2. SIGNIFICANT ACCOUNTING POLICIES:
2.1 Statements of compliance
The Financial Statements have been prepared in accordance with Indian Accounting Standards (IND AS) as prescribed
under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015 and
Companies (Indian Accounting Standards) (Amendment) Rules, 2016 and relevant provisions of the Companies Act,
2013. The Financial Statements comply with IND AS notified by Ministry of Company Affairs ("MCA"). The Company
has consistently applied the accounting policies used in the preparation for all periods presented.
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 policies hitherto in use.
As the quarter and year figures are taken from the source and rounded to the nearest digit, the figures reported for
the previous quarter might not always added up to the yearend figure reported in this statement.
2.2 BASIS OF PREPARATION AND PRESENTATION
These financial statements have been prepared on the historical cost basis, except for certain financial instruments
which are measured at fair values at the end of each reporting period, as explained in accounting policies below.
Historical cost is generally based on the fair value of the consideration given in the exchange for goods and services.
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, regardless of whether that price is directly observable or
estimated using another valuation technique .In estimating the fair values of an asset or a liability, the Company takes
into account the characteristics of the asset or liability if market participants would take those characteristics into
account when pricing the asset or liability at the measurement date. 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 highest and best use.
When measuring the fair value of an asset or liability, the Company uses observable market data as far as possible. if
the inputs used to measure the fair value of an asset or 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. For assets and liabilities that are recognized in balance sheet
on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by
re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a
whole) at the end of each reporting period.
Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis,
except for leasing transactions that are within the scope of Ind AS 17, and measurements that have some
similarities to fair value but are not fair value, such as net realizable value in Ind AS 2 or value in use in Ind AS 36.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis
of nature, characteristics and risks of asset or liability and the level of the fair value hierarchy as explained above.
The principal accounting policies are set out below:
2.3 Inventories
Inventories comprise all cost of purchase, and other costs incurred in bringing the inventories to their present
location and condition. The valuation of the Inventories are based on FIFO Method.
Finished goods purchased for sale, are carried at cost or net realisable value whichever is lower. Excise duty, VAT is
included in the value of finished goods inventory for Petroleum product (i.e. MS and HSD) at Petrol Pump for trading
purpose, Other than Petroleum products, finished goods are valued at cost or net realizable value whichever is
lower. Obsolete and slow-moving items are valued at cost or estimated net realisable value whichever is lower.
2.4 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, any deferrals or accruals of past or future operating cash receipts or payments
and item of income or expenses associated with investing of financing cash flows. The cash flows are segregated
into operating, investing and financing activities based on the extent of information available.
Cash and cash equivalents:
Cash and cash equivalents comprise cash in hand, demand deposits with banks/corporations and short-term highly
liquid investments (original maturity less than 3 months) that are readily convertible into known amount of cash
and are subject to an insignificant risk of change in value.
2.5 Taxation
Income tax expense represents the sum of the current tax and deferred tax.
2.5.1 Current Tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from 'profit before tax' as
reported in the Statement of Profit and Loss because of items of income and expense that are taxable or deductible
in the other years and items that are never taxable or deductible. The Company's current tax is calculated using tax
rates and laws that have been enacted or substantively enacted by the end of the reporting period.
2.5.2 Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the
Financial Statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are
generally recognized for all deductible temporary differences to the extent that is probable that taxable profit will
be available against which those deductible temporary differences can be utilised. Such deferred tax assets and
liabilities are not recognized if the temporary difference arises from the initial recognition of assets and liabilities in
a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be utilised.
Deferred tax liabilities and assets are measured at that are expected to apply in the period in which the liability is
settled or the asset realised, based enacted or substantively enacted by the end of the reporting period.
The measurement of the deferred tax liabilities and assets reflects the tax consequences that would follow from the
manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount
of its assets and liabilities.
2.5.3 Current and deferred tax for the year
Current and deferred tax expense is recognized in the Statement of Profit and Loss, except when they relate to the
items that are recognized in other comprehensive income or directly in equity, in which case, the current and
deferred tax are also recognized in other comprehensive income or directly in equity respectively.
2.6 Property, Plant and Equipment (Including capital work in progress)
Property, plant and equipment are carried at historical cost less accumulated depreciation and impairment losses, if
any. The cost of property, plant and equipment comprises the purchase price net of any trade discounts and
rebates, any import duties and other taxes (other than those subsequently recoverable) and includes interest on
borrowings attributable to acquisition of qualifying property, plant and equipment to the date the asset is ready for
its intended use and other incidental expenses incurred up to that date. Subsequent expenditure relating to
property, plant and equipment's is capitalised only if such expenditure results in an increase in the future benefits
from such asset beyond its previously assessed standard of performance.
