2. Significant Accounting Policies
The principal accounting policies applied in the preparation of these standalone financial
statements are set out below. These policies have been consistently applied to all the years
presented, unless otherwise stated.
2.1 Statement of compliances and basis of preparation and presentation
a.) Statement of compliance
These standalone financial statements (‘financial statements’) of the Company have been
prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the
‘Ind AS’) as notified by Ministry of Corporate Affairs (‘MCA’) under section 133 of the Companies
Act, 2013 (‘Act’) read with the Companies (Indian Accounting Standards) Rules, 2015, as
amended and other relevant provisions of the Act. The Company has uniformly applied the
accounting policies during the periods presented in these financial statements.
Accounting policies have been consistently applied to all the financial year presented in the
standalone financial statements except where a newly issued accounting standard is initially
adopted or a revision to the existing accounting standard requires a change in the accounting
policy hitherto in use.
The Standalone Balance Sheet, the Standalone Statement of Changes in Equity, the Standalone
Statement of Profit and Loss and disclosures are presented in the format prescribed under
Division III of Schedule III of the Companies Act, as amended from time to time that are required
to comply with Ind AS. The Standalone Statement of Cash Flows has been presented as per the
requirements of Ind AS 7 Statement of Cash Flows.
b. ) Basis of presentation
The Company is covered in the definition of non-banking financial Company as defined in
Companies (Indian Accounting Standards) (Amendment) Rules, 2015. The Company presents the
Balance Sheet, the Statement of Profit and Loss and the statement of Changes in Equity in the
order of liquidity as per the format prescribed under Division III of Schedule III to the Companies
Act, 2013. The format and figures in the statement of profit and loss and balance sheet of the
previous period in the financial statements have been accordingly restated and reclassified to
conform to the new format. There is no impact on Equity or Net Profit due to these regrouping /
reclassifications.
These standalone financial statements are presented in Indian Rupees (INR), which is also its
functional currency and all values are rounded to the nearest hundred. Except when otherwise
indicated.
The standalone financial statements for the year ended March 31, 2025 were authorised and
approved for issue by the Board of Directors on April 29, 2025.
c. ) Basis of measurement
The financial statements have been prepared on going concern basis, in accordance with
accounting principles generally accepted in India, as the Management is satisfied that the
Company shall be able to continue its business for the foreseeable future and no material
uncertainty exists that may cast significant doubt on the going concern assumption. Further, the
financial statements have been prepared on accrual and historical cost basis, except for the
following:
• Certain Financial instruments are measured at fair value (refer accounting policy regarding
Financial Instruments and fair value measurement);
• Securities held for trading;
• Derivative Financial Instruments; and
• Defined benefit plans as per actuarial valuation.
d. ) Use of estimates and judgements
In preparing these financial statements, management has made judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results could differ from these estimates.
Accounting estimates and underlying assumptions are reviewed on an on-going basis and could
change from period to period. Appropriate changes in estimates are recognized in the period in
which the Company becomes aware of the changes in circumstances surrounding the estimates.
Any revisions to accounting estimates are recognized prospectively in the period in which the
estimate is revised and future periods.
Judgments:
Information about judgements made in applying accounting policies that have the most
significant effects on the amounts recognized in the standalone financial statements is included
in the following notes:
Information about assumptions and estimation uncertainties that have a significant risk of
resulting in a material adjustment in the year ended March 31, 2024 is included in the following
notes:
• Recognition of deferred tax assets: availability of future taxable profit against which tax losses
carried forward can be used;
- Measurement of defined benefit obligations: key actuarial assumptions;
• Estimation of provision and contingencies;
• Determination of useful life of Property, Plant and Equipment’s, and Investment property and
method of depreciation;
• Determination of useful life of Intangible assets and method of depreciation;
- Effective interest rate;
- Evaluation of lease, lease term and discount rates;
- Fair value of financial instruments including unlisted equity instruments;
- Estimation of provisions and contingencies.
