Accounting Policies of Arisinfra Solutions Ltd. Company

Mar 31, 2025

Note 2: Summary of material accounting policies

This note provides a list of the material accounting policies
adopted in the preparation of these standalone financial
statements. These policies have been consistently applied to
all the years presented, unless otherwise stated.

a) Basis of preparation of standalone financial
statements

1. Compliance with Ind AS

The standalone financial statements of the Company
comply in all material aspects with the Indian Accounting
Standards (Ind AS) notified under Section 133 of the
Companies Act, 2013 (the Act) [Companies (Indian
Accounting Standard) Rules, 2015] and other relevant
provisions of the Act.

2. Historical cost convention

The standalone financial statements have been prepared
on a historical cost basis except for the following which
have been measured at fair value:

i) certain financial assets and liabilities (including
derivative instruments),

ii) defined benefit plans

iii) share based payments

3. New and amended standards adopted by the
Company

The Ministry of Corporate Affairs vide notification dated
9 September 2024 and 28 September 2024 notified
the Companies (Indian Accounting Standards) Second
Amendment Rules, 2024 and Companies (Indian
Accounting Standards) Third Amendment Rules,
2024, respectively, which amended/ notified certain

accounting standards (see below) and are effective for
annual reporting periods beginning on or after 1 April
2024:

• Insurance contracts - Ind AS 117; and

• Lease Liability in Sale and Leaseback -
amendments to Ind AS 116

These amendments did not have any material impact
on the amounts recognized in prior periods and are not
expected to significantly affect the current or future
periods.

The standalone financial statements as at and for the
year ended March 31,2025 were approved by the Board
of Directors of the Company on July 13, 2025.

b) Revenue recognition

1. Sale of Products:

The Company delivers the products from the vendor
directly to the customer without having to physically
hold the inventory at their warehouses, thereby
increasing efficiency and reducing costs. The Company
recognizes revenue on a gross basis as the principal in
the transaction because the Company is the primary
obligor in the arrangement, assume inventory risk if the
product is returned by the customer, set the price of the
product charged to the customer, assume credit risk for
the amounts invoiced and has separate arrangements
with vendor and customer.

Revenue is recognized when control of the products has
been transferred, being when the products are delivered
to the customer. Delivery occurs when the products have
been shipped to the customer or a location specified by
the customer, the risks of obsolescence and loss have
been transferred to the customer and the Company has
objective evidence that all criteria for acceptance of
these goods by the customer have been satisfied.

Revenue from these sales is recognized based on the
price specified in the contract except for customers
where there is a consideration paid to the customer
(refer (5) below). This consideration has been reduced
from the transaction price on the revenue contract and
accordingly reflected as a reduction of revenue.

A receivable is recognized when the goods are delivered
as this is the point in time that the consideration is
unconditional because only the passage of time is
required before the payment is due.

2. Revenue from services:

Commission Income:

The Company has contracts with customers to provide
Project Management Services and its related services
and earns Commission Income. Revenue is recognized
over time where the performance obligation complies

with the criteria given under Ind AS 115 - Revenue from
Contracts with Customers of providing an asset with
no alternative use. The revenue on the performance
obligation is recognized based on the progress towards
complete satisfaction of the performance obligation.
Where these criteria are not met it will be recognized in
time when the service is complete, or at multiple points
in time where the service is based on a milestone. In
these contracts, customers gain immediate use of the
output of the service once the professional service has
been rendered.

Service Income:

The Company provides transportation as well as loading,
unloading services in certain cases wherein the related
material is not supplied by the Company. In such cases,
the revenue is recognized when the service is complete.

3. Financing Component:

The Company does not have any contracts where the
period between the transfer of the promised goods or
services to the customer and payment by the customer
exceeds one year. As a consequence, the Company does
not adjust any of the transaction prices for the time value
of money.

4. Contract liabilities

A contract liability is recognized if a payment is received
or a payment is due (whichever is earlier) from the
customer before the Company transfers the related
goods or services. Contract liabilities are recognized as
revenue when the Company performs under the contract
(i.e., transfers control of the related goods or services to
the customer).

