2. Summary of material accounting policies

2.1 Basis of preparation

These Standalone Financial Statements ('Financial
Statements') have been prepared to comply in all
material respects with the Indian Accounting Standards
('Ind AS') as notified by the Ministry of Corporate Affairs
('MCA') under section 133 of the Companies Act, 2013
('Act'), read together with Rule 3 of the Companies (Indian
Accounting Standards) Rules, 2015 (as amended from
time to time) and other accounting principles generally
accepted in India.

The Financial Statements are approved for issue by the
Company's Board of Directors at its meeting held in
Gurugram, Haryana on May 13, 2026.

The Financial Statements are based on the classification
provisions contained in Ind AS 1, 'Presentation of Financial
Statements' and Division II of Schedule III (as amended)
to the Act. Further, for the purpose of clarity, various
items are aggregated in the Standalone Balance Sheet
('Balance Sheet') and Standalone Statement of Profit and
Loss ('Statement of Profit and Loss'). Nonetheless, these
items are disaggregated separately in the notes to the
Financial Statements, where applicable or required.

All the amounts included in the Financial Statements
are reported in millions of Indian Rupee ('Rupee' or ' H ')
and are rounded off to the nearest million, except per
share data and unless stated otherwise. Further, due to
rounding off, certain amounts are appearing as '0'.

The preparation of the said Financial Statements requires
the use of certain critical accounting estimates and
judgements. It also requires the management to exercise
judgement in the process of applying the Company's
accounting policies. The areas where estimates are
significant to the Financial Statements, or areas involving
a higher degree of judgement or complexity, are
disclosed in note 3.

The accounting policies, as set out in the following
paragraphs of this note, have been consistently applied,
by the Company, to all the periods presented in the said

Financial Statements, except in case of adoption of any
new standards and amendments during the year.

To provide more reliable and relevant information about the
effect of certain items in the Balance Sheet and Statement of
Profit and Loss, the Company has changed the classification
of certain items. Previous year figures have been re-grouped
or reclassified, to conform to such current year's groupings
/ classifications. There is no impact on Equity or Net profit
due to these regroupings / reclassifications.

Amendments to Ind AS

New amendments adopted during the year

During theyear ended March 31,2026, Ministry of Corporate
Affairs ("MCA") notified the following amendments:

1. Ind AS 21 - The Effects of Changes in Foreign
Exchange Rates, applicable w.e.f. April 1, 2025

- The amendment provides comprehensive
guidance on assessing the exchangeability of
currencies, determining spot exchange rates when
currencies are not exchangeable and enhancing
related disclosures. The Company has reviewed
the amendment and based on its evaluation has
determined that it does not have any impact in its
financial statements.

2. Ind AS 1, Presentation of Financial Statements,
applicable w.e.f. April 1, 2025 - The amendment
relates to classification of liabilities. In the context
of classifying a liability as current, it removes the
earlier requirement of an unconditional right to
defer settlement for at least twelve months and now
requires that such a right exists at the reporting date
and has substance. The amendment also introduced
a new guidance on classification of liabilities with
covenants. This amendment has no impact on these
financial statements.

3. Ind AS 7, Statement of Cash Flows and Ind AS 107,
Financial Instruments: Disclosures, applicable
w.e.f. April 1, 2025 - The amendment in Ind AS 7
requires the disclosures about supplier finance
arrangements, including the nature of arrangements,
carrying amounts of liabilities and payment due
date ranges. Ind AS 107 has been updated to
include supplier finance arrangements as a factor in
evaluating liquidity risk concentration. The Company
has reviewed the amendment and based on its
evaluation has determined that it does not have any
significant impact in its financial statements.

4. Ind AS 12, International Tax Reform - Pillar
Two Model Rules applicable immediately - The

amendments provide a mandatory temporary relief
from deferred tax accounting for top-up taxes
under the OECD Pillar Two rules. Companies availing

this relief must disclose its application and provide
new disclosures. The Company has reviewed
the amendment and based on its evaluation has
determined that it does not have any significant
impact in its financial statements.

