratuity as at the balance sheet date is ascertained on actuarial basis using projected unit credit method and balance in excess of fair value of the plan assets as at the yearend is duly provided for,

iii) Compensated absences

Short term compensated absences are provided for based on estimates at gross undiscounted values. Long term compensated absences are provided for based on actuarial valuation.

1.6 Provision for taxes:

Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current taxes and liabilities are offset where there is a legally enforceable right to set off the recognized amounts and there is a intention to settle the asset and the liability on a net basis.

Deferred Tax is recognized on timing differences between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. In respect of undertakings the income of which is exempt under section 10B of the Income Tax Act, 1961, deferred tax liability on account of timing differences arising but getting reversed during the tax holiday period has not been recognized.

Deferred tax assets are recognized and carried forward to the extent that there is a virtual certainty as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The carrying amount of deferred tax assets are reviewed at each reporting date. The company writes-down the carrying amount of deferred tax asset to the extent that it: is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available

Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set-off current tax assets against current tax liabilities and where deferred tax assets and deferred tax liabilities relate to taxes on income levied by the same governing laws and same taxable entity.

1.7 Accounting for provisions, contingent liabilities and contingent assets;

A provision is recognized when the company has a present: obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the management estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current management estimates.

Contingent liabilities are disclosed by way of notes to the Balance Sheet. Provision is made in the accounts in respect: of those liabilities which are likely to materialize after the year end, till the finalization of accounts and have material effect on the position stated in the Balance sheet.

Contingent assets are not recognized in the financial statements as a matter of prudence.

1.8 Borrowing costs

Borrowing costs that are attributable to the acquisition or construction or production of qualifying assets that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of such assets. All other borrowing costs are charged to revenue, during the period in which they are incurred. Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

1.9 Impairment of tangible and intangible 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. Where 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. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

The company bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the company's cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of seven years.

Impairment losses of continuing operations, including impairment on inventories, are recognized in the statement of profit and loss, except for previously revalued tangible fixed assets, where the revaluation was taken to revaluation reserve. In this case, the impairment is also recognized in the revaluation reserve up to the amount of any previous revaluation.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the -company estimates the asset's or cash-generating unit's recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset's recoverable amount since the last impairment loss was recognized, The reversal is limited so that the carrying amount 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 recognized for the asset in prior years. Such reversal is recognized in the statement of profit and loss unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase

1.10 investments

Investments that are readily realizable and intended to be held for not more than a year, if any are classified as current investments. All other investments are classified as long term investments, Current investments are carried at lower of cost and fair value determined on ari individual investment basis. Long term investments are carried at cost. Provision is made where there is a fall in value of such long-term investments, which are other than temporary in nature. Investments outside India in subsidiary companies are carried in the Balance Sheet at historical cost,

1.11 Cash Flow statement

Cash flows from operating activities are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the company are segregated,

1.12 Inventories

a)Cost of production representing overheads incurred for Animation contract services is earned over as work in progress in the Balance Sheet as at the year end.

1.13 Foreign currency transactions

i. Initial recognition - foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency approximately at the date of the transaction,

ii. Conversion - Foreign currency monetary items are reported using the closing rate at the year end, Non monetary items, which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.

iii. Exchange differences - exchange differences arising on the settlement or conversion of monetary items are recognized as income or as expenses in the period in which they arise,

1.14 Earnings Per Share

The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share and also the weighted average number of shares, if any, which would have been issued on the conversion of all dilutive potential equity shares.

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Mar 31, 2014

1.1 Basis of preparation

These financial statements have been prepared to comply in all material respects with the applicable accounting principles in India, the applicable accounting standards notified under Section 211 (3C) and the other provisions of the Companies Act 1956. The Financial Statements have been prepared under the historical cost convention on accrual basis. The accounting policies have been consistently applied by the company and except as disclosed, are consistent with those used during the previous year.

All the assets and liabilities have been classified as current or non current as per the Company''s normal operating cycle and other criteria set out in Schedule VI to the Companies Act 1956. Based on the nature of Products and Services and the time between the acquisition of assets for operations and their realization in cash and cash equivalent, the Company has ascertained its operating cycle to be 12 months, for the purpose of current - non-current classification of assets and liabilities.

