SIGNIFICANT ACCOUNTING POLICIES

A) Statement of compliance

These financial statements have been prepared in accordance with
the Indian Accounting Standards (hereinafter referred to as the Ind
AS) as notified by Ministry of Corporate Affairs pursuant to Section
133 of the Companies Act, 2013 (the Act) read with the Companies
(Indian Accounting Standards) Rules, 2015 as amended and other
relevant provisions of the Act and accounting principles generally
accepted in India.

B) Basis of preparation of financial statements

These financial statements have been prepared and presented under
the historical cost convention, on the accrual basis of accounting
except for certain financial assets and liabilities that are measured
at fair values at the end of each reporting period, as stated in the
accounting policies stated out below. These financial Statements
have been prepared by the Company as a going concern.

The accounting policies are applied consistently to all the periods
presented in the financial statements, except where a newly issued
accounting standard is initially adopted or a revision to an existing
standard requires a change in the accounting policy hitherto in use.

The financial statements are presented in Indian Rupee which is also
the functional currency of the Company. All amounts disclosed in the
financial statements and notes have been rounded-off to the nearest
million as per the requirement of Schedule III, unless otherwise stated.
Amount less than a million is presented as '0 million.

Assets and Liabilities are classified as Current or Non-current as per
the provisions of Schedule III to the Companies Act, 2013 and the
Company’s Normal Operating Cycle. Based on the nature of business,
the Company has ascertained its operating cycle as 12 months for the
classification of assets and liabilities.

The figures for the corresponding previous year have been regrouped/
reclassified wherever necessary, to make them comparable.
The impact of such reclassification/regrouping is not material to the
standalone financial statements.

Previous year figures, where applicable, have been indicated in
brackets.

C) Business combinations

Business combinations have been accounted for using the acquisition
method.

The consideration transferred is measured at the fair value of the
assets transferred, equity instruments issued and liabilities incurred
or assumed at the date of acquisition, which is the date on which
control is achieved by the Company. The cost of acquisition also
includes the fair value of any contingent consideration. Identifiable
assets acquired and liabilities and contingent liabilities assumed in a
business combination are measured initially at their fair value on the
date of acquisition.

Business combinations involving entities that are controlled by the
Company are accounted for using the pooling of interests method as
follows:

I The assets and liabilities of the combining entities are reflected
at their carrying amounts.

II No adjustments are made to reflect fair values, or recognise
any new assets or liabilities. Adjustments are only made to
harmonise accounting policies.

III The balance of the retained earnings appearing in the
financial statements of the transferor is aggregated with the
corresponding balance appearing in the financial statements
of the transferee or is adjusted against general reserve.

IV The identity of the reserves are preserved and the reserves of
the transferor become the reserves of the transferee.

V The difference, if any, between the amounts recorded as share
capital issued plus any additional consideration in the form of
cash or other assets and the amount of share capital of the
transferor is transferred to capital reserve and is presented
separately from other capital reserves.

VI The financial information in the financial statements in respect
of prior periods is restated as if the business combination
had occurred from the beginning of the preceding period in
the financial statements, irrespective of the actual date of
combination. However, where the business combination had
occured after that date, the prior period information is restated
only from that date.

Transaction costs that the Company incurs in connection with a
business combination such as finder’s fees, legal fees, due diligence
fees, and other professional and consulting fees are expensed as
incurred.

Goodwill is measured as the excess of the sum of the consideration
transferred, the amount of any non-controlling interest in the acquiree,
and the fair value of the acquirer’s previously held equity interest in
the acquiree (if any) over the net acquisition date amounts of the
identifiable assets acquired and the liabilities assumed.