2.2 Basis of measurement

The Financial Statements have been prepared on the
accrual and going concern basis and the historical cost
convention except where the Ind AS requires a different
accounting treatment. The principal variations from the
historical cost convention relate to financial instruments
classified as fair value through profit or loss ('FVTPL') or
fair value through other comprehensive income ('FVTOCI')
(refer note 2.10(b)) - which are measured at fair value.

Fair value measurement

Fair value is the price at the measurement date, at which
an asset can be sold or a liability can be transferred, in
an orderly transaction between market participants. The
Company's accounting policies require measurement of
certain financial instruments at fair values (either on a
recurring or non-recurring basis).

The Company is required to classify the fair valuation
method of the financial / non-financial assets and liabilities,
either measured or disclosed at fair value in the Financial
Statements, using a three level fair-value-hierarchy
(which reflects the significance of inputs used in the
measurement). Accordingly, the Company uses valuation
techniques that are appropriate in the circumstances and
for which sufficient data is available to measure fair value,
maximising the use of relevant observable inputs and
minimising the use of unobservable inputs.

The three levels of the fair-value-hierarchy are
described below:

Level 1: Quoted (unadjusted) prices for identical assets or
liabilities in active markets

Level 2: Significant inputs to the fair value measurement
are directly or indirectly observable

Level 3: Significant inputs to the fair value measurement
are unobservable

2.3 Business combinations

The Company accounts for business combinations using
the acquisition method of accounting. Accordingly, the
identifiable assets acquired and the liabilities assumed
of the acquiree are recorded at their acquisition date
fair values (except certain assets and liabilities which
are required to be measured as per the applicable
standard). The choice of measurement basis is made on
an acquisition-by-acquisition basis. The consideration
transferred for the acquisition of a business is aggregation

of the fair values of the assets transferred, the liabilities
incurred and the equity interests issued by the Company
in exchange for control of the business.

The consideration transferred also includes the fair
value of any asset or liability resulting from a contingent
consideration arrangement. Any contingent consideration
to be transferred by the acquirer is recognised at fair
value at the acquisition date. Contingent consideration
classified as an asset or liability is subsequently measured
at fair value with changes in fair value recognised in
Statement of Profit and Loss. Contingent consideration
that is classified as equity is not re-measured and its
subsequent settlement is accounted for within equity.

Acquisition-related costs are expensed in the period in
which the costs are incurred.

If the initial accounting for a business combination
is incomplete as at the reporting date in which the
combination occurs, the identifiable assets and liabilities
acquired in a business combination are measured at
their provisional fair values at the date of acquisition.
Subsequently adjustments to the provisional values
are made retrospectively within the measurement
period, if new information is obtained about facts and
circumstances that existed as of the acquisition date
and, if known, would have affected the measurement of
the amounts recognised as of that date or would have
resulted in the recognition of those assets and liabilities
as of that date; otherwise the adjustments are recorded
in the period in which they occur.

A contingent liability recognised in a business combination
is initially measured at its fair value. Subsequent to initial
recognition, it is measured at the higher of:

(i) the amount that would be recognised in accordance
with Ind AS 37, 'Provisions, Contingent Liabilities and
Contingent Assets' and

(ii) the amount initially recognised less, where
appropriate, cumulative amount of income
recognised in accordance with Ind AS 115 'Revenue
from Contracts with Customers'.

2.4 Common control transactions

Transactions arising from transfers of assets / liabilities,
interest in entities or businesses between entities
that are under the common control, are accounted at
their carrying amounts. The difference, between any
consideration paid / received and the aggregate carrying
amounts of assets / liabilities and interests in entities
acquired / disposed (other than impairment, if any), is
recorded in capital reserve / retained earnings / common
control reserve, as applicable.

2.5 Foreign currency transactions

a) Functional and presentation currency

The Financial Statements are presented in Indian
Rupee which is the functional and presentation
currency of the Company.

b) Transactions and balances

Transactions in foreign currencies are initially
recorded in the relevant functional currency
at the exchange rate prevailing at the date of
the transaction.

Monetary assets and liabilities denominated in
foreign currencies are translated into the functional
currency at the closing exchange rate prevailing
as at the reporting date with the resulting foreign
exchange differences, on subsequent re-statement
/ settlement, recognised in the Statement of Profit
and Loss. Non-monetary assets and liabilities
denominated in foreign currencies are translated
into the functional currency using the exchange
rate prevalent, at the date of initial recognition (in
case they are measured at historical cost) or at the
date when the fair value is determined (in case they
are measured at fair value) - the resulting foreign
exchange difference, on subsequent re-statement
/ settlement, recognised in the Statement of Profit
and Loss, except to the extent that it relates to items
recognised in the other comprehensive income
('OCI') or directly in equity.

The equity items denominated in foreign currencies
are translated at historical cost.

2.6 Current versus 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 other 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
realised or intended to be sold or consumed in normal
operating cycle, held primarily for the purpose of trading,
expected to be realised within twelve months after
the reporting period, or cash or cash equivalent unless
restricted from being exchanged or used to settle a liability
for at least twelve months after the reporting period.

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.

Separated embedded derivatives are classified basis
the host contract.

2.7 Property, plant and equipment ('PPE')

An item is recognised as an asset, if and only if, it is
probable that the future economic benefits associated
with the item will flow to the Company and its cost can be
measured reliably. PPE are initially recognised at cost. The
initial cost of PPE comprises its purchase price (including
non-refundable duties and taxes but excluding any trade
discounts and rebates), assets retirement obligations
('ARO') and any directly attributable cost of bringing the
asset to its working condition and location for its intended
use. Further, it includes assets installed on the premises
of customers as the associated risks, rewards and control
remain with the Company.

Subsequent to initial recognition, PPE are stated at cost
less accumulated depreciation and impairment losses,
if any. When significant parts of PPE are required to be
replaced at regular intervals, the Company recognises
such parts as separate component of assets. When
an item of PPE is replaced, then its carrying amount is
derecognised from the Balance Sheet and cost of the new
item of PPE is recognised. Further, in case the replaced
part was not being depreciated separately, the cost of
the replacement is used as an indication to determine the
cost of the replaced part at the time it was acquired.

Cost of assets not ready for use, as on the Balance Sheet
date, is shown as capital work-in-progress ('CWIP') and
advances given towards acquisition of PPE outstanding
at each Balance Sheet date are disclosed under other
non-current assets.

The expenditures that are incurred after the item of
PPE has been available for use, such as repairs and
maintenance, are normally charged to the Statement
of Profit and Loss in the period in which such costs
are incurred. However, in situations where the said
expenditure can be measured reliably and is probable
that future economic benefits associated with it will flow
to the Company, it is included in the asset's carrying value
or as a separate asset, as appropriate.

Depreciation on PPE is computed using the straight-line
method over the estimated useful lives. The management
basis its past experience and technical assessment has
estimated the useful lives, which is at variance with
the life prescribed in Part C of Schedule II to the Act

and has accordingly, depreciated the assets over such
useful lives. Freehold land is not depreciated as it has an
unlimited useful life. The Company has established the
estimated range of useful lives for different categories of
PPE as follows:

The useful lives, residual values and depreciation method
of PPE are reviewed and adjusted appropriately, at least, as
at each financial year end to ensure that the method and
period of depreciation are consistent with the expected
pattern of economic benefits from these assets. The
effect of any change in the estimated useful lives, residual
values and / or depreciation method are accounted
prospectively and accordingly the depreciation is
calculated over the PPE's remaining revised useful life.
The cost and the accumulated depreciation for PPE
sold, scrapped, retired or otherwise disposed off are
derecognised from the Balance Sheet and the resulting
gains / losses are included in the Statement of Profit and
Loss within other income / other expenses.

2.8 Intangible assets

Intangible assets are recognised when the Company
controls the asset, it is probable that future economic
benefits attributed to the asset will flow to the Company
and the cost of the asset can be measured reliably.

Goodwill represents the cost of the acquired business in
excess of the fair value of identifiable net assets purchased
(refer note 2.3). Goodwill is not amortised; however, it is
tested annually for impairment and whenever there is
an indication that the cash-generating-unit ('CGU') may
be impaired (refer note 2.9) and carried at cost less any
accumulated impairment losses. The gains / (losses) on
the disposal of a CGU include the carrying amount of
goodwill relating to the CGU sold (in case goodwill has
been allocated to group of CGUs; it is determined on the
basis of the relative fair value of operations sold).

The intangible assets that are acquired in a business
combination are recognised at its fair value. Other
intangible assets are initially recognised at cost. Those
assets having finite useful life are carried at cost less
accumulated amortisation and impairment losses, if any.
Amortisation is computed using the straight-line method
over the expected useful life of intangible assets.

Subsequent expenditure on intangible assets is
capitalised only when it increases the future economic
benefits embodied in the specific asset to which it
relates. All other expenditures are recognised in profit or
loss as incurred.

The Company has established the estimated useful lives
of different categories of intangible assets as follows:

a. Software

Software (including PAAS) are amortised over the
period of license, generally not exceeding five years.

b. Licenses (including spectrum)

Acquired licenses and spectrum are amortised
commencing from the date when the related
network is available for intended use in the relevant
jurisdiction. The useful life of acquired licenses and
spectrum range upto twenty years.

The revenue-share based fee on licenses / spectrum
is charged to the Statement of Profit and Loss in the
period such cost is incurred.

The useful lives and amortisation method are
reviewed and adjusted appropriately, at least at
each financial year end to ensure that the method
and period of amortisation are consistent with
the expected pattern of economic benefits from
these assets. The effect of any change in the
estimated useful lives and / or amortisation method
is accounted for prospectively and accordingly
the amortisation is calculated over the remaining
revised useful life.

Further, the cost of intangible assets under
development ('IAUD') includes the following:

(a) The amount of spectrum allotted to the
Company and related costs (including
borrowing costs) that are directly attributable
to the acquisition or construction of qualifying
assets (refer note 6), if any, for which services
are yet to be rolled out and are presented
separately in the Balance Sheet.

(b) The amount of software / IT platform
under development.

Gains or losses arising from derecognition of an
intangible asset are measured as the difference
between the net disposal proceeds and the
carrying amount of the asset and are recognised
in the Statement of Profit and Loss when the asset
is derecognised.

2.9 Impairment of non-financial assets

a. Goodwill

Goodwill is tested for impairment, at least annually
and whenever circumstances indicate that it
may be impaired. For the purpose of impairment
testing, the goodwill is allocated to a CGU or group
of CGUs, which are expected to benefit from the
acquisition-related synergies and represent the
lowest level within the entity at which the goodwill
is monitored for internal management purposes,
within an operating segment. A CGU is the smallest
identifiable group of assets that generates cash
inflows that are largely independent of the cash
inflows from other assets or group of assets.

Impairment occurs when the carrying value of a
CGU / CGUs including the goodwill, exceeds the
estimated recoverable amount of the CGU / CGUs.
The recoverable amount of a CGU / CGUs is the
higher of its fair value less costs to sell and its value
in use. Value in use is the present value of future cash
flows expected to be derived from the CGU / CGUs.

The total impairment loss of a CGU / CGUs is
allocated first to reduce the carrying value of
goodwill allocated to that CGU / CGUs and then to
the other assets of that CGU / CGUs - on pro-rata
basis of the carrying value of each asset.

b. PPE, right-of-use assets ('ROU'),
intangible assets and IAUD

PPE (including CWIP), ROU and intangible assets
with definite lives, are reviewed for impairment,
whenever events or changes in circumstances
indicate that their carrying values may not be
recoverable. IAUD is tested for impairment, at least
annually and whenever circumstances indicate that
it may be impaired.

For the purpose of impairment testing, the
recoverable amount (that is, higher of the fair value
less costs 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 which case the
recoverable amount is determined at the CGU level
to which the said asset belongs. If such individual
assets or CGU are considered to be impaired, the
impairment to be recognised in the Statement of

Profit and Loss is measured by the amount by which
the carrying value of the asset / CGU exceeds their
estimated recoverable amount and allocated on
pro-rata basis.

c. Reversal of impairment losses

Impairment loss in respect of goodwill is not
reversed. Other impairment losses are reversed in
the Statement of Profit and Loss and the carrying
value is increased to its revised recoverable amount
provided that this amount does not exceed the
carrying value that would have been determined
had no impairment loss been recognised for the said
asset / CGU previously.

2.10 Financial instruments

a. Recognition, classification and
presentation

The financial instruments are recognised in the
Balance Sheet when the Company becomes
a party to the contractual provisions of the
financial instrument.

The Company determines the classification of its
financial instruments at initial recognition.

The Company recognises its investment in
subsidiaries, associates and joint ventures at cost
less any impairment losses. The said investments
are tested for impairment whenever circumstances
indicate that their carrying values may exceed the
recoverable amount (viz. higher of the fair value less
costs to sell and the value in use).

The Company classifies its financial assets in the
following categories: a) those to be measured
subsequently at fair value (either through OCI, or
through profit or loss) and b) those to be measured
at amortised cost. The classification depends on the
entity's business model for managing the financial
assets and the contractual terms of the cash flows.

The Company measures all the non-derivative
financial liabilities at amortised cost.

The entire hybrid contract, financial assets with
embedded derivatives, are considered in their
entirety for determining the contractual terms of the
cash flow and accordingly the embedded derivatives
are not separated. However, derivatives embedded
in non-financial instrument / financial liabilities
(measured at amortised cost) host contracts are
classified as separate derivatives if their economic
characteristics and risks are not closely related to
those of the host contracts.

Financial assets and liabilities arising from different
transactions are off-set against each other and the
resultant net amount is presented in the Balance
Sheet, if and only when, the Company currently has
a legally enforceable right to set-off the related
recognised amounts and intends either to settle
on a net basis or to realise the assets and settle the
liabilities simultaneously.

b. Measurement - Non-derivative financial
instruments

I. Initial measurement

All financial assets are recognised initially at
fair value plus, in the case of financial assets not
recorded at FVTPL, transaction costs that are
attributable to the acquisition of the financial
asset. However, trade receivables that do not
contain a significant financing component
are measured at transaction price. All financial
liabilities are recognised initially at fair value, in
the case of loans and borrowings and payables,
net of directly attributable transaction costs.
Other transaction costs are expensed as
incurred in the Statement of Profit and Loss.

The transaction price is generally the best
evidence of the financial instrument's initial
fair value. However, it is possible for an entity
to determine that the instrument's fair value
is not the transaction price. The difference
between the transaction amount and the fair
value (if any) is accounted for as follows:

• The difference is recognised as a gain or
loss in the Statement of Profit and Loss
only if fair value is evidenced by a quoted
price in an active market for an identical
asset or liability (that is, a Level 1 input) or
based on a valuation technique that uses
only data from observable markets.

• In all other cases, an entity recognises the
instrument at fair value and defers the
difference between the fair value at initial
recognition and the transaction price in
the statement of financial position.

The liability component of a compound
financial instrument is initially recognised
at the fair value of a similar liability that does
not have an equity conversion option. The
equity component is initially recognised at
the difference between the fair value of the
compound financial instrument as a whole

and the fair value of the liability component.
Any directly attributable transaction costs are
allocated to the liability and equity components
in proportion to their initial carrying amounts.

II. Subsequent measurement - financial

assets

The subsequent measurement of the non¬
derivative financial assets depends on their
classification as follows:

i. Financial assets measured at

Amortised 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 amortised cost using the effective-
interest rate ('EIR') method (if the
impact of discounting / any transaction
costs is significant). Interest income
from these financial assets is included
in other income.

ii. Financial assets at Fair Value

Through OCI ('FVTOCI')

Equity investments which are not held for
trading and for which the Company has
elected to present the change in the fair
value in OCI and debt instruments that
are held for collection of contractual cash
flows and for selling the financial assets,
where the assets' cash flow represent
solely payment of principal and interest,
are measured at FVTOCI.

The changes in fair value are taken
to OCI, except the impairment (on
debt instruments), interest (basis EIR
method), dividend and foreign exchange
differences which are recognised in the
Statement of Profit and Loss.

iii. Financial assets measured at FVTPL

All financial assets that do not meet the
criteria for amortised cost or FVTOCI
are measured at FVTPL. Interest (basis
EIR method) and dividend income from
financial assets at FVTPL is recognised in
the Statement of Profit and Loss within
other income separately from the other
gains / losses arising from changes in
the fair value.

c. Measurement - derivative financial

instruments

Derivative financial instruments, including

separated embedded derivatives are classified as

financial instruments at FVTPL - Held for trading.

Such derivative financial instruments are initially
recognised at fair value. They are subsequently
measured at their fair value, with changes in
fair value being recognised in the Statement of
Profit and Loss.

d. Derecognition

The financial assets are de-recognised from the
Balance Sheet when the rights to receive cash
flows from the financial assets have expired, or have
been transferred and the Company has transferred
substantially all risks and rewards of ownership.
The financial liabilities are de-recognised from the
Balance Sheet when the underlying obligations
are extinguished, discharged, lapsed, cancelled,
expires or legally released. The resultant impact of
derecognition is recognised in the Statement of
Profit and Loss.

2.11 Leases

The Company, at the inception of a contract, assesses the
contract as, or containing, a lease if the contract conveys
the right to control the use of an identified asset for a
period of time in exchange for consideration. To assess
whether a contract conveys the right to control the use
of an identified asset, the Company assesses whether
the contract involves the use of an identified asset, the
Company has the right to obtain substantially all of the
economic benefits from use of the asset throughout the
period of use; and the Company has the right to direct the
use of the asset.

Company as a lessee

The Company recognises a ROU and a corresponding
lease liability with respect to all lease agreements in which
it is the lessee in the Balance Sheet. The lease liability
is initially measured at the present value of the lease
payments that are not paid at the commencement date,
discounted by using the incremental borrowing rate (as
the rate implicit in the lease cannot be readily determined).
Lease liabilities include the net present value of fixed
payments (including any in-substance fixed payments)
and payments of penalties for terminating the lease, if the
lease term reflects the lessee exercising that option.

Subsequently, the lease liability is measured at amortised
cost using the effective interest method. It is remeasured
when there is a change in future lease payments including
or when the lease contract is modified and the lease
modification is not accounted for as a separate lease.
The corresponding adjustment is made to the carrying
amount of the ROU, or is recorded in profit or loss if the
carrying amount of the related ROU has been reduced to
zero and there is a further reduction in the measurement
of the lease liability.

ROU are measured at cost, comprising the amount of the
initial measurement of lease liability, any lease payments
made at or before the commencement date and any
initial direct costs less any lease incentives received.

Subsequent to initial recognition, ROU are stated at cost
less accumulated depreciation and any impairment losses
and adjusted for certain remeasurements of the lease
liability. Depreciation is computed using the straight-line
method from the commencement date to the end of the
useful life of the underlying asset or the end of the lease
term, whichever is shorter. The estimated useful lives of
ROU are determined on the same basis as those of the
underlying asset.

In the Balance Sheet, the ROU and lease liabilities are
presented separately. In the Statement of Profit and
Loss, interest expense on lease liabilities are presented
separately from the depreciation charge for the ROU.
Interest expense on the lease liability is a component
of finance costs, which are presented separately in the
Statement of Profit or Loss. In the Statement of Cash
Flows, cash payments for the principal portion of lease
payments and the interest portion of lease liability are
presented as financing activities.

When a contract includes lease and non-lease
components, the Company allocates the consideration
in the contract on the basis of the relative stand-alone
prices of each lease component and the aggregate
stand-alone price of the non-lease components.

Short-term leases and leases of low-value
assets

The Company has elected not to recognise ROU and lease
liabilities for short term leases that have a lease term of
twelve months or less and leases of low value assets. The
Company recognises lease payments associated with
these leases as an expense on a straight-line basis over
the lease term.

Sale and leaseback

In case of sale and leaseback transactions, the Company
first considers whether the initial transfer of the
underlying asset to the buyer-lessor is a sale by applying
the requirements of Ind AS 115. If the transfer qualifies as a
sale and the transaction is on market terms, the Company
effectively derecognises the asset, recognises a ROU
asset (and lease liability) and recognises a portion of the

total gain or loss on the sale. The amount recognised is
calculated by splitting the total gain or loss into:

• an amount recognised in Statement of Profit and
Loss relating to the buyer-lessor's rights in the
underlying asset and

• an unrecognised amount relating to the rights
retained by the seller-lessee which is deferred by
way of reducing the ROU initially recognised.

2.12 Taxes

The income tax expense comprises of current and
deferred income tax. Income tax is recognised in the
Statement of Profit and Loss, except to the extent that
it relates to items recognised in the OCI or directly in
equity, in which case the related income tax is also
recognised accordingly.

a. Current tax

The current tax is calculated on the basis of the
tax rates, laws and regulations, which have been
enacted or substantively enacted as at the reporting
date. The payment made in excess / (shortfall) of the
Company's income tax obligation for the period
are recognised in the Balance Sheet under assets
as income tax assets / under current liabilities as
current tax liabilities.

Any interest, related to accrued liabilities for
potential tax assessments are not included in income
tax charge or (credit), but are rather recognised
within finance costs.

The Company periodically evaluates positions
taken in the tax returns with respect to situations
in which applicable tax regulations are subject to
interpretation. The Company considers whether it
is probable that a taxation authority will accept an
uncertain tax treatment. If the Company concludes
it is probable that the taxation authority will accept
an uncertain tax treatment, it determines the
taxable profit (tax loss), tax bases, unused tax losses,
unused tax credits or tax rates consistently with
the tax treatment used or planned to be used in its
income tax filings. If the Company concludes it is
not probable that the taxation authority will accept
an uncertain tax treatment, the entity reflects the
effect of uncertainty in determining the related
taxable profit (tax loss), tax bases, unused tax losses,
unused tax credits or tax rates.

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 realise
the asset and settle the liability simultaneously.

b. Deferred tax

Deferred tax is recognised on temporary differences
arising between the tax bases of assets and liabilities
and their carrying values in the Financial Statements.
Deferred tax is also recognised in respect of carried
forward tax losses and tax credits. Deferred tax assets
/ liabilities recognised for temporary differences and
unused carry forward losses arising from a business
combination, affect the amount of goodwill or the
bargain purchase gain that the Company recognises.
However, deferred tax liabilities are not recognised
if they arise from the initial recognition of goodwill.
Deferred tax is not recognised 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.

The measurement of deferred tax liabilities and
assets reflects the tax consequences that would
follow from the manner in which the Company
expects, at the end of the reporting period, to
recover or settle the carrying amount of its assets
and liabilities.

Deferred tax assets are recognised only to the extent
that it is probable that future taxable profit will be
available against which the temporary differences
can be utilised. The Company considers the
projected future taxable income and tax planning
strategies in making this assessment.

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

Deferred tax is determined using tax rates (and laws)
that have been enacted or substantively enacted by
the reporting date and are expected to apply when
the asset is realised or the liability is settled.

Deferred tax assets and liabilities are off-set where there
is a legally enforceable right to enforceable right to offset
current tax assets and liabilities and where the deferred
tax balances relate to the same taxation authority.

!.13 Cash and cash equivalents

Cash and cash equivalents include cash in hand, bank
balances and any deposits with original maturities of
three months or less (that are readily convertible to known
amounts of cash and cash equivalents and subject to an
insignificant risk of changes in value). However, for the
purpose of the Statement of Cash Flows, in addition to
above items, any bank overdrafts / cash credits that are
integral part of the Company's cash management, are also
included as a component of cash and cash equivalents.

2.14 Equity share capital

Ordinary shares are classified as Equity when the
Company has an un-conditional right to avoid delivery of
cash or another financial asset, that is, when the dividend
and repayment of capital are at the sole and absolute
discretion of the Company and there is no contractual
obligation whatsoever to that effect.

