2.1 Significant Accounting Policies:
a) Basis of Preparation of Standalone financial
statements:
The financial statement for the year ended 31 March
2025 has been prepared in accordance with Indian
Accounting Standard ('Ind AS'). The Company
is covered under the definition of NBFC and the
Ind AS is applicable under Phase II as defined in
notification dated 30th March 2016 issued by Ministry
of Corporate Affairs (MCA), since the company is a
listed company.
These Standalone financial results have been
prepared in accordance with the recognition
and measurement principles laid down in Indian
Accounting standards prescribed under Section 133
of the Companies Act, 2013 read with the relevant
rules issued there under and the other accounting
principles generally accepted in India and in
accordance with the requirements of Regulation
33 of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations 2015, and relevant
amendment rules issued thereafter and under the
historical cost convention on accrual basis except
for the following items:
These Financial Statements of the Company are
presented as per Schedule III (Division III) of the
Companies Act, 2013 applicable to NBFCs, as
notified by the Ministry of Corporate Affairs (MCA).
These Financial Statements of the Company are
presented in Indian Rupees ("INR”), which is also
the Company's functional currency and all values
are rounded to nearest Millions upto two decimal
places, except otherwise indicated. The Standalone
financial statements for the year ended March 31,
2025 are being authorized for issue in accordance
with a resolution of the directors on May 1,2025.
b) Property, plant and equipment:
Measurement at recognition:
An item of property, plant and equipment that qualifies
as an asset is measured on initial recognition at
cost. Following initial recognition, items of PPE are
carried at its cost less accumulated depreciation and
accumulated impairment losses.
The Company identifies and determines cost of each
part of an item of PPE separately, if the part has a
cost which is significant to the total cost of that item
of PPE and has useful life that is materially different
from that of the remaining item.
The cost of an item of PPE comprises of its
purchase price including import duties and other
non-refundable purchase taxes or levies, directly
attributable cost of bringing the asset to its working
condition for its intended use and the initial estimate
of decommissioning, restoration and similar liabilities,
if any. Any trade discounts and rebates are deducted
in arriving at the purchase price. Cost includes
cost of replacing a part of a plant and equipment
if the recognition criteria are met. Expenses directly
attributable to new manufacturing facility during its
construction period are capitalized if the recognition
criteria are met. Expenses related to plans, designs
and drawings of buildings or plant and machinery is
capitalized under relevant heads of property, plant
and equipment if the recognition criteria are met.
Items such as spare parts, stand-by equipment
and servicing equipment that meet the definition of
property, plant and equipment are capitalized at cost
and depreciated over their useful life. Subsequent
expenditure relating to property, plant and equipment
is capitalized only when it is probable that future
economic benefit associates with these will flow
into the Company and the cost of the item can be
measured reliably.
Items of Property, plant and equipment that have
been retired from active use and are held for disposal
are stated at the lower of their net book value or net
realisable value and are shown separately in the
financial statements.
Gains or losses arising from disposal or retirement
of tangible Property, plant and equipment are
measured as the difference between the net disposal
proceeds and the carrying amount of the asset and
are recognised net, within "Other Income” or "Other
Expenses”, as the case maybe, in the Statement of
Profit and Loss in the year of disposal or retirement.
When the use of a property changes from owner-
occupied to investment property, the property is
reclassified as investment property as its carrying
amount on the date of reclassification.
Depreciation:
Depreciation on each item of property, plant and
equipment is provided using the Straight-Line
Method based on the useful lives of the assets as
estimated by the management and is charged to the
Statement of Profit and Loss. The estimate of the
useful life of the assets has been assessed based
on technical advice which considers the nature of
the asset, the usage of the asset, expected physical
wear and tear, the operating conditions of the asset,
anticipated technological changes, manufacturers
warranties and maintenance support, etc. Significant
components of assets identified separately pursuant
to the requirements under Schedule II of the
Companies Act, 2013 are depreciated separately over
their useful life.
Freehold land is not depreciated. Leasehold land and
Leasehold improvements are amortized over the
period of lease.
