2.1 Basis of preparation
(i) Compliance with Indian Accounting Standards (Ind AS)
The standalone financial statements comply in all material
aspects with Indian Accounting Standards (Ind AS)
notified under Section 133 of the Companies Act, 2013
(the Act), The Companies (Indian Accounting Standards)
Rules, 2015, and presentation requirements of Division II
of Schedule III to the Companies Act, 2013 as amended
from time to time and other relevant provisions of the Act
and accounting principles generally accepted in India.
These Standalone financial statements have been
prepared by the Company on a going concern basis.
(ii) Basis of measurement
The Standalone financial statement has been prepared on
a historical cost basis and on accrual basis, except for the
following:
• Financial assets and liabilities are measured at fair
value or at amortised cost depending on classification;
• Derivative financial instruments are measured at fair
value;
• Defined benefit plans - plan assets measured at fair
value; and
• Share based payments - measured at fair value.
(iii) Consistency of accounting policy
The accounting policies are applied consistently to all the
periods presented in the standalone financial statement,
except where a newly issued accounting standard is
initially adopted or a revision to an existing standard
requires a change in the accounting policy hitherto in use.
(iv) Functional currency and rounding of amounts
The standalone financial statements are presented in
Indian Rupee (C) which is also the functional currency of
the Company. All amounts disclosed in the standalone
financial statements and notes have been rounded-off
to the nearest crores or decimal thereof as per the
requirement of Schedule III, unless otherwise stated.
2.2 Current and non-current classification
All assets and liabilities have been classified as current and
non-current as per the Company's normal operating cycle and
other criteria set out in the Schedule III of the Act and Ind AS 1,
Presentation of Financial Statements.
Assets:
An asset is classified as current when it satisfies any of the
following criteria:
a) it is expected to be realised in, or is intended for
sale or consumption in, the Company's normal
operating cycle;
b) it is held primarily for the purpose of being traded;
c) it is expected to be realised within twelve months
after the reporting date; or
d) it is cash or a cash equivalent unless it is restricted
from being exchanged or used to settle a liability for
at least twelve months after the reporting date.
Liabilities:
A liability is classified as current when it satisfies any of the
following criteria;
a) it is expected to be settled in the Company's normal
operating cycle;
b) it is held primarily for the purpose of being traded;
c) it is due to be settled within twelve months after the
reporting date; or
d) the Company does not have an unconditional right
to defer settlement of the liability for at least twelve
months after the reporting date. Terms of a liability
that could, at the option of the counterparty, result
in its settlement by the issue of equity instruments
do not affect its classification.
Current assets and liabilities include the current portion
of assets and liabilities, respectively. All other assets and
liabilities are classified as non-current. Deferred tax assets
and liabilities are always disclosed as non-current.
Based on assessment, the Company has determined 12
months to be its operating cycle
2.3 Use of estimates and judgements
The preparation of standalone financial statement requires
management of the Company to make judgements, estimates
and assumptions that affect the reported assets and liabilities,
revenue and expenses and disclosures relating to contingent
liabilities. Management believes that the estimates used in the
preparation of the standalone financial statements are prudent
and reasonable. Estimates and underlying assumptions are
reviewed by management at each reporting date. Actual results
could differ from these estimates. Any revision of these estimates
is recognised prospectively in the current and future periods.
Following are the critical judgements and estimates:
2.3.1 Judgements
(i) Leases
Ind AS 116 - Leases requires lessees to determine the lease
term as the non-cancellable period of a lease adjusted
with any option to extend or terminate the lease, if the
use of such option is reasonably certain. The Company
makes an assessment on the expected lease term on
a lease-by-lease basis and thereby assesses whether
it is reasonably certain that any options to extend or
terminate the contract will be exercised. In evaluating
the lease term, the Company considers factors such as
any significant leasehold improvements undertaken
over the lease term, costs relating to the termination of
the lease and the importance of the underlying asset to
Company's operations taking into account the location
of the underlying asset and the availability of suitable
alternatives. The lease term in future periods is reassessed
to ensure that the lease term reflects the current economic
circumstances.
(ii) Income taxes
Significant judgements are involved in determining
the provision for income taxes including judgement on
whether tax positions are probable of being sustained in
tax assessments. A tax assessment can involve complex
issues, which can only be resolved over extended time
periods. The recognition of taxes that are subject to
certain legal or economic limits or uncertainties is assessed
individually by management based on the specific facts
and circumstances.
In assessing the realisability of deferred tax assets,
management considers whether some portion or all of
the deferred tax assets will not be realised. The ultimate
realisation of deferred tax assets is dependent upon the
generation of future taxable income during the periods
in which the temporary differences become deductible.
Management considers the scheduled reversals of
deferred income tax liabilities, projected future taxable
income and tax planning strategies in making this
assessment. Based on the level of historical taxable income
and projections for future taxable income over the periods
in which the deferred income tax assets are deductible,
management believes that the company will realise the
benefits of those deductible differences. The amount
of the deferred income tax assets considered realisable,
however, could be reduced in the near term if estimates
of future taxable income during the carry forward period
are reduced.
(iii) Provisions and contingent liabilities
The Company exercises judgement in measuring and
recognising provisions and the exposures to contingent
liabilities related to pending litigation or other
outstanding claims subject to negotiated settlement,
mediation, government regulation, as well as other
contingent liabilities. Judgement is necessary in assessing
the likelihood that a pending claim will succeed, or a
liability will arise, and to quantify the possible range of the
financial settlement. Because of the inherent uncertainty
in this evaluation process, actual losses may be different
from the originally estimated provision. Provisions are
reviewed at each balance sheet date and adjusted to
reflect the current best estimate. If it is no longer probable
that the outflow of resources would be required to settle
the obligation, the provision is reversed.
2.3.2 Estimates
(i) Useful lives of property, plant and equipment and
intangible assets
Property, plant and equipment, and intangibles assets
represent a significant proportion of the asset base of the
Company. The charge in respect of periodic depreciation
is derived after determining an estimate of an asset's
expected useful life and the expected residual value at
the end of its life. The useful lives and residual values of
Company's assets are determined by the management at
the time the asset is acquired and reviewed periodically,
including at each financial year/period end. The lives are
based on historical experience with similar assets as well
as anticipation of future events, which may impact their
life, such as changes in technology.
(ii) Inventories obsolescence
The factors that the Company considers in determining
the provision for slow moving, obsolete and other
non-saleable inventory include estimated shelf life,
planned product discontinuances, price changes, ageing
of inventory and introduction of competitive new
products, to the extent each of these factors impact the
Company's business and markets. The Company considers
all these factors and adjusts the inventory obsolescence to
reflect its actual experience on a periodic basis.
(iii) Accounting for defined benefit plans
In accounting for post-retirement benefits, several
statistical and other factors that attempt to anticipate
future events are used to calculate plan expenses
and liabilities. These factors include expected return
on plan assets, discount rate assumptions and rate
of future compensation increases. To estimate these
factors, actuarial consultants also use estimates such as
withdrawal, turnover, and mortality rates which require
significant judgement. The actuarial assumptions used
by the Company may differ materially from actual results
in future periods due to changing market and economic
conditions, regulatory events, judicial rulings, higher or
lower withdrawal rates, or longer or shorter participant
life spans.
(iv) Impairment of non-financial assets
An impairment loss is recognised for the amount by
which an asset's or cash-generating unit's carrying
amount exceeds its recoverable amount. To determine
the recoverable amount, management estimates
expected future cash flows from each asset or cash
generating unit and determines a suitable interest rate in
order to calculate the present value of those cash flows.
In the process of measuring expected future cash flows,
management makes assumptions about future operating
results. These assumptions relate to future events and
circumstances. The actual results may vary and may cause
significant adjustments to the Company's assets.
In most cases, determining the applicable discount rate
involves estimating the appropriate adjustment to market
risk and the appropriate adjustment to asset-specific
risk factors.
(v) Fair value of financial instruments
Management uses valuation techniques in measuring the
fair value of financial instruments where active market
quotes are not available. Details of the assumptions
used are given in the notes regarding financial assets
and liabilities. In applying the valuation techniques,
management makes maximum use of market inputs and
uses estimates and assumptions that are, as far as possible,
consistent with observable data that market participants
would use in pricing the instrument. Where applicable
data is not observable, management uses its best estimate
about the assumptions that market participants would
make. These estimates may vary from the actual prices
that would be achieved in an arm's length transaction at
the reporting date.