5. Deposits with customers:

The security deposits with the customers recoverable in
cash at maturity have been recorded at fair value on initial
recognition. The difference between the initial fair value
of these deposits and their respective transaction prices
are treated as consideration paid to the customers. This
consideration has been reduced from the transaction
price on the revenue contract and accordingly reflected
as a reduction of revenue from contracts with customers.
These deposits have been subsequently measured at
amortized cost with interest income being recognized as
part of other income.

c) Financial liabilities and equity instruments

Classification as debt or equity

Debt and equity instruments are classified as either
financial liabilities or as equity in accordance with the
substance of the contractual arrangement.

1. Equity instruments and IPO related expenses

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 recognized at the proceeds received, net of
direct issue costs.

The Company has incurred certain IPO related expenses
such as legal fees, auditor fees, professional fees for
industry report, filing fees with stock exchanges, etc.
These expenses have been allocated on a systematic
basis. The cost allocated for issue of new shares has
been recognized within prepaid expenses and will be
adjusted against securities premium as permissible
under Section 52 of the Companies Act, 2013 during the
period of successful completion of Initial Public Offer
(IPO). The cost allocated for the listing of existing shares
has been recognized in the statement of profit & loss as
an exceptional item. The cost allocated towards existing
shares has been presented as part of operating activities
in the statement of cash flows whereas cost allocated
towards issue of new shares in proposed IPO has been
presented as part of financing activities.

2. Compound financial instruments

The component parts of compound financial instruments
issued by the Company are classified separately as
financial liabilities and equity in accordance with the
substance of the contractual arrangement. At the
date of issue, the fair value of the liability component
is estimated using the prevailing market interest rate
for a similar non-convertible instrument. This amount
is recorded as a liability on an amortized cost basis
using the effective interest method until extinguished
upon conversion or at the instrument’s maturity date.
The equity component is determined by deducting the
amount of the liability component from the fair value of
the compound instrument a whole. This is recognized
and included in equity, net of transaction cost and is not
subsequently re-measured.

3. Derivative financial instruments over own equity

Derivatives over own equity where the Company is
or maybe required to settle by issuing its own equity
instruments and where either the number of own equity
instruments or the amount of cash or other financial
asset exchanged, or both are not fixed are accounted for
as derivatives at fair value through profit or loss with the
fair value gain/loss being recognized in the profit or loss.

4. Embedded derivative

Derivatives embedded in a host contract that is an asset
within the scope of Ind AS 109 are not separated. Financial
assets with embedded derivatives are considered in their
entirety when determining whether their cash flows are
solely payment of principal and interest.

Derivatives embedded in all other host contracts are
separated only if the economic characteristics and risks

of the embedded derivative are not closely related to the
economic characteristics and risks of the host and are
measured at fair value through profit or loss. Embedded
derivatives closely related to the host contracts are not
separated.

A prepayment option embedded in a host debt contract
is considered closely related to the host contract if the
option’s exercise price is approximately equal on each
exercise date to the amortized cost of the host debt
instrument.

d) Current - Non-Current Classification

AIL assets and liabilities have been classified as current
or non-current as per the Company’s operating cycle and
other criteria set out in the Schedule III to the Companies
Act, 2013. Based on the nature of products and the time
between the acquisition of assets for processing and their
realization in cash and cash equivalents, the Company
has ascertained its operating cycle as 12 months for the
purpose of current/ non-current classification of assets
and Liabilities.

e) Property Plant and Equipment:

Recognition and Measurement

Property Plant and Equipment (PPE) are initially
recognized at cost. Subsequent to initiaL recognition,
PPE are stated at historicaL cost Less accumuLated
depreciation.

An asset’s carrying amount is written down immediateLy
to its recoverabLe amount if the asset’s carrying amount
is greater than its estimated recoverabLe amount.

Gains and Losses on disposals are determined by
comparing proceeds with carrying amount.

Depreciation methods, estimated useful lives and
residual value

Depreciation is provided on a straight- Line basis over
the estimated usefuL Life of the PPE based on the Life as
prescribed in Schedule II of Companies Act, 2013.

Estimated useful Life of assets used for depreciation is as
follows:

f) Intangible assets

An intangible asset is recognized when the Company
controLs the asset, it is probabLe that expected future
economic benefits that are attributabLe to asset wiLL fLow
to the entity and cost of such asset can be measured
reLiabLy.

