Mandatory Accounting Standards (Ind AS)-2

|605| Chap. 23 – Ind AS 102 — Share-based Payment March 31, 2017 March 31, 2016 Number of Weighted Units Average Exercise Price (`) Number of Weighted Units Average Exercise Price (`) Weighted average remaining contractual life (in years) 4.1 - 4.8 - Weighted average fair value of options granted (`) 468 162 Assumptions used in determination of the fair value of the stock options under the Black Scholes Model are as follows: Particulars March 31, 2017 March 31, 2016 Weighted Average Exercise Price - - Expected volatility 29.92% - 44.31% 29.92% Historical volatility 44.31% 29.92% Life of the options granted (vesting and exercise period) in years 5.0-6.5 5.0-6.5 Expected dividends per share 1 1 Average risk-free interest rate 7.12% 7.65% Expected dividend rate 0.30% 0.30% March 31, 2017 March 31, 2016 Summary of movement in respect of the shares held by the ESOP Trust is as follows: Opening balance 3,876,828 3,674,928 Add: Shares purchased by the ESOP trust 152,731 348,163 Less: Shares exercised by employees (499,689) (146,263) Closing balance 3,529,870 3,876,828 Options granted and eligible for exercise at end of the year 286,401 340,888 Options granted but not eligible for exercise at end of the year 3,323,649 3,228,326 Summary of movement in respect of equity shares of Syngene held by the RSU Trust is as follows: Opening balance 2,000,000 2,000,000 Less: Shares exercised by employees (10,742) _ Closing balance 1,989,258 2,000,000 3. DR. REDDY’S LABORATORIES LIMITED ACCOUNTING POLICY Share-based payments The grant date fair value of options granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the options. The expense is recorded for each separately vesting portion of the award as if the award was, in substance, multiple awards. The increase in equity recognised in connection with share-based payment transaction is presented as a separate component in equity under “share-based payment reserve”. The amount recognised as an expense is adjusted to reflect the actual number of stock options that vest. Share-based payment transactions The fair value of employee stock options is measured using the Black-Scholes-Merton valuation model. Measurement inputs include share price on grant date, exercise price of the instrument, expected volatility (based on weighted average historical volatility), expected life of the instrument (based on historical experience), expected dividends, and the risk free interest rate (based on government bonds).

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |606| Disclosure 2.28 EMPLOYEE STOCK INCENTIVE PLANS Dr. Reddy’s Employees Stock Option Plan -2002 (the “DRL 2002 Plan”) The Company instituted the DRL 2002 Plan for all eligible employees pursuant to the special resolution approved by the shareholders in the Annual General Meeting held on 24 September 2001. The DRL 2002 Plan covers all employees of DRL and its subsidiaries and directors (excluding promoter directors) of DRL and its subsidiaries (collectively, “eligible employees”). The Nomination, Governance and Compensation Committee of the Board of DRL (the “Committee”) administer the DRL 2002 Plan and grants stock options to eligible employees. The Committee determines which eligible employees will receive options, the number of options to be granted, the exercise price, the vesting period and the exercise period. The vesting period is determined for all options issued on the date of grant. The options issued under the DRL 2002 Plan vest in periods ranging between one and four years and generally have a maximum contractual term of five years. The DRL 2002 Plan, as amended at Annual General Meetings of shareholders held on 28 July 2004 and on 27 July 2005, provides for stock option grants in two categories: Category A: 300,000 stock options out of the total of 2,295,478 options reserved for grant having an exercise price equal to the fair market value of the underlying equity shares on the date of grant; and Category B: 1,995,478 stock options out of the total of 2,295,478 options reserved for grant having an exercise price equal to the par value of the underlying equity shares (i.e., ` 5 per option). Under the DRL 2002 Plan, the exercise price of the fair market value options granted under Category A above is determined based on the average closing price for 30 days prior to the grant in the stock exchange where there is highest trading volume during that period. Notwithstanding the foregoing, the Committee may, after obtaining the approval of the shareholders in the Annual General Meeting, grant options with a per share exercise price other than fair market value and par value of the equity shares After the stock split effected in the form of stock dividend issued by the Company in August 2006, the DRL 2002 Plan provides for stock option grants in the above two categories as follows: Particulars Number of Options Reserved under Category A Number of Options Reserved under Category B Total Options reserved under original plan 300,000 1,995,478 2,295,478 Options exercised prior to stock dividend date (A) 94,061 147,793 241,854 Balance of shares that can be allotted on exercise of options (B) 205,939 1,847,685 2,053,624 Options arising from stock dividend (C) 205,939 1,847,685 2,053,624 Options reserved after stock dividend (A+B+C) 505,939 3,843,163 4,349,102 Stock option activity under the DRL 2002 Plan for the two categories of options during the years ended 31 March 2017 and 31 March 2016 is as follows: Category A — Fair Market Value Options: There were no options outstanding under this category as of 31 March 2017 and 31 March 2016.

|607| Chap. 23 – Ind AS 102 — Share-based Payment Category B — Par Value Options For The Year Ended 31 March 2017 Particulars Shares Arising Out of Options Range of Exercise Prices Weighted Average Exercise Price Weighted Average Remaining Useful Life (Months) Outstanding at the beginning of the period 427,348 5.00 5.00 72 Granted during the period 103,136 5.00 5.00 90 Expired/forfeited during the period (22,597) 5.00 5.00 - Exercised during the period (177,745) 5.00 5.00 - Outstanding at the end of the period 330,142 5.00 5.00 69 Exercisable at the end of the period 40,882 5.00 5.00 38 Category B — Par Value Options For The Year Ended 31 March 2016 Particulars Shares Arising Out of Options Range of Exercise Prices Weighted Average Exercise Price Weighted Average Remaining Useful Life (Months) Outstanding at the beginning of the period 585,454 5.00 5.00 71 Granted during the period 102,224 5.00 5.00 90 Expired/forfeited during the period (66,319) 5.00 5.00 - Exercised during the period (194,011) 5.00 5.00 - Outstanding at the end of the period 427,348 5.00 5.00 72 Exercisable at the end of the period 53,801 5.00 5.00 42 The weighted average grant date fair value of par value options granted under category B above of the DRL 2002 Plan during the years ended 31 March 2017 and 31 March 2016 was ` 3,266 and ` 3,350 per option, respectively. The weighted average share price on the date of exercise of options during the years ended 31 March 2017 and 31 March 2016 was ` 3,292 and ` 3,504 per share, respectively. The aggregate intrinsic value of options exercised under the DRL 2002 Plan during the years ended 31 March 2017 and 31 March 2016 was ` 584 and ` 679, respectively. As of 31 March 2017, options outstanding under the DRL 2002 Plan had an aggregate intrinsic value of ` 867 and options exercisable under the DRL 2002 Plan had an aggregate intrinsic value of ` 107. The term of the DRL 2002 plan was extended for a period of 10 years effective as of 29 January 2012 by the shareholders at the Company’s Annual General Meeting held on 20 July 2012. Dr. Reddy’s Employees ADR Stock Option Plan, 2007 (the “DRL 2007 Plan”) The Company instituted the DRL 2007 Plan for all eligible employees in pursuance of the special resolution approved by the shareholders in the Annual General Meeting held on 27 July 2005. The DRL 2007 Plan became effective upon its approval by the Board of Directors on 22 January 2007. The DRL 2007 Plan covers all employees and directors (excluding promoter directors) of DRL and its subsidiaries (collectively, “eligible employees”). The Committee administers the DRL 2007 Plan and grants stock options to eligible employees. The Committee determines which eligible employees will receive the options, the number of options to be granted, the exercise price, the vesting period and the exercise period. The vesting period is determined for all options issued on the date of grant. The options issued under the DRL 2007 Plan vest in periods ranging between one and four years and generally have a maximum contractual term of five years.

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |608| The DRL 2007 Plan provides for option grants in two categories: Category A: 382,695 stock options out of the total of 1,530,779 stock options reserved for grant having an exercise price equal to the fair market value of the underlying equity shares on the date of grant; and Category B: 1,148,084 stock options out of the total of 1,530,779 stock options reserved for grant having an exercise price equal to the par value of the underlying equity shares (i.e., ` 5 per option). Category A — Fair Market Value Options: There were no options outstanding under this category as of 31 March 2017 and 31 March 2016. Category B — Par Value Options For the year ended 31 march 2017 Particulars Shares arising out of options Range of exercise prices Weighted average exercise price Weighted average remaining useful life (months) Outstanding at the beginning of the period 92,043 5.00 5.00 79 Granted during the period 52,956 5.00 5.00 90 Expired/forfeited during the period (23,039) 5.00 5.00 - Exercised during the period (33,819) 5.00 5.00 - Outstanding at the end of the period 88,141 5.00 5.00 74 Exercisable at the end of the period 6,517 5.00 5.00 43 Category B — Par Value Options For The Year Ended 31 March 2016 Particulars Shares Arising Out of Options Range of Exercise Prices Weighted Average Exercise Price Weighted Average Remaining Useful Life (Months) Outstanding at the beginning of the period 98,350 5.00 5.00 72 Granted during the period 40,184 5.00 5.00 90 Expired/forfeited during the period (14,023) 5.00 5.00 - Exercised during the period (32,468) 5.00 5.00 - Outstanding at the end of the period 92,043 5.00 5.00 79 Exercisable at the end of the period 7,141 5.00 5.00 45 The weighted average grant date fair value of par value options granted under category B of the DRL 2007 Plan during the years ended 31 March 2017 and 31 March 2016 was ` 3,266 and ` 3,465, respectively. The weighted average share price on the date of exercise of options during the years ended 31 March 2017 and 31 March 2016 was ` 3,268 and ` 3,575, respectively. The aggregate intrinsic value of options exercised under the DRL 2007 Plan during the years ended 31 March 2017 and 31 March 2016 was ` 110 and ` 116, respectively. As of 31 March 2017, options outstanding under the DRL 2007 Plan had an aggregate intrinsic value of ` 232 and options exercisable under the DRL 2007 Plan had an aggregate intrinsic value of ` 17. During the year ended 31 March 2015, the Company adopted a new program to grant performance linked stock options to certain employees under the DRL 2002 Plan and the DRL 2007 Plan. Under this program, performance targets are measured each year against pre-defined interim targets over the three year period ending on 31 March 2017 and eligible employees are granted stock options upon meeting such targets. The

|609| Chap. 23 – Ind AS 102 — Share-based Payment stock options so granted are ultimately vested with the employees who meet subsequent service vesting conditions which range from one to four years. After vesting, such stock options generally have a maximum contractual term of five years. Valuation of stock options The fair value of stock options granted under the DRL 2002 Plan and the DRL 2007 Plan has been measured using the Black–Scholes-Merton model at the date of the grant. The Black-Scholes-Merton model includes assumptions regarding dividend yields, expected volatility, expected terms and risk free interest rates. In respect of par value options granted under category B, the expected term of an option (or “option life”) is estimated based on the vesting term, contractual term, as well as expected exercise behavior of the employees receiving the option. In respect of fair market value options granted under category A, the option life is estimated based on the simplified method. Expected volatility of the option is based on historical volatility, during a period equivalent to the option life, of the observed market prices of the Company’s publicly traded equity shares. Dividend yield of the options is based on recent dividend activity. Risk-free interest rates are based on the government securities yield in effect at the time of the grant. These assumptions reflect management’s best estimates, but these assumptions involve inherent market uncertainties based on market conditions generally outside of the Company’s control. As a result, if other assumptions had been used in the current period, stock-based compensation expense could have been materially impacted. Further, if management uses different assumptions in future periods, stock based compensation expense could be materially impacted in future years. The estimated fair value of stock options is charged to income on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in-substance, multiple awards. The weighted average inputs used in computing the fair value of options granted were as follows: Particulars Grants Made On 15 November 2016 20 September 2016 26 July 2016 11 May 2015 Expected volatility 32.77% 32.92% 29.88% 25.98% Exercise price ` 5.00 ` 5.00 ` 5.00 ` 5.00 Option life 2.5 Years 2.5 Years 2.5 Years 2.5 Years Risk-free interest rate 6.27% 6.81% 6.91% 7.87% Expected dividends 0.60% 0.60% 0.60% 0.60% Grant date share price ` 3,310.70 ` 3,157.80 ` 3,319.65 ` 3,359.70 The fair value of services received in return for stock options granted to employees is measured by reference to the fair value of stock options granted. Employee wise details of options granted during the year to senior management personnel to be exercised at par value: Name Designation No. Of Options Granted 2002 Plan 2007 Plan Abhijit Mukherjee Chief Operating Officer 5,500 – Alok Sonig Executive Vice-President and Head - North America Generics – 3,760 Dr. Cartikeya Reddy Executive Vice-President– Biologics 3,500 – Saumen Chakraborty President, Chief Financial Officer and Global Head - IT & BPE 4,000 – M.V. Ramana Executive Vice-President and Head - Branded Markets (India & Emerging markets) 3,760 - Samiran Das Executive Vice-President and Head - Global Manufacturing Operations 3,000 –