2.15 Employee benefits

The Company's employee benefits mainly include
wages, salaries, bonuses, defined contribution plans,
defined benefit plans, compensated absences, deferred
compensation and share-based payments. The employee
benefits are recognised in the year in which the associated
services are rendered by the Company employees. Short¬
term employee benefits are recognised in Statement
of Profit and Loss at undiscounted amounts during the
period in which the related services are rendered.

a. Defined contribution plans

The contributions to defined contribution plans are
recognised in profit or loss as and when the services
are rendered by employees. The Company has no
further obligations under these plans beyond its
periodic contributions.

b. Defined benefit plans

In accordance with the local laws and regulations, all
the employees in India are entitled for the Gratuity
plan. The said plan requires a lump-sum payment
to eligible employees (meeting the required vesting
service condition) at retirement or termination of
employment, based on a pre-defined formula.

The Company provides for the liability towards
the said plans on the basis of actuarial valuation
carried out quarterly as at the reporting date, by an
independent qualified actuary using the projected-
unit-credit method.

The obligation towards the said benefits is
recognised in the Balance Sheet, at the present
value of the defined benefits obligations. The
present value of the said obligation is determined
by discounting the estimated future cash outflows,
using interest rates of government bonds.

The interest income / (expense) are calculated by
applying the above mentioned discount rate to the
plan assets and defined benefit obligations. The net
interest income / (expense) on the net defined benefit
obligations is recognised in the Statement of Profit
and Loss. However, the related re-measurements of
the net defined benefit obligations are recognised
directly in the OCI in the period in which they arise. The
said re-measurements comprise of actuarial gains

and losses (arising from experience adjustments and
changes in actuarial assumptions), the return on plan
assets (excluding interest). Re-measurements are not
re-classified to the Statement of Profit and Loss in
any of the subsequent periods.

c. Other employee benefits

The employees of the Company are entitled to
compensated absences as well as other long¬
term benefits. Compensated absences benefits
comprises of encashment and availment of leave
balances that were earned by the employees over
the period of past employment.

The Company provides for the liability towards the
said benefits on the basis of actuarial valuation
carried out quarterly as at the reporting date, by an
independent qualified actuary using the projected-
unit-credit method. The related re-measurements
are recognised in the Statement of Profit and Loss in
the period in which they arise.

d. Share-based payments

The Company operates equity-settled employee share-
based compensation plans, under which the Company
receives services from employees as consideration for
stock options towards shares of the Company.

The fair value of stock options (at grant date) is
recognised as an expense in the Statement of Profit
and Loss within employee benefits as employee
share-based payment expenses over the vesting
period, with a corresponding increase in share-
based payment reserve (a component of equity).

The total amount so expensed is determined by
reference to the grant date fair value of the stock
options granted, which includes the impact of any
market performance conditions and non-vesting
conditions but excludes the impact of any service
and non-market performance vesting conditions.
However, the non-market performance vesting and
service conditions are considered in the assumption
as to the number of options that are expected to
vest. The forfeitures are estimated at the time of
grant and reduce the said expense rateably over the
vesting period.

The expense so determined is recognised over the
requisite vesting period, which is the period over
which all of the specified vesting conditions are to
be satisfied. As at each reporting date, the Company
revises its estimates of the number of options that
are expected to vest, if required.

It recognises the impact of any revision to original
estimates in profit / (loss) such that the cumulative
expense reflects the revised estimate, with a

corresponding adjustment to the reserve in the
period of change. Accordingly, no expense is
recognised for awards that do not ultimately vest,
except for which vesting is conditional upon a
market performance / non-vesting condition. These
are treated as vested irrespective of whether or
not the market / non-vesting condition is satisfied,
provided that service conditions and all other non¬
market performance are satisfied.

Where the terms of an award are modified, in
addition to the expense pertaining to the original
award, an incremental expense is recognised for any
modification that results in additional fair value, or is
otherwise beneficial to the employee as measured
at the date of modification.

Where an existing award is cancelled (including due
to non-vesting conditions not being met), it is treated
as if it is vested thereon and any un-recognised
expense for the award is recognised immediately.