Judgements include considerations of inputs such
as expected earnings in future years, liquidity risk,
credit risk and volatility. Changes in assumptions
about these factors could affect the reported fair
value of these investments.

c. Deferred tax assets

I n assessing the realisability of deferred income
tax assets, management considers whether some
portion or all of the deferred income tax assets will
not be realised. The ultimate realisation of deferred
income tax assets is dependent upon the generation
of future taxable income during the periods in which
the temporary differences become deductible.
Management considers the scheduled reversals
of deferred income tax liabilities, projected future
taxable income and tax planning strategies in making
this assessment. Based on the level of historical
taxable income and projections for future taxable
income over the periods in which the deferred
income tax assets are deductible, management
believes that the Company will realise the benefits
of those deductible differences. The amount of the
deferred income tax assets considered realisable,
however, could be reduced in the near term if
estimates of future taxable income during the carry
forward period are reduced.

d. Defined benefit plans

The cost and present value of the gratuity obligation
and compensated absences are determined using
actuarial valuations. An actuarial valuation involves
making various assumptions that may differ from
actual developments in the future. These include
the determination of the discount rate, future salary
increases, attrition rate and mortality rates. Due to
the complexities involved in the valuation and its
long-term nature, a defined benefit obligation is
highly sensitive to changes in these assumptions.
All assumptions are reviewed at each reporting date.

e. Leases

The Company evaluates if an arrangement qualifies
to be a lease as per the requirements of Ind AS
116. Identification of a lease required significant
judgement. The Company uses significant
judgement in assessing the lease term (including
anticipated renewals) and the applicable discount
rate. The Company revises the lease term if there is
a change in non-cancellable period of a lease.

f. Useful lives of property, plant and equipment and
intangible assets

The charge in respect of periodic depreciation is
derived after determining an estimate of an asset's

expected useful life and the expected residual value
at the end of its life. The useful lives and residual
values of assets are determined by the management
at the time of acquisition of asset and reviewed
periodically, including at each financial year. The lives
are based on historical experience with similar assets
as well as anticipation of future events, which may
impact their life, such as changes in technology.

g. Provisions and contingent liabilities

A provision is recognised when the Company has
a present obligation as result of a past event and
it is probable that the outflow of resources will be
required to settle the obligation, in respect of which
a reliable estimate can be made. These are reviewed
at each balance sheet date and adjusted to reflect
the current best estimates. Contingent liabilities
are not recognised in the financial statements.
Contingent assets are disclosed where an inflow of
economic benefits is probable.

v. Fair value measurement

The Company measures financial instruments, at fair
value at each balance sheet date. (Refer note 37)

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

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

Ý In the absence of a principal market, In the most
advantageous market for the asset or liability.

The principal or the most advantageous market must
be accessible by the Company.

The fair value of an asset or a liability is measured
using the assumptions that market participants
would use when pricing the asset or liability,
assuming that market participants act in their
economic best interest.

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

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

disclosed in the financial statements are categorisec
within the fair value hierarchy, described as follows
based on the lowest level input that is significant to
the fair value measurement as a whole:

Level 1 - Quoted prices (unadjusted) in active market:
for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included
within Level 1 that are observable for the asset oi
liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities
that are not based on observable market data
(unobservable inputs).

For assets and liabil ities that are recog nised in
the financial statements on a recurring basis, the
Company determines whether transfers have
occurred between levels in the hierarchy by
re-assessing categorisation (based on the lowes
level input that is significant to the fair value
measurement as a whole) at the end of each
reporting period.

At each reporting date, the Management analyse
the movements in the values of assets and liabilities
which are required to be remeasured or re-assessed
as per the Company's accounting policies. For this
analysis, the Management verifies the major inputs
applied in the latest valuation by agreeing the
information in the valuation computation to
contracts and other relevant documents.

The Management also compares the change
in the fair value of each asset and liability with
relevant external sources to determine whether the
change is reasonable.

For the purpose of fair value disclosures, the
Company has determined classes of assets and
liabilities on the basis of the nature, characteristic
and risks of the asset or liability and the level of the
fair value hierarchy as explained above. This note
summarises accounting policy for fair value.

Other fair value related disclosures are given in the
relevant notes.

