2 Significant Accounting Policies

(a) Statement of compliance

The Company's Standalone Financial Statements have
been prepared in accordance with the provisions of the
Companies Act, 2013 and the Indian Accounting Standards
("Ind AS") notified under the Companies (Indian Accounting
Standards) Rules, 2015 and amendments thereto issued
by Ministry of Corporate Affairs under section 133 of the
Companies Act, 2013. In addition, the guidance notes/
announcements issued by the Institute of Chartered
Accountants of India (ICAI) are also applied except where
compliance with other statutory promulgations require
a different treatment. These financials statements have
been approved for issue by the Board of Directors at its
meeting held on May 28, 2025.

(b) Basis of accounting

The Company maintains its accounts on accrual basis
following historical cost convention, except for certain
assets and liabilities that are measured at fair value in
accordance with Ind AS.

Fair value measurements are categorised as below
based on the degree to which the inputs to the fair value
measurements are observable and the significance of the
inputs to the fair value measurement in its entirety:

• Level 1 inputs are quoted prices (unadjusted) in
active markets for identical assets or liabilities that
the Company can access at measurement date;

• Level 2 inputs are inputs, other than quoted prices
included in level 1, that are observable for the assets
or liabilities, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the
valuation of assets or liabilities.

Above levels of fair value hierarchy are applied consistently
and generally, there are no transfers between the levels of
the fair value hierarchy unless the circumstances change
warranting such transfer.

(c) Presentation of Standalone Financial Statements

The Balance Sheet, the Statement of Profit and Loss and
the Statement of Changes in Equity are prepared and
presented in the format prescribed in the Schedule III to
the Companies Act, 2013 (the Act). The Statement of Cash
Flows has been prepared and presented in accordance
with Ind AS 7 "Statement of Cash Flows". The disclosures
with respect to items in the Balance Sheet and Statement
of Profit and Loss, as prescribed in the Schedule III to
the Act, are presented by way of notes forming part
of the Standalone Financial Statements along with the
other notes required to be disclosed under the notified
Accounting Standards.

Amounts in the Standalone Financial Statements are
presented in Indian Rupee in millions [one million = Ten
Lakhs] rounded off to two decimal places as permitted by
Schedule III to the Act. Per share data are presented in
Indian Rupee in millions to two decimals places.

(d) Operating cycle for current and non-current
classification

Operating cycle for the business activities of the Company
covers the duration of the specific project or contract or
product line or service including the defect liability period
wherever applicable and extends up to the realisation of
receivables (including retention monies) within the agreed
credit period normally applicable to the respective lines of
business.

(e) Revenue recognition

Revenue from contracts with customers is recognised
when a performance obligation is satisfied by transfer of
promised goods or services to a customer.

For performance obligation satisfied over time, the
revenue recognition is done by measuring the progress
towards complete satisfaction of performance obligation.
The progress is measured in terms of a proportion of
actual cost incurred to-date, to the total estimated
cost attributable to the performance obligation. The
Company transfers control of a good or service over time
and therefore satisfies a performance obligation and
recognises revenue over a period of time if one of the
following criteria is met:

(a) the customer simultaneously consumes the benefit
of the Company's performance or

(b) the customer controls the asset as it is being created/
enhanced by the Company's performance or

(c) there is no alternative use of the asset and the
Company has either explicit or implicit right of
payment considering legal precedents,

In all other cases, performance obligation is considered as
satisfied at a point in time.

The revenue is recognised to the extent of transaction
price allocated to the performance obligation satisfied.
Transaction price is the amount of consideration to
which the Company expects to be entitled in exchange
for transferring goods or services to a customer
excluding amounts collected on behalf of a third party.
The Company includes variable consideration as part
of transaction price when there is a basis to reasonably
estimate the amount of the variable consideration
and when it is probable that a significant reversal of
cumulative revenue recognised will not occur when the
uncertainty associated with the variable consideration
is resolved. Variable consideration is estimated using
the expected value method or most likely amount as
appropriate in a given circumstance. Payment terms
agreed with a customer are as per business practice and
the financing component, if significant, is separated from
the transaction price and accounted as interest income.

