NOTE: 02 MATERIAL ACCOUNTING POLICIES
2.1 STATEMENT OF COMPLIANCE
These financial statements are prepared and presented in
accordance with the Indian Accounting Standards (Ind AS)
notified under the Companies (Indian Accounting Standards)
Rules, 2015 as amended by the Companies (Indian Accounting
Standards) (Amendment) Rules, 2016 notified under Section
133 of the Companies Act, 2013, the relevant provisions of
the Companies Act, 2013 ("the Act'') and guidelines issued
by the Securities and Exchange Board of India (SEBI), as
applicable. The financial statements are approved by the
Board of Directors of the Company at their meeting held on
17th April 2026.
2.2.1 BASIS OF PREPARATION
The financial statements are prepared and presented on
the going concern basis and at historical cost, except for the
following assets and liabilities which have been measured at
fair value:
- certain financial assets & liabilities at fair value (refer
accounting policy 2.9 on financial Instruments).
- employee's Defined Benefit Plan as per actuarial
valuation
Historical cost is generally based on the fair value of the
consideration given in exchange for goods and services. 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
• I n the absence of a principal market, in the most
advantageous market for the asset or liability
The principal or the most advantageous market must be
accessible by the Company.
The fair value of an asset or a 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.
A fair value measurement of a non-financial asset takes into
account a market participant's ability to generate economic
benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the
asset in its highest and best use.
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.
The Company presents its balance sheet in order of liquidity.
An analysis regarding recovery or settlement within 12
months after the reporting date 31st March 2026, and more
than 12 months after the reporting date 31st March 2026, is
presented in Note 32.
Financial assets and liabilities are generally reported gross
in the balance sheet. They are only offset and reported
net when, in addition to having an unconditional legally
enforceable right to offset the recognised amounts without
being contingent on a future event, the parties also intend to
settle on a net basis in all of the following circumstances:
• The normal course of business
• The event of default
2.2.2 BASIS OF ACCOUNTING
To provide more reliable and relevant information about the
effect of certain items in the Balance Sheet and Statement of
Profit and Loss, the Company has changed the classification of
certain items. Previous year's figures have been re-grouped
or reclassified, to confirm to such current year's grouping/
classifications. There is no impact on Equity or Net profit due
to these regrouping/reclassifications.
2.3 FUNCTIONAL AND PRESENTATION
CURRENCY:
The financial statements are presented in Indian Rupees,
which are the functional currency of the Company and the
currency of the primary economic environment in which the
Company operates.
2.4 PROPERTY, PLANT AND EQUIPMENT (PPE) &
DEPRECIATION:
Property, plant and equipment are stated at acquisition
or construction cost less accumulated depreciation and
impairment loss. Cost comprises the purchase price and any
attributable cost of bringing the asset to its location and
working condition for its intended use, including relevant
borrowing costs and any expected costs of decommissioning.
If significant parts of an item of PPE have different useful
lives, then they are accounted for as separate items (major
components) of PPE. Each part of an item of property, plant
and equipment with a cost that is significant in relation to
the total cost of the item is depreciated separately.
When significant parts of Property, Plant and Equipment
are required to be replaced at intervals, the Company
recognises such parts as individual assets with specific useful
lives and depreciates them accordingly. Likewise, when a
major inspection is performed, its cost is recognised in the
carrying amount of the Property, Plant and Equipment as
a replacement if the recognition criteria are satisfied. Any
trade discounts and rebates are deducted in arriving at the
purchase price.
Depreciation on Property, Plant and Equipment is provided
on Straight Line basis using the rates arrived at based on the
useful lives as specified in the Schedule II of the Companies
Act, 2013 or estimated by the management. The Company
has used the following useful life to provide depreciation on
its Property, Plant and Equipment.
The useful life of assets different from those prescribed in
Schedule II has been estimated by management supported
by the Internal Technical assessments and Policies.
