2.1 Basis of preparation and presentation of financial
statements
The financial statements are prepared in accordance
with the Indian Accounting Standards (Ind AS), under
the historical cost convention on the accrual basis
except for certain financial assets and financial
liabilities (including derivative instruments) and Defined
benefit plans - plan assets, which are measured at fair
values, the provisions of the Companies Act, 2013
("the Act") (to the extent notified) and guidelines issued
by the Securities and Exchange Board of India (SEBI).
The Ind AS are prescribed under section 133 of the Act
read with Rule 3 of the Companies (Indian Accounting
Standards) Rules, 2015 and relevant amendments
rules issued thereafter.
All assets and liabilities have been classified as current
or non-current as per the Company’s normal operating
cycle and other criteria set out in Schedule III to the Act.
For the business of manufacturing, based on the nature
of products and the time between the acquisition of
assets for processing and their realization in cash and
cash equivalents, the Company has ascertained its
operating cycle up to twelve months for the purpose
of current - non-current classification of assets and
liabilities. Operating cycle for the other business
activities of the Company covers the duration of the
specific project or contract or service and extends up
to the realisation of receivables within the agreed credit
period normally applicable to such lines of business.
Accounting policies have been consistently applied
except where a newly issued accounting standard is
initially adopted or a revision to an existing accounting
standard requires a change in the accounting policy
hitherto in use.
Certain comparative figures have been reclassified,
wherever necessary, to conform to the presentation
adopted in the financial statements. These
reclassifications were not significant and have no
impact on the total assets, total liabilities, total equity
and profit of the Company.
2.2 Functional and presentation currency
The financial statements are presented in Indian
Rupees which is also the Company’s functional
currency.
2.3 Critical accounting estimates, assumptions and
judgements
The preparation of the financial statements, in
conformity with generally accepted accounting
principles, requires management to make estimates,
assumptions and judgements that affect the reported
amounts of assets and liabilities and disclosures as at
the date of the financial statements and the reported
amounts of income and expense for the periods
reported
The estimates and associated assumptions are
based on historical experience and other factors that
are considered to be relevant. Actual results may
differ from these estimates considering different
assumptions and conditions
Estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the
estimates are revised and future periods are affected.
The estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying
values of assets and liabilities within the next financial
year are discussed below:
i) Useful lives of property, plant and equipment
('PPE') and other intangible assets
Property, plant and equipment/Intangible assets
are depreciated/amortised over their estimated
useful life, after taking into account estimated
residual value. Management reviews the estimated
useful life and residual values of the assets annually
in order to determine the amount of depreciation/
amortisation to be recorded during any reporting
period. The useful life and residual values are
based on the Company’s historical experience with
similar assets and take into account anticipated
technological changes, expected level of usage and
product life-cycle. The depreciation/amortisation
for future periods is revised if there are significant
changes from previous estimates.
ii) Employee benefit obligations
Employee benefit obligations are determined
using actuarial valuations. An actuarial valuation
involves making various assumptions that may
differ from actual developments. These include the
estimation of the appropriate discount rate, future
salary increases and mortality rates. Due to the
complexities involved in the valuation and its long¬
term nature, the employee benefit obligation is
highly sensitive to changes in these assumptions.
All assumptions are reviewed at each reporting
date.
iii) Provisions and contingencies
From time to time, the Company is subject to
legal proceedings, the ultimate outcome of each
being subject to uncertainties inherent in litigation.
A provision for litigation is made when it is
considered probable that a payment will be made
and the amount can be reasonably estimated.
Significant judgement is required when evaluating
the provision including, the probability of an
unfavourable outcome and the ability to make a
reasonable estimate of the amount of potential
loss. Litigation provisions are reviewed at each
accounting period and revisions made for the
changes in facts and circumstances. Contingent
liabilities are disclosed in the notes forming part
of the financial statements. Contingent assets are
not disclosed in the financial statements unless an
inflow of economic benefits is probable.
iv) Recognition of property, plant and equipment
(PPE), capital work in progress
Significant level of judgement is involved in
assessing whether the expenditure incurred meets
the recognition criteria under Ind AS 16 Property,
Plant and Equipment. Also estimates are involved
in determining the cost attributable to bringing the
assets to the location and condition necessary
for it to be capable of operating in the manner
intended by the management.
