2. Material Accounting Policy

2.1 Basis of preparation of standalone financial statements

The standalone financial statements of the Company
have been prepared in accordance with Indian Accounting
Standards (Ind AS) notified under Section 133 of the
Companies Act, 2013 (the Act') read with the Companies
(Indian Accounting Standards) Rules, 2015, (as amended
from time to time) and the presentation requirements of
Schedule III to the Act, as amended by the Companies
(Accounts) Amendment Rules, 2021 and made effective
from April 01, 2021. As stated in the above notification,
the Company has made the disclosures specified in the
Schedule III to the Act, to the extent those disclosures are
applicable and reportable.

These standalone financial statements have been prepared
on a historical cost basis, except for derivative financial
instruments and other financial assets held for trading,
which have been measured at fair value.

The Balance sheet and the Statement of profit and loss
are prepared and presented in the format prescribed in
the Division II of Schedule III to the Act. The Statement of
Cash Flows has been prepared and presented as per the
requirements of Ind AS 7, Statement of Cash Flows.

All amounts disclosed in the standalone financial
statements and notes are presented in H lakhs and have
been rounded off to two decimal as per the requirement
of Division II of Schedule III to the Act, unless otherwise
stated.

2.2 Presentation standalone of financial statements

The Company presents its standalone financial statements
in compliance with the Division II of the Schedule III to the
Act.

Financial assets and financial liabilities are generally
reported gross in the balance sheet. They are only offset and
reported net when, in addition to having an unconditional
legally enforceable right to offset the recognised amounts
without being contingent on a future event, the parties
also intend to settle on a net basis in all of the following
circumstances:

• The normal course of business

• The event of default

• The event of insolvency or bankruptcy of the company
and or its counterparties

2.3 Accounting judgments, assumptions and use of
estimates

The preparation of the Company's standalone financial
statements requires management to make judgments,
estimates and assumptions that affect the reported
amounts of revenues, expenses, assets, liabilities, the
accompanying disclosures including the disclosure of
contingent liabilities. Uncertainty about these assumptions
and estimates could result in outcomes that require a
material adjustment to the carrying amount of assets or
liabilities affected in future periods. The estimates and
associated assumptions are based on historical experience
and various other factors that are believed to be reasonable
under the circumstances existing when the financial
statements were prepared. The estimates and underlying
assumptions are reviewed on an ongoing basis. Revision to
accounting estimates is recognised in the year in which the
estimates are revised and in any future year affected.

Critical judgements in applying accounting policies

The following are the critical judgements, apart from those
involving estimations, that the management has made in
the process of applying the Company's accounting policies
and that have the most significant effect on the amounts
recognised in the standalone financial statements.

• Fair value measurement of standalone financial
instruments

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. When the fair values of financial
assets and financial liabilities recorded in the balance
sheet cannot be measured based on quoted prices
in active markets, their fair value is measured using

appropriate valuation techniques. The inputs for
these valuations are taken from observable sources
where possible, but where this is not feasible, a
degree of judgment is required in establishing fair
values. Judgments include considerations of various
inputs including liquidity risk, credit risk, volatility etc.
Changes in assumptions/judgments about these
factors could affect the reported fair value of financial
instruments.

• Impairment of financial assets using the Expected
Credit Loss method

The impairment provisions for financial assets are
based on assumptions about risk of default, expected
loss rates and loss given defaults. The Company uses
judgment in making these assumptions and selecting
the inputs to the impairment calculation, based on
the Company's history, existing market conditions as
well as forward looking estimates at the end of each
reporting period.

• Business model assessment

Classification and measurement of financial assets
depends on the results of the Solely for payment of
principal and interest (SPPI) test and the business
model test The Company determines the business
model at a level that reflects how groups of financial
assets are managed together to achieve a particular
business objective. This assessment includes
judgment used by the Company in determining the
business model including how the performance of the
assets is evaluated and their performance measured,
the risks that affect the performance of the assets
and how these are managed. The Company monitors
financial assets that are derecognised prior to their
maturity to understand the reason for their disposal
and whether the reasons are consistent with the
objective of the business for which the asset was
held.

• Income taxes

Significant judgments are involved in estimating
budgeted profits for the purpose of paying advance
tax, determining the provision for income taxes,

including amount expected to be paid/recovered for
uncertain tax positions.