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |610| Name Designation No. Of Options Granted 2002 Plan 2007 Plan Dr. Amit Biswas Executive Vice-President - Integrated Product Development 3,000 – Dr. K. V. S. Ram Rao Senior Vice-President and Head - PSAI Commercial Organisation 2,700 – Dr. S. Chandrasekhar President and Global Head - Human Resources 3,000 – Dr. Raghav Chari (until 31 October 2016) Executive Vice-President and Head - Proprietary Products – 3,760 Ganadhish Kamat Executive Vice-President and Head Global Quality Organization 3,096 – Anil Namboodiripad Senior Vice-President, Proprietary Products and Head, Promius Pharma. – 1,400 No employee of the Company received grant of options during the year amounting to 5% or more of options granted or exceeding 1% of issued capital of the Company. Share-based payment expense For the years ended 31 March 2017 and 31 March 2016 the Company recorded employee share-based payment expense of ` 377 and ` 442, respectively. As of 31 March 2017, there was approximately ` 432 of total unrecognised compensation cost related to unvested stock options. This cost is expected to be recognised over a weighted-average period of 2.95 years. 4. GILLETTE INDIA LIMITED ACCOUNTING POLICY Share-based payment arrangements Employees (including senior executives) of the Company receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions). Equity-settled transactions The Procter & Gamble Company, USA has an “Employee Stock Option Plan (ESOP)” whereby the specified employees covered by the plan are granted an option to purchase shares of the Ultimate Holding Company i.e. - The Procter & Gamble Company, USA at a fixed price (grant price) for a fixed period of time. The difference between the market price and grant price on the exercise of the stock options issued by the Ultimate Holding Company to the employees of the Company is charged in the year of exercise by the employees. Parent Company will recharge an amount equal to spread as on date of exercise of options. The cost of equity-settled transactions is recognised in employee benefits expense (refer note 2.3(e)), together with a corresponding increase in equity (other reserves) over the period in which the service and performance conditions are fulfilled (the vesting period). The cumulative expense recognised for equitysettled 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. Recharge to parent company to the extent of fair value of options will be debited in equity reserves and any excess recharge above the fair value of options will be recognised as equity distribution from the company. However, in respect of options granted and fully vested prior to the Ind AS transition date i.e. July 1, 2015, the Company would continue to account for the same in the Statement of Profit and Loss in the period when the employee exercises and the same is re-charged by the Parent to the Company. Employee share purchase plan The Procter & Gamble Company, USA has an “International Stock Ownership Plan (ISOP)” (employee share purchase plan) whereby specified employees of its subsidiaries have been given a right to purchase shares of the Ultimate Holding Company i.e. The Procter & Gamble Company, USA. Every employee who opts for

|611| Chap. 23 – Ind AS 102 — Share-based Payment the scheme contributes by way of payroll deduction up to a specified percentage (up to 15%) of base salary towards purchase of shares on a monthly basis. The Company contributes 50% of employee’s contribution (restricted to 2.5% of his base salary) and charged to employee benefit expenses. The expenses related ISOP are recognised immediately in the Statement of Profit and Loss since there are no vesting conditions attached to the scheme. The expense in the Statement of Profit and Loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period. 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 the share-based payment 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 the Statement of Profit and Loss. Disclosure 32. Share-based payments a) International Stock Ownership Plan (Stocks of the Ultimate Holding Company) The Gillette Company, USA (TGC) had a “Global Employee Stock Ownership Plan” (employee share purchase plan) whereby specified employees of its subsidiaries have been given a right to purchase shares of TGC. Every employee who opted for the scheme contributed by way of payroll deduction up to a specified percentage (up to 15%) of his gross salary towards purchase of shares on a monthly basis. The Company contributes 50% of employee’s contribution (restricted to 2.5% of gross salary). Such contribution is charged under employee benefits expense. Subsequent to the worldwide merger of Aquarium Acquisition Corporation (wholly owned subsidiary of the Procter & Gamble Company, USA) with TGC on October 1, 2005, the shares of TGC got delisted from the New York Stock Exchange and the share purchase plan has been adopted by the Procter & Gamble Company, USA. The shares of TGC (till September 30 2005)/The Procter & Gamble Company, USA are listed with New York Stock Exchange of USA and are purchased on behalf of the employees at market price on the date of purchase. During the year 2525.04 shares (Previous year: 2570.97 shares) were purchased by employees at weighted average fair value of ` 5 205.58 (Previous year: ` 5 211.99) per share. The Company’s contribution during the year on such purchase of shares amounting to ` 42 lakhs (Previous year: ` 37 lakhs) has been charged under employee benefits expense under Note 23. b) Employees Stock Options Plan (Stocks of the Ultimate Holding Company) The Gillette Company, USA (TGC) had an Employees Stock Options Scheme whereby specified employees of its subsidiaries covered by the plan were granted an option to purchase shares of the Parent Company i.e. The Gillette Company, USA at a fixed price (grant price) for a fixed period of time. Subsequent to the worldwide merger of Aquarium Acquisition Corporation (wholly owned subsidiary of the Procter & Gamble Company, USA) with The Gillette Company, USA on October 1, 2005, the shares of The Gillette Company got delisted from the New York Stock Exchange. Upon this change in control the 2005 Gillette Option award got automatically converted into P&G options at the established conversion ratio of 0.975 shares in the Procter and Gamble Company, USA for every share held in the Gillette Company. The shares of the Gillette Company (till September 30, 2005)/The Procter & Gamble Company, USA were/are listed with New York Stock Exchange of USA. The options were issued to Key Employees of the Company with exercise price equal to the market price of the underlying shares on the date of the grant. The Grants issued are vested after 3 years/5 years and have a 5 years/10 years life cycle.

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |612| The expense recognised for employee services received during the year is shown in the following table: As at June 30, 2017 As at June 30, 2016 ` in lakhs ` in lakhs Expense arising from equity-settled share-based payment transactions 263 225 Total expense arising from share-based payment transactions 263 225 There were no cancellations or modifications to the awards in June 30, 2017 or June 30, 2016. Movements during the year The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share options during the year (excluding SARs): As at June 30, 2017 As at June 30, 2017 Estimated fair value of Options Granted As at June 30, 2016 As at June 30, 2016 Estimated fair value of Options Granted Number WAEP (in $) in ` Number WAEP (in $) in ` Outstanding at July 1 88 690 84.67 — 79 775 78.24 — Granted during the year 15-Sep-16 354 88.06 583 — — — 28-Feb-17 6 129 91.07 687 — — — 28-Feb-17 1 403 91.07 5 705 — — — 3-Aug-15 — — — 3 273 76.40 4 459 29-Feb-16 — — — 14 250 80.29 564 29-Feb-16 — — — 1 349 80.29 4 447 Exercised during the year (7 157) 88.33 — (9 457) 82.08 — Expired during the year (3 231) — — (500) — — Forfeited during the year (673) — — — — — Outstanding at June 30 85 515 87.15 88 690 84.67 Exercisable at June 30 39 177 87.15 41 115 84.67 The weighted average share price at the date of exercise of these options was $ 88.33 (June 30, 2016: $ 82.08). The weighted average remaining contractual life for the share options outstanding as at June 30, 2017 was 5.69 years (June 30, 2016: 5.90 years). The weighted average fair value of options granted during the year was ` 1 575 (June 30, 2016: ` 1 517). These fair values for share options granted during the year were calculated using binomial lattice-based model. The following tables list the inputs to the models used for the plans for the years ended June 30, 2017 and June 30, 2016, respectively: As at June 30, 2017 As at June 30, 2016 Dividend yield (%) 3.21% 3.16% Expected volatility (%) 15.08% 15.62% Risk-free interest rate (%) 2.55% 1.76%

|613| Chap. 23 – Ind AS 102 — Share-based Payment 5. HINDUSTAN UNILEVER LIMITED ACCOUNTING POLICY Share-Based Payments Employees of the Company receive remuneration in the form of sharebased payments in consideration of the services rendered. Under the equity settled share based payment, the fair value on the grant date of the awards given to employees is recognised as ‘employee benefit expenses’ with a corresponding increase in equity over the vesting period. The fair value of the options at the grant date is calculated by an independant valuer basis Black Scholes model. At the end of each reporting period, apart from the non market vesting condition, the expense is reviewed and adjusted to reflect changes to the level of options expected to vest. When the options are exercised, the Company issues fresh equity shares. For cash-settled share based payments, the fair value of the amount payable to employees is recognised as ‘employee benefit expenses’ with a corresponding increase in liabilities, over the period of non market vesting conditions getting fulfilled. The liability is remeasured at each reporting period up to, and including the settlement date, with changes in fair value recognised in employee benefits expenses. Refer Note 42 for details. Share-based payments The Company has elected not to apply Ind AS 102 Share-Based Payment, to equity instruments that vested prior to the date of transition to Ind AS. Disclosure Refer Note 2.4(k) for accounting policy on Share Based Payments. The members of the Company had approved ‘2001 HLL Stock Option Plan’ at the Annual General Meeting held on 22nd June, 2001. The plan envisaged grant of share options to eligible employees at market price as defined in Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014. This plan was amended and revised vide ‘2006 HLL Performance Share Scheme’ at the Annual General Meeting held on 29th May, 2006. This scheme provided for conditional grant of Performance Shares at nominal value to eligible management employees as determined by the Compensation Committee of the Board of Directors from time to time, at the end of 3-year performance period. The performance measures under this scheme include group underlying sales growth and free cash flow. The scheme also provided for ‘Par’ Awards for the managers at different work levels. The 2006 scheme was further amended and revised vide ‘2012 HUL Performance Share Scheme’ at the Annual General Meeting held on 23rd July, 2012. This scheme provided for conditional grant of Performance Shares at nominal value to eligible management employees as determined by the Nomination and Remuneration Committee of the Board of Directors from time to time, at the end of 3-year performance period. The performance measures under this scheme include group underlying sales growth, core operating margin improvement and operating cash flow. The number of shares allocated for allotment under the 2006 and 2012 Performance Share Schemes is 2,00,00,000 (two crores) equity shares of ` 1/- each. The schemes are monitored and supervised by the Nomination and Remuneration Committee of the Board of Directors in compliance with the provisions of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and amendments thereof from time to time. The Employee Stock Option Plan includes employees of Hindustan Unilever Limited, its subsidiaries and a subsidiary of parent Company.

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |614| (All amounts in ` crores, unless otherwise stated) Scheme Year Date of grant Numbers of options granted Vesting Conditions Exercise Period Exercise Price (`) per share Weighted Average Exercise Price (`) per share 2001 HLL Stock Option Plan 2005 27-May-05 15,47,700 Vested after three years from date of grant 7 years from date of vesting 132.05 132.05 2006 HLL Performance Share Scheme 2012 Interim 2012 17-Feb-12 30-Jul-12 4,20,080 51,385 Vested after three years from date of grant 3 months from date of vesting 1.00 1.00 1.00 1.00 2012 HUL Performance Share Scheme 2013 Interim 2013 18-Mar-13 29-Jul-13 3,68,023 25,418 Vested after three years from date of grant 3 months from date of vesting 1.00 1.00 1.00 1.00 2014 Interim 2014 14-Feb-14 28-Jul-14 2,62,155 16,805 1.00 1.00 2015 Interim 2015 13-Feb-15 27-Jul-15 1,42,038 12,322 Vested after three years from date of grant 3 months from date of vesting 1.00 1.00 1.00 1.00 2016 Interim 2016 11-Feb-16 25-Jul-16 1,57,193 11,834 1.00 1.00 1.00 1.00 2017 13-Feb-17 1,23,887 1.00 1.00 Number of Share Options Scheme Year Outstanding at the beginning of the year Granted during the year* Forfeited/ Expired during the year Exercised during the year Exercisable at the end of the year Outstanding at the end of the year 2001 HLL Stock Option Plan 2005 - - - - - - (23,100) - - (23,100) - - - - - - - - 2006 HUL performance Share Scheme 2012 (3,24,629) - - (3,24,629) - - - - - - - - Interim 2012 (39,937) (18,305) - (58,242) - - 2013 3,08,705 - 3,08,705 - - (3,19,252) (55,602) - (66,149) (3,08,705) (3,08,705) 2012 HUL Performance Share Scheme Interim 2013 23,044 5,964 - 29,008 - - (25,418) - (2,374) - - (23,044) 2014 2,31,763 - 41,918 74,955 1,14,890 1,14,890 (2,43,708) - (11,945) - - (2,31,763) Interim 2014 16,805 - 1,702 - - 15,103 (16,805) - - - - (16,805) 2015 1,36,054 - 8,903 - - 1,27,151 (1,42,038) - (5,984) - - (1,36,054) Interim 2015 12,322 - 632 - - 11,690 - (12,322) - - - (12,322) 2016 1,56,351 - 8,492 - - 1,47,859 - (1,57,193) (842) - - (1,56,351) Interim 2016 - 11,834 - - - 11,834 - - - - - - 2017 - 1,23,887 - - - 1,23,887 - - - - - - * Granted during the year includes additional shares granted upon meeting the vesting conditions (figures in bracket pertain to 2015-16)

|615| Chap. 23 – Ind AS 102 — Share-based Payment 6. INFOSYS LIMITED ACCOUNTING POLICY Share-based compensation The Company recognizes compensation expense relating to share-based payments in net profit using fair value in accordance with Ind AS 102, Share-Based Payment. The estimated fair value of awards is charged to income on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was in-substance, multiple awards with a corresponding increase to share options outstanding account. Disclosure Employee Stock Option Plan (ESOP) 2015 Stock Incentive Compensation Plan (the 2015 Plan) : SEBI issued the Securities and Exchange Board of India (Share-based Employee Benefits) Regulations, 2014 (‘SEBI Regulations’) which replaced the SEBI ESOP Guidelines, 1999. The 2011 Plan (as explained below) was required to be amended and restated in accordance with the SEBI Regulations. Consequently, to effect this change and to further introduce stock options/ADRs and other stock incentives, the Company put forth the 2015 Stock Incentive Compensation Plan (‘the 2015 Plan’) for approval to the shareholders of the Company. Pursuant to the approval by the shareholders through a postal ballot which ended on March 31, 2016, the Board of Directors has been authorized to introduce, offer, issue and allot share-based incentives to eligible employees of the Company and its subsidiaries under the 2015 Plan. The maximum number of shares under the 2015 Plan shall not exceed 2,40,38,883 equity shares (this includes 1,12,23,576 equity shares which were held by the trust towards the 2011 Plan as at March 31, 2016). 1,70,38,883 equity shares will be issued as RSUs at par value and 70,00,000 equity shares will be issued as stock options at market price. These instruments will vest over a period of four years and the Company expects to grant the instruments under the 2015 Plan over a period of four to seven years. On August 1, 2016, the Company granted 17,83,615 RSUs (including equity shares and equity shares represented by ADSs) at par value, to employees up to mid-management (excluding grants made to Dr. Vishal Sikka). Further, the Company granted 73,020 incentive units (cash-settled) to eligible employees. These instruments will vest equally over a period of four years and are subject to continued service. On November 1, 2016, the Company granted 9,70,375 RSUs (including equity shares and equity shares represented by ADSs) at par value, 12,05,850 employee stock options (ESOPs) (including equity shares and equity shares represented by ADSs) to be exercised at market price at the time of grant, to certain employees at the senior management level. Further, the Company granted 20,640 incentive units (cash-settled) to certain employees at the senior management level. These instruments will vest equally over a period of four years and are subject to continued service. On February 1, 2017, the Company granted 18,550 incentive units (cash-settled) to certain employees at the senior management level. These instruments will vest equally over a period of four years and are subject to continued service. As of March 31, 2017, 1,12,89,514 shares are held by the trust under the 2015 Plan, out of which 1,00,000 shares have been earmarked for welfare activities for employees. As of March 31, 2017, 1,06,845 incentive units were outstanding (net of forfeitures) and the carrying value of the cash liability is ` 3 crore. Pursuant to the approval from the shareholders through a postal ballot on March 31, 2016, Dr. Vishal Sikka (CEO & MD) is eligible to receive under the 2015 Plan, an annual grant of RSUs of fair value US $2 million which will vest over time, subject to continued service, and an annual grant of performance-based equity and stock options of US $5 million subject to achievement of performance targets set by the Board or its committee, which will vest over time. US $2 million of fair value in RSUs for fiscal 2017 was granted on August 1, 2016 amounting to 1,20,700 RSUs in equity shares represented by ADSs.