2.3 Critical accounting estimates, assumptions and
judgements (continued)
v) Capitalisation of other intangible assets and
evaluation of indicators for impairment of assets
Distinguishing the research and development
phases of a new customised project and
determining whether the recognition requirements
for the capitalisation of development costs are
met requires judgement. After capitalisation,
management monitors whether the recognition
requirements continue to be met and whether
there are any indicators that capitalised costs may
be impaired.
The evaluation of applicability of indicators of
impairment of assets requires assessment of
several external and internal factors which could
result in deterioration of recoverable amount of
the assets. In assessing impairment, management
estimates the recoverable amount of each asset
or cash generating units based on expected
future cash flows and uses an interest rate to
discount them. Estimation uncertainty relates to
assumptions about future operating results and
the determination of a suitable discount rate.
2.4 Revenue from contracts with customers
To determine whether to recognise revenue from
contracts with customers, the Company follows a
5-step process:
a) Identifying the contract with customer
b) Identifying the performance obligations
c) Determining the transaction price
d) Allocating the transaction price to the performance
obligations
e) Recognising revenue when/as performance
obligation(s) are satisfied.
Revenue from contracts with customers for products
sold and service provided is recognised when control
of promised products or services are transferred to the
customer at an amount that reflects the consideration
to which the Company expects to be entitled in
exchange for those goods or services. Revenue is
measured based on the consideration to which the
Company expects to be entitled in a contract with a
customer and excludes Goods and Services Taxes
and is net of rebates and discounts. No element of
financing is deemed present as the sales are made
with a credit term , which is consistent with market
practice. A receivable is recognised when the goods
are delivered as this is the point in time that the
consideration is unconditional because only the
passage of time is required before the payment is due.
For performance obligation satisfied over time,
the revenue recognition is done by measuring
the progress towards complete satisfaction of
performance obligation. The progress is measured
in terms of a proportion of actual cost incurred to-
date, to the total estimated cost attributable to the
performance obligation except where this would not
be representative of the stage of completion. The
Company transfers control of a good or service over
time and therefore satisfies a performance obligation
and recognises revenue over a period of time if one of
the following criteria is met:
i) the customer simultaneously consumes the
benefit of Company’s performance or
ii) the customer controls the asset as it is being
created/enhanced by the Company’s performance
or
iii) t here is no alternative use of the asset and the
Company has either explicit or implicit right of
payment considering legal precedents.
In all other cases, performance obligation is considered
as satisfied at a point in time
Significant judgements are used in determining the
revenue to be recognised in case of performance
obligation satisfied over a period of time, revenue
recognition is done by measuring the progress towards
complete satisfaction of performance obligation.
These activity-specific revenue recognition criteria
are based on the goods or services provided to the
customer and the contract conditions in each case,
and are as described below.
a) Sale of manufactured goods
Revenue from sale of manufactured goods is
recognised at a point of time when control of the
product is transferred to the customer, being when
the products are delivered and acknowledged by
customers and the Company has not retained
any significant risks of ownership or there is
no unfulfilled obligation that could affect the
customer’s acceptance of the product. Revenue
from the sale is recognised based on the price
specified in the contract, net of rebates and
discounts.
b) Sale of Services
The company recognizes revenue when
performance obligation as promised is satisfied
with a transaction price and where there is no
uncertainty as to the measurement or collectability
of the consideration. Revenue from sale of services
is recognized over a period of time for maintenance
revenue when the related obligations are fulfilled
and revenue from other services are recognised at
a point in time.
2.5 Recognition of Dividend Income, Interest income or
expense
Dividend income is recognised when the unconditional
right to receive the income is established. Interest
income or expense is recognised using the effective
interest method
The 'effective interest rate’ is the rate that exactly
discounts estimated future cash payments or receipts
through the expected life of the financial instrument to:
- the gross carrying amount of the financial asset; or
- the amortised cost of the financial liability.
In calculating interest income and expense, the
effective interest rate is applied to the gross carrying
amount of the asset (when the asset is not credit-
i mpaired) or to the amortised cost of the l iabi li ty.
However, for financial assets that have become credit-
impaired subsequent to initial recognition, interest
income is calculated by applying the effective interest
rate to the amortised cost of the financial asset. If the
asset is no longer credit-impaired, then the calculation
of interest income reverts to the gross basis.
