3. Material accounting policies

A. Property, plant and equipment and
Capital work-in-progress

Property, plant and equipment are stated at
original cost net of tax/ duty credit availed, less
accumulated depreciation and accumulated
impairment losses. The cost of an asset includes
the purchase cost of materials including import
duties and non-refundable taxes, and any directly
attributable costs of bringing an asset to the
location and condition of its intended use. Interest
on borrowings used to finance the construction of
qualifying assets are capitalized as part of cost of
the asset until such time that the asset is ready for
its intended use. The present value of the expected
cost for the decommissioning of the asset after its
use is included in the cost of the respective asset if
the recognition criteria for a provision are met.

When significant part of the property, plant and
equipment are required to be replaced at intervals,
the Company derecognized the replaced part and
recognized the new parts with its own associated
useful life and it is depreciated accordingly.

Likewise when a major inspection is performed,
its cost is recognized in the carrying amount of
the plant and equipment as a replacement if the
recognition criteria are satisfied. All other repair anc
maintenance cost are recognized in the statement
of the profit and loss as incurred.

Internally manufactured property, plant and
equipment are capitalised at factory cost.

Capital work in progress include property plant &
equipment under installation/under development as
at the balance sheet date and are carried at cost,
comprising direct cost, related incidental expenses
and attributable borrowing cost.

Property, plant and equipment are derecognised
from the financial statement, either on disposal
or when no economic benefits are expected from
its use or disposal. Losses arising in the case of
retirement of property, plant and equipment and
gain or losses arising from disposal of property, plan
and equipment are a recognized in the statement ol
profit and loss in the year of occurrence.

For transition to Ind AS, the Company has elected tc
continue with the carrying value of all of its property
plant and equipment, except Land, recognised as
of April 1, 2016 (transition date) measured as per
the previous GAAP and use that carrying value as
its deemed cost as of the transition date. For Land
the Company has elected to use Fair Value at the
transition to Ind AS and use this value as its deemed
cost.

B. Investment Property

Investment properties are properties, either land
or building or both, held to earn rentals and/
or for capital appreciation (including property
under construction for such purposes). Investment
properties are measured initially at cost including
transactions costs. Subsequent to initial recognition,
investment properties are measured in accordance
with requirement for cost model.

An investment property is derecognised upon
disposal or when the investment property is
permanently withdrawn from use and no future
economic benefits are expected from the disposal.

Any gain or loss arising on derecognition of the
property (calculated as the difference between the
net disposal proceeds and the carrying amount of
the asset) is included in profit or loss in the period in
which the property is de-recognised.

C. Intangible assets

Intangible asset are recognised when it is probable
that the future economic benefits that are
attributable to the asset will flow to the entity and
the cost of asset can be measured reliably.

Capital expenditure on purchase and development
of identifiable assets without physical substance is
recognized as intangible assets in accordance with
principles given under Ind AS-38 - Intangible Assets.

Internally generated intangible asset, excluding
capitalized development cost, are not capitalized
and the related expenditure is reflected in
statement of profit & loss in the period in which the
expenditure is incurred.

The useful lives of intangible asset are assed as
either finite or indefinite. The amortization period
and the amortization method for an intangible
asset with a finite useful life are reviewed at least
at the end of each reporting period. Changes in
the expected useful life or the expected pattern
of consumption of future economic benefits
embodied in the assets are considered to modify the
amortization period or method, as appropriate, and
are treated as changes in accounting estimates.

Intangible assets with indefinite useful lives, are
not amortised, but are tested for impairment either
individually or at the cash generating unit level.

The assessment of indefinite useful life is reviewed
annually to determine whether the indefinite life
continues to be supportable. Currently there are no
intangible assets with indefinite useful life.

Gain or losses arising from de-recognition 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 & loss when the asset is
derecognised.

D. Depreciation and amortization

Depreciation on Property, Plant and Equipment (PPE)
and Intangible assets is calculated on the basis of
useful lives as prescribed under Schedule II to the
Companies Act, 2013. The following methods of

finance costs in the statement of profit and loss,
unless they are directly attributable to qualifying
assets, in which case they are capitalized in
accordance with the Company's general policy on
borrowing cost. A leased asset is depreciated over
the useful life of the asset. However, if there is no
reasonable certainty that the Company will obtain
ownership by the end of the lease term, the asset is
depreciated over the shorter of the estimated useful
life of the asset and the lease term.