Ý Disclosures for valuation methods, significani
estimates and assumptions (notes 36
39, 40 and 41).

Ý Financial instruments (including those carried
at amortised cost) (notes 6, 11, 12, 13, 18, 19
21, 22, and 23).

Ý Quantitative disclosure of fair value measurement
hierarchy (note 37).

vi. Property, Plant and Equipment (Tangible
assets)

Property, Plant and Equipment is stated at cost
of acquisition, including expenditure directly
attributable to the acquisition or construction of
asset to bring it in working condition for intended
use, if any, till the date of acquisition/ installation
of the assets less accumulated depreciation and
accumulated impairment losses, if any.

The Company has elected to regard previous GAAP
carrying values of property, plant and equipment as
deemed cost at the date of transition to Ind AS i.e.
January 1, 2016.

Subsequent expenditure relating to Property, Plant
and Equipment is capitalised only when 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. When significant
component of the asset is replaced, it is depreciated
separately based on specific useful life. All other
repairs and maintenance costs are charged to the
Statement of Profit and Loss as incurred. The cost
and related accumulated depreciation are eliminated
from the financial statements, either on disposal
or when retired from active use and the resultant
gain or loss are recognised in the Statement of
Profit and Loss.

vii. Capital work-in-progress

Capital work-in-progress, representing expenditure
incurred in respect of assets under development
and not ready for their intended use, are carried at
cost. Cost includes related acquisition expenses,
construction cost and other direct expenditure net
of accumulated impairment, if any.

viii. Intangible Assets

Intangible assets are stated at cost, only when
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,
less accumulated amortisation and accumulated
impairment losses, if any.

I ntangible assets mainly comprise of license fees
and implementation cost for software and other
application software acquired for in-house use.

ix. Depreciation and amortisation

Depreciation is provided for property, plant and equipment so as to expense the cost less residual value over their
estimated useful lives on a straight line basis. Intangible assets are amortised from the date they are available
for use, over their estimated useful lives. The estimated useful lives are as mentioned below:

The estimated useful life and residual values are
reviewed at each financial year end and the effect
of any change in the estimates of useful life/residual
value is accounted on prospective basis.

An asset's carrying amount is written down
immediately to its recoverable amount if the asset's
carrying amount is greater than its estimated
recoverable amount.

Depreciation on additions is provided on a pro-rata
basis, from the date on which asset is ready to use.

Gains and losses on disposals are determined by
comparing proceeds with carrying amount. These are
accounted in the Statement of Profit and Loss under
Other income and Other expenses.

Purchase of furniture fixtures & office equipments at
project sites are charged off in the year of acquisition.

x. Financial Instruments

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

a. Financial Assets

(i) Initial Recognition

In the case of financial assets, not recorded at fair
value through profit or loss (FVPL), financial assets
are recognised initially at fair value plus transaction

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

(ii) Subsequent Measurement

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

Financial Assets at Amortised Cost

Financial assets are subsequently measured at
amortised cost if these financial assets are held
within a business model with an objective to hold
these assets in order to collect contractual cash
flows and the contractual terms of the financial
asset give rise on specified dates to cash flows that
are solely payments of principal and interest on the
principal amount outstanding. Interest income from
these financial assets is included in finance income
using the effective interest rate ("EIR") method.
Impairment gains or losses arising on these assets
are recognised in the Statement of Profit and Loss.

Financial Assets Measured at Fair Value

Financial assets are measured at fair value through
Other Comprehensive Income ('OCI') if these financial
assets are held within a business model with an

objective to hold these assets in order to collect
contractual cash flows or to sell these financial
assets and the contractual terms of the financial
asset give rise on specified dates to cash flows
that are solely payments of principal and interest
on the principal amount outstanding. Movements in
the carrying amount are taken through OCI, except
for the recognition of impairment gains or losses,
interest revenue and foreign exchange gains and
l osses which are recognised in the Statement of
Profit and Loss.

Financial asset not measured at amortised cost or at
fair value through OCI is carried at FVPL.

(iii) Impairment of Financial Assets

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

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

For recognition of impairment loss on other financial
assets and risk exposure, the Company determines
that 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 recognising 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.