• Provisions and contingencies

Provisions and contingencies are recognized when
they become probable and when there will be a future
outflow of funds resulting from past operations or
events and the outflow of resources can be reliably
estimated. The timing of recognition and quantification
of the provision and liability requires the application of
judgement to existing facts and circumstances, which
are subject to change.

• Employee stock option scheme (ESOP)

The Company measures the cost of equity-settled
transactions with employees using Black-Scholes
Model to determine the fair value of the liability incurred
on the grant date. Estimating fair value for share-
based payment transactions requires determination
of the most appropriate valuation model, which is
dependent on the terms and conditions of the grant.
This estimate also requires determination of the most
appropriate inputs to the valuation model including
the expected life of the share option, volatility and
dividend yield and making assumptions about them.

Key source of assumptions and estimates

The key assumptions concerning the future and other key
sources of estimating uncertainty at the reporting date, that
have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next
financial year, are described below. The Company based its
assumptions and estimates on parameters available when
financial statements are prepared. Existing circumstances
and assumptions about future developments, however,
may change due to market changes or circumstances
arising that are beyond the control of the Company. Such
changes are reflected in the assumptions when they occur.

• Retirement and other employee benefits

The cost of the gratuity and long-term employee
benefits and the present value of its obligations are
determined using actuarial valuation. An actuarial
valuation involves making various assumptions
that may differ from actual developments in the
future. These include the determination of the future
salary increases, attrition rate, mortality rates and
discount rate. Due to the complexities involved in the
valuation and its long-term nature, the obligation is

highly sensitive to changes in these assumptions. All
assumptions are reviewed at each reporting date.

Future salary increases are based on expected future
inflation rates for India. The attrition rate represents
the Company's expected experience of employee
turnover. The mortality rate is based on publicly
available mortality tables for India. Those mortality
tables tend to change only at interval in response to
demographic changes. Discount rate is based upon
the market yields available on Government bonds at
the accounting date with a term that matches that of
the liabilities.

Further details about gratuity and long term employee
benefits obligations are provided in Note 32.

• Useful lives of property, plant and equipment:

The Company reviews the estimated useful lives
of property, plant and equipment at the end of each
reporting period. Uncertainties in these estimates
relate to technical and economic obsolescence that
may change the utility of assets.

• Effective interest rate

The effective interest rate is the rate that discounts
estimated future cash payments or receipts through
the expected life of the financial asset or financial
liability to the gross carrying amount of a financial (i.e.
its amortised cost before any impairment allowance)
or to the amortised cost of a financial liability.
This estimation, by nature, requires an element of
judgement regarding the expected behaviour and
life-cycle of the instruments and other fee income/
expense that are integral parts of the instrument.

• Investment in associates/joint ventures

An associate is an entity over which the Company
has significant influence. Significant influence is the
power to participate in the financial and operating
policy decision of the investee, but it's not control over
those policies. The Company's interest in its associate
is accounted for using the equity method from the
date on which the investee becomes an associate.

• Business combination

Business combinations are accounted for using the
acquisition method. The acquisition date is the date
on which control is transferred to the acquirer. The

consideration transferred in a business combination
comprises the fair values of the assets transferred,
liabilities incurred to the former owners of the acquired
business, equity interests issued by the Company and
fair value of any assets or liabilities resulting from a
contingent consideration arrangement. Acquisition-
related costs are expensed as incurred.

At the acquisition date, the identifiable assets acquired
and liabilities and contingent liabilities assumed in
a business combination are measured at their fair
values. However, certain assets and liabilities, i.e.,
deferred tax assets or liabilities, assets or liabilities
related to employee benefits arrangements, liabilities
or equity instruments related to share-based payment
arrangements and assets or disposal groups that
are classified as held for sale, acquired or assumed
in a business combination are measured as per the
applicable Ind AS.

The Company recognises any non-controlling interest
in the acquired entity on an acquisition by acquisition
basis either at fair value or at the non-controlling
interest's proportionate share of the acquired entity's
net identifiable assets.

The excess of the sum of the consideration transferred,
the amount of any non-controlling interests in the
acquired entity and the acquisition date fair value of
any previous equity interest in the acquired entity over
the acquisition-date fair value of the net identifiable
assets acquired is recognised as goodwill. Any gain
on a bargain purchase is recognised is in Other
comprehensive income and accumulated in equity
as Capital reserve if there exists clear evidence of
the underlying reasons for classifying the business
combination as resulting in a bargain purchase,
otherwise the gain is recognised directly in equity as
Capital Reserve.