Payment made under operating leases are
recognized as expense in the Statement of Profit
and Loss on a straight line basis over the lease term,
unless the receipts are structured to increase in line
with expected general inflation to compensate for
the lessor's expected inflationary cost increase.

Where the Company is the lessor

Leases in which the Company does not transfer
substantially all the risks and rewards of ownership
of an asset are classified as operating leases. Where
the escalation of lease rentals is in line with the
expected general inflation so as to compensate the
lessor for expected inflationary cost, the increases in
the rentals is not straight lined.

^:. Government grants

Government grants are recognised at fair value
when there is reasonable assurance that the grant
would be received and the Company would comply
with all the conditions attached with them.

Government grants whose primary condition is
that the Company should purchase, construct or
otherwise acquire non-current assets are recognised
as deferred revenue in the balance sheet and
transferred to profit or loss on a systematic and
rational basis over the useful lives of the related
assets.

Government grants that are receivable as
compensation for expenses or losses already
incurred or for the purpose of giving immediate
financial support to the Company with no future
related costs are recognised in profit or loss in the
period in which they become receivable.

The benefit of a government loan at a below-market
rate of interest is treated as a government grant,
measured as the difference between proceeds
received and the fair value of the loan based on
prevailing market interest rates.

G. Borrowing costs

Borrowing costs that are directly attributable to the
acquisition or construction of a qualifying asset are
capitalized as part of the cost of such asset till such
time that is required to complete and prepare the
asset to get ready for its intended use. A qualifying
asset is one that necessarily takes a substantial
period of time to get ready for its intended use.
Borrowing costs consist of interest and other costs
that the Company incurs in connection with the
borrowing of funds. Borrowing costs also include
exchange differences to the extent regarded as an
adjustment to the borrowing costs.

All other borrowing costs are charged to the
statement of profit and loss in the period in which
they are incurred.

H. Segment accounting and reporting

The chief operational decision maker monitors the
operating results of its business segments separately
for the purpose of making decisions about resource
allocation and performance assessment. Segment
performance is evaluated based on profit and loss
and is measured consistently with profit and loss in
the financial statements.

Operating segments are reported in a manner
consistent with the internal reporting provided to the
chief operating decision maker (CODM).

The accounting policies adopted for segment
reporting are in line with the accounting policies
adopted for preparing and presenting the financial
statements of the Company as a whole. In addition,
the following specific accounting policies have been
followed for segment reporting:

• Segment revenue includes sales and other
income directly identifiable with / allocable to
the segment including inter segment transfers.

• Inter segment transfers are accounted for
based on the transaction price agreed to
between the segments which is at cost in case
of transfer of Companys intermediate and final
products and estimated realisable value in case
of by-products.

• Revenue, expenses, assets and liabilities are
identified to segments on the basis of their
relationship to the operating activities of
the segment. Revenue, expenses, assets and
liabilities which relate to the Company as a

whole and are not allocable to segments on
direct and/or on a reasonable basis, have been
disclosed as "Unallocable"

I. Employee benefits

Expenses and liabilities in respect of employee
benefits are recorded in accordance with Indian
Accounting Standard (Ind AS)-19 - 'Employee
Benefits'.

a. Short-term employee benefits

Short-term employee benefits in respect of
salaries and wages, including non-monetary
benefits are recognised as an expense at
the undiscounted amount in the statement of
profit and loss for the year in which the related
service is rendered.

b. Defined contribution plan

Retirement benefits in the form of provident
fund, pension fund, superannuation fund
and ESI are a defined contribution scheme
and the contributions are charged to the
statement of profit and loss of the year when
the contributions to the respective funds are
due. There are no other obligations other than
the contribution payable to the provident fund/
trust.

c. Defined benefit plan

Retirement benefits in the form of gratuity and
provident fund contribution to Dalmia Cement
Provident Fund Trust are defined benefit plans.
Gratuity is provided for on the basis of an
actuarial valuation on projected unit credit
method made at the end of each financial year.
Contributions to Dalmia Cement Provident Fund
Trust are charged to the Statement of Profit and
Loss of the year when the contributions to the
fund is due.

