2. Material accounting policies

The material accounting policies applied by the
Company in the preparation of thestandalone
financial statements are listed below. Such
accounting policies have been applied
consistently to all the periods presented in this
standalone financial statements, unless otherwise
indicated.

a) Current versus non-current classification

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

An asset is classified as current when it is:

• Expected to be realised or intended to be
sold or consumed in normal operating
cycle;

• Held primarily for the purpose of trading.

• Expected to be realised 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 the other assets are classified as non¬
current.

A liability is classified as 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.

The Company classifies all other liabilities as
non-current. Deferred tax assets and liabilities
are classified as non-current assets and non¬
current liabilities respectively.

The operating cycle is the time between the

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

b) Property, plant, and equipment

Property, plant and equipment are carried
at cost of acquisition or construction
less accumulated depreciation and/ or
accumulated impairment, if any. The cost
includes its purchase price, including import
duties and other non-refundable taxes or
levies (for Leasehold improvements and
Vehicles, Goods and Services Tax is not
availed but added to the cost of acquisition
or construction), freight and any directly
attributable cost of bringing the asset to its
working condition for its intended use; any
trade discounts and rebates are deducted in
arriving at the purchase price.

Subsequent expenditures related to an item
of tangible property, plant and equipment are
added to its book value only if they increase
the future benefits from the existing asset
beyond its previously assessed standard of
performance.

The cost of property, plant and equipment not
ready for their intended use at the balance
sheet date are disclosed as capital work in
progress.

Advances paid towards the acquisition of
property, plant and equipment, outstanding
at each balance sheet date are disclosed as
''capital advances'' under ''other current assets''.

Where a significant component (in terms of
cost) of an asset has an economic useful life
shorter than that of it''s corresponding asset,
the component is depreciated over it''s shorter
life.

Assets individually costing up to Rupees five
thousand are not capitalized.

Depreciation methods, estimated useful
lives

Depreciation is provided on straight line
method over the estimated useful life of fixed
assets as per the useful life prescribed under
Part C of Schedule II of the Companies Act,
2013. Depreciation on addition to property,
plant and equipment is provided on pro¬
rata basis from the date the assets are ready
for intended use. Depreciation on sale /
deletion of property, plant and equipment is

provided for up to the date of sale, deduction
or discard of property, plant and equipment
as the case may be. In case of impairment,
if any, depreciation is provided on the
revised carrying amount of the asset over its
remaining useful life.

Leasehold improvements are being amortised
over the duration of the lease, or estimated
useful life of the assets, whichever is lower.

Depreciation methods, useful lives and
residual values are reviewed periodically
at each financial year end and adjusted
prospectively, as appropriate.

Transition to Ind AS

The Company has elected to continue with
the carrying value of all its property plant
and equipment recognised on the date of
transition, measured as per the previous GAAP,
and use that carrying value as the deemed
cost of the property, plant and equipment.

c) Intangible assets

Intangible assets are stated at cost of
acquisition or construction less accumulated
amortisation and impairment, if any. Intangible
assets purchased are measured at cost as
at the date of acquisition, as applicable, less
accumulated amortisation and accumulated
impairment, if any. The estimated useful life
of an identifiable intangible asset is based
on a number of factors including the effects
of obsolescence, demand, competition, and
other economic factors (such as the stability
of the industry, and known technological
advances), and the level of maintenance
expenditures required to obtain the expected
future cash flows from the asset.

Amortisation of intangible assets

Intangible assets are amortized over their
respective individual estimated useful lives on
a straight-line basis, from the date that they
are available for use. The management has
estimated life of software 5 years.

Transition to Ind AS

The Company has elected to continue
with the carrying value of all its intangible
assets recognised on the date of transition,
measured as per the previous GAAP, and use
that carrying value as the deemed cost of the
intangible assets.

d) Impairment of non-financial assets

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

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 fair value less costs
of disposal, recent market transactions are
taken into account. If no such transactions can
be identified, an appropriate valuation model
is used. These calculations are corroborated
by valuation multiples, quoted share prices for
publicly traded companies or other available
fair value indicators.