IntangibLe assets are amortized on straight-Line basis
over their estimated usefuL Lives. The amortization period
and amortization method are reviewed at Least at the
end of each financiaL year. If the expected usefuL Life of
asset is significantLy different from previous estimates,
amortization period is changed accordingLy.

Gains or Losses arising from the retirement or disposaL
of an intangibLe asset are determined as the difference
between the net disposaL proceeds and the carrying
amount of the asset and recognized as income or
expense in profit or Loss

The Company has estimated the usefuL Life of software
Licenses to be 3 years.

g) Intangible assets under development:

Software: Costs associated with maintaining software
programs are recognized as an expense as incurred.

DeveLopment costs that are directLy attributabLe to
the design and testing of an eLectronic network being
deveLoped by the Company are recognized as intangibLe
assets where the following criteria are met:

• it is technicaLLy feasibLe to compLete the software
so that it wiLL be avaiLabLe for use

• management intends to compLete the software
and use or seLL it

• there is an abiLity to use or seLL the software

• it can be demonstrated how the software wiLL
generate probabLe future economic benefits

• adequate technicaL, financiaL and other resources
to compLete the deveLopment and to use or seLL the
software are avaiLabLe and

• the expenditure attributabLe to the software during
its deveLopment can be reLiabLy measured.

DirectLy attributabLe costs that are capitaLized as part of
the software incLude empLoyee costs, EmpLoyee share-
based payment expenses and an appropriate portion of
reLevant overheads. During the period of deveLopment,
the asset is tested for impairment annuaLLy.

CapitaLized deveLopment costs are recorded as intangibLe
assets and amortized from the point at which the asset is
avaiLabLe for use.

h) Impairment of non-financial assets

The Company assesses, at each reporting date, whether

there is an indication that an asset may be impaired.
Assets are tested for impairment whenever events or
changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset’s carrying
amount exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s fair value less costs of
disposal and value in use. For the purpose of assessing
impairment, assets are at the lowest levels for which
there are separately identifiable cash inflows which
are largely independent of the cash inflows from other
assets or company’s of assets (cash-generating units).
Non-financial assets other than goodwill that suffered
an impairment are reviewed for possible reversal of the
impairment at the end of each reporting period.

i) Leases

The Company is a lessee under certain leasing
arrangements. Assets and liabilities arising from such
lease except short term and low value lease are initially
measured on a present value basis. Lease liabilities
include the net present value of the following lease
payments:

• fixed payments (including in-substance fixed
payments), less any lease incentives receivable

• amounts expected to be payable by the Company
under residual value guarantees

• the exercise price of a purchase option if the
Company is reasonably certain to exercise that
option and

• payments of penalties for terminating the lease,
if the lease term reflects the Company exercising
that option.

Lease payments to be made under reasonably certain
extension options are also included in the measurement
of the liability.

The lease payments are discounted using the interest
rate implicit in the lease. If that rate cannot be readily
determined, which is generally the case for leases in
the Company, the lessee’s incremental borrowing rate
is used, being the rate that the individual lessee would
have to pay to borrow the funds necessary to obtain an
asset of similar value to the right-of-use asset in a similar
economic environment with similar terms, security and
conditions.

To determine the incremental borrowing rate, the
Company uses recent third-party financing received
by the individual lessee as a starting point, adjusted to
reflect changes in financing conditions since third party
financing was received.

Lease payments are allocated between principal and
finance cost. The finance cost is charged to profit or

loss over the lease period so as to produce a constant
periodic rate of interest on the remaining balance of
liability for each period.

Right-of-use assets are measured at cost comprising the
following:

• the amount of the initial measurement of lease
liability

• any lease payments made at or before the
commencement date less any lease incentives
received

• any initial direct costs

• restoration costs.

Contracts may contain both lease and non-lease
components. The Company allocates the consideration
in the contract to the lease and non-lease components
based on their relative stand-alone prices. However, for
leases of real estate for which the Company is a lessee,
it has elected not to separate lease and non-lease
components and instead accounts for these as a single
lease component.

