Provisions, Contingent liabilities, Contingent assets and Commitments:
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation. Commitments include the amount
of purchase order (net of advances) issued to parties for completion of assets. Provisions, contingent liabilities,
contingent assets and commitments are reviewed at each balance sheet date. The expense relating to a provision
is presented in the statement of profit and loss net of any reimbursement.
Contingent liabilities are disclosed in respect of possible obligations that arise from past events, whose existence
would be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within
the control of the Company. A contingent liability also arises, in rare cases, where a liability cannot be recognised
because it cannot be measured reliably.
Contingent assets are disclosed where an inflow of economic resources is probable.
Fair Value Measurement
The Company measures financial instruments of 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 an asset or a liability is measured using the assumptions that market participants would use
when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair
value measurement of a non-financial asset takes into account a market participant’s ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would
use the asset in its highest and best use. The Company uses valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant
observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:
• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable
• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable for assets and liabilities that are recognised in the 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.
Financial instruments
Financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.
Financial assets
The classification depends on the Company’s business model for managing the financial assets and the contractual
terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive
income. For investments in equity instruments, this will depend on whether the Company has made an irrevocable
election at the time of initial recognition to account for the equity investment at fair value through other
comprehensive income.
Initial recognition and measurement
Financial assets are recognized when the Company becomes a party to the contractual provisions of the instrument.
Financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value
through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Transaction
costs of financial assets carried at fair value through profit or loss are expensed in the Statement of Profit and
Loss.
Subsequent measurement
After initial recognition, financial assets (other than investments in subsidiaries and joint ventures) are measured
either at:
i) fair value (either through other comprehensive income or through profit or loss) or,
ii) amortized cost
Measured at amortized cost:
Financial assets that are held within a business model whose objective is to hold Financial assets in order to
collect contractual cash flows that are solely payments of principal and interest, are subsequently measured at
amortized cost using the effective interest rate (‘EIR’) method less impairment, if any, the amortization of EIR and
loss arising from impairment, if any is recognized in the Statement of Profit and Loss.
Measured at fair value through other comprehensive income (FVOCI):
Financial assets that are held within a business model whose objective is achieved by both, selling financial
assets and collecting contractual cash Flows that are solely payments of principal and interest, are subsequently
measured at fair value through other comprehensive income. Fair value movements are recognized in the other
comprehensive income (OCI) net of taxes.
On transition to Ind AS, the Company has opted to continue with the carrying values measured under the previous
GAAP as at 31st March 2016 as the value of its investments as the deemed cost of these investments on the date
of transition.
De-recognition of Financial Assets
The Company de-recognises a financial asset only when the contractual rights to the cash flows from the asset
expire, or it transfers the financial asset and substantially all risks and rewards of ownership of the asset to
another entity. If the Company neither transfers nor retains substantially all the risks and rewards of ownership
and continues to control the transferred asset, the Company recognizes its retained interest in the assets and an
associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards
of ownership of a transferred financial asset, the Company continues to recognise the financial asset
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