2.6 Property, plant and equipment and intangible assets
i) Plant and equipment
Plant and other equipment (comprising plant
and machinery, furniture and fittings, electrical
equipment, office equipment, computers and
vehicles) are initially recognised at acquisition
cost, including any costs directly attributable to
bringing the assets to the location and condition
necessary for them to be capable of operating in
the manner intended by the management. Plant
and other equipment are subsequently measured
at cost less accumulated depreciation and any
impairment losses.
Parts of an item of PPE having different useful lives
and significant value and subsequent expenditure
on Property, Plant and Equipment arising on
account of capital improvement or other factors
are accounted for as separate components only
when it is probable that future economic benefits
associated with the item will flow to the Company
and the cost of the item can be measured reliably.
The carrying amount of any component accounted
for as a separate asset is derecognised when
replaced. All other repairs and maintenance are
charged to profit or loss during the reporting period
in which they are incurred.
Gains or losses arising on the disposal of property,
plant and equipment are determined as the
difference between the disposal proceeds and the
carrying amount of the assets and are recognised
in the statement of profit and loss within other
income or other expenses.
Property, plant and equipment are carried at
the cost of acquisition or construction less
accumulated depreciation and accumulated
impairment, if any. The cost of property, plant and
equipment includes non-refundable taxes, duties,
freight, professional fees, for qualifying assets,
borrowing costs capitalised in accordance with the
Company’s accounting policy based on Ind AS 23
- Borrowing costs and other incidental expenses
related to the acquisition and installation of the
respective assets. Property, plant and equipment
which are retired from active use and are held for
disposal are stated at the lower of their net book
value or net realizable value.
Advances paid towards the acquisition of property,
plant and equipment outstanding at each balance
sheet date is classified as capital advances under
other non-current assets and the cost of assets
not put to use before such date are disclosed
under 'Capital work-in-progress’. Subsequent
expenditures relating to property, plant and
equipment is capitalised only when it is probable
that future economic benefits associated with
these will flow to the company and the cost of the
item can be measured reliably
ii) a) Other intangible assets (Internally
developed)
Intangible assets acquired separately are
measured at cost of acquisition. Following
initial recognition, intangible assets are carried
at cost less accumulated amortization and
impairment losses, if any. The amortization
of an intangible asset with a finite useful life
reflects the manner in which the economic
benefit is expected to be generated.
b) Intangible assets under development
"Leveraging the Company’s existing
competencies, the Company undertakes
internal product development initiatives
aimed at expanding its business opportunities
and Total Addressable Market (TAM). Such
initiatives are evaluated for recognition as
intangible assets under development only
when they meet the recognition criteria
prescribed under Ind AS 38. Capitalisation is
not automatic and is based on the assessment
of the criteria outlined below.
The Company distinguishes between the
research phase and the development phase
of internal projects. Expenditure incurred
during the research phase is recognised in the
Statement of Profit and Loss as incurred."
Development expenditure is capitalised as
"Intangible Assets Under Development" only
when it is demonstrably established that
the asset is technically feasible to complete,
the Company has the intention and ability to
complete and use or sell the asset, adequate
technical, financial, and other resources are
available to complete the development, future
economic benefits are probable including
through internal use or commercialisation,
and the expenditure attributable to the asset
can be reliably measured.
Intangible Assets Under Development include
directly attributable costs such as material
costs, employee costs directly engaged in
development, and other expenditures directly
attributable to preparing the asset for its
intended use. General administrative costs,
overheads, and inefficiencies are expensed as
incurred.
Borrowing costs directly attributable to the
development of qualifying intangible assets
are capitalised in accordance with Ind AS 23,
where applicable.
When the development is completed and the
prototype is ready for its intended use, the
same will be transferred to Intangible Assets
and will be subjected to amortization.
c) Measurement, Impairment and Derecognition
Expenditure on research activities is
recognised in profit or loss as incurred.
Development expenditure is capitalised only
if all recognition criteria specified above are
met; otherwise, it is recognised in profit or loss
as incurred.
Subsequent to initial recognition, intangible
assets are measured at cost less accumulated
amortisation and accumulated impairment
losses, if any. Intangible Assets Under
Development are measured at cost less any
accumulated impairment losses and are
tested for impairment annually or whenever
there is an indication of impairment.
An intangible asset is derecognised on
disposal or when no future economic benefits
are expected from its use or disposal. Gains
or losses arising from derecognition 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.
d) Review of Estimates
The residual values, useful lives and methods
of amortization of intangible assets are
reviewed at each financial year end and
adjusted prospectively, if appropriate.
iii) Depreciation and amortisation
Depreciation on property, plant and equipment is
provided on straight line method and in the manner
prescribed in Schedule II to the Companies Act,
2013, over its useful life specified in the Act, or
based on the useful life of the assets as estimated
by Management based on technical evaluation and
advice. The residual value is generally assessed
as 5% of the acquisition cost which is considered
to be the amount recoverable at the end of the
asset’s useful life. The residual values, useful lives
and method of depreciation of property, plant and
equipment is reviewed at each financial year end.
Intangible assets are amortised on a straight line
basis over the estimated useful economic life.
Prototype assets developed will be amortized over
a period of 10 years from the date of capitalization
or over the delivery period of the contract, if any,
whichever is earlier.
The Company has evaluated the applicability of
component accounting as prescribed under Ind
AS 16 and Schedule II of the Companies Act, 2013,
the management has not identified any significant
component having different useful lives. Schedule
II requires the Company to identify and depreciate
significant components with different useful lives
separately. The useful lives of the assets are in line
with the useful lives as prescribed under Part C of
Schedule II of the Companies Act, 2013 and hence
doesn’t require Component Accounting.
The estimated useful life of the property, plant and
equipment and intangible assets is as under,
- Building (30 years)
- Plant and Machinery (15 years)
- Computer (3-6 years)
- Furniture and Fixtures (10 years)
- Vehicles (8 years)
- Software (6 years)
iv) Impairment testing of intangible assets and
property, plant and equipment
At each reporting date, the Company assesses
whether there is any indication that an asset may
be impaired, based on internal or external factors. If
any such indication exists, the Company estimates
the recoverable amount of the asset or the cash
generating unit.
For the purpose of impairment assessment,
assets are grouped at the lowest levels for which
there are largely independent cash inflows (cash¬
generating units). As a result, some assets are
tested individually for impairment and some are
tested at cash-generating unit level.
All individual assets or cash-generating units are
tested for impairment whenever events or changes
in circumstances indicate that the carrying amount
may not be recoverable.
An impairment loss is recognised for the amount
by which the asset’s (or cash-generating unit’s)
carrying amount exceeds its recoverable amount,
which is the higher of fair value less costs of
disposal and value-in-use. To determine the
value-in-use, management estimates expected
future cash flows from each cash-generating
unit and determines a suitable discount rate in
order to calculate the present value of those
cash flows. The data used for impairment testing
procedures are directly linked to the Company’s
latest approved budget, adjusted as necessary
to exclude the effects of future reorganizations
and asset enhancements. Discount factors are
determined individually for each cash-generating
unit and reflect current market assessments of
the time value of money and asset-specific risk
factors.
Impairment losses for cash-generating units
reduce first the carrying amount of any goodwill
allocated to that cash generating unit. Any
remaining impairment loss is charged pro rata
to the other assets in the cash-generating unit.
With the exception of goodwill, all assets are
subsequently reassessed for indications that an
impairment loss previously recognised may no
longer exist. An impairment loss is reversed if
the asset’s or cash-generating unit’s recoverable
amount exceeds its carrying amount.
Intangible assets that have an indefinite useful
life, not subject to amortisation and Intangible
assets under development are tested annually
for impairment, or more frequently if events or
changes in circumstances indicate that they might
be impaired.
For the purpose of impairment testing, 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 assets for
assessing the value in use. Significant judgement
are involved in determining the recoverable
value including the discount rate and the
subjective nature of the business projection
assumptions (in the Defence industry in which
the Company operates) made over a long period.
Other assets are tested for impairment whenever
events or changes in circumstances indicate that
the carrying amount may not be recoverable.
2.7 Non-Current assets held for sale
The company classifies an item of PPE as a non
current asset held for sale if its carrying amount will be
recovered principally through a sale transaction rather
than through continuing use. Non current assets held
for sale are measured at their carrying value / fair
value less cost to be incurred for its disposal. An item
of non current asset held for sale is not subject to any
depreciation during the period it is held for sale.
