2. Material accounting policies

a. Statement of compliance

These financial statements have been prepared
in accordance with Indian Accounting Standards
(‘Ind AS') notified under the Companies (Indian
Accounting Standards) Rules, 2015 (as amended
from time to time) and presentation requirements
of Division II of Schedule III to the Companies Act,
2013, as applicable to the financial statements.

b. Basis of preparation of financial statements

The financial statements have been prepared
on a historical cost basis, except for the
following assets and liabilities which have been
measured at fair value:

• Derivative financial instruments,

• Certain financial assets and liabilities
measured at fair value (refer note 2 (p)).

• Equity settled ESOP at grant date fair value
and cash settled ESOP at fair value at each
reporting date.

The accounting policies adopted for preparation
and presentation of financial statements have been
consistently applied. The Company segregates
assets and liabilities into current and non-current
categories for presentation in the balance sheet after
considering its normal operating cycle and other
criteria set out in Ind AS 1, “Presentation of Financial
Statements”. For this purpose, current assets and
liabilities include the current portion of non-current
assets and liabilities respectively. Deferred tax assets
and liabilities are always classified as non-current.

The operating cycle is the time between the
acquisition of assets for processing and their
realization in cash and cash equivalents. The
Company has identified period up to twelve
months as its operating cycle.

The financial statements are presented in Indian
Rupees (“INR”) and all values are rounded to the
nearest crores (INR 00,00,000), except when
otherwise indicated.

c. Significant accounting judgements,
estimates and assumptions

The preparation of these financial statements in
conformity with recognition and measurement
principles of Ind AS requires the management of
the Company to make judgements, estimates and
assumptions that affect the reported balances
of assets and liabilities, disclosures relating to
contingent liability as at the date of the financial
statements and the reported amounts of income
and expenses for the periods presented.

Estimates and underlying assumptions are
reviewed on an ongoing basis. Revision to
accounting estimates are recognised in the period
in which the estimates are revised and future
periods are affected.

i. Judgements

In the process of applying the Company's
accounting policies, the management has
made the following judgements, which have
the most significant effect on the amounts
recognised in the financial statements:

a) Revenue from contracts with customers:

As per Company's assessment, it is
generally the principal in its revenue
arrangements, as it typically controls the

goods or services before transferring
them to the customer.

b) Operating lease commitments -
Company as lessor

The Company has entered into property
leases (‘the leases') on its investment
property portfolio. The Company has
determined the accounting of the leases
as operating lease on its Investment
property portfolio, based on an evaluation
of the terms and conditions of the
arrangements, such as the lease term not
constituting a major part of the economic
life of the commercial property, the fair
value of the asset and the fact that it
retains all the significant risks and rewards
of ownership of these properties.

ii. Estimates and assumptions

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

a) Defined benefit plans

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

Judgements include considerations of
inputs such as liquidity risk, credit risk and
volatility. Changes in assumptions about
these factors could affect the reported
fair value of financial instruments.

e) Provision for decommissioning of assets

Provision for decommissioning of assets
relates to the costs associated with the
removal of long-lived assets when they
will be retired. The Company records
a liability at the estimated current fair
value of the costs associated with the
removal obligations, discounted at
present value using risk-free rate of
return. The liability for decommissioning
of assets is capitalised by increasing the
carrying amount of the related asset and
is depreciated over its useful life. The
estimated removal liabilities are based
on historical cost information, industry
factors and engineering estimates. The
impact of climate-related legislation
and regulations is considered in
estimating the timing and future costs of
decommissioning of the Company's fibre
network including the undersea cables.

f) Impairment of investments in
subsidiaries and associates

The carrying values of the investments are
reviewed for impairment at each balance
sheet date or earlier, if any indication of
impairment exists. The Company's telecom
business layout and asset structure of its
India and International (including Tata
Communications International Pte Limited
(‘TCIPL') group and Tata Communications
(UK) Limited (‘TC UK')) operations are
integrated for delivering products and
services to its customers in all jurisdictions.
For the purpose of impairment testing,
the Company prepares and analyses its
business units, on detailed budgets and
forecast calculations, which are prepared
in an integrated way across all jurisdictions.

