Accounting Policies of KHFM Hospitality & Facility Management Services Ltd. Company

Mar 31, 2025

III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Current/Non-Current classification

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

Deferred tax assets and liabilities, and all assets and liabilities which are not current (as discussed in the below
paragraphs) are classified as non-current assets and liabilities.

An asset is classified as current when it is expected to be realized or intended to be sold or consumed in normal
operating cycle, held primarily for the purpose of trading, expected to be realized within twelve months after the
reporting period, or cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at
least twelve months after the reporting period.

A liability is classified as current when it is expected to be settled in normal operating cycle, it is held primarily for the
purpose of trading, it is due to be settled within twelve months after the reporting period, or there is no unconditional
right to defer the settlement of the liability for at least twelve months after the reporting period.

(b) Revenue recognition:

The Company provides hospitality and facility management services under fixed-price and variable price contracts.
Revenue is recognised upon transfer of control of promised services to customers in an amount that reflects the
consideration which the Company expects to receive in exchange for those services.

• Revenue related to fixed price maintenance and support services contracts where the Company is standing ready to
provide services is recognised based on time elapsed mode and revenue is straight-lined over the period of
performance.

¦ In respect of other fixed-price contracts, revenue is recognised using percentage-of-completion method (''POC
method'') of accounting with contract costs incurred determining the degree of completion of the performance
obligation.

Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts,
service level credits, performance bonuses, price concessions and incentives, if any, as specified in the contract with
the customer. Revenue also excludes taxes collected from customers. The Company''s contracts with customers could
include promises to transfer multiple services to a customer. The Company assesses the services promised in a
contract and identifies distinct performance obligations in the contract. Identification of distinct performance
obligation involves judgement to determine the deliverables and the ability of the customer to benefit independently
from such deliverables. Judgement is also required to determine the transaction price for the contract and to ascribe
the transaction price to each distinct performance obligation. The transaction price could be either a fixed amount of
customer consideration or variable consideration with elements such as volume discounts, service level credits,
performance bonuses, price concessions and incentives. The estimated amount of variable consideration is adjusted in
the transaction price only to the extent that it is highly probable that a significant reversal in the amount of
cumulative revenue recognised will not occur and is reassessed at the end of each reporting period. The Company
allocates the elements of variable considerations to all the performance obligations of the contract unless there is
observable evidence that they pertain to one or more distinct performance obligations.

The Company exercises judgement in determining whether the performance obligation is satisfied at a point in time
or over a period of time. The Company considers indicators such as how customer consumes benefits as services are
rendered or who controls the asset as it is being created or existence of enforceable right to payment for
performance to date and alternate use of such product or service, transfer of significant risks and rewards to the
customer, acceptance of delivery by the customer, etc.

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

Unearned and deferred revenue ("contract liability") is recognised when there are billings in excess of revenues. The
billing schedules agreed with customers include periodic performance based payments and / or milestone based
progress payments. Invoices are payable within contractually agreed credit period.

Contracts are subject to modification to account for changes in contract specification and requirements. The
Company reviews modification to contract in conjunction with the original contract, basis which the transaction price
could be allocated to a new performance obligation, or transaction price of an existing obligation could undergo a
change. In the event transaction price is revised for existing obligation, a cumulative adjustment is accounted for.

Unsatisfied (or partially satisfied) performance obligations are subject to variability due to several factors such as
terminations, changes in scope of contracts, periodic revalidations of the estimates, economic factors (changes in
currency rates, tax laws etc).

(c) Interest:

Interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.
The Rate applicable is defined as determined on the basis of Fair Rate of Return in accordance with IND AS.

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the
company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by

reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying
amount on initial recognition.

(d) Dividend:

Revenue is recognized when the shareholders’ right to receive payment is established by the Balance Sheet date.

(e) Rent Income:

Rent Income is recognized on the basis of agreed periodic amount decided through agreement.

(f) Profit on sale of investment:

It is recognized on its liquidation/redemption.

(g) Taxes

(i) Current Income Taxes

Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the
Income-tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the company
operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted,
at the reporting date.