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |616| The Board, based on the recommendations of the nomination and remuneration committee, approved on April 13, 2017, performance-based equity and stock options for fiscal 2017 comprising RSUs amounting to US $1.9 million and ESOPs amounting to US $0.96 million. Further, the Board also approved the annual time-based vesting grant for fiscal 2018 amounting to RSUs of US $2 million. These RSUs and ESOPs will be granted w.e.f. May 2, 2017. Though the performance-based RSUs and stock options for fiscal 2017 and time-based RSUs for the remaining employment term have not been granted as of March 31, 2017, in accordance with Ind AS 102, Share-Based Payment, the Company has recorded employee stock-based compensation expense. The Company has recorded employee stock-based compensation expense of ` 28 crore and ` 7 crore during the years ended March 31, 2017 and March 31, 2016 respectively, towards CEO compensation. The nomination and remuneration committee, in its meeting held on October 14, 2016, recommended a grant of 27,250 RSUs and 43,000 ESOPs to U. B. Pravin Rao, Chief Operating Officer (COO), under the 2015 Plan and the same was approved by the shareholders through a postal ballot on March 31, 2017. These RSUs and ESOPs will be granted w.e.f. May 2, 2017. These RSUs and stock options would vest over a period of four years and shall be exercisable within the period as approved by the committee. The exercise price of the RSUs will be equal to the par value of the shares and the exercise price of the stock options would be the market price as on the date of grant, as approved by the shareholders. Though these RSUs and ESOPs have not been granted as of March 31, 2017, in accordance with Ind AS 102, Share-Based Payment, the Company has recorded employee stock-based compensation expense for the same during the year ended March 31, 2017. 2011 RSU Plan (‘the 2011 Plan’) now called 2015 Stock Incentive Compensation Plan (‘the 2015 Plan’) : The Company had a 2011 RSU Plan which provided for the grant of RSUs to eligible employees of the Company. The Board of Directors recommended the establishment of the 2011 Plan to the shareholders on August 30, 2011 and the shareholders approved the recommendation of the Board of Directors on October 17, 2011 through a postal ballot. The maximum aggregate number of shares that may be awarded under the plan was 1,13,34,400 as on the date of approval of the plan adjusted for bonus shares, and the plan was expected to continue in effect for a term of 10 years from the date of initial grant under the plan. Awards have been granted to Dr. Vishal Sikka under the 2011 RSU plan as detailed below. Further, the Company has earmarked 1,00,000 equity shares for welfare activities of the employees, approved by the shareholders vide a postal ballot which ended on March 31, 2016. The equity shares as of March 31, 2016 held under this plan, i.e. 1,12,23,576 equity shares (this includes the aggregate number of equity shares that may be awarded under the 2011 Plan as reduced by 10,824 equity shares already exercised by Dr. Vishal Sikka and 1,00,000 equity shares which have been earmarked for welfare activities of the employees) have been subsumed under the 2015 Plan. During the year ended March 31, 2015, the Company made a grant of 1,08,268 RSUs (adjusted for bonus issues) to Dr. Vishal Sikka, Chief Executive Officer and Managing Director. The Board in its meeting held on June 22, 2015, on recommendation of nomination and remuneration committee, further granted 1,24,061 RSUs to Dr. Vishal Sikka. These RSUs are vesting over a period of four years from the date of the grant in the proportions specified in the award agreement. The RSUs will vest subject to achievement of certain key performance indicators as set forth in the award agreement for each applicable year of the vesting tranche and continued employment through each vesting date. The award granted to Dr. Vishal Sikka on June 22, 2015 was modified by the nomination and remuneration committee on April 14, 2016. There is no modification or change in the total number of RSUs granted or the vesting period (which is four years). The modifications relate to the criteria of vesting for each of the years. Based on the modification, the first tranche of the RSUs will vest subject to the achievement of certain key performance indicators for the year ended March 31, 2016. Subsequent vesting of RSUs for each of the remaining years would be subject to continued employment. The activity in the 2015 Plan (formerly ‘the 2011 RSU Plan’) for equity-settled share-based payment transactions during the year ended March 31, 2017 is as follows :

|617| Chap. 23 – Ind AS 102 — Share-based Payment Particulars Year ended March 31, 2017 Shares arising Weighted out of options average exercise price (`) 2015 Plan : Indian equity shares (RSU – IES) Outstanding at the beginning (1) 2,21,505 5 Granted 18,78,025 5 Forfeited and expired 61,540 5 Exercised 34,062 5 Outstanding at the end 20,03,928 5 Exercisable at the end – – 2015 Plan : Employee Stock Options (ESOPs – IES) Outstanding at the beginning – – Granted 3,09,650 998 Particulars Year ended March 31, 2017 Shares arising out of options Weighted average exercise price (`) Forfeited and expired – – Exercised – – Outstanding at the end 3,09,650 998 Exercisable at the end – – (1) Adjusted for bonus issues (Refer to Note 2.12 above) Particulars Year ended March 31, 2017 Shares arising Weighted out of options average exercise price ($) 2015 Plan : American Depositary Shares (RSU – ADS) Outstanding at the beginning – – Granted 9,96,665 0.07 Forfeited and expired 39,220 0.07 Exercised – – Outstanding at the end 9,57,445 0.07 Exercisable at the end – – 2015 Plan : Employee Stock Options (ESOPs – ADS) Outstanding at the beginning – – Granted 8,96,200 15.26 Forfeited and expired 8,200 15.26 Exercised – – Outstanding at the end 8,88,000 15.26 Exercisable at the end – –

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |618| The activity in the 2015 Plan (formerly ‘the 2011 RSU Plan’) for equity-settled, share-based payment transactions during the year ended March 31, 2016 was as follows: Particulars Year ended March 31, 2016 Shares arising Weighted out of options average exercise price (`) 2015 Plan : Indian equity shares (IES) Outstanding at the beginning (1) 1,08,268 5 Granted 1,24,061 5 Forfeited and expired – – Exercised (1) 10,824 5 Outstanding at the end 2,21,505 5 Exercisable at the end – – (1) adjusted for bonus issues (Refer to Note 2.12 above) During the year ended March 31, 2017, the weighted average share price of options exercised under the 2015 Plan on the date of exercise was ` 1,084. During the year ended March 31, 2016, the weighted average share price of options exercised under the 2015 Plan on the date of exercise was ` 1,088. The details of the equity-settled RSUs and ESOPs outstanding as of March 31, 2017 are as follows: Range of exercise prices per share (`) Options outstanding No. of shares arising out of options Weighted average remaining contractual life Weighted average exercise price (`) 2015 Plan : ADS and IES 0-5 (RSU) 29,61,373 1.88 5.00 900-1100 (ESOP) 11,97,650 7.09 1,026.50 41,59,023 3.38 299.16 The weighted average remaining contractual life of RSUs outstanding as of March 31, 2016 under the 2015 Plan was 1.98 years. The fair value of each equity-settled RSU is estimated on the date of grant using the Black-Scholes-Merton model, with the following assumptions : Particulars For options granted in fiscal 2017 Equity shares ADSs RSU ESOP RSU ESOP Grant date 1-Nov-16 1-Nov-16 1-Nov-16 1-Nov-16 Weighted average share price (`)/($ – ADS) 989 989 15.26 15.26 Exercise price (`)/ ($ – ADS) 5.00 998 0.07 15.26 Expected volatility (%) 24-29 27-29 26-29 27-31 Expected life of the option (years) 1-4 3-7 1-4 3-7 Expected dividends (%) 2.37 2.37 2.29 2.29 Risk-free interest rate (%) 6-7 6-7 1-2 1-2 Weighted average fair value as on grant date (`)/ ($ – ADS) 929 285 14.35 3.46 Particulars For options granted in Fiscal 2017-Equity shares -RSU Fiscal 2017- ADS - RSU Fiscal 2016-Equity shares -RSU Fiscal 2015-Equity shares -RSU Grant date 1-Aug-16 1-Aug-16 22-Jun-15 21-Aug-14

|619| Chap. 23 – Ind AS 102 — Share-based Payment Particulars For options granted in Fiscal 2017-Equity shares -RSU Fiscal 2017- ADS - RSU Fiscal 2016-Equity shares -RSU Fiscal 2015-Equity shares -RSU Weighted average share price (`)/($ – ADS)(1) 1,085 16.57 1,024 3,549 Exercise price (`)/($ – ADS)(1) 5.00 0.07 5.00 5.00 Expected volatility (%) 25-29 26-30 28-36 30-37 Expected life of the option (years) 1-4 1-4 1-4 1-4 Expected dividends (%) 2.37 2.29 2.43 1.84 Risk-free interest rate (%) 6-7 0.5-1 7-8 8-9 Weighted average fair value as on grant date (`)/($ – ADS)(1) 1,019 15.59 948 3,355 (1) Data for fiscal 2015 is not adjusted for bonus issues. The expected term of the RSU/ESOP is estimated based on the vesting term and contractual term of the RSU/ESOP, as well as expected exercise behavior of the employee who receives the RSU/ESOP. Expected volatility during the expected term of the RSU/ESOP is based on historical volatility of the observed market prices of the Company’s publicly traded equity shares during a period equivalent to the expected term of the RSU/ESOP. During the years ended March 31, 2017 and March 31, 2016, the Company recorded an employee stock compensation expense of ` 107 crore and ` 7 crore in the Statement of Profit and Loss, which includes cash-settled stock compensation expense of ` 1 crore and nil, respectively. 7. ITC LIMITED ACCOUNTING POLICY Employee Share Based Compensation Stock Options are granted to eligible employees in accordance with the ITC Employee Stock Option Schemes (“ITC ESOS”), as may be decided by the Nomination & Compensation Committee. Eligible employees for this purpose include (a) such employees of the Company including Directors and those on deputation and (b) such employees of the Company’s subsidiary companies including Managing Director/Wholetime Director of a subsidiary. Under Ind AS, the cost of ITC Stock Options (Stock Options) is recognised based on the fair value of Stock Options as on the grant date. In terms of the exemptions, the fair value of unvested Stock Options as on the date of transition have been accounted for as part of Reserves, irrespective of whether they apply to Company employees (including those on deputation) or employees of subsidiary companies. While the fair value of Stock Options granted and vesting after the transition date are recognised in profit and loss for employees of the Company (other than those out on deputation), the value of Stock Options, net of reimbursements, to employees on deputation and to employees of the wholly owned and other subsidiary companies are considered as capital contribution/investment. The Company generally seeks reimbursement of the value of Stock Options from such companies, as applicable. It may, if so recommended by the Corporate Management Committee and approved by the Audit Committee, decide not to seek such reimbursements from: (a) Wholly owned subsidiaries who need to conserve financial capacity to sustain their business and growth plans and to address contingencies that may arise, taking into account the economic and market conditions then prevailing and opportunities and threats in the competitive context. (b) Other companies not covered under (a) above, who need to conserve financial capacity to sustain their business and growth plans and where the quantum of reimbursement is not material — the materiality threshold being ` 5 Crores for each entity for a financial year.

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |620| Disclosure Additional Notes to the Financial Statements (xii) Information in respect of Options granted under the Company’s Employee Stock Option Schemes (‘Schemes’): Sl. No. ITC Employee Stock Option Scheme (introduced in 2001) ITC Employee Stock Option Scheme - 2006 ITC Employee Stock Option Scheme - 2010 1. Date of Shareholders’ approval : 17-01-2001 22-01-2007 23-07-2010 2. Total number of Options approved under the Schemes : Options equivalent to 12,27,07,450 Ordinary Shares of ` 1.00 each Options equivalent to 37,89,18,503 Ordinary Shares of ` 1.00 each Options equivalent to 55,60,44,823 Ordinary Shares of ` 1.00 each Note: Adjusted for Bonus Shares issued in terms of Shareholders approval. 3. Vesting Schedule : The vesting period for conversion of Options is as follows: • On completion of 12 months from the date of grant of the Options : 30% vests • On completion of 24 months from the date of grant of the Options : 30% vests • On completion of 36 months from the date of grant of the Options : 40% vests 4. Pricing Formula : The Pricing Formula, as approved by the Shareholders of the Company, is such price, as determined by the Nomination & Compensation Committee, which is no lower than the closing price of the Company’s Share on the National Stock Exchange of India Limited (‘the NSE’) on the date of grant, or the average price of the Company’s Share in the six months preceding the date of grant based on the daily closing price on the NSE, or the ‘market price’ as defined from time to time under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014. The Options have been granted at ‘market price’ as defined from time to time under the aforesaid Regulations. 5. Maximum term of Options granted : 5 years from the date of grant 5 years from the date of vesting 6. Source of Shares : Primary 7. Variation in terms of Options : None 8. Method used for accounting of sharebased payment plans : The employee compensation cost has been calculated using the fair value method of accounting for Options issued under the Company’s Employee Stock Option Schemes. The employee compensation cost as per fair value method for the financial year 2016-17 is ` 450.32 Crores (2016 - ` 501.91 Crores) and ` 52.53 Crores (2016 - ` 51.74 Crores) for group entities. 9. Nature and extent of employee share based payment plans that existed during the period including the general terms and conditions of each plan : Each Option entitles the holder thereof to apply for and be allotted ten Ordinary Shares of the Company of ` 1.00 each upon payment of the exercise price during the exercise period. The exercise period commences from the date of vesting of the Options and expires at the end of five years from (i) the date of grant in respect of Options granted under the ITC Employee Stock Option Scheme (introduced in 2001) and (ii) the date of vesting in respect of Options granted under the ITC Employee Stock Option Scheme - 2006 & the ITC Employee Stock Option Scheme - 2010. The above is in addition to the other terms and conditions provided in the table under Serial Nos. (3) to (5) hereinbefore.

|621| Chap. 23 – Ind AS 102 — Share-based Payment Sl. No. ITC Employee Stock Option Scheme (introduced in 2001) ITC Employee Stock Option Scheme - 2006 ITC Employee Stock Option Scheme - 2010 10. Weighted average exercise prices and weighted average fair values of Options whose exercise price either equals or exceeds or is less than the market price of the stock. : Weighted average exercise price per Option : ` 2505.93 Weighted average fair value per Option : ` 550.67 11. Option movements during the year : ITC Employee Stock Option Scheme (introduced in 2001) ITC Employee Stock Option Scheme - 2006 ITC Employee Stock Option Scheme - 2010 a) Options outstanding at the beginning of the year : 1,81,060 35,39,624 2,64,09,243 b) Options granted during the year (Including Bonus Options allocated consequent to the Bonus Share issue in 2016-17 in the ratio of 1 Bonus Share for every 2 Ordinary Shares) : – 17,04,882 1,95,60,729 c) Options cancelled and lapsed during the year : – 1,03,099 7,84,633 d) Options vested and exercisable during the year (net of Options lapsed and exercised) : – 1,03,618 1,14,39,825 e) Options exercised during the year : 1,81,060 27,00,607 44,70,231 f) Number of Ordinary Shares of ` 1.00 each arising as a result of exercise of Options during the year : 18,10,600 2,70,06,070 4,47,02,310 g) Options outstanding at the end of the year : – 24,40,800 4,07,15,108 h) Options exercisable at the end of the year : – 23,18,163 2,38,40,646 i) Money realised by exercise of the Options during the year (` in Crores) : 36.63 256.33 774.00

