2.2 Summary of material accounting policies
a) Use of estimates
The preparation of financial statements in conformity
with the principles of Ind AS requires the management
to make judgements, estimates and assumptions that
effect the reported amounts of revenues, expenses,
assets and liabilities and the disclosure of contingent
liabilities, at the end of the reporting period. Although
these estimates are based on the management's best
knowledge of current events and actions, uncertainty
about these assumptions and estimates could result
in the outcomes requiring a material adjustment to
the carrying amounts of assets or liabilities in future
periods.
The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period
in which the estimate is revised if the revision affects
only that period, or in the period of the revision and
future periods if the revision affects both current and
future periods.
In particular, information about the significant areas
of estimation, uncertainty and critical judgements
in applying accounting policies that have the most
significant effect on the amounts recognised in the
standalone financial statements are disclosed in note
30.
b) Business combination and goodwill
Business combinations are accounted for using the
acquisition method.
The Company determines that it has acquired a
business when the acquired set of activities and
assets include an input and a substantive process
that together significantly contribute to the ability to
create outputs. The acquired process is considered
substantive if it is critical to the ability to continue
producing outputs, and the inputs acquired include
an organised workforce with the necessary skills,
knowledge, or experience to perform that process or
it significantly contributes to the ability to continue
producing outputs and is considered unique or scarce
or cannot be replaced without significant cost, effort,
or delay in the ability to continue producing outputs.
Acquisition method
The acquisition method of accounting is used
to account for all business combinations. The
consideration transferred for the acquisition of a
subsidiary comprises the
(i) fair values of the assets transferred;
(ii) liabilities incurred to the former owners of the
acquired business;
(iii) equity interests issued by the Company; and
(iv) fair value of any asset or liability resulting from
a contingent consideration arrangement.
However, the following assets and liabilities acquired
in a business combination are measured at the basis
indicated below:
i) Deferred tax assets or liabilities, and the
assets or liabilities related to employee benefit
arrangements are recognised and measured in
accordance with Ind AS 12 Income Tax and Ind
AS 19 Employee Benefits respectively.
At the acquisition date, the identifiable assets
acquired and the liabilities assumed are recognised
at their fair value.
The excess of the
(i) consideration transferred;
(ii) amount of any non-controlling interest in the
acquired entity, and
(iii) acquisition-date fair value of any previous equity
interest in the acquired entity
over the fair value of the net identifiable assets
acquired and liabilities assumed is recorded as
goodwill. If those amounts are less than the fair
value of the net identifiable assets of the business
acquired, the difference is recognised in other
comprehensive income and accumulated in equity
as capital reserve provided there is clear evidence
of the underlying reasons for classifying the business
combination as a bargain purchase. In other cases,
the bargain purchase gain is recognised directly in
equity as capital reserve.
After initial recognition, goodwill is measured at
cost less any accumulated impairment losses. For
the purpose of impairment testing, goodwill acquired
in a business combination is, from the acquisition
date, allocated to each of the Companies cash¬
generating units that are expected to benefit from
the combination, irrespective of whether other
assets or liabilities of the acquiree are assigned to
those units. A cash generating unit to which goodwill
has been allocated is tested for impairment annually,
or more frequently when there is an indication that
the unit may be impaired.
Where settlement of any part of cash consideration
is deferred, the amounts payable in the future are
discounted to their present value as at the date of
exchange. The discount rate used is the entity's
incremental borrowing rate, being the rate at which
a similar borrowing could be obtained from an
independent financier under comparable terms and
conditions.
Any contingent consideration to be transferred by the
acquirer is recognised at fair value at the acquisition
date. Contingent consideration is classified either as
equity or a financial liability. Amounts classified as a
financial liability are subsequently remeasured to fair
value with changes in fair value
Contingent consideration that is classified as equity
is not re-measured at subsequent reporting dates
and subsequent its settlement is accounted for
within equity.