Costs to obtain a contract which are incurred regardless
of whether the contract was obtained are charged-off in
profit or loss immediately in the period in which such costs
are incurred. The Company recognises asset from the
cost, if any, incurred to fulfill the contract such as set up
and mobilisation costs and amortises it over the contract
tenure on a systematic basis that is consistent with the
transfer to the customer of the goods or services to which
the asset relates.

Significant judgments are used in:

a. Determining the revenue to be recognised in case
of performance obligation satisfied over a period
of time; revenue recognition is done by measuring
the progress towards complete satisfaction of
performance obligation.

b. Determining the expected losses, which are
recognised in the period in which such losses become
probable based on the expected total contract cost as
at the reporting date.

c. Determining the method to be applied to arrive at
the variable consideration requiring an adjustment to
the transaction price.

(i) Revenue from operations

Revenue includes adjustments made towards
liquidated damages and variation wherever
applicable. Escalation and other claims, which
are not ascertainable/acknowledged by
customers are not taken into account.

A. Revenue from sale of goods including
contracts for supply/commissioning of
complex plant and equipment is recognised

as follows:

Revenue is recognised when the control
of the same is transferred to the customer
and it is probable that the Company will
collect the consideration to which it is
entitled for the exchanged goods. Revenue
from commissioning of complex plant and
equipment is recognised either 'over time'
or 'in time' based on an assessment of the
transfer of control as per the terms of the
contract.

B. Revenue from construction/project related
activity is recognised as follows:

• Cost plus contracts: Revenue from cost
plus contracts is recognised over time
and is determined with reference to
the extent performance obligations
have been satisfied. The amount of
transaction price allocated to the
performance obligations satisfied
represents the recoverable costs
incurred during the period plus the
margin as agreed with the customer.

• Fixed price contracts: Contract revenue
is recognised over time to the extent of
performance obligation satisfied and
control is transferred to the customer.
Contract revenue is recognised at
allocable transaction price which
represents the cost of work performed
on the contract plus proportionate
margin, using the percentage of
completion method.

Percentage of completion is the proportion
of cost of work performed to-date, to the
total estimated contract costs. For contracts
where the aggregate of contract cost
incurred to date plus recognised profits (or
minus recognised losses as the case may
be) exceeds the progress billing, the surplus
is shown as contract asset and termed as
"Due from customers". For contracts where
progress billing exceeds the aggregate
of contract costs incurred to-date plus
recognised profits (or minus recognised
losses, as the case may be), the surplus is
shown as contract liability and termed as
"Due to customers". Amounts received
before the related work is performed are
disclosed in the Balance Sheet as contract
liability and termed as "Advances from
customer". The amounts billed on customer

to receive the income is established as per
the terms of the contract.

(ii) Other income

A. 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.

(f) Property, plant and equipment (PPE)

PPE is recognised 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. PPE
is stated at original cost net of tax/duty credits availed,
if any, less accumulated depreciation and cumulative
impairment, if any. All directly attributable costs related
to the acquisition of PPE and, borrowing costs in case of
qualifying assets are capitalised in accordance with the
Company's accounting policy.

Own manufactured PPE is capitalised at cost including
an appropriate share of overheads. Administrative and
other general overhead expenses that are specifically
attributable to construction or acquisition of PPE or
bringing the PPE to working condition are allocated and
capitalised as a part of the cost of the PPE.

Subsequent costs are included in the asset's carrying
amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits
associated with the item will flow to the Company and the
cost can be measured reliably.