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |622| Sl. No. ITC Employee Stock Option Scheme (introduced in 2001) ITC Employee Stock Option Scheme - 2006 ITC Employee Stock Option Scheme - 2010 12 Summary of the status of Options Particulars : As at 31st March, 2017 As at 31st March, 2016 No. of Options Weighted Average Exercise Prices (`) No. of Options Weighted Average Exercise Prices (`) Outstanding at the beginning of the year 3,01,29,927 2,835.55 2,69,35,141 2,609.34 Add: Granted during the year (Includes Bonus Options allocated consequent to the Bonus Share issue in 2016-17) 2,12,65,611 2,088.96* 69,09,600 3,200.41 Less: Lapsed during the year 8,87,732 2,128.33* 5,46,069 3,012.09 Less: Exercised during the year 73,51,898 1,451.27 * 31,68,745 1,677.95 Outstanding at the end of the year 4,31,55,908 2,066.94* 3,01,29,927 2,835.55 Options exercisable at the end of the year 2,61,58,809 1,897.24* 1,62,05,121 2,452.64 *Adjusted for Bonus Share Issue 1:2 in 2016-17 13. Weighted average share price of Shares arising upon exercise of Options : The Options were exercised during the periods permitted under the Schemes, and weighted average share price of Shares arising upon exercise of Options, based on the closing market price on NSE on the date of exercise of Options (i.e. the date of allotment of shares by the Security holders Relationship Committee) for the year ended 31st March, 2017 was ` 265.38 (2016 - ` 322.18). 14. Summary of Options outstanding, scheme-wise: Particulars As at 31st March, 2017 As at 31st March, 2016 No. of Options Outstanding Range of Exercise Prices* (`) Weighted average remaining contractual life No. of Options Outstanding Range of Exercise Prices (`) Weighted average remaining contractual life ITC Employee Stock Option Scheme (introduced in 2001) : – – ––1,81,060 2023.50 0.40 ITC Employee Stock Option Scheme - 2006 : 24,40,800 726.67 – 2506.00 1.55 35,39,624 948.00 – 3572.00 1.79 ITC Employee Stock Option Scheme - 2010 : 4,07,15,108 1349.00 – 2655.00 3.32 2,64,09,243 2023.50 – 3572.00 4.91 * Adjusted for Bonus Share Issue 1 2 in 2016-17 15. A description of the method used during the year to estimate the fair values of Options, the weighted average exercise prices and weighted average fair values of Options granted : The fair value of each Option is estimated using the Black Scholes Option Pricing model. Weighted average exercise price per Option : ` 2505.93 Weighted average fair value per Option : ` 550.67 The significant assumptions used to ascertain the above : The fair value of each Option is estimated using the Black Scholes Option Pricing model after applying the following key assumptions on a weighted average basis: (i) Risk-free interest rate 6.91% (ii) Expected life 3.29 years (iii) Expected volatility 25.53% (iv) Expected dividends 2.63% (v) The price of the underlying shares in market at the time of Option grant ` 2498.29 (One Option = 10 Ordinary Shares)

|623| Chap. 23 – Ind AS 102 — Share-based Payment Sl. No. ITC Employee Stock Option Scheme (introduced in 2001) ITC Employee Stock Option Scheme - 2006 ITC Employee Stock Option Scheme - 2010 16. Methodology for determination of expected volatility. : The volatility used in the Black Scholes Option Pricing model is the annualised standard deviation of the continuously compounded rates of return on the stock over a period of time. The period considered for the working is commensurate with the expected life of the Options and is based on the daily volatility of the Company’s stock price on NSE. The Company has incorporated the early exercise of Options by calculating expected life on past exercise behaviour. There are no market conditions attached to the grant and vest. 17. Options granted to : As provided below:- (a) Key managerial personnel Name Designation No. of Options granted during the financial year 2016-17 1 Y. C. Deveshwar Chairman 2,70,000 2 S. Puri Chief Executive Officer & Executive Director 1,35,000 3 N. Anand Executive Director 1,35,000 4 R. Tandon Executive Director & Chief Financial Officer 1,35,000 5 B. B. Chatterjee Executive Vice-President & Company Secretary 40,000 6 C. Dar Group Head - LS&T, Central Projects, EHS and Quality Assurance 40,000 7 S. K. Singh Divisional Chief Executive (PSPD) 40,000 8 S. Sivakumar Group Head - Agri Business 56,250 9 R. Sridhar Head - Corporate Human Resources 25,300 10 B. Sumant President - FMCG 40,000 11 K. S. Suresh General Counsel 40,000 (b) Senior managerial personnel Name Designation No. of Options granted during the financial year 2016-17 12 S. M. Ahmad On deputation 25,300 13 A. Ambasta Head - Social Investments Programme 30,600 14 G. Anand Executive Vice-President, Pre-Opening Services (HD) 17,550 15 N. Arif Executive Vice-President & Head - Corporate Communications 34,000 16 R. Batra On deputation 25,300 17 S. K. Bezbaroa Executive Vice-President - Corporate EHS 25,300 18 A. Chand Executive Vice-President - Special Projects 20,700 19 L. C. Chandrasekharan Chief Scientist - Research & Technology Innovation 26,000 20 Saradindu Dutta Head - Corporate Accounts 25,300

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |624| Sl. No. ITC Employee Stock Option Scheme (introduced in 2001) ITC Employee Stock Option Scheme - 2006 ITC Employee Stock Option Scheme - 2010 (b) Senior managerial personnel Name Designation No. of Options granted during the financial year 2016-17 21 Supratim Dutta Executive Vice-President - Corporate Finance 30,600 22 M. Ganesan Executive Vice-President - Finance, Procurement & IT (FD) 30,600 23 S. Ganesh Kumar Chief Operating Officer - Staples, Snacks & Meals (FD) 30,600 24 S. Guha Executive Vice-President - Technical (ITD) 20,700 25 P. Gupta Head - Corporate Taxation 20,700 26 V. Gupta Divisional Chief Executive (LRBD) 15,000 27 D. Haksar Chief Executive - ITC Hotels/WelcomHotels (HD) 20,070 28 S. Kaul Divisional Chief Executive (ITD) 28,950 29 V. Kulkarni Chief Operating Officer (PSPD) 21,280 30 S. Kumar On deputation 17,550 31 H. Malik Divisional Chief Executive (FD) 35,000 32 A. K. Mukerji Corporate Financial Controller 40,000 33 A. R. Noronha Executive Vice-President - Projects (HD) 17,550 34 R. Parasuram Head - Corporate Internal Audit 28,950 35 A. Pathak On deputation 25,300 36 A. K. Poddar On deputation 17,600 37 R. Rai Chief Operating Officer (ABD) 25,300 38 V. M. Rajasekharan Executive Vice-President & SBU Chief Executive - Matches & Agarbatti 25,300 39 A. K. Rajput Senior Vice-President - Corporate Affairs 40,000 40 S. Rangrass Divisional Chief Executive (ABD-ILTD) 35,000 41 A. Roy Head of Supply Chain (TM&D) 21,280 42 C. V. Sarma Executive Vice-President - Finance & MIS (PSPD) 25,300 43 R. Senguttuvan Executive Vice-President & SBU Chief Executive (PPB) 35,000 44 A. Seth Executive Vice-President - Finance & MIS (ITD) 30,600 45 A. Sharma Executive Vice-President - Human Resources & Learning Services (HD) 17,550 46 J. Singh Executive Vice-President - Finance, Procurement & IT (HD) 21,280 47 S. A. Sule Chief Operating Officer (TM&D) 30,600 48 S. Tyagi Executive Vice-President & SBU Chief Executive (ESPB) 20,700 49 K. I. Viswanathan Executive Vice-President - Marketing & Commercial (PSPD) 25,300 50 S. Wanchoo Executive Vice-President - Marketing (ITD) 20,700 51 A. Zachariah Executive Vice-President - Central Projects Organisation 20,700 The Optionees were granted Options on 22nd July, 2016 at the exercise price of ` 2506.00 per Option, other than Mr. V. Gupta (Sl. No. 26) who was granted Options on 27th January, 2017 at the exercise price of ` 2655.00 per Option (c) Any other employee who received a grant on any one year of Options amounting to 5% or more of the Options granted during the year. : None

|625| Chap. 23 – Ind AS 102 — Share-based Payment Sl. No. ITC Employee Stock Option Scheme (introduced in 2001) ITC Employee Stock Option Scheme - 2006 ITC Employee Stock Option Scheme - 2010 (d) Identified employees who were granted Options, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant. : None 8. LARSEN & TOUBRO LIMITED ACCOUNTING POLICY Share-based payment arrangements The stock options granted pursuant to the company’s Stock Options Scheme, are measured at the fair value of the options at the grant date. The fair value of the options is treated as discount and accounted as employee compensation cost over the vesting period on a straight line basis. The amount recognised as expense each year is arrived at based on the number of grants expected to vest. If a grant lapses after the vesting period, the cumulative discount recognised as expense in respect of such grant is transferred to the general reserve within equity. The fair value of the stock options granted to employees of the company by the company’s subsidiaries is accounted as employee compensation cost over the vesting period and where such fair value is not recovered by the subsidiaries, the same is treated as dividend declared by them. Ind AS 102 Share-based Payment has not been applied to equity instruments in share-based payment transactions that vested before April 1, 2015. Disclosure h) Stock option schemes (i) Terms: A. The grant of options to the employees under the stock option schemes is on the basis of their performance and other eligibility criteria. The options are vested equally over a period of 4 years [5 years in the case of series 2006(A)], subject to the discretion of the management and fulfillment of certain conditions. B. Options can be exercised anytime within a period of 7 years from the date of grant and would be settled by way of issue of equity shares. Management has discretion to modify the exercise period (ii) The details of the grants under the aforesaid schemes under various series are summarised below: Sr. No. Series reference 2000 2002 (A) 2002 (B) 2003 (A) 2003 (B) 2006 2006 (A) 2016-17 2015-16 2016-17 2015-16 2016-17 2015-16 2016-17 2015-16 2016-17 2015-16 2016-17 2015-16 2016-17 2015-16 1 Grant price - (v) 2.30 2.30 2.30 2.30 2.30 2.30 11.70 11.70 11.70 11.70 400.70 400.70 400.70 400.70 2 Grant dates 1-6-2000 19-4-2002 19-4-2002 23-5-2003 onwards 23-5-2003 onwards 1-9-2006 onwards 1-7-2007 onwards 3 Vesting commences on 1-6-2001 19-4-2003 19-4-2003 23-5-2004 onwards 23-5-2004 onwards 1-9-2007 onwards 1-7-2008 onwards 4 Options granted and outstanding at the beginning of the year 25,200 25,200 32,250 32,250 59,550 59,550 47,178 47,178 5,26,919 5,85,284 2,57,366 3,04,656 48,44,579 66,54,724

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |626| Sr. No. Series reference 2000 2002 (A) 2002 (B) 2003 (A) 2003 (B) 2006 2006 (A) 2016-17 2015-16 2016-17 2015-16 2016-17 2015-16 2016-17 2015-16 2016-17 2015-16 2016-17 2015-16 2016-17 2015-16 5 Options lapsed during the year – – – – – – – – 41,662 40,611 35,747 11,270 4,54,865 4,42,400 6 Options granted during the year – – – – – – – – 89,100 1,50,400 – – 3,84,450 3,44,865 7 Options exercised during the year 12,000 – – – – – – – 1,47,226 1,68,154 45,035 36,020 12,82,697 17,12,610 8 Options granted and outstanding at the end of the year Of which 13,200 25,200 32,250 32,250 59,550 59,550 47,178 47,178 4,27,131 5,26,919 1,76,584 2,57,366 34,91,467 48,44,579 Options vested 13,200 25,200 32,250 32,250 59,550 59,550 47,178 47,178 75,692 96,458 1,76,584 2,57,366 17,46,787 23,34,008 Options yet to vest – – – – – – – – 3,51,439 4,30,461 – – 17,44,680 25,10,571 9 Weighted average remaining contractual life of options (in years) Nil Nil Nil Nil Nil Nil Nil Nil 4.98 5.18 Nil Nil 3.48 3.61 (iii) The number and weighted average exercise price of stock options are as follows: Particulars 2016-17 2015-16 No. of stock options Weighted average exercise price No. of stock options Weighted average exercise price (A) Options granted and outstanding at the beginning of the year 57,93,042 354.10 77,08,842 362.74 (B) Options granted during the year 4,73,550 327.51 4,95,265 282.57 (C) Options allotted during the year 14,86,958 358.97 19,16,784 366.57 (D) Options lapsed during the year 5,32,274 370.25 4,94,281 368.74 (E) Options granted and outstanding at the end of the year 42,47,360 347.41 57,93,042 354.10 (F) Options exercisable at the end of the year out of (E) supra 21,51,241 359.04 28,52,010 364.76 (iv) Weighted average share price at the date of exercise for stock options exercised during the year is ` 1386.19 (previous year: ` 1543.13) per share. (v) A. In respect of stock options granted pursuant to the Company’s stock options schemes, the fair value of the options is treated as discount and accounted as employee compensation over the vesting period. B. Expense on Employee Stock Option Schemes debited to the Statement of Profit and Loss during 2016-17 is ` 60.35 crore (previous year: ` 59.18 crore) net of recoveries of ` 1.42 crore (previous year: ` 1.16 crore) from its group companies towards the stock options granted to deputed employees, pursuant to the employee stock option schemes (Note 34). The entire amount pertains to equity-settled employee share-based payment plans. (vi) During the year, the Company has recovered ` 13.81 crore (previous year: ` 14.28 crore) from its subsidiary companies towards the stock options granted to their employees, pursuant to the Employee Stock Option Schemes. (vii) Weighted average fair values of options granted during the year is ` 1056.73 (previous year: ` 965.39) per option.