2.2 Property, plant and equipment
Recognition and measurement:
Land is carried at historical cost. All other items of property, plant and equipment are measured
at cost, less accumulated depreciation and accumulated impairment losses, if any.
Cost of an item of property, plant and equipment comprises its purchase price, including import
duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any
directly attributable cost of bringing the item to its working condition for its intended use and
estimated costs of dismantling and removing the item and restoring the site on which it is
located.
If significant parts of an item of property, plant and equipment have different useful lives, then
they are accounted for as separate items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment is recognised in
Statement of Profit and Loss.
Subsequent measurement:
All items of property, plant and equipment are stated at historical cost less depreciation.
Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset,
as appropriate, 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 separate asset is derecognised when replaced. All
other repairs and maintenance are charged to Statement of Profit and Loss during the reporting
period in which they are incurred.
Depreciation is calculated on cost of items of property, plant and equipment less their
estimated residual values over their estimated useful lives using the written down value method
and is generally recognised in the Statement of Profit and Loss. Freehold land is not
depreciated.
Depreciation on fixed assets is provided as per the guidance set out in Schedule II to the
Companies Act, 2013. Depreciation is charged on written-down value method based on
estimated useful life of the asset after considering residual value as set out in Schedule II to the
Companies Act, 2013.
Depreciation on additions (disposals) is provided on a pro-rata basis i.e. from (up to) the date on
which asset is ready for use (disposed of).
Leasehold improvements are amortised over the lease period or the estimated useful life,
whichever is shorter.
Depreciation method, useful lives and residual values are reviewed at each financial year-end
and adjusted if appropriate.
Derecognition:
The carrying amount of an item of property, plant and equipment is derecognized on disposal or
when no future economic benefits are expected from its use or disposal. Gains and losses on
disposals are determined by comparing proceeds with carrying amount and are recognized in the
statement of profit and loss when the asset is derecognized.
2.3 Intangible assets
Initial recognition:
Intangible assets are recognized where it is probable that the future economic benefit
attributable to the assets will flow to the Company and its cost can be reliably measured.
Intangible assets acquired separately are measured on initial recognition at cost. Intangible
assets arising on acquisition of business are measured at fair value as at date of acquisition.
Internally generated intangibles including research cost are not capitalized and the related
expenditure is recognized in the Statement of Profit and Loss in the period in which the
expenditure is incurred. Expenditure on the development of intangible assets, eligible for
capitalisation, are carried as Intangible assets under development where such assets are not yet
ready for their intended use. Following initial recognition, intangible assets with finite useful
life are carried at cost less accumulated amortization and accumulated impairment loss, if any.
Intangible assets with indefinite useful lives, that are acquired separately, are carried at
cost/fair value at the date of acquisition less accumulated impairment loss, if any.
Amortisation:
It is the systematic allocation of the depreciable amount of an asset over its useful life.
Intangible Assets with finite lives are amortised on a diminishing basis over the estimated useful
economic life. The amortization expense on intangible assets with finite lives is recognized in
the Statement of Profit and Loss. The amortisation period and the amortization method for an
intangible asset with finite useful life is reviewed at the end of each financial year. If any of
these expectations differ from previous estimates, such change is accounted for as a change in
an accounting estimate.
Derecognition:
The carrying amount of an intangible asset is derecognized on disposal or when no future
economic benefits are expected from its use or disposal. Gains or losses arising from de-
recognition of an intangible asset 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 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a
financial liability or equity instrument of another entity. Financial instruments also include
derivative contracts such as foreign currency forward contracts, interest rate swaps and currency options;
and embedded derivatives in the host contract.
Initial recognition and measurement:
Financial assets and financial liabilities are recognized when the entity becomes a party to the
contractual provisions of the instrument. Regular way purchases and sales of financial assets are
recognized on trade-date, the date on which the Company commits to purchase or sell the asset.