Impairment losses of continuing operations,
including impairment on inventories, are
recognised in the statement of profit and loss.

For assets an assessment is made at each
reporting date to determine whether there
is an indication that previously recognised
impairment losses no longer exist or have
decreased. If such indication exists, the
Company estimates the asset''s or CGU''s
recoverable amount. A previously recognised
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 recognised.
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 recognised for the asset in prior years.
Such reversal is recognised in the statement
of profit or loss unless the asset is carried at a

revalued amount, in which case, the reversal
is treated as a revaluation increase.

e) Borrowing and Borrowing Costs

Borrowings are initially recognised at fair
value, net of transaction costs incurred.
Borrowings are subsequently measured
at amortised cost. Any difference between
the proceeds (net of transaction costs) and
the redemption amount is recognised in
Statement of profit and loss over the period
of the borrowings using the effective interest
method. Borrowings are derecognised from
the balance sheet when the obligation
specified in the contract is discharged,
cancelled or expired. The difference between
the carrying amount of a borrowings that has
been extinguished or transferred to another
party and the consideration paid, including
any non-cash assets transferred or liabilities
assumed, is recognised in Statement of profit
and loss as other gains/(losses). Borrowings
are classified as current liabilities unless the
Company has an unconditional right to defer
settlement of the liability for at least 12 months
after the reporting period.

Borrowing costs directly attributable to the
acquisition, construction or production of an
asset that necessarily takes a substantial
period of time to get ready for its intended use
are capitalised as part of the cost of the asset.
All other borrowing costs are expensed in the
period in which they occur. Borrowing costs
consist of interest and other costs that an
entity incurs in connection with the borrowing
of funds. Borrowing cost also includes
exchange differences to the extent regarded
as an adjustment to the borrowing costs.

Borrowing costs directly attributable to the
acquisition or construction of qualifying
assets are capitalised as part of the cost of
the assets up to the date the asset is ready for
its intended use. All other borrowing costs are
recognised as an expense in the statement of
profit and loss in the year in which they are
incurred.

f) Inventories

Inventories are valued as follows:

Raw materials, stock in trade and stores
and spares - Lower of cost and net realisable
value. Cost is determined on a weighted
average basis. Materials and other items held
for use in the production of inventories are not

written down below costs, if finished goods in
which they will be incorporated are expected
to be sold at or above cost.

Work-in-progress and finished goods - Lower
of cost and net realisable value. Cost includes
direct materials, labour and a proportion of
manufacturing overheads.

Net realisable value is the estimated selling
price in the ordinary course of business, less
estimated costs of completion and to make
the sale. However, materials and other items
held for use in the production of finished
goods or providing services 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. The comparison of
cost and net realizable value is made on item
by item basis.

g) Revenue Recognition

Revenue is measured at amount of transaction
price (net of variable consideration) received
or receivable when control of the goods is
transferred to the customer and there are no
unfulfilled performance obligations as per the
contract with the customers. The Company
recognizes revenue when it satisfies a
performance obligation in accordance with
the provisions of contract with the customer.
This is achieved when;

• effective control of goods along with
significant risks and rewards of ownership
has been transferred to customer;

• the amount of revenue can be measured
reliably;

• it is probable that the economic benefits
associated with the transaction will flow to
the Company; and

• the costs incurred or to be incurred
in respect of the transaction can be
measured reliably.

The Company has concluded that it is the
principal in its revenue arrangements, as
it typically controls the goods or services
before transferring them to the customer.
The Company considers the terms of the
contract in determining the transaction price.
The transaction price is based upon the
amount the Company expects to be entitled
to in exchange for transferring of promised
goods and services to the customer after
deducting for certain incentives including, but
not limited to discounts, volume rebates, etc.
Revenue from sale of goods is recognised at
the point in time when control of the product is
transferred to the customer, which is generally
determined when title, ownership, risk of
obsolescence and loss pass to the customer
and the Company has the present right to
payment, all of which occurs at a point in time
upon shipment or delivery of the product or
customer acceptance, as per the respective
terms agreed with the customer.