If the business combination is achieved in stages,
the acquisition date carrying value of the acquirer's
previously held equity interest in the acquiree is
remeasured to fair value at the acquisition date. Any
gains or losses arising from such remeasurement
are recognised in the statement of profit and loss or
other comprehensive rnccj> Repo rts2 a § pria t^
c) Current versus non- current classification
The Company presents assets and liabilities in
the balance sheet based on current/ non-current
classification. An asset is treated as current when
it is:
i) Expected to be realised or intended to be sold or
consumed in normal operating cycle
ii) Held primarily for the purpose of trading
iii) It is expected to be realised within twelve months
after the reporting period, or
iv) Cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for
at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:
i) It is expected to be settled in normal operating
cycle
ii) Held primarily for the purpose of trading
iii) It is due to be settled within twelve months after
the reporting period, or
iv) There is no unconditional right to defer the
settlement of the liability for at least twelve
months after the reporting period.
The Company classifies all other liabilities as non¬
current.
Deferred tax assets and liabilities are classified as
non-current assets and liabilities.
The operating cycle is the time between the acquisition
of assets for processing and their realisation in cash
and cash equivalents. The Company has identified
twelve months as its operating cycle.
d) Foreign currencies
The Company's financial statements are presented in
',. Functional currency is the currency of the primary
economic environment in which the Company
operates and is normally the currency in which the
Company primarily generates and expends cash.
Transactions and balances
Transactions in foreign currencies are initially
recorded in the functional currencies using the spot
rates at the date when the transaction first qualifies
for recognition. However, for practical reasons,
the company uses an average rate if the average
approximates the exchange rates at the date of the
transaction.
Monetary assets and liabilities denominated in foreign
currencies are translated at the functional currency
spot rates of exchange at the reporting date.
Exchange differences arising on settlement or
translation of monetary items are recognised in profit
and loss.
Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated
using the exchange rates at the dates of the initial
transactions.
e) Fair value measurement
The Company measures financial instruments such
as Investment in mutual funds and similar financial
instruments at fair value at each balance sheet date.
Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly
transaction between market participants at the
measurement date. The fair value measurement is
based on the presumption that the transaction to sell
the asset or transfer the liability takes place either:
i) In the principal market for the asset or liability,
or
ii) In the absence of a principal market, in the most
advantageous market for the asset or liability
The principal or the most advantageous market must
be accessible by the Company.
The fair value of an asset or a liability is measured
using the assumptions that market participants would
use when pricing the asset or liability, assuming
that market participants act in their economic best
interest.
A fair value measurement of a non-financial asset
takes into account a market participant's ability to
generate economic benefits by using the asset in its
highest and best use or by selling it to another market
participant that would use the asset in its highest
and best use.
The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximising the use of relevant observable inputs and
minimising the use of unobservable inputs.
All assets and liabilities for which fair value is
measured or disclosed in the financial statements are
categorised within the fair value hierarchy, described
as follows, based on the lowest level input that is
significant to the fair value measurement as a whole:
i) Level 1 — Quoted (unadjusted) market prices in
active markets for identical assets or liabilities.
ii) Level 2 — Valuation techniques for which the
lowest level input that is significant to the fair
value measurement is directly or indirectly
observable.
iii) Level 3 — Valuation techniques for which the
lowest level input that is significant to the fair
value measurement is unobservable.
For assets and liabilities that are recognised in
the statements on a recurring basis, the Company
determines whether transfers have occurred
between levels in the hierarchy by re-assessing
categorisation (based on the lowest level input that is
significant to the fair value measurement as a whole)
at the end of each reporting period.
The Company's management determines the
policies and procedures for both recurring fair value
measurement, such as, Investment in mutual funds,
and similar financial instruments at fair value. The
team comprises of the Chief Financial Officer (CFO)
and Finance Controller.
External valuers are involved for valuation of
significant assets and liabilities. Involvement of
external valuers is decided on the basis of nature
of transaction and complexity involved. Selection
criteria include market knowledge, reputation,
independence and whether professional standards
are maintained.
At each reporting date, the finance team analyses
the movements in the values of assets and liabilities
which are required to be remeasured or re-assessed
as per the Company's accounting policies. For this
analysis, the team verifies the major inputs applied
in the latest valuation by agreeing the information
in the valuation computation to contracts and
other relevant documents. A change in fair value of
assets and liabilities is also compared with relevant
external sources to determine whether the change
is reasonable.