|627| Chap. 23 – Ind AS 102 — Share-based Payment (viii) The fair value has been calculated using the Black-Scholes Option Pricing Model and the significant assumptions and inputs to estimate the fair value of options granted during the year are as follows: Sr. No. Particulars 2016-17 2015-16 (A) Weighted average risk-free interest rate 6.72% 7.66% (B) Weighted average expected life of options 4.08 years 3.86 years (C) Weighted average expected volatility 30.79% 30.52% (D) Weighted average expected dividends over the life of the option ` 74.52 per option ` 62.69 per option (E) Weighted average share price ` 1355.66 per option ` 1211.45 per option (F) Weighted average exercise price ` 327.51 per share ` 282.57 per share (G) Method used to determine expected volatility Expected volatility is based on the historical volatility of the Company’s share price applicable to the total expected life of each option. (ix) The balance in share options (net) account as at March 31, 2017 is ` 177.25 crore (previous year: ` 242.23 crore), including ` 117.36 crore (previous year: ` 155.87 crore) for which the options have been vested to employees as at March 31, 2017. 9. RELIANCE INDUSTRIES LIMITED (RIL) ACCOUNTING POLICY Share-based payment transactions Ind AS 101 encourages, but does not require, first time adopters to apply Ind AS 102 Share based Payment to equity instruments that were vested before the date of transition to Ind AS. The Company has elected not to apply Ind AS 102 to options that vested prior to April 1, 2015. Disclosure 26.3 Share Based Payments a) Scheme details Company has an Employee Stock Option Scheme under which the maximum quantum of options was granted at ` 642 (face value ` 10 each) with options to be vested from time to time on the basis of performance and other eligibility criteria. Details of Employee Stock Option granted up to 31st March, 2015 but not vested as on 1st April, 2015 : Financial Year (Year of Grant) Number Financial Year of Vesting Range of Exercise Price (`) Range of Fair value at Grant Date (`) 2006-07 5,51,760 2015-16 642 309.7 2008-09 13,200 2015-16 & 2016-17 644.5 312.4 - 329.9 2010-11 5,760 2015-16 929 454.3 2011-12 16,855 2015-16 765 - 972 388.4 - 482 2013-14 60,107 2015-16 to 2018-19 860 - 880 281.3 - 452.9 2014-15 45,419 2015-16 to 2019-20 843.2 - 960.7 253.8 - 473 Total 6,93,101

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |628| Details of Employee Stock Option granted from 1st April, 2015 to 31st March, 2017 but not vested as on 31st March, 2017: Financial Year (Year of Grant) Number Financial Year of Vesting Range of Exercise Price (`) Range of Fair value at Grant Date (`) 2015-16 14,967 2016-17 to 2019-20 887.4 254.5 - 346.4 2016-17 74,454 2017-18 to 2020-21 1096 299.5 - 408.9 Total 89,421 Exercise period will expire not later than five years from the date of vesting of options or such other period as may be decided by the Human Resources, Nomination and Remuneration Committee. b) Compensation expenses arising on account of the share based payments (` in crore) Year ended 31st March, 2017 Year ended 31st March, 2016 Expenses arising from equity – settled share-based payment transactions 1.00 2.26 c) Fair Value on the grant date The fair value at grant date is determined using Black Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option. The model inputs for options granted during the year ended March 31, 2017 included; a. Weighted average exercise price ` 1,096 (March 31, 2016 ` 887) b. Grant date: 05-10-2016 & 10-10-2016 (March 31, 2016: 10-10-2015) c. Vesting year: 2017-18 to 2020-21 (March 31, 2016: 2016-17 to 2019-20) d. Share price at grant date: ` 1,089 at 05-10-2016 & ` 1,096 at 10-10-2016) e. Expected price volatility of Company’s share: 25.1% to 26.5% f. Expected dividend yield: 1.07% g. Risk free interest rate: 7% The expected price volatility is based on the historic volatility (based on remaining life of the options). d) Movement in share options during the year: Particulars As of 31st March, 2017 As of 31st March, 2016 Number of Share Options Weighted Average Exercise Price Number of Share Options Weighted Average Exercise Price Balance at the beginning of the year 5,66,253 697.61 6,93,101 686.74 Granted during the year 74,454 1,096.00 14,967 887.00 Forfeited during the year - - - - Exercised during the year (81,815) 642.03 (48,945) 642.03 Expired/Lapsed during the year (14,210) 758.55 (92,870) 676.36 Balance at the end of the year 5,44,682 758.82 5,66,253 697.61 Weighted average remaining contractual life of the share option outstanding at the end of year is 247 days (Previous Year 580 days). ll

|629| Chap. 24 – Ind AS 103 — Business Combinations Chapter 24 Ind AS 103 — Business Combinations 1. ADANI PORT LIMITED 40 BUSINESS COMBINATIONS (a) Acquisition of The Adani Harbour Services Private Limited The Company has acquired 100% equity stake of The Adani Harbour Services Private Limited (formerly known as TM Harbour Services Private Limited),engaged in business of marine port services pursuant to share purchase agreement signed on December 07, 2016, at a consideration of ` 106.27 crores. The fair value of the identifiable assets and liabilities of The Adani Harbour Services Private Limited as at the date of acquisition were: (` in crore) Particulars Fair value recognised on acquisition Assets Property, Plant and Equipment 59.35 Non Current tax assets (net) 0.47 Inventories 1.54 Trade Receivables 22.54 Cash and Cash Equivalents 1.07 Other Current Assets 0.91 Total Assets 85.88 Liabilities Trade Payables 0.08 Current Tax Liabilities (net) 0.06 Total Liabilities 0.14 Total identifiable net Assets at fair value 85.74 Goodwill arising on Acquisition 20.53 Purchase Consideration Transferred 106.27 From the date of acquisition, The Adani Harbour Services Private Limited has contributed ` 9.28 Crore and ` 4.85 Crore to the profit before tax of the Group. If the combination had taken place at the beginning of the year, revenue would have been ` 29.46 Crore and the profit before tax for the group would have been ` 15.97 crore. (b) Provisional business combination accounting for the acquisition of Abbot Point bulkcoal Pty Limited On September 19, 2016, the Abbot Point Operations Pty Limited(“APO”) a wholly owned subsidiary in Australia had executed a Share Sale Agreement to acquire 100% of the ordinary share capital of Abbot Point Bulkcoal Pty Ltd (“APB”) from Glencore Coal Queensland Pty Limited (the “Seller”). APB is an unlisted company based in Australia, engaged in the business of operations of Abbot Point Coal Terminal 1 (“APCT 1”). The purchase price of shares is Australian dollar AUD 1 plus a completion adjustment. APO also entered into Abbot Point Coal Terminal Operation and Maintenance Contract Variation Agreement (“Variation Agreement”) with Adani Abbot Point Terminal Pty Ltd, the owner of APCT 1. Under the Variation Agreement, APO paid AUD 15.4 million as security deposit and AUD 3.5 million (excluding GST) in relation to the Operations and Maintenance Agreement.

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |630| Post-acquisition, the APO becomes the 100% owner of APB and has the control of Operations and Maintenance Agreement with Adani Abbot Point Terminal Pty Ltd for the operations of APCT 1. The acquisition of the APB shares was subject to a number of conditions precedent. The condition precedent were satisfied on October 04, 2016 and the APO obtained control of APB on that date. As such, APO has accounted for the business combination as at October 04, 2016. At March 31, 2017, APO is yet to finalise the quantum of the completion adjustment with the Seller, accordingly, no impact of the completion adjustment has been reflected in the provisional business combination accounting. The impact of the completion adjustment will be reflected in the final purchase consideration for the business combination. The provisional business combination accounting resulted in the following fair values being allocated to the identifiable assets and liabilities of APB at the acquisition date Particulars AUD (` in crore) Assets Property, plant and Equipment 5,63,062 2.87 Inventories 39,34,443 20.05 Trade Receivables 67,18,496 34.23 Cash and Cash Equivalents 18,03,158 9.19 Other Current Assets 3,90,881 1.99 Total Assets 1,34,10,040 68.33 Liabilities Other Non Current Liabilities 32,83,816 16.73 Trade Payables 55,91,247 28.43 Other Current Liabilities 55,84,294 28.45 Total Liabilities 1,44,59,357 73.61 Total identifiable net liabilities at fair value (10,49,317) (5.28) Goodwill arising on Acquisition (refer note (i) (ii) and (iii) below) 10,49,318 5.28 Purchase Consideration Transferred 1 -* * Amount nullified on conversion to Hin crore. (i) At March 31, 2017, APO is yet to finalise the quantum of the completion adjustment with the Seller, accordingly, no impact of the completion adjustment has been reflected in the provisional business combination accounting. The impact of the completion adjustment will be reflected in the final purchase consideration for the business combination. (ii) For the purpose of the provisional business combination accounting, the difference between the provisional purchase consideration and the fair value of tangible assets, liabilities and contingent liabilities acquired has been allocated to goodwill. Inter alia, the amount of goodwill recognised is expected to change as a result of the finalisation of the completion adjustment (noted above) and the recognition of deferred tax consequences of the business combination (refer below). (iii) Given the completion adjustment has not been finalised at March 31, 2017, it is not practical to estimate the deferred tax consequences of the business combination. As such, no deferred tax assets or liabilities are include in the identifiable net assets acquired. To the extent, deferred tax assets or liabilities are required to be recognised as a consequence of the transaction, this will affect the quantum of goodwill provisionally recorded as part of the business combination accounting. In addition, other expenses in the consolidated statement of profit and loss includes ` 2.19 crore of transaction cost in respect of the acquisition. Since acquisition, APB’s contribution to the Groups profit before tax for the period ended March 31, 2017 is a profit ` 9.38 crore (equivalent to AUD 1.86 million). If the combination had taken place at the beginning of the year, the Group’s profit before tax would have been ` 18.12 crore (equivalent to AUD 3.65 million).

|631| Chap. 24 – Ind AS 103 — Business Combinations 2. ALL CARGO LOGISTICS LIMITED BUSINESS COMBINATIONS The Company accounts for its business combinations under acquisition method of accounting. Acquisition related costs are recognised in profit and loss as incurred. The acquirer’s identifiable assets, liabilities and contingent liabilities that meet the condition for recognition are recognised at their fair values at the acquisition date. Purchase consideration paid in excess of the fair value of net assets acquired is recognised as goodwill. Where the fair value of identifiable assets and liabilities exceed the cost of acquisition, after reassessing the fair values of the net assets and contingent liabilities, the excess is recognised as capital reserve. The interest of non-controlling shareholders is initially measured either at fair value or at the noncontrolling interests’ proportionate share of the acquiree’s identifiable net assets. The choice of measurement basis is made on an acquisition-byacquisition basis. Subsequent to acquisition, the carrying amount of noncontrolling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity of subsidiaries. Business combinations arising from transfers of interests in entities that are under the common control are accounted at historical cost. The difference between any consideration given and the aggregate historical carrying amount of assets and liabilities of the required entity are recorded in shareholders’ equity. 3. ATUL LIMITED BUSINESS COMBINATION The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary company comprises the i) fair values of the assets transferred; ii) liabilities incurred to the former owners of the acquired business; iii) equity interest issued by the Group; and iv) fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair value at the acquisition date. The Group recognises any non-controlling interest in the acquired entity on an acquisition either at fair value or at the proportionate share of non-ontrolling interest in net identifiable assets of the acquired entity. Acquisition-related costs are expensed as incurred. The excess of the • consideration transferred, • amount of any non-controlling interest in the acquired entity and • acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as Goodwill. If these amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised in Other Comprehensive Income and accumulated in equity as capital reserve provided there is clear evidence of the underlying reasons for classifying the business combination as a bargain purchase. In other cases, the bargain purchase gain is recognised directly in equity as Capital reserve. Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is incremental borrowing rate of the entity, being the rate at which a similar borrowing may be obtained from an independent financier under comparable terms and conditions.

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |632| Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value with changes in fair value recognised in profit or loss. If the business combination is achieved in stages, the acquisition date carrying value equity interest in the acquiree previously held by the acquirer is remeasured at fair value on the acquisition date. Any gains or losses arising from such remeasurement are recognised in profit or loss or Other Comprehensive Income, as appropriate. 4. BHARAT FORGE LIMITED BUSINESS COMBINATIONS In accordance with Ind AS 101 provisions related to first time adoption, the Group has elected to apply Ind AS accounting for business combinations prospectively from April 1, 2015. As such, Indian GAAP balances relating to business combinations entered into before that date, including goodwill, have been carried forward with minimal adjustment (please refer note 38 and 60). Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred at acquisition date fair value and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition related costs are expensed as incurred. At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their acquisition date fair values. For this purpose, the liabilities assumed include contingent liabilities representing present obligation and they are measured at their acquisition fair values irrespective of the fact that outflow of resources embodying economic benefits is not probable. However, the following assets and liabilities acquired in a business combination are measured at the basis indicated below: - Deferred tax assets or liabilities, and the assets or liabilities related to employee benefit arrangements are recognised and measured in accordance with Ind AS 12 Income Tax and Ind AS 19 Employee Benefits respectively. When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of Ind AS 109 Financial Instruments, is measured at fair value with changes in fair value recognised in the statement of profit and loss. If the contingent consideration is not within the scope of Ind AS 109, it is measured in accordance with the appropriate Ind AS. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and subsequent its settlement is accounted for within equity. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group reassesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in OCI and accumulated in equity as capital reserve. However, if there is no clear evidence of bargain purchase, the entity recognises the gain directly in equity as capital reserve, without routing the same through OCI. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

|633| Chap. 24 – Ind AS 103 — Business Combinations 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 pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised in the statement of profit and loss. An impairment loss recognised for goodwill is not reversed in subsequent periods. Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted through goodwill during the measurement period, or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that date. These adjustments are called as measurement period adjustments. The measurement period does not exceed one year from the acquisition date. Business combinations and acquisition of non-controlling interests Acquisitions during the year ended 31 March 2017 Acquisition of Bharat Forge PMT Technologie LLC and Bharat Forge Tennessee Inc., USA On December 1, 2016, pursuant to a block deal the Group acquired 100 % stake of 2 entities of Walker Forge Group Inc. (“seller”). 100% of the voting shares in Bharat Forge Tennessee Inc. (BFT) (formerly known as “PMT Holdings LLC”) and 100% of the voting shares of Bharat Forge PMT Technologie LLC (BF PMT) (formerly known as “Walker Forge Tennessee LLC”) including shares held through BFT. Both the aquirees are non-listed LLCs based in USA and specialising in manufacture and sale of steel forgings to customers in the automotive, construction, and truck industries. The acquisition of Walker Forge Tennessee LLC fits well with Group’s strategy to build an asset platform that offers value to its customers, partners, and collaborators. The acquisition of Walker Forge Tennessee creates a strategic manufacturing footprint of the Group in North America to leverage the existing customer relationships while simultaneously enabling the Group to address new end market segments and broaden the product portfolio. 38. Business combinations and acquisition of non-controlling interests Assets acquired and liabilities assumed The fair values of the identifiable assets and liabilities of BF PMT and BFT as at the date of acquisition were: In ` Million Fair value recognised on acquisition Assets Property, plant and equipment 507.92 Cash and cash equivalents 0.13 Trade recievables 191.92 Inventories 258.21 Prepaid expenses 0.26 Liabilities Trade payables 78.29 Total identifiable net assets at fair value 880.15 Goodwill arising on acquisition - Purchase consideration transferred 880.15