The Company provides installation and
maintenance services on its certain products
at the time of sale in terms of the contract
with customers. These installation and
maintenance services are sold together
with the sale of product. Each component
is treated as a separate performance
obligation because the promises to transfer
the product and to provide the installation
and maintenance services are capable
of being distinct. The transaction price is
allocated based on stand-alone selling
prices, determined using observable prices
or estimated using the cost-plus margin
method. Revenue from the sale of product
and services is recognized at the point in time
when control is transferred to the customer.

For incentives offered to customers, the
Company makes estimates related customer
performance and sales volume to determine
the total amounts earned and to be recorded
as deductions. The estimate is made in such
a manner, which ensures that it is highly
probable that a significant reversal in the
amount of cumulative revenue recognised
will not occur. The actual amounts may differ
from these estimates and are accounted for
prospectively.

The Company considers shipping and
handling activities as costs to fulfill the
promise to transfer the related products and
the customer payments for shipping and
handling costs are recorded as a component
of revenue. In certain customer contracts,
shipping and handling services are treated
as a distinct separate performance obligation
and the Company recognizes revenue
for such services when the performance
obligation is completed. The Company
provides warranties for repairs of defects that
existed at the time of sale. These warranties
are accounted for under Ind AS 37 Provisions,

Contingent Liabilities and Contingent Assets.

Revenue are net of Goods and Service Tax. No
element of significant financing is deemed
present as the sales are made with a credit
term, which is consistent with market practice.

Export incentives are recognized when there is
reasonable assurance that the Company will
comply with the conditions and the incentives
will be received.

Interest income from a financial asset is
recognised when it is probable that the
economic benefits will flow to the Company
and the amount of income can be measured
reliably. Interest income is accrued on a
time basis, by reference to the principal
outstanding and at the effective interest
rate applicable, which is the rate that exactly
discounts estimated future cash receipts
through the expected life of the financial asset
to that asset''s net carrying amount on initial
recognition.

Contract assets

Contract asset is right to consideration in
exchange for goods or services transferred
to the customer and performance obligation
satisfied. If the Company performs by
transferring goods or services to a customer
before the customer pays consideration or
before payment is due, a contract asset is
recognised for the earned consideration
that is conditional. Upon completion of
the attached condition and acceptance
by the customer, the amounts recognised
as contract assets is reclassified to trade
receivables upon invoicing. A receivable
represents the Company''s right to an amount
of consideration that is unconditional.
Contract assets are subject to impairment
assessment.

Contract liabilities

A contract liability is the obligation to transfer
goods or services to a customer for which the
Company has received consideration from
the customer. If customer pays consideration
before the Company transfers goods or
services to the customer, a contract liability
is recognised when the payment is made.
Contract liabilities are recognised as revenue
when the Company performs under the
contract (i.e., transfers control of the related
goods or services to the customer).

Trade receivables

A trade receivable is recognised if an amount
of consideration that is unconditional (i.e.,
only the passage of time is required before
payment of the consideration is due). For
trade receivables and contract assets, the
Company applies the simplified approach
required by Ind AS 109, which requires expected
lifetime losses to be recognised from initial
recognition of the receivables.

h) Foreign currencies

The Company''s standalone financial
statements are presented in INR, which is also
its functional currency.

Transactions and balances

Transactions in foreign currencies are initially
recorded by the Company at functional
currency spot rates at the date the transaction
first qualifies for recognition.

Monetary assets and liabilities denominated
in foreign currencies are translated at the
functional currency closing rate of exchange
at the reporting date.

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

i) Income Taxes
Current tax

Current tax assets and liabilities are measured
at the amount expected to be recovered from
or paid to the taxation authorities. The tax rates
and tax laws used to compute the amount
are those that are enacted or substantively
enacted in India, at the reporting date.

Current tax relating to items recognised
outside statement of profit or loss is recognised

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

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

Deferred tax

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

Deferred tax assets are recognised for all
deductible temporary differences, the carry
forward of unused tax credits and any unused
tax losses. Deferred tax assets are recognised
to the extent that it is probable that taxable
profit will be available against which the
deductible temporary differences, and the
carry forward of unused tax credits and
unused tax losses can be utilised. Deferred tax
liabilities are generally recognised for all the
taxable temporary differences.