PPE not ready for the intended use on the date of the
Balance Sheet are disclosed as "capital work-in-progress".
(Also refer to the policies on leases, borrowing costs,
impairment of assets and foreign currency transactions
infra). Depreciation is recognised using written down
value method so as to write off the cost of the assets
(other than freehold land and capital work-in-progress)
less their residual values over their useful lives specified in
Schedule II to the Companies Act, 2013, or in the case of
assets where the useful life was determined by technical
evaluation, over the useful life so determined.

Depreciation charge for impaired assets is adjusted in future
periods in such a manner that the revised carrying amount
of the asset is allocated over its remaining useful life.

Depreciation method is reviewed at each financial year
end to reflect the expected pattern of consumption of
the future economic benefits embodied in the asset. The
estimated useful life and residual values are also 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.

Where cost of a part of the asset ("asset component") is
significant to total cost of the asset and useful life of that
part is different from the useful life of the remaining asset,
useful life of that significant part is determined separately
and such asset component is depreciated over its separate
useful life.

Depreciation on additions to/deductions from, owned
assets is calculated pro rata to the period of use.

PPE is derecognised upon disposal or when no future
economic benefits are expected from its use or disposal.
Any gain or loss arising on derecognition is recognised in
the Statement of Profit and Loss in the same period.

(g) Intangible assets

Intangible assets are recognised when it is probable that
the future economic benefits that are attributable to the
asset will flow to the Company and the cost of the asset
can be measured reliably. Intangible assets are stated at
original cost net of tax/duty credits availed, if any, less
accumulated amortisation and cumulative impairment.
All directly attributable costs and other administrative
and other general overhead expenses that are specifically
attributable to acquisition of intangible assets are allocated
and capitalised as a part of the cost of the intangible
assets. Research and development expenditure on new
products:

(h) Employee Benefits

(i) Short term employee benefits:

Employee benefits such as salaries, wages, short
term compensated absences, bonus, ex-gratia and
performance-linked rewards falling due wholly within
twelve months of rendering the service are classified
as short-term employee benefits and are expensed
in the period in which the employee renders the
service.

(ii) Post-employment benefits:

A. Defined contribution plans: The Company's
superannuation scheme, state governed
provident fund scheme, employee state
insurance scheme and employee pension
scheme are defined contribution plans. The
contribution paid/payable under the schemes
is recognised during the period in which the
employee renders the service.

B. Defined benefit plans: The employees' gratuity
fund schemes and employee provident fund
schemes managed by board of trustees
established by the Company, the post-retirement
medical care plan and the company pension plan

(All amounts in R Millions, unless otherwise stated)
represent defined benefit plans. The present
value of the obligation under defined benefit
plans is determined based on actuarial valuation
using the Projected Unit Credit Method. The
obligation towards defined benefit plans is
measured at the present value of the estimated
future cash flows using a discount rate based
on the market yield on government securities
of a maturity period equivalent to the weighted
average maturity profile of the defined benefit
obligations at the Balance Sheet date.

Re-measurement, comprising actuarial gains
and losses, the return on plan assets (excluding
amounts included in net interest on the net
defined benefit liability or asset) and any change
in the effect of asset ceiling (if applicable) is
recognised in other comprehensive income and
is reflected in retained earnings and the same is
not eligible to be reclassified to profit or loss.

Defined benefit costs comprising current service
cost, past service cost and gains or losses on
settlements are recognised in the Statement of
Profit and Loss as employee benefits expense.
Interest cost implicit in defined benefit
employee cost is recognised in the Statement
of Profit and Loss under finance costs. Gains
or losses on settlement of any defined benefit
plan are recognised when the settlement occurs.
Past service cost is recognised as expense at the
earlier of the plan amendment or curtailment
and when the Company recognises related
restructuring costs or termination benefits.

In case of funded plans, the fair value of the
plan assets is reduced from the gross obligation
under the defined benefit plans to recognise the
obligation on a net basis.

(i) Long-term employee benefits:

The obligation recognised in respect of
long-term benefits such as compensated
absences, long service award etc. is
measured at present value of estimated
future cash flows expected to be made by
the Company and is recognised in a similar
manner as in the case of defined benefit
plans vide (ii)(B) above.

