CT MATERIAL ACCOUNTING POLICY INFORMATION

a) Foreign currency transactions and balances

Initial Recognition

Foreign currency transactions are initially recorded
in the reporting currency, by applying to the foreign
currency amount, the exchange rate between the
reporting currency and the foreign currency at the date
of the transaction. However, for practical reasons, the
Company uses a monthly average rate if the average
rate approximates the actual rate at the date of the
transactions.

Conversion

Monetary assets and liabilities denominated in foreign
currencies are reported using the closing rate at the
reporting date. Non-monetary items which are carried
in terms of historical cost denominated in a foreign
currency are reported using the exchange rate at the
date of the transaction.

Treatment of exchange difference

Exchange differences arising on settlement/
restatement of foreign currency monetary assets and
liabilities of the Company are generally recognized as
income or expense in the Statement of Profit and Loss.
Exchange differences are deferred in equity if they
relate to qualifying cash flow hedges and qualifying net
investment hedges or are attributable to part of the net
investment in a foreign operation.

b) Revenue Recognition

Revenue is measured based on the transaction price,
which is the consideration, adjusted for variable
considerations, if any, as specified in the contracts
with the customers. Revenue excludes taxes collected
from customers on behalf of the government. Accruals
for variable considerations are estimated based on
accumulated experience and underlying agreements
with customers. Due to the short nature of credit period
given to customers, there is no financing component in
the contract.

Contracts where the performance obligations are
satisfied over time and where there is no uncertainty as
to measurement or collectability of consideration, are
recognized as per the input method or output method,
based on the nature of obligations to be performed. The

are accounted on accrual basis when the conditions
precedent are met and there is no significant uncertainty
about the collectability.

Costs to obtain a contract which are incurred regardless
of whether the contract was obtained are charged-off
in statement of profit and loss immediately in the period
in which such costs are incurred.

Other operational revenue represents income earned
from the activities incidental to the business and
is recognized when the performance obligation is
satisfied and right to receive the income is established
as per the terms of the contract.

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.

Dividend income from investments is recognized when
the right to receive payment has been established,
provided that it is probable that the economic benefits
will flow to the Company and the amount of income
can be measured reliably.

Other non-operating income is recognized as and when
due or received, whichever is earlier.

c) Investment in subsidiaries and joint ventures

Investments in equity of subsidiaries and joint ventures
are accounted at cost in accordance with Ind AS 27
“Separate Financial Statements". The Company reviews
the carrying value of investments carried at cost
annually, or more frequently when there is indication for
impairment. If the recoverable amount is less than its
carrying amount, the impairment loss is recorded in the
Statement of Profit and Loss.

d) Interest in joint arrangements

As per Ind AS 111 "Joint Arrangements", investment in
joint arrangement is classified as either Joint Operation
or Joint Venture. The classification depends on the
rights and obligations of each investor rather than
legal structure of the joint arrangement. The Company
classifies its joint arrangements as Joint Ventures.
When the Company has joint control with other parties
of the arrangement and rights to the net assets of the
joint arrangement, it recognizes its interest as joint
venture.

A joint operation is a joint arrangement whereby the
parties that have the joint control of the arrangement
have rights to the assets, and obligations for the
liabilities relating to the arrangement.

The Company has entered into arrangement with
another entity and executed Revenue Sharing Contracts
("RSC") with the Government. This arrangement is in the
form of joint arrangements wherein the participating
entity's assets and liabilities are proportionate to it’s
participating interest. In accounting for these joint
operations, the Company recognizes its assets and
liabilities in proportion to its participating interest.
Likewise, revenue and expenses are recognized for it’s
participating interest only. The Company accounts for
the assets, liabilities, revenues and expenses relating to
its interest in accordance with the applicable Ind AS.
The standalone financial statements of the Company
reflect its share of assets, liabilities, income and
expenditure of the arrangement which are accounted,
on a line-by-line basis with similar items in the
Company's accounts to the extent of the participating
interest of the Company as per the RSC.

e) Taxes

Income tax expense comprises of current tax expense
and deferred tax expenses. Current tax and deferred tax
are recognized in Statement of Profit and Loss, except
when they relate to items that are recognized in other
comprehensive income or directly in equity, in which
case, the current and deferred tax are also recognized
in other comprehensive income or directly in equity,
respectively.