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

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

Deferred tax assets and deferred tax liabilities
are offset if a legally enforceable right exists to
set off current tax assets against current tax

liabilities and the deferred taxes relate to the
same taxable entity and the same taxation
authority.

j) Employee benefits
Short-term benefits

The undiscounted amount of short-term
employee benefits expected to be paid
in exchange for the service rendered by
employees are recognised during the period
when the employee renders the services.

Defined contribution plans

Retirement benefit in the form of provident
fund is a defined contribution scheme. The
Company has no obligation, other than
the contribution payable to the provident
fund. The Company recognizes contribution
payable to the provident fund scheme as
an expense, when an employee renders the
related service.

Company''s contribution to state defined
contribution plans namely Employee State
Insurance is made in accordance with the
Statute, and are recognised as an expense
when employees have rendered services
entitling them to the contribution.

Defined benefits plans

The Company operates a defined benefit
gratuity plan in India, which requires
contributions to be made to a separately
administered fund. Gratuity is a defined
benefit obligation.

The cost of providing benefits under the
defined benefit plan is determined using the
projected unit credit method. In respect of
post-retirement benefit re-measurements
comprising of actuarial gains and losses, the
effect of the asset ceiling, excluding amounts
included in net interest on the net defined
benefit liability and the return on plan assets,
are recognised immediately in the balance
sheet with a corresponding debit or credit to
retained earnings through OCI in the period in
which they occur. Re-measurements are not
reclassified to statement of profit or loss in
subsequent periods.

Past service cost is recognised as an expense
when the plan amendment or curtailment
occurs or when any related restructuring
costs or termination benefits are recognised,
whichever is earlier.

Other long-term benefits

Accumulated leave, which is expected to
be utilized within the next twelve months, is
treated as short-term employee benefit. The
Company measures the expected cost of
such absences as the additional amount that
it expects to pay as a result of the unused
entitlement that has accumulated at the
balance sheet date. Actuarial gains/ losses on
the compensated absences are immediately
taken to the statement of profit and loss and
are not deferred.

k) Leases

Company as a lessee

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

The Company recognizes a right-of-use asset
and a lease liability at the commencement
date, except for short-term leases of twelve
months or less and leases for which the
underlying asset is of low value, which are
expensed in the statement of operations on a
straight-line basis over the lease term.

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 interest rate implicit in
the lease, or, if not readily determinable, the
incremental borrowing rate specific to the
country, term and currency of the contract.
Lease payments can include fixed payments,
variable payments that depend on an index
or rate known at the commencement date,
as well as any extension or purchase options,
if the Company is reasonably certain to
exercise these options. The lease liability is
subsequently measured at amortized cost
using the effective interest method and
remeasured with a corresponding adjustment
to the related right-of-use asset when there is
a change in future lease payments in case of
renegotiation, changes of an index or rate or
in case of reassessments of options.

The right-of-use asset comprises, at inception,
the initial lease liability, any initial direct
costs and, when applicable, the obligations
to refurbish the asset, less any incentives
granted by the lessors. The right-of-use asset

is subsequently depreciated, on a straight¬
line basis, over the lease term, if the lease
transfers the ownership of the underlying
asset to the Company at the end of the lease
term or, if the cost of the right-of-use asset
reflects that the lessee will exercise a purchase
option, over the estimated useful life of the
underlying asset. other are also subject to
testing for impairment if there is an indicator
for impairment. Variable lease payments not
included in the measurement of the lease
liabilities are expensed to the statement of
operations in the period in which the events
or conditions which trigger those payments
occur. In the statement of financial position
right-of-use assets and lease liabilities are
classified respectively as part of property,
plant and equipment and short-term/long-
term debt.

l) Government grant and subsidies

Grants from the Government are recognised
at their fair value where there is a reasonable
assurance that the grant will be received and
the Company will comply with all attached
conditions. Government grants relating to the
purchase of property, plant and equipment are
included in noncurrent liabilities as deferred
income and are credited to statement of
profit and loss on a systematic basis over
the expected lives of the related assets to
match them with the costs for which they
are intended to compensate and presented
within other income.