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |634| The gross amount and fair value of the trade receivables is ` 191.92 million. None of the trade receivables is credit impaired and it is expected that the full contractual amounts can be collected. The fair value measurements are based on significant inputs that are not observable in the market. The fair value estimate is based on: 1) An assumed discount rate of 14% 2) A terminal value, calculated based on long-term sustainable growth rates for the industry ranging from 2% to 4%, which has been used to determine income for the future years 3) A reinvestment ratio of 60% of earnings From the date of acquisition, BF PMT has contributed `132 million of revenue and ` (10) million to the loss before tax from continuing operations of the Group. If the combination had taken place at the beginning of the year, revenue from continuing operations would have been more by ` 1,882 million and the profit before tax from continuing operations for the Group would have been lower by ` (336) million. Purchase consideration ` in Million Shares issued, at fair value 6.32 6.32 Analysis of cash flows on acquisition Transaction costs of the acquisition (included in cash flows from operating activities) 18.23 Net cash acquired with the subsidiary (included in cash flows from investing activities) (0.13) Transaction costs attributable to issuance of shares (included in cash flows from financing activities, net of tax) - Net cash flow on acquisition 18.10 5. BHARTI AIRTEL LIMITED BUSINESS COMBINATIONS The Group accounts for business combinations using the acquisition method of accounting, and accordingly, the identifiable assets acquired and the liabilities assumed in the acquiree are recorded at their acquisition date fair values (except certain assets and liabilities which are required to be measured as per the applicable standard) and the non-controlling interest is initially recognised at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets. The consideration transferred for the acquisition of a subsidiary is aggregation of the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group in exchange for control of the acquiree. The consideration transferred also includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Contingent consideration classified as an asset or liability is subsequently measured at fair value with changes in fair value recognised in profit or loss. Contingent consideration that is classified as equity is not re-measured and its subsequent settlement is accounted for within equity. The excess of the consideration transferred, along with the amount of any non-controlling interests in the acquiree and the acquisition-date fair value (with the resulting difference being recognised in statement of profit and loss) of any previous equity interest in the acquiree, over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. Acquisition-related costs are expensed in the period in which the costs are incurred. If the initial accounting for a business combination is incomplete as at the reporting date in which the combination occurs, the identifiable assets and liabilities acquired in a business combination are measured at their provisional fair values at the date of acquisition. Subsequently adjustments to the provisional values

|635| Chap. 24 – Ind AS 103 — Business Combinations are made within the measurement period, if new information is obtained about facts and circumstances that existed as of the acquisition date and, if known, would have resulted in the recognition of those assets and liabilities as of that date; otherwise the adjustments are recorded in the period in which they occur. A contingent liability recognised in a business combination is initially measured at its fair value. Subsequently, it is measured at the higher of the amount that would be recognised in accordance with Ind AS 37, ‘Provisions, Contingent Liabilities and Contingent Assets’, or amount initially recognised less, when appropriate, cumulative amortisation recognised in accordance with Ind AS 18 ‘Revenue’. 6. CIPLA LIMITED BUSINESS COMBINATIONS Business combinations are accounted for using the acquisition method. The acquisition method involves the recognition of the acquiree’s identifiable assets and liabilities, including contingent liabilities, regardless of whether they were recorded in the Consolidated Financial Statements prior to acquisition. As on the acquisition-date, the identifiable assets and liabilities assumed are included in the consolidated statement of financial position at their acquisition date fair values. The excess of consideration transferred, the amount of any Non-Controlling Interests (NCI) in the acquiree and the acquisition date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill. If the consideration transferred, non-controlling interest recognised and previously held interest measured is less than the fair value of the net assets acquired, the difference is recognised in Capital Reserve. The NCI is measured at proportionate value of its interest. (ii) Acquisition of Quality Chemical Limited On 22nd August, 2015, the Group, through its wholly owned subsidiary Cipla (EU) Limited, acquired 51% of the equity shares of Quality Chemical Limited, Uganda-based pharmaceutical company engaged in trading in animal, human and environmental healthcare products. The total consideration for the said acquisitions was ` 21.54 crore. As a part of the transition, Cipla Group also acquired additional stake of 14.5% in Quality Chemical Industries Limited (QCIL). Assets acquired and liabilities assumed The fair values of the identifiable assets and liabilities of Quality Chemical Limited as at the date of acquisition were: ` in Crore Particulars Fair value recognised on acquisition Assets Identified Intangible Assets Net Working Capital (1.26) Net Fixed Assets 5.71 Deferred Tax Assets 0.86 Total Identifiable Net Assets at Fair Value 5.31 Goodwill Arising on Acquisition 28.81 Non-Controlling Interests in the Acquired Entity 12.58 Purchase Consideration Transferred 21.54 Purchase Consideration Paid 21.54 Analysis of Cash Flow on Acquisition Transaction Cost of Acquisition (Included in operating activities) (6.73) Net Cash Acquired (Included in financing activities) 6.90 Net Cash outflow on Acquisition 0.17

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |636| From the date of acquisition, subsidiary has contributed ` 20.52 crore of revenue and ` 0.53 crore to the profit before tax from continuing operation. B. Disposal of Four M Propack Private Limited On 1st February, 2017, the Group disposed of Four M Propack Private Limited which carried out manufacturing operations of pet bottles, Rotacaps and containers. Consideration received Consideration received in cash and cash equivalents of ` 20.86 Crore. Analysis of Asset and Liabilities over which control was lost Particulars ` in Crore Non-Current Assets 11.79 Current Assets 7.45 Total Assets 19.24 Non-Current Liabilities 0.33 Current Liabilities 1.83 Total Liabilities 1.83 Net Assets Disposed off 17.41 Gain on Disposal of a Subsidiary Consideration Received 20.86 Net Assets Disposed off (17.41) Total 3.45 Net Cash Inflow on Disposal of a Subsidiary Consideration Received in Cash and Cash Equivalents 20.86 Less: Cash and Cash Equivalents disposed off (0.23) Total 20.63 7. DR. REDDY’S LABORATORIES LIMITED BUSINESS COMBINATIONS AND GOODWILL In accordance with Ind AS 101 provisions related to first time adoption, the Company has elected to apply Ind AS accounting for business combinations prospectively from transition date i.e., 1 April 2015. As such, Indian GAAP balances relating to business combinations entered into before that date, including goodwill, have been carried forward. The Company uses the acquisition method of accounting to account for business combinations. The acquisition date is the date on which control is transferred to the acquirer. Judgment is applied in determining the acquisition date and determining whether control is transferred from one party to another. Control exists when the Company is exposed to, or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through power over the entity. In assessing control, potential voting rights are considered only if the rights are substantive. The Company measures goodwill as of the applicable acquisition date at the fair value of the consideration transferred, including the recognised amount of any non-controlling interest in the acquiree, less the net recognised amount of the identifiable assets acquired and liabilities assumed. When the fair value of the net identifiable assets acquired and liabilities assumed exceeds the consideration transferred, the excess is recognised in equity as capital reserve. Consideration transferred includes the fair values of the assets transferred, liabilities incurred by the Company to the previous owners of the acquiree, and equity interests issued by the Company. Consideration transferred also includes the fair value of any contingent consideration. Consideration transferred does not include amounts related to the settlement of pre-existing relationships. Any goodwill that arises on account of such business combination is tested annually for impairment.

|637| Chap. 24 – Ind AS 103 — Business Combinations Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of a financial instrument is classified as equity, then it is not re-measured and the settlement is accounted for within equity. Otherwise, other contingent consideration is re-measured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are recorded in the statement of profit and loss. A contingent liability of the acquiree is assumed in a business combination only if such a liability represents a present obligation and arises from a past event, and its fair value can be measured reliably. On an acquisition-by-acquisition basis, the Company recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. 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. Acquisitions of non-controlling interests are accounted for as transactions with equity holders in their capacity as equity holders. The difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. 8. HINDUSTAN UNILEVER LIMITED BUSINESS COMBINATION Business combinations are accounted for using the acquisition accounting method as at the date of the acquisition, which is the date at which control is transferred to the Group. The consideration transferred in the acquisition and the identifiable assets acquired and liabilities assumed are recognised at fair values on their acquisition date. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. The Group recognises any noncontrolling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets. Consideration transferred does not include amounts related to settlement of pre-existing relationships. Such amounts are recognised in the Statement of Profit and Loss. Transaction costs are expensed as incurred, other than those incurred in relation to the issue of debt or equity securities. Any contingent consideration payable is measured at fair value at the acquisition date. Subsequent changes in the fair value of contingent consideration are recognised in the Statement of Profit and Loss. In accordance with Ind AS 101 provisions related to first time adoption, the Group has elected to apply Ind AS accounting for business combinations prospectively from 1st April 2015. As such, Previous GAAP balances relating to business combinations entered into before that date, including goodwill, have been carried forward as at the date of transition to Ind AS. 9. IDEA CELLULAR INDIA LIMITED BUSINESS COMBINATIONS Business Combinations are accounted for using Ind AS 103 Business Combination. Acquisitions of businesses are accounted for using the acquisition method unless the transaction is between entities under common control. Acquisition related costs are recognized in the statement of profit and loss as incurred. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition are recognized at their respective fair value at the acquisition date, except certain assets and liabilities required to be measured as per applicable standards. Purchase consideration in excess of the Company’s interest in the acquiree’s net fair value of identifiable assets, liabilities and contingent liabilities is recognized as goodwill. Excess of the Company’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the purchase consideration is recognized, after reassessment of fair value of net assets acquired, is recognised as Capital reserve. Business Combinations arising from transfer of

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |638| interests in entities that are under common control are accounted using pooling of interest method wherein, assets and liabilities of the combining entities are reflected at their carrying value, no adjustment are made to reflect fair values, or recognize any new assets or liabilities. The identity of the reserves is preserved and appears in the financial statements of the transferee in the same form in which they appeared in the financial statements of the transferor. 10. IL&FS TRANSPORTATION NETWORKS LIMITED (ITNL) BUSINESS COMBINATIONS Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred, liabilities incurred (including contingent liabilities representing present obligation) and the equity interests issued by the Group in exchange of control of the acquired entity. Acquisition-related costs are generally recognized in profit or loss as incurred However, the following assets and liabilities acquired in a business combination are measured at the basis indicated below: Deferred tax assets or liabilities, and the assets or liabilities related to employee benefit arrangements are recognised and measured in accordance with Ind AS 12 Income Tax and Ind AS 19 Employee Benefits respectively. Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any noncontrolling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the acquisitiondate amounts of the identifiable assets acquired and the liabilities assumed. In case of a bargain purchase, before recognizing a gain in respect thereof, the Group determines whether there exists clear evidence of the underlying reasons for classifying the business combination as a bargain purchase. Thereafter, the Group reassesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and recognizes any additional assets or liabilities that are identified in that reassessment. The Group 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 Group recognizes 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 Group recognizes the gain, after reassessing and reviewing (as described above), directly in equity as capital reserve. If the business combination is achieved in stages, any previously held equity interest is re-measured at its acquisition date fair value and any resulting gain or loss is recognised in profit or loss or Other Comprehensive Income (“OCI”), as appropriate. Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests’ proportionate share of the recognized amounts of the acquiree’s identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, are recognised subsequently if new information about facts and circumstances change. Acquired deferred tax benefits recognised within the measurement period reduce goodwill related to that acquisition if they result from new information obtained about facts and circumstances existing at the acquisition date. If the carrying amount of goodwill is zero, any remaining deferred tax benefits are recognised in OCI/capital reserve depending on the principle explained for bargain purchase gains. All other acquired tax benefits realised are recognised in profit or loss.

|639| Chap. 24 – Ind AS 103 — Business Combinations 11. INFOSYS LIMITED BUSINESS COMBINATIONS Business combinations have been accounted for using the acquisition method under the provisions of Ind AS 103, Business Combinations. The cost of an acquisition 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 transferred to the Group. 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 between entities under common control are accounted for at carrying value. Transaction costs that the Group 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. 12. JSW ENERGY LIMITED BUSINESS COMBINATION During the year ended 31st March, 2016, the Company has acquired 100% stake in Himachal Baspa Power Company Limited (HBPCL), an unlisted entity, which has (i) 300 MW Baspa II and (ii) 1091 MW Karcham Wangtoo hydroelectric projects both located at Himachal Pradesh from Jaiprakash Power Ventures Limited (JPVL). Consequently, HBPCL has become a 100% subsidiary of the Company effective 8th September, 2015. HBPCL was acquired so as to diversify its investment in Hydro business. The fair values of the identifiable assets and liabilities of HBPCL as at the date of acquisition were: ` in crore Particulars Fair value recognised on acquisition Assets Property, plant and equipment 8,917.70 Cash and cash equivalents 159.10 Trade receivables 476.69 Inventories 31.32 Other current assets 287.84 Other non-current assets 5.18 Total Assets 9,877.83 Liabilities Trade payables 53.58 Other current liabilities 142.15 Borrowings 5,928.74 Total Liabilities 6,124.47 Total identifiable net assets at fair value 3,753.36 Contingent consideration payable 636.50 Net identifiable assets transferred in Business combination 4,389.86 Purchase consideration discharged Equity shares (1,250,050,000 of ` 10 each) 1,889.86 13% Redeemable Non-convertible Debentures (250,000,000 of ` 100 each) 2,500.00 Total consideration 4,389.86 Transaction costs of the acquisition has been recognised as an expense in “Legal and other professional charges” in the Statement of Profit and Loss 8.61