ECL impairment loss allowance (or reversal) during
the period is recognised as income/expense in the
Statement of Profit and Loss.

(iv) De-recognition of Financial Assets

The Company de-recognises a financial asset only
when the contractual rights to the cash flows from
the asset expire, or it transfers the financial asset
and substantially all risks and rewards of ownership
of the asset to another entity.

If the Company neither transfers nor retains
substantially all the risks and rewards of ownership
and continues to control the transferred asset, the
Company recognises its retained interest in the
assets and an associated liability for amounts it
may have to pay.

If the Company retains substantially all the risks and
rewards of ownership of a transferred financial asset,
the Company continues to recognise the financial
asset and also recognises a collateralised borrowing
for the proceeds received.

On derecognition of a financial asset in its entirety,
the difference between the carrying amount at the
date of derecognition and the consideration received
is recognised in profit or loss.

b. Equity Instruments and Financial Liabilities

Financial liabilities and equity instruments issued
by the Company are classified according to the
substance of the contractual arrangements entered
into and the definitions of a financial liability and an
equity instrument.

(i) Equity Instruments

An equity instrument is any contract that evidences
a residual interest in the assets of the Company after
deducting all of its liabilities. Equity instruments
which are issued for cash are recorded at the proceeds
received, net of direct issue costs. Equity instruments
which are issued for consideration other than cash
are recorded at fair value of the equity instrument.

(ii) Financial Liabilities
- Initial Recognition

Financial liabilities are classified, at initial recognition,
as financial liabilities at FVPL, loans and borrowings
and payables as appropriate. All financial liabilities
are recognised initially at fair value and, in the case
of loans and borrowings and payables, net of directly
attributable transaction costs.

- Subsequent Measurement

The measurement of financial liabilities depends on
their classification, as described below:

- Financial liabilities at FVPL

Financial liabilities at FVPL include financial
liabilities held for trading and financial liabilities
designated upon initial recognition as at FVPL.
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 recognised in the Statement of
Profit and Loss.

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

- Financial liabilities at amortised cost

After initial recognition, interest-bearing loans
and borrowings are subsequently measured at
amortised cost using the EIR method. Any difference
between the proceeds (net of transaction costs)
and the settlement or redemption of borrowings is
recognised over the term of the borrowings in the
Statement of Profit and Loss.

Amortised cost is calculated by taking into account
any discount or premium on acquisition and fees or
costs that are an integral part of the EIR. The EIR
amortisation is included as finance costs in the
Statement of Profit and Loss.

- Derivative financial instruments

The Company uses derivative financial instruments
i.e. foreign exchange forward and options contracts
to manage its exposure to foreign exchange
risks. Such derivative financial instruments are
initially recognised at fair value on the date on
which a derivative contract is entered into and are
subsequently re-measured at fair value. The Company
uses hedging instruments that are governed by the
policies of the Company.

- Hedge Accounting

The Company uses foreign currency forward and
options contracts to hedge its foreign currency
risks which are initially recognised at fair value
on the date a derivative contract is entered into
and are subsequently remeasured at their fair
value with changes in fair value recognised in the
Standalone Statement of Profit and Loss in the
period when they arise.

- De-recognition of Financial Liabilities

Financial liabilities are de-recognised when the
obligation specified in the contract is discharged,
cancelled or expired. When an existing financial
liability is replaced by another from the same lender
on substantially different terms, or the terms of
an existing liability are substantially modified,
such an exchange or modification is treated as
de-recognition of the original liability and recognition
of a new liability. The difference in the respective
carrying amounts is recognised in the Statement of
Profit and Loss.

c. 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 recognised amounts and there is an intention to
settle on a net basis to realise the assets and settle
the liabilities simultaneously.

xi. Employee Benefits

a. Defined Contribution Plan

Contributions to defined contribution schemes
such as superannuation scheme, employees'
state insurance, labour welfare are charged as an
expense based on the amount of contribution
required to be made as and when services are
rendered by the employees. The above benefits are
classified as Defined Contribution Schemes as the
Company has no further obligations beyond the
monthly contributions.

b. Defined Benefit Plan

I n respect of certain employees, provident fund
contributions are made to a trust administered by the
Company. The interest rate payable to the members
of the trust shall not be lower than the statutory
rate of interest declared by Central Government
under Employees Provident Fund and Miscellaneous
Provisions Act, 1952 and shortfall, if any, shall be
made good by the Company. The contribution
paid or payable including the interest shortfall,
if any, is recognised as an expense in the period

in which services are rendered by the employee.
Accordingly the Provident Fund is treated as a defined
benefit plan. Further, the pattern of investments for
investible funds is as prescribed by the Government.
Accordingly, other related disclosures in respect of
provident fund have not been made.