1.2 Use of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialized.

1.3 Revenue recognition:

(i) Animation services

In respect of Animation services for third parties, income is recognized based on milestone achieved as specified in the contracts. In case of own production of Animated content income is recognized on sale/licensing of such products. Share of surplus from co-production ventures is recognized as and when the same accrues after recoupment of the production cost in full as per the terms of the agreement.

(ii) Rental income

Revenue from renting out of moveable and immoveable properties are recognized on accrual basis.

1.4 Fixed assets and depreciation:

Fixed assets:

(i) Tangible assets

Fixed assets are stated at cost or at replacement cost, in case of revaluation, less accumulated depreciation and impairment, if any, in the value of the assets. Cost of fixed assets includes all incidental expenses and interest cost on borrowings where applicable, attributable to the acquisition of assets, up to the date of commissioning of the assets.

(ii) Leased assets

Fixed assets acquired on finance lease have been capitalized at lower of present value of minimum lease payments or fair value. These assets have been depreciated over the useful life of the asset as technically ascertained by the company.

(iii) Intangible assets

Intangible assets in the nature of software licenses are stated at cost and are amortized over the estimated useful life of one to five years, using straight line method as technically assessed.

Intangible assets in the nature of digital assets are capitalized as and when it is completed and ready for commercialization and amortized over a period of revenue earning potential as estimated by the management. Cost of own/co-production of animation products and not ready for commercialization as at the year end is carried forward as capital work in progress in the balance sheet as at the year end, if the management is convinced of the commercial viability of the same. Development expenses of animation products that are not considered to be commercially viable are expensed.

Gains or losses arising from derecognition of an intangible asset 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.

(iv) Depreciation/amortization

Depreciation on fixed assets is provided for from the date the asset is ready to be put to use, under straight-line method in the manner and at the rates specified in Schedule XIV to the Companies Act, 1956, except ion case of computer software for which life is technically ascertained by the management as five years and the depreciation is charged at the rate of 20%. The rates of depreciation and amortization are as follows:

Asset Rate of depreciation/ amortization (%)

Buildings 3.34

Plant and equipment 4.75

Office equipment 4.75

Furniture and fixtures 6.33

Computer hardware 16.21

Computer software 20.00

Vehicles 9.50

Intangibles-Digital Assets 25.00

Lease hold improvements/ Over the lower of estimated Licenses/studio materials useful lives of the assets or the primary period of the lease.

Fixed assets individually costing Rs. 5,000 or less are fully depreciated on purchase during the relevant year. Assets installed in leased premises are amortized over the lease period of the premises. Digital assets (Intangible) are amortized over the estimated life (revenue earning potential) of such assets under written down value method.

1.5 Employee Benefits:

i) Defined contribution plan:

Provident fund/Employee State Insurance Scheme

Contribution to Provident fund scheme and Employee State Insurance Scheme are charged to Profit and Loss account in the year of contribution. There are no other obligations other than such contribution payable to the respective fund/scheme.

ii) Defined benefit plan:

Gratuity

Gratuity has been covered under group gratuity cum assurance scheme of Life Insurance Corporation of India. Accrued liability for gratuity as at the balance sheet date is ascertained on actuarial basis using projected unit credit method and balance in excess of fair value of the plan assets as at the year-end is duly provided for.

iii) Compensated absences

Short term compensated absences are provided for based on estimates at gross undiscounted values. Long term compensated absences are provided for based on actuarial valuation.

1.6 Provision for taxes:

Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current taxes and liabilities are offset where there is a legally enforceable right to set off the recognized amounts and there is a intention to settle the asset and the liability on a net basis.

Deferred Tax is recognized on timing differences between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. In respect of undertakings the income of which is exempt under section 10B of the Income Tax Act, 1961, deferred tax liability on account of timing differences arising but getting reversed during the tax holiday period has not been recognized.

Deferred tax assets are recognized and carried forward to the extent that there is a virtual certainty as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The carrying amount of deferred tax assets are reviewed at each reporting date. The company writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available

Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set-off current tax assets against current tax liabilities and where deferred tax assets and deferred tax liabilities relate to taxes on income levied by the same governing laws and same taxable entity.

1.7 Accounting for provisions, contingent liabilities and contingent assets:

A provision is recognized when the company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the management estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current management estimates.

Contingent liabilities are disclosed by way of notes to the Balance Sheet. Provision is made in the accounts in respect of those liabilities which are likely to materialize after the year end, till the finalization of accounts and have material effect on the position stated in the Balance sheet.