Government grants that compensate
the Company for expenses incurred are
recognised in the Statement of Profit and Loss,
as income or deduction from the relevant
expense, on a systematic basis in the periods
in which the expense is recognised.

m) Cash and cash equivalents

Cash and cash equivalent comprise cash at
banks and on hand, cheques on hand and
short-term deposits with an original maturity
of three months or less, which are subject to
an insignificant risk of changes in value.

revalued amount, in which case, the reversal
is treated as a revaluation increase.

e) Borrowing and Borrowing Costs

Borrowings are initially recognised at fair
value, net of transaction costs incurred.
Borrowings are subsequently measured
at amortised cost. Any difference between
the proceeds (net of transaction costs) and
the redemption amount is recognised in
Statement of profit and loss over the period
of the borrowings using the effective interest
method. Borrowings are derecognised from
the balance sheet when the obligation
specified in the contract is discharged,
cancelled or expired. The difference between
the carrying amount of a borrowings that has
been extinguished or transferred to another
party and the consideration paid, including
any non-cash assets transferred or liabilities
assumed, is recognised in Statement of profit
and loss as other gains/(losses). Borrowings
are classified as current liabilities unless the
Company has an unconditional right to defer
settlement of the liability for at least 12 months
after the reporting period.

Borrowing costs directly attributable to the
acquisition, construction or production of an
asset that necessarily takes a substantial
period of time to get ready for its intended use
are capitalised as part of the cost of the asset.
All other borrowing costs are expensed in the
period in which they occur. Borrowing costs
consist of interest and other costs that an
entity incurs in connection with the borrowing
of funds. Borrowing cost also includes
exchange differences to the extent regarded
as an adjustment to the borrowing costs.

Borrowing costs directly attributable to the
acquisition or construction of qualifying
assets are capitalised as part of the cost of
the assets up to the date the asset is ready for
its intended use. All other borrowing costs are
recognised as an expense in the statement of
profit and loss in the year in which they are
incurred.

f) Inventories

Inventories are valued as follows:

Raw materials, stock in trade and stores
and spares - Lower of cost and net realisable
value. Cost is determined on a weighted
average basis. Materials and other items held
for use in the production of inventories are not

written down below costs, if finished goods in
which they will be incorporated are expected
to be sold at or above cost.

Work-in-progress and finished goods - Lower
of cost and net realisable value. Cost includes
direct materials, labour and a proportion of
manufacturing overheads.

Net realisable value is the estimated selling
price in the ordinary course of business, less
estimated costs of completion and to make
the sale. However, materials and other items
held for use in the production of finished
goods or providing services 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. The comparison of
cost and net realizable value is made on item
by item basis.

g) Revenue Recognition

Revenue is measured at amount of transaction
price (net of variable consideration) received
or receivable when control of the goods is
transferred to the customer and there are no
unfulfilled performance obligations as per the
contract with the customers. The Company
recognizes revenue when it satisfies a
performance obligation in accordance with
the provisions of contract with the customer.
This is achieved when;

• effective control of goods along with
significant risks and rewards of ownership
has been transferred to customer;

• the amount of revenue can be measured
reliably;

• it is probable that the economic benefits
associated with the transaction will flow to
the Company; and

• the costs incurred or to be incurred
in respect of the transaction can be
measured reliably.

Revenue represents net value of goods
and services provided to customers after
deducting for certain incentives including,
but not limited to discounts, volume rebates,
etc. For incentives offered to customers, the
Company makes estimates related customer
performance and sales volume to determine
the total amounts earned and to be recorded
as deductions. The estimate is made in such
a manner, which ensures that it is highly
probable that a significant reversal in the

amount of cumulative revenue recognised
will not occur. The actual amounts may differ
from these estimates and are accounted for
prospectively.