g) Deferred Taxes

Assessment of the appropriate amount
and classification of income taxes is
dependent on several factors, including
estimates of the timing and probability
of realisation of deferred income taxes
and the timing of income tax payments.
Deferred income taxes are provided

Provisions and contingent liabilities are
reviewed at each balance sheet date.

d. Cash and cash equivalents

Cash comprises Cash on hand and Cash at banks.
Cash equivalents are short-term balances (with an
original maturity of three months or less from the
date of acquisition) which are unrestricted from
withdrawal and usage, highly liquid investments
that are readily convertible into known amounts of
cash and which are subject to insignificant risk of
changes in value. Bank overdrafts do not form an
integral part of the Company's cash management
and so the same is not considered as component
of cash and cash equivalents.

e. Property, plant and equipment

Property, plant and equipment is stated at cost
of acquisition or construction, less accumulated
depreciation / amortisation and impairment loss, if
any. Cost includes inward freight, duties, taxes and
all incidental expenses incurred to bring the assets
to its working condition for their intended use.

Freehold land is measured at cost and is
not depreciated.

Jointly owned assets are capitalised in proportion
to the Company's ownership interest in such assets.

Capital work-in-progress includes cost of property,
plant and equipment under installation/ under
development as at the balance sheet date and is
carried at cost (net of accumulated impairment
loss, if any), comprising of direct cost, directly
attributable cost and attributable interest.

Cost of property, plant and equipment also includes
present value of provision for decommissioning
of assets if the recognition criteria for a
provision are met.

The depreciable amount for property, plant and
equipment is the cost of the property, plant
and equipment or other amount substituted
for cost, less its estimated residual value
(wherever applicable).

Depreciation on property, plant and equipment
has been provided on the straight-line method as
per the estimated useful lives. The assets' residual
values, estimated useful lives and methods of
depreciation are reviewed at each financial year
end and any change in estimate is accounted for
on a prospective basis.

f. Intangible assets

Intangible assets are recognised when it is
probable that the future economic benefits that are
attributable to the assets will flow to the Company
and the cost of the asset can be measured reliably.
Cost incurred on intangible assets not ready for
their intended use is disclosed as intangible assets
under development.

Following initial recognition, intangible assets are
carried at cost less any accumulated amortisation
and accumulated impairment losses, if any.

Indefeasible Right to Use ("IRU”) taken for optical
fibres are capitalised as intangible assets at the
amounts paid for acquiring such rights. These
are amortised on straight line basis, over the
period of contract.

The amortisation period and the amortisation
method for an intangible asset with a finite useful
life are reviewed at the end of each financial year.
Changes in the expected useful life or the expected
pattern of consumption of future economic
benefits embodied in the asset are considered
to modify the amortisation period or method,
as appropriate, and are treated as changes in
accounting estimates.

Intangible assets with finite lives are amortised
over the expected useful life and assessed for
impairment whenever there is an indication that
the intangible asset may be impaired.

Intangible assets are amortised as follows:

An intangible asset is de-recognised on disposal,
or when no future economic benefits are expected
from use or disposal. Gains 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 and
Loss when the asset is de-recognised.

g. Internal-Use Software Development Costs

Certain costs of the technology platform and other
software applications developed for internal use

are capitalised. The Company capitalises qualifying
internal-use software development costs that are
incurred during the application development stage
of projects with a useful life greater than one year.
Capitalisation of costs begins when two criteria are
met: (i) the preliminary project stage is completed,
and (ii) it is probable that the software will be
completed and used for its intended purpose.

Capitalisation ceases when the software is
substantially complete and ready for its intended
use, including the completion of all-significant
testing. The Company also capitalises costs related
to specific upgrades and enhancements when it is
probable the expenditures will result in additional
functionality. Costs related to maintenance, minor
upgrades, enhancements, preliminary project
activities and post-implementation operating
activities are expensed as incurred.

h. Investment properties

Investment properties comprise of land and
buildings that are held for long term lease
rental yields and/or for capital appreciation.
Investment properties are initially recognised at
cost including transaction costs. Subsequently,
investment properties comprising of building are
carried at cost less accumulated depreciation and
accumulated impairment losses, if any.