Contingent assets are not recognized in the financial statements as a matter of prudence.

1.8 Borrowing costs

Borrowing costs that are attributable to the acquisition or construction or production of qualifying assets that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of such assets. All other borrowing costs are charged to revenue, during the period in which they are incurred. Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

1.9 Impairment of tangible and intangible 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. Where 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. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

The company bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the company''s cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of seven years.

Impairment losses of continuing operations, including impairment on inventories, are recognized in the statement of profit and loss, except for previously revalued tangible fixed assets, where the revaluation was taken to revaluation reserve. In this case, the impairment is also recognized in the revaluation reserve up to the amount of any previous revaluation.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the company estimates the asset''s or cash-generating unit''s recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset''s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount 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 recognized for the asset in prior years. Such reversal is recognized in the statement of profit and loss unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase.

1.10 Investments

Investments that are readily realizable and intended to be held for not more than a year, if any are classified as current investments. All other investments are classified as long term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost. Provision is made where there is a fall in value of such long-term investments, which are other than temporary in nature. Investments outside India in subsidiary companies are carried in the Balance Sheet at historical cost.

1.11 Cash Flow statement

Cash flows from operating activities are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the company are segregated.

1.12 Inventories

a) Cost of production representing overheads incurred for Animation contract services is carried over as work in progress in the Balance Sheet as at the year end.

1.13 Foreign currency transactions

i. Initial recognition - foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency approximately at the date of the transaction.

ii. Conversion - Foreign currency monetary items are reported using the closing rate at the year end. Non monetary items, which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.

iii. Exchange differences - exchange differences arising on the settlement or conversion of monetary items are recognized as income or as expenses in the period in which they arise.

1.14 Earnings Per Share

The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share and also the weighted average number of shares, if any, which would have been issued on the conversion of all dilutive potential equity shares.

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Mar 31, 2013

1.1 Basis of preparation

These fnancial statements have been prepared to comply in all material respects with the applicable accounting principles in India, the applicable accounting standards notifed under Section 211 (3C) and the other provisions of the Companies Act 1956 . The Financial Statements have been prepared under the historical cost convention on accrual basis. The accounting policies have been consistently applied by the company and except as disclosed, are consistent with those used during the previous year.

All the assets and liabilities have been classifed as current or non current as per the Company''s normal operating cycle and other criteria set out in Schedule VI to the Companies Act 1956. Based on the nature of Products and Services and the time between the acquisition of assets for operations and their realization in cash and cash equivalent, the Company has ascertained its operating cycle to be 12 months, for the purpose of current – non current classifcation of assets and liabilities.

1.2 Use of estimates:

The preparation of fnancial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that afect the reported amounts of assets and liabilities of the fnancial statements and the reported amounts of revenues and expenses during the reporting period. Diferences between actual results and estimates are recognized in the period in which the results are known / materialized.

1.3 Revenue recognition:

(i) Animation services

In respect of Animation services for third parties, income is recognized based on milestone achieved as specifed in the contracts. In case of own production of Animated content income is recognized on sale / licensing of such products. Share of surplus from co production ventures is recognized as and when the same accrues after recoupment of the production cost in full as per the terms of the agreement.

(ii) Rental income

Revenue from renting out of moveable and immoveable properties are recognized on accrual basis.

1.4 Fixed assets and depreciation: Fixed assets:

(i) Tangible assets

Fixed assets are stated at cost or at replacement cost, in case of revaluation, less accumulated depreciation and impairment, if any, in the value of the assets. Cost of fxed assets includes all incidental expenses and interest cost on borrowings where applicable, attributable to the acquisition of assets, up to the date of commissioning of the assets.

(ii) Leased assets

Fixed assets acquired on fnance lease have been capitalized at lower of present value of minimum lease payments or fair value. These assets have been depreciated over the useful life of the asset as technically ascertained by the company.

(iii) Intangible assets

Intangible assets in the nature of software licenses are stated at cost and are amortized over the estimated useful life of one to fve years, using straight line method as technically assessed.

Intangible assets in the nature of digital assets are capitalized as and when it is completed and ready for commercialization and amortized over a period of revenue earning potential as estimated by the management. Cost of own / co production of animation products and not ready for commercialization as at the year end is carried forward as capital work in progress in the balance sheet as at the year end, if the management is convinced of the commercial viability of the same. Development expenses of animation products that are not considered to be commercially viable are expensed.