The Company considers shipping and
handling activities as costs to fulfill the
promise to transfer the related products and
the customer payments for shipping and
handling costs are recorded as a component
of revenue. In certain customer contracts,
shipping and handling services are treated
as a distinct separate performance obligation
and the Company recognizes revenue for such
services when the performance obligation is
completed.

Revenue are net of Goods and Service Tax. No
element of significant financing is deemed
present as the sales are made with a credit
term, which is consistent with market practice.

Company generate revenue from sale of
pumps and related support services. Revenue
from services is recognised in the accounting
period in which the services are rendered.

Revenue (other than sale) 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. Export
incentives are recognized when there is
reasonable assurance that the Company will
comply with the conditions and the incentives
will be received.

Export entitlements (in the form of duty
drawback, Merchandise Export Incentive
Scheme and other schemes) are recognized
in the statement of profit and loss when the
right to receive credit as per the terms of the
scheme is established in respect of exports
made and when there is no significant
uncertainty regarding the ultimate collection
of the relevant export proceeds.

Interest income from a financial asset is
recognised when it is probable that the
economic benefits will flow to the Company
and the amount of income can be measured
reliably. Interest income is accrued on a
time basis, by reference to the principal
outstanding and at the effective interest
rate applicable, which is the rate that exactly
discounts estimated future cash receipts
through the expected life of the financial asset
to that asset''s net carrying amount on initial
recognition.

Contract assets

Contract asset is right to consideration in
exchange for goods or services transferred
to the customer and performance obligation
satisfied. If the Company performs by
transferring goods or services to a customer
before the customer pays consideration or
before payment is due, a contract asset is
recognised for the earned consideration
that is conditional. Upon completion of
the attached condition and acceptance
by the customer, the amounts recognised
as contract assets is reclassified to trade
receivables upon invoicing. A receivable
represents the Company''s right to an amount
of consideration that is unconditional.
Contract assets are subject to impairment
assessment.

Contract liabilities

A contract liability is the obligation to transfer
goods or services to a customer for which the
Company has received consideration from
the customer. If customer pays consideration
before the Company transfers goods or
services to the customer, a contract liability
is recognised when the payment is made.
Contract liabilities are recognised as revenue
when the Company performs under the
contract (i.e., transfers control of the related
goods or services to the customer).

Trade receivables

Trade receivables are amounts due from
customers for goods sold or services
performed in the ordinary course of business.
If the receivable is expected to be collected
within a period of 12 months or less from the
reporting date (or in the normal operating
cycle of the business, if longer), they are
classified as current assets otherwise as non¬
current assets.

Trade receivables are measured at their
transaction price unless it contains a significant
financing component in accordance with Ind
AS 115 for pricing adjustments embedded in
the contract.

Loss allowance for expected lifetime credit
loss is recognised on initial recognition.

h) Foreign currencies

The Company''s standalone financial
statements are presented in INR, which is also
its functional currency.

Transactions and balances

Transactions in foreign currencies are initially
recorded by the Company at functional
currency spot rates at the date the transaction
first qualifies for recognition.

Monetary assets and liabilities denominated
in foreign currencies are translated at the
functional currency closing rate of exchange
at the reporting date.

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

i) Income Taxes
Current tax

Current tax assets and liabilities are measured
at the amount expected to be recovered from
or paid to the taxation authorities. The tax rates
and tax laws used to compute the amount
are those that are enacted or substantively
enacted in India, at the reporting date.

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

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

Deferred tax

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

Deferred tax assets are recognised for all
deductible temporary differences, the carry
forward of unused tax credits and any unused
tax losses. Deferred tax assets are recognised
to the extent that it is probable that taxable
profit will be available against which the
deductible temporary differences, and the
carry forward of unused tax credits and
unused tax losses can be utilised. Deferred tax
liabilities are generally recognised for all the
taxable temporary differences.

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

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

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

j) Employee benefits
Short-term benefits

The undiscounted amount of short-term
employee benefits expected to be paid
in exchange for the service rendered by
employees are recognised during the period
when the employee renders the services.