Depreciation on building is provided over the
estimated useful lives (refer note 2(e)) as specified
in Schedule II to the Companies Act, 2013.
The residual values, estimated useful lives and
depreciation method of investment properties are
reviewed and adjusted on prospective basis as
appropriate, at each financial year end. The effects
of any revision are included in the Statement of
Profit and Loss when the changes arise.

Though the Company measures investment
properties using cost based measurement,
the fair values of investment properties are
disclosed in note 7(b).

Investment properties are de-recognised when
either they have been disposed off or doesn't
meet the criteria of investment property when the
investment property is permanently withdrawn
from use and no future economic benefit is
expected from its disposal.

The difference between the net disposal proceeds
and the carrying amount of the asset is recognised
in the Statement of Profit and Loss in the period of
de-recognition.

i. Impairment of non-financial assets

The carrying values of assets / cash generating
units ("CGU”) at each balance sheet date are
reviewed for impairment, if any indication of
impairment exists. The following intangible assets
are tested for impairment at the end of each
financial year even if there is no indication that the
asset is impaired:

i. an intangible asset that is not yet available
for use; and

ii. an intangible asset with indefinite useful lives.

If the carrying amount of the assets exceed
the estimated recoverable amount, impairment
is recognised for such excess amount. The
impairment loss is recognised as an expense in the
Statement of Profit and Loss, unless the asset is
carried at a revalued amount, in which case any
impairment loss of the revalued asset is treated as
a revaluation decrease to the extent a revaluation
reserve is available for that asset.

The recoverable amount is the greater of the fair
value less cost of disposal and the value in use.
Value in use is arrived at by discounting the future
cash flows to their present value based on an
appropriate discount factor. 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 cost of disposal,
recent market transactions are taken into account.

When there is indication that an impairment loss
recognised for an asset (other than a revalued
asset) in earlier accounting periods no longer
exists or may have decreased, such reversal of
impairment loss is recognised in the Statement
of Profit and Loss, to the extent the amount was
previously charged to the Statement of Profit and
Loss. In case of revalued assets, such reversal is
not recognised.

The Company bases its impairment calculation on
detailed budgets and forecasts. These budgets
and forecasts generally cover a significant period.
For longer periods, a long-term growth rate is
calculated and applied to projected future cash
flows after the significant period.

j. Leases

The determination of whether an arrangement is
(or contains) a lease is based on the substance
of the arrangement at the inception of the

lease. The arrangement is, or contains, a lease
if fulfilment of the arrangement is dependent
on the use of a specific asset or assets and the
arrangement conveys a right to use the asset or
assets, even if that right is not explicitly specified
in an arrangement.

The Company as a Lessee

The Company's lease asset classes primarily
consist of leases for land, buildings and colocation
spaces. The Company assesses whether a contract
contains a lease, at inception of a contract. A
contract is, or contains, a lease if the contract
conveys the right to control the use of an
identified asset for a period of time in exchange
for consideration. To assess whether a contract
conveys the right to control the use of an identified
asset, the Company assesses whether: (i) the
contract involves the use of an identified asset (ii)
the Company has substantially all of the economic
benefits from use of the asset through the period
of the lease and (iii) the Company has the right to
direct the use of the asset.

At the date of commencement of the lease, the
Company recognizes a right-of-use asset ("ROU”)
and a corresponding lease liability for all lease
arrangements in which it is a lessee, except for
leases with a term of twelve months or less (short¬
term leases) and low value leases. For these short¬
term and low value leases, the Company recognizes
the lease payments as an operating expense on a
straight-line basis over the term of the lease.

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

The right-of-use assets are initially recognized at
cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or
prior to the commencement date of the lease plus
any initial direct costs less any lease incentives. They
are subsequently measured at cost less accumulated
depreciation and impairment losses, if any.