2.8 Leases
Company as a lessee
The Company evaluates each contract or arrangement,
whether it qualifies as lease as defined under
Ind AS 116.
The Company determines the lease term as the
noncancellable period of a lease, together with periods
covered by an option to extend the lease, where the
Company is reasonably certain to exercise that option.
The Company at the commencement of the lease
contract recognizes a Right-of-Use (ROU) asset at
cost and corresponding lease liability, except for
leases with term of less than twelve months (short
term leases) and low-value assets. For these short
term and low value leases, the Company recognizes
the lease payments as an operating expense on a
straight line basis over the lease term. The cost of the
right-of-use asset comprises the amount of the initial
measurement of the lease liability, any lease payments
made at or before the inception date of the lease,
plus any initial direct costs, less any lease incentives
received. Subsequently, the right-of-use assets are
measured at cost less any accumulated depreciation
and accumulated impairment losses, if any
The right-of-use assets are depreciated using the
straight-line method from the commencement date
over the shorter of lease term or useful life of right-
of-use asset. The estimated useful life of right-of-use
assets are determined on the same basis as those of
property, plant and equipment.
The Company applies Ind AS 36 to determine
whether an RoU asset is impaired and accounts for
any identified impairment loss as described in the
impairment of non-financial assets below.
For lease liabilities at the commencement of the
lease, the Company measures the lease liability at
the present value of the lease payments that are not
paid at that date. The lease payments are discounted
using the interest rate implicit in the lease, if that rate
can be readily determined. If that rate is not readily
determined, the lease payments are discounted using
the incremental borrowing rate that the Company
would have to pay to borrow funds, including the
consideration of factors such as the nature of the asset
and location, collateral, market terms and conditions,
as applicable in a similar economic environment.
After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of interest
and reduced for the lease payments made.
The Company recognizes the amount of the
remeasurement of lease liability as an adjustment to
the right-of-use assets. Where the carrying amount of
the right-of-use asset is reduced to zero and there is
a further reduction in the measurement of the lease
liability, the Company recognizes any remaining
amount of the remeasurement in statement of profit
and loss.
Lease liability payments are classified as cash used in
financing activities in the statement of cash flows.
2.9 Inventories
i) Raw materials
Raw materials are valued at lower of cost and net
realisable value. However, materials and other
items held for use in the production of inventories
are not written down below cost if the finished
products in which they will be incorporated are
expected to be sold at or above cost. Cost is
determined on a specific identification method
ii) Work in progress and finished goods
Work in progress and finished goods are valued
at lower of cost and net realizable value. Cost
includes the combined cost of material, labour and
a proportion of manufacturing overheads based
on normal operating capacity. Cost is determined
on a specific identification method.
The cost comprises of costs of purchase, duties
and taxes (other than those subsequently
recoverable), conversion cost and other costs
incurred in bringing the inventories to their present
location and condition. Net realisable value is the
estimated selling price in the ordinary course of
business less estimated cost of completion and
applicable selling expenses.
2.10 Post-employment benefits and short-term employee
benefits
a) Defined contribution plan
Contribution to Provident Fund in India are in
the nature of defined contribution plan and are
made to a recognised fund. Contribution to
Superannuation Fund is in the nature of defined
contribution plan and is remitted to insurance
company in accordance with the scheme framed
by the Corporation. The Company has no legal
or constructive obligations to pay contributions
in addition to its fixed contributions, which are
recognised as an expense in the period that related
employee services are received.
I) Provident fund
The Company makes contribution to the
statutory provident fund in accordance with
Employees Provident Fund and Miscellaneous
Provisions Act, 1952, which is a defined
contribution plan, and contribution paid or
payable is recognised as an expense in the
period in which it falls due.
ii) Other funds
The Company’s contribution towards defined
contribution plan is accrued in compliance
with the requirement of the domestic laws of
the country. Payments to defined contribution
retirement benefit plans are charged as an
expense as they fall due.
b) Defined benefit Plan
Under the Company’s defined benefit plans, the
amount of benefit that an employee will receive on
retirement is defined by reference to the employee’s
length of service and final salary.