The useful lives, residual values of each part of
an item of property, plant and equipment and the
depreciation methods are reviewed at the end of
each financial year. If any of these expectations differ
from previous estimates, such change is accounted
for as a change in an accounting estimate.
Depreciation is charged using the straight line
method based on the useful life of fixed assets as
estimated by the management as specified below.
Depreciation is charged from the month in which new
assets are put to use. No depreciation is charged for
the month in which assets are sold. In the case of
transfer of used fixed assets from group companies,
depreciation is charged over the remaining useful
life of the assets. Individual assets / group of similar
assets costing up to ? 5,000 have been depreciated
in full in the year of purchase. Lease hold land is
depreciated on a straight line basis over the lease
hold period.
and independent technical evaluation carried out by
external valuers the management believes that the useful
lives as given above best represent the period over which
management expects to use these assets. Hence the
useful lives for these assets are different from the useful
lives as prescribed under Part C of Schedule II of the
Companies Act 2013.
Derecognition:
The carrying amount of an item of property, plant
and equipment is derecognized on disposal or when
no future economic benefits are expected from its
use or disposal. The gain or loss arising from the
de-recognition of an item of property, plant and
equipment is measured as the difference between
the net disposal proceeds and the carrying amount of
the item and is recognized in the Statement of Profit
and Loss when the item is derecognized.
Capital work in progress and Capital advances:
Cost of assets not yet ready for intended use, as on
the Balance Sheet date, is shown as capital work in
progress. Advances given towards acquisition of
fixed assets outstanding at each Balance Sheet date
are disclosed as Other Non Financial Assets.
c) Intangible assets:
Measurement at recognition:
Intangible assets acquired separately are measured
on initial recognition at cost. Intangible assets
arising on acquisition of business are measured
at fair value as at date of acquisition. Internally
generated intangibles including research cost are not
capitalized and the related expenditure is recognized
in the Statement of Profit and Loss in the period in
which the expenditure is incurred. Following initial
recognition, intangible assets with finite useful life
are carried at cost less accumulated amortization
and accumulated impairment loss, if any. Intangible
assets with indefinite useful lives, that are acquired
separately, are carried at cost/fair value at the date of
acquisition less accumulated impairment loss, if any.
Expenditure on software development eligible for
capitalisation are carried as Intangible assets under
development where such assets are not yet ready for
their intended use.
Amortization:
Intangible Assets with finite lives are amortized
on a Straight Line basis over the estimated useful
economic life. The amortization expense on
intangible assets with finite lives is recognized in the
Statement of Profit and Loss.
The amortization period and the amortization
method for an intangible asset with finite useful life
is reviewed at the end of each financial year. If any of
these expectations differ from previous estimates,
such change is accounted for as a change in an
accounting estimate.
Derecognition:
The carrying amount of an intangible asset is
derecognized on disposal or when no future
economic benefits are expected from its use or
disposal. The gain or loss arising from the de¬
recognition of an intangible asset is measured as the
difference between the net disposal proceeds and
the carrying amount of the intangible asset and is
recognized in the Statement of Profit and Loss when
the asset is derecognized.
d) Impairment of Non-Financial Assets
Assets that have an indefinite useful life are not
subject to amortization and are tested for impairment
annually or whenever there is an indication that the
asset may be impaired. Assets that are subject
to depreciation and amortization are reviewed
for impairment whenever events or changes in
circumstances indicate that carrying amount may
not be recoverable. Such circumstances include,
though are not limited to, significant or sustained
decline in revenues or earnings and material adverse
changes in the economic environment.