(vi) Expected credit loss
In accordance with Ind AS 109 - Financial Instruments,
the Company applies ECL model for measurement and
recognition of impairment loss on the trade receivables or
any contractual right to receive cash or another financial
asset that result from transactions that are within the scope
of Ind AS 115 - Revenue from Contracts with Customers.
For this purpose, the Company follows 'simplified
approach' for recognition of impairment loss allowance
on the trade receivable balances, contract assets and
lease receivables. The application of simplified approach
requires expected lifetime losses to be recognised from
initial recognition of the receivables based on lifetime
ECLs at each reporting date. As a practical expedient, the
Company uses a provision matrix to determine impairment
loss allowance on portfolio of its trade receivables.
The provision matrix is based on its historically observed
default rates over the expected life of the trade receivables
and is adjusted for forward-looking estimates. At every
reporting date, the historical observed default rates are
updated and changes in the forward-looking estimates are
analysed. In case of other assets, 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 twelve months ECL is measured and recognised
as loss allowance. However, if credit risk has increased
significantly, an amount equal to lifetime ECL is measured
and recognised as loss allowance.
2.4 Property, plant and equipment
(i) Recognition and measurement
All items of property, plant and equipment, including
freehold land, are initially recorded at cost.
Cost of property, plant and equipment comprises
purchase price, non-refundable taxes, levies, and any
directly attributable cost of bringing the asset to its
working condition for the intended use.
Such cost includes the cost of replacing part of the plant
and equipment and borrowing costs for long-term
construction projects if the recognition criteria are
met. When significant parts of plant and equipment
are required to be replaced at intervals, the Company
depreciates them separately based on their specific useful
lives. Likewise, when a major inspection is performed, its
cost is recognised in the carrying amount of the plant and
equipment as a replacement if the recognition criteria
are satisfied. All other repair and maintenance costs are
recognised in standalone statement of profit and loss
as incurred.
Subsequent expenditure is capitalised only if it is probable
that the future economic benefits associated with the
expenditure will flow to the Company.
Subsequent to initial recognition, property, plant and
equipment other than freehold land are measured at
cost less accumulated depreciation and any accumulated
impairment losses.
The carrying values of property, plant and equipment
are reviewed for impairment when events or changes in
circumstances indicate that the carrying value may not
be recoverable.
Advances paid towards the acquisition of property, plant
and equipment outstanding at each reporting date is
disclosed as capital advance under non-current assets.
Capital work-in-progress included in non-current assets
comprises of direct costs, related incidental expenses and
attributable interest. Capital work-in-progress are not
depreciated as these assets are not yet available for use.
Freehold land has an unlimited useful life and therefore
is not depreciated.
Depreciation on the property, plant and equipment
(other than freehold land) is provided based on useful
life of the assets as estimated by the management.
Depreciation on property, plant and equipment, which
are added / disposed-off during the year, is provided on
pro-rata basis with reference to the month of addition/
deletion, in the standalone statement of profit and
loss. Depreciation on Property, Plant and Equipment is
provided using straight line method over the lives of the
assets. Leasehold improvement is being amortised over
the period of lease agreement.
The Company, based on technical assessment and
management estimates, depreciates certain items of
property, plant and equipment over useful lives that are
different from those prescribed under Schedule II to the
Companies Act, 2013. During the year, the Company has
reassessed the estimated useful lives of certain assets
based on their pattern of usage and technical evaluation.
The management believes that the revised useful lives
represent a realistic and reasonable estimate of the
period over which the assets are expected to be utilised.
Accordingly, the change in useful lives has been treated as
a change in accounting estimate and the impact has been
recognised prospectively in the financial statements for
the year ended 31 March 2026.
The residual values, useful lives and methods of
depreciation of property, plant and equipment are
reviewed at each financial year end and, if expectations
differ from previous estimates, the change(s) are
accounted for as a change in an accounting estimate in
accordance with Ind AS 8 - Accounting Policies, Changes
in Accounting Estimates and Errors.
An item of property, plant and equipment, is de-recognised
upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or loss
arising on de-recognition of the asset (calculated as the
difference between the net disposal proceeds and the
carrying amount of the asset) is included in the standalone
statement of profit and loss.
2.5 Intangible assets
(i) Recognition and measurement
Intangible assets comprise of product related intellectual
property rights, order backlog, customer relationships
and computer software acquired separately are measured
on initial recognition at cost. The cost of intangibles
acquired in a business combination is their fair value at
the date of acquisition. Following initial recognition,
intangible assets are carried at cost less accumulated
amortisation and accumulated impairment loss, if any.
Subsequent expenditures are capitalised only when they
increase the future economic benefits embodied in the
specific asset to which they relate. Internally generated
intangibles are not capitalised, and the related expenditure
is reflected in the standalone statement of Profit and Loss
in the period in which expenditure is incurred
(ii) Amortisation
The Company amortises intangible assets with a finite
useful life using the straight-line method over the
following useful lives:
Product related IPs - 10 years
Order Backlog - 1.5 years
Customer relationships - 10.5 years
Computer Software - 3 years
(iii) De-recognition
Intangible assets are de-recognised either on their disposal
or where no future economic benefits are expected from
their use. Losses arising on such de-recognition are
recorded in the profit or loss and are measured as the
difference between the net disposal proceeds, if any, and
the carrying amount of respective intangible assets as at
the date of de-recognition.
2.6 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 indication
exists, or when annual impairment testing for an asset is
required, the Company estimates the asset's recoverable
amount. An asset's recoverable amount is the higher of an
asset's cash-generating unit's (CGU) fair value less costs of
disposal and its value in use. Recoverable amount is determined
for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other
assets or Company's of assets. When the carrying amount of
an asset or CGU exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable
amount. Non-financial assets other than goodwill that suffered
an impairment are reviewed for possible reversal of the
impairment at the end of each reporting period.
Impairment losses, including impairment on inventories, are
recognised in the standalone statement of profit and loss.
2.7 Borrowing costs
Borrowing costs consists of interest, ancillary costs and other
costs in connection with the borrowing of funds and exchange
differences arising from foreign currency borrowings to the
extent they are regarded as an adjustment to interest costs.
Borrowing costs attributable to acquisition and/or construction
of qualifying assets are capitalised as a part of the cost of such
assets, up to the date such assets are ready for their intended
use. Other borrowing costs are charged to the standalone
statement of profit and loss.
2.8 Foreign currency transactions and balances
Transactions in foreign currencies are translated to the
functional currency of the Company at exchange rates at the
dates of the transactions. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the
translation of monetary items denominated in foreign currency
at prevailing reporting date exchange rates are recognised in
standalone statement of profit and loss. Non-monetary items
are measured at historical cost (translated using the exchange
rates at the transaction date), except for non-monetary items
measured at fair value which are translated using the exchange
rates at the date when fair value was determined.
2.9 Inventories
Inventories consists of raw materials and packing materials,
stores, spares and consumables, work-in-progress and finished
goods and are measured at the lower of cost and net realizable
value after providing for obsolescence, if any.
Cost of inventories is determined on a weighted average basis.
Net realizable value is the estimated selling price in the ordinary
course of business, less the estimated costs of completion and
costs necessary to make the sale.
Cost includes expenditures incurred in acquiring the inventories,
production or conversion costs and other costs incurred in
bringing them to their existing location and condition. In the
case of finished goods and work-in-progress, cost includes an
appropriate share of overheads based on normal operating
capacity.
Raw materials, components and other supplies held for use in
the production of finished products are not written down below
cost except in cases where material prices have declined and it
is estimated that the cost of the finished products will exceed
their net realisable value.
Stores and spares are inventories that do not qualify to be
recognised as property, plant and equipment and consists of
consumables, engineering spares (such as machinery spare
parts), which are used in operating machines or consumed as
indirect materials in the manufacturing process.
2.10 Government grants
Government grants are recognised where there is reasonable
assurance that the grant will be received and all attached
conditions will be complied with. When the grant relates to
an asset, it is recognised as income in equal amounts over the
expected useful life of the related asset and presented within
other income.
Export entitlement from government authorities is recognised
in the standalone statement of profit and loss as other operating
revenue when the right to receive is established as per the terms
of the scheme in respect of the exports made by the Company
with no future related cost and where there is no significant
uncertainty regarding the ultimate collection of the relevant
export proceeds.