For the purpose of fair value disclosures, the
Company has determined classes of assets and
liabilities on the basis of the nature, characteristics
and risks of the asset or liability and the level of the
fair value hierarchy as explained above.
f) Property, plant and equipment
Property, plant and equipment ("PPE") are stated at
cost, less accumulated depreciation and accumulated
impairment loss, if any. Such cost includes the
expenditure directly attributable to bringing the
asset to the location and condition necessary for it
to be capable of operating in the manner intended
by management.
Subsequent costs on a PPE are included in the
asset's carrying amount 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. Rest of the subsequent
costs are charged to the statement of profit and loss
in the reporting period ln which they are incurred.
Capital work in progress is stated at cost, net of
accumulated impairment loss, if any.
Depreciation on all property plant and equipment
are provided on a straight line method based on the
estimated useful life of the asset, which is as follows:
Leasehold improvements are amortised over five
years or life based on lease period.
The useful life of furniture and fittings, plant and
machinery and office equipment are estimated as 5
years, 5-10 years and 3-5 years respectively. These
lives are lower than those indicated in schedule II to
Companies Act 2013.
The management has estimated the useful lives and
residual values of all property, plant and equipment
and adopted useful lives based on management's
technical assessment of their respective economic
useful lives. The residual values, useful lives and
methods of depreciation of property, plant and
equipment are reviewed at each financial year end
and adjusted prospectively (if any),
Depreciation on the assets purchased during the
year is provided on pro-rata basis from the date of
purchase of the assets.
An item of property, plant and equipment and any
significant part initially recognised is derecognised
upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or
loss arising on derecognition of the asset (calculated
as the difference between the net disposal proceeds
and the carrying amount of the asset) is included in
the statement of profit and loss when the asset is
derecognised.
g) Goodwill and Other intangible assets
Goodwill represents the cost of acquired business as
established at the date of acquisition of the business
in excess of the acquirer's interest in the net fair value
of the identifiable assets, liabilities and contingent
liabilities less accumulated impairment losses, if any.
Goodwill is tested for impairment annually or when
events or circumstances indicate that the implied fair
value of goodwill is less than the carrying amount
Intangible assets (mainly includes software and trade
marks) acquired separately are measured on initial
recognition at cost. The amortisation period and the
amortisation method for an Intangible asset with
a finite useful life are reviewed at least at the end
of each reporting period. Changes in the expected
useful life or the expected pattern of consumption
of future economic benefits embodied in the asset
are considered to modify the amortisation period or
method, as appropriate, and are treated as changes in
accounting estimates. The amortisation expense on
intangible assets with finite lives is recognised in the
statement of profit and loss unless such expenditure
forms part of carrying value of another asset.
Amortisation on intangible assets are provided on a
straight line method based on the estimated useful
life of the asset, which is as follows:
An intangible asset is derecognised upon disposal
(i.e., at the date the recipient obtains control) or when
no future economic benefits are expected from its
use or disposal. Any gains or losses arising from
derecognition 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.
Intangible assets acquired in business combination,
include non-compete and customer relationship
which are amortized over the period of five years on
straight line method basis
The management has estimated the useful lives and
residual values of all intangible assets and adopted
useful lives based on management's technical
assessment of their respective economic useful
lives. The residual values, useful lives and methods
of amortisation of intangible assets are reviewed at
each financial year end and adjusted prospectively
(if any),
h) Leases
The Company assesses at contract inception
whether a contract is, or contains, a lease. That is, if
the contract conveys the right to control the use of
an identified asset for a period of time in exchange
for consideration.
Company as a lessee
The Company applies a single recognition and
measurement approach for all leases, except for
short-term leases and leases of low-value assets.
The Company recognises lease liabilities to make
lease payments and right-of-use assets representing
the right to use the underlying assets.
i) Right of use assets
The Company recognises right-of-use assets
at the commencement date of the lease (i.e.,
the date the underlying asset is available for
use). Right-of-use assets are measured at
cost, less any accumulated depreciation and
accumulated impairment losses, and adjusted
for any remeasurement of lease liabilities. The
cost of right-of-use assets includes the amount
of lease liabilities recognised, initial direct
costs incurred, and lease payments made at
or before the commencement date less any
lease incentives received. Right-of-use assets
are depreciated on a straight-line basis over
the shorter of the lease term and the estimated
useful lives of the assets.
If ownership of the leased asset transfers to the
Company at the end of the lease term or the
cost reflects the exercise of a purchase option,
depreciation is calculated using the estimated
useful life of the asset.