Current income tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in
other comprehensive income or in equity). Current tax items are recognized 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.

(ii) Deferred Taxes

Deferred tax is recognized, using the liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying values in the standalone financial statements. However, deferred tax are not
recognized if it arises from initial recognition of an asset or liability in a transaction other than a business combination
that at the time of the transaction affects neither accounting nor taxable profit or loss.

Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available
against which the temporary differences can be utilized.

The unrecognized deferred tax assets / carrying amount of deferred tax assets are reviewed at each reporting date for
recoverability and adjusted appropriately.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse,
using tax rates enacted or substantively enacted at the reporting date. The measurement of deferred tax reflects the
tax consequences that would follow from the manner in which the company expects, at the reporting date, to recover
or settle the carrying amount of its assets and liabilities.

For operations carried out in tax free units, deferred tax assets or liabilities, if any, have been recognized for the tax
consequences of those temporary differences between the carrying values of assets and liabilities and their respective
tax bases that reverse after the tax holiday ends.

Deferred tax assets and liabilities are offset only if:

i) The entity has a legally enforceable right to set off current tax assets against current tax liabilities; and

ii) The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority
on the same taxable entity.

(h) Non Current Assets Held for Sale

The Company classifies non-current asset (or disposal group) as held for sale, if its carrying amount will be recovered
principally through a sale transaction rather than through continuing use. Such asset should be available for sale and
plan to dispose it off should be initiated by the management. The assets of a disposal group classified as held for sale
separately from other asset in the balance sheet and such asset are valued at carrying amount or net realizable value
whichever is lower.

(i) Property, Plant & Equipment

Property, plant & equipment are stated at their cost of acquisition/construction, net of accumulated depreciation and
impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met, directly
attributable cost of bringing the asset to its working condition for the intended use and initial estimate of
decommissioning, restoring and similar liabilities. Each part of an item of property, plant and equipment with a cost
that is significant in relation to the total cost of the item is depreciated separately. Likewise, when a major inspection
is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the
recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.
Subsequent expenditure related to an item of property, plant and equipment is added to its book value only if it
increases the future benefits from the existing asset beyond its previously assessed standard of performance.
Borrowing costs directly attributable to acquisition of property, plant and equipment which take substantial period of
time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready
to be put to use. An item of property, plant and equipment and any significant part initially recognized is de¬
recognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss
arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the
carrying amount of the asset) is included in the income statement when the Property, plant and equipment is
derecognized. Expenditure directly relating to construction activity is capitalized.

The Company reviews the useful lives of property, plant and equipment and other intangible assets at the end of each
reporting period. This re-assessment may result in change in depreciation and amortization expense in future periods.
Other Indirect Expenses, if any incurred relating to project, net of income earned during the project development
stage prior to its intended use, are considered as per - operative expenses and disclosed under Capital Work - in -
Progress.

Depreciation on Property, Plant and Equipment is provided on a pro-rata basis on the Written Down Value method
based on estimated useful life prescribed under Schedule II to the Companies Act, 2013.

The Details of useful life of an assets and its residual value estimated by the management are as follows :

In none of the case the residual value of an assets is more than five percent of the Original Cost 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.

Gains or losses arising from derecognition of a 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.

(j) Investment Property

Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the
Company, is classified as investment property. Investment property is measured initially at its cost, including related
transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalised to the asset''s carrying
amount only when it is probable that future economic benefits associated with the expenditure will flow to the
Company and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed
when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is
derecognised. Investment properties are subsequently measured at cost less depreciation. Investment properties are
depreciated based on their estimated useful lives. Office premises which is considered as Investment property has a
useful life of 60 years. The useful life has been determined based on technical evaluation performed by the
management.

k) Impairment of Non-Financial Assets

Intangible assets, property, plant and equipment and other non-financial assets are evaluated for recoverability
whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the
purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-
in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely
independent of those from other assets.

In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs. If
such assets are considered to be impaired, the impairment to be recognized in the statement of profit and loss is
measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the
asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates
used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable
amount, provided that this amount does not exceed the carrying amount that would have been determined (net of
any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.

