2 MATERIAL ACCOUNTING POLICIES
(INCLUDING BASIS OF PREPARATION)

(i) Statement of compliance

The financial statements have been prepared
in accordance with Indian Accounting
Standards ('Ind AS') as per the Companies
(Indian Accounting Standards) Rules, 2015,
as amended from time to time, notified
under Section 133 of the Companies Act,
2013 ('Act') and other relevant provisions of
the Act.

Accounting policies have been consistently
applied except where a newly issued
accounting standard is initially adopted or a
revision to an existing accounting standard
requires a change in the accounting policy
hitherto in use.

The Company's financial statements are
presented in Indian Rupees, which is also
its functional currency and all values are
rounded to the nearest lakh, except when
otherwise indicated.

The standalone financial statements for
the year ended 31 March 2026 are being
approved for issue in accordance with a
resolution of the directors on 29 April 2026.

(ii) Use of estimates and judgements

The preparation of the financial statements
in conformity with Ind AS requires that
management make judgments, estimates
and assumptions that affect the application
of accounting policies and the reported
amounts of assets, liabilities and disclosures
of contingent assets and liabilities as of
the date of the financial statements and
the income and expense for the reporting
period. The actual results could differ from
these estimates. Estimates and underlying
assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates
are recognised in the period in which the
estimate is revised and in any future periods
affected.

The Company makes certain judgments
and estimates for valuation and impairment
of financial instruments, fair valuation
of employee stock options, useful life of
property, plant and equipment, deferred tax
assets and retirement benefit obligations.
Management believes that the estimates
used in the preparation of the financial
statements are prudent and reasonable.

Judgements

Information about judgements made in
applying accounting policies that have
effects on the amounts recognised in the
financial statements are included in the
notes:

- Note 7 - Valuation of investments

- Note 39 - Lease classification

Note 45 - Allocation of cost to subsidiary
in the form of shared services and
management support fee

Assumptions and estimation uncertainties

Information about assumptions and
estimation uncertainties that have risk
resulting in a material adjustment in the
year ended 31 March 2026 is included in the
following notes:

- Note 5 and 6 - Expected credit loss
allowance for trade receivables and
loans: key assumption in determining
the average loss rate

- Note 10 and 13 - Measurement of useful
life and residual value of property, plant
and equipment and intangible assets

- Note 34 - Recognition and measurement
of provisions and contingencies: key
assumptions about the likelihood and
magnitude of an outflow of resources

- Note 36 - Recognition of deferred tax
asset: availability of future taxable profit
against which tax losses carried forward
can be used

- Note 38 - Measurement of defined
benefit obligations: key actuarial
assumptions

(iii) Basis of measurement

The financial statements have been prepared

on the historical cost basis except for the

following items:

(iv) Measurement of fair values

A number of the Company's accounting
policies and disclosures require the
measurement of fair values, for both financial
and non-financial assets and liabilities.

Fair values are categorised into different
levels in a fair value hierarchy based on the
inputs used in the valuation techniques as
follows:

- Level 1: The investments included in
Level 1 of fair value hierarchy have

been valued using quoted prices for
instruments in an active market.

- Level 2: The investments included in
Level 2 of fair value hierarchy have
been valued using valuation techniques
based on observable market data.

- Level 3: The investments included in
Level 3 of fair value hierarchy have been
valued using the income approach and
break-up value to arrive at their fair
value.

When measuring the fair value of an asset
or a liability, the Company uses observable
market data as far as possible. If the inputs
used to measure the fair value of an asset
or a liability fall into different levels of the
fair value hierarchy, then the fair value
measurement is categorised in its entirety
in the same level of the fair value hierarchy
as the lowest level input that is significant to
the entire measurement.

The Company recognises transfers between
levels of the fair value hierarchy at the end
of the reporting period during which the
change has occurred.