(i) Current income tax:

Current tax is the amount of tax payable on the
taxable income for the year as determined in
accordance with the provisions of the Income Tax
Act of the respective jurisdiction. The current tax is
calculated using tax rates that have been enacted
or substantively enacted, at the reporting date.
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.

(ii) Deferred tax:

Deferred tax is recognized using the Balance
Sheet approach on temporary differences arising
between the tax bases of assets and liabilities and
their carrying amounts.

Deferred tax liabilities are recognized for all
taxable temporary differences. Deferred tax
assets are recognized for all deductible temporary
differences, the carry forward of unused tax credits
and any unused tax losses. Deferred tax assets

are recognized to the extent that it is probable that
taxable profit will be available against which the
deductible temporary differences, and the carry
forward of unused tax credits and unused tax
losses can be utilized, except when the deferred
tax asset relating to the deductible temporary
difference arises from the initial recognition of
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.

The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced
to the extent that it is no longer probable that
sufficient taxable profit will be available to allow
all or part of the deferred tax asset to be utilized.
Unrecognized deferred tax assets are re-assessed
at each reporting date and are recognized 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
using substantively enacted tax rates expected
to apply to taxable income in the years in which
the temporary differences are expected to be
recovered or settled.

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.
The Company recognizes deferred tax liability for
all taxable temporary differences, except to the
extent that both of the following conditions are
satisfied:

• When the Company can control the timing of
the reversal of the temporary difference; and

• I t is probable that the temporary difference
will not reverse in the foreseeable future.

f) Property, Plant and Equipment (other than oil assets)

All items of property, plant and equipment are initially
recorded at cost. Cost of property, plant and equipment
comprises purchase price, non-refundable taxes,
levies and any directly attributable cost of bringing the
asset to its working condition for the intended use.
Subsequent to initial recognition, property, plant and
equipment are measured at cost less accumulated
depreciation and any accumulated impairment losses.
The carrying values of property, plant and equipment
are reviewed for impairment when events or changes in
circumstances indicate that the carrying value may not
be recoverable.

The cost of an item of property, plant and equipment
is recognized 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. The cost includes the cost
of replacing part of the property, plant and equipment
and borrowing costs that are directly attributable to the
acquisition, construction or production of a qualifying
property, plant and equipment.

Items such as spare parts, stand-by equipment
and servicing equipment that meet the definition of
property, plant and equipment are capitalized at cost
and depreciated over their useful life. Costs in nature
of repairs and maintenance are recognized in the
Statement of Profit and Loss as and when incurred.
The present value of the expected cost for the
decommissioning of an asset after its use is included
in the cost of the respective asset if the recognition
criteria for a provision is met.

Capital work-in-progress (CWIP) comprises cost of
property, plant and equipment and directly related
expenses, net of accumulated impairment losses, if
any, that are not yet ready for their intended use at the
reporting date.

Depreciation on property, plant and equipment
is provided based on useful life of the assets as
prescribed in Schedule II to the Companies Act, 2013 as
per straight line method except for certain categories
of assets in respect of which life has been assessed
internally by management, taking into account the
nature of the asset, the estimated usage of the asset,
the operating conditions of the asset, past history
of replacement, anticipated technological changes,
manufacturers warranties and maintenance support,
etc. The summary of such assets is presented below:

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.

On transition to Ind AS, the Company had elected to
continue with the carrying value of all of its property,
plant and equipment recognized as at April 01, 2016,
measured as per the previous GAAP and use that
carrying value as the deemed cost of the property, plant
and equipment.

g) Oil Assets

Oil assets are stated at historical cost less accumulated
depletion and impairment and are presented as
property, plant and equipment. These are accounted
in respect of an area / field having proved oil and gas
reserves, when the wells in the area / field are ready to
commence commercial production.