Goodwill represents excess of the cost of portfolio
acquisition over the net fair value of the identifiable
assets and liabilities. Goodwill paid on acquisition
of portfolio is included in intangible assets. Goodwill
recognised is tested for impairment annually and
when there are indications that the carrying amount
may exceed the recoverable amount.

Goodwill on acquisitions of subsidiaries is shown
as separate line item in financial statements.
These Goodwill is not amortised, but it is tested for

impairment annually, or more frequently if events
or changes in circumstances indicate that it might
be impaired and is carried at cost less accumulated
impairment losses. Gains and losses on the disposal
of an entity include the carrying amount of goodwill
relating to the entity sold

Any contingent consideration is measured at fair
value at the date of acquisition. If an obligation
to pay contingent consideration that meets the
definition of a financial instrument is classified as
equity, then it is not re-measured subsequently and
settlement is accounted for within equity. Other
contingent consideration is re-measured at fair value
at each reporting date and changes in the fair value
of contingent consideration are recognised in profit or
loss.

When a business combination is achieved in stages,
any previously held equity interest in the acquiree is
re-measured at its acquisition-date fair value and
the resulting gain or loss, if any, is recognised in the
Consolidated Statement of Profit and Loss or Other
Comprehensive Income, as appropriate.

Where it is not possible to complete the determination
of fair values by the end of the reporting period in which
the combination occurs, a provisional assessment
of fair values is made and any adjustments required
to those provisional values, and the corresponding
adjustments to goodwill, are finalised within 12
months of the acquisition date.

Common control business combinations includes
transactions, such as transfer of subsidiaries or
businesses, between entitles within a Company.
Company has accounted all such transactions based
on pooling of interest method, which is as below:-

• The assets and liabilities of the combining
entities are reflected at their carrying amounts

• No adjustments are made to reflect fair values,
or recognise any new assets or liabilities.

• The financial information in the financial
statements in respect of prior periods are
restated as if the business combination had
occurred from the beginning of the preceding
period in the financial statements, irrespective of
the actual date of the combination.

The identity of the reserves shall be preserved and shall
appear in the financial statements of the transferee in
the same form in which they appeared in the financial
statements of the transferor. The difference, if any,
between the amount recorded as share capital issued
plus any additional consideration in the form of cash
or other assets and the amount of share capital of the
transferor shall be transferred to capital reserve.

2.4 Other accounting policies (refer related notes to the

standalone financial statements)

a. Property, plant and equipment (PPE) [refer note 3]

PPE are stated at cost less accumulated depreciation
and impairment losses, if any. Cost comprises the
purchase price and any attributable cost of bringing
the asset to its working condition for its intended
use. Subsequent costs incurred on an item of PPE is
recognised in the carrying amount thereof when those
costs meet the recognition criteria as mentioned
above. Repairs and maintenance are recognised in
profit or loss as incurred. Borrowing costs relating to
acquisition of PPE which takes substantial period of
time to get ready for its intended use are also included
to the extent they relate to the period till such assets
are ready to be put to use. Gains or losses arising
from derecognition of PPE 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.

Depreciation on PPE is provided on straight line method
over the useful lives of assets as prescribed in Schedule
II of the Act, except for leasehold improvements.
Leasehold improvements are amortised over a period
of lease or useful life, whichever is less. The residual
values, useful lives and method of depreciation of PPE
are reviewed at each financial year end and adjusted
prospectively, if appropriate.

b. Intangible assets [refer note 5]

Intangible assets are recorded at the consideration
paid for the acquisition of such assets and are carried
at cost less accumulated amortisation and impairment
losses, if any. The cost of intangible assets acquired in
a business combination is their fair value at the date
of acquisition. Intangible assets are amortised on
straight line basis over the estimated useful life. The
useful lives and method of depreciation of intangible
assets are reviewed at each financial year end and
adjusted prospectively, if appropriate. Gains or losses
arising from derecognition of an intangible asset are
measured as the difference between the net disposal
value and the carrying amount of the asset and are
recognized in the Statement of profit and loss when
the asset is derecognized.