The Company's liabilities on account of gratuity
and earned leaves on retirement of employees
are determined at the end of each financial
year on the basis of actuarial valuation
certificates obtained from registered actuary in
accordance with the measurement procedure
as per Indian Accounting Standard 19 (Ind
AS 19) 'Employee Benefits'. Gratuity liability is
funded on year-to-year basis by contribution to
respective fund. The costs of providing benefits
under these plans are also determined on the
basis of actuarial valuation at each year end.

Actuarial gains and losses for defined benefit
plans are recognized through OCI in the period
in which they occur. Re-measurements are
not reclassified to profit or loss in subsequent
periods.

Accumulated leave, which is expected to
be utilized within the next 12 months, is
treated as short-term employee benefit. The
Company measures the expected cost of
such absenteeism as the additional amount
that it expects to pay as a result of the
unused entitlement that has accumulated
at the reporting date. The Company treats
accumulated leave expected to be carried
forward beyond twelve months, as long-term
employee benefit for measurement purposes.
Such long term compensated absences are
provided for based on actuarial valuation. The
actuarial valuation is done as per projected unit
credit method at the year-end.

J. Inventories

a. Finished goods are valued at lower of cost
or net realisable value. In case of Dead Burnt
Magnesite Dust Stocks to the extent these
are considered saleable, valuation is done at
raw materials cost plus packing charges or
net realizable value, whichever is lower. By¬
products (including final molasses) are valued a1
net realisable value. B Heavy molasses is valued
at derived values based on proportionate
sugar content. Cost includes direct materials
and labour and a proportion of manufacturing
overheads based on normal operating capacity.
Cost is determined on a weighted average
basis.

b. Work in progress is valued at lower of cost or
net realisable value. Cost is determined on a
weighted average basis.

c. Stores, Spares and Raw Materials are valued at
lower of cost or net realisable value. However
materials & other items of inventories held for
use in the production are not written below
cost if the finished products in which they will
be incorporated are expected to be sold at or
above cost. Cost is determined on a weighted
average basis.

d. Net realizable value is the estimated selling
price in the ordinary course of business, less
estimated costs of completion and estimated
costs necessary to make the sale.

K. Assets (or disposal group) held for sale
and discontinued operation

Assets (or disposal group) are classified as held
for sale if their carrying amounts will be recovered
principally through a sale transaction rather than
through continuing use and a sale is considered
highly probable. Assets held for sale are measured
at the lower of their carrying amount and the fair
value less costs to sell.

An impairment loss is recognized for any initial or
subsequent write-down of the asset (or disposal
group) to fair value less costs to sell. A gain is
recognized for any subsequent increases in fair
value less costs to sell of an asset (or disposal
group), but not in excess of any cumulative
impairment loss previously recognized. A gain or
loss not previously recognized by the date of the
sale of the non-current asset (or disposal group) is
recognized at the date of de-recognition.

Assets (including those that are part of a disposal
group) are not depreciated or amortised while they
are classified as held for sale. Interest and other
expenses attributable to the liabilities of a disposal
group classified as held for sale continue to be
recognised.

Assets classified as held for sale and the assets
of a disposal group classified as held for sale are
presented separately from the other assets in the
balance sheet. The liabilities of a disposal group
classified as held for sale are presented separately
from other liabilities in the balance sheet.

A discontinued operation is a component of an
entity that either has been disposed of, or is
classified as held for sale, and:

• Represent as separate major line of business or
geographical area of operations,

• Is part of a single co-ordinated plan to
dispose of a separate major line of business or
geographical area of operations.

Discontinued operations are excluded from the
results of continuing operations and are presented
as profit or loss before/ after tax from discontinued
operations in the statement of profit and loss.

L. Financial Instruments

(a) Financial Assets

i. Classification

The Company classified financial assets as

subsequently measured at amortized cost, fair
value though other comprehensive income
(FVTOCI) or fair value through profit or loss
(FVTPL) on the basis of its business model for
managing the financial assets and contractual
cash flow characteristics of the financial asset.

ii. Initial Recognition and Measurement

The financial assets include equity and debt
securities, trade and other receivables, loans
and advances, cash and bank balances and
derivative financial instruments. All financial
assets are recognized initially at fair value plus,
in the case of financial assets not recorded
at fair value through profit or loss, transaction
costs that are attributable to the acquisition of
the financial asset.

iii. Subsequent Measurement

For the purpose of subsequent measurement
the financial assets are classified in three
categories:

• At amortised cost - For debt instruments
only.