The Company also provides for gratuity which is
a defined benefit plan, the liabilities of which is
determined based on valuations, as at the balance
sheet date, made by an independent actuary using
the projected unit credit method. Re-measurement,
comprising of actuarial gains and losses, in respect
of gratuity are recognised in the OCI, in the period
in which they occur. Re-measurement recognised in
OCI are not reclassified to the Statement of Profit
and Loss in subsequent periods. Past service cost is
recognised in the Statement of Profit and Loss in the
year of plan amendment or curtailment.

c. Leave entitlement and compensated absences

Accumulated leave which is expected to be utilised
within next twelve months, is treated as short-term
employee benefit. Leave entitlement, other than
short term compensated absences, are provided
based on a actuarial valuation, similar to that of
gratuity benefit. Re-measurement, comprising
of actuarial gains and losses, in respect of leave
entitlement are recognised in the Statement of
Profit and Loss in the period in which they occur.

d. Short-term Benefits

Short-term employee benefits such as salaries,
wages, performance incentives etc. are recognised
as expenses at the undiscounted amounts
in the Statement of Profit and Loss of the
period in which the related service is rendered.
Expenses on non-accumulating compensated
absences is recognised in the period in which the
absences occur.

xii. Inventories

a. The stock of construction materials, stores,
spares and embedded goods and fuel is valued
at cost or net realisable value, whichever is
lower. However, these items are considered to
be realisable at cost if the finished products
in which they will be used, are expected to
be sold at or above cost. Cost is determined
on weighted average basis and includes all
applicable cost of bringing the goods to their
present location and condition.

b. Spares that are of regular use are charged
to the statement of profit and loss as
and when consumed.

xiii. Cash and Cash Equivalents

Cash and cash equivalents in the Balance Sheet
comprises of cash at banks and on hand and
short-term deposits with an original maturity of three
month or less, which are subject to an insignificant
risk of changes in value.

xiv. Segment Reporting

Operating segments are reported in a manner
consistent with the internal reporting provided
to the chief operating decision maker. The chief
operating decision maker regularly monitors and
reviews the operating result of the whole Company
as one segment of "Construction". Thus, as defined
in Ind AS 108 "Operating Segments”, the Company's
entire business falls under this one operational
segment and hence the necessary information has
already been disclosed in the Balance Sheet and the
Statement of Profit and Loss.

xv. Foreign Exchange Translation of Foreign
Projects and Accounting of Foreign Exchange
Transaction

a. 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.

b. 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.

c. Treatment of Exchange Difference

Exchange differences arising on settlement/
restatement of foreign currency monetary assets and
liabilities of the Company are recognised as income
or expense in the Statement of Profit and Loss.

xvi. Revenue Recognition

a. Contract Revenue

The Company derives revenues primarily from
providing construction services.

Revenue from construction services, where the
performance obligations are satisfied over time and
where there is no uncertainty as to measurement
or collectability of consideration, is recognised
as per the percentage-of-completion method.
The percentage-of-completion of a contract is
determined by the proportion that contract costs
incurred for work performed upto the reporting
date bear to the estimated total contract costs.
When there is uncertainty as to measurement
or ultimate collectability, revenue recognition is
postponed until such uncertainty is resolved.

Contract revenue earned in excess of certification
are classified as contract assets (which we refer
as unbilled revenue) while certification in excess
of contract revenue are classified as contract
liabilities (which we refer to as due to customer).
Advance payments received from contractee for
which no services are rendered are presented
as 'Advance from contractee'. Impairment loss is
recognised on account of credit risk in respect of a
contract asset using expected credit loss model on
similar basis as applicable to trade receivables.