Gains or losses arising from derecognition of an intangible asset are measured as the diference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of proft and loss when the asset is derecognized.

(iv) Depreciation / amortization

Depreciation on fxed assets is provided for from the date the asset is ready to be put to use, under straight-line method in the manner and at the rates specifed in Schedule XIV to the Companies Act, 1956, except ion case of computer software for which life is technically ascertained by the management as fve years and the depreciation is charged at the rate of 20%. The rates of depreciation and amortization are as follows:

Fixed assets individually costing Rs 5,000 or less are fully depreciated on purchase during the relevant year. Assets installed in leased premises are amortized over the lease period of the premises. Digital assets (Intangible) are amortized over the estimated life (revenue earning potential) of such assets under written down value method.

1.5 Employee Benefts:

i) Defned contribution plan:

Provident fund / Employee State Insurance Scheme

Contribution to Provident fund scheme and Employee State Insurance Scheme are charged to Proft and Loss account in the year of contribution. There are no other obligations other than such contribution payable to the respective fund / scheme.

ii) Defned beneft plan:

Gratuity

Gratuity has been covered under group gratuity cum assurance scheme of Life Insurance Corporation of India. Accrued liability for gratuity as at the balance sheet date is ascertained on actuarial basis using projected unit credit method and balance in excess of fair value of the plan assets as at the yearend is duly provided for.

iii) Compensated absences

Short term compensated absences are provided for based on estimates at gross undiscounted values. Long term compensated absences are provided for based on actuarial valuation.

1.6 Provision for taxes:

Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current taxes and liabilities are ofset where there is a legally enforceable right to set of the recognized amounts and there is a intention to settle the asset and the liability on a net basis.

Deferred Tax is recognized on timing diferences between the accounting income and the taxable income for the year, and quantifed using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. In respect of undertakings the income of which is exempt under section 10B of the Income Tax Act, 1961, deferred tax liability on account of timing diferences arising but getting reversed during the tax holiday period has not been recognized.

Deferred tax assets are recognized and carried forward to the extent that there is a virtual certainty as the case may be that sufcient future taxable income will be available against which such deferred tax assets can be realized.

The carrying amount of deferred tax assets are reviewed at each reporting date. The company writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufcient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufcient future taxable income will be available

Deferred tax assets and deferred tax liabilities are ofset when there is a legally enforceable right to set-of current tax assets against current tax liabilities and where deferred tax assets and deferred tax liabilities relate to taxes on income levied by the same governing laws and same taxable entity.

1.7 Accounting for provisions, contingent liabilities and contingent assets:

A provision is recognized when the company has a present obligation as a result of past event, it is probable that an outfow of resources embodying economic benefts will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the management estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to refect the current management estimates.

Contingent liabilities are disclosed by way of notes to the Balance Sheet. Provision is made in the accounts in respect of those liabilities which are likely to materialize after the yearend, till the fnalization of accounts and have material efect on the position stated in the Balance sheet.

Contingent assets are not recognized in the fnancial statements as a matter of prudence.

1.8 Borrowing costs

Borrowing costs that are attributable to the acquisition or construction or production of qualifying assets that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of such assets. All other borrowing costs are charged to revenue, during the period in which they are incurred. Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange diferences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

1.9 Impairment of tangible and intangible 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. Where 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. In assessing value in use, the estimated future cash fows are discounted to their present value using a pre-tax discount rate that refects current market assessments of the time value of money and the risks specifc to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identifed, an appropriate valuation model is used.

The company bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the company''s cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of seven years.

Impairment losses of continuing operations, including impairment on inventories, are recognized in the statement of proft and loss, except for previously revalued tangible fxed assets, where the revaluation was taken to revaluation reserve. In this case, the impairment is also recognized in the revaluation reserve up to the amount of any previous revaluation.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the company estimates the asset''s or cash-generating unit''s recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset''s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount 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 recognized for the asset in prior years. Such reversal is recognized in the statement of proft and loss unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase

1.10 Investments

Investments that are readily realizable and intended to be held for not more than a year, if any are classifed as current investments. All other investments are classifed as long term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost. Provision is made where there is a fall in value of such long-term investments, which are other than temporary in nature. Investments outside India in subsidiary companies are carried in the Balance Sheet at historical cost.