• At fair value through profit & loss
account

• At fair value through other comprehensive
income

iv. Debt instruments at amortized cost

A Financial Asset i.e. a debt instrument is
measured at the amortized cost if both the
following condition are met.

• The assets is held within a business model
whose objective is to hold assets for
collecting contractual cash flow (business
model test), and

• Contractual terms of the assets give rise
on specified dates to cash flows that are
solely payments of principle and interest
(SPPI) on the principle amount outstanding
(contractual cash flow characteristics).

After initial measurement (at Fair value minus
transaction cost), such financial assets are
subsequently measurement at amortized cost
using the effective interest rate (EIR) method.
Amortized cost is calculated by taking into
account any discount and premium and fee or
costs that are an integral part of an EIR. The

EIR amortization is included in finance income
in the statement of profit and loss. The losses
arising from impairment are recognized in the
statement of profit and loss.

v. Debt instrument at Fair value through Profit
or loss

Debt instruments included within the fair
value through profit or loss (FVTPL) category
are measured at fair value with all changes
recognized in the statement of profit and loss.

vi. Debt instruments at Fair value through other
comprehensive income

A financial asset should be measured at FVTOCI
if both the following condition are met:

• The assets is held within a business model
in which asset are managed both in order
to collect contractual cash flows and for
sale (business model test), and

• Contractual terms of the assets give rise
on specified dates to cash flows that are
solely payments of principle and interest
(SPPI) on the principle amount outstanding
(contractual cash flow characteristics).

After initial measurement (at Fair value minus
transaction cost), such financial assets are
measured at Fair value with changes in fair
value recognized in OCI except for:

(a) Interest calculated using EIR

(b) Foreign exchange gain and losses; and

(c) Impairment losses and gains

vii. Equity investments

All equity investments other than investment in
subsidiaries, joint venture and associates are
measured at fair value. Equity instruments which
are held for trading are classified as at FVTPL.
For all other equity instruments, the Company
decides to classify the same either as at fair
value through other comprehensive income
(FVTOCI) or FVTPL. The Company makes such
election on an instrument-by- instrument basis.
The classification is made on initial recognition
and is irrevocable.

If the Company decides to classify an equity
instrument at FVTOCI, then fair value change
on the instrument, excluding dividends, are

recognised in other compressive income (OCI).
There is no recycling of the amounts from OCI
to statement of profit or loss, even on sale of
such investments.

Equity instrument includes within the FVTPL
category are measured at fair value with all
changes recognised in the Statement of profit
or loss.

viii. Derecognition

A financial asset (or, where applicable, a part
of a financial asset) is primarily derecognised
when:

• The right to receive cash flows from the
assets have expired or

• The Company has transferred substantially
all the risks and rewards of the assets, or

• The Company has neither transferred nor
retained substantially all the risks and
rewards of the assets, but has transferred
control of the assets.

(b) Financial liabilities & Equity

i. Classification

Debt and equity 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.

ii. Initial recognition and measurement of
Financial Liability

The Company recognizes financial liability
when it becomes a party to the contractual
provisions of the instrument. All financial liability
are recognized initially at fair value minus, for
financial liability not subsequently measured
at FVTPL, transaction costs that are directly
attributable to the issue of financial liability.

iii. Subsequent Measurement of Financial
Liability

All financial liabilities are subsequently
measured at amortised cost using the effective
interest method or at FVTPL.

However, financial liabilities that arise when a
transfer of a financial asset does not qualify

for derecognition or when the continuing
involvement approach applies, financial
guarantee contracts issued by the Company,
and commitments issued by the Company to
provide a loan at below-market interest rate
are measured in accordance with the specific
accounting policies.

iv. Financial Liability at amortised cost

After initial recognition, interest-bearing loans
and borrowings are subsequently measured at
amortised cost using the Effective Interest Rate
(EIR) Method. Gain and losses are recognised in
statement of profit and loss when the liabilities
are derecognised.

Amortised cost is calculated by taking into
account any discount or premium on acquisition
and transaction cost. The EIR amortization is
included as finance cost in the statement of
profit and loss.

This category generally applies to loans &
Borrowings.

v. Financial Liability at FVTPL

Financial liabilities are classified as at FVTPL
when the financial liability is either contingent
consideration recognised by the Company as
an acquirer in a business combination to which
Ind AS 103 applies or is held for trading or it is
designated as at FVTPL.