(I) Inventories

Items of inventories are measured in at lower cost & net realiasable value after providing for obsolescence, if any
except in case of by-products which are valued at net realizable value. Cost of inventories comprises of cost of
purchase, cost of conversion and other costs including manufacturing overheads net of recoverable taxes incurred in
bringing them to their respective present location and condition.

Cost of raw materials, chemicals, stores and spares, packing material, trading and other products are determined on
weighted average basis.

(m) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the
cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying
assets is deducted from the borrowing costs eligible for capitalization. All other borrowing costs are Recognised in
profit or loss in the period in which they are incurred based on Amortised Cost as per Ind AS using effective interest
rate method.

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Mar 31, 2024

III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Current/Non-Current classification

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

Deferred tax assets and liabilities, and all assets and liabilities which are not current (as discussed in the below paragraphs) are classified as non-current assets and liabilities.

An asset is classified as current when it is expected to be realized or intended to be sold or consumed in normal operating cycle, held primarily for the purpose of trading, expected to be realized within twelve months after the reporting period, or cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current when it is expected to be settled in normal operating cycle, it is held primarily for the purpose of trading, it is due to be settled within twelve months after the reporting period, or there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

(b) Revenue recognition:

The Company provides hospitality and facility management services under fixed-price and variable price contracts. Revenue is recognised upon transfer of control of promised services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those services.

• Revenue related to fixed price maintenance and support services contracts where the Company is standing ready to provide services is recognised based on time elapsed mode and revenue is straight-lined over the period of performance.

• In respect of other fixed-price contracts, revenue is recognised using percentage-of-completion method (''POC method'') of accounting with contract costs incurred determining the degree of completion of the performance obligation.

Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts, service level credits, performance bonuses, price concessions and incentives, if any, as specified in the contract with the customer. Revenue also excludes taxes collected from customers. The Company''s contracts with customers could include promises to transfer multiple services to a customer. The Company assesses the services promised in a contract and identifies distinct performance obligations in the contract. Identification of distinct performance obligation involves judgement to determine the deliverables and the ability of the customer to benefit independently from such deliverables. Judgement is also required to determine the transaction price for the contract and to ascribe the transaction price to each distinct performance obligation. The transaction price could be either a fixed amount of customer consideration or variable consideration with elements such as volume discounts, service level credits, performance bonuses, price concessions and incentives. The estimated amount of variable consideration is adjusted in the transaction price only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur and is reassessed at the end of each reporting period. The Company allocates the elements of variable considerations to all the performance obligations of the contract unless there is observable evidence that they pertain to one or more distinct performance obligations.

The Company exercises judgement in determining whether the performance obligation is satisfied at a point in time or over a period of time. The Company considers indicators such as how customer consumes benefits as services are rendered or who controls the asset as it is being created or existence of enforceable right to payment for performance to date and alternate use of such product or service, transfer of significant risks and rewards to the customer, acceptance of delivery by the customer, etc.

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

Unearned and deferred revenue ("contract liability") is recognised when there are billings in excess of revenues. The billing schedules agreed with customers include periodic performance based payments and / or milestone based progress payments. Invoices are payable within contractually agreed credit period.

Contracts are subject to modification to account for changes in contract specification and requirements. The Company reviews modification to contract in conjunction with the original contract, basis which the transaction price could be allocated to a new performance obligation, or transaction price of an existing obligation could undergo a change. In the event transaction price is revised for existing obligation, a cumulative adjustment is accounted for.

Unsatisfied (or partially satisfied) performance obligations are subject to variability due to several factors such as terminations, changes in scope of contracts, periodic revalidations of the estimates, economic factors (changes in currency rates, tax laws etc).

(c) Interest:

Interest is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable. The Rate applicable is defined as determined on the basis of Fair Rate of Return in accordance with IND AS.

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

(d) Dividend:

Revenue is recognized when the shareholders'' right to receive payment is established by the Balance Sheet date.

(e) Rent Income:

Rent Income is recognized on the basis of agreed periodic amount decided through agreement.