Financial instruments are initially measured at their fair value, except in the case of financial assets and
financial liabilities recorded at FVTPL, transaction costs are added to, or subtracted from, this amount.
Classification and subsequent measurement:
• Financial asset
The Company classifies its financial assets in the following measurement categories:
1) Amortised cost
2) Fair value through other comprehensive income (FVOCI)
3) Fair value through profit or loss (FVTPL)
Financial assets carried at amortised cost:
A financial asset is measured at amortised cost if it meets both of the following conditions:
(i) the asset is held within a business model whose objective is to hold assets to collect
contractual cash flows (‘Asset held to collect contractual cash flows’); and
(ii) the contractual terms of the financial asset give rise on specified dates to cash flows that
are solely payments of principal and interest (‘SPPI’) on the principal amount outstanding.
This category generally applies to cash and bank balances, trade and other receivables, loans,
securities deposits etc. of the Company. 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 interest
income in the Statement of Profit and Loss
2) Financial assets at fair value through other comprehensive income (FVOCI)
Financial assets that are held within a business model whose objective is achieved by both,
selling financial assets and collecting contractual cash flows that are solely payments of
principal and interest, are subsequently measured at fair value through other comprehensive
income. Fair value movements in debt and equity instrument are recognised in the other
comprehensive income (OCI) except interest / dividend income which is recognised in profit and
loss. However, in case of equity instruments, the Company may, irrevocably elects to measure
the investments in equity instruments either at FVOCI or FVTPL and makes such election on an
instrument-by-instrument basis. If Company opts to measure the equity instrument at FVOCI,
such fair value movements will be directly transferred to OCI.
3) Financial assets at fair value through profit and loss (FVTPL)
Financial assets, which do not meet the criteria for categorisation as at amortised cost or as
FVOCI or either designated, are measured at FVTPL. Subsequent changes in fair value are
recognised in profit or loss. The Company recognises the derivative financial asset being the
advance premium paid on the options, future’s MTM profit and Securities for trade - at FVTPL.
• Financial liabilities
The Company classifies its financial liabilities in the following measurement categories:
1) Amortised cost, and
2) Fair value through profit or loss (‘FVTPL’).
Financial liabilities are classified at FVTPL when the financial liability is recognised by the
Company on account of business combination (Ind AS 103) or is held for trading or is designated
as FVTPL. In all other cases, they are measured at amortised cost.
1) Financial Liabilities carried at amortised cost:
Financial liabilities are subsequently measured at amortised cost using the EIR method. The EIR
is a method of calculating the amortised cost of a financial liability and of allocating interest
expense over the relevant period at effective interest rate. The effective interest rate is the
rate that exactly discounts estimated future cash payments through the expected life of the
financial liability, or, where appropriate, a shorter period.
2) Financial liabilities at Fair value through Profit and Loss:
Financial liabilities at fair value through profit and loss are measured at fair value with all
changes recognized in the statement of profit and loss. The Company recognises the derivative
financial liability being Future’s MTM loss at FVTPL.
• Financial asset
Financial asset is derecognised when: - The rights to receive cash flows from the asset have
expired, or - The Company has transferred its rights to receive cash flows from the asset and
either (a) Company has transferred substantially all the risks and rewards of the asset, or (b) the
Company has neither transferred nor retained substantially all the risks and rewards of the
asset, but has transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset, it evaluates if
and to what extent it has retained the risks and rewards of ownership. When it has transferred
substantially all risks and rewards, the Company derecognise the asset and, when it has neither
transferred nor retained substantially all of the risks and rewards of the asset, nor transferred
control of the asset, the Company continues to recognise the transferred asset to the extent of
the Company's continuing involvement.
On derecognition of a financial asset, the difference between the carrying amount of the asset
(or the carrying amount allocated to the portion of the asset derecognised) and the sum of (i)
the consideration received (including any new asset obtained less any new liability assumed) and
(ii) any cumulative gain or loss that had been recognised in OCI, is recognised in profit or loss
(except for equity instruments measured at FVOCI). For Equity Instruments at FVOCI, the
realised amount of gain/(loss) on their disposal is then finally transferred from OCI to retained
earnings.