Oil assets acquired in a business combination are
recognized at fair value at the acquisition date.

For oil assets, a "successful efforts" based accounting
policy is followed. Costs incurred prior to obtaining
the legal rights to explore an area are expensed
immediately to the statement of profit and loss.
All costs incurred after the technical feasibility and
commercial viability of producing oil/gas/hydrocarbons
has been demonstrated, are capitalized. Subsequent
expenditure is capitalized only where it either enhances
the economic benefits of the development/producing
asset or replaces part of the existing development/
producing asset.

All costs relating to development wells are initially
capitalized as 'Wells in Progress’ under CWIP and
transferred to oil assets on completion.

Depletion is charged on a unit of production method
reflecting the pattern of consumption. Depletable
reserves are proved reserves for acquisition costs
and proved and developed reserves for successful
exploratory wells, development wells, processing
facilities, distribution assets, estimated future
abandonment cost and all other related costs. Reserves
are considered on working interest basis which are
assessed periodically. Impact of changes to reserves,
if any are accounted prospectively.

h) Intangible assets

Intangible assets such as computer software acquired
separately are measured on initial recognition at cost.
Intangible assets arising on acquisition of business
are measured at fair value as at date of acquisition.
Following initial recognition, intangible assets are
carried at cost less accumulated amortization and
accumulated impairment loss, if any.

Intangible assets are amortized over their estimated
useful life of 6 years on straight line method and is
recognized in the statement of profit and loss under
the head "Depreciation and Amortization expense". The
estimated useful life of the intangible assets and the
amortization period are reviewed at the end of each
financial year and the amortization period is revised to
reflect the changed pattern, if any.

Intangible under development (IUD) comprises of
direct cost, related incidental expenses and attributable
borrowing cost, if any, on intangible assets which
are not ready for their intended use. Expenditure on
research activities is recognized in statement of profit
and loss as incurred.

i) Decommissioning costs

Provision for decommissioning costs is recognized
when the Company has a legal or constructive
obligation to plug and abandon a well, dismantle and
remove plant and equipment to restore the site on
which it is located. The estimated liability towards
the costs relating to dismantling, abandoning and
restoring well sites and allied facilities are recognized in
respective assets when the well is completed, and the
plant and equipment are installed.

The amount recognized is the present value of the
estimated future expenditure determined using
existing technology at current prices and escalated
using appropriate inflation rate till the expected date of
decommissioning and discounted up to the reporting
date using the appropriate risk-free interest rate.

The corresponding amount is also capitalized to the
cost of the producing property and is depleted on unit
of production method. Any change in the estimated
liability is dealt with prospectively and is also adjusted
to the carrying value of the producing property.

Any change in the present value of the estimated
decommissioning expenditure other than the
periodic unwinding of discount is adjusted to the
decommissioning provision and the carrying value of
the asset. In case reversal of provision exceeds the
carrying amount of the related asset, the excess amount
is recognized in the Statement of Profit and Loss. The
unwinding of discount on provision is charged in the
Statement of Profit and Loss as finance cost.

Provision for decommissioning cost in respect of
assets under joint operations is considered as per the
participating interest of the Company in the oilfield.

j) Inventories

Inventories of finished goods of crude oil is valued
at lower of cost or net realizable value. The cost is
determined on absorption costing method basis which
include direct cost and directly attributable service
cost including depreciation and depletion but excludes
recoverable taxes.

k) Cash and cash equivalents

Cash and cash equivalents comprises cash in hand
and demand deposits with banks, short-term balances
(with an original maturity of three months or less from
the date of acquisition), highly liquid investments that
are readily convertible into known amounts of cash and
which are subject to insignificant risk of changes in
value.

l) Borrowing costs

Borrowing costs consists of interest, ancillary costs
and other costs in connection with the borrowing of
funds.