Right-of-use assets are depreciated over the lease term
on a straight-line basis.

Any gain or loss arising on account of difference between
the carrying amounts of right of use assets and related
lease liabilities at the date of lease termination forms
part of other income or other expense.

j) Cash and cash equivalents

For the purpose of presentation in the statement of
cash flows, cash and cash equivalents include cash on
hand, deposits held at call with financial institutions,
other short-term, highly liquid investments with original
maturities of three months or less that are readily
convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.

k) Other financial assets

(i) Classification

The Company classifies its financial assets in the
following measurement categories:

- those to be measured subsequently at fair
value (either through other comprehensive
income, or through profit or loss), and

- those to be measured at amortized cost.

The classification depends on the entity’s business
model for managing the financial assets and the
contractual terms of the cash flows.

For assets measured at fair value, gains and losses
will either be recorded in profit or loss or other
comprehensive income.

(ii) Measurement

At initial recognition, the Company 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 that are directly
attributable to the acquisition of the financial
asset. Transaction costs of financial assets carried
at fair value through profit or loss are expensed in
profit or loss. However, trade receivables that do
not contain a significant financing component are
measured at transaction price.

Subsequent measurement of financial assets
depends on the Company’s business model
for managing the asset and the cash flow
characteristics of the asset. There are three
measurement categories into which the Company
may classify its financial asset.

a) Amortized cost:

Assets that are held for collection of
contractual cash flows where those cash
flows represent solely payments of principal
and interest are measured at amortized
cost. Interest income from these financial
assets is included in Other Income using the
effective interest rate method. Any gain or
loss arising on derecognition is recognised
directly in profit or loss and presented in
other gains/(losses). Impairment losses
are presented as a separate line item in the
standalone statement of profit and loss.

b) Fair value through other comprehensive
income (FVOCI):

Assets that are held for collection of
contractual cash flows and for selling the
financial assets, where the assets’ cash
flows represent solely payments of principal
and interest, are measured at FVOCI.
Movements in the carrying amount are taken
through OCI, except for the recognition of
impairment gains or losses, interest income
and foreign exchange gains and losses which
are recognised in profit and loss. When
the financial asset is derecognized, the
cumulative gain or loss previously recognised
in OCI is reclassified from equity to profit or
loss and recognised in other gains/(losses).
Interest income from these financial assets is
included in other income using the effective
interest rate method. Foreign exchange
gains and losses are presented in other
gains/(losses) and impairment expenses
are presented as a separate line item in the
standalone statement of profit and loss.

c) Fair value through profit or loss:

Assets that do not meet the criteria for
amortized cost or FVOCI are measured at
fair value through profit or loss. A gain or loss
on a debt investment that is subsequently
measured at fair value through profit or loss
is recognised in profit or loss and presented
net within other gains/(losses) in the period
in which it arises. Interest income from these
financial assets is included in other income.

(iii) Impairment of financial assets

The Company applies expected credit loss (ECL)
model for measurement and recognition of
impairment loss on the financial assets which
are measured at amortized cost. Impairment of
financial assets is measured as either 12 month
expected credit losses or life time expected credit
losses, depending on whether there has been
a significant increase in credit risk since initial
recognition. The Company uses historical loss
experience and adjusts the loss allowance to
reflect the information about current conditions
and reasonable and supportable forecasts of
future economic conditions.

Trade receivables are of a short duration, normally
less than 12 months and hence the loss allowance
measured as lifetime expected credit losses
does not differ from that measured as 12 month
expected credit losses.

l) Financial liabilities

Financial liabilities are classified as either financial

liabilities ‘at FVTPL’ or ‘other financial liabilities’.

Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when

the financial liability is either held for trading or it is

designated as at FVTPL.

A financial liability is classified as held for trading if:

• it has been acquired or incurred principally for the
purpose of repurchasing it in the near term; or

• on initial recognition it is part of a portfolio of
identified financial instruments that the Company
manages together and for which there is evidence
of a recent actual pattern of short-term profit
taking; or

• it is a derivative that is not designated and effective
as a hedging instrument.