Due to the nature of the work required to be
performed on many of the performance obligations,
the estimation of total revenue and cost of completion
is complex, subject to many variables and requires
significant judgement. Variability in the transaction
price arises primarily due to liquidated damages,
price variation clauses, changes in scope, incentives,
if any. The Company considers its experience with
similar transactions and expectations regarding
the contract in estimating the amount of variable
consideration to which it will be entitled and
determining whether the estimated variable
consideration should be constrained. The Company
includes estimated amounts in the transaction
price to the extent it is probable that a significant
reversal of cumulative revenue recognised will not
occur when the uncertainty associated with the
variable consideration is resolved. The estimates
of variable consideration are based largely on an
assessment of anticipated performance and all
information (historical, current and forecasted) that
is reasonably available.

Contract modifications are accounted for when
additions, deletions or changes are approved either to
the contract scope or contract price. The accounting
for modifications of contracts involves assessing
whether the services added to an existing contract
are distinct and whether the pricing is at the
standalone selling price. Services added that are not
distinct are accounted for on a cumulative catch up

basis, while those that are distinct are accounted
for prospectively, either as a separate contract, if
the additional services are priced at the standalone
selling price, or as a termination of the existing
contract and creation of a new contract if not priced
at the standalone selling price.

The Company presents revenues net of indirect taxes
in its Statement of Profit and Loss.

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.

b. Share of profit and loss from unincorporated

entities in the nature of Subsidiary, Joint Venture
or Joint Operations

In case of Unincorporated Entities in the nature of
subsidiary / joint venture, share of profit and loss
are recognised in the Statement of Profit and Loss
as and when the right to receive the profit share or
obligation to settle the loss is established.

I n case of Unincorporated Entities in the nature
of a Joint Operation; the Company recognises its
direct right to the assets, liabilities, contingent
liabilities, revenues and expenses of joint operations
and its share of any jointly held or incurred assets,
liabilities, revenues and expenses. These have been
incorporated in the financial statements under the
appropriate headings.

xvii. Other Income

a. Interest Income

I nterest income is accrued on a time proportion
basis, by reference to the principal outstanding and
the applicable Effective Interest Rate (EIR).

b. Other Income

Other items of income are accounted as and when
the right to receive such income arises and it is
probable that the economic benefits will flow to
the Company and the amount of income can be
measured reliably.

xviii. Income Taxes

Income tax expense comprises of current tax expense
and the net change in the deferred tax asset or
liability during the period. Current and deferred taxes
are recognised in the Statement of Profit and Loss,
except when they relate to items that are recognised
in other comprehensive income or directly in equity,
in which case, the current and deferred tax are

also recognised in other comprehensive income or
directly in equity, respectively.

a. Current Taxes

Current income tax is recognised based on the
estimated tax liability computed after taking credit
for allowances and exemptions in accordance
with the Income Tax Act, 1961. Current income tax
assets and liabilities are measured at the amount
expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws used
to compute the amount are those that are enacted
or substantively enacted, at the reporting date.

b. Deferred Taxes

Deferred tax is determined by applying the Balance
Sheet approach. Deferred tax assets and liabilities are
recognised for all deductible temporary differences
between the financial statements' carrying amount
of existing assets and liabilities and their respective
tax base. Deferred tax assets and liabilities are
measured using the enacted tax rates or tax rates
that are substantively enacted at the Balance Sheet
date. The effect on deferred tax assets and liabilities
of a change in tax rates is recognised in the period
that includes the enactment date. Deferred tax
assets are only recognised to the extent that it is
probable that future taxable profits will be available
against which the temporary differences can be
utilised. Such assets are reviewed at each Balance
Sheet date to reassess realisation.

Deferred tax assets and liabilities are offset when
there is a legally enforceable right to offset current
tax assets and liabilities. 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.

xix. Leases

The Company's lease asset classes primarily consist
of leases for land, building and plant and equipment.
The Company assesses whether a contract contains
a lease, at inception of a contract. A contract is, or
contains, a lease if the contract conveys the right to
control the use of an identified asset for a period of
time in exchange of the consideration.

At the date of the commencement of the lease,
the Company recognises a right-of-use asset
representing its right to use the underlying asset
for the lease term and a corresponding lease
liability for all the lease arrangements in which it
is a lease, except for leases with a term of twelve

months or less (short-term leases) and low value
leases. For these short-term and low value leases,
the Company recognises the lease payments as an
operating expense on a straight-line basis over the
term of the lease.