Further information about the assumptions
made in measuring fair values is included in
the following notes:

- Share-based payment arrangements

- Financial instruments

- Fair value of investment property

(v) Revenue and Other income

The Company is engaged in the business
of retail and institutional broking and
distribution of financial products. In
accordance with Ind AS 115, Revenue from
Contracts with Customers, the revenue is
accounted in the following manner for each
head:

a) Brokerage fee income

Brokerage income is recognised on
the trade date of transaction upon
confirmation of the transaction by the
stock exchange. The services are point

in time in nature. This business has been
transferred by the Company to its wholly
owned subsidiary Geojit Investments
Limited effected on 21 March 2025. Also
refer Note 44 (Transfer of broking and
depository business and discontinued
operations)

b) I ncome from depository services and
portfolio management services

Income from depository services, penal
charges and portfolio management
services are recognised on the basis of
agreements entered into with clients
and when the right to receive the
income is established. It is recognised
at the point in time for transaction
charges and others are recognised over
the period of service as applicable.
Depository services business has been
transferred by the Company to its wholly
owned subsidiary Geojit Investments
Limited effected on 21 March 2025. Also
refer Note 44 (Transfer of broking and
depository business and discontinued
operations)

c) Income from distribution of financial
products

Commission income from financial
products distribution is recognised on
the basis of agreements entered into
with principals and when the right to
receive the income is established. The
date of the agreement is considered
as point in time when the performance
obligation is satisfied. In case of
continuing services, the same is
recognised over a period of time.

d) Interest income

Interest income is recognised using the
effective interest rate method.

e) Dividend income and others

Dividend income is recognised in the
statement of profit or loss on the date
that the Company's right to receive
payment is established, it is probable
that the economic benefits associated
with the dividend will flow to the entity
and the amount of dividend can be
reliably measured. Shared services cost
is recognised based on agreements
entered into with the parties. Marketing

support income is recognised as income
when performance obligation is satisfied
as per the terms of agreement.

(vi) Property, plant and equipment and
intangible assets

Property, plant and equipment and

intangible assets are carried at cost less
accumulated depreciation / amortisation
and impairment losses, if any. The cost
of property, plant and equipment and
intangible assets comprises its purchase
price net of any trade discounts and rebates,
any import duties and other taxes (other
than those subsequently recoverable from
the tax authorities), any directly attributable
expenditure on making the asset ready for
its intended use, other incidental expenses
and interest on borrowings attributable to
acquisition of qualifying property, plant and
equipment up to the date the asset is ready
for its intended use. Subsequent expenditure
on property, plant and equipment after its
purchase / completion is capitalised only
if such expenditure results in an increase
in the future benefits from such asset
beyond its previously assessed standard of
performance.

The cost of property, plant and equipment
as at 1 April 2018, the Company's date of
transition to Ind AS, was determined with
reference to its carrying value recognised as
per the previous GAAP (deemed cost), as at
the date of transition to Ind AS.

Property, plant and equipment retired from
active use and held for sale are stated at
the lower of their net book value and net
realisable value and are disclosed separately.

Advances paid towards the acquisition of
property, plant and equipment and intangible
assets, outstanding at each balance sheet
date are shown under advances for capital
goods. The cost of the property, plant and
equipment not ready for their intended use
before such date are disclosed under capital
work-in-progress.

Depreciation and amortisation

Depreciable amount for assets is the cost
of an asset, less its estimated residual
value. Depreciation on property, plant and
equipment has been provided under the

Depreciation on additions/ (disposals) is
provided on a pro-rata basis ie. from/ (upto)
the date on which asset is ready for use/
(disposed off).

Improvements to leasehold premises are
amortised over the lease term or useful
lives of the assets, whichever is lower. If the
premises are vacated before the expiry of
above term, the un-amortised costs are fully
written off in the year of vacation.

Intangible assets are recognised where
it is probable that the future economic
benefit attributable to the assets will
flow to the Company and its cost can be
reliably measured. Expenditure incurred
on acquisition / development of intangible
assets which are not put/ ready to use at the
reporting date is disclosed under intangible
assets under development. Subsequent
expenditure is capitalised only when it
increases the future economic benefits
embodied in the specific asset to which it
relates. All other expenditure is recognised
in profit or loss as incurred.

Development expenditure on software is
capitalised as part of the cost of the resulting
intangible asset only if the expenditure can
be measured reliably, the product or process
is technically and commercially feasible,
future economic benefits are probable and
the Company intends to and has sufficient
resources to complete development and to
use or sell the asset. Otherwise it is recognised
in the profit or loss as incurred. Subsequent
to initial recognition, the asset is measured
at cost less accumulated amortisation and
any accumulated impairment losses.