*In the case of Furniture & Fixtures fitted within premises,
Depreciation calculated based on lease period taking into
account the secondary lease period or 7 years whichever
is less.
#In the case of vehicles, depreciation calcu lated based on the
period mentioned in the Group vehicle policy. As per policy, an
employee has the choice to purchase the vehicle after 4 Years
or 5 Years as per the applicable job band.
Property, Plant and Equipment, individually costing less
than Rupees five thousand are fully depreciated in the year
of purchase.
Depreciation on the Property, Plant and Equipment added/
disposed off/discarded during the year is provided on pro¬
rata basis with reference to the month of addition/disposal/
discarding.
Gains or losses arising from de-recognition of Property, Plant
and Equipment are measured as the difference between the
net disposal proceeds and the carrying amount of the asset
and are recognised in the statement of profit and loss when
the asset is derecognised.
2.4.1 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 in Other
Non Financial Assets.
2.5 INTANGIBLE ASSETS & AMORTISATION
Intangible assets acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible
assets are carried at cost less any accumulated amortisation
and accumulated impairment losses. Capitalised costs
include direct costs of implementation and expenses directly
attributable to the development of the software. All other
expenses on existing intangible assets, including day-to-day
maintenance expenditure are charged to the statement of
profit and loss for the period during which such expenses
are incurred.
The useful lives of intangible assets are assessed as either
finite or indefinite.
Intangible assets with finite lives are amortised over the useful
economic life and assessed for impairment whenever there
is an indication that the intangible asset may be impaired.
The amortisation period and the amortisation method for an
intangible asset with a finite useful life are reviewed at least
at the end of each reporting period. Changes in the expected
useful life or the expected pattern of consumption of future
economic benefits embodied in the asset are considered to
modify the amortisation period or method, as appropriate,
and are treated as changes in accounting estimates. The
amortisation expense on intangible assets with finite lives
is recognised in the statement of profit and loss unless such
expenditure forms part of carrying value of another asset.
Computer software cost capitalised is amortised over the
estimated useful life of 6 years on a straight-line basis.
2.5.1 Intangible Assets Under Development
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.
2.6 IMPAIRMENT
The carrying amounts of assets are reviewed at each balance
sheet date if there is any indication of impairment based on
internal/external factors. An impairment loss is recognised
wherever the carrying amount of an asset exceeds its
recoverable amount. The recoverable amount is the greater
of the assets' net selling price and value in use. In assessing
value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of
money and risks specific to the asset.
After impairment, depreciation is provided on the revised
carrying amount of the assets over its remaining useful life.
2.7 BORROWING COSTS
Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily takes
a substantial period of time to get ready for its intended use
or sale are capitalised as part of the cost of the assets. All
other borrowing costs are expensed in the period in which
they occur. Borrowing costs consist of interest and other
costs that an entity incurs in connection with the borrowing
of funds.
2.8 LEASES
The Company's lease asset classes primarily consist of leases
for land and buildings. The Company assesses whether
a contract contains a lease, at inception of a contract. A
contract is, or contains, a lease if the contract conveys the
right to control the use of an identified asset for a period
of time in exchange for consideration. To assess whether a
contract conveys the right to control the use of an identified
asset, the Company assesses whether: (1) the contract
involves the use of an identified asset (2) the Company has
substantially all of the economic benefits from use of the
asset through the period of the lease and (3) the Company
has the right to direct the use of the asset.
At the date of commencement of the lease, the Company
recognises right - of - use asset ("ROU") and a corresponding
lease liability for all lease arrangements in which it is a lessee,
except for leases with a term of twelve months or less (short¬
term leases) and low value leases. For these short-term and
low value leases, the Company recognises the lease payments
as an operating expense on a straight-line basis over the term
of the lease.
Certain lease arrangements includes the options to extend
or terminate the lease before the end of the lease term. ROU
assets and lease liabilities include these options when it is
reasonably certain that they will be exercised.