I n case of a bargain purchase, before recognising a gain in respect
thereof, the Company determines whether there exists clear evidence
of the underlying reasons for classifying the business combination
as a bargain purchase. Thereafter, the Company reassesses whether
it has correctly identified all of the assets acquired and all of the
liabilities assumed and recognises any additional assets or liabilities
that are identified in that reassessment. The Company then reviews
the procedures used to measure the amounts that Ind AS requires for
the purposes of calculating the bargain purchase. If the gain remains
after this reassessment and review, the Company recognises it in
other comprehensive income and accumulates the same in equity as
capital reserve. This gain is attributed to the acquirer. If there does
not exist clear evidence of the underlying reasons for classifying
the business combination as a bargain purchase, the Company
recognises the gain, after assessing and reviewing (as described
above), directly in equity as capital reserve.

When the consideration transferred by the Company in a business
combination includes assets or liabilities resulting from a contingent
consideration arrangement, the contingent consideration
arrangement is measured at its acquisition date fair value and included
as a part of the consideration transferred in a business combination.
Changes in the fair value of the contingent consideration that qualify
as measurement period adjustments are adjusted retrospectively,
with the corresponding adjustments against goodwill or capital
reserve, as the case may be. Measurement period adjustments are
adjustments that arise from additional information obtained during
the ‘measurement period’ (which cannot exceed one year from the
acquisition date) about facts and circumstances that existed at the
acquisition date.

The subsequent accounting for changes in the fair value of
contingent consideration that do not qualify as measurement
period adjustments depends on how the contingent consideration
is classified. Contingent consideration that is classified as equity is
not remeasured at subsequent reporting dates and its subsequent
settlement is accounted for within equity. Contingent consideration
that is classified as an asset or a liability is remeasured at fair value at
subsequent reporting dates with the corresponding gain or loss being
recognised in the statement of profit and loss.

When a business combination is achieved in stages, the Company’s
previously held equity interest in the acquiree is remeasured to its
acquisition date fair value and the resulting gain or loss, if any, is
recognised in profit or loss. Amounts arising from interests in the
acquiree prior to the acquisition date that have previously been
recognised in other comprehensive income are reclassified to profit
or loss where such treatment would be appropriate if that interest
were disposed off.

D) Property, plant and equipment

I Property, plant and equipment are stated at cost, less
accumulated depreciation and impairment loss, if any. The
cost comprises purchase price and related expenses and for
qualifying assets, borrowing costs are capitalised based on the
Company’s accounting policy. Integrated Receiver Decoders
(IRD) boxes are capitalised, when available for deployment.

II Capital work-in-progress comprises cost of property, plant and
equipment and related expenses that are not yet ready for their
intended use at the reporting date.

III Depreciation is recognised so as to write off the cost of assets
(other than free hold land and capital work-in-progress) less
their residual values over their useful lives, using the straight¬
line method. The estimated useful lives, residual values and
depreciation method are reviewed at each reporting period,
with the effect of changes in estimate accounted for on a
prospective basis.

IV The estimate of the useful life of the assets has been assessed
based on technical advice, taking into account the nature of
the asset, the estimated usage of the asset, the operating
conditions of the asset, past history of replacement etc. The
estimated useful life of items of property, plant and equipment
is as mentioned below:

E) Investment property

I Investment property are properties (land or a building or part
of a building or both) held to earn rentals and/or for capital
appreciation (including property under construction for such
purposes). Investment property is measured initially at cost
including purchase price, borrowing costs. Subsequent to
initial recognition, investment property is measured at cost less
accumulated depreciation and impairment, if any.

II Depreciation on investment property is provided as per the
useful life prescribed in Schedule II to the Companies Act, 2013.

F) Non-current assets held for sale

The Company classifies non-current assets as held for sale if their
carrying amounts will be recovered principally through a sale
rather than through continuing use and the sale is highly probable.
Management must be committed to the sale, which should be
expected within one year from the date of classification.