The cost of other intangible assets as at
1 April 2018, the Company's date of transition
to Ind AS, was determined with reference
to its carrying value recognised as per the
previous GAAP (deemed cost), as at the
date of transition to Ind AS.

Computer softwares are amortised under
straight-line method over the estimated
useful life of 5 years or license period
whichever is lower. Client acquisition is
amortised under straight-line method over
an estimated useful life of 5 years. The
estimated useful life of the intangible assets

and the amortisation period are reviewed
at the end of each financial year and the
amortisation method is revised to reflect the
changed pattern, if any.

Derecognition

The carrying amount of an item of property,
plant and equipment is derecognised on
disposal or when no future economic benefits
are expected from its use or disposal. The
gain or loss arising from the derecognition
of an item of property, plant and equipment
is measured as the difference between the
net disposal proceeds and the carrying
amount of the item and is recognised in the
statement of profit and loss when the item is
derecognised.

(vii) Investment property

a) Recognition and measurement

Investment property is property held
either to earn rental income or for
captital appreciation or for both., but
not for sale in the ordinary course of
business, use in the production or supply
of goods or services or for administrative
purposes. Upon initial recognition,
and investment property is measured
at cost, including related transaction
costs. Subsequent to initial recognition,
investment property is measured at
cost less accumulated depreciation and
accumulated impairment losses, if any.

Investment property is derecognised
either when it has been disposed off or
when it is permenantly withdrawn from
use and no future economic benefit is
expected from its disposal. Any gain or
loss on disposal of investment property
(calculated as the difference between
the net proceeds from disposal and
the carrying amount of the item) is
recognised in profit or loss.

b) Subsequent expenditure

Subsequent expenditure is capitalised
only if it is probable that the future
economic benefits associated with the
expenditure will flow to the company
and the cost of the item can be
measured reliably.

c) Depreciation

Based on technical evaluation and
consequent advice, the management
believes a period of 40 years as
representing the best estmiate of the
period over which investment property
(which is quite similar) is expected to
be used. Accordingly, the Company
depreciates investment property over
a period of 40 years on a straight-line
basis. The useful life estimate of 40
years is different from the indicative
useful life of relevant type of buildings
mentioned in Part C of Schedule II to
the Act, ie. 30 years.

d) Reclassification from/ to investment
property

Transfers to (or from) investment
property are made only when there
is a change in use. Transfers between
investment property, owner-occupied
property and inventories do not change
the carrying amount of the property
transferred and they do not change the
cost of that property for measurement
or disclosure purposes.

e) Fair value disclosure

The fair values of investment property
is disclosed in the notes. Fair values is
determined by an independent valuer
who holds a recognised and relevant
professional qualification and has
recent experience in the location and
category of the investment property
being valued.

f) Transition to Ind AS

The cost of investment property at
1 April 2018, the Company's date of
transition to Ind AS, was determined
with reference to its carrying value
recognised as per the previous GAAP
(deemed cost), as at the date of
transition to Ind AS.

(viii)Investment in subsidiaries, associate and
joint venture

Investment in subsidiaries, associate and
joint venture is measured at cost less
accumulated impairment, if any.

(ix) Financial instruments

The Company recognises all the financial
assets and liabilities at its fair value on
initial recognition; In the case of financial
assets not at fair value through profit or
loss, transaction costs that are directly
attributable to the acquisition or issue of the
financial asset are added to the fair value on
initial recognition. The financial assets are
accounted on a trade date basis.

Financial assets - Business model assessment

The Company makes an assessment of the
objective of the business model in which
a financial asset is held at a portfolio level
because this best reflects the way the
business is managed and information is
provided to management. The information
considered includes:

- the stated policies and objectives for
the portfolio and the operation of
those policies in practice. These include
whether management's strategy
focuses on earning contractual interest
income, maintaining a particular interest
rate profile, matching the duration of
the financial assets to the duration of
any related liabilities or expected cash
outflows or realising cash flows through
the sale of the assets;

- how the performance of the portfolio
is evaluated and reported to the
Company's management;

- the risks that affect the performance of
the business model (and the financial
assets held within that business model)
and how those risks are managed;

- how managers of the business

are compensated - e.g. whether
compensation is based on the fair
value of the assets managed or the
contractual cash flows collected; and

- the frequency, volume and timing
of sales of financial assets in prior
periods, the reasons for such sales and
expectations about future sales activity.