The right-of-use assets are initially recognised at cost, which
comprises the initial amount of the lease liability adjusted for
any lease payments made at or prior to the commencement
date of the lease plus any initial direct costs less any lease
incentives. They are subsequently measured at cost less
accumulated depreciation and impairment losses.
Right-of-use assets are depreciated from the commencement
date on a straight-line basis over the shorter of the lease term
and useful life of the underlying asset. Right of use assets are
evaluated for recoverability whenever events or changes in
circumstances indicate that their carrying amounts may not
be recoverable. For the purpose of impairment testing, the
recoverable amount (i.e. the higher of the fair value less cost
to sell and the value - in - use) is determined on an individual
asset basis unless the asset generates cash flows that
are largely dependent of those from other assets. In such
cases, the recoverable amount is determined for the Cash
Generating Unit (CGU) to which the asset belongs.
The lease liability is initially measured at amortised cost at
the present value of the future lease payments. The lease
payments are discounted using the interest rate implicit in
the lease or, if not readily determinable, using the incremental
borrowing rates in the country of domicile of the leases.
Lease liabilities are remeasured with a corresponding
adjustment to the related right of use asset if the Company
changes its assessment on exercise of an extension or a
termination option.
Lease liability and ROU assets have been separately presented
in the Balance Sheet and lease payments have been classified
as financing cash flows.
2.9 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 to another entity.
2.9.1. Financial Asset
2.9.1.1 Initial Recognition and Measurement
The classification of financial instruments at initial recognition
depends on their contractual terms and the business model
for managing the instruments. Financial instruments are
initially measured at their fair value, Transaction costs are
added to, or subtracted from, the said fair value except in
the case of financial assets and financial liabilities recorded
at FVTPL. However, trade receivables are measured at the
transaction price.
The purchase or sale of financial assets that require delivery
of assets within a time frame established by regulation or
convention in the marketplace are recognised on the trade
date i.e. the date that the Company commits to purchase or
sell the asset.
2.9.1.2 Subsequent Measurement
For the purpose of subsequent measurement, financial assets
are classified as below:
i) Financial instruments at amortised cost
i i) Financial instruments at fair value through other
comprehensive income (FVTOCI)
iii) Financial instruments, derivatives and equity
instruments at fair value through profit or loss (FVTPL)
iv) Equity instruments measured at fair value through
other comprehensive income (FVTOCI)
(i) Financial assets measured at amortised cost
A 'Financial instrument' is measured at the amortised
cost if both the following conditions are met:
The asset is held within a business model whose
objective is to hold assets for collecting contractual
cash flows, and
Contractual terms of the asset give rise on specified
dates to cash flows that are solely payments of principal
and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are
subsequently measured at amortised cost using the
effective interest rate (EIR) method. Amortised cost
is calculated by taking into account any discount or
premium on acquisition and fees or costs that are
an integral part of the EIR. The EIR amortisation is
included in finance income in the profit or loss. The
losses arising from impairment are recognised in the
profit or loss. This category generally applies to trade
and other receivables.
(ii) Financial assets at fair value through other
comprehensive income (FVTOCI):
A 'Financial Instrument' is classified as at the FVTOCI if
both of the following criteria are met:
a) The objective of the business model is achieved
both by collecting contractual cash flows and
selling the financial assets, and
b) The asset's contractual cash flows represent SPPI.
Financial Instruments included within the FVTOCI
category are measured initially as well as at each
reporting date at fair value. Fair value movements are
recognised in the other comprehensive income (OCI).
However, the Company recognises interest income,
impairment losses & reversals and foreign exchange
gain or loss in the P&L. On de- recognition of the asset,
cumulative gain or loss previously recognised in OCI is
reclassified from the equity to P&L. Interest earned
whilst holding FVTOCI Financial Instrument is reported
as interest income using the EIR method.