Property, Plant and Equipment acquired and put to use for project purpose are capitalised and deprecation thereon
is included in the project cost till the project is ready for its intended use.
Any part or components of property, plant and equipment which are separated identifiable and expected to have a
useful life which are different from that of the main assets are capitalised separated, based on the technical
assessment of the management.
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.
Capital Work In Progress
Capital work in progress represents projects under the property, plant and equipment's are not intended use and
are carried at cost determined as aforesaid.
Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at
cost, comprising direct cost, related incidental expenses and attributable interest.
2.6.1 Depreciation
Depreciation is provided for property, plant and equipment so as to expense the cost over their estimated useful
lives based on technical evaluation. The estimated useful lives are reviewed at the end of each reporting period,
with the effect of any change in estimate accounted for on a prospective basis.
2.7 Investment properties:
Investment properties comprise portion of freehold land and office buildings that are held for long- term rental yields
and /or for capital appreciation. Investment properties are initially recognized at cost. Subsequently investment
property comprising of buildings is carried at cost less accumulated depreciation and accumulated impairment losses,
if any.
The cost includes the cost of replacing parts and borrowing costs for long-term construction projects if the recognition
criteria are met. When significant parts of the investment property are required to be replaced at intervals, the
Company depreciates them separately based on their specified useful lives. All other repair and maintenance costs
are recognized in profit and loss as incurred.
Depreciation on building is provided over the estimated useful lives as specified in Schedule II to the Companies Act,
2013. The useful lives and depreciation method of investments properties are reviewed, and adjusted on prospective
basis as appropriate, at each balance sheet date. The effects of any revision are included in the statements of profit
and loss when the changes arise.
Investment properties are derecognized when either they have been disposed of or when the investment property is
permanently withdrawn from use no future economic benefit is expected economic benefit is expected from its
disposal.
The difference between the net disposal proceeds and the carrying amount of the asset is recognized in the
statements of profit and loss in the period of de-recognition.
2.8 Impairment of non-financial assets:
The Company assesses whether there is an indication that an asset may be impaired and also whether there is an
indication of reversal of impairment loss recognized in the previous periods. If any indication exists, or when annual
impairment testing for an asset is required, if any, the company determines the recoverable amount and impairment
loss is recognized when the carrying amount of an asset exceeds its recoverable amount.
Recoverable amount is determined:
In the case of an individual assets, at the higher of the fair value less cost to sell and the value in use; and
In the case of cash generating unit (a company of assets that generates identified, independent cash flows), at the
higher of the cash generating unit's fair value less cost to sell and the value in use.
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 no such
transaction can be identified, an appropriate valuation model is used. These calculations are corroborated by
valuation multiples, quoted share price for publicity traded companies or other available fair value indicators.
The Company bases its impairment calculation on detailed budgets and forecast calculations, which are prepared
separately for each of the company's CGUs to which the individual assets are allocated. These budget and forecast
calculation generally cover a period of five years. For longer periods, a long-term growth rate is calculated and applied
to project future cash flows after the fifth year.
Impairment losses of continuing operations, including impairment on inventories, are recognized in the statement of
profit and loss, except for properties previously revalued with the revaluation taken to other Comprehensive income
(the 'OCI'), if any. For such properties, the impairment is recognized in OCI to the amount of any previous revaluation.
2.9 Intangible assets
Intangible assets are recognized 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.
2.10 Amortisation
Intangible assets are amortized over the estimated useful life of 3 years on straight line method.
Intangible assets with indefinite useful lives, if any are not amortised, but are tested for impairment annually, either
individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine
whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is
made on a prospective basis.
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 recognized in the statement of profit and loss when
the asset is derecognized.
2.11 Revenue recognition
Revenue from contracts with customers
The Company derives revenues primarily from Transportation of Goods, sale of Automobile parts & Lubricants and
HSD-BSVI, Wind Power, Supply of Man Power and Renting of Immovable property.
Ind AS 115 "Revenue from Contracts with Customers" provides a control-based revenue recognition model and
provides a five-step application approach to be followed for revenue recognition.
• Identify the contract(s) with a customer;
• Identify the performance obligations;
• Determine the transaction price;
• Allocate the transaction price to the performance obligations;
• Recognize revenue when or as an entity satisfies performance obligation.
Revenue from contracts with customers is recognized when control of the goods or services are transferred to the
customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for
those goods or services. Revenue excludes amounts collected on behalf of third parties.
Sale of Goods/Services
Revenue is recognized to the extent it is probable that the economic benefits will flow to the company and that the
revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair
value of consideration received or receivable, taking into account contractually defined terms of payment and
excluding taxes or duties collected on behalf of the government. The Company assesses its revenue arrangements
against specific criteria, i.e., whether it has exposure to the significant risks and rewards associated with the sale of
goods or the rendering of services, in order to determine if it is acting as a principal or as an agent. Revenue is
recognized, net of trade discounts, sales tax, GST or other taxes, as applicable.
Revenue from goods transport services is recognized when goods are delivered to the customers/near transshipment
points.
Rent income is recognized on straight line basis over the period of agreement.
Power distribution
Revenue from power distribution business is recognized upon deposit of units of generated power at the grid of the
purchasing customer and billing to the customers and includes unbilled revenues accrued up to the end of the
accounting year. Customers are billed as per the tariff rates issued by electricity regulatory commission. Interest is
accounted on accrual basis on overdue bills.
Interest income
For all financial assets measured either at amortized cost or at fair value through other comprehensive income,
interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated
future cash payments or receipts over the expected life of the financial instrument or a shorter period, where
appropriate, to the gross carrying amount of the financial asset or to the amortized cost of a financial liability. When
calculating the effective interest rate, the company estimates the expected cash flows by considering all the
contractual terms of the financial instrument. Interest income is included in other income in the statement of profit
and loss.
Other Income
Dividend Income from investments is recognized when the shareholder's right to receive payment is established,
which is generally when shareholders approve the dividend.
Insurance claims are accounted for on the basis of claims admitted/expected to be admitted and to the extent that
the amount recoverable can be measured reliably and it is reasonable to expect ultimate collection.
2.12 Employee Benefits
Employee benefits are accrued in the period in which the associated services are rendered by the employees of the
Company, as detailed below:
Defined contribution plans
The Company's contribution to State Governed provided fund scheme, Employee State Insurance scheme and
Employee pension scheme are considered as defined contribution plans and expenses are recognized in the
Statement of Profit and Loss based on the amount of contribution required to be made and when services are
rendered by the employees.
Defined benefit plans
The cost of the defined benefit plans and the present value of the defined benefit obligation are based on actuarial
valuation using the projected unit credit method. 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 morality 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.
The Company accrues for liability towards Gratuity which is a defined benefit plan. The present value of obligation
under such defined benefit plan is determined based on actuarial valuation as the balance sheet date, using the
Projected Unit Credit Method. Remeasurement, comprising actuarial gains and losses, the effect of the changes to
the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the
balance sheet with a charge or credit recognized in other comprehensive income in the period in which they occur.
Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and is not
reclassified to profit or loss. Past service cost is recognized in profit or loss in the period of a plan amendment. Net
interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability
or asset. Defined benefit costs are categorized as follows:
• Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and
settlements);
• Net interest expense or income; and
• Re measurement
The Company presents the first two components of defined benefit costs in profit or loss in the line item 'Employee
benefits expense'. Curtailment gains and losses are accounted for as past service costs.
The retirement benefit obligation recognized in the balance sheet represents the actual deficit or surplus in the
Company's defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any
economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
Compensated absences
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 an actuarially determined liability at the present value
of the obligation at the Balance sheet date.
2.14 Lease
As a Lessee
Right of use Asset
The Company recognises a right-of-use asset and a lease liability at the lease commencement date. At the
commencement date, a lessee shall measure the right-of-use asset at cost which comprises initial
measurement of the lease liability, any lease payments made at or before the commencement date, less any
lease incentives received, any initial direct costs incurred by the lessee; and an estimate of costs to be incurred
by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or
restoring the underlying asset to the condition required by the terms and conditions of the lease.
Lease Liability
At the commencement date, a lessee shall measure the lease liability at the present value of the lease
payments that are not paid at that date. The lease payments shall be discounted using the interest rate
implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the
lessee shall use the lessee's incremental borrowing rate.
Short-term lease and leases of low-value assets
The Company has elected not to recognise right-of-use assets and lease liabilities for short- term leases that
have a lease term of less than 12 months or less and leases of low-value assets, including IT Equipment. The
Company recognises the lease payments associated with these leases as an expense on a straight-line basis
over the lease term.
The election for short-term leases shall be made by class of underlying asset to which the right of use relates.