An impairment loss is recognized whenever the
carrying amount of an asset or its cash generating
unit (CGU) exceeds its recoverable amount. The
recoverable amount of an asset is the greater of
its fair value less cost to sell and value in use. To
calculate value in use, the estimated future cash
flows are discounted to their present value using
a pre-tax discount rate that reflects current market
rates and the risk specific to the asset. For an asset
that does not generate largely independent cash
inflows, the recoverable amount is determined for
the CGU to which the asset belongs. Fair value
less cost to sell is the best estimate of the amount
obtainable from the sale of an asset in an arm's
length transaction between knowledgeable, willing
parties, less the cost of disposal. Impairment losses,
If any, are recognized in the Statement of Profit and
Loss and included in depreciation and amortization
expenses. After impairment (if any), depreciation/
amortisation is provided on the revised carrying
amount of the assets over its remaining life.
Impairment losses are reversed in the Statement
of Profit and Loss only to the extent that the asset's
carrying amount does not exceed the carrying
amount that would have been determined if no
impairment loss had previously been recognized.
e) Financial Instruments:
A financial instrument is any contract that gives
rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.
Financial instruments also covers contracts to
buy or sell a non-financial item that can be settled
net in cash or another financial instrument, or by
exchanging financial instruments, as if the contracts
were financial instruments, with the exception of
contracts that were entered into and continue to be
held for the purpose of the receipt or delivery of a
non-financial item in accordance with the entity's
expected purchase, sale or usage requirements.
Financial assets
Initial recognition and measurement:
Trade Receivables, Loans and Deposits are initially
recognized when they are originated. The Company
recognizes a financial asset in its Balance Sheet
when it becomes party to the contractual provisions
of the instrument.
All financial assets are recognized initially at fair value,
plus in the case of financial assets not recorded at
fair value through profit or loss (FVTPL), transaction
costs that are attributable to the acquisition of the
financial asset. However, trade receivables that do
not contain a significant financing component are
measured at transaction price.
Where the fair value of a financial asset at initial
recognition is different from its transaction price, the
difference between the fair value and the transaction
price is recognized as a gain or loss in the Statement
of Profit and Loss at initial recognition if the fair value
is determined through a quoted market price in an
active market for an identical asset (i.e. level 1 input)
or through a valuation technique that uses data from
observable markets (i.e. level 2 input).
In case the fair value is not determined using a level
1 or level 2 input as mentioned above, the difference
between the fair value and transaction price is
deferred appropriately and recognized as a gain or
loss in the Statement of Profit and Loss only to the
extent that such gain or loss arises due to a change
in factor that market participants take into account
when pricing the financial asset.
Trade receivables that do not contain a
significant financing component are measured at
transaction price.
Subsequent measurement:
For subsequent measurement, the Company
classifies a financial asset in accordance with the
below criteria:
i) The Company business model for managing the
financial asset and
ii) The contractual cash flow characteristics of the
financial asset.
Based on the above criteria, the Company classifies
its financial assets into the following categories:
i) Financial assets measured at amortized cost
ii) Financial assets measured at fair value through
other comprehensive income (FVTOCI)
iii) Financial assets measured at fair value through
profit or loss (FVTPL)
i. Financial assets measured at amortized cost:
A financial asset is measured at the amortized
cost if both the following conditions are met:
a) The Company business model objective
for managing the financial asset is to
hold financial assets in order to collect
contractual cash flows, and
b) The contractual terms of the financial
asset give rise on specified dates to cash
flows that are solely payments of principal
and interest (SPPI) on the principal
amount outstanding.
For the purpose of SPPI test, principal is
the fair value of the financial asset at initial
recognition. That principal amount may change
over the life of the financial asset (e.g. if there
are repayments of principal). Interest consists
of consideration for the time value of money,
for the credit risk associated with the principal
amount outstanding during a particular period
of time and for other basic lending risks and
costs, as well as a profit margin. The SPPI
assessment is made in the currency in which
the financial asset is denominated. Contractual
cash flows that are SPPI are consistent with a
basic lending arrangement. Contractual terms
that introduce exposure to risks or volatility in
the contractual cash flows that are unrelated to
a basic lending arrangement, such as exposure
to changes in equity prices or commodity prices,
do not give rise to contractual cash flows that
are SPPI. An assessment of business models
for managing financial assets is fundamental
to the classification of a financial asset. The
Company determines the business models
at a level that reflects how financial assets
are managed together to achieve a particular
business objective. The Company business
model does not depend on management's
intentions for an individual instrument, therefore
the business model assessment is performed
at a higher level of aggregation rather than on
an instrument-by-instrument basis.