The right-of-use assets are also subject to
impairment. Refer to the accounting policies in
section (r) Impairment of non-financial assets."
ii) Lease liabilities
At the commencement date of the lease, the
Company recognises lease liabilities measured
at the present value of lease payments to be
made over the lease term. The lease payments
include fixed payments (including in substance
fixed payments) less any lease incentives
receivable, variable lease payments that depend
on an index or a rate, and amounts expected to
be paid under residual value guarantees. The
lease payments also include the exercise price
of a purchase option reasonably certain to be
exercised by the Company and payments of
penalties for terminating the lease, if the lease
term reflects the Company exercising the option
to terminate. Variable lease payments that do not
depend on an index or a rate are recognised as
expenses (unless they are incurred to produce
inventories) in the period in which the event or
condition that triggers the payment occurs.
In calculating the present value of lease
payments, the Company uses its incremental
borrowing rate at the lease commencement
date because the interest rate implicit in the
lease is not readily determinable. After the
commencement date, the amount of lease
liabilities is increased to reflect the accretion
of interest and reduced for the lease payments
made. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification,
a change in the lease term, a change in the lease
payments (e.g., changes to future payments
resulting from a change in an index or rate used
to determine such lease payments) or a change
in the assessment of an option to purchase the
underlying asset.
iii) Short term leases
The Company applies the short-term lease
recognition exemption to its properties (i.e.,
those leases that have a lease term of 12 months
or less from the commencement date and do
not contain a purchase option). It also applies
the lease of low-value assets recognition
exemption to leases of office equipment that
are considered to be low value. Lease payments
on short-term leases and leases of low-value
assets are recognised as expense on a straight¬
line basis over the lease term.
i) Inventories
Inventories are valued at lower of cost and net
realisable value. Cost is determined on weighted
average basis. Inventory cost includes purchase
price and other directly attributable costs (such
as taxes other than those subsequently recovered
from the tax authorities), freight inward and other
related incidental expenses incurred in bringing the
inventory to its present condition and location.
Net realisable value is the estimated selling price in
the ordinary course of business less estimated cost
necessary to make the sale.
j) Revenue recognition
Revenue from contracts with customers is recognised
when control of the goods 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. The
Company has concluded that it is the principal in its
revenue arrangements because it typically controls
the goods or services before transferring them to
the customers.
The disclosures of significant accounting judgements,
estimates and assumptions relating to revenue from
contracts with customers are provided in note 30 of
standalone financial statements.
Performance obligation
At contract inception, the Company assess the goods
and services promised in contracts with customers
and identifies various performance obligations to
provide distinct goods and services to the customers.
The transaction price of goods sold and services
rendered is net of variable consideration on account
of various elements like discounts etc. offered by the
company as part of the contract.
The Company has determined following distinct
goods and services that represent its primary
performance obligation.
Delivery services includes:
• Revenue from Express Parcel Services
• Revenue from Part Truck Load Services (PTL)
• Revenue from Truck Load Services (TL)
• Revenue from cross - border services
The Company recognizes revenue from delivery and
logistics services over time in accordance with Ind
AS 115. The following methods and explanations
are provided as required by paragraph 124 of the
Standard:
(a) Methods Used to Recognise Revenue:
Revenue for delivery and logistics contracts that
extend over time is recognized using the input
method, specifically based on the cost incurred
relative to the total expected cost, as they are
satisfied over the contract term, which generally
represents the transit period including the
incomplete trips at the reporting date. The
transit period can vary based upon the mode
of transport, generally a couple days for over
the road, rail, and air transportation, or several
weeks in the case of an ocean shipment. The
company also provides certain ancillary logistics
services, such as handling of goods, customs
clearance services etc. The service period
for these services is usually for a very short
duration, generally few days or weeks. Hence,
revenue from these services is recognised over
the service period as the Company performs the
primary obligation of delivery of goods.
The input method involves measuring revenue
based on the proportion of costs incurred to
date relative to total estimated costs of the
performance obligation.
(b) Explanation of Method Choice:
The input method faithfully depicts the transfer
of control to the customer, as it reflects the
entity's performance in fulfilling its obligations.
As Company incurs costs evenly over the term
of service such as fuel, labor, and logistics costs.