1.11 Cash Flow statement

Cash fows from operating activities are reported using the indirect method, whereby net proft before tax is adjusted for the efects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash fows from regular revenue generating, investing and fnancing activities of the company are segregated.

1.12 Inventories

a) Cost of production representing overheads incurred for Animation contract services is carried over as work in progress in the Balance Sheet as at the year end.

1.13 Foreign currency transactions

i. Initial recognition – foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency approximately at the date of the transaction.

ii. Conversion – Foreign currency monetary items are reported using the closing rate at the yearend. Non monetary items, which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.

iii. Exchange diferences – exchange diferences arising on the settlement or conversion of monetary items are recognized as income or as expenses in the period in which they arise.

1.14 Earnings Per Share

The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share and also the weighted average number of shares, if any, which would have been issued on the conversion of all dilutive potential equity shares.

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Mar 31, 2012

1.1 Basis of preparation

These financial statements have been prepared to comply in all material respects with the applicable accounting prin- ciples in India, the applicable accounting standards notified under Section 211 (3C) and the other provisions of the Com- panies Act 1956 . The Financial Statements have been pre- pared under the historical cost convention on accrual basis. The accounting policies have been consistently applied by the company and except as disclosed, are consistent with those used during the previous year.

All the assets and liabilities have been classified as current as per the Company's normal operating cycle and other criteria set out in Schedule VI to the Companies Act 1956. Based on the nature of Products and Services and the time between the acquisition of assets for operations and their realization in cash and cash equivalent, the Company has ascertained its operating cycle as 12 months.

1.2 Use of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires esti- mates and assumptions to be made that affect the reported amounts of assets and liabilities of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known / materialized.

1.3 Revenue recognition:

(i) Animation services

In respect of Animation services for third parties, income is recognized based on milestone achieved as specified in the contracts. In case of own production of Animated content in- come is recognized on sale / licensing of such products. Share of surplus from co production ventures is recognized as and when the same accrues after recoupment of the production cost in full as per the terms of the agreement.

(ii) Software services

Software services are either provided on a time & material ba- sis or on a fixed price basis. IT Services provided on a time & material basis are recognized in / for the period in which the services are performed. IT Services provided on a fixed price basis are recognized based on the milestones as specified in the contracts. Unbilled revenue included under Other Current Assets represents amount recognized based on services per- formed in advance of billing in accordance with contractual terms.

(iii) Rental income

Revenue from renting out of moveable and immoveable prop- erties are recognized on accrual basis.

1.4 Fixed assets and depreciation: Fixed assets (i) Tangible assets:

Fixed assets are stated at cost or at replacement cost, in case of revaluation, less accumulated depreciation and impairment, if any, in the value of the assets. Cost of fixed assets includes all incidental expenses and interest cost on borrowings where applicable, attributable to the acquisition of assets, up to the date of commissioning of the assets.

(ii) Leased assets

Fixed assets acquired on finance lease have been capitalized at lower of present value of minimum lease payments or fair value.These assets have been depreciated over the useful life ofthe asset as technically ascertained by the company.

(iii) Intangible assets

(a) Intangible assets in the nature of software licenses are stated at cost and are amortized over the estimated useful life of one to five years, using straight line method as technically assessed.

(b) Goodwill on merger included under fixed assets, is amortized over a period of 5 years.

(c) Intangible assets in the nature of digital assets is capitalized as and when it is completed and ready for commercialization and amortized over a period of revenue earning potential as estimated by the management. Cost of own / co production of animation products and not ready for commercialization as at the year end is carried forward as capital work in progress in the balance sheet as at the year end, if the management is convinced of the commercial viability of the same. Development expenses of animation products that are not considered to be commercially viable are expensed.

Gains or losses arising from derecognition of an intangible asset 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.

(iv) Depreciation / amortization

Depreciation on fixed assets is provided for from the date the asset is ready to be put to use, under straight-line method in the manner and at the rates specified in Schedule XIV to the Companies Act, 1956, except in case of computer software for which life is technically ascertained by the management as five years and the depreciation is charged at the rate of 20%. The rates of depreciation and amortization are as follows:

Fixed assets individually costing Rs 5,000 or less are fully depreciated on purchase during the relevant year. Assets installed in leased premises are amortized over the lease period of the premises. Digital assets (Intangible) are amortized over the estimated life (revenue earning potential) of such assets under written down value method.

1.5 Employee Benefits:

i) Defined contribution plan:

Provident fund / Employee State Insurance Scheme

Contribution to Provident fund scheme and Employee State Insurance Scheme are charged to Profit and Loss account in the year of contribution. There are no other obligations other than such contribution payable to the respective fund / scheme.

ii) Defined benefit plan:

Gratuity

Gratuity has been covered under group gratuity cum assurance scheme of Life Insurance Corporation of India. Accrued liability for gratuity as at the balance sheet date is ascertained on actuarial basis using projected unit credit method and balance in excess of fair value of the plan assets as at the yearend is duly provided for.

iii) Compensated absences

Short term compensated absences are provided for based on estimates at gross undiscounted values. Long term compensated absences are provided for based on actuarial valuation.

1.6 Provision for taxes:

Tax expense comprises current and deferred tax. Current income tax is measured as the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current taxes and liabilities are offset where there is a legally enforceable right to set off the recognized amounts and there is a intention to settle the asset and the liability on a net basis..

Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. In respect of undertakings the income of which is exempt under section 10B ofthe Income Tax Act, 1961, deferred tax liability on account of timing differences arising but getting reversed during the tax holiday period has not been recognized.

Deferred tax assets are recognized and carried forward to the extent that there is a virtual certainty as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The carrying amount of deferred tax assets are reviewed at each reporting date. The company writes-down the carrying amount of deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available

Deferred tax assets and deferred tax liabilities are offset when there is , if a legally enforceable right exists to set-off current tax assets against current tax liabilities and where deferred tax assets and deferred taxes liabilities relate to taxes on income levied by the same governing laws and same taxable entity.

1.7 Accounting for provisions, contingent liabilities and con- tingent assets:

A provision is recognized when the company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the management estimate required to settle the obligation at the reporting date.These estimates are reviewed at each reporting date and adjusted to reflect the current management estimates.

Contingent liabilities are disclosed by way of notes to the Balance Sheet. Provision is made in the accounts in respect of those liabilities which are likely to materialize after the yearend, till the finalization of accounts and have material effect on the position stated in the Balance sheet.

Contingent assets are not recognized in the financial statements as a matter of prudence.

1.8 Segment reporting:

Segment accounting policies

Segment accounting policies are in line with the accounting policies of the company. However, the following specific accounting policies have been followed for segment reporting:

i. Segment revenue includes sales, service and other income directly identifiable with / allocable to the segment including inter-segment revenue.

ii. Expenses that are directly identifiable with / allocable to segments are considered for determining the segment result. The expenses, which relate to the company as a whole and not allocable to segments, are included under "other unallocable expenditure"

iii. Income, which relates to the company, as a whole and not allocable to segments is included in "unallocable corporate income"

iv. Segment result includes margins on inter-segment capital jobs, which are reduced in arriving at the profit before tax of the company.

v. Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable corporate assets and liabilities represent the assets and liabilities that relate to the company as a whole and not allocable to any segment. Unallocable assets mainly comprise of investments in subsidiaries and others. Unallocable liabilities include provisions for employee retirement benefits & Taxation.

vi Segment Revenue resulting from transactions with other business segments is accounted on the basis of transfer price agreed between the segments. Such transfer prices are either determined to yield a desired margin or agreed on a negotiated basis.

1.9 Borrowing costs

Borrowing costs that are attributable to the acquisition or construction or production of qualifying assets that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of such assets. All other borrowing costs are charged to revenue, during the period in which they are incurred. Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

1.10 Impairment of tangible and intangible 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. Where 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. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

The company bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the company's cash-generating units to which the individual assets are allocated.These budgets and forecast calculations are generally covering a period of seven years.

Impairment losses of continuing operations, including impairment on inventories, are recognized in the statement of profit and loss, except for previously revalued tangible fixed assets, where the revaluation was taken to revaluation reserve. In this case, the impairment is also recognized in the revaluation reserve up to the amount of any previous revaluation.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the company estimates the asset's or cash-generating unit's recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset's recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount 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 recognized for the asset in prior years. Such reversal is recognized in the statement of profit and loss unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase

1.11 Investments

Investments that are readily realizable and intended to be held for not more than a year, if any are classified as current investments. All other investments are classified as long term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost. Provision is made where there is a fall in value of such long-term investments, which are other than temporary in nature. Investments outside India in subsidiary companies are carried in the Balance Sheet at historical cost.