This category generally applies to cash and bank
balances, trade receivables, loans and other
financial assets of the Company. Such financial
assets are subsequently measured at amortized
cost using the effective interest method.
Under the effective interest method, the future
cash receipts are exactly discounted to the
initial recognition value using the effective
interest rate. The cumulative amortization using
the effective interest method of the difference
between the initial recognition amount and
the maturity amount is added to the initial
recognition value (net of principal repayments,
if any) of the financial asset over the relevant
period of the financial asset to arrive at the
amortized cost at each reporting date. The
corresponding effect of the amortization under
effective interest method is recognized as
interest income over the relevant period of the
financial asset.
The amortized cost of a financial asset is also
adjusted for loss allowance, if any.
ii. Financial assets measured at FVTOCI:
A financial asset is measured at FVTOCI if both
of the following conditions are met:
a) The business model objective for
managing the financial asset is achieved
both by collecting contractual cash flows
and selling the financial assets, and
b) The contractual terms of the financial
asset give rise on specified dates to
cash flows that are solely payments of
principal and interest on the principal
amount outstanding.
Such financial assets are measured initially
as well as at each reporting date at fair value.
Fair value changes are recognized in the Other
Comprehensive Income (OCI). However, the
Company recognizes interest income and
impairment losses and its reversals in the
Statement of Profit and Loss.
On Derecognition of such financial assets,
cumulative gain or loss previously recognized
in OCI is reclassified from equity to Statement
of Profit and Loss.
As at the balance sheet date, there are no
financial assets which are measured at FVOCI.
iii. Investments in equity instruments at FVTOCI:
On initial recognition, the Company can make
an irrevocable election (on an instrument-by-
instrument basis) to present the subsequent
changes in fair value in other comprehensive
income pertaining to investments in equity
instruments. This election is not permitted if
the equity investment is held for trading. These
elected investments are initially measured at fair
value plus transaction costs. Subsequently, they
are measured at fair value with gains and losses
arising from changes in fair value recognised in
other comprehensive income and accumulated
in the 'Reserve for equity instruments through
other comprehensive income'. The cumulative
gain or loss is not reclassified to profit or loss on
disposal of the investments. Dividend from these
investments are recognised in the Statement
of Profit and Loss when the Company right
to receive dividends is established. As at the
reporting dates, there are no equity instruments
measured at FVOCI.
iv. Investments in equity instruments of
subsidiaries & associates
Investments in equity instruments of
subsidiaries are carried at cost less any
Provision for impairment. Investments are
reviewed for impairment if events or changes
in circumstances indicate that the carrying
amount may not be recoverable
v. Financial assets measured at FVTPL:
A financial asset is measured at FVTPL unless
it is measured at amortized cost or at FVTOCI
as explained above. This is a residual category
applied to all other investments of the Company
excluding investments in subsidiaries. Such
financial assets are subsequently measured
at fair value at each reporting date. Fair value
changes are recognized in the Statement of
Profit and Loss. Further, the Company, through
an irrevocable election at initial recognition,
has measured certain investments in equity
instruments at FVTPL. The Company has made
such election on an instrument by instrument
basis. These equity instruments are neither held
for trading nor are contingent consideration
recognized under a business combination.
Pursuant to such irrevocable election,
subsequent changes in the fair value of such
equity instruments are recognized in Statement
of Profit and Loss. The Company recognizes
dividend income from such instruments in the
Statement of Profit and Loss.
Reclassifications:
If the business model under which the
Company holds financial assets changes, the
financial assets affected are reclassified. The
classification and measurement requirements
related to the new category apply prospectively
from the first day of the first reporting period
following the change in business model
that results in reclassifying the Company's
financial assets. During the current financial
year and previous accounting period there
was no change in the business model under
which the Company holds financial assets
and therefore no reclassifications were
made. Changes in contractual cash flows are
considered under the accounting policy on
modification and derecognition of financial
assets described below.