Financial liabilities at FVTPL are stated at
fair value, with any gains or losses arising on
re-measurement recognised in profit or loss.

The net gain or loss recognised in profit or loss
incorporates any interest paid on the financial
liability

vi. Equity Instruments

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 a Company entity
are recognised at the proceeds received, net of
direct issue costs.

Repurchase of the Company's own equity
instruments is recognised and deducted
directly in equity. No gain or loss is recognised
in profit or loss on the purchase, sale, issue
or cancellation of the Company's own equity
instruments.

vii. Derecognition

A financial liability is derecognised when the
obligation under the liability is discharged or
cancelled or expires. 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 the derecognition of the original
liability and the recognition of a new liability.

The difference in the respective carrying amount
recognised in the Statement of Profit and loss.

viii. Offsetting of financial instrument

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 realize the assets and settle the liabilities
simultaneously.

ix. Derivative financial instruments

The Company uses derivative instruments
as a part of its management of exposure to
fluctuations in foreign currency exchange
rates. The Company does not acquire or issue
derivative instruments for trading or speculative
purposes. The Company does not enter into
complex derivative transactions to manage the
treasury.

All derivative financial instruments are
recognized as assets or liabilities on the
balance sheet and measured at fair value,
generally based on quotation obtained from
banks/financial institutions. The accounting
for changes in the fair value of a derivative
instruments depends on the intended use of the
derivatives and the resulting designation.

The fair values of all derivatives are separately
recorded in the balance sheet within current
and non-current assets and liabilities.

Derivatives that are designated as hedges are
classified as current and non-current depending
upon the maturity of the derivatives.

The use of derivative can give rise to credit
and market risk. The Company tries to control
credit risk as far as possible by only entering
into the contract with reputable banks/
financial institution. The use of derivative
instrument is subject to limits, authorities
and regular monitoring by appropriate levels
of management. The limits, authorities and
monitoring systems are periodically reviewed
by the management and board. The market risk
on derivatives are mitigated by changes in the
valuation of the underlying assets, liabilities or
transactions, as derivatives are used only for risk
management purposes.

x. Cash flow hedge

The Company designates certain foreign
exchange forward as cash flow hedges to
mitigate the risk of foreign exchange exposure
on highly probable forecast cash transactions.

When a derivative is designated as a cash
flow hedge instrument, the effective portion
of changes in the fair value of the derivative
is recognized in other comprehensive
income and accumulated in the cash flow
hedge reserve. Any ineffective portion of
changes in the fair value of the derivative is
recognized immediately in the net profit in the
Statement of Profit and Loss. If the hedging
instrument no longer meets the criteria for
hedge accounting, then hedge accounting
is discontinued prospectively. If the hedging
instrument expires or is sold, terminated or
exercised, the cumulative gain or loss on the
hedging instrument recognized in cash flow
hedge reserve till the period the hedge was
effective remains in cash flow hedge reserve
until the forecasted transaction occurs. The
cumulative gain or loss previously recognized
in the cash flow hedge reserve is transferred to
the net profit in the Statement of Profit and Loss
upon the occurrence of the related forecasted
transaction. If the forecasted transaction is
no longer expected to occur, then the amount
accumulated in cash flow hedge reserve is
reclassified to the Statement of Profit and Loss.

M. Investments in subsidiaries, Joint venture
& Associate

Investments in equity shares of Subsidiaries, Joint
Ventures & Associates are recorded at cost and
reviewed for impairment at each balance sheet
date.

N. Revenue recognition

Revenue is recognized to the extent that it is
probable that the economic benefits will flow to the
Company and the revenue can be reliably measured.

Sale of goods

Sale is exclusive of goods and service tax (GST) and
is accounted for upon dispatch of goods from the
factory when the risks and rewards of ownership are
transferred to the buyer. Gross sales and net sales
are disclosed separately in Statement of Profit &
Loss.

Ind AS 115 introduces a new framework of five step
model for the analysis of Revenue transactions. The
model specifies that revenue should be recognized
when (or as) an entity transfer control of goods
or services to a customer at the amount to which
the entity expects to be entitled. Further the new
standard requires enhanced disclosures about the
nature, amount, timing, and uncertainty of revenue
and cash flows arising from the entity's contracts
with customers.

Revenue is recognized upon transfer of control of
promised products or services to customers in an
amount that reflects the consideration we expect to
receive in exchange for those products or services.