1.12 Cash Flow st inent

Cash flows from operating activities are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, investing and financing activities of the company are segregated.

1.13 Inventories

a) Cost of production representing overheads incurred for Animation contract services is carried over as work in progress in the Balance Sheet as at the year end.

1.14 Foreign currency transactions

i. Initial recognition - foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency approximately at the date of the transaction.

ii. Conversion - Foreign currency monetary items are reported using the closing rate at the yearend. Non monetary items, which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.

iii. Exchange differences - exchange differences arising on the settlement or conversion of monetary items are recognized as income or as expenses in the period in which they arise.

1.15 Earnings Per Share

The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share and also the weighted average number of shares, if any, which would have been issued on the conversion of all dilutive potential equity shares.

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Mar 31, 2010

(a) Basis of preparation of fnancial statements

The fnancial statements have been prepared to comply in all material respects with the Accounting Standards notifed un- der Companies (Accounting Standards) Rules 2006 and the relevant provisions of the Companies Act, 1956. The Financial Statements have been prepared under the historical cost con- vention on accrual basis. The Accounting policies have been consistently applied by the company and except as disclosed, are consistent with those used during the previous year.

(b) Use of Estimates

The preparation of fnancial statements in conformity with generally accepted accounting principles requires esti- mates and assumptions to be made that affect the reported amounts of assets and liabilities of the fnancial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known / materialized.

(c) Fixed Assets , depreciation and amortization

(i) Fixed assets

Fixed assets are stated at cost or at replacement cost, in case of revaluation, less accumulated depreciation and impairment, if any, in the value of the assets. Cost of Fixed Assets includes all incidental expenses and interest cost on borrowings where applicable, attributable to the acquisition of assets, up to the date of commissioning of the assets.

(ii) Leased assets

Fixed Assets acquired on Finance lease have been capitalized at lower of present value of minimum lease payments or fair value. These assets have been depreciated over the useful life of the asset as technically ascertained by the company.

(iii) Impairment of assets

The carrying amounts of Fixed Assets of the cash generating units of the company are reviewed at the Balance Sheet date to assess whether they are recorded in excess of their recov- erable amounts, and where the carrying values exceeds the estimated recoverable amount, the assets are written down to their recoverable amount.

Lease hold improvements Over the lower of estimated useful

lives of the assets or the primary period of the lease.

Fixed assets individually costing Rs 5,000 or less are fully depreciated on purchase during the relevant year. Assets in- stalled in leased premises are amortized over the lease period of the premises. Digital Assets (Intangible) are amortized over the estimated life (revenue earning potential) of such assets under written down value method.

(d) Borrowing costs

Borrowing costs that are attributable to the acquisition or con- struction of qualifying assets are capitalized as part of the cost of such assets. All other borrowing costs are charged to rev- enue, during the period in which they are incurred.

(e) Intangible assets

(i) Intangible assets in the nature of software licenses are stated at cost and are amortized over the estimated useful life of one to fve years, using straight line method as technically assessed. Goodwill included under fxed assets, is amortized over a period of 5 years.

(ii) Intangible assets in the nature of Digital Assets (Animation Contents) is capitalized as and when it is completed and ready for commercialization and amortized over a period of revenue earning potential as estimated by the management. Cost of own / co production of Animation products and not ready for commercialization as at the year end is carried for- ward as capital work in progress in the Balance sheet as at the yearend, if the management is convinced of the commercial viability of the same. Development expenses of animation products that are not considered to be commercially viable is expensed.

(f) Investments

Investments that are readily realizable and intended to be held for not more than a year, if any are classifed as current investments. All other investments are classifed as long term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost. Provision is made where there is a fall in value of such long-term investments, which are other than temporary in nature. Investments out- side India in subsidiary companies are carried in the Balance Sheet at historical cost.

(g) Cash fow statement

Cash fows from operating activities are reported using the indirect method, whereby net proft before tax is adjusted for the effects of transactions of a non-cash nature and any de- ferrals or accruals of past or future cash receipts or payments. The cash fows from regular revenue generating, investing and fnancing activities of the company are segregated.

(h) Inventories

Cost of production representing overheads incurred for Ani- mation contract services is carried over as work in progress in the Balance Sheet as at the year end.

