Financial liabilities

Initial recognition and measurement

All financial liabilities are recognised initially at
fair value and, in the case of financial liabilities
at amortized cost, net of directly attributable
transaction costs.

All financial liabilities (except derivatives and fair
value liabilities) are subsequently measured at
amortised cost using the effective interest rate
method.

The effective interest method is a method of
calculating the amortised 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.

Derecognition

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.

Offsetting of financial instruments

Financial assets and financial liabilities are offset
and the net amount is reported in the balance sheet
if there is a currently enforceable legal right to offset
the recognised amounts and there is an intention to
settle on a net basis, to realise the assets and settle
the liabilities simultaneously.

Investments in equity instruments of subsidiaries

These are measured at cost in accordance with Ind
AS 27 'Separate Financial Statements'.

r) Inventories

Inventories comprising expendable aircraft spares,
miscellaneous stores and in-flight inventories
which are valued at cost or net realizable
value, whichever is lower after providing for
obsolescence and other losses, where considered
necessary. Cost includes cost of purchase and
other costs incurred in bringing the inventories
to their present location and condition and is
determined on a weighted average basis. Net
realisable value is the estimated selling price
in the ordinary course of business, less the
estimated costs of completion and the estimated
costs necessary to make the sale.

s) Manufacturers' incentives

Cash incentives

The Company receives incentives from original
equipment manufacturers ('OEMs') of aircraft
components in connection with acquisition of
aircraft and engines. In case of owned aircraft,
incentives are recorded as a reduction to the cost
of related aircraft and engines. In case of aircraft
and engines held under leases, the incentives are
recorded as reduction to the carrying amount of
right to use assets at the commencement of lease
of the respective aircraft.

Where the aircraft is held under finance lease as
per erstwhile Ind AS, the milestone incentives are
deferred and recognised under the head 'Other
operating revenue' in the statement of profit and
loss, on a straight line basis over the remaining
initial lease period of the respective aircraft for
which the aircraft is expected to be used. In case of
prepayment of finance lease obligations for aircraft
taken on finance lease and consequently taking
the ownership of the aircraft, before the expiry of
the lease term, the unamortised balance of such
deferred incentive is recorded as a reduction to the
carrying value of the aircraft.

Non-cash incentives

Non-cash incentives relating to aircraft are
recorded as and when due to the Company by
setting up a deferred asset and a corresponding
deferred incentive. These incentives are recorded
as a reduction to the cost of related aircraft and
engines in case of owned aircraft. In case of aircraft
held under leases, the incentives are recorded
as reduction to the carrying amount of right to
use assets at the commencement of lease of the
respective aircraft. The deferred asset explained
above is reduced on the basis of utilization against
purchase of goods and services.

t) Commission to agents

Commission expense is recognized as an expense
coinciding with the recognition of related revenues
considering various estimates including applicable
commission slabs, performance of individual agents
with respect to their targets etc.

u) Share-based payment expense

Employees (including senior executives) of the
Company receive remuneration in the form of share-
based payment transactions, whereby employees
render services as consideration for equity
instruments (equity-settled transactions). The cost
of equity-settled transactions is determined by the
fair value of instrument at the date when the grant
is made using an appropriate valuation model.

That cost is recognised as employee benefits
expense, together with a corresponding increase
in stock options outstanding account in equity
over the period in which the performance
and/or service conditions are fulfilled. The
cumulative expense recognised for equity-
settled transactions at each reporting date until
the vesting date reflects the extent to which the
vesting period has expired and the Company's
best estimate of the number of equity instruments
that will ultimately vest. The statement of profit
and loss expense (or reversal) for a period
represents the movement in cumulative expense
recognised as at the beginning and end of that
period and is recognised in employee benefits
expense.

When the terms of an equity-settled award are
modified, the minimum expense recognised is the
expense had the terms had not been modified, if the
original terms of the award are met. An additional
expense is recognised for any modification that
increases the total fair value of equity-settled
transaction, or is otherwise beneficial to the
employee as measured at the date of modification.
Where an award is cancelled by the entity or by
the counterparty, any remaining element of the
fair value of the award is expensed immediately
through statement of profit and loss.

v) Segment reporting

Operating segments are reported in a manner
consistent with the internal reporting provided
to the chief operating decision maker. The chief
operating decision maker is considered to be the
Board of Directors who makes strategic decisions
and is responsible for allocating resources
and assessing performance of the operating
segments.

w) Contingent liabilities and contingent assets

A contingent liability is a possible obligation that
arises from past events whose existence will be
confirmed by the occurrence or non-occurrence
of one or more uncertain future events beyond
the control of Company or present obligation that
is not recognized because it is not probable that
an outflow of resources will be required to settle
the obligation. A contingent liability also arises
in cases where there is a liability that cannot be
recognized because it cannot be measured reliably.
The Company does not recognise a contingent
liability but discloses its existence in the financial
statements.

Contingent assets are disclosed only when inflow
of economic benefits therefrom is probable and
recognize only when realization of income is
virtually certain.

x) Measurement of earnings before interest, tax,
depreciation and amortization (‘EBITDA')

The Company has elected to present EBITDA as a
separate line item on the face of the statement of
profit and loss. In its measurement, the Company
does not include depreciation and amortization,
finance income, finance costs and tax expense.

B. Changes in accounting policies/disclosures
and recent accounting pronouncement

Recent accounting pronouncement [as applicable]

Amendment to Ind AS 1, Presentation of Financial
Statements

The Ministry of Corporate Affairs ("MCA") vide
notification dated March 31, 2023, has issued an
amendment to Ind AS 1 which requires entities
to disclose material accounting policies instead
of significant accounting policies. Accounting
policy information considered together with other
information, is material when it can reasonably
be expected to influence decisions of primary
users of general purpose financial statements.
The amendment also clarifies that immaterial
accounting policy information does not need to
disclose. If it is disclosed, it should not obscure
material accounting information. The Company is
evaluating the requirement of the said amendment
and its impact on these financial statements.

Amendment to Ind AS 8, Accounting Policies,
Change in Accounting Estimates and Errors

The Ministry of Corporate Affairs ("MCA") vide
notification dated March 31, 2023, has issued
an amendment to Ind AS 8 which specifies an
updated definition of an 'accounting estimate'.
As per the amendment, accounting estimates are
monetary amounts in the financial statements
that are subject to measurement uncertainty and
measurement techniques and inputs are used to
develop an accounting estimate. Measurement
techniques include estimation techniques and
valuation techniques. The Company is evaluating
the requirement of the said amendment and its
impact on these financial statements.

Amendment to Ind AS 12, Income Taxes

The Ministry of Corporate Affairs ("MCA") vide
notification dated March 31, 2023, has issued an
amendment to Ind AS 12, which requires entities
to recognise deferred tax on transactions that, on
initial recognition, give rise to equal amounts of
taxable and deductible temporary differences. This
will typically apply to transactions such as leases
of lessees and decommissioning obligations and
will require recognition of additional deferred tax
assets and liabilities. The Company is evaluating the
requirement of the said amendment and its impact
on these financial statements.