The Company capitalises computer software and
related implementation cost where it is reasonably
estimated that the software has an enduring useful
life. Software including operating system licenses
are amortized over their estimated useful life of 6- 9
years.

c. Impairment of non-financial assets [refer note 28]

As at the end of each accounting year, the Company
reviews the carrying amounts of its PPE and intangible
assets to determine whether there is any indication
that those assets have suffered an impairment loss. If
such indication exists, the PPE and intangible assets
are tested for impairment so as to determine the
impairment loss, if any.

Impairment loss is recognised when the carrying
amount of an asset exceeds its recoverable amount.
Recoverable amount is the higher of fair value less
costs of disposal and value in use. In assessing value
in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that
reflects current market assessments of the time value
of money and the risks specific to the asset for which
the estimates of future cash flows have not been
adjusted.

If recoverable amount of an asset (or cash generating
unit) is estimated to be less than its carrying amount,
such deficit is recognised immediately in the

Statement of profit and loss as impairment loss and
the carrying amount of the asset (or cash generating
unit) is reduced to its recoverable amount. For this
purpose, the impairment loss recognized in respect
of a cash generating unit is allocated to reduce the
carrying amount of the assets of the cash generating
unit on a pro-rata basis.

d. Revenue from operations [refer note 22]

Revenue is measured at transaction price i.e. the
amount of consideration to which the Company
expects to be entitled in exchange for transferring
promised services to the customer, excluding
amounts collected on behalf of third parties. The
Company consider the terms of the contract and
its customary business practices to determine the
transaction price. Where the consideration promised
is variable, the Company excludes the estimates
of variable consideration that are constrained. The
company applies five-step model for the recognition
of revenue.

The Company recognises revenue from the following
sources:

Fee income including fees for Advisory, Syndication
and other allied services. The right to receive fees
is based on milestones defined in accordance with
the terms of the contracts entered into between the
Company and counterparties which also defines its
performance obligation. Fee income are accounted
for on an accrual basis.

e. Recognition of Interest and dividend income [refer
note 24]

Interest income

Under Ind AS 109, Financial Instruments, interest
income is recorded using the Effective Interest Rate
(EIR) method for all financial instruments measured
at amortised cost. The EIR is the rate that exactly
discounts estimated future cash receipts through
the expected life of the financial asset to the gross
carrying amount of the financial asset.

The calculation of the EIR includes all transaction cost
and fees that are incremental and directly attributable
to the acquisition of a financial asset.

The interest income is calculated by applying the EIR
to the gross carrying amount of non-credit impaired
financial assets (i.e. at the amortized cost of the

financial asset before adjusting for any expected
credit loss allowance). For credit-impaired financial
assets the interest income is calculated by applying
the EIR to the amortized cost of the credit-impaired
financial assets (i.e. the gross carrying amount less
the allowance for Expected Credit Losses (ECLs)). The
Company assesses the collectability of the interest on
credit impaired assets at each reporting date. Based
on the outcome of such assessment, the Interest
income accrued on credit impaired financial assets
are either accounted for as income or written-off.

Dividend income

Dividend income is recognised in the statement of
profit and loss when the Company's right to receive
payment of the dividend is established, it is probable
that the economic benefits associated with the
dividend will flow to the entity, and the amount of the
dividend can be measured reliably.

f. Leases [refer note 36]

The Company as a lessee

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 for consideration. To assess whether
a contract conveys the right to control the use of an
identified asset, the Company assesses whether: (1)
the contract involves the use of an identified asset;
(2) the Company has substantially all of the economic
benefits from use of the asset through the period of
the lease; and (3) the Company has the right to direct
the use of the asset.

At the date of commencement of the lease, the
Company recognizes a Right-of-Use asset ('RoU')
and a corresponding lease liability for all lease
arrangements in which it is a lessee, 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 recognizes the lease
payments as an operating expense on a straight-line
basis over the term of the lease.

Certain lease arrangements include the options to
extend or terminate the lease before the end of the
lease term. RoU assets and lease liabilities includes
these options when it is reasonably certain that they
will be exercised.

The RoU assets are initially recognized 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 plus any
initial direct costs less any lease incentives. 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 lease liability is initially measured at amortized
cost at the present value of the future lease payments.
The lease payments are discounted using the interest
rate implicit in the lease or, if not readily determinable,
using the incremental borrowing rates in the country
of domicile of the leases. Lease liabilities are re¬
measured with a corresponding adjustment to the
related right of use asset if the Company changes its
assessment if whether it will exercise an extension or
a termination option.