Long-term employee benefit costs
comprising current service cost and gains
or losses on curtailments and settlements,
re-measurements including actuarial gains
and losses are recognised in the Statement
of Profit and Loss as employee benefits
expenses. Interest cost implicit in long-term

employee benefit cost is recognised in the
Statement of Profit and Loss under finance
costs.

(ii) Termination benefits:

Termination benefits such as compensation
under employee separation schemes are
recognised as expense when the Company's
offer of the termination benefit can no
longer be withdrawn or when the Company
recognises the related restructuring costs
whichever is earlier.

(i) Leases

Assets taken on lease are accounted as right-of-use assets
and the corresponding lease liability is recognised at the
lease commencement date. Initially the right-of-use asset
is measured at cost which comprises the initial amount of
the lease liability adjusted for any lease payments made at
or before the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle and
remove the underlying asset or to restore the underlying
asset or the site on which it is located, as reduced by any
lease incentives received.

The lease liability is initially measured at the present value
of the lease payments, discounted using the Company's
incremental borrowing rate. It is remeasured when there
is a change in future lease payments arising from a change
in an index or a rate, or a change in the estimate of the
guaranteed residual value, or a change in the assessment
of purchase, extension or termination option. When the
lease liability is remeasured in this way, 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.

The right-of-use asset is measured by applying cost model

i.e. right-of-use asset at cost less accumulated depreciation
and cumulative impairment, if any. The right-of-use asset
is depreciated using the written down value method from
the commencement date to the end of the lease term
or useful life of the underlying asset whichever is earlier.
Carrying amount of lease liability is increased by interest
on lease liability and reduced by lease payments made.

Lease payments associated with following leases are
recognised as expense on written down value basis:

(i) Low value leases; and

(ii) Leases which are short-term.

Assets given on lease are classified either as operating
lease or as finance lease. A lease is classified as a finance
lease if it transfers substantially all the risks and rewards
incidental to ownership of an underlying asset. Asset
held under finance lease is initially recognized in balance

sheet and presented as a receivable at an amount equal
to the net investment in the lease. Finance income is
recognised over the lease term, based on a pattern
reflecting a constant periodic rate of return on Company's
net investment in the lease. A lease which is not classified
as a finance lease is an operating lease. The Company
recognises lease payments in case of assets given on
operating leases as income on a witten down value basis.
The Company presents underlying assets subject to
operating lease in its balance sheet under the respective
class of asset. (Also refer to policy on depreciation, above).

(j) Financial instruments

Financial assets and/or financial liabilities are recognised
when the Company becomes party to a contract
embodying the related financial instruments. All financial
assets, financial liabilities and financial guarantee
contracts are initially measured at fair value excepting for
trade receivables not containing a significant financing
component are initially measured at transaction price.
Transaction costs that are 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 as
the case may be, the fair value of such financial assets or
liabilities, 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 in profit or loss.

In case of funding to subsidiary companies in the form of
interest free or concession loans and preference shares,
the excess of the actual amount of the funding over
initially measured fair value is accounted as an equity
investment. A financial asset and a financial liability is
offset and presented on net basis in the balance sheet
when there is a current legally enforceable right to set-off
the recognised amounts and it is intended to either settle
on net basis or to realise the asset and settle the liability
simultaneously.

(i) Financial assets:

A. All recognised financial assets are subsequently
measured in their entirety either at amortised cost or
at fair value as follows:

1. Investments in debt instruments that are
designated as fair value through profit or loss
(FVTPL) - at fair value. Debt instruments at FVTPL
is a residual category for debt instruments, if any,
and all changes are recognised in profit or loss.