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |640| Contingent consideration As per the terms of Securities Purchase Agreement (SPA), amount aggregating to ` 636.50 crore payable to JPVL, upon happening of certain future events, towards trade receivables, entry tax and differential project cost, has been considered as contingent consideration. There will be probable cash outflows on account of the same. As per the terms of the SPA, an additional consideration of ` 300 crore shall be payable to JPVL upon receipt of certain additional consents and approvals related to the installed capacity of 1,091 MW Karcham Wangtoo HEP on or before 6th September, 2020. Business Combinations Business combinations are accounted for using acquisition method. The cost of acquisition is measured as the aggregate of the consideration transferred, measured at fair value on date of acquisition and the amount of non-controlling interest. The consideration transferred for the acquisition comprises the: (a) Fair value of assets transferred (b) Liabilities incurred to the former owners of the acquired business (c) Equity instruments issued by the Group (d) Fair value of any asset or liability resulting from a contingent consideration arrangement. For each business combination, the Group elects whether it measures the non-controlling interest either at fair value or at the proportionate share of the acquiree’s identifiable net assets. At the acquisition date, the Group measure and recognises, separately from goodwill, the identifiable assets acquired and identifiable liabilities assumed at their fair value. It classifies or designate the identifiable assets acquired and liabilities assumed as necessary to apply other Ind AS subsequently. Further the Group make those classification or designations on the basis of the contractual terms, economic conditions, its operating and accounting policies and other conditions as they exist at the acquisition date. Acquisition cost incurred are expensed, as incurred, in the consolidated statement of profit & loss. The excess of the • Consideration transferred; • Amount of any non-controlling interest in the acquired entity; and • Acquisition date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised in other comprehensive income and accumulated in equity as capital reserves provided the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date and reassessment also results in excess of fair value of net assets acquired over the consideration transferred. In other cases, bargain purchase gain is recognised directly in equity as capital reserves. When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as 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 corresponding adjustments against goodwill. 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.

|641| Chap. 24 – Ind AS 103 — Business Combinations The subsequent accounting for changes in the fair value of the 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. Other contingent consideration that: (i) is within the scope of Ind AS 109 is measured at fair value at each reporting date and changes in fair value is recognised in consolidated statement of profit and loss in accordance with Ind AS 109. (ii) is not within the scope of Ind AS 109 is measured at fair value at each reporting date and changes in fair value is recognised in consolidated statement of consolidated statement of profit and loss. When a business combination is achieved in stages, the Group’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date (i.e. the date when the Group obtains control) and the resulting gain or loss, if any, is recognised in the Consolidated Statement of Profit and Loss. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognised at that date. Business Combinations involving entities or businesses under common control are accounted using the pooling of interest method. 13. MAHINDRA LIFESPACE DEVELOPERS LIMITED 35) BUSINESS COMBINATIONS (a) Joint Venture became Subsidiary after Acquisition On 27th July, 2015, Mahindra Lifespace Developers Limited acquired 48.99 % of voting shares of Mahindra Water Utilities Limited. The primary reason for business combination was to increase stake. Name of the Company Principal Activity Date of Acquisition Proportion of voting equity interest acquired Consideration transferred [Refer Note (d)] Mahindra Water Utilities Limited Operation & Maintenance of water collection, treatment & distribution 27th July 2015 48.99% 0.52 Consequent to above, Mahindra Lifespace Developers Limited holds 98.99% of voting shares of Mahindra Water Utilities Limited. (b) Consideration Transferred Mahindra Water Utilities Limited Cash 0.52 Total Consideration 0.52 (c) Assets Acquired and liabilities recognised at the date of acquisition Particulars Amount Current Assets Cash and & cash equivalents 1,000.98 Trade and other receivables 1,750.00 Inventories Current investments 2.72

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |642| Particulars Amount Short-term loans and advances 34.11 Other current assets 17.04 Non-current assets Tangible assets 15.17 Deferred tax assets (net) 211.84 Long-term loans and advances 154.23 Other non-current assets 2,223.00 Current liabilities Trade payables. (290.85) Other current liabilities (140.84) Short-term provisions (192.58) Non-current liabilities Long-term provisions (40.87) 4,743.95 (d) Non-Controlling Interest For each business combination in which the acquirer holds less than 100 per cent of the equity interests in the acquiree at the acquisition date: (i) the amount of the non-controlling interest in the acquiree recognised at the acquisition date and the measurement basis for that amount; and (ii) for each non-controlling interest in an acquiree measured at fair value, the valuation technique(s) and significant inputs used to measure that value. Particulars Proportionate holding by non-controlling interest Amount of non-controlling interest Measurement basis of non-controlling interest Minority Interest 1.01% 47.91 Proportionate share of acquired net identifiable assets. (e) Goodwill/(Capital Reserve) arising on acquistion A qualitative description of the factors that make up the goodwill recognised, such as expected synergies from combining operations of the acquiree and the acquirer, intangible assets that do not qualify for separate recognition or other factors. Particulars Mahindra Water Utilities Limited Consideration transferred 0.52 Less : Fair Value of net assets acquired 2,309.67 Goodwill/(Capital Reserve) Arising on acquisition (2,309.15) (f) Impact of acquisitions on the results of the Group The acquired business contributed revenue of ` 1,143.33 lakh and net profit of ` 275.28 lakh to Mahindra Lifespace Developers Limited for the period from 27th July 2015 to 31st March 2016. Had this business combination been effected at 1st April 2015, the revenue of the Group from continuing operations for FY. 2016 would have been ` 69,147.75 lakh, and the profit for the year from continuing operations would have been ` 9,229.82 lakh.

|643| Chap. 24 – Ind AS 103 — Business Combinations 14. PVR LIMITED BUSINESS COMBINATIONS AND GOODWILL In accordance with Ind AS 101 provisions related to first time adoption, the Group has elected to apply Ind AS accounting for business combinations prospectively from April 01, 2015 (transition date). As such, Indian GAAP balances relating to business combinations entered into before that date, including goodwill, have been carried forward with minimal adjustment. Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred measured at acquisition date on the basis of fair value and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred. At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their acquisition date on the basis of fair values. For this purpose, the liabilities assumed include contingent liabilities representing present obligation and they are measured at their acquisition fair values irrespective of the fact that outflow of resources embodying economic benefits is not probable. When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives, if any in host contracts by the acquire. If the business combination is achieved in stages, any previously held equity interest is re-measured at its acquisition date fair value and any resulting gain or loss is recognised in profit or loss or OCI, as appropriate. Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of Ind AS 109 Financial Instruments, is measured at fair value with changes in fair value recognised in profit or loss. If the contingent consideration is not within the scope of Ind AS 109, it is measured in accordance with the appropriate Ind AS. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and subsequent its settlement is accounted for within equity. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for noncontrolling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in OCI and accumulated in equity as capital reserve. However, if there is no clear evidence of bargain purchase, the entity recognises the gain directly in equity as capital reserve, without routing the same through OCI. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units (Theatrical exhibition unit) that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Goodwill arising from business combination is tested for impairment, considering the integrated business of PVR (Theatrical exhibition unit), as practically it is impossible to allocate to specific cinema location, considering various synergies in term of pricing of ticket, advertisement income, purchasing power and other commercial aspects.

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |644| 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 pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted through goodwill during the measurement period, or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that date. These adjustments are called as measurement period adjustments. The measurement period does not exceed one year from the acquisition date. Computation of Goodwill on consolidation (` in lakhs) Particulars March 31, 2017 March 31, 2016 Investment in equity shares of PVR Pictures Limited 6,000 6,000 Less: PVR Limited’s share in the net assets of its subsidiary PVR Pictures Limited 4,433 4,433 Less: amount pertaining to the production business undertaking of PVR Pictures Limited merged with PVR Limited pursuant to the scheme of arrangement approved by the Court 1,254 1,254 Balance (A) 313 313 Investment in equity shares of Zea Maize Pvt. Ltd. 500 500 Less: PVR Limited share in the net assets of its subsidiary Zea Maize Private Limited 294 294 Balance (B) 206 206 Investment in compulsory convertible preference share capital of Zea Maize Pvt. Ltd. 350 - Less: PVR Limited share in the net assets of its subsidiary Zea Maize Private Limited 164 - Balance (C) 186 - Goodwill (A+B+C) 705 519 Computation of Capital Reserve: (` in lakhs) Particulars March 31, 2017 March 31, 2016 Investment in Equity share capital of PVR Leisure Limited 2,324 2,324 Less: PVR Limited’s share in net assets of its subsidiary 2,081 2,081 Goodwill (A) 243 243 Investment in compulsory convertible preference share capital of PVR Leisure Limited 1,376 1,376 Less: Preference share value in PVR Subsidiary PVR Limited’s share in net assets of its subsidiary 2,004 2,004 Capital Reverse (B) (628) (628) Reversal of Capital Reserve due to merger of PVR Leisure Limited in the Parent Company 385 - Capital Reverse (C) 385 - Net Capital Reserve (A+B+C) - (385)

|645| Chap. 24 – Ind AS 103 — Business Combinations 41. BUSINESS COMBINATIONS (i) Amalgamation of Bijli Holdings Private Limited with PVR Limited Pursuant to the scheme of amalgamation, approved by Hon’ble High Court of Delhi on September 15, 2016, between PVR Limited (the Parent Company) and Bijli holdings Private Limited (BHPL), BHPL was merged with the Parent Company from the appointed date i.e January 01, 2016. BHPL was forming part of the promoter group of the Parent Company, which was holding 10,031,805 equity shares in the Company constituting 21.55% of the Parent Company’s paid-up equity share capital. Consequent upon amalgamation of BHPL with the Parent Company, individual promoters of the Parent Company, directly hold shares in the Parent Company in the same proportion as they held through the erstwhile BHPL. The amalgamation has resulted in simplification of the shareholding structure and reduction of shareholding tiers as well as demonstrates the promoter’s direct commitment to and engagement to the Parent Company. Pursuant to the above, BHPL stands merged with the Parent Company following “Purchase Method” of accounting as per the Accounting standard 14 “Accounting for Amalgamation”, issued by the Institute of Chartered Accountants of India, basis approved scheme by Hon’ble High Court of Delhi. Upon the scheme becoming effective, the authorised share capital of the Parent Company shall automatically stand enhanced by the authorised share capital of BHPL. Assets acquired and liabilities assumed (` in lakhs) Particulars Amount Assets Loans and advances 0.96 Cash and bank balances 77.38 Total A 78.34 Liabilities Trade Payables 21.02 Other current liabilities 0.53 Total B 21.55 Capital reserve (Balancing figure) A-B 56.79 Pursuant to the approved scheme, 10,031,805 fully paid up equity shares of the face value of ` 10 each credited as fully paid up in the share capital of the Parent Company to the members of BHPL in the ratio of their equity shareholding in BHPL. There was no change in the promoter shareholding of the Parent Company, pursuant to this scheme. The promoter continues to hold the same percentage of shares in the Parent Company, pre and immediately post the amalgamation of BHPL. Had the above merger would have been accounted for, following Ind AS 103 ‘Business Combination’ there would not be having any difference in above transaction. (ii) Amalgamation of Lettuce Entertain you Limited, PVR Leisure Limited with PVR Limited Pursuant to the scheme of amalgamation, approved by Hon’ble High Court of Delhi on January 04, 2017, between PVR Limited (the Parent Company) and PVR Leisure Limited (PVR Leisure) and Lettuce Entertain you Limited (Lettuce), later Companies were amalgamated with the Company from the appointed date i.e. April 01, 2015. Lettuce and PVR Leisure are individually referred to as “Amalgamating Company and collectively referred to as “Amalgamating Companies” and the Parent Company is referred to as “Amalgamated Company” for the purpose of this clause. Amalgamating Companies are subsidiaries of the Parent Company and are engaged in similar/related businesses. Through consolidation, the synergies that exist among the entities in terms of similar business processes and resources can be put to the best advantage of the stakeholders.

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |646| Pursuant to the above, Amalgamating Companies stands merged with the Parent Company following “Purchase Method” of accounting as per the Accounting standard 14 “Accounting for Amalgamation”, issued by the Institute of Chartered Accountants of India, basis approved scheme by Hon’ble High Court of Delhi. Upon the scheme becoming effective, the authorised share capital of the Parent Company shall automatically stand enhanced by the authorised share capital of Amalgamating Companies. Assets acquired and liabilities assumed (` in lakhs) Particulars PVR Leisure Limited Lettuce Entertain you Limited Assets Cash and cash equivalents 20.93 29.76 Fixed Assets - 496.32 Inventories - 56.45 Investment – PVR BluO Entertainment Limited 4,340.00 - Deferred Tax Assets - 498.44 Trade receivables - 2.57 Loans and advances 2,458.58 48.40 Other current assets 29.87 - Total 6,849.38 1,131.94 Liabilities Provisions 0.43 2.25 Trade payables 1.54 151.23 Other current liabilities 0.14 48.95 Borrowings - 950 Total 2.11 1,152.42 Net Assets over (liabilities) 6,847.27 (20.49) Add: Net Liability of Lettuce Entertain you Limited (20.49) 20.49 Net value of assets taken over 6,826.78 - Value of Investment of PVR Leisure in PVR Limited 6,281.62 Capital reserve (Balancing Figure) 545.16 Pursuant to the approved scheme, entire paid-up equity and non-cumulative convertible preference share capital of PVR Leisure as held by the Parent Company directly, and the entire paid-up equity share capital of Lettuce held by the Parent Company through PVR Leisure, upon the scheme becoming effective shall stand cancelled on the effective date and no shares of the Parent Company shall be issued or allotted in consideration for amalgamation. Had the Parent Company was required to follow the Ind AS 103, ‘Business Combination” the entities under common control should have used “Pooling of Interest method”, according to which, recognized capital reserve would had been ` 468 lakhs as against ` 545 lakhs recognized in books as per the approved order of Hon’ble High Court. (iii) Acquisition of Cinema exhibition undertaking of DLF Utilities Limited The Parent Company during the year, acquired part of the Cinema exhibition undertaking of DLF Utilities Limited (operated under the brand name of “DT Cinemas”) on a slump sale basis. Last year, in connection with this, Company had deposited ` 5,000 lakhs in an Escrow account. The sale and transfer of the said Cinema exhibition undertaking, as a going concern had been completed on May 31, 2016 and the same has been accounted as per Ind AS 103, “Business combination”.