Lease liability and RoU asset have been separately
presented in the Balance Sheet and lease payments
have been classified as financing cash flows.

The Company as a lessor

Leases for which the Company is a lessor is classified
as a finance or operating lease. Whenever the terms
of the lease transfer substantially all the risks and
rewards of ownership to the lessee, the contract is
classified as a finance lease. All other leases are
classified as operating leases.

When the Company is an intermediate lessor, it
accounts for its interests in the head lease and the
sublease separately. The sublease is classified as a
finance or operating lease by reference to the RoU
asset arising from the head lease.

For operating leases, rental income is recognized on a
straight line basis over the term of the relevant lease.

g. Financial instruments
Date of recognition

Financial assets and financial liabilities, with the
exception of borrowings are initially recognised on the
trade date, i.e., the date that the Company becomes a
party to the contractual provisions of the instrument.

This includes regular trades, purchases or sales of
financial assets that require delivery of assets within
the time frame generally established by regulation
or convention. The Company recognises borrowings
when funds are received by the Company.

Initial measurement of financial instruments

Financial assets 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
financial assets and financial liabilities at fair value
through profit or loss) 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 fair value through profit or loss are recognised
immediately in profit or loss.

Classification and subsequent measurement of
financial instruments

(i) Financial assets :

The Company subsequently classifies all of its
debt financial assets based on the business
model for managing the assets and the asset's
contractual terms, measured at either:

Financial assets carried at amortised cost (AC)

A financial asset is measured at amortised
cost if it is held within a business model whose
objective is to hold the asset in order to collect
contractual cash flows and the contractual terms
of the financial asset gives rise to cash flows
on specified dates that are solely payments of
principal and interest on the principal amount
outstanding. The changes in carrying value of
such financial asset is recognised in profit and
loss account.

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

A financial asset is measured at FVTOCI if it is
held within a business model whose objective
is achieved by both collecting contractual
cash flows and selling financial assets and the
contractual terms of the financial asset give
rise to cash flows on specified dates that are
solely payments of principal and interest on the

principal amount outstanding. The changes in
fair value of such financial asset is recognised in
Other Comprehensive Income.

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

A financial asset which is not classified in
any of the above categories are measured at
FVTPL. The Company measures all financial
assets classified as FVTPL at fair value at each
reporting date. The changes in fair value of such
financial asset is recognised in Profit and loss
account.

Amortised cost and Effective interest method

The effective interest method is a method
of calculating the amortised cost of a debt
instrument and of allocating interest income
over the relevant period.

For financial instruments the effective interest
rate is the rate that exactly discounts estimated
future cash receipts (including all fees and
points paid or received that form an integral part
of the effective interest rate, transaction costs
and other premiums or discounts) excluding
expected credit losses, through the expected life
of the debt instrument, or, where appropriate, a
shorter period, to the gross carrying amount of
the debt instrument on initial recognition.

The amortised cost of a financial asset is
the amount at which the financial asset is
measured at initial recognition minus the
principal repayments, plus the cumulative
amortisation using the effective interest method
of any difference between that initial amount
and the maturity amount, adjusted for any loss
allowance. On the other hand, the gross carrying
amount of a financial asset is the amortised cost
of a financial asset before adjusting for any loss
allowance.

Financial assets held for trading

The Company classifies financial assets as
held for trading when they have been acquired
primarily for short-term profit making through
trading activities or form part of a portfolio
of financial instruments that are managed
together, for which there is pattern of short-term

profit. Held-for-trading assets and liabilities are
recorded and measured in the balance sheet at
fair value.

Investment in equity instruments of subsidiary,
associates and joint ventures

The Company measures all equity investments
in subsidiaries and associates at cost as
permitted under Ind AS 27, Separate Financial
statements subject to impairment, if any.

Other equity instruments

The Company subsequently measures all other
equity investments at fair value through profit
or loss, unless the management has elected
to classify irrevocably some of its equity
investments as equity instruments at FVTOCI,
when such instruments meet the definition of
Equity under Ind AS 32, Financial Instruments:
Presentation and are not held for trading. Such
classification is determined on an instrument-
by-instrument basis.