(ix) Financial instruments (contd..)

Transfers of financial assets to third parties
in transactions that do not qualify for
derecognition are not considered sales for
this purpose, consistent with the Company's
continuing recognition of the assets.

Financial assets that are held for trading
or are managed and whose performance is
evaluated on a fair value basis are measured
at FVTPL.

Financial assets - Assessment whether
contractual cash flows are solely payments
of principal and interest

For the purposes of this assessment,
'principal' is defined as the fair value of the
financial asset on initial recognition. 'Interest'
is defined as consideration for the time value
of money and for the credit risk associated
with the principal amount outstanding during
a particular period of time and for other basic
lending risks and costs (e.g. liquidity risk
and administrative costs), as well as a profit
margin. In assessing whether the contractual
cash flows are solely payments of principal
and interest, the Company considers the
contractual terms of the instrument. This
includes assessing whether the financial
asset contains a contractual term that could
change the timing or amount of contractual
cash flows such that it would not meet this
condition. In making this assessment, the
Company considers:

- contingent events that would change
the amount or timing of cash flows;

- terms that may adjust the contractual
coupon rate, including variable-rate
features;

- prepayment and extension features;
and

- terms that limit the Company's claim to
cash flows from specified assets (e.g.
non-recourse features).

A prepayment feature is consistent
with the solely payments of principal
and interest criterion if the prepayment

amount substantially represents unpaid
amounts of principal and interest on the
principal amount outstanding, which may
include reasonable compensation for early
termination of the contract. Additionally,
for a financial asset acquired at a discount
or premium to its contractual par amount, a
feature that permits or requires prepayment
at an amount that substantially represents
the contractual par amount plus accrued
(but unpaid) contractual interest (which
may also include reasonable compensation
for early termination) is treated as consistent
with this criterion if the fair value of the
prepayment feature is insignificant at initial
recognition.

For subsequent measurement, financial
assets are categorised into:

a) Amortised cost: The Company
classifies the financial assets at
amortised cost if the contractual cash
flows represent solely payments of
principal and interest on the principal
amount outstanding and the assets are
held under a business model to collect
contractual cash flows. The gains and
losses resulting from fluctuations in fair
value are not recognised for financial
assets classified in amortised cost
measurement category. These assets are
subsequently measured at amortised
cost using the effective interest rate
method. The amortised cost is reduced
by impairment losses. Interest income,
foreign exchange gains and losses
and impairment are recognised in
statement of profit or loss. Any gain or
loss on derecognition is recognised in
statement of profit or loss.

b) Fair value through other comprehensive
income (FVOCI): The Company
classifies the financial assets as FVOCI
if the contractual cash flows represent
solely payments of principal and interest
on the principal amount outstanding
and the Company's business model is
achieved by both collecting contractual
cash flow and selling financial assets.
The impairment gains or losses, foreign
exchange gains or losses and interest

calculated using the effective interest
method are recognised in profit or
loss. Other net gains and losses are
recognised in OCI. On de-recognition,
the cumulative gain or loss previously
recognised in other comprehensive
income is reclassified from equity
to profit or loss as a reclassification
adjustment.

c) Fair value through profit or loss

(FVTPL): The financial assets are
classified as FVTPL if these do not meet
the criteria for classifying at amortised
cost or FVOCI. Further, in certain
cases to eliminate or significantly
reduce a measurement or recognition
inconsistency (accounting mismatch),
the Company irrevocably designates
certain financial instruments at FVTPL
at initial recognition. In case of financial
assets measured at FVTPL, changes
in fair value are recognised in profit
or loss. Net gains and losses including
any interest or dividend income are
recognised in statement of profit or
loss.

Profit or loss on sale of investments is
determined on the basis of first-in-first-out
(FIFO) basis.

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:

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

- 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.

In order to show how fair values have been
derived, financial instruments are classified
based on a hierarchy of valuation techniques,
as summarised below:

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

Level 2: inputs other than quoted prices
included in Level 1 that are observable for
the asset or liability, either directly (e.g. as
prices) or indirectly (e.g. derived from the
prices).

Level 3: inputs for the current assets or
liability that are not based on observable
market data (unobservable inputs).

Based on the Company's business model for
managing the investments, the Company
has classified its investments at FVTPL.
Investment in subsidiaries is carried at
deemed cost (previous GAAP carrying
amount) as per Ind AS 27.