For these purposes, sale transactions include exchanges of non¬
current assets for other non-current assets when the exchange has
commercial substance. The criteria for held for sale classification
is regarded as met only when the asset is available for immediate
sale in its present condition, subject only to terms that are usual and

customary for sales of such assets, its sale is highly probable; and it
will genuinely be sold, not abandoned. The Company treats sale of
the asset to be highly probable when:

I The appropriate level of management is committed to a plan to
sell the asset,

II An active programme to locate a buyer and complete the plan
has been initiated (if applicable),

III The asset is being actively marketed for sale at a price that is
reasonable in relation to its current fair value,

IV The sale is expected to qualify for recognition as a completed
sale within one year from the date of classification, and

V Actions required to complete the plan indicate that it is unlikely
that significant changes to the plan will be made or that the plan
will be withdrawn.

Non-current assets held for sale are measured at the lower of their
carrying amount and the fair value less costs to sell.

Property, plant and equipment and intangible assets once classified
as held for sale are not depreciated or amortised.

Gains and losses on disposals of non-current assets are determined
by comparing proceeds with carrying amounts and are recognised in
the statement of profit and loss.

A discontinued operation is a component of the entity that has been
disposed off or is classified as held for sale and

i represents a separate major line of business or geographical
area of operations and;

ii is part of a single co-ordinated plan to dispose of such a line of
business or area of operations.

The result of discontinued operations are presented separately as a
single amount as profit or loss after tax from discontinued operations
in the statement of profit and loss.

An impairment loss is recognised for any initial or subsequent write¬
down the asset to fair value less costs to sell. A gain is recognised
for any subsequent increases in fair value less costs to sell of an
asset, but not in excess of any cumulative impairment loss previously
recognised. A gain or loss not previously recognised by the date of
the sale of the asset is recognised at the date of de-recognition.

G) Goodwill

Goodwill arising on an acquisition of a business is carried at cost as
established at the date of acquisition of the business less accumulated
impairment losses, if any.

For the purpose of impairment testing, goodwill is allocated to the
respective cash generating units that is expected to benefit from the
synergies of the combination.

A cash generating unit to which goodwill has been allocated is
tested for impairment annually, or more frequently when there is an
indication that the unit may be impaired. If the recoverable amount
of the cash generating unit is less than its carrying amount, the

impairment loss is allocated first to reduce the carrying amount of
any goodwill allocated to the unit and then to the other assets of the
unit on a pro-rata basis, based on the carrying amount of each asset
in the unit. Any impairment loss for the goodwill is recognised directly
in the statement of profit and loss. An impairment loss recognised for
goodwill is not reversed in subsequent periods.

On the disposal of the relevant cash generating unit, the attributable
amount of goodwill is included in the determination of the profit or
loss on disposal.

H) Intangible assets

Intangible assets with finite useful lives that are acquired are carried
at cost less accumulated amortisation and accumulated impairment
losses. Amortisation is recognised on a straight-line basis over the
estimated useful lives.

The estimated useful life for intangible assets is 3 years. The
estimated useful and amortisation method are reviewed at each
reporting period, with the effect of any changes in the estimate being
accounted for on a prospective basis.

Intangible assets under development:

Expenditure incurred on acquisition/development of intangible assets
which are not ready for their intended use at balance sheet date are
disclosed under intangible assets under development.

Research and development of internally generated assets:

Research costs are expensed as incurred. Development expenditures
on an internally generated assets are recognised as an intangible
asset when the Company can demonstrate:

I. The technical feasibility of completing the intangible asset so
that the asset will be available for use or sale;

II. Its intention to complete and its ability and intention to use or
sell the asset;

III. How the asset will generate future economic benefits;

IV. The availability of resources to complete the asset;

V. The ability to measure reliably the expenditure during
development.

The cost of development on internally generated intangible asset
includes the directly attributable expenditure of preparing the asset
for its intended use. Expenditure on training activities, identified
inefficiencies and initial operating losses is expensed as it is incurred.

The cost recognised is the sum of expenditure incurred from the date
when the intangible asset first meets the recognition criteria and prohibits
reinstatement of expenditure previously recognised as an expense.

Directly attributable costs comprise all costs necessary to create,
produce, and prepare the asset to be capable of operating in the
manner intended by management. The capitalisation cut off is
determined by when the testing stage of the software has been
completed and the software is ready to go live. Costs incurred after
the final acceptance testing and launch have been successfully
completed, is expensed.

Post the launch of the software, the cost is accounted for as part of
the development phase only where there is the software platform
development and activities to improve its functionality which enhance
the asset’s economic benefits potential and the cost meets the
recognition criteria listed above for the recognition of development
costs as an asset.

Following initial recognition of the development expenditure as an
asset, the asset is carried at cost less any accumulated amortisation
and accumulated impairment losses. Amortisation of the asset begins
when development is complete and the asset is available for use. It is
amortised over the period of expected future benefit. Amortisation
expense is recognised in the statement of profit and loss unless such
expenditure forms part of carrying value of another asset. During the
period of development, the asset is tested for impairment annually.

Intangible assets acquired in a business combination:

Intangible assets acquired in a business combination and recognised
separately from Goodwill are initially recognised at their fair value at
the acquisition date (which is regarded as their cost). Subsequent
to initial recognition, the intangible assets acquired in a business
combination are reported at cost less accumulated amortisation and
accumulated impairment losses, on the same basis as intangible
assets that are acquired separately.

I) Impairment of property, plant and equipment/ right-of-use
assets/ other intangible assets/ investment property

The carrying amounts of the Company’s property, plant and equipment,
right-of-use assets, other intangible assets and investment property
are reviewed at each reporting date to determine whether there is any
indication that those assets have suffered any impairment loss. If there
are indicators of impairment, an assessment is made to determine
whether the asset’s carrying value exceeds its recoverable amount.
Where it is not possible to estimate the recoverable amount of an
individual asset, the Company estimates the recoverable amount of
the cash generating unit to which the asset belongs.

An impairment loss is recognised in statement of profit and loss
whenever the carrying amount of an asset or a cash generating unit
exceeds its recoverable amount. The recoverable amount is the
higher of fair value less costs of disposal and value in use. In assessing
the value in use, the estimated future cash flows are discounted to
the 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 assets for which the estimates of future cash flows have not
been adjusted.

Where an impairment loss subsequently reverses, the carrying
amount of the asset (or cash generating unit) is increased to the
revised estimate of its recoverable amount, so that the increased
carrying amount does not exceed the carrying amount that would
have been determined had no impairment loss been recognised
for the asset (or cash generating unit) in prior years. Reversal of an
impairment loss is recognised immediately in the statement of profit
and loss.

J) Derecognition of property, plant and equipment/ right-of-use
assets/ other intangible assets/ investment property

The carrying amount of an item of property, plant and equipment/
right-of-use assets/ other intangible assets/ investment property 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/ right-of-use
assets/ other intangible assets/ investment property is deteremined
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.

K) Leases

The Company evaluates each contract or arrangement, whether it
qualifies as lease as defined under Ind AS 116 on ‘Leases’.

I The Company as lessee:

The Company assesses whether a contract is or contains a
lease, at inception of the contract. The Company recognises
a right-of-use asset and a corresponding lease liability with
respect to all lease arrangements in which it is the lessee,
except for short-term leases (defined as leases with a lease
term of 12 months or less) and leases of low value assets. For
these leases, the Company recognises the lease payments as
an operating expense on a straight-line basis over the term of
the lease.

The lease liability is initially measured at the present value of
the lease payments that are not paid at the commencement
date, discounted by using the rate implicit in the lease. If this
rate cannot be readily determined, the Company uses its
incremental borrowing rate.