2. Investments in debt instruments that meet the
following conditions are subsequently measured
at amortised cost (unless the same designated
as fair value through profit or loss):

• The asset is held within a business model
whose objective is to hold assets in order to
collect contractual cash flows; and

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

3. Investment in debt instruments that meet the
following conditions are subsequently measured
at fair value through other comprehensive
income [FVTOCI] (unless the same are designated
as fair value through profit or loss)

• The asset is held within a business model
whose objective is achieved both by
collecting contractual cash flows and selling
financial assets; and

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

4. Investment in equity instruments issued by
subsidiary, associate and joint venture companies
are measured at cost less impairment.

5. Investment in preference shares of the subsidiary
companies are treated as equity instruments
if the same are convertible into equity shares
or are redeemable out of the proceeds of
equity instruments issued for the purpose of
redemption of such investments. Investment
in preference shares not meeting the aforesaid
conditions are classified as debt instruments at
FVTPL.

6. Investments in equity instruments issued by
other than subsidiaries are classified as at FVTPL,
unless the related instruments are not held for
trading and the Company irrevocably elects
on initial recognition to present subsequent
changes in fair value in Other Comprehensive
Income.

7. Trade receivables, security deposits, cash and
cash equivalents, employee and other advances
- at amortised cost.

B. For financial assets that are measured at FVTOCI,
income by way of interest and dividend, provision
for impairment and exchange difference, if any, (on
debt instrument) are recognised in profit or loss
and changes in fair value (other than on account of
above income or expense) are recognised in other
comprehensive income and accumulated in other
equity. On disposal of debt instruments at FVTOCI,

the cumulative gain or loss previously accumulated in
other equity is reclassified to profit or loss. In case of
equity instruments at FVTOCI, such cumulative gain
or loss is not reclassified to profit or loss on disposal
of investments.

C. A financial asset is primarily derecognised when:

1. the right to receive cash flows from the asset has
expired, or

2. 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 (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.

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.

D. Impairment of financial assets: Impairment loss
on trade receivables is recognised using expected
credit loss model, which involves use of a provision
matrix constructed on the basis of historical credit
loss experience as permitted under Ind AS 109
and is adjusted for forward looking information.
Impairment loss on investments is recognised when
the carrying amount exceeds its recoverable amount.
For all other financial assets, expected credit losses
are recognised based on the difference between
the contractual cashflows and all the expected cash
flows, discounted at the original effective interest
rate. ECLs are measured at an amount equal to
12-month expected credit losses or at an amount
equal to lifetime expected credit losses if the credit
risk on the financial asset has increased significantly
since initial recognition.

(ii) Financial liabilities:

A. Financial liabilities, including derivatives and
embedded derivatives, which are designated for
measurement at FVTPL are subsequently measured
at fair value. Financial guarantee contracts are
subsequently measured at the amount of impairment
loss allowance or the amount recognised at inception
net of cumulative amortisation, whichever is higher.
All other financial liabilities including loans and
borrowings are measured at amortised cost using
Effective Interest Rate (EIR) method.

B. A financial liability is derecognised when the related
obligation expires or is discharged or cancelled.

(iii) The Company designates certain hedging instruments,
such as derivatives, embedded derivatives and
in respect of foreign currency risk, certain non¬
derivatives, as either fair value hedges, cash flow
hedges or hedges of net investments in foreign
operations. Hedges of foreign exchange risk on firm
commitments are accounted as cash flow hedges.

A. Fair value hedges: Changes in fair value of the
designated portion of derivatives that qualify as
fair value hedges are recognised in profit or loss
immediately, together with any changes in the
fair value of the hedged asset or liability that are
attributable to the hedged risk.

Hedge accounting is discontinued when the hedging
instrument expires or is sold, terminated, or
exercised, or when it no longer qualifies for hedge
accounting. The fair value adjustment to the carrying
amount of the hedged item arising from the hedged
risk is amortised to profit or loss from that date.