Gains and losses on these equity instruments
are never recycled to profit or loss. Dividends
are recognised in profit or loss as dividend
income when the right of the payment has been
established, except when the benefits from such
proceeds as a recovery of part of the cost of
the instrument, in which case, such gains are
recorded in OCI.

Impairment of financial assets

The Company records allowance for expected
credit losses for all amortised cost financial
assets and financial guarantee contracts, in this
section all referred to as 'financial instruments'.
Equity instruments are not subject to impairment
under Ind AS 109,Financial Instruments.

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

matrix is based on its historically observed
default rates over the expected life of the
receivables.

For all other financial instruments, the Company
recognises lifetime ECL when there has been
a significant increase in credit risk since
initial recognition. If, on the other hand, the
credit risk on the financial instrument has not
increased significantly since initial recognition,
the Company measures the loss allowance
for that financial instrument at an amount
equal to 12-month expected credit losses. The
assessment of whether lifetime ECL should be
recognised is based on significant increases
in the likelihood or risk of a default occurring
since initial recognition instead of on evidence
of a financial asset being credit-impaired at the
reporting date or an actual default occurring.

For financial assets, the expected credit loss
is estimated as 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 Company expects
to receive, discounted at the original effective
interest rate. The Company recognises an
impairment gain or loss in profit or loss for all
financial instruments with a corresponding
adjustment to their carrying amount through a
loss allowance account.

The method and significant judgments used
while computing the expected credit losses
and information about the exposure at default,
probability of default and loss given default have
been set out in Note 40.

Derecognition of financial assets

A financial asset (or, where applicable, a part of
a financial asset or part of a company of similar
financial assets) is primarily derecognised (i.e.
removed from the Company's balance sheet)
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

(a) the Company has transferred substantially
all the risks and rewards Of the asset, or (b) the
Company has neither transferred nor retained
substantially all the risks and rewards of the
asset, but has transferred control of the asset.

When the Company has transferred its rights to
receive cash flows from an asset, it evaluates
if and to what extent it has retained the risks
and rewards of ownership. When it has neither
transferred nor retained substantially all of the
risks and rewards of the asset, nor transferred
control of the asset, the Company continues to
recognise the transferred asset to the extent
of the company's continuing involvement. In
that case, the Company also recognizes an
associated liability, the transferred asset and the
associated liability are measured on the basis
that reflects the rights and obligations that the
Company has returned.

(ii) Financial liabilities and equity :

Financial instruments issued by the Company
are classified as either financial liabilities or as
equity in accordance with the substance of the
contractual arrangements and the definitions of
a financial liability and an equity instrument.

An equity instrument is any contract that
evidences a residual interest in the assets of an
entity after deducting all of its liabilities. Equity
instruments issued by the Company entity are
recognised at the proceeds received, net of
direct issue costs.

All financial liabilities are measured at amortised
cost except for financial guarantees and
derivative financial liabilities.

Debt securities and other borrowed funds

After initial measurement, debt issued and other
borrowed funds are subsequently measured at
amortised cost. Amortised cost is calculated by
taking into account any discount or premium on
issue funds, and costs that are an integral part of
the EIR.

Financial guarantee:

Financial guarantees are contracts that requires
the Company to make specified payments to the
holders to make good the losses incurred arising

from default in performance obligation by the
borrower.

Financial guarantee issued or commitments to
provide a loan at below market interest rate are
initially measured at fair value and the initial fair
value is amortised over the life of the guarantee
or the commitment. Subsequently they are
measured at higher of this amortised amount
and the amount of loss allowance.

Derivative contracts (Derivative assets/
Derivative liability)

The Company enters into a variety of derivative
financial contracts to manage its exposure
to market risks including futures and options
contracts.

Derivatives are initially recognised at fair value
and are subsequently re-measured at fair value
through profit or loss. The resulting gain or loss
is recognised in profit or loss immediately.

Embedded derivatives

The embedded derivatives are treated as
separate derivatives when:

• their economic characteristics and risks
are not closely related to those of the host
contract;

• a separate instrument with the same terms
would meet the definition of a derivative;
and

• a hybrid instrument is not measured at fair
value.

An embedded derivative is a component of a
hybrid (combined) instrument that also includes
a non- derivative host contract, with the effect
that some of the cash flows of the combined
instrument vary in a way similar to a standalone
derivative. An embedded derivative causes
some or all of the cash flows that otherwise
would be required by the contract to be modified
according to an index of prices or rates or other
variable. Reassessment only occurs if there is
either a change in the terms of the contract that
significantly modifies the cash flows that would
otherwise be required or a reclassification of a

financial asset out of the fair value through profit
or loss.

