Updater Services Ltd. कंपली की लेखा नीति

Mar 31, 2025

2.2 Material accounting policies

a. Foreign currencies
Transactions and Balances

Transactions in foreign currencies are initially
recorded by the Company at its functional currency
spot rates at the date the transaction first qualifies
for recognition. However, for practical reasons,
the Company uses average rate if the average
approximates the actual rate at the date of
the transaction. Monetary assets and liabilities
denominated in foreign currencies are translated
at the functional currency spot rates of exchange
at the reporting date. Exchange differences arising
on settlement or translation of monetary items are
recognised in the standalone statement of profit
and loss.

In determining the spot exchange rate to use on
initial recognition of the related asset, expense
or income (or part of it) on the derecognition of
a non-monetary asset or non-monetary liability
relating to advance consideration, the date of the
transaction is the date on which the Company
initially recognises the non- monetary asset or
non-monetary liability arising from the advance
consideration. If there are multiple payments or
receipts in advance, the Company determines the
transaction date for each payment or receipt of
advance consideration.

b. Property, plant and equipment

The cost of an item of property, plant and
equipment shall be recognised as an asset if, and
only if it is probable that future economic benefits
associated with the item will flow to the Company
and the cost of the item can be measured reliably.

Property, plant and equipment are stated 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 and estimated costs of dismantling
and removing the item and restoring the site on
which it is located.

The cost of property, plant and equipment not
ready for intended use before such date is
disclosed as capital work-in-progress.

All other expenses on existing property, plant
and equipment, including day-to-day repair and
maintenance expenditure, are charged to the
statement of profit and loss for the period during
which such expenses are incurred when recognition
criteria are not met.

An item of property, plant and equipment and any
significant part initially recognised is derecognised
upon disposal or when no future economic
benefits are expected from its use or disposal.
Gains or losses arising from de-recognition of
property, plant and equipment are measured as
the difference between the net disposal proceeds
and the carrying amount of the asset and are
recognized in the statement of profit and loss when
the asset is derecognized.

Subsequent expenditure is capitalised only if it
is probable that the future economic benefits
associated with the expenditure will flow to the
Company and the cost of the item can be measured
reliably.

Depreciation

The Company, based on technical assessment
made by experts and management estimates,
depreciates certain items of property, plant and
equipment over estimated useful lives which are
different from the useful life prescribed in Schedule
II to the Companies Act, 2013 based on the
pattern of consumption of such assets and having
regard to the nature of assets in this industry. The
management believes that these estimated useful
lives are realistic and reflect fair approximation
of the period over which the assets are likely to
be used.

Depreciation is calculated on a straight line basis
that closely reflects the expected pattern of
consumption of future economic benefits embodied
in the respective assets over the estimated useful
lives of the assets.

The residual values, useful lives and methods of
depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted
prospectively, if appropriate. Depreciation on
additions/(disposals) is provided on a pro-rata
basis i.e. from/ (upto) the date on which asset is
ready for use/ (disposed off).

The Company has charged depreciation on
property, plant & equipment (PPE) based on
Written Down Value ("WDV") method upto
December 31, 2023. With effect from January 1,
2024, the Company has changed its method of
depreciation from WDV to Straight Line Method
("SLM") based upon the technical assessment of
expected pattern of consumption of the future
economic benefits embodied in the assets.

c. Impairment of non-financial assets

The Company assesses, at each reporting date,
whether there is an indication that a non-financial
asset (other than inventories, contract assets
and deferred tax assets) may be impaired. If
any indication exists, the Company estimates
the asset''s recoverable amount. An asset''s
recoverable amount is the higher of an asset''s or
cash-generating units (CGU) fair value less cost
of disposal and its value in use. The 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 group of assets. 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
fair value less cost of disposal, 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 five years. For longer periods, a long¬
term growth rate is calculated and applied to
project future cash flows after the fifth year. To
estimate cash flow projections beyond periods
covered by the most recent budgets/forecasts, the
Company extrapolates cash flow projections in the
budget using a steady or declining growth rate for
subsequent years, unless an increasing rate can
be justified. In any case, this growth rate does
not exceed the long-term average growth rate for
the services, industries, or country or countries
in which the entity operates, or for the market in
which the asset is used.

Impairment losses including impairment on
inventories, are recognized in the statement of
profit and loss. After impairment, depreciation /
amortization is provided on the revised carrying
amount of the asset over its remaining useful life.

An assessment for assets excluding goodwill
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 units
recoverable amount. A previously recognized
impairment loss is reversed only if there has been
a change in the assumptions used to determine

the 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 / amortization, had no impairment
loss been recognized for the asset in prior years.
Such reversal is recognized in the statement of
profit and loss.

d. Revenue from contracts with
customers

The Company derives revenue primarily from
Integrated Facility Management services (''IFM'')
Revenues from contracts with customers are
considered for recognition and measurement when
the contract has been approved by the parties to
the contract, the parties to contract are committed
to perform their respective obligations under the
contract, and the contract is legally enforceable.

Revenue from contracts with customers is
recognised when control of the goods or services
("performance obligations") are transferred to
the customer at an amount that reflects the
consideration to which the Company expects to be
entitled in exchange for those goods or services.
Revenue is measured at the Transaction price of
the consideration received or receivable, taking into
account contractually defined terms of payment
and excluding taxes or 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 credit risks. Revenue is recognised
to the extent that it is highly probable that a
significant reversal in the amount of cumulative
revenue recognised will not occur. When there is
uncertainty as to collectability, revenue recognition
is postponed until such uncertainty is resolved.

The contract with customers for IFM services
generally contains a single performance obligation.
The company''s contracts may include variable
consideration including discounts and penalties
which are reduced from revenues and recognised
based on an estimate of the expected pay out
relating to these considerations (expected price
concessions). Revenue is adjusted for expected
price concessions based on the management
estimates.

Goods and Service Tax (GST) is not received by

the Company or Company on its own account.
Rather, it is the tax collected on value added on the
services and commodity by the seller on behalf of
the government. Accordingly, it is excluded from
revenue.

If contractual unconditional right to consideration is
dependent on completion of contractual obligations
including right to receive the reimbursement of
gratuity cost from the customers, then such assets
are classified as contract assets.

The specific recognition criteria described below
must also be met before revenue is recognised.

e. Income from facility management
services

Revenues from facility management service
contracts are recognised over a period of time
in accordance with the requirements of Ind-AS
115, "Revenue from Contracts with customers"
as and when the Company satisfies performance
obligations by rendering the promised services
to its customers, and are net of discounts. The
performance obligations in the contracts are
fulfilled based on customer acceptances for
delivery of work/ attendance of resources, where
applicable, or as per terms of arrangements
entered with the customers

Contract balances

Contract assets

A contract asset is the right to consideration in
exchange for services transferred to the customer.
If the Company renders 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 service period and acceptance
by the customer (generally by confirming the
attendance records), the amount recognised as
contract assets is reclassified to trade receivables.

Contract assets are subject to impairment
assessment. Refer to accounting policies on
impairment of financial assets in section "Financial
instruments - initial recognition and subsequent
measurement". Refer section (i)

Trade receivables

A receivable represents the Company''s right to
an amount of consideration that is unconditional
(i.e., only the passage of time is required before
payment of the consideration is due).

Contract liabilities

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

f. Recognition of dividend income and
interest income

Dividend income on investments is recognised
when the unconditional right to receive dividend
is established. Interest income is recognized using
the effective interest rate 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.

g. Investment in subsidiaries

Investments in subsidiaries are carried at cost
less accumulated impairment losses, if any. Where
an indication of impairment exists, the carrying
amount of investment is assessed and written
down immediately to its recoverable amount.

h. Financial Instruments

A financial instrument is any contract that gives
rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.

Financial assets:

Initial recognition and measurement

Trade receivables 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 (unless it is a trade receivable
without a significant financing component) are
recognised initially at fair value plus or minus, in
the case of financial assets not recorded at fair
value through profit or loss, transaction costs that
are attributable to the acquisition of the financial
asset. A trade receivable without a significant
financing component is initially measured at the
transaction price.

Effective interest method

The effective interest method (EIR) is a method
of calculating the amortised cost of a financial
instrument and of allocating interest income or
expense over the relevant period. The effective
interest rate is the rate that exactly discounts
future cash receipts or payments through the
expected life of the financial instrument, or where
appropriate, a shorter period. 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.

Subsequent measurement

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

• Financial assets at amortised cost

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

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

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

Financial assets at amortised cost

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

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

This category is the most relevant to the Company.
After initial measurement, such financial assets
are subsequently measured at amortised cost
using the effective interest rate (EIR) method.
Amortised cost is calculated by taking into account
any discount or premium on acquisition and fees or
costs that are an integral part of the EIR. The EIR
amortisation is included in finance income in the
profit or loss. The losses arising from impairment
are recognised in the profit or loss. This category
generally applies to trade and other receivables.
For more information on receivables, refer to Note
10 (Trade Receivables).

Financial asset at FVTOCI

A ''financial asset'' is classified as at the
FVTOCI if both of the following criteria
are met:

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

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

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

the EIR method. The Company does not have any
debt instrument at FVTOCI.

Financial asset at FVTPL

FVTPL is a residual category for financial
instruments. Any financial instrument, which
does not meet the criteria for categorization as
at amortized cost or as FVTOCI, is classified as
at FVTPL.

In addition, the Company may elect to designate
a financial instrument, which otherwise meets
amortized cost or FVTOCI criteria, as at FVTPL.
However, such election is allowed only if doing
so reduces or eliminates a measurement or
recognition inconsistency (referred to as ''accounting
mismatch'') The Company has not designated any
financial instrument as at FVTPL.

Financial instruments included within the FVTPL
category are measured at fair value with all
changes recognized in the statement of profit
and loss. Contingent consideration classified as
financial liability recognised by an acquirer in a
business combination to which Ind AS103 applies
are classified as at FVTPL. The Company does not
have any debt instrument at FVTPL.

The Company makes an assessment of the
objective of the business model in which a financial
asset is held at a portfolio level because this best
reflects the way the business is managed and
information is provided to management. The
information considered includes:

• the stated policies and objectives for
the portfolio and the operation of those
policies in practice. These include whether
management''s strategy focuses on earning
contractual interest income, maintaining
a particular interest rate profile, matching
the duration of the financial assets to the
duration of any related liabilities or expected
cash outflows or realizing cash flows through
the sale of the assets;

• how the performance of the portfolio is
evaluated and reported to the Company''s
management;

• the risks that affect the performance of the
business model (and the financial assets
held within that business model) and how
those risks are managed;

• how managers of the business are

compensated - e.g. whether compensation
is based on the fair value of the assets
managed or the contractual cash flows
collected; and

• the frequency, volume and timing of sales of
financial assets in prior periods, the reasons
for such sales and expectations about future
sales activity.

Transfers of financial assets to third parties in
transactions that do not qualify for derecognition
are not considered sales for this purpose, consistent
with the company''s continuing recognition of the
assest.

Financial assets that are held for trading or are
managed and whose performance is evaluated on
a fair value basis are measured at FVTPL.

Financial assets - Assessment whether contractual
cash flows are solely payments of principal and

interest

For the purposes of this assessment, Principal is
defined as the fair value of the financial asset on
initial recognition. is defined as consideration for
the time value of money and for the credit risk
associated with the principal amount outstanding
during a particular period of time and for other
basic lending risks and costs (e.g. liquidity risk and
administrative costs), as well as a profit margin.

In assessing whether the contractual cash flows
are solely payments of principal and interest,
the Company considers the contractual terms of
the instrument. This includes assessing whether
the financial asset contains a contractual term
that could change the timing or amount of
contractual cash flows such that it would not meet
this condition. In making this assessment, the
Company considers:

• contingent events that would change the
amount or timing of cash flows;

• terms that may adjust the contractual coupon
rate, including variable-rate features;

• prepayment and extension features; and

• terms that limit the Company''s claim to
cash flows from specified assets (e.g. non¬
recourse features).

A prepayment feature is consistent with the solely
payments of principal and interest criterion if the
prepayment amount substantially represents

unpaid amounts of principal and interest on the
principal amount outstanding, which may include
reasonable compensation for early termination
of the contract. Additionally, for a financial asset
acquired at a discount or premium to its contractual
par amount, a feature that permits or requires
prepayment at an amount that substantially
represents the contractual par amount plus
accrued (but unpaid) contractual interest (which
may also include reasonable compensation for
early termination) is treated as consistent with this
criterion if the fair value of the prepayment feature
is insignificant at initial recognition.

Derecognition

A financial asset (or, where applicable, a part of
a financial asset or part of a Company of similar
financial assets) is primarily derecognised (i.e.
removed from the company''s standalone balance
sheet) when:

• The rights to receive cash flows from the
asset have expired, or

• The Company has transferred its rights
to receive cash flows from the asset or
has assumed an obligation to pay the
received cash flows in full without material
delay to a third party under a ''pass¬
through'' arrangement; and either (a) the
Company has transferred substantially
all the risks and rewards of the asset, or
(b) the Company has neither transferred
nor retained substantially all the risks and
rewards of the asset, but has transferred
control of the asset.

When the Company has transferred its rights to
receive cash flows from an asset or has entered into
a pass-through arrangement, it evaluates if and to
what extent it has retained the risks and rewards
of ownership. When it has neither transferred nor
retained substantially all of the risks and rewards of
the asset, nor transferred control of the asset, the
Company continues to recognise the transferred
asset to the extent of the Company''s continuing
involvement. In that case, the Company also
recognises an associated liability. The transferred
asset and the associated liability are measured on
a basis that reflects the rights and obligations that
the Company has retained.

Continuing involvement that takes the form of a
guarantee over the transferred asset is measured

at the lower of the original carrying amount of the
asset and the maximum amount of consideration
that the Company could be required to repay.

Impairment of financial assets

The Company performs impairment testing of its
investment in subsidiaries when any impairment
indicator exists, based on internal or external
sources of information. The recoverable amount
of the investment in subsidiary, which is based on
the higher of the value in use or fair value less
costs to sell has been derived using a discounted
cash flow model. These models use several key
assumptions, concerning estimates of future cash
flow forecasts, near and long-term growth rate and
the discount rate.

The Company applies expected credit loss model
for recognising impairment loss on financial
assets measured at amortised cost. The Company
measures the loss allowance for trade receivables
at an amount equal to lifetime expected credit loss
(ECL). The Company has used a practical expedient
by computing the expected credit loss allowance
for trade receivables based on a provision matrix
under simplified approach. The provision matrix
takes into account historical credit loss experience
and adjusted for forward looking information. The
expected credit loss allowance is based on the
ageing of the days the receivables are due.

The Company follows ''simplified approach'' for
recognition of impairment loss allowance on trade
receivables. The application of simplified approach
does not require the Company to track changes
in credit risk. Rather, it recognises impairment
loss allowance based on lifetime ECLs at each
reporting date, right from its initial recognition.
Provision for ECL is recognised for financial assets
measured at amortised cost and fair value through
other comprehensive income. It is the Company''s
policy to measure ECLs on financial assets on a
12-month basis. However, when there has been a
significant increase in credit risk since origination,
the allowance will be based on the lifetime ECL.

For recognition of impairment loss on other
financial assets, the Company determines whether
there has been a significant increase in the credit
risk since initial recognition. If credit risk has not
increased significantly, 12-month ECL is used to
provide for impairment loss. However, if credit
risk has increased significantly, lifetime ECL is
used. If in subsequent period, credit quality of

the instrument improves such that there is no
longer a significant increase in credit risk since
initial recognition, then the Company reverts to
recognising impairment loss allowance based on
12-month ECL.

ECL impairment loss allowance (or reversal)
recognized during the period is recognized as
expenses in the statement of profit and loss (P&L).
This amount is

reflected under the head ''Impairment losses on
financial instrument and contract assets'' in the
P&L.

Write-off

The gross carrying amount of a financial asset is
written off when the Company has no reasonable
expectations of recovering a financial asset in its
entirety or a portion thereof. 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.

Reclassification of financial assets

The Company determines classification of financial
assets and liabilities on initial recognition. After
initial recognition, no reclassification is made
for financial assets which are equity instruments
and financial liabilities. For financial assets which
are debt instruments, a reclassification is made
only if there is a change in the business model
for managing those assets. Changes to the
business model are expected to be infrequent.
A change in the business model occurs when
the Company either begins or ceases to perform
an activity that is significant to its operations.
If the Company reclassifies financial assets, it
applies the reclassification prospectively from the
reclassification date which is the first day of the
immediately next reporting period following the
change in business model.

Financial liabilities:

Initial recognition and measurement

All financial liabilities are recognised initially at
fair value and, in the case of financial liabilities
at amortized cost, net of directly attributable
transaction costs.

The company''s financial liabilities include trade
and other payables, borrowings including bank
overdrafts, redemption liability and financial
guarantee contracts.

Subsequent measurement

All financial liabilities except derivatives are
subsequently measured at amortised cost using
the effective interest rate method or at Fair Value
through profit and loss.

The effective interest method is a method of
calculating the amortised cost of a financial liability
and of allocating interest expense over the relevant
period. The effective interest rate is the rate that
exactly discounts estimated future cash payments
(including all fees and points paid or received that
form an integral part of the effective interest rate,
transaction costs and other premiums or discounts)
through the expected life of the financial liability,
or (where appropriate) a shorter period, to the net
carrying amount on initial recognition.

Financial liabilities designated upon initial
recognition at fair value through profit or loss are
designated as such at the initial date of recognition,
and only if the criteria in Ind AS 109 are satisfied.
For liabilities designated as FVTPL, fair value gains/
losses attributable to changes in own credit risk
are recognized in OCI. These gains/ losses are
not subsequently transferred to P&L. However,
the Company may transfer the cumulative gain or
loss within equity. All other changes in fair value
of such liability are recognised in the statement
of profit and loss.

Derecognition

A financial liability is derecognised when the
obligation under the liability is discharged or
cancelled or expires. When an existing financial
liability is replaced by another from the same
lender on substantially different terms, or the
terms of an existing liability are substantially
modified, such an exchange or modification is
treated as the derecognition of the original liability
and the recognition of a new liability. The difference
in the respective carrying amounts is recognised
in the statement of profit or loss.

Offsetting of financial instruments:

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

Derivative Financial Instruments:

The Company uses derivative financial instruments,
such as forward currency contracts, interest rate
swaps and forward commodity contracts, to hedge
its foreign currency risks, interest rate risks and
commodity price risks, respectively. Embedded
derivatives are separated from the host contract
and accounted for separately if the host contract
is not a financial asset and certain criteria are met.
Derivatives are initially recognised at fair value on
the date on which a derivative contract is entered
into and are subsequently re-measured at fair
value. Derivatives are carried as financial assets
when the fair value is positive and as financial
liabilities when the fair value is negative.

The purchase contracts that meet the definition of
a derivative under Ind AS 109 are recognised in the
statement of profit and loss. Commodity contracts
that are entered into and continue to be held for
the purpose of the receipt or delivery of a non¬
financial item in accordance with the company''s
expected purchase, sale or usage requirements
are held at cost.

Any gains or losses arising from changes in the
fair value of derivatives are taken directly to profit
or loss, except for the effective portion of cash
flow hedges, which is recognised in OCI and later
reclassified to profit or loss when the hedge item
affects profit or loss or treated as basis adjustment
if a hedged forecast transaction subsequently
results in the recognition of a non-financial asset
or non-financial liability.

For the purpose of hedge accounting, hedges are
classified as:

• Fair value hedges when hedging the exposure
to changes in the fair value of a recognised
asset or liability or an unrecognised firm
commitment

• Cash flow hedges when hedging the exposure

to variability in cash flows that is either
attributable to a particular risk associated
with a recognised asset or liability or a
highly probable forecast transaction or the
foreign currency risk in an unrecognised firm
commitment

• Hedges of a net investment in a foreign

operation

At the inception of a hedge relationship, the
Company formally designates and documents the
hedge relationship to which the Company wishes to

apply hedge accounting and the risk management
objective and strategy for undertaking the hedge.

The documentation includes identification of the
hedging instrument, the hedged item, the nature
of the risk being hedged, and how the Company
will assess whether the hedging relationship meets
the hedge effectiveness requirements (including
the analysis of sources of hedge ineffectiveness
and how the hedge ratio is determined). A
hedging relationship qualifies for hedge accounting
if it meets all of the following effectiveness
requirements:

• There is an economic relationship'' between
the hedged item and the hedging instrument.

• The effect of credit risk does not ''dominate
the value changes'' that result from that
economic relationship.

• The hedge ratio of the hedging relationship is
the same as that resulting from the quantity
of the hedged item that the Company actually
hedges and the quantity of the hedging
instrument that the Company actually uses
to hedge that quantity of hedged item.

Hedges that meet the strict criteria for hedge
accounting are accounted for, as described below:

Fair value hedges

The change in the fair value of a hedging
instrument is recognised in the statement of profit
and loss as finance costs. The change in the fair
value of the hedged item attributable to the risk
hedged is recorded as part of the carrying value
of the hedged item and is also recognised in the
statement of profit and loss as finance costs.

For fair value hedges relating to items carried at
amortised cost, any adjustment to carrying value is
amortised through profit or loss over the remaining
term of the hedge using the EIR method. EIR
amortisation may begin as soon as an adjustment
exists and no later than when the hedged item
ceases to be adjusted for changes in its fair value
attributable to the risk being hedged.

If the hedged item is derecognised, the
unamortised fair value is recognised immediately
in profit or loss.

When an unrecognised firm commitment is
designated as a hedged item, the subsequent
cumulative change in the fair value of the firm

commitment attributable to the hedged risk
is recognised as an asset or liability with a
corresponding gain or loss recognised in profit
or loss.

Cash flow hedges

The effective portion of the gain or loss on the
hedging instrument is recognised in OCI in the
Effective portion of cash flow hedges, while any
ineffective portion is recognised immediately in the
statement of profit and loss. The Effective portion
of cash flow hedges is adjusted to the lower of the
cumulative gain or loss on the hedging instrument
and the cumulative change in fair value of the
hedged item.

The Company uses forward currency contracts as
hedges of its exposure to foreign currency risk
in forecast transactions and firm commitments,
as well as forward commodity contracts for its
exposure to volatility in the commodity prices.
The ineffective portion relating to foreign currency
contracts is recognised in finance costs and the
ineffective portion relating to commodity contracts
is recognised in other income or expenses.

The Company designates only the spot element of
a forward contract as a hedging instrument. The
forward element is recognised in OCI.

The amounts accumulated in OCI are accounted
for, depending on the nature of the underlying
hedged transaction. If the hedged transaction
subsequently results in the recognition of a
non-financial item, the amount accumulated in
equity is removed from the separate component
of equity and included in the initial cost or other
carrying amount of the hedged asset or liability.
This is not a reclassification adjustment and will
not be recognised in OCI for the period. This also
applies where the hedged forecast transaction
of a non-financial asset or non-financial liability
subsequently becomes a firm commitment for
which fair value hedge accounting is applied.

For any other cash flow hedges, the amount
accumulated in OCI is reclassified to profit or loss
as reclassification adjustment in the same period
or periods during which the hedged cash flows
affect profit or loss.

If cash flow hedge accounting is discontinued, the
amount that has been accumulated in OCI must
remain in accumulated OCI if the hedged future
cash flows are still expected to occur. Otherwise,

the amount will be immediately reclassified to
profit or loss as a reclassification adjustment. After
discontinuation, once the hedged cash flow occurs,
any amount remaining in accumulated OCI must
be accounted for depending on the nature of the
underlying transaction as described above.

Hedges of a net investment

Hedges of a net investment in a foreign operation,
including a hedge of a monetary item that is
accounted for as part of the net investment, are
accounted for in a way similar to cash flow hedges.
Gains or losses on the hedging instrument relating
to the effective portion of the hedge are recognised
as OCI while any gains or losses relating to the
ineffective portion are recognised in the statement
of profit or loss. On disposal of the foreign
operation, the cumulative value of any such gains
or losses recorded in equity is reclassified to the
statement of profit and loss (as a reclassification
adjustment).

Financial guarantee contracts:

Financial guarantee contracts issued by the
Company are those contracts that require a
payment to be made to reimburse the holder
for a loss it incurs because the specified debtor
fails to make a payment when due in accordance
with the terms of a debt instrument. Financial
guarantee contracts are recognised initially as a
liability at fair value, adjusted for transaction costs
that are directly attributable to the issuance of the
guarantee. Subsequently, the liability is measured
at the higher of the amount of loss allowance
determined as per impairment requirements of Ind
AS 109 and the amount recognised less cumulative
amortisation.

i. Leases

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

Company as a lessee

The Company applies a single recognition and
measurement approach for all leases, except for
short-term leases and leases of low-value assets.

a) Right-of-use assets

The Company recognises right-of-use assets at the

commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use
assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted
for any remeasurement of lease liabilities. The
cost of right-of-use assets includes the amount
of lease liabilities recognised, initial direct costs
incurred, and lease payments made at or before
the commencement date less any lease incentives
received. Right-of-use assets are depreciated on
a straight line basis over the shorter of the lease
term and the estimated useful lives of the assets,

as follows-

If ownership of the leased asset transfers to the
Company at the end of the lease term or the
cost reflects the exercise of a purchase option,
depreciation is calculated using the estimated
useful life of the asset.

The right-of-use assets are also subject to
impairment. Refer to the accounting policies in
section (f) Impairment of non-financial assets.

b) Lease liabilities

At the commencement date of the lease, the
Company recognises lease liabilities measured at
the present value of lease payments to be made
over the lease term. The lease payments include
fixed payments (including in substance fixed
payments) less any lease incentives receivable,
variable lease payments that depend on an index
or a rate, and amounts expected to be paid under
residual value guarantees. The lease payments
also include the exercise price of a purchase option
reasonably certain to be exercised by the Company
and payments of penalties for terminating the
lease, if the lease term reflects the Company
exercising the option to terminate. Variable lease
payments that do not depend on an index or a
rate are recognised as expenses (unless they are
incurred to produce inventories) in the period in
which the event or condition that triggers the
payment occurs.

In calculating the present value of lease payments,
the Company uses its incremental borrowing rate
at the lease commencement date because the
interest rate implicit in the lease is not readily
determinable. After the commencement date, the

amount of lease liabilities is increased to reflect
the accretion of interest and reduced for the lease
payments made. In addition, the carrying amount
of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change
in the lease payments (e.g., changes to future
payments resulting from a change in an index or
rate used to determine such lease payments) or a
change in the assessment of an option to purchase
the underlying asset. (Refer Note 29)

c) Short-term leases and leases of low-
value assets

The Company applies the short-term lease
recognition exemption to its short-term leases
of Buildings and Machinery and Equipment (i.e.,
those leases that have a lease term of 12 months
or less from the commencement date and do not
contain a purchase option). It also applies the
lease of low-value assets recognition exemption to
leases of office equipment that are considered to
be low value. Lease payments on short-term leases
and leases of low-value assets are recognised as
expense on a straight-line basis over the lease
term.

j. Retirement and other employee benefits

a) Short-term employment benefits

Liabilities for wages and salaries, including non¬
monetary benefits that are expected to be settled
wholly within 12 months after the end of the
period in which the employees render the related
service are recognised in respect of employee''s
services up to the end of the reporting period and
are measured at the amounts expected to be paid
when the liabilities are settled.

b) Compensated absences

Accumulated leave, which is expected to be utilized
within the next 12 months, is treated as short-term
employee benefit. The Company measures the
expected cost of such absences as the additional
amount that it expects to pay as a result of the
unused entitlement that has accumulated at the
reporting date.

The Company treats accumulated leave expected
to be carried forward beyond twelve months, as
non-current employee benefit for measurement
purposes. Such non-current compensated absences
are provided for based on the actuarial valuation
using the projected unit credit method at the year-

end. Remeasurement actuarial gains/losses are
immediately taken to the statement of profit and
loss and are not deferred.

c) Termination benefits

Termination benefits are expensed at the earlier
of when the Company can no longer withdraw the
offer of those benefits and when the Company
recognises costs for a restructuring. If benefits are
not expected to be settled wholly within 12 months
of the reporting date, then they are discounted.
The liabilities are presented as provision for
employee benefits in the balance sheet.

d) Post-employment obligations

The Company operates the following post¬
employment schemes:

i. Gratuity obligations

Gratuity liability under the Payment of Gratuity
Act, 1972 is a defined benefit obligation. The
Plan provides payment to vested employees at
retirement, death or termination of employment,
of an amount based on the respective employee''s
salary and the tenure of employment. The
Company provides the gratuity benefit through
annual contribution to a fund managed by the Life
Insurance Corporation of India (LIC). Under this
scheme the settlement obligation remains with the
Company although the LIC administers the scheme
and determines the contribution premium required
to be paid by the Company. The cost of providing
benefits under this plan is determined on the basis
of actuarial valuation at each year-end using the
projected unit credit method.

In addition to the above, the Company recognises
its liability in respect of gratuity for employees
(where customer reimburses gratuity) and its
right of

reimbursement as an asset. Employee benefits
expense in respect of gratuity to employees and
reimbursement right is presented in accordance
with Ind AS - 19.

Remeasurement, comprising of actuarial gains
and losses, the effect of the asset ceiling,
excluding amounts included in net interest on
the net defined benefit liability and the return
on plan assets (excluding amounts included in
net interest on the net defined benefit liability),
are recognised immediately in the balance sheet
with a corresponding debit or credit to retained

earnings through OCI in the period in which they
occur. Remeasurement is not reclassified to profit
or loss in subsequent periods.

Past service cost is recognised in profit or loss
on the earlier of the date of the plan amendment
or curtailment, and the date that the Company
recognises related restructuring costs.

Net interest is calculated by applying the discount
rate to the net defined benefit liability or asset. The
Company recognises the following changes in the
net defined benefit obligation as an expense in the
statement of profit and loss:

• Service costs comprising current Service
costs, past-Service costs and

• Net interest expense or income.
ii. Retirement benefits

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 expenditure, when an employee renders the
related service. If the contribution payable to the
scheme for service received before the balance
sheet date exceeds the contribution already paid,
the deficit payable to the scheme is recognized as
a liability after deducting the contribution already
paid. If the contribution already paid exceeds the
contribution due for services received before the
balance sheet date, then excess is recognized as
an asset to the extent that the pre-payment will
lead to, for example, a reduction in future payment
or a cash refund.

k. Taxes

Current tax

Income tax expense comprises current tax expense
and deferred tax charge or credit during the
year. Current income tax assets and liabilities are
measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax
rates and tax laws used to compute the amount are
those that are enacted or substantively enacted,
at the reporting date in the countries where the
Company operates and generates taxable income.
The Company has determined that interest and
penalties related to income taxes, including
uncertain tax treatments, do not meet the
definition of income taxes, and therefore accounted

for them under Ind AS 37 Provisions, Contingent
Liabilities and Contingent Assets.

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

The Company shall reflect the effect of uncertainty
for each uncertain tax treatment by using either
most likely method or expected value method,
depending on which method predicts better
resolution of the treatment.

Current tax assets and 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.

Deferred tax

Deferred tax is recognised using the liability method
on temporary differences between the tax bases
of assets and liabilities and their carrying amounts
for financial reporting purposes at the reporting
date. Deferred tax liabilities are recognised for all
taxable temporary differences, except:

• When the deferred tax liability arises from
the initial recognition of goodwill or an asset
or liability in a transaction that is not a
business combination and, at the time of the
transaction, affects neither the accounting
profit nor taxable profit or loss.

• In respect of taxable temporary differences
associated with investments in subsidiaries
when the timing of the reversal of the
temporary differences can be controlled and
it is probable that the temporary differences
will not reverse in the foreseeable future
and at the time of the transaction, it does
not give rise to equal taxable and deductible
temporary differences.

Deferred tax assets are generally recognised for
all deductible temporary differences to the extent
that it is probable that taxable profits will be
available against which those deductible temporary

differences can be utilised. Such deferred tax
assets and liabilities are not recognised if the
temporary difference arises from the initial
recognition (other than in a business combination)
of assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting
profit and at the time of the transaction, it does
not give rise to equal taxable and deductible
temporary differences. In respect of deductible
temporary differences associated with investments
in subsidiaries, deferred tax assets shall be
recognised to the extent that, and only to the
extent that, it is probable that the temporary
difference will reverse in the foreseeable future
and taxable profit will be available against which
the temporary difference can be utilised.

Deferred tax asset is recognised for the carry
forward of unused tax losses and unused tax
credits to the extent that it is probable that future
taxable profit will be available against which the
unused tax losses and unused tax credits can be
utilised.

Minimum alternate tax (MAT) paid in a year is
charged to the statement of profit and loss as
current tax. The Company recognizes MAT credit
available as an asset only to the extent that there
is convincing evidence that the Company will pay
normal income tax during the specified period, i.e.,
the period for which MAT credit is allowed to be
carried forward. In the year in which the Company
recognizes MAT credit as a deferred tax asset. The
Company reviews the MAT credit entitlement asset
at each reporting date and writes down the asset
to the extent that it is no longer probable that it
will pay normal tax during the specified period.

The carrying amount of deferred tax assets is
reviewed at each reporting date and written off
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 app

---

Mar 31, 2024

1. Corporate information

The Standalone Financial Statements comprise financial statements of Updater Services Limited (formerly known as Updater Services Private Limited) (‘the Company'', ‘UDS'') for the year ended March 31, 2024. The Company is domiciled and incorporated as a public limited company in India under the provisions of the Companies Act, 2013 with its equity shares are listed on National Stock Exchange and Bombay Stock Exchange in India. The Company''s registered office is at First floor, 42, Gandhi Mandapam Road, Kotturpuram, Chennai 600 085. The Company is engaged in providing facility management services like integrated facility management services to various industries such as information technology enabled services, manufacturing, hospitality and other industries and catering services, which includes industrial catering, and services at food courts.

Facility management services includes housekeeping, janitorial, garden management, pest control, waste management, vendor management, cleaning and mail room services, mechanical and electrical services, water management, hygiene management, plumbing, energy/ safety audit, design erection, installation, testing and commissioning and catering solutions.

The Company has converted itself from Private Limited to Public Limited, pursuant to a special resolution passed in the extraordinary general meeting of the shareholders of the Company held on March 4, 2023 and consequently the name of the Company has changed to “Updater Services Limited” pursuant to a fresh certificate of incorporation by the Registrar of Companies on March 24, 2022.

The Standalone Financial Statements were approved for issue in accordance with a resolution of the Board of directors on May 20, 2024.

Details of the Company''s material accounting policies are included in Note 2.2 to the Standalone financial statements.

2.1 Basis of preparation

A. Statement of compliance

The Standalone Financial Statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) as per Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) notified under section 133 of the Companies Act 2013 (“Act”) and other relevant provisions of the Act and

presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule III), as applicable to the Standalone Financial Statements.

B. Basis of measurement

The Standalone financial statements have been prepared on an accrual basis under the historical cost convention except for the following:

a) Certain financial assets and liabilities measured at fair value as explained in the accounting policies;

b) Net defined benefit (plan asset)/ liability measured at fair value of plan assets less the present value of the defined benefit obligation.

C. Functional and presentation currency

The Company''s Standalone financial statements are presented in Indian Rupees (INR), which is also the Company''s functional currency. All values are rounded to nearest millions except when otherwise stated.

D. Use of judgements and estimates

In preparing these Standalone financial statements, management has made judgements and estimates that affect the application of the Company''s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

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

a) Judgements

Information about judgements made in applying accounting policies that have the most significant effects on the amounts recognised in the financial statements is included in the following notes:

¦ Note 35 - Determining the lease term of contracts with renewal and termination options - Company as Lessee

¦ Note 41 and Note 42 - Fair value measurement of financial instruments

b) Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties at the reporting date that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is included in the following notes:

¦ Notes 2.2(g) and 18: revenue recognition: estimate of expected price concessions;

¦ Note 2.2(k) and Note 28: measurement of defined benefit obligations: key actuarial assumptions;

¦ Note 2.2(i) and Note 26E: recognition of deferred tax assets: availability of future taxable profit against which deductible temporary differences and tax losses carried forward can be utilised;

¦ Note 2.2(e): impairment test of intangible assets and investment in subsidiaries: key assumptions underlying recoverable amounts

¦ Notes 32: recognition and measurement of provisions and contingencies: key assumptions about the likelihood and magnitude of an outflow of resources;

¦ Note 35 - Impairment of financial assets

¦ Note 30 - determination of fair value of employee stock option

E. 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 control framework with respect to the measurement of fair values. This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the chief financial officer. The Company measures financial instruments, such as, derivatives at fair value at each balance sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

¦ In the principal market for the asset or liability, or

¦ In the absence of a principal market, in the most advantageous market for the asset or liability

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their best economic interest. The principle or the most advantageous market must be accessible by the Company.

A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

¦ Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

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

¦ Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

I nvolvement of external valuers is decided upon annually by the Company. At each reporting date, the Company analyses the movements in the values of assets and liabilities which are required to be remeasured or re-assessed as per the accounting policies. For this analysis, the Company verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents. Other fair value related disclosures are given in the relevant notes.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above. Also refer Note 36.

F. Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is:

¦ Expected to be realised 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 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

The Company classifies all other liabilities as non-current.

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

2.2 Material accounting policies

a. Foreign currencies Transactions and Balances

Transactions in foreign currencies are initially recorded by the Company at its functional currency spot rates at the date the transaction first qualifies for recognition. However, for practical reasons, the Company uses average rate if the average approximates the actual rate at the date of the transaction.

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

Exchange differences arising on settlement or translation of monetary items are recognised in profit or loss with the exception of the following:

¦ Exchange differences arising on monetary items that forms part of a reporting entity''s net investment in a foreign operation are recognised in profit or loss in the separate financial statements of the reporting entity or the individual financial statements of the foreign operation, as appropriate.

¦ Exchange differences arising on monetary items that are designated as part of the hedge of the Company''s net investment of a foreign operation. These are recognised in OCI until the net investment is disposed of, at which time, the cumulative amount is reclassified to profit or loss.

¦ Tax charges and credits attributable to exchange differences on those monetary items are also recorded in OCI.

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

I n determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a nonmonetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which the Company initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, the Company determines the transaction date for each payment or receipt of advance consideration.

b. Property, plant and equipment

The cost of an item of property, plant and equipment shall be recognised as an asset if, and only if it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Cost comprises the purchase price and any 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.

The cost of property, plant and equipment not ready for intended use before such date is disclosed under capital work-in- progress.

I f 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 and depreciated separately based on their specific useful lives.

All other expenses on existing property, plant and equipment, including day-to-day repair and maintenance expenditure, are charged to the statement of profit and loss for the period during which such expenses are incurred when recognition criteria are not met.

An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Gains or losses arising from de-recognition of property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit and loss when the asset is derecognised.

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliably.

The Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as of April 1, 2017 (the transition date) measured as per the previous GAAP and use such carrying value as its deemed cost as of the transition date.

Depreciation

The Company, based on technical assessment made by experts and management estimates, depreciates certain items of property, plant and equipment over estimated useful lives which are different from the useful life prescribed in Schedule II to the Companies Act, 2013 based on the pattern of consumption of such assets and having regard to the nature of assets in this industry. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.

Depreciation is calculated on a straight line basis that closely reflects the expected pattern of consumption of future economic benefits embodied in the respective assets over the estimated useful lives of the assets.

Asset Classification	Estimated Useful Life (Years)	Schedule II Life (ye ars)
Plant and machinery	5 to 15	15
Furniture and fittings	10	10
Office equipment	5	5
Vehicles	8	8
Computer and accessories	3	5
Building	60	30
Leasehold improvements#	1-5 years	NA

# Leasehold Improvements are depreciated over the leasehold period or useful life estimated by management whichever is lesser.

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

Depreciation on additions/(disposals) is provided on a pro-rata basis i.e. from/ (upto) the date on which asset is ready for use/ (disposed off).

The Company has charged depreciation on property, plant & equipment (PPE) based on Written Down Value (“WDV”) method upto December 31, 2023. With effect from January 1, 2024, the Company has changed its method of depreciation from WDV to Straight Line Method (“SLM”) based upon the technical assessment of expected pattern of consumption of the future economic benefits embodied in the assets.

c. Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.

Expenditure on research activities is recognised in profit or loss as incurred. Development expenditure is capitalised as part of the cost of the resulting intangible asset only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Company intends to and has sufficient resources to complete development and to use or sell the asset. Otherwise, it is recognised in profit or loss as incurred.

Subsequent to initial recognition, development expenditure is measured at cost less accumulated amortisation and any accumulated impairment losses.

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates and the cost of the asset can be measured reliably. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption

of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss unless such expenditure forms part of carrying value of another asset.

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

The Company has elected to continue with the carrying value of intangible assets recognised as of April 1, 2017 (the transition date) measured as per the previous GAAP and use such carrying value as its deemed cost as of the transition date.

An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising upon derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss. when the asset is derecognised.

Asset Classification	Useful Life (Yea rs)	Amortisation method	Internally generated or acquired
Software	3 to 10 years	Amortised on a straight-line basis over the life	Acquired

Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

d. Impairment of non-financial assets

The Company assesses, at each reporting date, whether there is an indication that a non-financial asset (other than inventories, contract assets and deferred tax assets) may be impaired. If any indication exists, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or cash-generating units (CGU) fair value less cost of disposal and its value in use. The 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 group of assets. 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 fair value less cost of disposal, 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 five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year. To estimate cash flow projections beyond periods covered by the most recent budgets/forecasts, the Company extrapolates cash flow projections in the budget using a steady or declining growth rate for subsequent years, unless an increasing rate can be justified. In any case, this growth rate does not exceed the long-term average growth rate for the services, industries, or country or countries in which the entity operates, or for the market in which the asset is used.

Impairment losses including impairment on inventories, are recognised in the statement of profit and loss. After impairment, depreciation / amortisation is provided on the revised carrying amount of the asset over its remaining useful life.

An assessment for assets excluding goodwill is made at each reporting date as to whether there is any indication that previously recognised 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 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 / amortisation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the statement of profit and loss.

e. Revenue from contracts with customers

The Company derives revenue primarily from Integrated Facility Management services (‘IFM''). Revenues from contracts with customers are considered for recognition and measurement when the contract has been approved by the parties to the contract, the parties to contract are committed to perform their respective obligations under the contract, and the contract is legally enforceable.

Revenue from contracts with customers is recognised when control of the goods or services (“performance obligations”) are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. Revenue is measured at the Transaction price of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or 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 credit risks. Revenue is recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. When there is uncertainty as to collectability, revenue recognition is postponed until such uncertainty is resolved.

The contract with customers for IFM services generally contains a single performance obligation. The Company''s contracts may include variable consideration including discounts and penalties which are reduced from revenues and recognised based on an estimate of the expected pay out relating to these considerations (expected price concessions). Revenue is adjusted for expected price concessions based on the management estimates.

Goods and Service Tax (GST) is not received by the Company or Company on its own account. Rather, it is the tax collected on value added on the services and commodity by the seller on behalf of the government. Accordingly, it is excluded from revenue.

If contractual unconditional right to consideration is dependent on completion of contractual obligations including right to receive the reimbursement of gratuity cost from the customers, then such assets are classified as contract assets.

The specific recognition criteria described below must also be met before revenue is recognised.

Income from facility management services

Revenues from facility management service contracts are recognised over a period of time in accordance with the requirements of Ind-AS 115, “Revenue from Contracts with Customers” as and when the Company satisfies performance obligations by rendering the promised services to its customers, and are net of discounts. The performance obligations in the contracts are fulfilled based on customer acceptances for delivery of work/ attendance of resources, where applicable, or as per terms of arrangements entered with the customers.

Contract balances Contract assets

A contract asset is the right to consideration in exchange for services transferred to the customer. If the Company renders 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 service period and acceptance by the customer (generally by confirming the attendance records), the amount recognised as contract assets is reclassified to trade receivables.

Contract assets are subject to impairment assessment. Refer to accounting policies on impairment of financial assets in section “Financial instruments - initial recognition and subsequent measurement”. Refer section (i)

Trade receivables

A receivable represents the Company''s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).

Contract liabilities

A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a

contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract.

f. Recognition of dividend income and interest income

Dividend income on investments is recognised when the unconditional right to receive dividend is established. Interest income is recognised using the effective interest rate method.

¦ the gross carrying amount of the financial asset; or

¦ the amortised cost of the financial liability.

I n 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.

g. Investment in subsidiaries

I nvestments in subsidiaries are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of investment is assessed and written down immediately to its recoverable amount.

h. Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial assets

Initial recognition and measurement

Trade receivables 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 (unless it is a trade receivable without a significant financing component) are recognised initially at fair value plus or minus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that

are attributable to the acquisition of the financial asset. A trade receivable without a significant financing component is initially measured at the transaction price.

Effective interest method

The effective interest method (EIR) is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts future cash receipts or payments through the expected life of the financial instrument, or where appropriate, a shorter period. 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.

Subsequent measurement

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

¦ Financial assets at amortised cost

¦ Financial assets at fair value through other comprehensive income (FVTOCI)

¦ Financial assets, derivatives and equity instruments at fair value through profit or loss (FVTPL)

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

Financial assets at amortised cost

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

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

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

This category is the most relevant to the Company. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. This category generally applies to trade and other receivables. For more information on receivables, refer to Note 10 (Trade Receivables).

Financial asset at FVTOCI

A ‘financial asset'' is classified as at the FVTOCI if both of the following criteria are met:

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

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

Financial instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognised in the other comprehensive income (OCI). However, the Company recognises interest income, impairment losses & reversals and foreign exchange gain or loss in the P&L. On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to P&L. Interest earned whilst FVTOCI debt instrument is reported as interest income using the EIR method. The Company does not have any debt instrument at FVTOCI.

Financial asset at FVTPL

FVTPL is a residual category for financial instruments. Any financial instrument, which does not meet the criteria for categorisation as at amortised cost or as FVTOCI, is classified as at FVTPL.

I n addition, the Company may elect to designate a financial instrument, which otherwise meets amortised cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch''). The Company has not designated any financial instrument as at FVTPL.

Financial instruments included within the FVTPL category are measured at fair value with all changes recognised in the statement of profit and loss. Contingent consideration classified as financial liability recognised by an acquirer in a business combination to which Ind AS103 applies are classified as at FVTPL. The Company does not have any debt instrument at FVTPL.

Financial assets - Business model assessment

The Company makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

¦ the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management''s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realising cash flows through the sale of the assets;

¦ how the performance of the portfolio is evaluated and reported to the Company''s management;

¦ the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;

¦ how managers of the business are compensated - e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and

¦ the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with the Company''s continuing recognition of the assets.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

Financial assets - Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, ‘principal'' is defined as the fair value of the financial asset on initial recognition. ‘Interest'' is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.

I n assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Company considers:

¦ contingent events that would change the amount or timing of cash flows;

¦ terms that may adjust the contractual coupon rate, including variable-rate features;

¦ prepayment and extension features; and

¦ terms that limit the Company''s claim to cash flows from specified assets (e.g. non-recourse features).

A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include reasonable compensation for early termination of the contract. Additionally, for a financial asset acquired at a discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include reasonable compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognised (i.e. removed from the Company''s Standalone balance sheet) when:

¦ The rights to receive cash flows from the asset have expired, or

¦ The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through'' arrangement; and either (a) the Company has transferred substantially all the risks and rewards of

the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company''s continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

Impairment of financial assets

The Company performs impairment testing of its investment in subsidiaries when any impairment indicator exists, based on internal or external sources of information. The recoverable amount of the investment in subsidiary, which is based on the higher of the value in use or fair value less costs to sell has been derived using a discounted cash flow model. These models use several key assumptions, concerning estimates of future cash flow forecasts, near and long-term growth rate and the discount rate.

The Company applies expected credit loss model for recognising impairment loss on financial assets measured at amortised cost. The Company measures the loss allowance for trade receivables at an amount equal to lifetime expected credit loss (ECL). The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix under simplified approach. The provision matrix takes into account historical credit loss experience and adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due.

The Company follows ‘simplified approach'' for recognition of impairment loss allowance on trade receivables. The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition. Provision for ECL is recognised for financial assets measured at amortised cost and fair value through other comprehensive income. It is the Company''s policy to measure ECLs on financial assets on a 12-month basis. However, when there has been a significant increase in credit risk since origination, the allowance will be based on the lifetime ECL.

For recognition of impairment loss on other financial assets, the Company determines whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If in subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the Company reverts to recognising impairment loss allowance based on 12-month ECL.

ECL impairment loss allowance (or reversal) recognised during the period is recognised as expenses in the statement of profit and loss (P&L). This amount is reflected under the head ‘Impairment losses on financial instrument and contract assets'' in the P&L.

Write-off

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. 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.

Reclassification of financial assets

The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. A change in the business model occurs when the Company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model.

Financial liabilities

Initial recognition and measurement

All financial liabilities are recognised initially at fair value and, in the case of financial liabilities at amortised cost, net of directly attributable transaction costs.

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

Subsequent measurement

All financial liabilities except derivatives are subsequently measured at amortised cost using the effective interest rate method or at Fair Value through profit and loss.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition,

and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognised in OCI. These gains/ losses are not subsequently transferred to P&L. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit and loss.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.

Offsetting of financial instruments

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

Derivative Financial Instruments

The Company uses derivative financial instruments, such as forward currency contracts, interest rate swaps and forward commodity contracts, to hedge its foreign currency risks, interest rate risks and commodity price risks, respectively. Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met. Derivatives are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

The purchase contracts that meet the definition of a derivative under Ind AS 109 are recognised in the statement of profit and loss. Commodity contracts that are entered into and continue to be held for the purpose of the receipt or delivery of a non-financial item in accordance with the Company''s expected purchase, sale or usage requirements are held at cost.

Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss, except for the effective portion of cash flow hedges, which is recognised in OCI and later reclassified to profit or loss when the hedge item affects profit or loss or treated as basis adjustment if a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability.

For the purpose of hedge accounting, hedges are classified as:

¦ Fair value hedges when hedging the exposure to changes in the fair value of a recognised asset or liability or an unrecognised firm commitment

¦ Cash flow hedges when hedging the exposure to variability in cash flows that is either attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction or the foreign currency risk in an unrecognised

firm commitment

¦ Hedges of a net investment in a foreign operation

At the inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which the Company wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge.

The documentation includes identification of the hedging instrument, the hedged item, the nature of the risk being hedged, and how the Company will assess whether the hedging relationship meets the hedge effectiveness requirements (including the analysis of sources of hedge ineffectiveness and how the hedge ratio is determined). A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements:

¦ There is an economic relationship'' between the hedged item and the hedging instrument.

¦ The effect of credit risk does not ‘dominate the value changes'' that result from that economic relationship.

¦ The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Company actually hedges and the quantity of the hedging instrument that the Company actually uses to hedge that quantity of hedged item.

Hedges that meet the strict criteria for hedge accounting are accounted for, as described below:

(1) Fair value hedges

The change in the fair value of a hedging instrument is recognised in the statement of profit and loss as finance costs. The change in the fair value of the hedged item attributable to the risk hedged is recorded as part of the carrying value of the hedged item and is also recognised in the statement of profit and loss as finance costs.

For fair value hedges relating to items carried at amortised cost, any adjustment to carrying value is amortised through profit or loss over the remaining term of the hedge using the EIR method. EIR amortisation may begin as soon as an adjustment exists and no later than when the hedged item ceases to be adjusted for changes in its fair value attributable to the risk being hedged.

If the hedged item is derecognised, the unamortised fair value is recognised immediately in profit or loss.

When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value of the firm commitment attributable to the hedged risk is recognised as an asset or liability with a corresponding gain or loss recognised in profit or loss.

Cash flow hedges

The effective portion of the gain or loss on the hedging instrument is recognised in OCI in the Effective portion of cash flow hedges, while any ineffective portion is recognised immediately in the statement of profit and loss. The Effective portion of cash flow hedges is adjusted to the lower of the cumulative gain or loss on the hedging instrument and the cumulative change in fair value of the hedged item.

The Company uses forward currency contracts as hedges of its exposure to foreign currency risk in forecast transactions and firm commitments, as well as forward commodity contracts for its exposure to volatility in the commodity prices. The ineffective portion relating to foreign currency contracts is recognised in finance costs and the ineffective portion relating to commodity contracts is recognised in other income or expenses.

The Company designates only the spot element of a forward contract as a hedging instrument. The forward element is recognised in OCI.

The amounts accumulated in OCI are accounted for, depending on the nature of the underlying hedged transaction. If the hedged transaction subsequently results in the recognition of a non-financial item, the amount accumulated in equity is removed from the separate component of equity and included in the initial cost or other carrying amount of the hedged asset or liability. This is not a reclassification adjustment and will not be recognised in OCI for the period. This also applies where the hedged forecast transaction of a non-financial asset or non-financial liability subsequently becomes a firm commitment for which fair value hedge accounting is applied.

For any other cash flow hedges, the amount accumulated in OCI is reclassified to profit or loss as reclassification adjustment in the same period or periods during which the hedged cash flows affect profit or loss.

I f cash flow hedge accounting is discontinued, the amount that has been accumulated in OCI must remain in accumulated OCI if the hedged future cash flows are still expected to occur. Otherwise, the amount will be immediately reclassified to profit or loss as a reclassification adjustment. After discontinuation, once the hedged cash flow occurs, any amount remaining in accumulated OCI must be accounted for depending on the nature of the underlying transaction as described above.

Hedges of a net investment

Hedges of a net investment in a foreign operation, including a hedge of a monetary item that is accounted for as part of the net investment, are accounted for in a way similar to cash flow hedges. Gains or losses on the hedging instrument relating to the effective portion of the hedge are recognised as OCI while any gains or losses relating to the ineffective portion are recognised in the statement of profit or loss. On disposal of the foreign operation, the cumulative value of any such gains or losses recorded in equity is reclassified to the statement of profit and loss (as a reclassification adjustment).

Financial guarantee contracts

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with

the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised less cumulative amortisation.

i. Leases

Th

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Mar 31, 2023

Significant Accounting Policies

2.1 Basis of Accounting and Preparation of
Standalone Financial Statements

The accompanying standalone financial statements
comprising the standalone Balance Sheet as of 31
March 2023, standalone statement of profit and loss
for the year ended 31 March 2023, standalone cash
flow statement for the year ended 31 March 2023 and
the standalone statement of changes in equity for
the year ended 31 March 2023 have been prepared
in accordance with Indian Accounting Standards,
as prescribed under section 133 of the Companies
Act, 2013 read with Companies (Indian Accounting
Standards) Rules, 2015, Companies (Indian Accounting
Standards) Amendment Rules, 2016 as amended and
presentation and disclosure requirements of Division II
of Schedule III to the Companies Act, 2013.

The standalone financial statements are presented in
Indian Rupees (Million) which is also the Company''s
functional currency. All values are rounded to nearest
Million except when otherwise stated.

The standalone financial statements have been
prepared on a historical cost basis, except for the
following:

a) Certain financial assets and liabilities measured at
fair value as explained in the accounting policies;
and

b) Defined benefit plan assets measured at fair value.

The Company has prepared the financial statements
on the basis that it will continue to operate as a going
concern.

The accounting policies adopted in the preparation of
the standalone financial statements are consistent with
those followed in the preparation of the Company''s
annual financial statements for the year ended 31 March
2023.

2.2 Summary of Significant Accounting Policies

a) Current Versus Non-current Classification

The Company presents assets and liabilities in
the balance sheet based on current/ non-current
classification. An asset is treated as current when
it is:

¦ Expected to be realised 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 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.

The Company classifies all other liabilities as
non- current.

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

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

b) Property, Plant and Equipment

Capital work-in-progress is stated at cost, net of
accumulated impairment loss, if any. Property, plant
and equipment are stated at cost less accumulated
depreciation and accumulated impairment losses,
if any. Cost comprises the purchase price and
any 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.

The cost of property, plant and equipment
not ready for intended use before such date is
disclosed under capital work-in-progress.

For depreciation purposes, the Company identifies
and determines cost of asset significant to the total
cost of the asset having useful life that is materially
different from that of the life of the principal asset
and depreciates them separately based on their
specific useful lives. Expenses on existing property,
plant and equipment, including day-to-day repair
and maintenance expenditure, are charged to the
statement of profit and loss for the period during
which such expenses are incurred when recognition
criteria are not met.

An item of property, plant and equipment and any
significant part initially recognised is derecognised
upon disposal or when no future economic
benefits are expected from its use or disposal.
Gains or losses arising from de-recognition of
property, plant and equipment are measured as
the difference between the net disposal proceeds
and the carrying amount of the asset and are
recognised in the statement of profit and loss when
the asset is derecognised.

The Company has elected to continue with the
carrying value of all of its property, plant and
equipment recognised as of 1 April 2017 (the
transition date) measured as per the previous
GAAP and use such carrying value as its deemed
cost as of the transition date.

Depreciation

The Company, based on technical assessment
made by experts and management estimates,
depreciates certain items of property, plant and

equipment over estimated useful lives which are
different from the useful life prescribed in Schedule
II to the Companies Act, 2013. The management
believes that these estimated useful lives are
realistic and reflect fair approximation of the period
over which the assets are likely to be used.

Depreciation is calculated on a written down value
(WDV) method over the estimated useful lives of
the assets as follows:
*The Company is using useful life different from the life
prescribed in Schedule II of the Companies act based on
technical estimate by expert. The Plant and Machinery are
used more than one shift and based on the nature of assets
and Industry of the Company, such assets can be used for a
period of 5 years.

Leasehold Improvements are depreciated over
the leasehold period or useful life estimated by
management whichever is lesser.

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

c) Intangible Assets

Intangible assets acquired separately are measured
on initial recognition at cost. Following initial
recognition, intangible assets are carried at cost
less accumulated amortisation and accumulated
impairment losses. Amortisation is recognised on
a straight-line basis over their estimated useful
lives. The estimated useful life and amortisation
method are reviewed at the end of each reporting
period, with the effect of any changes in estimate
being accounted for on a prospective basis. The
amortisation expense on intangible assets with
finite lives is recognised in the statement of profit
and loss unless such expenditure forms part of
carrying value of another asset.

Costs incurred towards purchase of software are
amortized using the straight-line method based

on management''s estimate of useful lives of such
software, or over the license period of the software,
whichever is shorter.

The Company has elected to continue with the
carrying value of intangible assets recognised as
of 1 April 2017 (the transition date) measured as per
the previous GAAP and use such carrying value as
its deemed cost as of the transition date.

Derecognition of Intangible Assets

An intangible asset is derecognised on disposal,
or when no future economic benefits are expected
from use or disposal. Gain or loss arising from
derecognition of an intangible asset, measured
as the difference between the net disposal
proceeds and the carrying amount of the asset,
are recognised in profit or loss when the asset is
derecognised.

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, the Company
estimates the asset''s recoverable amount. An
asset''s recoverable amount is the higher of an
asset''s or cash-generating units (CGU) fair value
less cost of disposal and its value in use. The
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. 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 fair value
less cost of disposal, 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 five years. For longer periods, a
long-term growth rate is calculated and applied
to project future cash flows after the fifth year. To
estimate cash flow projections beyond periods
covered by the most recent budgets/forecasts,
the Company extrapolates cash flow projections in
the budget using a steady or declining growth rate
for subsequent years, unless an increasing rate
can be justified. In any case, this growth rate does
not exceed the long-term average growth rate for
the services, industries, or country or countries
in which the entity operates, or for the market in
which the asset is used.

Impairment losses including impairment on
inventories, are recognised in the statement of
profit and loss. After impairment, depreciation/
amortization 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
recognised 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 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/amortisation, had
no impairment loss been recognised for the asset
in prior years. Such reversal is recognised in the
statement of profit and loss.

e) Revenue from Contracts with Customers

The Company derives revenue primarily from
Integrated Facility Management services. Further,
it also provides training and skill development
services under the workforce management.
Revenues from customer contracts are considered
for recognition and measurement when the
contract has been approved by the parties to the
contract, the parties to contract are committed
to perform their respective obligations under the
contract, and the contract is legally enforceable.

Revenue is recognised upon transfer of control
of promised products or services (“performance
obligations”) to customers in an amount that reflects
the consideration the Company has received or
expects to receive in exchange for these products
or services (“transaction price”). 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. When there is
uncertainty as to collectability, revenue recognition
is postponed until such uncertainty is resolved.

The contract with customer for Integrated Facility
Management services, generally contains a single
performance obligation and revenue is measured at
the transaction price of the consideration received
or receivable, taking into account contractually
defined terms of payment and excluding taxes
or duties collected on behalf of the government.
The Company''s contracts may include variable
consideration including discounts and penalties
which are reduced from revenues and recognised
based on an estimate of the expected pay out
relating to these considerations (expected price
concessions). Revenue is adjusted for expected
price concessions based on the management
estimates.

Revenue from Integrated Facility Management
services (Supply of Manpower) is recognised over
time since the customer simultaneously receives
and consumes the benefits. The invoicing for these
services is either based on cost plus a service fee
or fixed fee model depending upon the contract
with customer

Revenue from training and skill development
services are recognised over time based on
satisfaction of specific performance criteria included
in contractual arrangements with customers. The
Company has concluded that it is the principal in all
of its revenue arrangements since it is the primary
obligor and has pricing latitude which establishes
control before transferring products and services
to the customer. The Company''s receivables are
rights to consideration that are unconditional.

If contractual unconditional right to consideration is
dependent on completion of contractual obligations
including right to receive the reimbursement of
gratuity cost from the customers, then such assets
are classified as contract assets.

Goods and Service Tax (GST) is not received by
the Company on its own account. Rather, it is

the tax collected on value added on the services
and commodity by the seller on behalf of the
government. Accordingly, it is excluded from
revenue.

Dividend Income

Dividend income is recognised when the
unconditional right to receive the payment is
established, which is generally when shareholders
approve the dividend.

Interest Income

Interest income is recognised on a time proportion
basis taking into account the amount outstanding
and the applicable interest rate. Interest income is
included under the head “Finance income” in the
statement of profit and loss.

Contract Balances

(i) Contract Assets

A contract asset is the right to consideration
in exchange for goods or services transferred
to the customer. 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 service period and
acceptance by the customer (generally by
confirming the attendance records), the
amount recognised as contract assets is
reclassified to trade receivables.

Contract assets are subject to impairment
assessment. Refer to accounting policies on
impairment of financial assets in section (f)(iv).

(ii) Trade Receivables

A receivable represents the Company''s
right to an amount of consideration that is
unconditional (i.e., only the passage of time is
required before payment of the consideration
is due).

(iii) Contract Liabilities

A contract liability is the obligation to transfer
goods or services to a customer for which
the Company has received consideration (or
an amount of consideration is due) from the
customer. If a customer pays consideration
before the Company transfers goods or
services to the customer, a contract liability is

recognised when the payment is made, or the
payment is due (whichever is earlier). Contract
liabilities are recognised as revenue when the
Company performs under the contract.

(iv) Refund Liabilities

A refund liability is recognised for the obligation
to refund some, or all of the consideration
received (or receivable) from the customer.
The Company''s refund liabilities arise from
customers'' right of return and volume rebates.
The Company updates its estimates of refund
liabilities (and the corresponding change in the
transaction price) at the end of each reporting
period.

f) Financial Instruments

A financial instrument is any contract that gives
rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.

Initial Recognition and Measurement

Financial assets are classified, at initial recognition,
as subsequently measured at amortised cost, fair
value through other comprehensive income (OCI),
and fair value through profit or loss.

The classification of financial assets at initial
recognition depends on the financial asset''s
contractual cash flow characteristics and the
Company''s business model for managing them.
With the exception of trade receivables that do
not contain a significant financing component or
for which the Company has applied the practical
expedient, the Company initially measures a
financial asset at its fair value plus, in the case of
a financial asset not at fair value through profit
or loss, transaction costs. Trade receivables that
do not contain a significant financing component
are measured at the transaction price determined
under Ind AS 115. Refer to the accounting policies in
section (e) Revenue from contracts with customers.

I n order for a financial asset to be classified and
measured at amortised cost or fair value through
OCI, it needs to give rise to cash flows that are
‘solely payments of principal and interest (SPPI)'' on
the principal amount outstanding. This assessment
is referred to as the SPPI test and is performed
at an instrument level. Financial assets with cash
flows that are not SPPI are classified and measured
at fair value through profit or loss, irrespective of
the business model.

The Company''s business model for managing
financial assets refers to how it manages its

financial assets in order to generate cash flows. The
business model determines whether cash flows
will result from collecting contractual cash flows,
selling the financial assets, or both. Financial assets
classified and measured at amortised cost are held
within a business model with the objective to hold
financial assets in order to collect contractual cash
flows while financial assets classified and measured
at fair value through OCI are held within a business
model with the objective of both holding to collect
contractual cash flows and selling.

Purchases or sales of financial assets that require
delivery of assets within a time frame established
by regulation or convention in the marketplace
(regular way trades) are recognised on the trade
date, i.e., the date that the Company commits to
purchase or sell the asset.

Subsequent Measurement

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

¦ Financial assets at amortised cost (debt
instruments)

¦ Financial assets at fair value through other
comprehensive income (FVTOCI) with
recycling of cumulative gains and losses (debt
instruments)

¦ Financial assets designated at fair value through
OCI with no recycling of cumulative gains and
losses upon derecognition (equity instruments)

¦ Financial assets at fair value through profit
or loss.

(i) Financial Assets

Debt instruments that meet the following conditions
are subsequently measured at amortised cost:

¦ the asset is held within a business model whose
objective is to hold assets in order to collect
contractual cash fows; and

¦ the contractual terms of the instrument give
rise on specifed dates to cash fows that are
solely payments on principal and interest on the
principal amount outstanding.

Debt instruments that meet the following conditions
are subsequently measured at FVTOCI:

¦ the asset is held within a business model
whose objective is achieved both by collecting
contractual cash flows and selling financial
assets; and

¦ the contractual terms of the instrument give
rise on specified dates to cash flows that are
solely payments of principal and interest on the
principal amount outstanding.

Investment in equity instruments issued by

subsidiaries are measured at cost less impairment.

(ii) Effective Interest Method

The effective interest method is a method
of calculating the amortised cost of a debt
instrument and of allocating interest income
over the relevant period. The effective interest
rate is the rate that exactly discounts estimated
future cash receipts through the expected life
of the debt instrument, or, where appropriate,
a shorter period, to the net carrying amount
on initial recognition.

I ncome is recognised on an effective interest
basis for debt instruments other than those
financial assets classified as at FVTPL. Interest
income is recognised in profit or loss and is
included in the “Other Income” line item.

(iii) Financial Assets at Fair Value Through Profit
or Loss (FVTPL)

Debt instruments that do not meet the
amortised cost criteria or FVTOCI criteria are
measured at FVTPL. Investments in Mutual
funds are measured at FVTPL.

Financial assets at FVTPL are measured at fair
value at the end of each reporting period, with
any gains or losses arising on re-measurement
recognised in profit or loss. The net gain or loss
recognised in profit or loss incorporates any
dividend or interest earned on the financial
asset and is included in the “Other Income”
line item.

(iv) Impairment of Financial Assets

The Company applies expected credit loss
model for recognising impairment loss on
financial assets measured at amortised cost.

The Company follows ‘simplified approach'' for
recognition of impairment loss allowance on
trade receivables. The application of simplified
approach does not require the Company
to track changes in credit risk. Rather, it
recognises impairment loss allowance based
on lifetime ECLs at each reporting date, right
from its initial recognition. Provision for ECL is
recognised for financial assets measured at

amortised cost and fair value through other
comprehensive income. It is the Company''s
policy to measure ECLs on financial assets on
a 12-month basis. However, when there has
been a significant increase in credit risk since
origination, the allowance will be based on the
lifetime ECL.

For recognition of impairment loss on other
financial assets, the Company determines
whether there has been a significant increase
in the credit risk since initial recognition. If
credit risk has not increased significantly,
12-month ECL is used to provide for
impairment loss. However, if credit risk has
increased significantly, lifetime ECL is used.
If in subsequent period, credit quality of the
instrument improves such that there is no
longer a significant increase in credit risk since
initial recognition, then the Company reverts
to recognising impairment loss allowance
based on 12-month ECL.

ECL impairment loss allowance (or reversal)
recognised during the period is recognised as
expenses in the statement of profit and loss
(P&L). This amount is reflected under the head
‘other expenses'' in the P&L.

(v) De-recognition of Financial Assets

The Company derecognises a financial asset
when the contractual rights to the cash flows
from the asset expire, or when it transfers
the financial asset and substantially all the
risks and rewards of ownership of the asset
to another party. If the Company neither
transfers nor retains substantially all the risks
and rewards of ownership and continues to
control the transferred asset, the Company
recognises its retained interest in the asset and
an associated liability for amounts it may have
to pay. If the Company retains substantially
all the risks and rewards of ownership of a
transferred financial asset, the Company
continues to recognise the financial asset and
also recognises a collateralised borrowing for
the proceeds received.

On de-recognition of a financial asset in
its entirety, the difference between the
assets carrying amount and the sum of the
consideration received and receivable is
recognised in the Statement of profit and loss.

(vi) Reclassification of Financial Assets

The Company determines classification
of financial assets and liabilities on initial
recognition. After initial recognition, no
reclassification is made for financial assets
which are equity instruments and financial
liabilities. For financial assets which are
debt instruments, a reclassification is made
only if there is a change in the business
model for managing those assets. Changes
to the business model are expected to be
infrequent. A change in the business model
occurs when the Company either begins or
ceases to perform an activity that is significant
to its operations. If the Company reclassifies
financial assets, it applies the reclassification
prospectively from the reclassification date
which is the first day of the immediately next
reporting period following the change in
business model.

(vii) Financial Liabilities and Equity Instruments

1) Classification as Debt or Equity

Debt and equity instruments issued by the
Company are classified as either financial
liabilities or as equity in accordance
with the substance of the contractual
arrangements and the definitions of a
financial liability and an equity instrument.

2) Equity Instruments

An equity instrument is any contract that
evidences a residual interest in the assets
of an entity after deducting all of its
liabilities. Equity instruments issued by the
Company are recognised at the proceeds
received, net of direct issue costs.

Repurchase of the Company''s own equity
instruments is recognised and deducted
directly in equity. No gain or loss is recognised
in profit or loss on the purchase, sale, issue
or cancellation of the Company''s own equity
instruments.

(viii) Financial Liabilities

All financial liabilities are subsequently
measured at amortised cost using the effective
interest rate method or at FVTPL.

Financial liabilities at FVTPL are stated at fair
value, with any gains or losses arising on re¬
measurement recognised in profit or loss. The
net gain or loss recognised in profit or loss
incorporates any interest paid on the financial
liability and is included in the ‘Other income''
line item.

Gains or losses on financial guarantee
contracts issued by the Company that are
designated by the Company as at FVTPL are
recognised in profit or loss.

(ix) Financial Liabilities Subsequently Measured
at Amortised Cost

Financial liabilities that are not held—for-
trading and are not designated as at FVTPL
are measured at amortised cost at the end
of subsequent accounting periods. The
carrying amounts of financial liabilities that
are subsequently measured at amortised
cost are determined based on the effective
interest method. Interest expense that is not
capitalised as part of costs of an asset is
included in the “Finance Costs” line item.

(x) Effective Interest Method

The effective interest method is a method of
calculating the amortised cost of a financial
liability and of allocating interest expense over
the relevant period. The effective interest rate
is the rate that exactly discounts estimated
future cash payments (including all fees and
points paid or received that form an integral
part of the effective interest rate, transaction
costs and other premiums or discounts) through
the expected life of the financial liability, or
(where appropriate) a shorter period, to the
net carrying amount on initial recognition.

(xi) De-recognition of Financial Liabilities

The Company derecognises financial liabilities
when, and only when, the Company''s
obligations are discharged, cancelled, or
have expired, a substantial modification of
the terms of an existing financial liability
(whether or not attributable to the financial
difficulty of the debtor) is accounted for as an
extinguishment of the original financial liability
and the recognition of a new financial liability.
The difference between the carrying amount
of the financial liability derecognised and the
consideration paid and payable is recognised
in profit or loss.

The Company has applied the de-recognition
requirements. of financial liabilities
prospectively for transactions occurring on or
after 1 April 2017 (the transition date).

(xii) Derivative Financial Instruments

Initial Recognition and Subsequent
Measurement

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

The purchase contracts that meet the
definition of a derivative under Ind AS 109 are
recognised in the statement of profit and loss.
Commodity contracts that are entered into
and continue to be held for the purpose of
the receipt or delivery of a non-financial item
in accordance with the Company''s expected
purchase, sale or usage requirements are held
at cost.

Any gains or losses arising from changes in the
fair value of derivatives are taken directly to
profit or loss, except for the effective portion
of cash flow hedges, which is recognised
in OCI and later reclassified to profit or loss
when the hedge item affects profit or loss
or treated as basis adjustment if a hedged
forecast transaction subsequently results
in the recognition of a non-financial asset or
non-financial liability.

For the purpose of hedge accounting, hedges
are classified as:

¦ Fair value hedges when hedging the
exposure to changes in the fair value
of a recognised asset or liability or an
unrecognised firm commitment.

¦ Cash flow hedges when hedging the
exposure to variability in cash flows that
is either attributable to a particular risk
associated with a recognised asset or
liability or a highly probable forecast
transaction or the foreign currency risk in
an unrecognised firm commitment.

¦ Hedges of a net investment in a foreign
operation.

At the inception of a hedge relationship, the
Company formally designates and documents
the hedge relationship to which the Company
wishes to apply hedge accounting and the
risk management objective and strategy for
undertaking the hedge.

The documentation includes identification
of the hedging instrument, the hedged item,
the nature of the risk being hedged, and how
the Company will assess whether the hedging
relationship meets the hedge effectiveness
requirements (including the analysis of sources
of hedge ineffectiveness and how the hedge
ratio is determined). A hedging relationship
qualifies for hedge accounting if it meets all of
the following effectiveness requirements:

- There is an economic relationship'' between

the hedged item and the hedging
instrument.

- The effect of credit risk does not ‘dominate

the value changes'' that result from that
economic relationship.

- The hedge ratio of the hedging relationship

is the same as that resulting from the
quantity of the hedged item that the
Company actually hedges and the
quantity of the hedging instrument that
the Company actually uses to hedge that
quantity of hedged item.

Hedges that meet the strict criteria for hedge
accounting are accounted for, as described
below:

(i) Fair Value Hedges

The change in the fair value of a hedging
instrument is recognised in the statement
of profit and loss as finance costs. The
change in the fair value of the hedged
item attributable to the risk hedged is
recorded as part of the carrying value of
the hedged item and is also recognised
in the statement of profit and loss as
finance costs.

For fair value hedges relating to items
carried at amortised cost, any adjustment
to carrying value is amortised through
profit or loss over the remaining term
of the hedge using the EIR method. EIR
amortisation may begin as soon as an
adjustment exists and no later than when
the hedged item ceases to be adjusted

for changes in its fair value attributable to
the risk being hedged.

If the hedged item is derecognised, the
unamortised fair value is recognised
immediately in profit or loss.

When an unrecognised firm commitment
is designated as a hedged item, the
subsequent cumulative change in the fair
value of the firm commitment attributable
to the hedged risk is recognised as an
asset or liability with a corresponding
gain or loss recognised in profit or loss.

(ii) Cash Flow Hedges

The effective portion of the gain or loss
on the hedging instrument is recognised
in OCI in the Effective portion of cash flow
hedges, while any ineffective portion is
recognised immediately in the statement
of profit and loss. The Effective portion of
cash flow hedges is adjusted to the lower
of the cumulative gain or loss on the
hedging instrument and the cumulative
change in fair value of the hedged item.

The Company uses forward currency
contracts as hedges of its exposure
to foreign currency risk in forecast
transactions and firm commitments, as
well as forward commodity contracts for
its exposure to volatility in the commodity
prices. The ineffective portion relating to
foreign currency contracts is recognised
in finance costs and the ineffective
portion relating to commodity contracts is
recognised in other income or expenses.

The Company designates only the spot
element of a forward contract as a
hedging instrument. The forward element
is recognised in OCI.

The amounts accumulated in OCI are
accounted for, depending on the nature of
the underlying hedged transaction. If the
hedged transaction subsequently results
in the recognition of a non-financial item,
the amount accumulated in equity is
removed from the separate component
of equity and included in the initial cost or
other carrying amount of the hedged asset
or liability. This is not a reclassification
adjustment and will not be recognised
in OCI for the period. This also applies

where the hedged forecast transaction
of a non-financial asset or non-financial
liability subsequently becomes a firm
commitment for which fair value hedge
accounting is applied.

For any other cash flow hedges, the
amount accumulated in OCI is reclassified
to profit or loss as reclassification
adjustment in the same period or periods
during which the hedged cash flows
affect profit or loss.

If cash flow hedge accounting is
discontinued, the amount that has
been accumulated in OCI must remain
in accumulated OCI if the hedged
future cash flows are still expected to
occur. Otherwise, the amount will be
immediately reclassified to profit or loss
as a reclassification adjustment. After
discontinuation, once the hedged cash
flow occurs, any amount remaining in
accumulated OCI must be accounted for
depending on the nature of the underlying
transaction as described above.

(iii) Hedges of a Net Investment

Hedges of a net investment in a foreign
operation, including a hedge of a
monetary item that is accounted for as
part of the net investment, are accounted
for in a way similar to cash flow hedges.
Gains or losses on the hedging instrument
relating to the effective portion of the
hedge are recognised as OCI while any
gains or losses relating to the ineffective
portion are recognised in the statement
of profit or loss. On disposal of the foreign
operation, the cumulative value of any
such gains or losses recorded in equity is
reclassified to the statement of profit and
loss (as a reclassification adjustment).

(xiii)Offsetting of Financial Instruments

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

g) Leases

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

As A Lessee

The Company applies a single recognition and
measurement approach for all leases, except
for short-term leases and leases of low-value
assets. The Company recognises lease liabilities
to make lease payments and right-of-use assets
representing the right to use the underlying assets.

i. Right-of-use Assets

The Company recognises right-of-use assets
at the commencement date of the lease (i.e.,
the date the underlying asset is available
for use). Right-of-use assets are measured
at cost, less any accumulated depreciation
and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost
of right-of-use assets includes the amount
of lease liabilities recognised, initial direct
costs incurred, and lease payments made at
or before the commencement date less any
lease incentives received. Right-of-use assets
are depreciated on a written-down value basis
over the shorter of the lease term and the
estimated useful lives of the assets, as follows:

. Estimated Useful

Asset Classification , .. ,_w „

Life (Years)

Building 1 - 5

If ownership of the leased asset transfers to
the Company at the end of the lease term or
the cost reflects the exercise of a purchase
option, depreciation is calculated using the
estimated useful life of the asset.

The right-of-use assets are also subject to
impairment. Refer to the accounting policies in
section (d) Impairment of non-financial assets.

ii. Lease Liabilities

At the commencement date of the lease, the
Company recognises lease liabilities measured
at the present value of lease payments to
be made over the lease term. The lease
payments include fixed payments (including
in substance fixed payments) less any lease
incentives receivable, variable lease payments
that depend on an index or a rate, and

amounts expected to be paid under residual
value guarantees. The lease payments also
include the exercise price of a purchase
option reasonably certain to be exercised
by the Company and payments of penalties
for terminating the lease, if the lease term
reflects the Company exercising the option to
terminate. Variable lease payments that do not
depend on an index or a rate are recognised
as expenses in the period in which the event
or condition that triggers the payment occurs.

In calculating the present value of lease
payments, the Company uses its incremental
borrowing rate at the lease commencement
date because the interest rate implicit in the
lease is not readily determinable. After the
commencement date, the amount of lease
liabilities is increased to reflect the accretion
of interest and reduced for the lease payments
made. In addition, the carrying amount of
lease liabilities is remeasured if there is a
modification, a change in the lease term, a
change in the lease payments (e.g., changes
to future payments resulting from a change in
an index or rate used to determine such lease
payments) or a change in the assessment of
an option to purchase the underlying asset
(see Note 38).

iii. Short-term Leases and Leases of
Low-value Assets

The Company applies the short-term lease
recognition exemption to its short-term leases
of Buildings and Machinery and Equipment
(i.e. those leases that have a lease term of
12 months or less from the commencement
date and do not contain a purchase option).
It also applies the lease of low-value assets
recognition exemption to leases of office
equipment that are considered to be low
value. Lease payments on short-term leases
and leases of low-value assets are recognised
as expense on a straight-line basis over the
lease term.

As A Lessor

Leases in which the Company does not transfer
substantially all the risks and rewards incidental
to ownership of an asset are classified as
operating leases. Rental income arising is
accounted for on a straight-line basis over
the lease terms. Initial direct costs incurred in
negotiating and arranging an operating lease

are added to the carrying amount of the leased
asset and recognised over the lease term on
the same basis as rental income. Contingent
rents are recognised as revenue in the period
in which they are earned.

Leases are classified as finance leases when
substantially all of the risks and rewards of
ownership transfer from the Company to
the lessee. Amounts due from lessees under
finance leases are recorded as receivables
at the Company''s net investment in the
leases. Finance lease income is allocated to
accounting periods so as to reflect a constant
periodic rate of return on the net investment
outstanding in respect of the lease.

h) Retirement and Other Employee Benefits

i. Compensated Absences

Liabilities for wages and salaries, including
non-monetary benefits that are expected to
be settled wholly within 12 months after the
end of the period in which the employees
render the related service are recognised in
respect of employees'' services up to the end
of the reporting period and are measured
at the amounts expected to be paid when
the liabilities are settled. The liabilities are
presented as current employee benefit
obligations in the balance sheet.

Accumulated leave, which is expected to be
utilized within the next 12 months, is treated as
short-term employee benefit. The Company
measures the expected cost of such absences
as the additional amount that it expects to pay
as a result of the unused entitlement that has
accumulated at the reporting date.

The Company treats accumulated leave
expected to be carried forward beyond twelve
months, as non-current employee benefit for
measurement purposes. Such non-current
compensated absences are provided for
based on the actuarial valuation using the
projected unit credit method at the year-end.
Remeasurement actuarial gains / losses are
immediately taken to the statement of profit
and loss and are not deferred.

ii. Post-employment Obligations

The Company operates the following post¬
employment schemes:

i) Gratuity Obligations

Gratuity liability under the Payment of
Gratuity Act, 1972 is a defined benefit
obligation. The Plan provides payment to
vested employees at retirement, death or
termination of employment, of an amount
based on the respective employee''s
salary and the tenure of employment with
the Company. The Company provides
the gratuity benefit through annual
contribution to Updater Services Limited
(Formerly Known as Updater Services
Private Limited) - Employee benefit
scheme. Under this scheme the settlement
obligation remains with the Company
although the LIC administers the scheme
and determines the contribution premium
required to be paid by the Company. The
cost of providing benefits under this plan
is determined on the basis of actuarial
valuation at each year-end using the
projected unit credit method.

In addition to the above, the Company
recognises its liability in respect of
gratuity for employees (where customer
reimburses gratuity) and its right of
reimbursement as an asset. Employee
benefits expense in respect of gratuity
to employees and reimbursement right is
presented in accordance with Ind AS - 19.

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

Past service cost is recognised in profit
or loss on the earlier of the date of the
plan amendment or curtailment, and the
date that the Company recognises related
restructuring costs.

Net interest is calculated by applying the
discount rate to the net defined benefit
liability or asset. The Company recognises

the following changes in the net defined
benefit obligation as an expense in the
statement of profit and loss:

- Service costs comprising current
service costs, past-service costs and

- Net interest expense or income.

ii. Retirement Benefits

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 expenditure, when an
employee renders the related service. If
the contribution payable to the scheme
for service received before the balance
sheet date exceeds the contribution
already paid, the deficit payable to the
scheme is recognised as a liability after
deducting the contribution already paid.
If the contribution already paid exceeds
the contribution due for services received
before the balance sheet date, then
excess is recognised as an asset to the
extent that the pre-payment will lead
to, for example, a reduction in future
payment or a cash refund.

i) Taxes

Current Income Tax

Income tax expense comprises current tax expense
and deferred tax charge or credit during the
year. Current income tax assets and liabilities are
measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax
rates and tax laws used to compute the amount are
those that are enacted or substantively enacted,
at the reporting date in the countries where the
Company operates and generates taxable income

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

Deferred Tax

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

Deferred tax liabilities are recognised for all taxable
temporary differences, except:

¦ In respect of taxable temporary differences
associated with investments in subsidiaries,
associates and interests in joint ventures, when
the timing of the reversal of the temporary
differences can be controlled and it is probable
that the temporary differences will not reverse
in the foreseeable future.

Deferred tax assets are recognised for all deductible
temporary differences to the extent that it is
probable that taxable profits will be available against
which those deductible temporary differences can
be utilised. Such deferred tax assets and liabilities
are not recognised if the temporary difference
arises from the initial recognition (other than in a
business combination) of assets and liabilities in a
transaction that affects neither the taxable profit
nor the accounting profit.

Minimum alternate tax (MAT) paid in a year is
charged to the statement of profit and loss as
current tax. The Company recognizes MAT credit
available as an asset only to the extent that there
is probable evidence that the Company will pay
normal income tax during the specified period, i.e.,
the period for which MAT credit is allowed to be
carried forward. In the year in which the company
recognizes MAT credit as an asset, it is created by
way of credit to the statement of profit and loss and
shown as part of deferred tax asset. The company
reviews the “MAT credit entitlement” asset at each
reporting date and writes down the asset to the
extent that it is no longer probable that it will pay
normal tax during the specified period.

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

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

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

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

j) Government Grants

Government grants are recognised where there is
reasonable assurance that the grant will be received,
and all attached conditions will be complied with.
When the grant relates to an expense item, it is
recognised as income on a systematic basis over
the periods that the related costs, for which it is
intended to compensate, are expensed. When the
grant relates to an asset, it is recognised as income
in equal amounts over the expected useful life of
the related asset.

When the company receives grants of non¬
monetary assets, the asset and the grant are
recorded at fair value amounts and released
to profit or loss over the expected useful life in
a pattern of consumption of the benefit of the
underlying asset i.e., by equal annual instalments.
When loans or similar assistance are provided by
governments or related institutions, with an interest
rate below the current applicable market rate, the
effect of this favourable interest is regarded as a
government grant. The loan or assistance is initially
recognised and measured at fair value and the
government grant is measured as the difference
between the initial carrying value of the loan and
the proceeds received. The loan is subsequently
measured as per the accounting policy applicable
to financial liabilities.

The Company is availing of benefits under a
government scheme - Pradhan Mantri Rojgar
Protsahan Yojana (PMRPY) wherein the Central
Government is paying the employer''s contribution
towards Employee Pension Scheme/Provident
Fund in respect of new employees meeting
specified criteria. The same is recognised as

income on a systematic basis over the periods
that the related costs, for which it is intended to
compensate, are expensed (Refer Note 29).

k) Financial Guarantee Contracts

Financial guarantee contracts issued by the
company are those contracts that require a
payment to be made to reimburse the holder
for a loss it incurs because the specified debtor
fails to make a payment when due in accordance
with the terms of a debt instrument. Financial
guarantee contracts are recognised initially as a
liability at fair value, adjusted for transaction costs
that are directly attributable to the issuance of the
guarantee. Subsequently, the liability is measured
at the higher of the amount of loss allowance
determined as per impairment requirements of Ind
AS 109 and the amount recognised less cumulative
amortisation.

l) Fair Value Measurement

The Company measures financial instruments,
such as, derivatives at fair value at each balance
sheet date.

Fair value is the price that w