Derecognition:
A financial asset (or, where applicable, a part
of a financial asset or part of a similar financial
assets) is derecognized (i.e. removed from the
Balance Sheet) when any of the following occurs:
i. The contractual rights to cash flows from the
financial asset expires;
ii. The Company transfers its contractual rights
to receive cash flows of the financial asset and
has substantially transferred all the risks and
rewards of ownership of the financial asset;
iii. The Company retains the contractual rights to
receive cash flows but assumes a contractual
obligation to pay the cash flows without material
delay to one or more recipients under a 'pass¬
through' arrangement (thereby substantially
transferring all the risks and rewards of
ownership of the financial asset);
iv. The Company neither transfers nor retains,
substantially all risk and rewards of ownership,
and does not retain control over the
financial asset.
In cases where Company has neither transferred nor
retained substantially all of the risks and rewards
of the financial asset, but retains control of the
financial asset, the Company continues to recognize
such financial asset to the extent of its continuing
involvement in the financial asset. In that case, the
Company also recognizes an associated liability.
The financial asset and the associated liability are
measured on a basis that reflects the rights and
obligations that the Company has retained.
On derecognition of a financial asset the difference
between the carrying amount and the consideration
received is recognized in the Statement of Profit
and Loss.
Impairment of financial assets:
The Company applies Expected Credit Loss (ECL)
model for measurement and recognition of loss
allowance on the following:
i. Trade receivables and lease receivables
ii. Financial assets measured at amortized
cost (other than trade receivables and lease
receivables)
iii. Financial assets measured at fair value through
other comprehensive income (FVTOCI)
In case of trade receivables and lease receivables,
the Company follows a simplified approach wherein
an amount equal to lifetime ECL is measured and
recognised as loss allowance.
In case of other assets (listed as ii and iii above), the
Company determines if there has been a significant
increase in credit risk of the financial asset since
initial recognition. If the credit risk of such assets
has not increased significantly, an amount equal
to 12-month ECL is measured and recognized as
loss allowance. However, if credit risk has increased
significantly, an amount equal to lifetime ECL is
measured and recognised as loss allowance.
Subsequently, if the credit quality of the financial asset
improves such that there is no longer a significant
increase in credit risk since initial recognition, the
Company reverts to recognizing impairment loss
allowance based on 12-month ECL.
ECL is the difference between all contractual cash
flows that are due to the Company in accordance
with the contract and all the cash flows that the entity
expects to receive (i.e., all cash shortfalls) discounted
at the original effective interest rate.
Lifetime ECL are the expected credit losses resulting
from all possible default events over the expected life
of a financial asset. 12-month ECL area portion of the
lifetime ECL which result from default events that are
possible within 12 months from the reporting date.
ECL are measured in a manner that they reflect
unbiased and probability weighted amounts
determined by a range of outcomes, taking into
account the time value of money and other
reasonable information available as a result of past
events, current conditions and forecasts of future
economic conditions.
As a practical expedient, the Company uses a
provision matrix to measure lifetime ECL on its
portfolio of trade receivables. The provision matrix
is prepared based on historically observed default
rates over the expected life of trade receivables and
is adjusted for forward-looking estimates. At each
reporting date, the historically observed default
rates and changes in the forward-looking estimates
are updated.
Financial Liabilities and equity:
Initial recognition and measurement:
The Company recognizes a financial liability in
its Balance Sheet when it becomes party to the
contractual provisions of the instrument. All financial
liabilities are recognized initially at fair value minus,
in the case of financial liabilities not recorded at fair
value through profit or loss (FVTPL), transaction
costs that are attributable to the acquisition of the
financial liability.
Where the fair value of a financial liability at initial
recognition is different from its transaction price, the
difference between the fair value and the transaction
price is recognized as a gain or loss in the Statement
of Profit and Loss at initial recognition if the fair value
is determined through a quoted market price in an
active market for an identical asset (i.e. level 1 input)
or through a valuation technique that uses data from
observable markets (i.e. level 2 input).