B. Cash flow hedges: In case of transaction related
hedges, the effective portion of changes in the
fair value of derivatives that are designated and
qualify as cash flow hedges is recognised in other
comprehensive income and accumulated in equity
as 'hedging reserve'. The gain or loss relating to the
ineffective portion is recognised immediately in profit
or loss. Amounts previously recognised in other
comprehensive income and accumulated in equity
relating to the effective portion, are reclassified
to profit or loss in the periods when the hedged
item affects profit or loss, in the same head as the
hedged item. The effective portion of the hedge is
determined at the lower of the cumulative gain or
loss on the hedging instrument from inception of the
hedge and the cumulative change in the fair value of
the hedged item from the inception of the hedge and
the remaining gain or loss on the hedging instrument
is treated as ineffective portion.

In case of time period related hedges, the premium
element and the spot element of a forward contract
is separated and only the change in the value of the
spot element of the forward contract is designated
as the hedging instrument. Similarly, wherever
applicable, the foreign currency basis spread is
separated from the financial instrument and is
excluded from the designation of that financial
instrument as the hedging instrument in case of time
period related hedges. The changes in the fair value
of the premium element of the forward contract or
the foreign currency basis spread of the financial

instrument is accumulated in a separate component
of equity as "cost of hedging reserve". The changes
in the fair value of such premium element or foreign
currency basis spread are reclassified to profit or loss
as a reclassification adjustment on a written down
basis over the period of the forward contract or the
financial instrument.

The cash flow hedges are allocated to the forecast
transactions on gross exposure basis. Where
the hedged forecast transaction results in the
recognition of a non-financial asset, such gains/
losses are transferred from hedge reserve (but not as
reclassification adjustment) and included in the initial
measurement cost of the non- financial asset.

Hedge accounting is discontinued when the hedging
instrument expires or is sold, terminated, or exercised,
or when it no longer qualifies for hedge accounting.
Any gain or loss recognised in other comprehensive
income and accumulated in equity at that time
remains in equity and is recognised when the forecast
transaction is ultimately recognised in profit or loss.
When a forecast transaction is no longer expected
to occur, the gain or loss accumulated in equity is
recognised in profit or loss.

(iv) Compound financial instruments issued by the
Company which can be converted into fixed number
of equity shares at the option of the holders
irrespective of changes in the fair value of the
instrument are accounted by recognising the liability
and the equity components separately. The liability
component is initially recognised at the fair value of
a comparable liability that does not have an equity
conversion option. The equity component is initially
recognised at the difference between the fair value
of the compound financial instrument as a whole and
the fair value of the liability component. The directly
attributable transaction costs are allocated to the
liability and the equity components in proportion to
their initial carrying amounts. Subsequent to initial
recognition, the liability component of the compound
financial instrument is measured at amortised cost
using the effective interest method. The equity
component of a compound financial instrument is
not remeasured subsequently.

(k) Inventories

Inventories are valued after providing for obsolescence, as

under:

(i) Raw materials, components, construction materials,
stores, spares and loose tools at lower of weighted
average cost or net realisable value. However, these
items are considered to be realisable at cost if the
finished products in which they will be used, are

(ii) Manufacturing work-in-progress at lower of
weighted average cost including related overheads
or net realisable value. In some cases, manufacturing
work-in-progress are valued at lower of specifically
identifiable cost or net realisable value. In the case
of qualifying assets, cost also includes applicable
borrowing costs vide policy relating to borrowing
costs.

(iii) Finished goods and stock-in-trade (in respect of goods
acquired for trading) at lower of weighted average
cost or net realizable value. Cost includes costs
of purchases, costs of conversion and other costs
incurred in bringing the inventories to their present
location. Taxes which are subsequently recoverable
from taxation authorities are not included in the cost.

(iv) Completed property/work-in-progress (including
land) in respect of property development activity at
lower of specifically identifiable cost or net realisable
value.

Assessment of net realisable value is made at each
reporting period end and when the circumstances
that previously caused inventories to be written-
down below cost no longer exist or when there is
clear evidence of an increase in net realisable value
because of changed economic circumstances, the
write- down, if any, in the past period is reversed to
the extent of the original amount written-down so
that the resultant carrying amount is the lower of the
cost and the revised net realisable value.