2.11 Revenue recognition
A contract with a customer exists only when: the parties to the
contract have approved it and are committed to perform their
respective obligations, the Company can identify each party's
rights regarding the distinct goods or services to be transferred
("performance obligations"), the Company can determine the
transaction price for the goods or services to be transferred,
the contract has commercial substance and it is probable that
the Company will collect the consideration to which it will
be entitled in exchange for the goods or services that will be
transferred to the customer.
The Company has concluded that it is the principal in all its
revenue arrangements since it is the primary obligor in all the
revenue arrangements as it has pricing latitude and is also
exposed to inventory and credit risks.
Revenues are recorded in the amount of consideration to
which the Company expects to be entitled in exchange for
performance obligations upon transfer of control to the
customer and is measured at the amount of transaction
price net of returns, sales tax and applicable trade discounts,
allowances, Goods and Services Tax (GST) and amounts
collected on behalf of third parties. As the period between
customer payment and the transfer of goods or services is one
year or less, the Company has applied the practical expedient
under paragraph 63 of Ind AS 115 and, accordingly, has not
adjusted the promised consideration for the effects of a
significant financing component.
Further, the Company has also applied the practical expedient
under paragraph 121 of Ind AS 115 and, therefore, has not
disclosed the transaction price allocated to the remaining
(unsatisfied) performance obligations.
The specific recognition criteria described below must also be
met before revenue is recognised:
Sale of products
Revenue from sale of goods is recognised when a promise
in a customer contract (performance obligation) has been
satisfied by transferring control over the promised goods to the
customer. Control is usually transferred upon shipment, delivery
to, upon receipt of goods by the customer, in accordance
with the delivery and acceptance terms agreed with the
customers. The amount of revenue to be recognised is based
on the transaction price, excluding trade discounts, volume
discounts, sales returns and any taxes or duties collected on
behalf of the government which are levied on sales such as
goods and services tax, etc., where applicable. Any additional
amounts based on terms of agreement entered with customers,
is recognised in the period when the collectability becomes
probable and a reliable measure of the same is available.
In arriving at the transaction price, the Company considers the
terms of the contract with the customers and its customary
business practices. The transaction price is the amount of
consideration the Company is entitled to receive in exchange
for transferring promised goods or services, excluding amounts
collected on behalf of third parties. The amount of consideration
varies because of certain estimated and actual deductions
by customers which are considered to be key estimates.
Any amount of variable consideration is recognised as revenue
only to the extent that it is highly probable that a significant
reversal will not occur. The Company estimates the amount of
variable consideration using the expected value method.
Service income
Revenue from services rendered is recognised in the standalone
statement of profit and loss as the underlying services are
performed. Upfront non-refundable payments received under
these arrangements are deferred and recognised as revenue
over the expected period over which the related services are
expected to be performed.
Profit sharing revenue
The Company from time to time enters into marketing
arrangements with certain business partners for the sale of
its products in certain markets. Under such arrangements,
the Company sells its products to the business partners at
a non-refundable base purchase price agreed upon in the
arrangement and is also entitled to a profit share which is over
and above the base purchase price. The profit share is typically
dependent on the business partner's ultimate net sale proceeds
or net profits, subject to any reductions or adjustments that are
required by the terms of the arrangement. Such arrangements
typically require the business partner to provide confirmation
of units sold and net sales or net profit computations for the
products covered under the arrangement
Revenue in an amount equal to the base sale price is recognised
in these transactions upon delivery of products to the business
partners. An additional amount representing the profit share
component is recognised as revenue only to the extent that
it is highly probable that a significant reversal will not occur.
Other income (interest income and Others)
a) Interest income
Interest income from a financial asset is recognised when
it is probable that the economic benefits will flow to the
Company and the amount of income can be measured
reliably. Interest income is accrued on a time basis, by
reference to the principal outstanding and at the effective
interest rate applicable, which is the rate that discounts
estimated future cash receipts through the expected life
of the financial asset to that asset's net carrying amount
on initial recognition.
b) Others (other than interest and dividend income)
Other Income is recognised when it is probable that the
economic benefits will flow to the Company and amount
of income can be measured reliably.
Contract balances
Contract assets
A Contract asset is the right to consideration in exchange for
goods or services transferred to the customer. If the Company
performs by transferring goods or services to a customer before
the customer pays consideration or before payment is due, a
contract asset is recognised for the earned consideration that
is conditional.