Defined contribution plans

Retirement benefit in the form of provident
fund is a defined contribution scheme. The

Company has no obligation, other than
the contribution payable to the provident
fund. The Company recognizes contribution
payable to the provident fund scheme as
an expense, when an employee renders the
related service.

Company''s contribution to state defined
contribution plans namely Employee State
Insurance is made in accordance with the
Statute, and are recognised as an expense
when employees have rendered services
entitling them to the contribution.

Defined benefits plans

The Company operates a defined benefit
gratuity plan in India, which requires
contributions to be made to a separately
administered fund. Gratuity is a defined
benefit obligation.

The cost of providing benefits under the
defined benefit plan is determined using the
projected unit credit method. In respect of
post-retirement benefit re-measurements
comprising of actuarial gains and losses, the
effect of the asset ceiling, excluding amounts
included in net interest on the net defined
benefit liability and the return on plan assets,
are recognised immediately in the balance
sheet with a corresponding debit or credit to
retained earnings through OCI in the period in
which they occur. Re-measurements are not
reclassified to statement of profit or loss in
subsequent periods.

Past service cost is recognised as an expense
when the plan amendment or curtailment
occurs or when any related restructuring
costs or termination benefits are recognised,
whichever is earlier.

Other long-term benefits

Accumulated leave, which is expected to
be utilized within the next twelve months, is
treated as short-term employee benefit. The
Company measures the expected cost of
such absences as the additional amount that
it expects to pay as a result of the unused
entitlement that has accumulated at the
balance sheet date. Actuarial gains/ losses on
the compensated absences are immediately
taken to the statement of profit and loss and
are not deferred.

k) Leases

Company as a lessee

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

The Company recognizes a right-of-use asset
and a lease liability at the commencement
date, except for short-term leases of twelve
months or less and leases for which the
underlying asset is of low value, which are
expensed in the statement of operations on a
straight-line basis over the lease term.

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 interest rate implicit in
the lease, or, if not readily determinable, the
incremental borrowing rate specific to the
country, term and currency of the contract.
Lease payments can include fixed payments,
variable payments that depend on an index
or rate known at the commencement date,
as well as any extension or purchase options,
if the Company is reasonably certain to
exercise these options. The lease liability is
subsequently measured at amortized cost
using the effective interest method and
remeasured with a corresponding adjustment
to the related right-of-use asset when there is
a change in future lease payments in case of
renegotiation, changes of an index or rate or
in case of reassessments of options.

The right-of-use asset comprises, at inception,
the initial lease liability, any initial direct
costs and, when applicable, the obligations
to refurbish the asset, less any incentives
granted by the lessors. The right-of-use asset
is subsequently depreciated, on a straight¬
line basis, over the lease term, if the lease
transfers the ownership of the underlying
asset to the Company at the end of the lease
term or, if the cost of the right-of-use asset
reflects that the lessee will exercise a purchase
option, over the estimated useful life of the
underlying asset. other are also subject to
testing for impairment if there is an indicator
for impairment. Variable lease payments not
included in the measurement of the lease
liabilities are expensed to the statement of

operations in the period in which the events
or conditions which trigger those payments
occur. In the statement of financial position
right-of-use assets and lease liabilities are
classified respectively as part of property,
plant and equipment and short-term/long-
term debt.

l) Government grant and subsidies

Grants from the Government are recognised
at their fair value where there is a reasonable
assurance that the grant will be received and
the Company will comply with all attached
conditions. Government grants relating to the
purchase of property, plant and equipment are
included in noncurrent liabilities as deferred
income and are credited to statement of
profit and loss on a systematic basis over
the expected lives of the related assets to
match them with the costs for which they
are intended to compensate and presented
within other income.

Government grants that compensate
the Company for expenses incurred are
recognised in the Statement of Profit and Loss,
as income or deduction from the relevant
expense, on a systematic basis in the periods
in which the expense is recognised.

m) Cash and cash equivalents

Cash and cash equivalent comprise cash at
banks and on hand, cheques on hand and
short-term deposits with an original maturity
of three months or less, which are subject to
an insignificant risk of changes in value.