A financial liability other than a financial liability
held for trading may also be designated as at FVTPL
upon initial recognition if:

• such designation eliminates or significantly reduces
a measurement or recognition inconsistency that
would otherwise arise; or

• the financial liability forms part of a Company of
financial assets or financial liabilities or both, which
is managed and its performance is evaluated on a
fair value basis, in accordance with the Company’s
documented risk management or investment
strategy and information about the Company is
provided internally on that basis; or

• it forms part of a contract containing one or more
embedded derivatives and Ind-AS 109 Financial
Instruments permits the entire combined contract
to be designated as at FVTPL.

Financial liabilities at FVTPL are stated at fair value, with
any gains or losses arising on re-measurement recognized
in the standalone statement of profit and loss, except for
the amount of change in the fair value of the financial
liability that is attributable to changes in the credit risk of
that liability which is recognized in other comprehensive
income. The net gain or loss recognized in the standalone
statement of profit and loss incorporates any interest
paid on the financial liability.

Other financial liabilities

Other financial liabilities, including borrowings, are
initially measured at fair value, net of transaction costs.
Other financial liabilities are subsequently measured at
amortized cost using the effective interest method, with
interest expense recognized on an effective yield basis.
The effective interest method is a method of calculating
the amortized 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 through the expected life of the
financial liability, or (where appropriate) a shorter period,
to the net carrying amount on initial recognition.

De-recognition of financial liabilities

A financial liability is derecognized 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 recognized in the statement of profit or loss.

m) Offsetting financial instruments

Financial assets and liabilities are offset and the net
amount reported in the standalone balance sheet when
there is a legally enforceable right to offset the recognized
amounts and there is an intention to settle on a net basis
or realize the asset and settle the liability simultaneously.

The legally enforceable right must not be contingent on
future events and must be enforceable in the normal
course of business and in the event of default, insolvency
or bankruptcy of the Company or the counterparty.

n) Trade receivables

Trade receivables are amounts due from customers for
goods sold or services performed in the ordinary course
of business. Trade receivables are recognized when
the goods are delivered as this is the point in time that
the consideration is unconditional and are measured
at transaction price unless they contain significant
financing components, when they are recognized at fair
value. The Company holds the trade receivables with the
objective of collecting the contractual cash flows and
therefore measures them subsequently at amortized
cost less loss allowance.

o) Trade and other payables

These amounts represent liabilities for goods and
services provided to the Company prior to the end
of the financial year which are unpaid. The amounts
are unsecured and are usually paid within due dates
(average) of recognition. Trade and other payables are
presented as current liabilities unless payment is not
due within 12 months after the reporting period. They are
recognized initially at their fair value and subsequently
measured at amortized cost using the effective interest
method.

p) Inventories

Raw materials and stores traded and finished goods
are stated at the lower of cost and net realizable value.
Cost of raw materials and traded goods comprises cost
of purchases. Cost of finished goods comprises direct
materials, direct labour and an appropriate proportion of
variable and fixed overhead expenditure, the latter being
allocated on the basis of normal operating capacity.
Cost of inventories also include all other costs incurred
in bringing the inventories to their present location and
condition. Costs of purchased inventory are determined
after deducting rebates and discounts. Net realizable
value is the estimated selling price in the ordinary course
of business less the estimated costs of completion and
the estimated costs necessary to make the sale. The cost
is determined on a first-in first-out basis.

q) Borrowings

Borrowings are initially recognized at fair value, net of
transaction costs incurred. Borrowings are subsequently
measured at amortized cost. Any difference between the
proceeds (net of transaction costs) and the redemption
amount is recognized in profit or loss over the period of
the borrowings using the effective interest method.

Borrowings are classified as current liabilities unless the
Company has an unconditional right to defer settlement

of the liability for at least 12 months after the reporting
period. Where there is a breach of a material provision of
a long-term loan arrangement on or before the end of the
reporting period with the effect that the liability becomes
payable on demand on the reporting date, the entity does
not classify the liability as current, if the lender agreed,
after the reporting period and before the approval of the
financial statements for issue, not to demand payment
as a consequence of the breach.

r) Employee benefits

(i) Short-term employee benefits

Employee benefits payable wholly within twelve
months of rendering the service are classified as
short-term employee benefits and are recognised
in the period in which the employee renders the
related service. These benefits include salaries,
wages and bonus. The undiscounted amount
of short-term employee benefits to be paid in
exchange for employee services are recognized as
an expense as the related service is rendered by
employees.