In case the fair value is not determined using a level
1 or level 2 input as mentioned above, the difference
between the fair value and transaction price is
deferred appropriately and recognized as a gain or
loss in the Statement of Profit and Loss only to the
extent that such gain or loss arises due to a change
in factor that market participants take into account
when pricing the financial liability.
Subsequent measurement:
All financial liabilities are initially recognised at fair
value net of transaction cost that are attributable
to the separate liabilities. All financial liabilities are
subsequently measured at amortised cost using the
effective interest method or at FVTPL.
Financial liabilities are classified as at FVTPL when
the financial liability is either contingent consideration
recognised by the Company as an acquirer in a
business combination to which Ind AS 103 applies
or is held for trading or it is designated as at FVTPL.
Financial liabilities that are not held-for-trading and
are not designated as at FVTPL are measured at
amortised cost. The carrying amounts of financial
liabilities that are subsequently measured at
amortised cost are determined based on the effective
interest method.
The effective interest method is a method of
calculating the amortised cost of a financial liability
and of allocating interest expense over the relevant
period. The effective interest rate is the rate that
exactly discounts estimated future cash payments
(including all fees paid or received that form an
integral part of the effective interest rate, transaction
costs and other premiums or discounts) through
the expected life of the financial liability, or (where
appropriate) a shorter period, to the amortised cost
of a financial liability.
Equity instruments:
An equity instrument is any contract that evidences
a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments
issued by the Company are recognised at the
proceeds received, net of direct issue costs.
Derecognition:
A financial liability is derecognized when the obligation
under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced
by another from the same lender on substantially
different terms, or the terms of an existing liability
are substantially modified, such an exchange or
modification is treated as the derecognition of the
original liability and the recognition of a new liability.
The difference between the carrying amount of the
financial liability derecognized and the consideration
paid is recognized in the Statement of Profit and Loss.
f) Fair Value:
The Company measures financial instruments at
fair value in accordance with the accounting policies
mentioned above. Fair value is the price that would
be received to sell an asset or paid to transfer a
liability in an orderly transaction between market
participants at the measurement date. The fair value
measurement is based on the presumption that the
transaction to sell the asset or transfer the liability
takes place either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most
advantages market for the asset or liability.
The fair value of an asset or liability is measured using
the assumptions that market participants would
use when pricing the asset or liability, assuming
that market participants act in their economic best
interest. The Company uses valuation techniques that
are appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximising the use of relevant observable inputs and
minimising the use of unobservable inputs.
All assets and liabilities for which fair value is
measured or disclosed in the financial statements
are categorized within the fair value hierarchy that
categorizes into three levels, described as follows,
the inputs to valuation techniques used to measure
value. The fair value hierarchy gives the highest
priority to quoted prices in active markets for identical
assets or liabilities (Level 1 inputs) and the lowest
priority to unobservable inputs (Level 3 inputs).
Level 1 — quoted (unadjusted) market prices in
active markets for identical assets or liabilities
Level 2 — inputs other than quoted prices included
within Level 1 that are observable for the asset or
liability, either directly or indirectly
Level 3 — inputs for assets or liabilities that are not
based on observable market data.
For assets and liabilities that are recognized in the
financial statements at fair value on a recurring
basis, the Company determines whether transfers
have occurred between levels in the hierarchy by re¬
assessing categorization at the end of each reporting
period and discloses the same.
g) Foreign Currency Translation:
These financial statements are presented in Indian
Rupees, which is the Company's functional currency.
i) Functional and presentation currencies:
Items included in the Standalone Financial
Statements are measured using the currency of
the primary economic environment in which the
entity operates ('the functional currency'). The
financial statements are presented in INR which
is the functional and presentation currency
for Company.
ii) Transactions & Balances:
Foreign currency transactions are translated into
the functional currency at the exchange rates on
the date of transaction. Foreign exchange gains
and losses resulting from settlement of such
transactions and from translation of monetary
assets and liabilities at the year-end exchange
rates are generally recognized in the Statement
Profit and Loss. They are deferred in equity if
they relate to qualifying cash flow hedges.