(iii) Financial Instrument at FVTPL
FVTPL is a residual category for Financial Instruments.
Any Financial Instrument, which does not meet the
criteria for categorisation as at amortised cost or as
FVTOCI, is classified as at FVTPL.
In addition, the Company may elect to designate a
Financial Instrument, which otherwise meets amortised
cost or FVTOCI criteria, as at FVTPL. However, such an
election is allowed only if doing so reduces or eliminates a
measurement or recognition inconsistency (referred to
as 'accounting mismatch'). The Company has classified
the current investments held as investment in securities
(WDM portfolio) at FVTPL.
Financial Instruments included within the FVTPL
category are measured at fair value with all changes
recognised in the P&L.
(iv) Equity Investments
All equity investments in scope of IND AS 109 are
measured at fair value and the Company may make an
irrevocable election to present in other comprehensive
income subsequent changes in the fair value. The
Company makes such election on an instrument by
instrument basis. The classification is made on initial
recognition and is irrevocable.
If the Company decides to classify an equity instrument
as at FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognised in the
OCI. There is no recycling of the amount from OCI to P&L,
even on sale of investment. However, the group may
transfer the cumulative gain or loss within equity.
Equity instruments included within the FVTPL category
are measured at fair value with all changes recognised
in the P&L.
2.9.I.3. De-Recognition of Financial Assets
Financial assets are de-recognised when the contractual
rights to the cashflows from the financial asset expire
or the financial asset is transferred, and the transfer
qualifies for de-recognition. On de-recognition of a financial
asset in its entirety the difference between the carrying
amount (measured at the date of de-recognition) and the
consideration received (including any new asset obtained less
any new liability assumed) shall be recognised in Statement
of profit and loss.
2.9.1.4 Impairment of Financial Assets
Financial assets, other than those at FVTPL, are assessed
for indicators of impairment at the end of each reporting
period. In the case of trade receivables, the Company
follows the simplified approach permitted by Ind AS 109 -
Financial Instruments - for recognition of impairment loss
allowance. The application of the simplified approach does
not require the Company to track changes in credit risk of
trade receivable.
The Company calculates the expected credit losses on
trade receivables using a provision matrix on the basis of its
historical credit loss experience.
In this approach, assets are grouped on the basis of similar
credit characteristics such as industry, customer segment,
past due status and other factors which are relevant to
estimate the expected cash loss from these assets.
2.9.1.5. Other Financial Assets
Other financial assets are tested for impairment based on
significant change in credit risk since initial recognition and
impairment is measured based on probability of default over
the lifetime when there is significant increase in credit risk.
2.9.2 Financial Liabilities
Financial liabilities are classified, at initial recognition,
- as financial liabilities at fair value through profit or loss,
- loans and borrowings,
- payables
All financial liabilities are recognised initially at fair value
and, in the case of loans and borrowings & payables, net
of directly attributable transaction costs. The Company's
financial liabilities include trade and other payables, loans
and borrowings including bank overdrafts.
2.9.2.1. Subsequent Measurement:
The measurement of financial liabilities depends on their
classification, as described below:
2.9.2.1.1. Financial liabilities at FVTPL
Financial liabilities at fair value through profit or loss include
financial liabilities held for trading and financial liabilities
designated upon initial recognition as at fair value through
profit or loss.
Financial liabilities designated upon initial recognition at fair
value through profit or loss are designated as such at the
initial date of recognition, and only if the criteria in IND AS
109 are satisfied.
For liabilities designated as FVTPL, fair value gains/losses
attributable to changes in own credit risk is recognised in OCI.
These gains/losses are not subsequently transferred to P&L.
However, the Company may transfer the cumulative gain or
loss within equity.
All other changes in fair value of such liability are recognised
in the statement of profit or loss. The Company has not
designated any financial liability as at fair value through profit
and loss.
2.9.2.1.2. Loans & Borrowings:
After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortised cost
using the EIR method. Gains and losses are recognised in profit
or loss when the liabilities are derecognised as well as through
the EIR amortisation process.
Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that
are an integral part of the EIR. The EIR amortisation is included
as finance costs in the statement of profit and loss
2.9.2.1.3. De-recognition of financial liabilities:
A financial liability shall be de-recognised when, and only
when, it is extinguished i.e. when the obligation specified in
the contract is discharged or cancelled or expires.
2.10 Investment in Securities
Securities acquired with the intention to trade are classified
as Investment. Investments are valued at market/fair value.
The profit or loss from the sale of investment is recognised
on trade date or settlement date in the Statement of Profit
and Loss according to the nature of investment.
2.11. Cash and Cash Equivalents
Cash and cash equivalents in the balance sheet comprise
cash at bank and in hand and short-term investments with
an original maturity of three months or less which are subject
to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and
cash equivalents consist of cash and short-term deposits,
as defined above, net of outstanding bank overdrafts as
they are considered an integral part of the Company's
cash management.
2.12. FAIR VALUE MEASUREMENT
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 the
liability; or In the absence of a principal market, in the most
advantageous market for the asset or liability, the principal
or the most advantageous market must be accessible by
the Company.
The fair value of an asset or a 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.
A fair value measurement of a non-financial asset takes into
account market participant's ability to generate economic
benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the
asset in its highest and best use.
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 categorised
within the fair value hierarchy, described as follows, based
on the lowest level input that is significant to the fair value
measurement as a whole:
Level 1 - Quoted (unadjusted) market prices in active markets
for identical assets or liabilities.
Level 2 - Valuation techniques for which the lowest level input
that is significant to the fair value measurement is directly
or indirectly observable.
Level 3 - Valuation techniques for which the lowest level
input that is significant to the fair value measurement
is unobservable.
For assets and liabilities that are recognised in the financial
statements on a recurring basis, the Company determines
whether transfers have occurred between levels in the
hierarchy by re-assessing categorisation (based on the lowest
level input that is significant to the fair value measurement
as a whole) at the end of each reporting period.
Management determines the policies and procedures for
both recurring fair value measurement, such as derivative
instruments and unquoted financial assets measured at fair
value, and for non-recurring measurement, such as assets
held for disposal in discontinued operations.
2.13. IMPAIRMENT OF NON-FINANCIAL ASSETS
The Company assesses at each reporting date whether
there is an indication that an asset may be impaired. If any
such indication exists or when annual impairment testing
for any asset is required, the Company estimates the assets
recoverable amount. An assets recoverable amount is the
higher of an assets fair value less cost of disposal and its
value in use.
Recoverable amount is determined for an individual asset,
unless the asset does not generate cash inflow that is largely
independent of those from other assets or group of assets.
When the carrying amount of an asset exceeds its recoverable
amount, the asset is considered impaired and is written down
to it recoverable amount.
2.14. REVENUE RECOGNITION
Revenue (other than for those items to which Ind AS 109
Financial Instruments are applicable) is measured at
transaction price i.e. the amount of consideration to which the
Company expects to be entitled in exchange for transferring
promised goods or services to the customer, excluding
amounts collected on behalf of third parties. The Company
considers the terms of the contract and its customary
business practices to determine the transaction price.
Where the consideration promised is variable, the Company
excludes the estimates of variable consideration that
are constrained. Ind AS 115 Revenue from contracts
with customers outlines a single comprehensive model
of accounting for revenue arising from contracts
with customers.
The Company recognises revenue from contracts with
customers based on a five-step model as set out in Ind AS 115:
Step 1: Identify contract(s) with a customer: A contract is
defined as an agreement between two or more parties that
creates enforceable rights and obligations and sets out the
criteria for every contract that must be met.
Step 2: Identify performance obligations in the contract:
A performance obligation is a promise in a contract with a
customer to transfer a good or service to the customer.
Step 3: Determine the transaction price: The transaction price
is the amount of consideration to which the Company expects
to be entitled in exchange for transferring promised goods
or services to a customer, excluding amounts collected on
behalf of third parties.
Step 4: Allocate the transaction price to the performance
obligations in the contract: For a contract that has more
than one performance obligation, the Company allocates
the transaction price to each performance obligation in an
amount that depicts the amount of consideration to which
the Company expects to be entitled in exchange for satisfying
each performance obligation.
Step 5: Recognise revenue when (or as) the Company satisfies
a performance obligation.
Revenue is recognised to the extent that it is probable that
the economic benefits will flow to the Company and the
revenue can be reliability measured, regardless of when
the payment is being made. Revenue is measured at the
transaction price, considering contractually defined terms
of payment and excluding taxes and duties collected on behalf
of the government.
When the outcome of a transaction involving the rendering of
services can be estimated reliably, revenue associated with
the transaction shall be recognised.
The outcome of a transaction can be estimated reliably when
all the following conditions are satisfied:
- the amount of revenue can be measured reliably.
- it is probable that the economic benefits associated
with the transaction will flow to the Company; and
- the costs incurred for the transaction or to be incurred
in respect of the transaction can be measured reliably.
When the outcome of the transaction involving the rendering
of services cannot be estimated reliably, revenue shall be
recognised only to the extent of the expenses recognised
that are recoverable. The revenue recognition in respect of
the various streams of revenue is described below:
Brokerage Income and related charges are recognised on
the trade date of the transaction upon confirmation of the
transactions by the exchanges. Account opening charges are
recognised when right to receive the income is established.
Income from depository services, interest and finance charges
on funding facility availed by the clients are recognised on the
basis of agreements entered into with clients and when the
right to receive the income is established.
I nterest bearing instruments are measured either at
amortised cost and interest income is recorded using the
effective interest rate (EIR) method. EIR is the rate that
exactly discounts the estimated future receipts over the
expected life of the financial instrument, to the gross carrying
amount of the financial asset.
Interest earned from income bearing instruments is allocated
between pre-acquisition and post- acquisition period and the
accrued portion of the pre-acquisition portion is deducted
from cost. The post- acquisition portion of interest is
considered as revenue. The Profit/Loss realised from sale
of securities are recognised on trade date basis.
Other interest incomes are recognised on a time proportion
basis taking into account the amount outstanding and the
applicable rate of interest.
Portfolio management fees are recognised on an accrual basis
in accordance with the Portfolio Management Agreements
entered into with the respective clients.
Dividend income is recognised when the Company's right to
receive dividend is established by the reporting date.
2.15. RETIREMENT AND OTHER EMPLOYEE
BENEFITS
2.15.1 Employee benefits
Employee benefits are accrued in the period in which the
associated services are rendered by employees of the
Company, as detailed below:
2.15.1.1 Defined contribution plan (Provident fund)
In accordance with Indian law, eligible employees receive
benefits from provident fund, which is a defined contribution
plan. Both the employee and employer make monthly
contributions to the plan, each equal to a specified percentage
of employee's basic salary.
The Company has no further obligations under the plan
beyond its monthly contributions. The Company does not
have any legal or constructive obligation to pay further
contributions if the fund does not hold sufficient assets to
pay all employee benefits relating to employee service in
the current and prior periods. Obligation for contributions
to the plan is recognised as an employee benefit expense in
the Statement of Profit and Loss when incurred.
2.15.1.2 Defined Benefit Plans (Gratuity)
In accordance with applicable Indian laws, the Company
provides for gratuity, a defined benefit retirement plan (the
Gratuity Plan) covering eligible employees. The Gratuity
Plan provides a lump sum payment to vested employees, at
retirement or termination of employment, an amount based
on the respective employee's last drawn salary and the years
of employment with the Company.