This approach provides a reliable measure of
progress toward complete satisfaction of the
performance obligation.
This method aligns with the economic reality of
the services delivered and ensures that revenue
recognition mirrors the pattern in which services
are rendered and consumed.
Other allied services includes:
• Revenue from supply chain services
Revenue from these services are recognised over
time as the customer simultaneously avails the
benefits of these services. Hence, the revenue from
such services is recognised on a monthly basis, basis
the amount fixed as per the agreements.
The Company collects Goods & Service Tax (GST)
GST on behalf of the government and, therefore, it
is not an economic benefit flowing to the Company.
Hence, it is excluded from revenue.
Interest
Interest income is recognised when it is probable
that the economic benefits will flow to the Company
and amount of income can be measured reliably.
Interest income is included under the head "other
income" in the statement of profit and loss.
Contract balances:
Contract assets
The Company recognised contract assets when
there exists a right to receive consideration in
exchange for goods or services already transferred
to the customer which is conditional on something
other than passage of time (e.g. The Company's
future performance obligation).
Trade receivables
A receivable represents the Company's right to an
amount of consideration that is unconditional (i.e.,
only the passage of time is required before payment
of the consideration is due).
Contract liabilities
The Company recognises a contract liability for an
obligation to transfer goods or services to a customer
for which the Company has received consideration
(or the amount is due) from the customer.
k) Retirement and other employee benefits
Retirement benefit in the form of provident fund and
social security is a defined contribution scheme.
The Company has no obligation, other than the
contribution payable to the provident fund/social
security. The Company recognizes contribution
payable to the provident fund scheme/ social security
scheme as an expense, when an employee renders
the related service. If the contribution payable to
the scheme for service received before the balance
sheet date exceeds the contribution already paid,
the deficit payable to the scheme is recognized as
a liability after deducting the contribution already
paid. If the contribution already paid exceeds the
contribution due for services received before the
balance sheet date, then excess is recognized as an
asset (representing a reduction in future payment or
a cash refund).
The cost of providing benefits under the defined
benefit plan is determined using the projected unit
credit method.
Remeasurements, comprising of actuarial gains
and losses, excluding amounts included in net
interest on the net defined benefit liability are
recognised immediately in the balance sheet with
a corresponding debit or credit to retained earnings
through OCI in the period in which they occur.
Remeasurements are not reclassified to statement
of profit and loss in subsequent periods.
The Company recognises the following changes in
the net defined benefit obligation as an expense in
the statement of profit and loss:
Past service costs are recognised in profit and loss
on the earlier of:
i) The date of the plan amendment or curtailment,
and
ii) The date that the Company recognises related
restructuring costs
Net interest is calculated by applying the discount
rate to the net defined benefit liability. The Company
recognises the following changes in the net defined
benefit obligation as an expense in the statement of
profit and loss:
i) Service costs comprising current service
costs, past-service costs, gains and losses on
curtailments and non-routine settlements; and
ii) Net interest expense
Compensated Absence
Accumulated leave, which is expected to be utilized
within the next 12 months, is treated as short-term
employee benefit. The Company measures the
expected cost of such absences as the additional
amount that it expects to pay as a result of the
unused entitlement that has accumulated at the
reporting date. The Company recognizes expected
cost of short-term employee benefit as an expense,
when an employee renders the related service.
The Company also operates a leave encashment plan.
The Company treats accumulated leave expected to
be carried forward beyond twelve months, as long¬
term employee benefit for measurement purposes.
Such long-term compensated absences are provided
for based on the actuarial valuation using the
projected unit credit method at the reporting date.
Actuarial gains/losses are immediately taken to the
statement of profit and loss and are not deferred.
The obligations are presented as current liabilities
in the balance sheet if the entity does not have an
unconditional right to defer the settlement for at least
twelve months after the reporting date.
l) Taxes
Current income tax
Current income tax assets and liabilities are measured
at the amount expected to be recovered from or paid
to the taxation authorities. The tax rates and tax
laws used to compute the amount are those that are
enacted or substantively enacted, at the reporting
date in the country where the Company operates and
generates taxable income.
Current tax expense is recognised in statement of
profit and loss except to the extent that it relates to
items recognised outside profit and loss is recognised
in other comprehensive income. Current tax items
are recognised in correlation to the underlying
transaction in OCI. