Provisions and contingent liabilities Provisions

A Provision is recorded when the Company has a present obligation (legal or constructive) as a result of past
events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be
reasonably estimated.

Contingent liabilities:

Whenever there is possible obligation that arises from past events and whose existence will be confirmed only
by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the
entity or a present obligation that arises from past events but is not recognised because (a) it is not probable that
an outflow of resources embodying economic benefits will be required to settle the obligation; or (b) the amount
of the obligation cannot be measured with sufficient reliability are considered as contingent liability. Show cause
notices are not considered as Contingent Liabilities unless converted into demand.

Contingent Assets:

Contingent assets are not recognised in the standalone financial statements since this may result in recognition
of income that may never be realized. However, when the realization of income is virtually certain, then the
related assets is not a contingent asset and is recognised.

23.Investment in Subsidiaries

The investments in subsidiaries are carried in these standalone financial statements at historical cost except
when the investment, or a portion thereof, is classified as held for sale, in which case it is accounted for as non¬
current assets held for sale and discontinued operations.

When the Company is committed to a sale plan involving disposal of an investment, or a portion of an
investment, in a subsidiary, the investment or the portion of the investment that will be disposed of is classified
as held for sale when the criteria described above are met.

Any retained portion of an investment in a Subsidiary that has not been classified as held for sale continues to be
accounted for at historical cost.

24.Financial InstrumentsInitial Recognition and Measurement:

Financial assets (other than trade receivables) and financial liabilities are recognized when the Company
becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value
adjusted for transaction costs, except for those carried at fair value through Statement of Profit and Loss which
are measured initially at fair value.

Trade receivables are recognised at their transaction value as the same do not contain significant financing
component.

Trade payable is in respect of the amount due on account of goods purchased in the normal course of business.
They are recognised at their transaction and services availed value as the same do not contain significant
financing component.

Classification and Subsequent Measurement:

Financial Assets:

The Company classifies financial assets as subsequently measured at amortised cost, fair value through other
comprehensive income (FVTOCI) or fair value through profit or loss (FVTPL) on the basis of both

(a) Business model for managing the financial assets, and

(b) The contractual cash flow characteristics of the financial asset

A Financial Asset is measured at amortised cost if both of the following conditions are met:

(i) the financial asset is held within a business model whose objective is to hold financial assets in order to
collect contractual cash flows, and

(ii) 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.

A financial asset is measured at fair value through Other Comprehensive Income (FVTOCI) if both of the
following conditions are met:

(i) the financial asset is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets, and

(ii) 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.

A Financial Asset shall be classified and measured at fair value through profit or loss (FVTPL) unless it is
measured at amortised cost or at fair value through OCI (FVTOCI). All recognised financial assets are
subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of
the financial assets.

Equity Investments:

Equity investments in Subsidiaries and Associates are out of scope of Ind AS 109 and hence, the Company has
accounted for its investment in Subsidiaries at cost. All other equity investments are measured at fair value.
Equity instruments, which are held for trading are classified as at FVTPL. For equity instruments other than held
for trading, the company has exercised irrevocable option to recognise in other comprehensive income
subsequent changes in the fair value.

Derecognition of financial assets:

The Company derecognize 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. If the Company neither transfers nor retains substantially all the risks and rewards of ownership
and continues to control the transferred asset, the Company recognises its retained interest in the asset 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 and also
recognises an associated liability.

On derecognition of a financial asset, 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 recognised in other
comprehensive income and accumulated in equity is recognised in the Statement of profit and loss.

Financial Liabilities and Equity Instruments
Classification as Debt or Equity:

Debt and 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.

Equity instruments:

An equity instrument is any contract that evidences a residual interest in the assets of the Company after
deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds
received, net of direct issue costs.

Financial liabilities:

Financial liabilities are classified, at initial recognition:

• at fair value through Profit or Loss,

• Loans and borrowings, Payables, or

• as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognised initially at fair value and in the case of loans and borrowings and payables,
they are recognised net of directly attributable transaction costs. The Company’s financial liabilities include trade
and other payables, loans and borrowings, including bank overdrafts, financial guarantee contracts and
derivative financial instruments.

Subsequent Measurement:

The measurement of financial liabilities depends on their classification, as described below:

Financial Liabilities at FVTPL:

Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon
initial recognition as at FVTPL. Financial liabilities are classified as held for trading, if they are incurred for the
purpose of repurchasing in the near term. This category also includes derivative financial instruments entered
into by the company that are not designated as hedging instruments in hedge relationships as defined by Ind AS
109. Separated embedded derivatives are also classified as held for trading unless they are designated as
effective hedging instruments.

Gains or losses on liabilities held for trading are recognised in the statement of profit and loss.

Financial liabilities designated upon initial recognition at FVTPL are designated as such at the initial date of
recognition, and only if the criteria in IND AS 109 are satisfied.

Loans and Borrowings:

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost
using the Effective Interest Rate (EIR) method. Gains and losses are recognised in the 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 fees or costs that
are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and
Loss.

Derecognition of Financial Liabilities:

The Company de-recognises financial liabilities when and only when, the Company’s obligations are discharged,
cancelled or have expired. The difference between the carrying amount of the financial liability de-recognised

and the consideration paid and payable is recognised in the statement of profit and loss.

25.Earnings per share

Basic earnings per share are calculated by dividing the Net Profit or Loss for the period attributable to equity
shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the Net Profit or Loss for the period attributable to
equity shareholders and the weighted average number of shares outstanding during the period are considered
for the effects of all dilutive potential equity shares.