Right-of-use assets are depreciated from the
commencement date on a straight-line basis over
the shorter of the lease term and useful life of the
underlying asset. Right of use assets are evaluated
for recoverability whenever events or changes
in circumstances indicate that their carrying
amounts may not be recoverable. Refer to the
accounting policies in note 2(i) Impairment of non¬
financial assets.

The lease liability is initially measured at amortized
cost at the present value of the future lease
payments. The lease payments are discounted
using the interest rate implicit in the lease or, if
not readily determinable, using the incremental
borrowing rates in the country of domicile of these
leases. The Company uses return on treasury
bills with similar maturity as base rate and makes
adjustments for spread based on the Company's
credit rating as the implicit interest rate cannot
be readily determinable. Lease liabilities are
remeasured with a corresponding adjustment
to the related right-of-use asset if the Company
changes its assessment if whether it will exercise
an extension or a termination option.

Lease liability and ROU asset have been separately
presented in the Balance Sheet.

The Company as a Lessor

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

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

k. Inventories

Inventories of traded goods, required to provide
Data Services ("DS”), are valued at the lower of
cost or net realisable value. Cost includes cost of
purchase and all expenses incurred to bring the
inventory to its present location and condition.
Cost is determined on a weighted average basis.
Net realisable value is the estimated selling price in
the ordinary course of business less the estimated
cost necessary to make the sale.

l. Employee benefits

Employee benefits include contributions to
provident fund, employee state insurance scheme,
gratuity fund, compensated absences, pension
and post-employment medical benefits.

i. Short term employee benefits

The undiscounted amount of short term
employee benefits expected to be paid in
exchange for services rendered by employees
is recognised during the period when the
employee renders the service. These benefits
include compensated absences such as paid

annual leave and performance incentives
payable within twelve months.

ii. Post-employment benefits

Contributions to defined contribution
retirement benefit schemes are recognised
as expense when employees have rendered
services entitling them to the contributions.

For defined benefit schemes, the cost of
providing benefits is determined using the
Projected Unit Credit Method, with actuarial
valuations being carried out at each balance
sheet date which recognized each period
of service as giving rise to additional unit of
employee benefit entitlement and measure each
unit separately to build up the final obligation.

Remeasurements, comprising of actuarial
gains and losses, the effect of the asset
ceiling (if applicable), excluding amounts
included in net interest on the net defined
benefit liability and the return on plan
assets (excluding amounts included in
net interest on the net defined benefit
liability), are recognized immediately in the
balance sheet with a corresponding debit
or credit to retained earnings through other
comprehensive income in the period in
which they occur. Remeasurements are not
reclassified to the Statement of Profit and
Loss in subsequent periods.

Past service cost is recognized in the
Statement of Profit and Loss in the period
of plan amendment. These benefits include
gratuity, pension, provident fund and post¬
employment medical benefits.

Net interest is calculated by applying the
discount rate to the net defined benefit
liability or asset.

The Company recognized changes in service
costs comprising of current service costs, past-
service costs, gains and losses on curtailments
and non-routine settlements under employee
benefits expense in the Statement of Profit
and Loss. The net interest expense or income
is recognized as part of finance cost in the
Statement of Profit and Loss.

The retirement benefit obligation recognised
in the balance sheet represents the present
value of the defined benefit obligation as
adjusted for unrecognised past service cost,
and as reduced by the fair value of scheme

assets. Any asset resulting from this calculation
is limited to past service cost, plus the present
value of available refunds and reductions in
future contributions to the scheme.

iii. Other long-term benefits

Compensated absences, which are not
expected to occur within twelve months after
the end of the period in which the employee
renders the related services, are recognized
as a liability at the present value of the defined
benefit obligation at the balance sheet date.

iv. Share-Based Payments to employees

Share Based Payments are classified under
equity settled and cash settled. Under the
equity settled share based payment, the fair
value of Restricted Stock Units (RSU's) on the
grant date of the awards given to employees
is recognised as ‘employee benefit expenses'
with a corresponding increase in equity over
the vesting period.