The Company's net obligation in respect of the gratuity plan
is calculated by estimating the amount of future benefits
that the employees have earned in return for their service
in the current and prior periods; that benefit is discounted to
determine its present value. Any unrecognised past service
cost and the fair value of plan assets are deducted.
The discount rate is the yield at the reporting date on risk free
government bonds that have maturity dates approximating
the terms of the Company's obligations. The calculation is
performed annually by a qualified actuary using the projected
unit credit method. When the calculation results in a benefit
to the Company, the recognised asset is limited to the total
of any unrecognised past service costs and the present va lue
of economic benefits available in the form of any future
refunds from the plan or reductions in future contributions
to the plan.
The Company recognises all re-measurements of net defined
benefit liability/asset directly in other comprehensive income
and presented within equity. The Company has employees'
gratuity fund under Grasim Industries Limited Employees
Gratuity Trust managed by the Grasim Industries Limited.
2.15.1.3 Short Term Benefit
Short-term employee benefit obligations are measured on an
undiscounted basis and are expensed as the related service is
provided. A liability is recognised for the amount expected to
be paid under short-term cash bonus or profit-sharing plans
if the Company has a present legal or constructive obligation
to pay this amount as a result of past service provided by the
employee and the obligation can be estimated reliably.
2.15.1.4 Compensated Absences
The employees of the Company are entitled to Leave
encashment benefit. The employees can carry forward a
portion of the unutilised accrued absence and utilize it in
future periods or receive cash compensation at retirement
or termination of employment for the unutilised accrued
compensated absence. The Company recognises an obligation
for compensated absences in the period in which the
employee renders the services.
The Company provides for the expected cost of compensated
absence in the Statement of Profit and Loss as the additional
amount that the Company expects to pay as a result of the
unused entitlement that has accumulated based on actuarial
valuations carried out by an independent actuary at the
balance sheet date.
Re-measurements, comprising of actuarial gains and losses,
the effect of the asset ceiling, excluding amounts included
in net interest on the net defined benefit liability and the
return on plan assets (excluding amounts included in net
interest on the net defined benefit liability), are recognised
immediately in the balance sheet with a corresponding debit
or credit to retained earnings through Statement of Profit
& Loss in the period in which they occur. Re-measurements
are not reclassified to profit or loss in subsequent periods.
2.15.1.5 Share-Based Payment Transactions
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).
2.15.1.6 Equity - Settled Transactions
The cost of equity-settled transactions is determined by
the fair value at the date when the grant is made using an
appropriate valuation model.
That cost is recognised, together with a corresponding
increase in share-based payment (SBP) reserves in equity,
over the period in which the performance and/or service
conditions are fulfilled in employee benefits expense.
The cumulative expense recognised for equity-settled
transactions at each reporting date until the vesting date
reflects the extent to which the vesting period has expired
and the Company's best estimate of the number of equity
instruments that will ultimately vest. The statement of
profit and loss expense or credit for a period represents
the movement in cumulative expense recognised as at
the beginning and end of that period and is recognised in
employee benefits expense.
Service and non-market performance conditions are not
taken into account when determining the grant date fair
value of awards, but the likelihood of the conditions being
met is assessed as part of the Company's best estimate
of the number of equity instruments that will ultimately
vest. Market performance conditions are reflected within
the grant date fair value. Any other conditions attached to
an award, but without an associated service requirement,
are considered to be non-vesting conditions. Non-vesting
conditions are reflected in the fair value of an award and lead
to an immediate expensing of an award unless there are also
service and/or performance conditions.
No expense is recognised for awards that do not ultimately
vest because non-market performance and/or service
conditions have not been met. Where awards include a market
or non-vesting condition, the transactions are treated as
vested irrespective of whether the market or non-vesting
condition is satisfied, provided that all other performance
and/or service conditions are satisfied.
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 profit or loss.
The dilutive effect of outstanding options is reflected as
additional share dilution in the computation of diluted
earnings per share.
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