|647| Chap. 24 – Ind AS 103 — Business Combinations (` In lakhs) Particulars Amount Total Consideration payable for taking the part of the film exhibition business of DLF Utilities 43,250 Fair value of assets acquired (The Parent Company had appointed an Independent valuer to value the assets acquired from DLF Utilities Limited) 9,038 Other net liability related to film exhibition business acquired by the Company (388) Balancing figure recognized as Goodwill 34,600 Out of the total consideration payable to DLF Utilities Limited as mentioned above, ` 10,000 lakhs are payable on obtaining two separate regulatory approvals, ` 5,000 lakhs payable on obtaining each approval. The management at the time of acquisition has assessed that it shall obtain all the approvals shortly and thus no adjustment in this regard are made. The Parent Company during the year has received one such approval and has paid ` 5,000 lakhs accordingly and is confident of receiving the other approval. 15. SUN PHARMACEUTICAL INDUSTRIES LIMITED BUSINESS COMBINATION The Group uses the acquisition method of accounting to account for business combinations that occurred on or after April 01, 2015. The acquisition date is generally the date on which control is transferred to the acquirer. Judgment is applied in determining the acquisition date and determining whether control is transferred from one party to another. Control exists when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through power over the entity. In assessing control, potential voting rights are considered only if the rights are substantive. The Group measures goodwill as of the applicable acquisition date at the fair value of the consideration transferred, including the recognised 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), less the net recognised amount of the identifiable assets acquired and liabilities assumed. When the fair value of the net identifiable assets acquired and liabilities assumed exceeds the consideration transferred, a bargain purchase gain is recognised immediately in the OCI and accumulates the same in equity as Capital Reserve where there exists clear evidence of the underlying reasons for classifying the business combination as a bargain purchase else the gain is directly recognised in equity as Capital Reserve. Consideration transferred includes the fair values of the assets transferred, liabilities incurred by the Group to the previous owners of the acquiree, and equity interests issued by the Group. Consideration transferred also includes the fair value of any contingent consideration. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill or capital reserve, as the case maybe. The subsequent accounting for changes in the fair value of the 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 profit or loss. Consideration transferred does not include amounts related to settlement of pre-existing relationships. A contingent liability of the acquiree is assumed in a business combination only if such a liability represents a present obligation and arises from a past event, and its fair value can be measured reliably. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the noncontrolling interest’s proportionate share of the acquiree’s identifiable net assets. Transaction costs that the Group 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. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |648| above), or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognised at that date. 16. SUZLON ENERGY LIMITED BUSINESS COMBINATIONS AND GOODWILL In accordance with Ind AS 101 provisions related to first time adoption, the Group has elected to apply Ind AS accounting for business combinations prospectively from April 1, 2015. As such, Indian GAAP balances relating to business combinations entered into before that date, including goodwill, have been carried forward. The same first time adoption exemption is also used for joint venture. Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred measured at acquisition date fair value and the amount of any noncontrolling interests in the acquiree. For each business combination, the Group elects whether to measure the noncontrolling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred. At the acquisition date the identifiable assets acquired and the liabilities assumed are recognised at their acquisition date fair values. For this purpose, the liabilities assumed include contingent liabilities representing present obligation and they are measured at their acquisition fair values irrespective of the fact that outflow of resources embodying economic benefits is not probable. However, the following assets and liabilities acquired in a business combination are measured at the basis indicated below: • Deferred tax assets or liabilities, and the assets or liabilities related to employee benefit arrangements are recognised and measured in accordance with Ind AS 12 Income Tax and Ind AS 19 Employee Benefits respectively. • Liabilities or equity instruments related to share based payment arrangements of the acquiree or share – based payments arrangements of the Group entered into to replace share-based payment arrangements of the acquiree are measured in accordance with Ind AS 102 Share-based Payments at the acquisition date. • Assets (or disposal groups) that are classified as held for sale in accordance with Ind AS 105 Noncurrent Assets Held for Sale and Discontinued Operations are measured in accordance with that standard. When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquire. If the business combination is achieved in stages, any previously held equity interest is re-measured at its acquisition date fair value and any resulting gain or loss is recognised in profit or loss or OCI, as appropriate. Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of Ind AS109 Financial Instruments, is measured at fair value with changes in fair value recognised in profit or loss. If the contingent consideration is not within the scope of Ind AS 109, it is measured in accordance with the appropriate Ind AS. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and subsequent its settlement is accounted for within equity. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group reassesses whether it has correctly identified all of the assets

|649| Chap. 24 – Ind AS 103 — Business Combinations acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If there assessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in OCI and accumulated in equity as capital reserve. However, if there is no clear evidence of bargain purchase, the entity recognises the gain directly in equity as capital reserve, without routing the same through OCI. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. 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 pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods. Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted through goodwill during the measurement period, or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognised at that date. These adjustments are called as measurement period adjustments. The measurement period does not exceed one year from the acquisition date. Extract from Independent Auditor’s Report – Note 8 We draw attention to Note 7 of the accompanying standalone IndAS financial statements, whereby the Company has recognised goodwill on amalgamation aggregating to ` 1,059.80 Crore and amortised the same in accordance with the composite scheme of amalgamation and arrangement approved by the National Company Law Tribunal. This accounting treatment is different from that prescribed under Indian Accounting Standard (Ind AS) 103 – Business Combinations in case of common control business combinations as is more fully described in the aforesaid note. Our opinion is not qualified in respect of this matter. 17. TATA MOTORS LIMITED BUSINESS COMBINATION Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. Acquisition related costs are recognized in profit or loss as incurred. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition are recognized at their fair value at the acquisition date, except certain assets and liabilities required to be measured as per the applicable standard. Purchase consideration in excess of the Company’s interest in the acquiree’s net fair value of identifiable assets, liabilities and contingent liabilities is recognized as goodwill. Excess of the Company’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the purchase consideration is recognized, after reassessment of fair value of net assets acquired, in the Capital Reserve.

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |650| 18. TATA POWER LIMITED 45 BUSINESS COMBINATIONS 45.1 Subsidiaries Acquired: ` in crore Name of the acquired Subsidiaries Principal Activity Date of Acquisition Proportion of voting equity interest acquired Consideration transferred Indo Rama Renewable Jath Ltd. (IRRJL) Wind Energy Generation 19th May, 2016 100% 84.13 Welspun Renewable Energy Private Ltd. (WREPL) Renewable Energy Generation 14th September, 2016 100% 3,782.30 Welspun Urja India Ltd. (WUIL) Energy Generation 30th January, 2017 100% 3.76 Total 3,870.19 The above subsidiaries were acquired so as to continue the expansion of the Group’s activities into renewables energy portfolio. 45.2 Consideration transferred ` in crore Cash paid (Excluding acquisition cost) 84.13 3,604.74 3.76 3,692.63 Contingent Consideration Nil 177.56 Nil 177.56 84.13 3,782.30 3.76 3,870.19 Under the Contingent Consideration arrangement, the Group is required to pay additional consideration of ` 177.56 crore to the transferor, if the transferor comply with the certain conditions which are mainly project completion, actual realisation of working capital and Plant Load Factor (PLF) Incentives, the majority of which is expected to be completed within the year of arrangement. ` 177.56 crore represents the estimated fair value of this obligation at the acquisition date. Acquisition related costs amounting to ` 21.31 crore have been excluded from the consideration transferred and have been recognised as an expenses in profit and loss in the current year, within the “Other expenses” line item. 45.3 Assets acquired and liabilities recognised at the date of acquisition ` in crore IRRJL WREPL WUIL Total Current assets Cash and Cash Equivalents 0.04 57.73 0.03 57.80 Bank balances other than above Nil 74.26 Nil 74.26 Current Investments 7.36 30.16 Nil 37.52 Trade and other receivables 20.83 410.65 0.13 431.61 Inventories Nil 21.02 Nil 21.02 Non-Current assets Property, Plant and Equipment 187.70 5,462.30 4.57 5,654.57 Capital Work-in-Progress Nil 406.74 Nil 406.74 Deferred Tax Assets 0.67 36.13 Nil 36.80 Intangible Assets 12.90 1,372.60 Nil 1,385.50 Other Non-Current Assets Nil 391.95 Nil 391.95 Current Liabilities Trade and other Payables (0.81) (395.72) (18.72) (415.25) Borrowings Nil (3.95) Nil (3.95)

|651| Chap. 24 – Ind AS 103 — Business Combinations ` in crore IRRJL WREPL WUIL Total Non-Current liabilities Deferred Tax Labilities (8.05) (262.60) Nil (270.65) Other Non-Current Payables NIl (8.23) (2.30) (10.53) Borrowings (149.61) (5,493.63) Nil (5,643.24) Net identifiable assets acquired 71.03 2,099.41 (16.29) 2,154.15 Consideration transferred 84.13 3,782.30 3.76 3,870.19 Add: Non-Controlling Interest Nil 30.95 (20.05) 10.90 Less: fair value of identifiable net assets acquired. (71.03) (2,099.41) 16.29 (2,154.15) Goodwill arising on acquisition 13.10 1,713.84 Nil 1,726.94 Goodwill arose in the acquisition of above subsidiaries because the cost of the combination included a control premium. In addition, the consideration paid for the combination effectively included amounts in relation to the benefi of expected synergies, revenue growth, future market development and assembled workforce of acquired subsidiaries. These benefi are not recognised separately from goodwill because they do not meet the recognised criteria for identifi intangible assets. None of the goodwill arising on these acquisitions is expected to be deductible for tax purpose. 45.4 Net cash outflow on acquisition of subsidiaries ` in crore 31st March, 2017 Consideration paid in cash 3,692.63 Less: Cash and cash equivalent balance acquired (57.80) 3,634.83 45.5 Impact of acquisitions on the results of the Group From the date of acquisition, these companies have contributed ` 667.31 crore of revenue and ` 105.88 crore to the profit before tax of the Group. If the combination had taken place at the beginning of the year, revenue from continuing operations would have been ` 28,318.33 crore and loss before tax of the group would have been ` 351.46 crore. 19. VEDANTA LIMITED BUSINESS COMBINATION The Group has elected to apply Ind AS 103 accounting for business combinations retrospectively for all past business combinations, and not avail exemptions provided under Ind AS 101. Business acquisitions are accounted for under the purchase method. The acquirer’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under Ind AS 103, are recognised at their fair value at the acquisition date. Excess of purchase consideration and the acquisition date non-controlling interest over the acquisition date fair value of identifiable assets acquired and liabilities assumed is recognised as goodwill. Goodwill arising on acquisitions is reviewed for impairment annually. Where the fair values of the identifiable assets and liabilities exceed the cost of acquisition, the Group reassesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognized at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognized in other

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |652| comprehensive income and accumulated in equity as capital reserve. However, if there is no clear evidence of bargain purchase, the entity recognizes the gain directly in equity as capital reserve, without routing the same through other comprehensive income. Where it is not possible to complete the determination of fair values by the date on which the first postacquisition financial statements are approved, a provisional assessment of fair value is made and any adjustments required to those provisional fair values are finalised within 12 months of the acquisition date. The Group makes adjustments to the provisional fair value amounts recognised at the date of acquisition to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognised as of that date. The Group applies the measurement period adjustments retrospectively to the consolidated financial statements to reflect the measurement period adjustments as retrospectively recorded on the date of the acquisition as if measurement period adjustments had been recorded initially at the date of acquisition. Any non-controlling interest in an acquiree is measured at fair value or as the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets. This accounting choice is made on a transaction by transaction basis. Acquisition expenses are charged to consolidated statement of profit and loss in line with Ind AS 103. Common control transactions A business combination involving entities or businesses under common control is a business combination in which all of the combining entities or businesses are ultimately controlled by the same party or parties both before and after the business combination and the control is not transitory. The transactions between entities under common control are specifically covered by Ind AS 103. Such transactions are accounted for using the pooling-of-interest method. The assets and liabilities of the acquired entity are recognised at their carrying amounts of the ultimate parent entity’s consolidated financial statements with the exception of certain income tax and deferred tax assets. No adjustments are made to reflect fair values, or recognise any new assets or liabilities. The only adjustments that are made are to harmonise accounting policies. The components of equity of the acquired companies are added to the same components within Group equity. 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. The Group’s shares issued in consideration for the acquired companies are recognized from the moment the acquired companies are included in these financial statements and the financial statements of the commonly controlled entities would be combined, retrospectively, as if the transaction had occurred at the beginning of the earliest reporting period presented. However, the prior year comparative information is only adjusted for periods during which entities were under common control. ll

|653| Chap. 25 – Ind AS 104 — Insurance Contracts Chapter 25 Ind AS 104 — Insurance Contracts 1. SHOPPERS STOP LIMITED ACCOUNTING POLICY (EXTRACTS) 2.5 FINANCIAL INSTRUMENTS 2.5.3 Financial guarantee contracts: The Company on a case to case basis elects to account for financial guarantee contracts as a financial instrument or as an insurance contract, as specified in Ind AS 109 on Financial Instruments and Ind AS 104 on Insurance Contracts. The Company has regarded all its financial guarantee contracts as insurance contracts. At the end of each reporting period the Company performs a liability adequacy test, (i.e. it assesses the likelihood of a pay-out based on current undiscounted estimates of future cash flows), and any deficiency is recognized in profit or loss. 2. VEDANTA LIMITED ACCOUNTING POLICY (EXTRACTS) (j) Financial guarantees Financial guarantees issued by the Company on behalf of group companies are designated as ‘Insurance Contracts’. The Company assess at the end of each reporting period whether its recognised insurance liabilities (if any) are adequate, using current estimates of future cash flows under its insurance contracts. If that assessment shows that the carrying amount of its insurance liabilities is inadequate in the light of the estimated future cash flows, the entire deficiency is recognised in profit or loss. VEDANTA RESOURCES PLC 47. COMPANY ACCOUNTING POLICIES FINANCIAL INSTRUMENTS FINANCIAL GUARANTEES Guarantees issued by the Company on behalf of other Group companies are designated as ‘Insurance Contracts’. Accordingly these are shown as contingent liabilities. (note 57). ll

Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |654| Chapter 26 Ind AS 105 — Non-current Assets held for Sale and Discontinued Operations 1. ASIAN PAINTS LIMITED CONSOLIDATED FINANCIAL STATEMENTS Significant Accounting Policies 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 of the assets and actions required to complete such sale indicate that it is unlikely that significant changes to the plan to sell will be made or that the decision to sell will be withdrawn. Also, such assets are classified as held for sale only if the management expects to complete the sale within one year from the date of classification. Non-current assets classified as held for sale are measured at the lower of their carrying amount and the fair value less cost to sell. Non-current assets are not depreciated or amortized. Disclosures Note 12 : Assets Classified as held for Sale As at 31.03.2017 As at 31.03.2016 As at 01.04.2015 Plant and Equipment (i) 0.57 0.96 2.79 Tinting Systems (ii) - - 0.01 Freehold Land (iii) - - 2.07 TOTAL 0.57 0.96 4.87 1. The Company intends to dispose off plant and equipment as it no longer intends to utilise in the next 12 months. It was previously used in its manufacturing facility at Bhandup. A search for a buyer is underway. No impairment loss was recognised on reclassification of the plant & equipment as held for sale and the Company expects the fair value less cost to sell to be higher than carrying amount. 2. As at 01st April, 2015, the Company intended to sell tinting systems as it no longer planned to utilise then in the next 12 months. It was previously given on operating lease to dealers. No impairment loss was recognised on reclassification of tinting systems as held for sale. The same was sold during the year 2015-16. 3. As at 01st April, 2015, the Company intended to dispose off freehold land as it no longer had plans to utilise the same in the next 12 months. It was previously held for setting up a manufacturing plant. No impairment loss was recognised on reclassification of the freehold land as held for sale. The same was sold during the year 2015-16.