The defined benefit plans are as below:
I) Gratuity
The liability recognised in the statement of financial
position for defined benefit plans is the present
value of the defined benefit obligation (DBO) at the
reporting date less the fair value of plan assets.
The Company estimates the DBO annually with the
assistance of independent actuaries. This is based
on standard rates of inflation, salary growth rate
and mortality. Discount factors are determined
close to each year-end by reference to government
securities that are denominated in the currency in
which the benefits will be paid and that have terms
to maturity approximating the terms of the related
gratuity liability.
Service cost on the Company’s defined benefit plan
is included in employee benefits expense. Actuarial
gains and losses resulting from measurements of
the net defined benefit liability are included in other
comprehensive income.
ii) Leave salary - compensated absences
The Company also extends defined benefit
plans in the form of compensated absences to
employees. Provision for compensated absences
is made on actuarial valuation basis. Entitlement
to privilege leave is recognised when it accrues to
the employees. Privilege leave can be accumulated
subject to restriction as mentioned in the leave
policy.
2.H Borrowing cost
Borrowing costs directly attributable to the acquisition,
construction or production of a qualifying asset are
capitalized during the period of time that is necessary
to complete and prepare the asset for its intended
use or sale. Other borrowing costs are expensed in
the period in which they are incurred and reported in
finance costs.
2.12 Earnings per equity share
Basic earnings per equity share is calculated by
dividing the total profit for the period attributable
to equity shareholders (after deducting attributable
taxes) by the weighted average number of equity
shares outstanding during the period. The weighted
average number of equity shares outstanding during
the period is adjusted for events including a bonus
issue, bonus element in a rights issue to existing
shareholders, share split and reverse share split
(consolidation of shares). In this scenario, the number
of equity shares outstanding increases without an
increase in resources due to which the number of
equity shares outstanding before the event is adjusted
for the proportionate change in the number of equity
shares outstanding as if the event had occurred at the
beginning of the earliest period reported.
For the purpose of calculating diluted earnings per
share, the net profit or loss for the period attributable to
equity shareholders and the weighted average number
of shares outstanding during the period are adjusted
for the effects of all dilutive potential equity shares.
2.13 Income tax
Income tax comprises current and deferred tax.
Income tax expense is recognized in the statement
of profit and loss except to the extent it relates to a
business combination, or items directly recognized in
equity or in other comprehensive income.
i) Current income tax
Current income tax for the current and prior
periods are measured at the amount expected
to be recovered from or paid to the taxation
authorities based on the taxable income for
the period. The tax rates and tax laws used to
compute the current tax amounts are those that
are enacted or substantively enacted as at the
reporting date and applicable for the period. While
determining the tax provisions, the Company
assesses whether each uncertain tax position is to
be considered separately or together with one or
more uncertain tax positions depending the nature
and circumstances of each uncertain tax position.
The Company offsets current tax assets and
current tax liabilities, where it has a legally
enforceable right to set off the recognized amounts
and where it intends either to settle on a net basis,
or to realize the asset and liability simultaneously.
ii) Deferred income tax
Deferred income tax is recognized using the
balance sheet approach. Deferred income tax
assets and liabilities are recognized for deductible
and taxable temporary differences arising between
the tax base of assets and liabilities and their
carrying amount in financial statements, except
when the deferred income tax arises from the
initial recognition of goodwill or an asset or liability
in a transaction that is not a business combination
and affects neither accounting nor taxable profits
or loss at the time of the transaction.
Deferred income tax assets are recognized to
the extent 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 utilized.
Deferred income tax liabilities are recognized for all
taxable temporary differences except in respect of
taxable temporary differences that is expected to
reverse within the tax holiday period.
The carrying amount of deferred income 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 income tax asset to
be utilized.
Deferred income tax assets and liabilities are
measured at the tax rates that are expected to
apply in the period when the asset is realized or the
liability is settled, based on tax rates (and tax laws)
that have been enacted or substantively enacted at
the reporting date.
The Company offsets deferred income tax assets
and liabilities, where it has a legally enforceable
right to offset current tax assets against current
tax liabilities, and they relate to taxes levied by the
same taxation authority on either the same taxable
entity, or on different taxable entities where there
is an intention to settle the current tax liabilities
and assets on a net basis or their tax assets and
liabilities will be realized simultaneously.
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