A class of underlying asset is a grouping of underlying assets of a similar nature and use in Company's
operations. The election for leases for which the underlying asset is of low value can be made on a lease-by¬
lease basis.
As a lessor
Leases in which the company does not transfer substantially all the risks and reward of ownership of assets are
classified as operating lease. Rental income from operating lease is recognised on a straight-line basis over the term
of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the
carrying amount of the leased asset and recognised over the lease term on the same basis as rental income.
Contingents rent are recognised as revenue in the period in which they are earned.
2.15 Foreign Currency transactions:
The functional currency of the Company is Indian Rupees which represents the currency of the primary economic
environment in which it operates.
"In preparing the financial statements, transactions in currencies other than the entity's functional currency (foreign
currencies) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each
reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that
date. Non-monetary items are carried at fair value that are denominated in foreign currencies are retranslated at the
rates prevailing at the date when the fair value was determined.
2.16 Borrowing costs:
a) Borrowing costs that are attributable to the acquisition, construction, or production of a qualifying asset are
capitalized as a part of the cost 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 (generally over twelve months) to get ready for
its intended use or sale.
b) All other borrowing costs are recognized as expenses in the period in which they are incurred.
2.17 Financial instruments
Financial assets and financial liabilities are recognized when a Company entity becomes a party to the contractual
provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly
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 the fair value of the financial
assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in
profit or loss.
2.17.1 Financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. Regular
way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame
established by regulation or convention in the marketplace.
All recognized financial assets are subsequently measured in their entirety at either amortized cost or fair value,
depending on the classification of the financial assets.
Classification of financial assets
Debt instruments that meet the following conditions are subsequently measured at amortized cost:
• 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 the instrument give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
For the impairment policy on financial assets measured at amortised cost, refer para of Impairment of financial assets.
Debt instruments that meet the following conditions are subsequently measured at fair value through other
comprehensive income:
• 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 the instrument give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
Interest income is recognized in profit or loss for FVTOCI debt instruments. For the purposes of recognizing foreign
exchange gains and losses, FVTOCI debt instruments are treated as financial assets measured at amortized cost. Thus,
the exchange differences on the amortized cost are recognized in profit or loss and other changes in the fair value of
FVTOCI financial assets are recognized in other comprehensive income and accumulated under the heading of
'Reserve for debt instruments through other comprehensive income'. When the investment is disposed of, the
cumulative gain or loss previously accumulated in this reserve is reclassified to profit or loss.
For the impairment policy on debt instruments at FVTOCI, refer Para of Impairment of financial assets. All other
financial assets are subsequently measured at fair value.
Effective interest method
The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating
interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future
cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate,
transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where
appropriate, a shorter period, to the net carrying amount on initial recognition.
Income is recognized on an effective interest basis for debt instruments other than those financial assets classified as
at FVTPL. Interest income is recognized in profit or loss and is included in the "Other income" line item.
Financial assets at fair value through profit or loss (FVTPL)
Debt instruments that do not meet the amortised cost criteria or FVTOCI criteria (see above) are measured at FVTPL.
In addition, debt instruments that meet the amortised cost criteria or the FVTOCI criteria but are designated as at
FVTPL are measured at FVTPL.
Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses
arising on Remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates
any dividend or interest earned on the financial asset and is included in the 'Other income' line item. Dividend on
financial assets at FVTPL is recognised when the Company's right to receive the dividends is established, it is probable
that the economic benefits associated with the dividend will flow to the entity, the dividend does not represent a
recovery of part of cost of the investment and the amount of dividend can be measured reliably.
Impairment of financial assets
The Company applies the expected credit loss model for recognizing impairment loss on financial assets measured at
amortized cost, debt instruments at FVTOCI, lease receivables, trade receivables, other contractual rights to receive
cash or other financial asset, and financial guarantees not designated as at FVTPL.
Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the
weights. Credit loss is the difference between all contractual cash flows that are due to the Company in accordance
with the contract and all the cash flows that the Company expects to receive (i.e. all cash shortfalls), discounted at
the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-
impaired financial assets). The Company estimates cash flows by considering all contractual terms of the financial
instrument (for example, prepayment, extension, call and similar options) through the expected life of that financial
instrument.
The Company measures the loss allowance for a financial instrument at an amount equal to the lifetime expected
credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. If the
credit risk on a financial instrument has not increased significantly since initial recognition, the Company measures
the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses. 12-month
expected credit losses are portion of the life-time expected credit losses and represent the lifetime cash shortfalls
that will result if default occurs within the 12 months after the reporting date and thus, are not cash shortfalls that
are predicted over the next 12 months.