• Financial liability:
A financial liability is derecognised when the obligation under the liability is discharged or
cancelled or expires. When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as the derecognition of the original
liability and the recognition of a new liability. The difference in the respective carrying amounts
is recognised in the Statement of profit and loss.
Derivatives and hedge accounting
Derivatives are initially recognised at fair value and are subsequently re-measured to their fair
value at the end of each reporting period. The resulting gains / losses is recognised in Statement
of Profit and Loss immediately unless the derivative is designated and effective as a hedging
instrument, in which event the timing of recognition in profit or loss / inclusion in the initial
cost of non-financial asset depends on the nature of the hedging relationship and the nature of
the hedged item.
The Company complies with the principles of hedge accounting where derivative contracts are
designated as hedge instruments. At the inception of the hedge relationship, the Company
documents the relationship between the hedge instrument and the hedged item, along with the
risk management objectives and its strategy for undertaking hedge transaction, which can be a
fair value hedge or a cash flow hedge.
• Fair value hedges:
Changes in fair value of the designated portion of derivatives that qualify as fair value hedges
are recognised in profit or loss immediately, together with any changes in the fair value of the
hedged asset or liability that are attributable to the hedged risk. The change in the fair value of
the designated portion of hedging instrument and the change in fair value of the hedged item
attributable to the hedged risk are recognised in Statement of Profit and Loss in the line item
relating to the hedged item. Hedge accounting is discontinued when the hedging instrument
expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting.
The fair value adjustment to the carrying amount of the hedged item arising from the hedged
risk is amortised to profit or loss from that date.
• Cash flow hedges:
The effective portion of changes in the fair value of derivatives that are designated and qualify
as cash flow hedges is recognised in the other comprehensive income and accumulated as ‘Cash
Flow Hedging Reserve’. The gains / losses relating to the ineffective portion are recognised in
the Statement of Profit and Loss. Amounts previously recognised and accumulated in other
comprehensive income are reclassified to profit or loss when the hedged item affects the
Statement of Profit and Loss. However, when the hedged item results in the recognition of a
non-financial asset, such gains/losses are transferred from equity (but not as reclassification
adjustment) and included in the initial measurement cost of the non-financial asset. Hedge
accounting is discontinued when the hedging instrument expires or is sold, terminated, or
exercised, or when it no longer qualifies for hedge accounting. Any gains/losses recognised in
other comprehensive income and accumulated in equity at that time remains in equity and is
reclassified when the underlying transaction is ultimately recognised. When an underlying
transaction is no longer expected to occur, the gains / losses accumulated in equity is
recognised immediately in the Statement of Profit and Loss.
• Investment in equity instruments of subsidiary
Investments in subsidiary is measured at cost less accumulated impairment, if any, as per Ind AS
27 'Separate Financial Statements'. The Company assesses at the end of each reporting period if
there is any indications of impairment on such investment. If so, the Company estimates the
recoverable amount of the investment and provides for impairment.
• Securities for trade
The Company deals in Equity shares which are held for the purpose of trading. Such securities
are valued at Fair value in accordance with Ind AS 109 and such securities are classified at fair
value through profit and loss.
• Investment in Equity Shares and Mutual Fund
Company also invests in Securities like Equity shares and mutual funds other than held for trade
or, held for strategic purpose. In respect of such for a strategic financial instruments, Company
decides to measure them, at the time of initial recognition, at FVTPL or FVTOCI based on
management intention.
2.5 Foreign currency translation or transaction
Functional and presentation currency:
Items included in the financial statements are measured using the currency of the primary
economic environment in which the entity operates ('the functional currency'). The financial
statements are presented in Indian rupee (INR), which is entity's functional and presentation
currency.