(f) Profit on sale of investment:

It is recognized on its liquidation/redemption.

(g) Taxes

(i) Current Income Taxes

Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Current income tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognized 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.

(ii) Deferred Taxes

Deferred tax is recognized, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying values in the standalone financial statements. However, deferred tax are not recognized if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.

Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.

The unrecognized deferred tax assets / carrying amount of deferred tax assets are reviewed at each reporting date for recoverability and adjusted appropriately.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

For operations carried out in tax free units, deferred tax assets or liabilities, if any, have been recognized for the tax consequences of those temporary differences between the carrying values of assets and liabilities and their respective tax bases that reverse after the tax holiday ends.

Deferred tax assets and liabilities are offset only if:

i) The entity has a legally enforceable right to set off current tax assets against current tax liabilities; and

ii) The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.

(h) Non Current Assets Held for Sale

The Company classifies non-current asset (or disposal group) as held for sale, if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. Such asset should be available for sale and plan to dispose it off should be initiated by the management. The assets of a disposal group classified as held for sale separately from other asset in the balance sheet and such asset are valued at carrying amount or net realizable value whichever is lower.

(i) Property, Plant & Equipment

Property, plant & equipment are stated at their cost of acquisition/construction, net of accumulated depreciation and impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met, directly attributable cost of bringing the asset to its working condition for the intended use and initial estimate of decommissioning, restoring and similar liabilities. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred. Subsequent expenditure related to an item of property, plant and equipment is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. Borrowing costs directly attributable to acquisition of property, plant and equipment which take substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use. An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the Property, plant and equipment is derecognized. Expenditure directly relating to construction activity is capitalized.

The Company reviews the useful lives of property, plant and equipment and other intangible assets at the end of each reporting period. This re-assessment may result in change in depreciation and amortization expense in future periods. Other Indirect Expenses, if any incurred relating to project, net of income earned during the project development stage prior to its intended use, are considered as per - operative expenses and disclosed under Capital Work - in -Progress.

Depreciation on Property, Plant and Equipment is provided on a pro-rata basis on the Written Down Value method based on estimated useful life prescribed under Schedule II to the Companies Act, 2013.

The Details of useful life of an assets and its residual value estimated by the management are as follows :

In none of the case the residual value of an assets is more than five percent of the Original Cost 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.

Gains or losses arising from derecognition of a 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.

(j) Investment Property

Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Company, is classified as investment property. Investment property is measured initially at its cost, including related transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalised to the asset''s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognised. Investment properties are subsequently measured at cost less depreciation. Investment properties are depreciated based on their estimated useful lives. Office premises which is considered as Investment property has a useful life of 60 years. The useful life has been determined based on technical evaluation performed by the management.

k) Impairment of Non-Financial Assets

Intangible assets, property, plant and equipment and other non-financial assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets.

In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs. If such assets are considered to be impaired, the impairment to be recognized in the statement of profit and loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.

(l) Inventories

Items of inventories are measured in at lower cost & net realiasable value after providing for obsolescence, if any except in case of by-products which are valued at net realizable value. Cost of inventories comprises of cost of

purchase, cost of conversion and other costs including manufacturing overheads net of recoverable taxes incurred in bringing them to their respective present location and condition.

Cost of raw materials, chemicals, stores and spares, packing material, trading and other products are determined on weighted average basis.

(m) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. All other borrowing costs are Recognised in profit or loss in the period in which they are incurred based on Amortised Cost as per Ind AS using effective interest rate method.

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Mar 31, 2023

III. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Current/Non-Current classification

The Company presents assets and liabilities in the balance sheet based on currentu/naDiti classification.

Deferred tax assets and liabilities, and all assets and liabilities which are not current (as discussed in the below paragraphs) are classifieas non-current assets and liabilities.

An asset is classified as current when it is expected to be realized or intended to be sold or consumed in normal operating cycle, held primarily for the purpose of trading, expected to be realized within twelve months after the reporting period, or cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current when it is expected to be siDtlnormal 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 afte reporting period .

(b) Revenue recognition:

The Company provides hospitality and facility management services under -price and variable price contracts.

Revenue is recognised upon transfer of control of promised services to customers in dD tdratureflects the consideration which the Company expects to receive in exchange for those se rvices.

• Revenue related to fixed price maintenance and support services contracts where the Company is standing ready to provide services is recognised based time elapsed mode and revenue is straighDed over the period of performance.

• In respect of other fixed-price contracts, revenue is recognised using percentageompletion method („POC method’) of accounting with contract costs incurred determining the degree of completion of the performance obligation .

Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts, service level credits, performance bonuses, price concessions and incentfveiny, as specified in the contract with the customer. Revenue also excludes taxes collected from customers. The Company’s contracts with customers could include promises to transfer multiple services to a customer. The Company assesses the services pnosed in a contract and identifies distinct performance obligations in the contract. Identification of distinct performance obligation involves judgement to determine the deliverables and the ability of the customer to benefit independently from such edeflbles. Judgement is also required to determine the transaction price for the contract and to ascribe the transaction price to each distinct performance obligation. The transaction price could be either a fixed amount of customer consideration or variable consideration with elements such as volume discounts, service level credits, performance bonuses, price concessions and incentives. The estimated amount of variable consideration is adjusted in the transaction price only to the extent that it is highbabje that a significant reversal in the amount of cumulative revenue recognised will not occur and is reassessed at the end of each reporting period. The Company allocates the elements of variable considerations to all the performance obligationscotftthet unless there is observable evidence that they pertain to one or more distinct performance obligations.

The Company exercises judgement in determining whether the performance obligation is satisfied at a point in time or over a period of time. TCompany considers indicators such as how customer consumes benefits as services are rendered or who controls the asset as it is being created or existence of enforceable right to payment for performance to date and alternate use of such product or, ierarisfer of significant risks and rewards to the customer, acceptance of delivery by the custome r, etc.

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

Unearned and deferred revenue (“contract liability”) is recognised when there are billings in excess of revenues. The billing schedules agreed with customers include periodic performance based payments and / or milestone based progress payments. Invoices are payable within contractually agreed credit period.

Contracts are subject to modification tooucc for changes in contract specification and requirements. The Company reviews modification to contract in conjunction with the original contract, basis which the transaction price could be allocated to a new performance obligation, or transaction opricE existing obligation could undergo a change. In the event transaction price is revised for existing obligation, a cumulative adjustment is accounted for.

Unsatisfied (or partially satisfied) performance obligations are subject to variability duerao factors such as terminations, changes in scope of contracts, periodic revalidations of the estimates, economic factors (changes in currency rates, tax laws etc).

(c) Interest:

Interest is recognized on a time proportion basis taking into accoerntmthint outstanding and the rate applicable. The Rate applicable is defined as determined on the basis of Fair Rate of Return in accordance with IN D AS .

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

(d) Dividend:

Revenue is recognized when the shareholders’ right to receive payment is established by the Balance Sheet date.

(e) Rent Income:

Rent Income is recognized on the basis of agreed periodic amount decided through agreement.

(f) Profit on sale of investment:

It is recognized on its liquidation/redempti on.

(g) TAXES

(i) Current Income Taxes

Current incomeax is measured at the amount expected to be paid to the tax authorities in accordance with the Incometax Act, 961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the company operates. The tax rates and tax laws used mpute the amount are those that are enacted or substantively enacted, at the reporting date.

Current income tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other comprehensive income or in equity). rCnt tax items are recognized 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 ar d cs ujctpretation and establishes provisions where appropriate.

(ii) Deferred Taxes

Deferred tax is recognized, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying values intandalsone financial statements. However, deferred tax are not recognized if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accountable nor ta profit or loss.

Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be uti l ized.

The unrecognized deferred tax assets / carrying amduidt: fierred tax assets are reviewed at each reporting date for recoverability and adjusted appropriat ely.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or sanktsitvely enacted at the reporting date. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the company expects, at the reporting date, to recover or settle the carrying amount of its assets anid sliabilit

For operations carried out in tax free units, deferred tax assets or liabilities, if any, have been recognized for the tax consequences of those temporary differences between the carrying values of assets and liabilities and their respective tax bas dhat reverse after the tax holiday ends.

