Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been
classified as financing cash flows.

Transition to Ind AS 116 - Leases:

Effective 01 April, 2017, the Company adopted Ind AS 116 “Leases” and applied the standard to all lease contracts
existing on 01 April, 2017 using the modified retrospective method. Consequently, the Group recorded the lease
liability at the present value of the lease payments discounted at the incremental borrowing rate and the right-of-use
assets are recognised at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease
payments relating to that lease recognised in the balance sheet immediately before the date of initial application.

On transition, the adoption of the new standard resulted in recognition of 'Right of Use’ asset of 7629.45 million, anda
lease liability of 609.86 million. Ind AS 116 will result in an increase in cash inflows from operating activities and an
increase in cash outflows from financing activities on account of lease payments. On application of Ind AS 116, the
nature of expenses has changed from lease rent in previous periods to depreciation cost for the right-of-use asset, and
finance cost for interest accrued on lease liability.

The following is the summary of practical expedients elected on initial application:

1. Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of
lease term on the date of initial application

2. Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application.
3. Applied the practical expedient to grandfather the assessment of which transactions are leases. Accordingly, Ind
AS 116 is applied only to contracts that were previously identified as leases under Ind AS 17.

The weighted average incremental borrowing rate applied to lease liabilities as at 01 April, 2017 is 10.50%.

B.9 FINANCIAL INSTRUMENTS

Financial assets and financial liabilities are recognised when the Group 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 recognised immediately
in profit or loss.

Classification of financial assets

The financial assets are initially measured at fair value. Transaction costs that are directly attributable to the
acquisition of financial assets are added to the fair value of the financial assets on initial recognition.

After initial recognition:

i) Financial assets (other than investments and derivative instruments) are subsequently measured at amortised
cost using the effective interest method.

Effective interest method is a method of calculating the amortised 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 paid 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.

ii) Financial assets (i.e. derivative instruments and investments in instruments other than equity of joint ventures)
are subsequently measured at fair value.

Such financial assets are measured at fair value at the end of each reporting period, with any gains or losses arising on
re-measurement recognised in other comprehensive income.

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