Transactions and balances:
Foreign currency transactions are translated into the functional currency using the exchange
rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated into the
functional currency at the exchange rate at the reporting date. Non-monetary assets and
liabilities that are measured based on historical cost in a foreign currency are translated at the
exchange rate at the date of the transaction. Exchange differences are recognised in Statement
of Profit and Loss.
2.6 Employee benefits
Short-term employee obligations:
Short-term employee benefits comprise of employee costs such as salaries, bonus etc. and are
recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for
the year in which the related services are rendered. The Company recognises the costs of bonus
payments when it has a present obligation to make such payments as a result of past events and
a reliable estimate of the obligation can be made.
Long-term employee benefits:
i. Defined contribution plans:
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed
contributions into a separate entity and will have no legal or constructive obligation to pay
further amounts. The Company makes monthly contributions to statutory provident fund
(Government administered provident fund scheme) in accordance with Employees Provident
Fund and Miscellaneous Provisions Act, 1952 which is a defined contribution plan. Obligations for
contributions to defined contribution plans are recognised as an employee benefit expense in
Statement of Profit and Loss in the period(s) during which the related services are rendered by
employees.
ii. Defined benefit plans:
A defined benefit plan is a post-employment benefit plan other than a defined contribution
plan. Gratuity is a post- employment benefit and is in the nature of a defined benefit plan.
The Company's net obligation in respect of defined benefit plans is calculated separately for
each plan by estimating the amount of future benefit that employees have earned in the current
and prior periods, discounting that amount and deducting the fair value of any plan assets.
The calculation of defined benefit obligation is performed annually by a qualified actuary using
the projected unit credit method. When the calculation results in a potential asset for the
Company, the recognised asset is limited to the present value of economic benefits available in
the form of any future refunds from the plan or reductions in future contributions to the plan
(‘the asset ceiling’). In order to calculate the present value of economic benefits, consideration
is given to any minimum funding requirements.
Re-measurements of the net defined benefit liability, which comprise actuarial gains and losses,
the return on plan assets (excluding interest) and the effect of the asset ceiling (if any,
excluding interest), are recognised in Other Comprehensive Income (OCI). The Company
determines the net interest expense (income) on the net defined benefit liability (asset) for the
period by applying the discount rate used to measure the defined benefit obligation at the
beginning of the annual period to the then-net defined benefit liability (asset), taking into
account any changes in the net defined benefit liability (asset) during the period as a result of
contributions and benefit payments. Net interest expense and other expenses related to defined
benefit plans are recognised in Statement of Profit and Loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in
benefit that relates to past service (‘past service cost’ or ‘past service gain’) or the gain or loss
on curtailment is recognised immediately in Statement of Profit and Loss. The Company
recognises gains and losses on the settlement of a defined benefit plan when the settlement
occurs.
2.7 Exceptional items
Items of income or expense from ordinary activities which are of such size, nature or incidence
that, there disclosure is relevant to explain the performance of the enterprise for the period,
are disclosed separately in the Statement of Profit and Loss.
2.8 Measurement of fair values
A number of the accounting policies and disclosures require measurement of fair values, for
both financial and non-financial assets and liabilities. Fair values are categorized into different
levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.
Level 2: Inputs other than quoted price included within Level 1 that are observable for the asset
or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
The fair value of financial instruments that are not traded in an active market is determined
using market approach and valuation techniques which maximise the use of observable market
data and rely as little as possible on entity-specific estimates. If significant inputs required to
fair value an instrument are observable, the instrument is included in Level 2.
Derivatives [call & put options, un-hedged] are valued using valuation techniques with market
observable inputs and these are marked to market based on prevailing quoted rates, as
applicable.
Level 3: Inputs for the assets or liabilities that are not based on observable market data
(unobservable inputs).
If one or more of the significant inputs is not based on observable market data, the fair value is
determined using generally accepted pricing models based on a discounted cash flow analysis,
with the most significant inputs being the discount rate that reflects the credit risk of
counterparty.