The fair value of the options at the grant date
is calculated by an independent valuer basis
Black & Scholes model. At the end of each
reporting period, apart from the non-market
vesting condition, the expense is reviewed
and adjusted to reflect changes to the level of
RSU's expected to vest.

For cash-settled share-based payments, the
fair value of the amount payable to employees
is recognised as ‘employee benefit expenses'
with a corresponding increase in liabilities, over
the period of non-market vesting conditions
getting fulfilled. The liability is remeasured
at each reporting period up to the vesting
date, with changes in fair value recognised
in employee benefits expenses. Refer note
37 for details.

m. Revenue recognition

Revenue is recognized upon transfer of control of
promised goods or services to the customers for an
amount, that reflects the consideration which the
Company expects to receive in exchange for those
goods or services in normal course of business.
Revenue is measured at the transaction price that
is allocated to performance obligation excluding
taxes collected on behalf of the government and
is reduced for estimated credit notes and other
similar allowances based on management's best
assessment of its likely outcome.

Types of products and services and their revenue

recognition criteria are as follows:

i. Revenue from Voice Solutions (VS) is
recognised at the end of each month based
on minutes of traffic carried during the month.

ii. Revenue from Data Services (DS) is recognised
over the period of the arrangement based on
contracted fee schedule or based on usage. In
respect of sale of equipment (ancillary to DS)
revenue is recognised when the control over the
goods has been passed to the customer and/ or
the performance obligation has been fulfilled.

iii. The Company has entered into certain
multiple-element revenue arrangements
which involve the delivery and performance
of equipment and services. At the inception of
the arrangement, all the deliverables therein
are evaluated to determine whether they
represent distinct performance obligations,
and if so, they are accounted for separately.
Total consideration related to the multiple
element arrangements is allocated to each
performance obligation based on their
relative fair values. Revenue is recognised for
respective components either at the point
in time or over time on satisfaction of the
performance obligation. In contracts where
the Company provides significant integration
services, the contract is treated as a single
performance obligation and the revenue is
recognized on acceptance by the customer,
as per the terms of the respective contract.

iv. Bandwidth capacity sale under IRU
arrangements is treated as revenue from
operations. These arrangements do not have
any significant financing component and are
recognised on a straight line basis over the
term of the relevant IRU arrangement.

v. Exchange/ swaps with service providers
are accounted as monetary/ non-monetary
transactions depending on the nature of the
arrangement with such service provider.

vi. Revenue from annual maintenance service
charges is recognised over the period for
which services are provided.

vii. Income from real estate business and dark
fibre contracts are recognized over the
period as per the terms of the contract with
the customer and are considered as revenue
from operations.

viii. Accounting treatment of assets and liabilities
arising in course of sale of goods and services
is set out below:

I. Trade receivable

Trade receivable represents the
Company's right to an amount of
consideration that is unconditional
(i.e., only the passage of time is
required before payment of the
consideration is due).

II. Contract assets

Contract asset is recorded when
revenue is recognized in advance of
the Company's right to bill and receive
the consideration (i.e. the Company
must perform additional services or
complete a milestone of performance
obligation in order to bill and receive the
consideration as per the contract terms).

III. Contract liabilities

Contract liabilities represent
consideration received from customers
in advance for providing the goods
and services promised in the contract.
The Company defers recognition of
the consideration until the related
performance obligation is satisfied.
Contract liabilities include recurring
services billed in advance and the non¬
recurring charges recognized over
the contract/ service period. Contract
liabilities have been disclosed as deferred
revenue in the financial statements.

IV. The incremental cost of acquisition and/
or fulfilment of a contract with customer
includes non recurring charges for
connectivity services and incentives
to employees for customer contracts.
These costs are recognised under 'Other
assets' and amortised over the period
of the arrangement in network and
transmission expenses for connectivity
services and employee benefit expenses
for incentives to employees.

n. Other income

i. Dividend from investments is recognised
when the right to receive payment is
established and no significant uncertainty as
to collectability exists.

ii. Interest income - For all financial instruments
measured at amortised cost, interest income
is recorded on accrual basis.

o. Taxation

Current income tax

Current tax expense is determined in accordance
with the provisions of the Income Tax Act,
1961 (as amended).