(ii) Post employment benefit- gratuity obligations

The liability recognised in the balance sheet in
respect of defined benefit obligation- gratuity is the
present value of the defined benefit obligation at
the end of the reporting period.

The defined benefit obligation is calculated
annually by actuaries using the projected unit
credit method. The present value of the defined
benefit obligation is determined by discounting
the estimated future cash outflows by reference to
market yields at the end of the reporting period on
government bonds that have terms approximating
to the terms of the related obligation.

The net interest cost is calculated by applying the
discount rate to the net balance of the defined
benefit obligation. This cost is included in employee
benefit expense in the statement of profit and loss.
Remeasurement gains and losses arising from
experience adjustments and changes in actuarial
assumptions are recognised in the period in
which they occur, directly in other comprehensive
income. They are included in retained earnings
in the statement of changes in equity and in the
balance sheet. Changes in the present value
of the defined benefit obligation resulting from
curtailments are recognised immediately in profit
or loss as past service cost.

(iii) Post employment benefit- defined contribution
plans - Provident Fund

The Company pays provident fund contributions
to publicly administered provident funds as per

local regulations. The Company has no further
payment obligations once the contributions have
been paid. The contributions are accounted for as
defined contribution plans and the contributions
are recognised as employee benefit expense when
they are due. Prepaid contributions are recognised
as an asset to the extent that a cash refund or a
reduction in the future payments is available.

(iv) Other long term employee benefits-
Compensated absences

The liabilities for earned leave are not expected to
be settled wholly within 12 months after the end
of the period in which the employees render the
related service. They are therefore measured as the
present value of expected future payments to be
made in respect of services provided by employees
up to the end of the reporting period using the
projected unit credit method. The benefits are
discounted using the market yields at the end of the
reporting period that have terms approximating the
terms of the related obligation. Remeasurements
as a result of experience adjustments and changes
in actuarial assumptions are recognised in profit or
loss.

The obligations are presented as current or
non-current liabilities in the balance sheet as
determined by the actuary in his report.

(v) Share-based payments

Certain employees (including senior executives) of
the Company receive remuneration in the form of
share-based payments, whereby such employees
render services as consideration for equity
instruments (equity-settled transactions). The cost
of equity-settled transactions is determined by the
fair value at the date when the grant is made using
an appropriate valuation model.

The fair value of options at the grant is expensed
over the respective vesting period in which all of the
specified vesting conditions are to be satisfied with
a corresponding increase in equity as employee
stock options outstanding reserve. Where the
share options vest in instalments, each tranche
is treated as a separate grant and the expense for
each such tranche is recognized over the respective
vesting periods. In case of forfeiture of unvested
option, portion of amount already expensed is
reversed. In a situation where the vested options
are forfeited or expires unexercised, the related
balance standing to the credit of the employee
stock options outstanding reserve are transferred
to the “Retained Earnings”.

When the options are exercised, the Company
issues its equity shares. The proceeds received

and the related balance standing to credit of the
employee stock options outstanding reserve are
credited to share capital (nominal value) and
Securities Premium Account.

The dilutive effect, if any, of outstanding options
is reflected as additional share dilution in the
computation of diluted earnings per share when
required by Ind AS 33.

The Company has established a new Employee
Stock Option Scheme 2024 (Arisinfra ESOP-
2024) to enable the employees of the Company
to participate in the future growth and success of
the Company. The share options issued under the
scheme vest in tranches and are exercisable by
the employees subject to completion of a certain
period of service. Share options granted during the
year under this scheme have performance based
vesting conditions (market and non-market) along
with time based vesting criteria. Options granted
under this plan are for no consideration and carry
no dividend or voting rights. When exercisable,
each option represents a right to one equity share.
Unvested options are forfeited on separation.