All other foreign exchange gains and losses are
presented in the statement of profit and loss on
a net basis.
Non-monetary foreign currency items are
carried at cost and accordingly the investments
in shares of foreign subsidiaries are expressed
in Indian currency at the rate of exchange
prevailing at the time when the original
investments are made or fair values determined.
iii) Foreign operations:
The results and financial position of foreign
operations that have a functional currency
different from the presentation currency are
translated into the presentation currency
as follows:
• assets and liabilities are translated at the
closing rate as on that balance sheet date
• income and expenses are translated at
average exchange rates, and
• all resulting exchange differences are
recognised in other comprehensive income.
On disposal of a foreign operation, the
associated exchange differences are
reclassified to Statement of Profit and Loss as
part of the gain or loss on disposal.
h) Income Taxes:
Tax expense is the aggregate amount included in
the determination of profit or loss for the period in
respect of current tax and deferred tax.
Current tax:
Provision for current tax is made as per the
provisions of the Income Tax Act, 1961. Current
income tax assets and liabilities are measured at the
amount expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws used
to compute the amount are those that are enacted or
substantively enacted, at the reporting date. Current
income tax relating to items recognised outside
profit or loss is recognised outside profit or loss
(either in other comprehensive income or in equity).
Management periodically evaluates positions taken
in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation
and establishes provisions where appropriate.
Deferred tax:
Deferred tax is provided using the balance sheet
method on temporary differences between the tax
bases of assets and liabilities and their carrying
amounts for financial reporting purposes as at
the reporting date. Deferred tax is recognized on
temporary differences between the carrying amounts
of assets and liabilities in the financial statements and
the corresponding tax bases used in the computation
of taxable profit under Income tax Act, 1961.
Deferred tax liabilities are generally recognized for
all taxable temporary differences. However, in case
of temporary differences that arise from initial
recognition of assets or liabilities in a transaction
(other than business combination) that affect
neither the taxable profit nor the accounting profit,
deferred tax liabilities are not recognized. Also, for
temporary differences if any that may arise from
initial recognition of goodwill, deferred tax liabilities
are not recognized.
Deferred tax assets are generally recognized for all
deductible temporary differences to the extent it is
probable that taxable profits will be available against
which those deductible temporary difference can be
utilized. In case of temporary differences that arise
from initial recognition of assets or liabilities in a
transaction (other than business combination) that
affect neither the taxable profit nor the accounting
profit, deferred tax assets are not recognized.
The tax effects of income tax losses, available for
carry forward, are recognised as deferred tax asset,
when it is probable that future taxable profits will be
available against which these losses can be set-off.
The carrying amount of deferred tax assets is
reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to allow
the benefits of part or all of such deferred tax assets
to be utilized.
The deferred tax assets (net) and deferred tax
liabilities (net) are determined separately for the
Parent and each subsidiary company, as per their
applicable laws and then aggregated.
Deferred tax assets and liabilities are measured at
the tax rates that have been enacted or substantively
enacted by the Balance Sheet date and are expected
to apply to taxable income in the years in which those
temporary differences are expected to be recovered
or settled.
Presentation of current and deferred tax:
Current and deferred tax are recognized as income
or an expense in the Statement of Profit and Loss,
except when they relate to items that are recognized
in Other Comprehensive Income, in which case,
the current and deferred tax income/expense are
recognized in Other Comprehensive Income.
The Company offsets current tax assets and current
tax liabilities, where it has a legally enforceable
right to set off he recognized amounts and where it
intends either to settle on a net basis, or to realize the
asset and settle the liability simultaneously. In case
of deferred tax assets and deferred tax liabilities,
the same are offset if the Company has a legally
enforceable right to set off corresponding current
tax assets against current tax liabilities and the
deferred tax assets and deferred tax liabilities relate
to income taxes levied by the same tax authority on
the Company.
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