(l) Cash and bank balances

Cash and bank balances include fixed deposits, margin
money deposits, earmarked balances with banks and other
bank balances which have restrictions on repatriation.
Short-term and liquid investments being subject to more
than insignificant risk of change in value, are not included
as part of cash and cash equivalents.

(m) Securities premium

(i) Securities premium includes:

A. The difference between the face value of the equity
shares and the consideration received in respect of
shares issued.

B. The fair value of the stock options which are treated
as expense, if any, in respect of shares allotted
pursuant to Stock Options Scheme.

(ii) The issue expenses of securities which qualify as equity
instruments are written off against securities premium.

(n) Borrowing Costs

Borrowing costs include finance costs calculated using the
effective interest method, finance charges in respect of
assets acquired on lease and exchange differences arising
on foreign currency borrowings to the extent they are
regarded as an adjustment to finance costs.

In cases where hedging instruments are acquired for
protection against exchange rate risk related to borrowings
and are accounted as hedging a time-period related hedge
item, the borrowing costs also include the amortisation
of premium element of the forward contract and foreign
currency basis spread as applicable, over the period of the
hedging instrument.

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 capitalised/inventorised 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 recognised in profit or loss in the period in which
they are incurred.

(o) Share-based payment arrangements

The stock options granted to employees in terms of the
Company's Stock Options Schemes, are measured at the
fair value of the options at the grant date. The fair value
of the options is treated as discount and accounted as
employee compensation cost over the vesting period on
a straight-line basis. The amount recognised as expense
in each year is arrived at based on the number of grants
expected to vest. If a grant lapses after the vesting period,
the cumulative discount recognised as expense in respect
of such grant is transferred to the general reserve within
equity.

The fair value of the stock options granted to employees of
the Company by the Company's subsidiaries is accounted
as employee compensation cost over the vesting period
and where such fair value is not recovered by the
subsidiaries, the same is treated as dividend declared by
them. The share- based payment equivalent to the fair
value as on the date of grant of employee stock options
granted to key managerial personnel is disclosed as a
related party transaction in the year of grant.

The dilutive effect of outstanding options is reflected as
additional share dilution in the computation of diluted
earnings per share.

(p) Foreign currencies

(i) The functional currency and presentation currency of
the Company is Indian Rupee.

(q) Taxes on income

Tax on income for the current period is determined on
the basis of taxable income and tax credits computed in
accordance with the provisions of the Income Tax Act,1961
and using estimates and judgments based on the expected
outcome of assessments/appeals and the relevant rulings
in the areas of allowances and disallowances.

Deferred tax is recognised on temporary differences
between the carrying amounts of assets and liabilities in
the Company's Standalone Financial Statements and the
corresponding tax bases used in computation of taxable
profit and quantified using the tax rates as per laws
enacted or substantively enacted as on the Balance Sheet
date.

Deferred tax liabilities are generally recognised for all
taxable temporary differences including the temporary
differences associated with investments in subsidiaries
and associates, and interests in joint ventures, except
where the Company is able to control the reversal of the
temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future.

Deferred tax assets are generally recognised for all taxable
temporary differences to the extent that is probable
that taxable profits will be available against which those
deductible temporary differences can be utilised. The
carrying amount of deferred tax assets is reviewed at the
end of each reporting period 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.

Transaction or event which is recognised outside profit or
loss, either in other comprehensive income or in equity, is
recorded along with the tax as applicable.

(r) Interests in joint operations

The Company as a joint operator recognises in relation
to its interest in a joint operation, its share in the assets/
liabilities held/ incurred jointly with the other parties of
the joint arrangement. Revenue is recognised for its share
of revenue from the sale of output by the joint operation.
Expenses are recognised for its share of expenses incurred
jointly with other parties as part of the joint arrangement.
Interests in joint operations are included in the segments
to which they relate.