The options (whether market based or non-market
based) where the Nomination and Remuneration
Committee (NRC) or Board of the Company has not
fixed either the reference price or the exercise price,
or has defined it to be a range, it is considered that
the grant date has not been established for such
options and therefore, the Company recognizes
the charge in the statement of profit or loss based
on the estimated fair value at the reporting date.
The Company continues to estimate the fair value
of the options at each reporting date until the grant
date is established

s) Income Tax

The income tax expense or credit for the period is the tax
payable on the current period’s taxable income based
on the applicable income tax rate adjusted by changes
in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.

Deferred income tax is provided in full, using the liability
method, on temporary differences arising between
the tax bases of assets and liabilities and their carrying
amounts in the financial statements. However, deferred
tax liabilities are not recognized if they arise from the
initial recognition of goodwill. Deferred income tax is
determined using tax rates (and laws) that have been
enacted or substantially enacted by the end of the
reporting period and are expected to apply when the
related deferred income tax asset is realized or the
deferred income tax liability is settled.

Deferred tax assets are recognized for all deductible

temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to
utilize those temporary differences and losses.

Deferred tax assets and liabilities are offset where there
is a legally enforceable right to offset current tax assets
and liabilities and where the deferred tax balances relate
to the same taxation authority. Current tax assets and
tax liabilities are offset where the entity has a legally
enforceable right to offset and intends either to settle on
a net basis, or to realize the asset and settle the liability
simultaneously.

Deferred tax liabilities are not recognized for temporary
differences between the carrying amount and tax bases
of investments in subsidiaries where the Company is
able to control the timing of the reversal of the temporary
differences and it is probable that the differences will not
reverse in the foreseeable future.

Deferred tax assets are not recognized for temporary
differences between the carrying amount and tax bases
of investments in subsidiaries where it is not probable
that the differences will reverse in the foreseeable future
and taxable profit will not be available against which the
temporary difference can be utilized.

Management periodically evaluates positions taken in
tax returns with respect to situations in which applicable
tax regulation is subject to interpretation and considers
whether it is probable that a taxation authority will accept
an uncertain tax treatment. The Company measures its
tax balances either based on the most likely amount or
the expected value, depending on which method provides
a better prediction of the resolution of the uncertainty.

Current and deferred tax is recognized in profit or loss,
except to the extent that it relates to items recognized in
other comprehensive income or directly in equity. In this
case, the tax is also recognized in other comprehensive
income or directly in equity, respectively.

t) Earnings per share (‘EPS’)

• Basic Earnings per share

Basic EPS is computed by dividing

1) the profit attributable to the owners of the
Company for the year

2) by the weighted average number of equity
shares (including equity shares issuable
upon conversion of compulsorily convertible
instruments classified entirely as equity)
outstanding during the financial year,
adjusted for bonus issue of shares and stock
splits.

In cases where the exercise price for the options
is insignificant, the Company has considered
vested stock options under ESOP scheme in the

weighted average of number of equity shares for
basic earnings per share from the dates on which
respective options vest.

• Diluted earnings per share

Diluted earnings per share adjusts the figures used
in the determination of basic earnings per share to
take into account:

1) the after income tax effect of interest and
other financing costs associated with dilutive
potential equity shares

2) the weighted average number of additional
equity shares that would have been
outstanding assuming the conversion of all
dilutive potential equity shares.

Unvested stock options under ESOP scheme other
than those containing performance conditions
are considered to be potential equity shares and
have been included in the determination of diluted
earnings per share to the extent to which they
are dilutive as computed in accordance with Ind
AS 33. For unvested stock options under ESOP
scheme which contain performance conditions
(either market or non-market), these are included
in the determination of diluted earnings per share
only when such stock options would have been
considered vested if the reporting date were
considered the end of the performance period
and to the extent to which they are dilutive. Stock
options issued but for which grant date is not yet
established are also considered for diluted EPS
using the same principles as above.

The impact of bonus shares and share split is
reflected in EPS computation retrospectively since
the earliest period presented regardless of whether
such bonus issue or share split occurred during
the reporting period or after the end of the reporting
period but before the financial statements are
authorized for issue.

u) Cash flow statement

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

v) Segment Reporting

Operating segments are reported in a manner consistent
with the internal reporting provided to the Chief
Operating Decision maker (“CODM”). The CODM, who
is responsible for allocating resources and assessing
the performance of the operating segments, has been
identified as the Directors of the Company.