The Company has evaluated the requirement of
the amendment and the impact on the financial
statements. The effect on adoption of Ind AS 115 was
insignificant.

Sale of Power

Revenue from power has been recognized on
transmission of electricity to Grid. Power generated
at power plant is consumed at manufacturing
units and excess power is sold to Grid, which is
included in sales at power tariff prevailing as per the
respective Power Purchase Agreements.

Inter-unit transfer of power is accounted at the rate
at which the Company would have purchased power
from grid. For consolidation purposes these transfers
are eliminated from respective heads.

Revenue from sale of Certified Emission
Reductions (CERs) and Renewable Energy
Certificates (REC)

Entitlement to Renewable Energy Certificates (REC)
owing to generation of power are recognized to the
extent sold.

Dividends

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

Insurance claim

Insurance claims are accounted for on the basis
of claims admitted/ expected to be admitted and
to the extent that the amount recoverable can be
measured reliably and it is reasonable to expect
ultimate collection.

Sale of services

The Company being a manufacturing entity does not
generally provide services in the normal course of
business except the travel related service.

Revenue from supply of services if any is recognized
as and when the services has been provided and
recoverability accrues.

O. Foreign currency translation/conversion

Financial statements have been presented in Indian
Rupees ('), which is the Company's functional and
presentation currency.

• Initial recognition

Foreign currency transactions are recorded on
initial recognition in the functional currency,
using the exchange rate at the date of the
transaction.

• Conversion

Foreign currency monetary items are
retranslated using the exchange rate prevailing
at the reporting date. Non-monetary items,
which are measured in terms of historical
cost denominated in a foreign currency, are
reported using the exchange rate at the date
of the transaction. Non-monetary items, which
are measured at fair value or other similar
valuation denominated in a foreign currency,
are translated using the exchange rate at the
date when such value was determined.

• Exchange differences

The gain or loss arising on translation of non¬
monetary items measured at fair value is
treated in line with the recognition of the gain
or loss on the change in fair value of the item
(i.e., translation differences on items whose fair
value gain or loss is recognized in OCI or profit
or loss are also recognized in OCI or profit or
loss, respectively).

P. Taxes

Tax expense comprises current and deferred tax.
Current income tax is measured at the amount

expected to be paid to the tax authorities in
accordance with the Income-Tax Act, 1961 enacted
in India. The tax rates and tax laws used to
compute the amount are those that are enacted or
substantively enacted, at the reporting date.

Current income tax

Current income tax assets and liabilities are
measured at the amount expected to be recovered
from or paid to the taxation authorities. Current
income tax relating to items recognized directly
in equity is recognised in equity and not in the
statement of profit and loss. Management
periodically evaluates positions taken in the tax
returns with respect to situations in which applicable
tax regulations are subject to interpretation and
establishes provisions where appropriate.

Deferred tax

Deferred tax is provided using the balance sheet
approach on temporary differences at the reporting
date between the tax bases of assets and liabilities
and their carrying amounts for financial reporting
purpose at reporting date. Deferred income tax
assets and liabilities are measured using tax
rates and tax laws that have been enacted or
substantively enacted by the balance sheet date
and are expected to apply to taxable income in
the years in which those temporary differences are
expected to be recovered or settled. The effect of
changes in tax rates on deferred income tax assets
and liabilities is recognized as income or expense
in the period that includes the enactment or the
substantive enactment date. A deferred income tax
asset is recognized to the extent that it is probable
that future taxable profit will be available against
which the deductible temporary differences and tax
losses can be utilized.

The carrying amount of deferred tax assets are
reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of
the deferred tax assets to be utilised. Unrecognised
deferred tax assets are reassessed at each reporting
date and are recognised to the extent that it has
become probable that future taxable profits will
allow deferred tax assets to be recovered.

The Company offsets current tax assets and current
tax liabilities, where it has a legally enforceable
right to set off the recognized amounts and where
it intends either to settle on a net basis, or to realize
the asset and settle the liability simultaneously.

Q. Earnings per share

Basic earnings per share are calculated by dividing
the net profit or loss for the year attributable to
equity shareholders by the weighted average
number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per
share, the net profit or loss for the year attributable
to equity shareholders and the weighted average
number of shares outstanding during the period
are adjusted for the effects of all dilutive potential
equity shares.