If the Company measured loss allowance for a financial instrument at lifetime expected credit loss model in the
previous period, but determines at the end of a reporting period that the credit risk has not increased significantly
since initial recognition due to improvement in credit quality as compared to the previous period, the Company again
measures the loss allowance based on 12-month expected credit losses.
When making the assessment of whether there has been a significant increase in credit risk since initial recognition,
the Company uses the change in the risk of a default occurring over the expected life of the financial instrument
instead of the change in the amount of expected credit losses. To make that assessment, the Company compares the
risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on
the financial instrument as at the date of initial recognition and considers reasonable and supportable information,
that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial
recognition.
For trade receivables or any contractual right to receive cash or another financial asset that result from transactions
that are within the scope of Ind AS 11 and Ind AS 18, the Company always measures the loss allowance at an amount
equal to lifetime expected credit losses.
Further, for the purpose of measuring lifetime expected credit loss allowance for trade receivables, the Company has
used a practical expedient as permitted under Ind AS 109. This expected credit loss allowance is computed based on
a provision matrix which takes into account historical credit loss experience and adjusted for forward-looking
information.
The impairment requirements for the recognition and measurement of a loss allowance are equally applied to debt
instruments at FVTOCI except that the loss allowance is recognized in other comprehensive income and is not reduced
from the carrying amount in the balance sheet.
Derecognition of financial assets
The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or
when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another
party.
On derecognition of a financial asset in its entirety, the difference between the asset's carrying amount and the sum
of the consideration received and receivable and the cumulative gain or loss that had been recognized in other
comprehensive income and accumulated in equity is recognized in profit or loss if such gain or loss would have
otherwise been recognized in profit or loss on disposal of that financial asset.
On derecognition of a financial asset other than in its entirety (e.g. when the Company retains an option to repurchase
part of a transferred asset), the Company allocates the previous carrying amount of the financial asset between the
part it continues to recognize under continuing involvement, and the part it no longer recognizes on the basis of the
relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated
to the part that is no longer recognized and the sum of the consideration received for the part no longer recognized
and any cumulative gain or loss allocated to it that had been recognized in other comprehensive income is recognized
in profit or loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of that financial
asset. A cumulative gain or loss that had been recognized in other comprehensive income is allocated between the
part that continues to be recognized and the part that is no longer recognized on the basis of the relative fair values
of those parts.
2.17.2 Financial liabilities
All financial liabilities are subsequently measured at amortized cost using the effective interest method or at FVTPL.
However, financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when
the continuing involvement approach applies, financial guarantee contracts issued by the Company, and
commitments issued by the Company to provide a loan at below-market interest rate are measured in accordance
with the specific accounting policies set out below.
Financial liabilities subsequently measured at amortized cost
Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at amortized cost
at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently
measured at amortized cost are determined based on the effective interest method. Interest expense that is not
capitalized as part of costs of an asset is included in the 'Finance costs' line item.
The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating
interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated
future cash payments (including all fees and points paid or received that form an integral part of the effective interest
rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where
appropriate) a shorter period, to the net carrying amount on initial recognition.
Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the
holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the terms
of a debt instrument.
Financial guarantee contracts issued by a Company entity are initially measured at their fair values and, if not
designated as at FVTPL, are subsequently measured at the higher of:
• The amount of loss allowance determined in accordance with impairment requirements of Ind AS 109; and
• The amount initially recognized less, when appropriate, the cumulative amount of income recognized in accordance
with the principles of Ind AS 18.
Derecognition of financial liabilities
The Company derecognizes financial liabilities when, and only when, the Company's obligations are discharged,
cancelled or have expired. An exchange between with a lender of debt instruments with substantially different terms
is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability.
Similarly, a substantial modification of the terms of an existing financial liability (whether or not attributable to the
financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the
recognition of a new financial liability. The difference between the carrying amount of the financial liability
derecognized and the consideration paid and payable is recognized in profit or loss.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognized in
profit or loss. The net gain or loss recognized in profit or loss incorporates any interest paid on the financial liability
and is included in the 'Other income' line item.
2.18 Earnings per share
Basic earnings per share are computed by dividing the net profit after tax by weighted average number of equity
shares outstanding during the period. Diluted earnings per share is computed by dividing the profit after tax by
weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential
equity shares, if any
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