Lease payments included in the measurement of the lease
liability comprise:

a Fixed lease payments (including in-substance fixed
payments), less any lease incentives receivable;

b Variable lease payments that depend on an index or
rate, initially measured using the index or rate at the
commencement date;

The amount expected to be payable by the lessee under
residual value guarantees;

c The exercise price of purchase options, if the lessee is
reasonably certain to exercise the options; and

d Payments of penalties for terminating the lease, if the
lease term reflects the exercise of an option to terminate
the lease. The lease liability is presented as a separate
line item in the balance sheet.

The lease liability is subsequently measured by increasing the
carrying amount to reflect interest on the lease liability (using
the effective interest method) and by reducing the carrying
amount to reflect the lease payments made.

The Company remeasures the lease liability (and makes a
corresponding adjustment to the related right-of-use asset)
whenever:

a The lease term has changed or there is a significant event
or change in circumstances resulting in a change in the
assessment of exercise of a purchase option, in which
case the lease liability is remeasured by discounting the
revised lease payments using a revised discount rate.

b The lease payments change due to changes in an
index or rate or a change in expected payment under
a guaranteed residual value, in which cases the lease
liability is remeasured by discounting the revised lease
payments using an unchanged discount rate (unless the
lease payments change is due to a change in a floating
interest rate, in which case a revised discount rate is
used).

c A lease contract is modified and the lease modification
is not accounted for as a separate lease, in which case
the lease liability is remeasured based on the lease term
of the modified lease by discounting the revised lease
payments using a revised discount rate at the effective
date of the modification.

The Company did not make any such adjustments during the
periods presented.

The right-of-use assets comprise the initial measurement of the
corresponding lease liability, lease payments made at or before
the commencement day, less any lease incentives received and
any initial direct costs. They are subsequently measured at cost
less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated over the shorter period of
lease term and useful life of the right-of-use asset. If a lease
transfers ownership of the underlying asset or the cost of the
right-of-use asset reflects that the Company expects to exercise
a purchase option, the related right-of-use asset is depreciated
over the useful life of the underlying asset. The depreciation
starts at the commencement date of the lease.

The right-of-use assets is presented as a separate line item in
the balance sheet.

The Company applies Ind AS 36 to determine whether a right-of-
use asset is impaired and accounts for any identified impairment
loss as described in the ‘Property, Plant and Equipment’ policy.

II The Company as a lessor:

The Company enters into lease agreements as a lessor with
respect to some of its investment properties.

Leases for which the Company is a lessor are classified as
finance or operating leases. 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.

Rental income from operating leases 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 on a straight-line basis over the lease term.

L) Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at
banks and in hand and short-term deposits with an original maturity
of three months or less, which are subject to an insignificant risk of
changes in value.

For the purpose of the statement of cash flows, cash and cash
equivalents consist of cash and short-term deposits, as defined
above.

M) InventoriesI Media Content:

Media content i.e. Programs, Film rights, Music rights (completed
(commissioned/acquired) and under production) including
content in digital form are stated at lower of cost/unamortised
cost or realisable value. Cost comprises acquisition/direct
production cost. Where the realisable value of media content
is less than its carrying amount, the difference is expensed.
Programs, film rights, music rights are expensed/amortised as
under:

a Programs - reality shows, chat shows, events, game
shows, etc. are fully expensed on telecast/upload.

b Programs (other than (a) above) are amortised over three
financial years starting from the year of first telecast/
upload, as per management estimate of future revenue
potential.

c Film rights are amortised on a straight-line basis over the
licensed period or sixty months from the commencement
of rights, whichever is shorter.

d Music rights are amortised over ten years starting from
the year of commencement of rights, as per management
estimate of future revenue potential.

e The cost of educational content acquired is amortised on
a straight-line basis over the license period or 60 months
from the date of acquisition/right start date, whichever is
shorter.

f Films produced and/or acquired for distribution/sale of
rights:

Cost is allocated to each right based on management estimate
of revenue. Film rights are amortised as under:

i Satellite rights - Allocated cost of right is expensed
immediately on sale.

ii Theatrical rights - Amortised in the month of theatrical
release.

iii Intellectual Property Rights (IPRs) - Allocated cost of IPRs
are amortised over 5 years from release of film.

iv Music and Other Rights - Allocated cost of each right is
expensed immediately on sale.