Financial liabilities are carried at amortised
cost using the effective interest rate method.
For trade and other payables the carrying
amount approximates the fair value due to
short maturity of these instruments.

d) Impairment of financial assets: In

accordance with Ind AS 109, the Company
applies expected credit loss model (ECL) for
measurement and recognition of impairment
loss. The Company recognises lifetime
expected losses for all contract assets
including loan and trade receivables that
do not constitute a financing transaction. At
each reporting date, the Company assesses
whether the loans have been impaired. The
Company is exposed to credit risk when
the customer defaults on his contractual
obligations. The Company has followed
simplified approach for measurement of
expected credit loss in case of receivables
and loans.

Credit-impaired financial assets

At each reporting date, the Company
assesses whether financial assets carried
at amortised cost are credit-impaired. A
financial asset is 'credit impaired' when
one or more events that have a detrimental
impact on the estimated cash flows of the
financial asset have occurred.

Events that a financial asset is credit-
impaired includes the following observable
data:

- Significant financial difficulty of the
debtor;

- A breach of contract such as a default
or being more than 90 days past due (in
case of unsecured receivables);

- The restructuring of a loan or advance
by the Company on terms that the
Company would not consider otherwise;

- It is probable that the debtor will
enter bankruptcy or other financial
reorganisation; or

- The disappearance of an active market
for a security because of financial
difficulties;

e) Offsetting: Financial assets and financial
liabilities are offset and the net amount
presented in the balance sheet when, and
only when, the Company currently has
a legally enforceable right to set off the
amounts and it intends either to settle them
on a net basis or to realise the asset and
settle the liability simultaneously.

Derecognition
Financial assets

The Company derecognises a financial asset
when:

- the contractual rights to the cash flows
from the financial asset expire; or

- it transfers the rights to receive the
contractual cash flows in a transaction
in which either:

a) substantially all of the risks and
rewards of ownership of the
financial asset are transferred; or

b) the Company neither transfers nor
retains substantially all of the risks
and rewards of ownership and
it does not retain control of the
financial asset.

The Company enters into transactions
whereby it transfers assets recognised on
its balance sheet but retains either all or
substantially all of the risks and rewards of
the transferred assets. In these cases, the
transferred assets are not derecognised.

Financial liabilities

The Company derecognises a financial
liability when its contractual obligations
are discharged or cancelled or expire. The
Company also derecognises a financial
liability when its terms are modified and
the cash flows of the modified liability are
substantially different, in which case a new
financial liability based on the modified
terms is recognised at fair value.

On derecognition of a financial liability, the
difference between the carrying amount
extinguished and the consideration paid
(including any non-cash assets transferred
or liabilities assumed) is recognised in profit
or loss.

Presentation of allowance for expected
credit loss (ECL) in the balance sheet

Loss allowances for financial assets measured
at amortised cost are deducted from the
gross carrying amount of the assets.

Write-off

The gross carrying amount of a financial
asset is written off when the Company has
no reasonable expectations of recovering
a financial asset in its entirety or a portion
thereof. The Company expects no significant
recovery from the amount written off.
However, financial assets that are written
off could still be subject to enforcement
activities in order to comply with the
Company's procedures for recovery of
amounts due.

(x) Employee benefits

a) Short- term employee benefits

Short-term employee benefits are
expensed as the related service is
provided. An undiscounted liability is
recognised for the amount expected to
be paid if the Company has a present
legal or constructive obligation to pay
this amount as a result of past service
provided by the employee and the
obligation can be estimated reliably.

b) Provident fund

The Company's contribution to
provident fund scheme is considered
as defined contribution plan, and is
charged as an expense based on the
amount of contribution required to be
made and when services are rendered
by the employees.

c) Gratuity

The Company pays gratuity, a defined
benefit plan, to its employees who retire
or resign after a minimum period of five
years of continuous service.

A defined benefit plan is a post
employment benefit plan other than
a defined contribution plan. The
Company's net obligation in respect of
the defined benefit plan is calculated
by estimating the amount of future
benefit that employee has earned in
exchange of their service in the current
and prior periods and discounted back
to the current valuation date to arrive
at the present value of the defined
benefit obligation. The defined benefit
obligation is deducted from the fair
value of plan assets, to arrive at the
net asset / (liability), which need to be
provided for in the books of accounts of
the Company.