Borrowing costs attributable to acquisition and/
or construction of qualifying assets are capitalized
as a part of the cost of such assets, up to the date
such assets are ready for their intended use. All other
borrowing costs are charged to the Statement of Profit
and Loss.

m) Impairment of non-financial assets

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

When the carrying amount of an asset or CGU exceeds
its recoverable amount, the asset is considered
impaired and is written down to its recoverable
amount. Impairment losses of continuing operations
are recognized in the Statement of Profit and Loss.

n) Employee stock option scheme

The Company operates equity-settled share-based
remuneration plans for its employees.

All services received in exchange for the grant of any
share-based payment are measured at their fair values
on the grant date and is recognized as an employee
expense, in the profit or loss with a corresponding
increase in equity, over the period that the employees
become unconditionally entitled to the options. The
increase in equity recognized in connection with share-
based payment transaction is presented as a separate
component in equity. The amount recognized as an
expense is adjusted to reflect the actual number of
stock options that vest. Grant date is the date when the
Company and employees have shared an understanding
of terms and conditions on the arrangement.

All share-based transactions are recognized as an
expense in the statement of profit or loss except when
share based transactions are done with the employees
of group companies wherein the Company does not
receive services. The amount attributable to such
transactions are recognized directly within equity. If
vesting periods or other vesting conditions apply, the
expense is allocated over the vesting period, based on the
best available estimate of the number of share options
expected to vest. Non-market vesting conditions are
included in assumptions about the number of options
that are expected to become exercisable. Estimates are
subsequently revised if there is any indication that the
number of share options expected to vest differs from
previous estimates. Any adjustment to cumulative
share-based compensation resulting from a revision is
recognized in the current period. The number of vested
options ultimately exercised by holder does not impact
the expense recorded in any period. Market conditions
are considered when estimating the fair value of the
equity instruments granted.

Upon exercise of share options, the proceeds received,
net of any directly attributable transaction costs, are
allocated to share capital up to the nominal (or par)
value of the shares issued with any excess being
recorded as securities premium.

The Company has implemented its stock option
plan through creation of an Employee Benefit Trust
(ESOP Trust). The Company treats ESOP Trust as its
extension. The Company has advanced an interest free
loan to ESOP Trust which in turn purchases shares of
the Company from open market, for giving shares to
employees. The balance equity shares not exercised
and held by the ESOP Trust are disclosed as a reduction
from the share capital and securities premium account
with an equivalent adjustment to the subscription loan
advanced to the ESOP Trust.

o) Leases

Company as a lessee

At the commencement date of a lease, the Company
recognizes a liability to make lease payments (i.e., the
lease liability) and an asset representing the right to
use the underlying asset during the lease term (i.e., the
right-of-use asset). Right-of-use assets are measured
at cost, less any accumulated depreciation, impairment
losses and adjusted for any remeasurement of lease
liabilities. The cost of right-of-use assets includes
the amount of lease liabilities recognized and lease
payments made at or before the commencement date.
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. 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 Company recognizes lease liabilities measured
at the present value of lease payments to be made
over the lease term. The lease payments also include
the exercise price of a purchase option reasonably
certain to be exercised by the Company. In calculating
the present value of lease payments, the Company
uses its incremental borrowing rate at the lease
commencement date.

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 or a change in the lease
term. The Company separately recognizes the interest
expense on the lease liability as finance cost and the
depreciation expense on the right-of-use asset.

The Company accounts for a lease modification as a
separate lease when both of the following conditions
are met:

• The modification increases the scope of the lease
by adding the right to use one or more underlying
assets.

• The consideration for the lease increases
commensurate with the standalone price for the
increase in scope and any adjustments to that
stand-alone price reflect the circumstances of the
particular contract.

For a lease modification that fully or partially decreases
the scope of the lease the Company decreases the
carrying amount of the right-of-use asset to reflect

partial or full termination of the lease. Any difference
between those adjustments is recognized in profit or
loss at the effective date of the modification.

The Company has elected to use the exemptions
under the standard on lease contracts for which
the lease terms end within 12 months as of the date
of initial application, and lease contracts for which
the underlying asset is of low value. The Company
recognizes the lease payments associated with such
leases as an expense in the statement of profit and
loss.

Company as a lessor

Rental income from operating leases where the
Company is a lessor is recognized on a straight¬
line basis over the lease term unless the receipts are
structured to increase in line with expected general
inflation to compensate for the expected inflationary
cost increases.

p) Business combinations

The Company accounts for its business combination
under acquisition method of accounting. Acquisition
related costs are recognized in the statement of profit
and loss as incurred.

Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are, with
limited exceptions, measured initially at their fair values
at the acquisition date.

The excess of the fair value of net assets acquired over
the aggregate consideration transferred is recognized
as capital reserve.

The Company determines that it has acquired a
business when the acquired set of activities and
assets include an input and a substantive process that
together significantly contribute to the ability to create
outputs.

If the initial accounting for a business combination
is incomplete by the end of the reporting period in
which the business combination occurs, the Company
reports provisional amounts for the items for which the
accounting is incomplete. During the measurement
period, the Company retrospectively adjusts the
provisional amounts recognized at the acquisition date
to reflect new information obtained about facts and
circumstances that existed as of the acquisition date
and, if known, would have affected the measurement of
the amounts recognized as of that date.

q) Financial Instruments

Initial recognition and measurement

Financial instruments (assets and liabilities) are
recognized when the Company becomes a party to a
contract that gives rise to a financial asset of one entity
and a financial liability or equity instrument of another
entity.

Financial assets (unless it is a trade receivable without
a significant financing component) and financial
liabilities are initially measured at fair value. Transaction
costs that are directly attributable to the acquisition or
issue of financial assets and financial liabilities, other
than those designated as fair value through profit or
loss (FVTPL), are added to or deducted from the fair
value of the financial assets or financial liabilities, as
appropriate, on initial recognition. Transaction costs
directly attributable to the acquisition of financial
assets or financial liabilities at FVTPL are recognized
immediately in statement of profit and loss. A trade
receivable without a significant financing component is
initially measured at the transaction price. The amount
of retention money held by the customers is disclosed
as part of trade receivables.

i. Financial assets

All regular way purchase or sale of financial
assets are recognized and derecognized on a
trade date basis. Regular way purchase or sales
are purchases or sales of financial assets that
require delivery of assets within the time frame
established by regulation or convention in the
marketplace.

Subsequent measurement

All recognized financial assets are subsequently
measured in their entirety at either amortised cost
or fair value, depending on the classification of the
financial assets:

a) Financial assets measured at amortized cost

b) Financial assets measured at fair value through
profit or loss (FVTPL)

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

Financial assets measured at amortized cost

A financial asset is measured at amortized cost if both
the following conditions are met:

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

• Contractual terms of the instruments give rise
on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.

After initial measurement, such financial assets are
subsequently measured at amortized cost using
the Effective Interest Rate (EIR) method. EIR is the
rate that exactly discounts estimated future cash
receipts (including all fees, transaction costs and other
premiums or discounts) through the expected life of the
debt instrument or where appropriate, a shorter period,
to the net carrying amount on initial recognition.

The EIR amortization is included in other income in the
statement of profit and loss. The losses arising from
impairment are recognized in the statement of profit
and loss. This category generally applies to trade and
other receivables, loans, etc.

Financial assets measured at FVTOCI

Financial assets are measured at FVTOCI if these
financial assets are held within a business model whose
objective is achieved both by collecting contractual
cash flows and selling the financial assets. 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, dividend income,
impairment losses and reversals and foreign exchange
gain or loss in the statement of profit and loss.

Financial assets measured at FVTPL

Debt instrument

FVTPL is a residual category for debt instruments. Any
debt instrument, which does not meet the criteria for
categorization as at amortized cost or as FVTOCI, is
classified at FVTPL. Financial assets included within
the FVTPL category are measured at fair value with all
changes recognized in the statement of profit and loss.