II Raw Stock:

Tapes are valued at lower of cost or estimated net realisable
value. Cost is taken on weighted average basis.

N) Financial Instruments

Financial instruments is any contract that gives rise to a financial asset
of one entity and a financial liability or equity instrument of another
entity.

I Initial Recognition

Financial assets (excluding trade receivables) 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
and 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 and loss are recognised immediately in the
statement of profit and loss.

However, trade receivables that do not contain a significant
financing component are measured at transaction price under
Ind AS 115 “Revenue from Contracts with Customers”.

II Financial assetsa Classification of financial assets

Financial assets are classified into the following specified
categories: amortised cost, financial assets ‘at fair value
through profit and loss’ (FVTPL), ‘Fair value through other
comprehensive income’ (FVTOCI). The classification
depends on the Company’s business model for managing
the financial assets and the contractual terms of cash flows.

b Subsequent measurementi Debt Instrument - amortised cost:

A financial asset is subsequently measured at
amortised cost if it is held within a business model
whose objective is to hold the asset in order to
collect contractual cash flows and the contractual
terms of the financial asset give rise on specified
dates to cash flows that are solely payments of
principal and interest on the principal amount
outstanding. This category generally applies to
trade and other receivables.

ii Fair value through other comprehensive
income (FVTOCI):

A ‘debt instrument’ is classified as at the FVTOCI if
both of the following criteria are met:

v Investment in subsidiaries, joint ventures and
associates:

Investment in subsidiaries, joint ventures and
associates are carried at cost less impairment loss
in accordance with Ind AS 27 on ‘Separate Financial
Statements’.

vi Derivative financial instruments:

Derivative financial instruments are classified and
measured at fair value through profit and loss.

c Derecognition of financial assets

A financial asset is derecognised only when:

i The Company has transferred the rights to receive
cash flows from the asset or the rights have expired
or

ii The Company retains the contractual rights to
receive the cash flows of the financial asset, but
assumes a contractual obligation to pay the cash
flows to one or more recipients in an arrangement.

Where the entity has transferred an asset, the
Company evaluates whether it has transferred
substantially all risks and rewards of ownership of
the financial asset. In such cases, the financial asset
is derecognised. Where the entity has not transferred
substantially all risks and rewards of ownership of the
financial asset, the financial asset is not derecognised.

d Impairment of financial assets

I n accordance with Ind AS 109, the Company applies
Expected Credit Losses (“ECL”) model for measurement
and recognition of impairment loss on the following
financial assets:

• Financial assets that are debt instruments, and are
measured at amortised cost, e.g. loans and deposits;

• Financial assets that are debt instruments and are
measured at fair value through other comprehensive
income (FVTOCI);

• 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 115.

Expected Credit Losses are measured through a loss
allowance at an amount equal to:

• The 12-months expected credit losses (expected
credit losses that result from those default events on
the financial instrument that are possible within 12
months after the reporting date), if the credit risk on a
financial instrument has not increased significantly; or

• Full lifetime expected credit losses (expected credit
losses that result from all possible default events over
the life of the financial instrument), if the credit risk
on a financial instrument has increased significantly.

I n accordance with Ind AS 109 - Financial Instruments,
the Company applies ECL model for measurement and
recognition of impairment loss on the 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 115 - Revenue from Contracts with
Customers.

For this purpose, the Company follows ‘simplified
approach’ for recognition of impairment loss allowance
on the trade receivable balances, contract assets and
lease receivables. The application of simplified approach
requires expected lifetime losses to be recognised from
initial recognition of the receivables based on lifetime
ECLs at each reporting date.