As required by the Ind AS 19, the
discount rate used to arrive at the
present value of the defined benefit
obligations is based on the Indian
Government security yields prevailing
as at the balance sheet date that have
maturity date equivalent to the tenure
of the obligation.

The calculation is performed by a
qualified actuary using the projected
unit credit method. When the calculation

results in a net asset position, the
recognised asset is limited to the
present value of economic benefits
available in form of reductions in future
contributions.

Remeasurements arising from defined
benefit plans comprises of actuarial
gains and losses on benefit obligations,
the return on plan assets in excess of
what has been estimated and the effect
of asset ceiling, if any, in case of over
funded plans. The Company recognises
these items of remeasurements in other
comprehensive income and all the other
expenses related to defined benefit
plans as employee benefit expenses in
the statement of profit and loss.

When the benefits of the plan are
changed, or when a plan is curtailed or
settlement occurs, the portion of the
changed benefit related to past service
by employees, or the gain or loss on
curtailment or settlement, is recognised
immediately in the statement of profit or
loss when the plan amendment or when
a curtailment or settlement occurs.

d) Compensated absences

The employees can carry forward
a portion of the unutilised accrued
compensated absences and utilise it in
future service periods or receive cash
compensation. The Company records
an obligation for such compensated
absences in the period in which the
employee renders the services that
increase the entitlement. The obligation
is measured on the basis of independent
actuarial valuation using the projected
unit credit method. Actuarial losses/
gains are recognised in the statement
of profit and loss as and when they are
incurred.

e) Employee stock option scheme

Equity settled share based payments
to employees are measured at the fair
value of the equity instruments at the
grant date. The fair value determined
at the grant date of the equity settled
share based payments is expensed on
a straight-line basis over the vesting
period, based on the Company's

estimate of equity instruments that will
eventually vest, with a corresponding
increase in equity.

(xi) Borrowing costs

Borrowing costs include interest expense as
per the effective interest rate (EIR) and other
costs incurred by the Company in connection
with the borrowing of funds. Borrowing
costs directly attributable to acquisition or
construction of those tangible fixed assets
which necessarily take a substantial period
of time to get ready for their intended use
are capitalised. Other borrowing costs are
recognised as an expense in the year in
which they are incurred.

(xii) Foreign currency transactions and
translations

Foreign currency transactions 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 recognised in profit or loss.

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. For example, translation
differences on non-monetary assets and
liabilities such as equity instruments held at
fair value through profit or loss are recognised
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 recognised in other
comprehensive income.

(xiii) Leases

The Company evaluates if an arrangement
qualifies to be a lease as per the requirements
of Ind AS 116 “Lease” as notified by MCA.

a) Determining whether an arrangement
contains a lease

At inception of an arrangement, it is
determined whether the arrangement

is or contains a lease. At inception or
on reassessment of the arrangement
that contains a lease, the payments
and other consideration required by
such an arrangement are separated into
those for the lease and those for other
elements on the basis of their relative
fair values.

The Company accounts for each
lease component within the contract
as a lease separately from non-lease
components of the contract and
allocates the consideration in the
contract to each lease component on
the basis of the relative stand-alone
price of the lease component and the
aggregate stand-alone price of the non¬
lease components.

b) Measurement of leases as a lessee

The Company recognises right-of-use
asset representing its right to use the
underlying asset for the lease term at
the lease commencement date. The cost
of the right-of-use asset measured at
inception shall comprise of the amount
of the initial measurement of the lease
liability adjusted for any lease payments
made at or before the commencement
date less any lease incentives received,
plus any initial direct costs incurred and
an estimate of costs to be incurred by
the lessee in dismantling and removing
the underlying asset or restoring the
underlying asset or site on which it
is located. The right-of-use assets is
subsequently measured at cost less any
accumulated depreciation, accumulated
impairment losses, if any and adjusted
for any remeasurement of the lease
liability. The right-of-use assets is
depreciated using the straight-line
method from the commencement date
over the shorter of lease term or useful
life of right-of-use asset. The estimated
useful lives of right-of-use assets are
determined on the same basis as those
of property, plant and equipment. Right-
of-use assets are tested for impairment
whenever there is any indication that
their carrying amounts may not be

recoverable. Impairment loss, if any, is
recognised in the statement of profit
and loss.

The Company measures the lease
liability at the present value of the
lease payments that are not paid at the
commencement date of the lease. The
lease payments are discounted using the
interest rate implicit in the lease, if that
rate can be readily determined. If that
rate cannot be readily determined, the
Company uses incremental borrowing
rate. The Company determines its
incremental borrowing rate by obtaining
interest rates from various external
financing sources and makes certain
adjustments to reflect the terms of
the lease and type of the asset leased.
The lease payments shall include fixed
payments, variable lease payments,
residual value guarantees, exercise
price of a purchase option where the
Company is reasonably certain to
exercise that option and payments of
penalties for terminating the lease, if the
lease term reflects the lessee exercising
an option to terminate the lease.

The lease liability is subsequently
remeasured when there is a change in
future lease payments arising from a
change in an index or rate, if there is
a change in the Company's estimate
of the amount expected to be payable
under a residual value guarantee, if
the Company changes its assessment
of whether it will exercise a purchase,
extension or termination option or if
there is a revised in-substance fixed
lease payment. 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 lease payments associated with
leases, that have a lease term of 12
months or less, are recognised as an
expense on a straight-line basis over the
lease term.

(xiv)Income tax

The income tax expense comprises current
and deferred tax incurred by the Company.
Income tax expense is recognised in the
income statement except to the extent that
it relates to items recognised directly in
equity or OCI, in which case the tax effect
is recognised in equity or OCI. Income
tax payable on profits is based on the
applicable tax laws in each tax jurisdiction
and is recognised as an expense in the
period in which profit arises. Current tax
is the expected tax payable/receivable on
the taxable income or loss for the period,
using tax rates enacted for the reporting
period and any adjustment to tax payable/
receivable in respect of previous years.

Deferred tax is recognised in respect of
temporary differences between the carrying
amounts of assets and liabilities for financial
reporting purpose and the amounts for tax
purposes.

Deferred tax liabilities are generally
recognised for all taxable temporary
differences and deferred tax assets are
recognised, for all deductible temporary
differences, to the extent it is probable
that future taxable profits will be available
against which deductible temporary
differences can be utilised. Deferred tax is
measured at the tax rates that are expected
to be applied to the temporary differences
when they reverse, based on the laws that
have been enacted or substantively enacted
by the reporting date. Deferred tax assets
are reviewed at each reporting date and are
reduced to the extent that it is no longer
probable that the related tax benefit will be
realised. The tax effects of income tax losses,
available for carry forward, are recognised
as deferred tax asset, when it is probable
that future taxable profits will be available
against which these losses can be set-off.

Additional taxes that arise from the
distribution of dividends by the Company
are recognised directly in equity at the
same time as the liability to pay the related
dividend is recognised.

Current and deferred tax are recognised
as an expense or income in the standalone
statement of profit and loss, except when
they relate to items credited or debited
either in other comprehensive income or
directly in equity, in which case the tax is
also recognised in OCI or directly in equity.

(xv) Cash and cash equivalents

Cash and cash equivalents for the purpose
of cash flow statement include cash in hand,
balances with the banks and short term
investments with an original maturity of
three months or less, and accrued interest
thereon.

(xvi) Cash flow statement

Cash flows are reported using the indirect
method, whereby profit before tax is
adjusted for the effects of transactions
of a non-cash nature and any deferrals or
accruals of past or future cash receipts
or payments. The cash flows from regular
revenue generating, investing and financing
activities of the Company are segregated.

(xvii) Impairment of non financial assets

The Company assesses at the reporting date
whether there is an indication that an asset
may be impaired. If any indication exists,
or when annual impairment testing for an
asset is required, the Company estimates
the asset's recoverable amount. An asset's
recoverable amount is the higher of an
asset's or cash generating unit's (“CGU”) fair
value less costs of disposal and its value in
use. The recoverable amount is determined
for an individual asset, unless the asset does
not generate cash inflows that are largely
independent of those from other assets or
groups of assets. Where the carrying amount
of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and
is written down to its recoverable amount. 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. In determining fair value less
costs of disposal, recent market transactions
are taken into account, if available. If no such
transactions can be identified, an appropriate
valuation model is used. Impairment losses
are recognised in statement of profit and
loss.