These embedded derivatives are separately
accounted for at fair value, with changes in fair
value recognised in the statement of profit or
loss unless the Company chooses to designate
the hybrid contracts at fair value through profit or
loss.

Treasury Shares

The Company is a sponsor to trust namely
Centrum ESPS Trust. These trust have been
formed exclusively to provide benefits to
employees of the Company and its subsidiaries.
These trust have been treated as an extension of
the Company for the purpose of these financial
statements. Accordingly, the equity shares of
the Company held by these trust have been
treated as treasury shares. The amount paid for
the treasury shares is deducted from equity. No
gain or loss is recognised in profit or loss on the
purchase, sale, issue or cancellation of treasury
shares.

Derecognition of financial liabilities

The Financial liabilities are derecognised when
they are extinguished i.e. when the obligation
specified in the contract is discharged, cancelled
or expired. Where 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 a derecognition of the original liability and
the recognition of a new liability. The difference
between the carrying value of the original
financial liability and the consideration paid,
including modified contractual cash flow
recognised as new financial liability, would be
recognised in profit or loss.

Reclassification of financial assets and
financial liabilities

The Company does not reclassify its financial
assets subsequent to their initial recognition,
apart from the exceptional circumstances in
which the Company acquires, disposes of, or
terminates a business line. Financial liabilities
are never reclassified.

Offsetting of 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.

Write-off policy

The Company writes off financial assets, in
whole or in part, when it has exhausted all
practical recovery efforts and has concluded
there is no reasonable expectation of recovery.

h. Fair value measurement [refer note 37]

The Company measures financial instruments, such
as investments and derivatives at fair values at each
Balance Sheet date.

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:

a) In the principal market for the asset or liability, or

b) 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 are 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
categorised 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 (unadjusted) market prices in active
markets for identical assets or liabilities

Level 2 - Valuation techniques for which the lowest
level input that is significant to the fair value
measurement are derived from directly or indirectly
observable market data available.

Level 3 - Valuation techniques for which the lowest level
input that is significant to the fair value measurement
is unobservable

For assets and liabilities that are recognised 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 lowest level input that is significant to
the fair value measurement as a whole) at the end of
each reporting period.

The Management determines the policies and
procedures for both recurring fair value measurement,
such as derivative instruments and unquoted financial
assets measured at fair value, and for non-recurring
measurement, such as assets held for disposal in
discontinued operations.

At each reporting date, management analyses 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.

i. Cash and cash equivalents [refer note 11]

Cash and cash equivalents comprise cash at bank
and on hand, short-term deposits and highly liquid
investments with an original maturity of three months
or less, which are readily convertible in cash and
subject to insignificant risk of change in value. Bank
overdrafts are shown within borrowings in other
financial liabilities in the balance sheet.

j. Borrowing costs [refer note 25]

Borrowing costs include interest expense calculated
using the effective interest method. Borrowing costs
net of any investment income from the temporary
investment of related borrowings that are attributable
to the acquisition, construction or production of a
qualifying asset are capitalized as part of cost of such
asset till such time the asset is ready for its intended
use or sale. A qualifying asset is an asset that
necessarily requires a substantial period of time to get
ready for its intended use or sale. All other borrowing
costs are recognized in profit or loss in the period in
which they are incurred.

k. Foreign exchange transactions and translations
[refer note 40]

Initial recognition

Transactions in foreign currencies are recognized at
the prevailing exchange rates between the reporting
currency and a foreign currency on the transaction
date.

Conversion

Transactions in foreign currencies are translated into
the functional currency using the exchange rates
at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement
of such transactions and from the translation of
monetary assets and liabilities denominated in foreign
currencies at year end exchange rates are generally
recognized in Statement of profit and loss.

Foreign exchange differences regarded as an
adjustment to borrowing costs are presented in the
Statement of profit and loss, within finance costs. All
other foreign exchange gains and losses are presented
in the Statement of profit and loss on a net basis.

Non-monetary items that are measured at fair value in
a foreign currency are translated using the exchange
rates at the date when the fair value was determined.
Translation differences on assets and liabilities carried
at fair value are reported as part of the fair value gain
or loss. Thus, translation differences on non-monetary
assets and liabilities such as equity instruments held
at fair value through profit or loss are recognized in
profit or loss as part of the fair value gain or loss
and translation differences on non-monetary assets

such as equity investments classified as FVOCI are
recognized in other comprehensive income.

Non-monetary items that are measured at historical
cost in foreign currency are not retranslated at
reporting date.

l. Retirement and other employee benefits [refer note
32]

Retirement benefits in the form of Provident Fund are
a defined contribution scheme and the contributions
are charged to the Statement of Profit and Loss of the
year when the contribution to the fund is due. There
are no other obligations other than the contribution
payable to the fund.

(i) Under the Payment of Gratuity Act,1972 'Gratuity
liability is a defined benefit obligation and is
provided for on the basis of an actuarial valuation
on Projected Unit Credit Method made at the
end of the financial year. The Company makes
contribution to a Scheme administered by the
Life Insurance Corporation of India ("LIC”) to
discharge the gratuity liability to employees. The
Company records its gratuity liability based on
an actuarial valuation made by an independent
actuary as at year end. Contribution made to
the LIC fund and provision made for the funded
amounts are expensed in the books of account.

(ii) Long term compensated absences are provided
for based on actuarial valuation. The actuarial
valuation is done as per Projected Unit Credit
Method.

(iii) Remeasurement gains and losses arising from
experience adjustments and changes in actuarial
assumptions are recognized in the period in
which they occur, directly in other comprehensive
income. They are included in retained earnings
in the statement of changes in equity and in
the balance sheet. Remeasurements are not
reclassified to profit or loss in subsequent
period.

m. Income tax [refer note 30]

The income tax expense or credit for the period is the
tax payable on the current period's taxable income
based in accordance with the Income Tax Act, 1961
adjusted by changes in deferred tax assets and

liabilities attributable to temporary differences and to
unused tax losses.

Current tax

The current income tax charge is calculated based on
the tax laws enacted or substantively enacted at the
end of the reporting period. Management periodically
evaluates positions taken in tax returns with respect
to situations in which applicable tax regulation is
subject to interpretation. It establishes provisions
where appropriate based on amounts expected to be
paid to the tax authorities.

Deferred tax

Deferred tax is recognised on differences between
the carrying amounts of assets and liabilities in the
Balance Sheet and the corresponding tax bases used
in the computation of taxable profit.

Deferred tax liabilities are generally recognised for all
taxable temporary differences. Deferred tax assets
are generally recognised for all deductible temporary
differences to the extent that it is probable that taxable
profits will be available against which those deductible
temporary differences can be utilised. Such assets
and liabilities are not recognised if the temporary
difference arises from the initial recognition (other
than in a business combination) of other assets and
liabilities in a transaction that affects neither the
taxable profit nor the accounting profit.

Deferred tax assets are also recognised with respect
to carry forward of unused tax losses to the extent that
it is probable that future taxable profit will be available
against which the unused tax losses and unused tax
credits can be utilised.

It is probable that taxable profit will be available against
which a deductible temporary difference, unused tax
loss or unused tax credit can be utilised when there
are sufficient taxable temporary differences which
are expected to reverse in the period of reversal of
deductible temporary difference or in periods in which
a tax loss can be carried forward or back. When this
is not the case, deferred tax asset is recognised to the
extent it is probable that:

• the entity will have sufficient taxable profit in the
same period as reversal of deductible temporary
difference or periods in which a tax loss can be
carried forward or back; or

• tax planning opportunities are available that will
create taxable profit in appropriate periods.

The carrying amount of deferred tax assets is
reviewed at each Balance Sheet date and reduced to
the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of
the asset to be recovered.

Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply in the period in
which the liability is settled or the asset realised, based
on tax rates (and tax laws) that have been enacted or
substantively enacted by the Balance Sheet date. 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 reporting date, to recover or settle the carrying
amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when
there is a legally enforceable right to set off current
tax assets against current tax liabilities, and when they
relate to income taxes levied by the same taxation
authority, and the Company intends to settle its
current tax assets and liabilities on a net basis.

Current and deferred tax for the year

Current and deferred tax are recognised in 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. The Company has
opted for the concessional tax regime under Section
115BAA of the Income-tax Act, 1961 from the current
financial year.