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Notes on the standalone financial statements
for the year ended 31 March 2017
Impairment of financial assets
The Company assesses impairment based on expected credit losses (ECL) model for measurement and recognition of
impairment loss, the calculation of which is based on historical data, on the financial assets that are trade receivables
or contract revenue receivables and all lease receivables.
(b) Financial liabilities
Classification
The Company classifies all financial liabilities as subsequently measured at amortized cost, except for financial liabilities
at fair value through profit or loss. Such liabilities, including derivatives that are liabilities, shall be subsequently
measured at fair value.
Initial recognition and measurement
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs. The Company’s financial liabilities include trade and other payables, loans and
borrowings including bank overdrafts, and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
• Financial liabilities at amortised cost
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the
EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through
the EIR amortization process.
Amortized 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 amortization is included as finance costs in the statement of profit and loss.
• Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities
designated upon initial recognition as at fair value through profit or loss. 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 recognized in the statement of profit and loss.
Derecognition
A financial liability is derecognized 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
recognized in the statement of profit and loss.
(c) 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 recognized amounts and there is an intention to settle on a net basis, to
realize the assets and settle the liabilities simultaneously