(i) Revenue recognition

(i) Sale of products

Sales (net of returns) are reported exclusive of sales tax ,octroi, all other taxes, duties, rebates and discounts. Sales are rec- ognized when signifcant risks and rewards of ownership are passed on to the buyer, which generally coincides with deliv- ery of goods.

(ii) Income from service

Income from Services is recognized on accrual basis, as follows and are exclusive of service tax.

(iii) Annual maintenance contracts

Income from Annual maintenance contracts is recognized proportionately over the period of the respective contracts.

(iv) Software services

Software services are either provided on a time & material ba- sis or on a fxed price basis. IT Services provided on a time & material basis are recognized in / for the period in which the services are performed. IT Services provided on a fxed price basis are recognized based on the milestones as specifed in the contracts. Unbilled revenue included under Other Current Assets represents amount recognized based on services per- formed in advance of billing in accordance with contractual terms.

(v) Animation services

In respect of Animation services for third parties, income is recognized based on milestone achieved as specifed in the contracts. In case of own production of Animated content in- come is recognized on sale / licensing of such products. Share of surplus from co production ventures is recognized as and when the same accrues after recoupment of the production cost in full as per the terms of the agreement.

(j) Employee benefts

i) Defned contribution plan:

Provident Fund / Employee State Insurance Scheme

Contribution to Provident Fund Scheme and Employee State Insurance Scheme are charged to Proft and Loss Account in the year of contribution. There are no other obligations other than such contribution payable to the respective fund / scheme.

ii) Defned beneft plan:

Gratuity

Gratuity has been covered under Group Gratuity cum Assur- ance Scheme of Life Insurance Corporation of India. Accrued Liability for gratuity as at the Balance Sheet date is ascertained on actuarial basis using projected unit credit method and bal- ance in excess of fair value of the plan Assets as at the yearend is duly provided for.

iii) Compensated absences

Short term compensated absences are provided for based on estimates at gross undiscounted values. Long term compen- sated absences are provided for based on actuarial valuation.

(k) Taxes on income

Provision for current tax is made based on the liability com- puted in accordance with the relevant tax rates and tax laws.

Deferred Tax is recognized on timing differences between the accounting income and the taxable income for the year, and quantifed using the tax rates and laws enacted or substan- tively enacted as on the Balance Sheet date. In respect of un- dertakings the income of which is exempt under section 10B of the Income Tax Act, 1961, Deferred Tax liability on account of timing differences arising but getting reversed during the tax holiday period has not been recognized.

Deferred Tax assets are recognized and carried forward to the extent that there is a virtual certainty as the case may be that suffcient future taxable income will be available against which such deferred tax assets can be realized.

(l) Foreign currency transactions

i. Initial recognition – foreign currency transactions are re- corded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency approximately at the date of the transaction.

ii. Conversion – Foreign currency monetary items are report- ed using the closing rate at the yearend. Non monetary items, which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.

iii. Exchange differences – Exchange differences arising on the settlement or conversion of monetary items are recog- nized as income or as expenses in the period in which they arise.

(m) Earnings per share

The number of shares used in computing basic earnings per share is the weighted average number of shares outstand- ing during the year. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share and also the weighted average number of shares, if any, which would have been issued on the conversion of all dilutive po- tential equity shares.

(n) Segment accounting

1. Segment accounting policies

Segment accounting policies are in line with the accounting policies of the Company. However, the following specifc ac- counting policies have been followed for segment reporting:

i. Segment Revenue includes Sales, Service and other in- come directly identifable with / allocable to the segment in- cluding inter-segment revenue.

ii. Expenses that are directly identifable with / allocable to segments are considered for determining the Segment Result. The expenses, which relate to the company as a whole and not allocable to segments, are included under "Other Unallocable expenditure".

iii. Income, which relates to the Company, as a whole and not allocable to segments is included in "Unallocable Corporate Income".

iv. Segment result includes margins on inter-segment capital jobs, which are reduced in arriving at the proft before tax of the company.

v. Segment assets and liabilities include those directly iden- tifable with the respective segments. Unallocable corporate assets and liabilities represent the assets and liabilities that re- late to the company as a whole and not allocable to any seg- ment. Unallocable assets mainly comprise of investments in Subsidiaries and Others. Unallocable liabilities include provi- sions for employee retirement benefts & Taxation.