I n case of other assets, the Company determines if
there has been a significant increase in credit risk of the
financial asset since initial recognition. If the credit risk
of such assets has not increased significantly, an amount
equal to twelve months ECL is measured and recognised
as loss allowance. However, if credit risk has increased
significantly, an amount equal to lifetime ECL is measured
and recognised as loss allowance.

When determining whether the credit risk of a financial
asset has increased significantly since initial recognition
and when estimating expected credit losses, the Company
considers reasonable and supportable information that is
relevant and available without undue cost or effort. This
includes both quantitative and qualitative information and
analysis, based on the Company’s historical experience
and informed credit assessment and including
forward-looking information.

The gross carrying amount of a financial asset is written
off (either partially or in full) to the extent that there is no
realistic prospect of recovery. This is generally the case
when the Company determines that the debtor does not
have assets or sources of income that could generate
sufficient cash flows to repay the amounts subject to the
write 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.

III Financial liabilities and equity instruments
a Classification of debt or equity:

Debt or equity instruments issued by the Company
are classified as either financial liabilities or as equity
in accordance with the substance of the contractual
arrangements and the definitions of a financial liability
and an equity instrument.

b Subsequent measurement:i Financial liabilities measured at amortised cost:

Financial liabilities are subsequently measured
at amortised cost using the effective interest rate
(EIR) method. Gains and losses are recognised in
statement of profit and loss when the liabilities
are derecognised as well as through the EIR
amortisation process. Amortised cost is calculated
by taking into account any discount or premium
on acquisition and fee or costs that are an integral
part of the EIR. The EIR amortisation is included in
finance costs in the statement of profit and loss.

ii Financial liabilities measured at fair value
through profit and loss (FVTPL):

Financial liabilities at FVTPL include financial
liabilities held for trading and financial liabilities
designated upon initial recognition as FVTPL.
Financial liabilities are classified as held for trading
if they are incurred for the purpose of repurchasing
in the near term. Derivatives, including separated
embedded derivatives are classified as held for
trading unless they are designated as effective
hedging instruments. Financial liabilities at fair
value through profit and loss are carried in the
financial statements at fair value with changes in
fair value recognised in other income or finance
costs in the statement of profit and loss.

Lease liability associated with assets taken on
lease (except short-term and low value assets) is
measured at the present value of lease payments to
be made. Lease payments are discounted using the
incremental rate of borrowing as the case may be.
Lease payments comprise fixed payments in relation
to the lease (less lease incentives receivable),
variable lease payments, if any and other amounts
(residual value guarantees, penalties, etc.) to be
payable in future in relation to the lease arrangement.

c Derecognition of financial liabilities:

A financial liability is derecognised when the obligation
under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another
from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified,
such an exchange or modification is treated as the
derecognition of the original liability and the recognition
of a new liability. The difference in the respective carrying
amounts is recognised in the statement of profit and loss.

IV Fair value measurement

The Company measures financial instruments such as debts 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:

a In the principal market for the asset or liability or

b 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.

The Company uses valuation techniques that are appropriate in
the circumstances and for which sufficient data are 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:

a Level 1 — Quoted (unadjusted) market prices in active
markets for identical assets or liabilities.

b Level 2 — Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
directly or indirectly observable.

c 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.

V Offsetting financial instruments

Financial assets and liabilities are offset and the net amount
is reported in the balance sheet where there is a legally
enforceable right to offset the recognised amounts and there
is an intention to settle on a net basis or realise the asset and
settle the liability simultaneously. The legally enforceable
right must not be contingent on future events and must be
enforceable in the normal course of business and in the event
of default, insolvency or bankruptcy of the Company or the
counterparty.

O) Borrowings and borrowing costs

Borrowing costs directly attributable to the acquisition, construction
or production of qualifying assets, which are assets that necessarily
take a substantial period of time to get ready for their intended use
or sale, are added to the cost of those assets, until such time as the
assets are substantially ready for their intended use of sale. All other
borrowing costs are recognised in profit or loss in the period in which
they are incurred.