The fair value of trade receivables, trade payables and other current financial assets and
liabilities is considered to be equal to the carrying amounts of these items due to their short¬
term nature. Where such items are non-current in nature, the same has been classified as Level
3 and fair value determined using discounted cash flow basis. Similarly, unquoted equity
instruments where most recent information to measure fair value is insufficient, or if there is a
wide range of possible fair value measurements, cost has been considered as the best estimate
of fair value.
There has been no change in the valuation methodology for Level 3 inputs during the year. The
Company has not classified any material financial instruments under Level 3 of the fair value
hierarchy. There were no transfers between Level 1 and Level 2 during the year.
L9 Revenue Recognition
Revenue (other than for those items to which Ind AS 109 Financial Instruments are applicable) is
measured at fair value of the consideration received or receivable. The Company recognises
revenue from contracts with customers based on a five-step model as set out in Ind AS 115 -
“Revenue from Contracts with Customers”, to determine when to recognize revenue and at
what amount. Revenue is measured based on the consideration specified in the contract with a
customer. Revenue from contracts with customers is recognised when services are provided and
it is highly probable that a significant reversal of revenue is not expected to occur.
Revenue is recognised when (or as) the Company satisfies a performance obligation by
transferring a promised service or goods (i.e. an asset) to a customer. An asset is transferred
when (or as) the customer obtains control of that asset.
When (or as) a performance obligation is satisfied, the Company recognizes as revenue the
amount of the transaction price (excluding estimates of variable consideration) that is allocated
to that performance obligation. The Company applies the five-step approach for recognition of
revenue:
• Identification of contract(s) with customers;
• Identification of the separate performance obligations in the contract;
• Determination of transaction price;
• Allocation of transaction price to the separate performance obligations; and
• Recognition of revenue when (or as) each performance obligation is satisfied.
i. Brokerage and related income:
Brokerage Income is recognised on trade date basis and is exclusive of Goods and Service tax
(GST), Security Transaction Tax (STT) and stamp duty, wherever applicable, Income from
depository participants is recognized as & when assured.
ii. Dividend income:
Dividend income is recognized in the statement of profit or loss on the date that the Company’s
right to receive payment is established, it is probable that the economic benefits associated
with the dividend will flow to the entity and the amount of dividend can be reliably measured.
iii. Interest Income
Interest income on financial assets at amortized cost is recognized on a time proportion basis.
Interest income on financial assets 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-impaired) or to the amortised cost of
the liability. 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.
iv. Proprietory Income (Income from trading in securities and derivatives):
Revenue from trading primarily consists of income from trading in marketable financial
instruments earned by the Company. Net Trading income represents trading gain net of losses.
Purchase & Sales of derivatives financial instruments are recorded on trade date. The profit or
loss arising from all transactions entered into on account and risk of the Company are recorded
on trade date. The revenue is recorded at the gross value. Market value for exchange traded
derivatives, principally, futures and options, are based on quoted market prices. The gains or
losses on derivatives used for trading purposes are included in revenue from trading.
All securities (exchange traded equity shares) which are squared-off during the day (i.e. intra¬
day) are included in trading income. Purchase & Sales of derivatives financial instruments are
recorded on trade date. The profit or loss arising from all transactions entered into on account
and risk of the Company are recorded on trade date. The revenue is recorded at the gross value.
Market Value for exchange traded equity instruments, are based on quoted market prices. The
gains or losses on securities used for trading purposes are included in revenue from trading.
As per Ind AS 109 Financial Instruments, in respect of all open positions (option contracts) as on
the reporting date are marked to market at closing rate. The balance receivable or payable is
shown in balance sheet as financial assets or financial liabilities.
v. Market making fees (incentive income)
Incentives from exchanges are recognised on point in time basis.
vi. other income
Other income have been recognised on an accrual basis in the Financial Statements, except
when there is uncertainty of collection.