Contract liabilities
A contract liability is the obligation to transfer goods or
services to a customer for which the Company has received
consideration (or an amount of consideration is due) from the
customer. If a customer pays consideration before the Company
transfers goods or services to the customer, a contract liability
is recognised when the payment is made or the payment is
due (whichever is earlier). Contract liabilities are recognised as
revenue when the Company performs under the contract.
2.12 Employee benefits
(i) Short term employee benefits
All employee benefits payable wholly within twelve
months of rendering the service are classified as short term
employee benefits. Benefits such as salaries, wages etc.,
and the expected cost of ex-gratia are recognised in the
period in which the employee renders the related service.
A liability is recognised for the amount expected to be
paid 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.
(ii) Defined contribution plans
Post-retirement contribution plans such as Employees'
Provident Fund, Employees' Pension Scheme, Labour
Welfare Fund, Employee State Insurance Corporation
(ESIC) are charged to the standalone statement of profit
and loss for the year when the contributions to the
respective funds accrue. The Company does not have any
obligation other than the contribution made.
(iii) Defined benefit plans
Gratuity obligations
Post-retirement benefit plans such as gratuity is
determined on the basis of actuarial valuation made
by an independent actuary as at the reporting date.
Re-measurement, comprising actuarial gains and losses,
the effect of the changes to the asset ceiling (if applicable)
and the return on plan assets (excluding net interest), is
recognised in other comprehensive income in the period
in which they occur. Re-measurement recognised in other
comprehensive income is included in retained earnings
and will not be reclassified to standalone statement of
profit and loss.
The present value of the defined benefit obligation is
determined by discounting the estimated future cash
outflows by reference to market yields at the end of the
reporting period on government bonds that have terms
approximating to the terms of the related obligation.
The net interest cost is calculated by applying the
discount rate to the net balance of the defined benefit
obligation and the fair value of plan assets. This cost is
included in employee benefit expense in the statement
of profit and loss.
Changes in the present value of the defined benefit
obligation resulting from plan amendments or
curtailments are recognised immediately in standalone
statement of profit and loss as past service cost.
(iv) Other liabilities
Liability in respect of compensated absences becoming
due or expected to be availed within one year from the
reporting date is recognised on the basis of undiscounted
value of estimated amount required to be paid or
estimated value of benefit expected to be availed by the
employees. Liability in respect of compensated absences
becoming due or expected to be availed more than one
year after the reporting date is estimated on the basis
of an actuarial valuation performed by an independent
actuary using the projected unit credit method at the
period-end. Actuarial gains/losses are immediately taken
to the standalone statement of profit and loss and are
not deferred.
2.13 Taxes
Income tax expense comprises of current tax expense and
deferred tax expense/benefit. Current and deferred taxes
are recognised in standalone statement of profit and loss,
except when they relate to items that are recognised in other
comprehensive income or directly in equity, in which case,
the current and deferred tax are also recognised in other
comprehensive income or directly in equity.
(i) Current income tax
Current income tax is the amount of tax payable on the
taxable income for the year as determined in accordance
with the provisions of the applicable income tax law.
The current tax is calculated using tax rates that have been
enacted or substantively enacted, at the reporting date,
and any adjustment to tax payable in respect of previous
years. Current tax assets and tax liabilities are offset where
the entity has a legally enforceable right to offset and
intends either to settle on a net basis, or to realise the asset
and settle the liability simultaneously.
(ii) Deferred tax
Deferred tax is recognised using the Balance Sheet
approach on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts.
Deferred tax assets are recognised to the extent that it
is probable that taxable profit will be available against
which the deductible temporary differences, and the carry
forward of unused tax credits and unused tax losses can
be utilised, except when the deferred tax asset relating
to the deductible temporary difference arises from the
initial recognition of an asset or liability in a transaction
that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor
taxable statement of profit and loss.
The carrying amount of deferred tax assets is reviewed
at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred tax asset to be
utilised. Unrecognized deferred tax assets are re-assessed
at each reporting date and are recognised to the extent
that it has become probable that future taxable profits will
allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured using
substantively enacted tax rates expected to apply to
taxable income in the years in which the temporary
differences are expected to be recovered or settled.
Deferred tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets
and liabilities.
2.14 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and cash at
bank including fixed deposit with original maturity period of
three months or less and short term highly liquid investments
with an original maturity of three months or less.
|