Provisions for current income taxes and advance
taxes paid in respect of the same jurisdiction are
presented in the balance sheet after offsetting
these balances on an assessment year basis.

Current tax relating to items recognised outside the
Statement of Profit and Loss is recognised outside
the Statement of Profit and Loss. Current tax items
are recognised in correlation to the underlying
transaction either in other comprehensive income
or directly in equity.

Deferred tax

Deferred tax is provided using the balance sheet
approach on temporary differences between the
tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes at the
reporting date.

The carrying amount of deferred tax assets is
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 asset 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 the deferred tax asset
to be recovered.

Deferred tax assets and liabilities are measured at
the tax rates that are expected to apply in the year
when the asset is realised or the liability is settled
and are based on tax rates (and tax laws) that
have been enacted or substantively enacted at the
reporting date.

Deferred tax relating to items recognised outside
the Statement of Profit and Loss is recognised
outside the Statement of Profit and Loss.
Deferred tax items are recognised in correlation
to the underlying transaction either in other
comprehensive income or directly in equity.

Deferred tax assets and deferred tax liabilities are
offset if a legally enforceable right exists to set
off current tax assets against current income tax

liabilities and the deferred taxes relate to the same
taxable entity and the same taxation authority.

p. Fair value measurement

The Company measures financial instruments such
as derivatives and certain investments, at fair value
at each balance sheet date.

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

• 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 a financial 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.

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

All assets and liabilities for which fair value is
measured or disclosed in the financial statements
are categorised within the fair value hierarchy,
described as follows, based on the lowest
level input that is significant to the fair value
measurement as a whole:

• Level 1 — Inputs are quoted prices
(unadjusted) in active markets for identical
assets or liabilities.

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

• Level 3 — Inputs are not based on observable
market data (unobservable inputs). Fair
values are determined in whole or in part using
a valuation model based on assumptions
that are neither supported by prices from

observable current market transactions in
the same instrument nor are they based on
available market data.

For assets and liabilities that are recognised in the
balance sheet on a recurring basis, the Company
determines whether transfers have occurred
between levels in the hierarchy by re-assessing
categorisation (based on the lowest level input
that is significant to the fair value measurement as
a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the
Company has determined classes of assets and
liabilities on the basis of the nature, characteristics
and risks of the asset or liability and the level of the
fair value hierarchy as explained above.

q. Foreign currencies

The Company's financial statements are
presented in INR, which is also the Company's
functional currency.

Foreign currency transactions are converted into
INR at rates of exchange approximating those
prevailing at the transaction dates or at the
average exchange rate for the month in which the
transaction occurs. Foreign currency monetary
assets and liabilities outstanding as at the balance
sheet date are translated to INR at the closing rates
prevailing on the balance sheet date. Exchange
differences on foreign currency transactions are
recognised in the Statement of Profit and Loss.

Non-monetary assets and liabilities that
are measured in terms of historical cost in
foreign currencies are not restated on the
balance sheet date.

r. Borrowing costs

Borrowing costs directly attributable to the
acquisition, construction or production of an
asset that necessarily takes a substantial period
of time to get ready for its intended use or sale
are capitalised as part of the cost of the asset. All
other borrowing costs are expensed in the period
in which they occur. Borrowing costs consist of
interest and other costs that an entity incurs in
connection with the borrowing of funds.

s. Earnings per share

Basic earnings per share is calculated by dividing
the net profit or loss for the year attributable to
equity shareholders (after deducting preference
dividends and attributable taxes) by the weighted
average number of equity shares outstanding
during the year. The weighted average number

of equity shares outstanding during the year is
adjusted for events, if any such as bonus issue to
existing shareholders or a share split.

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