The right-of-use assets are initially recognised at
cost, which comprises the initial amount of the
lease liability adjusted for any lease payments
made at or prior to the commencement date of
the lease. They are subsequently measured at cost
less accumulated depreciation and impairment
losses. Right-of-use assets are depreciated from the
commencement date on a straight-line basis over
the shorter of the lease term and useful life of the
underlying asset. The estimated useful life of the
assets are determined on the same basis as those
of property, plant and equipment.

Right-of-use assets are evaluated for recoverability
whenever events or changes in circumstances
indicate that their carrying amounts may not be
recoverable. Carrying amount of right-of-use asset is
written down immediately to its recoverable amount
if the asset's carrying amount is greater than its
estimated recoverable amount.

The lease liability is initially measured at amortised
cost at the present value of the future lease payments.
The future lease payments are discounted using the
interest rate implicit in the lease or, if not readily
determinable, using the incremental borrowing rates.
For a lease with reasonably similar characteristics,
the Company, on a lease by lease basis, may adopt
either the incremental borrowing rate specific to
the lease or the incremental borrowing rate for
the portfolio as a whole. In addition, the carrying
amount of lease liabilities is remeasured if there
is a modification, a change in the lease term, a
change in the lease payments or a change in the
assessment of an option to purchase the underlying
asset. When the lease liability is remeasured, a
corresponding adjustment is made to the carrying
amount of the right-of-use asset, or is recorded in
profit or loss if the carrying amount of the right-of-
use asset has been reduced to zero.

Right-of-use assets and Lease liabilities have
been separately presented in the Balance Sheet.
Further, lease payments have been classified as
financing cash flows.

xx. Impairment of non-financial assets

As at each Balance Sheet date, the Company assesses
whether there is an indication that a non-financial
asset may be impaired and also whether there is an

indication of reversal of impairment loss recognised
in the previous periods. If any indication exists, or
when annual impairment testing for an asset is
required, the Company determines the recoverable
amount and impairment loss is recognised when
the carrying amount of an asset exceeds its
recoverable amount.

Recoverable amount is determined:

Ý In case of an individual asset, at the higher
of the assets' fair value less cost to sell and
value in use; and

Ý In case of cash generating unit (a group of assets
that generates identified, independent cash
flows), at the higher of cash generating unit's fair
value less cost to sell and value in use.

In assessing value in use, the estimated future cash
flows are discounted to their present value using
pre-tax discount rate that reflects current market
assessments of the time value of money and risk
specified to the asset. In determining fair value less
cost to sell, recent market transaction are taken into
account. If no such transaction can be identified, an
appropriate valuation model is used.

Impairment losses of continuing operations, including
impairment on inventories, are recognised in the
Statement of Profit and Loss, except for properties
previously revalued with the revaluation taken to OCI.
For such properties, the impairment is recognised in
OCI up to the amount of any previous revaluation.

When the Company considers that there are no
realistic prospects of recovery of the asset, the
relevant amounts are written off. If the amount of
impairment loss subsequently decreases and the
decrease can be related objectively to an event
occurring after the impairment was recognised,
then the previously recognised impairment loss is
reversed through the Statement of Profit and Loss.

xxi. Earnings Per Share

Basic earnings per share is computed by dividing the
net profit or loss for the period attributable to the
equity shareholders of the Company by the weighted
average number of equity shares outstanding during
the period. The weighted average number of equity
shares outstanding during the period and for all
periods presented is adjusted for events, such as
bonus shares, other than the conversion of potential
equity shares, that have changed the number of
equity shares outstanding, without a corresponding
change in resources.

Diluted earnings per share is computed by dividing
the net profit or loss for the period attributable to the
equity shareholders of the Company and weighted
average number of equity shares considered for
deriving basic earnings per equity share and also
the weighted average number of equity shares that
could have been issued upon conversion of all dilutive
potential equity shares. The dilutive potential equity
shares are adjusted for the proceeds receivable had
the equity shares been actually issued at fair value
i.e., the average market value of the outstanding
equity shares).