Deferred tax assets and liabilities are offset only if:

(i) The entity has a legally enforceable right to set off current tax assets against current tax liabilities; and

(ii) ii) The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same

taxation authority on the same taxable entity.

(h) NON CURRENT ASSETS HELD FOR SALE

The Company classifies nonurrent asset (or disposal group) as held sale, if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. Such asset should be available for sale and plan to dispose it off should be initiated by the management. The assets of a disposa group classified as held for sale separately from other asset in the balance sheet and such asset are valued at carrying amount or net realizable value whichever is lower.

(i) PROPERTY, PLANT AND EQUIPMENT

Property, plant & equipment are stated at thest of acquisition/construction, net of accumulated depreciation and impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met, directly attributable cost of bringing the asset to its working fondthe intended use and initial estimate of decommissioning, restoring and similar liabilities. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. Lewise, when a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or losscasr rind. Subsequent expenditure related to an item of property, plant and equipment is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. Borrowing costs dirteritiyt able to acquisition of property, plant and equipment which take substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use. An item of propert ylant and equipment and any significant part initially recognized -iise degnized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the diffjH’dnetween the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the Property, plant and equipment is derecognized. Expenditure directly relating to construction activity is capitalized.

The Company reviws the useful lives of property, plant and equipment and other intangible assets at the end of each reporting period. This-asssessment may result in change in depreciation and amortization expense in future periods.

Other Indirect Expenses, if any inced relating to project, net of income earned during the project development stage prior to its intended use, are considered as- puperative expenses and disclosed under Capital Work- in - Progress .

Depreciation on Property, Plant and Equipment isaped on a prorata basis on the Written Down Value method based on estimated useful life prescribed under Schedule II to the Companies Act, 20B.

In none of the case the residual vafean assets more than five percent of the Original Cost of the assets.

The residual values, useful lives and methods of depreciation of Property, Plant and Equipmentewreel at each financial year end and adjusted prospectively, if appropr iate.

Gains or losses arising from -recognition of a Property, Plant and Equipment are measured as the difference between the net disposal proceeds and the carrying amount of sldteaad are recognized in the Statement^ Profit and Loss when the asset is derecognized.

(j) INVESTMENT PROPERTY

Property that is held for l-tegm rental yields or for capital appreciation or both, and that is not occupied by the Company, is classified as investment property. Investment property is measured initially at its cost, including related transaction costard where applicable borrowing costs. Subsequent expenditure is capitalised to the asset’s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Company and the cost of the item can bermleasdiably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognised. Investment properties are subsequently measured at cost less deprciation. Investment properties are depreciated based on their estimated useful lives. Office premises which is considered as Investment property has a useful life of 60 years. The useful life has been determined based on technical evaluation performed hy tnanagement .

(k) IMPAIRMENT OF NON FINANCIAL ASSETS

Intangible assets, property, plant and equipment and other -fioancial assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amountsbmay not recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the valine-use) is determined on an individual asset basis unless the asset does not generate cash flows that are laygindependent of those from other ass ets.

In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs. If such assets are considered to be impaired, the impairment to be recognized in the statement of profit and loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates useddttermine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization orcideprn) had no impairment loss been recognized for the asset in prior years.

(l) INVENTORIES

Items of inventories are measured in at lower cost & net realiasable value after providing for obsolescence, if any except in case of byproducts which are valuedt net realizable value. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads net of recoverable taxes incurred in bringing them to their respective present location and condition.

Cost of raw materials, chemicals, stores and spares, packing material, trading and other products are determined on weighted average basi s.

(m) BORROWING COSTS

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale,

are added to the cost of those a$s atntil such time as the assets are substantially ready for their intended use or sale .

Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligiblecapitalization. All other borrowing costs are Recognised in profit or loss in the period in which they are incurred based on Amortised Cost as per Ind AS using effective interest rate met hod.