Equity investments

All equity investments in scope of Ind AS 109 are
measured at fair value. Equity instruments which are
held for trading are classified as at FVTPL. For all other
equity instruments, the Company decides to classify
the same either as at FVTOCI or FVTPL. The Company
makes such election on an instrument-by instrument
basis. The classification is made on initial recognition
and is irrevocable.

If the Company decides to classify an equity instrument
as at FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognized in
the OCI. There is no recycling of the amounts from
OCI to Statement of Profit and Loss, even on sale of
investment. However, the Company may transfer the
cumulative gain or loss within equity.

Equity instruments included within the FVTPL category
are measured at fair value with all changes recognized
in the statement of profit and loss.

De-recognition

A financial asset (or, where applicable, a part of a
financial asset or part of a group of similar financial
assets) is primarily derecognized 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

- the Company has transferred substantially
all the risks and rewards of the asset, or

- the Company has neither transferred nor
retained substantially all the risks and
rewards of the asset, but has transferred
control of the asset.

Impairment of financial assets

In accordance with Ind AS 109, the Company applies
Expected Credit Loss (ECL) model for measurement
and recognition of impairment loss on the following
financial assets and credit risk exposure:

• Debt instruments measured at amortized cost
e.g., loans and bank deposits

• Trade receivables

• Other financial assets not designated as FVTPL
For recognition of impairment loss on other financial
assets and risk exposure, 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
a 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
entity reverts to recognizing impairment loss allowance
based on 12-month ECL.

ECL is the difference between all contractual cash flows
that are due to the Company in accordance with the
contract and all the cash flows that the entity expects
to receive (i.e., all cash shortfalls), discounted at the
original EIR. Lifetime ECL are the expected credit losses
resulting from all possible default events over the
expected life of a financial instrument. The 12-month
ECL is a portion of the lifetime ECL which results from
default events that are possible within 12 months after
the reporting date.

The Company follows 'simplified approach’ for
recognition of impairment loss allowance on Trade
receivables (including lease receivables). The
application of simplified approach does not require
the Company to track changes in credit risk. Rather,
it recognizes impairment loss allowance based on
lifetime ECL at each reporting date, right from its initial
recognition.

ii. Financial liabilities
Subsequent measurement

All financial liabilities are subsequently measured at
amortized cost using the EIR method or at FVTPL.

Financial liabilities at amortized cost

After initial recognition, interest-bearing borrowings
and other payables are subsequently measured at
amortized cost using the EIR method. Gains and losses
are recognized in statement of profit and loss when the
liabilities are derecognized as well as through the EIR
amortization process. Amortized cost is calculated by
considering any discount or premium on acquisition
and fees or costs that are an integral part of the EIR.
The EIR amortization is included as finance costs in the
statement of profit and loss.

Financial liabilities at FVTPL

Financial liabilities are classified as FVTPL when the
financial liabilities are held for trading or are designated
as FVTPL on initial recognition. Financial liabilities are
classified as held for trading if they are incurred for
the purpose of repurchasing in the near term. Gains or
losses on liabilities held for trading are recognized in
the profit or loss.

De-recognition

A financial liability is de-recognized when the obligation
under the liability is discharged or cancelled or expires.

iii Trade receivables

A receivable represents the Company’s right to an
amount of consideration under the contract with

a customer that is unconditional and realizable
on the due date (i.e., only the passage of time is
required before payment of the consideration
is due). Trade receivable without a significant
financing component is initially measured at the
transaction price.

iv. Trade and other payables

These amounts represent liabilities for goods and
services provided to the Company prior to the end
of financial year which are unpaid. The amounts
are unsecured and are usually paid as per agreed
terms. 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 transaction price and
subsequently measured at amortized cost using
the effective interest method.

v. Offsetting 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 recognized amounts and there is an
intention to settle on a net basis or to realize the
assets and settle the liabilities simultaneously.