2.10 Leases
The Company’s lease asset classes primarily consist of leases for 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: (i) the contract involves
the use of an identified asset (ii) the Company has substantially all of the economic benefits
from use of the asset through the period of the lease and (iii) the Company has the right to
direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use (ROU) asset
and a corresponding lease liability for all lease arrangements in which it is a lessee, except for
leases with a term of 12 months or less (short-term leases) and low value leases. 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 term of the lease. Certain lease arrangements include
the options to extend or terminate the lease before the end of the lease term. ROU assets and
lease liabilities includes these options when it is reasonably certain that they will be exercised.
The ROU assets are initially recognized 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. ROU 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. ROU 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 does not
generate cash flows that are largely independent 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 amortized 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 these leases. Lease liabilities are re-measured with a corresponding adjustment to
the related ROU asset if the Company changes its assessment of whether it will exercise 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.
The Company has applied the exemption to not to recognize ROU assets and liabilities for leases
with less than 12 months of lease term on the date of initial application.
Income tax comprises current and deferred tax. It is recognised in Statement of Profit and Loss
except to the extent that it relates to a business combination or to an item recognised directly
in equity or in other comprehensive income.
/. Current tax:
Current tax comprises the expected tax payable or receivable on the taxable income or loss for
the year and any adjustment to the tax payable or receivable in respect of previous years. The
amount of current tax reflects the best estimate of the tax amount expected to be paid or
received after considering the uncertainty, if any, related to income taxes. It is measured using
tax rates (and tax laws) enacted or substantively enacted by the reporting date.
Current tax assets and current tax liabilities are offset only if there is a legally enforceable right
to set off the recognised amounts, and it is intended to realise the asset and settle the liability
on a net basis or simultaneously.
j7. Deferred tax:
Deferred tax is recognised in respect of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the corresponding amounts used for
taxation purposes. Deferred tax is also recognised in respect of carried forward tax losses and
tax credits. Deferred tax is not recognised for:
- temporary differences related to investments in subsidiary and associate to the extent that
the Company is able to control the timing of the reversal of the temporary differences and it
is probable that they will not reverse in the foreseeable future; and
- deferred tax assets are recognised to the extent that it is probable that future taxable profits
will be available against which they can be used. The existence of unused tax losses is strong
evidence that future taxable profit may not be available. Therefore, in case of a history of
recent losses, the Company recognises a deferred tax asset only to the extent that it has
sufficient taxable temporary differences or there is convincing other evidence that sufficient
taxable profit will be available against which such deferred tax asset can be realised.
Deferred tax assets unrecognised or recognised, are reviewed at each reporting date and
are recognised/ reduced to the extent that it is probable/ no longer probable respectively
that the related tax benefit will be realised.
Deferred tax is measured at the tax rates that are expected to apply to the period when the
asset is realised or the liability is settled, based on the laws that have been enacted or
substantively enacted by the reporting date.
Current and deferred tax is recognised in the Statement of Profit and Loss, except to the extent
that it relates to items recognised in other comprehensive income or directly in equity and in
this case, the tax is also recognised in other comprehensive income or directly in equity,
respectively.
The measurement of deferred tax reflects the tax consequences that would follow from the
manner in which the Company expects, at the reporting date, to recover or settle the carrying
amount of its assets and liabilities.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset
current tax liabilities and assets, and they relate to income taxes levied by the same tax
authority on the same taxable entity, or on different tax entities, but they intend to settle
current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised
simultaneously.
2.12 Earnings per share
The basic earnings/(loss) per share is computed by dividing the net profit/(loss) for the period (
excluding other comprehensive income) attributable to equity shareholders of the Company by
the weighted average number of equity shares outstanding during the period.
The number of shares used in computing diluted earnings/(loss) per share comprises the
weighted average shares considered for deriving basic earnings/(loss) per share and also the
weighted average number of equity shares which could have been issued on the conversion of all
dilutive potential equity shares.
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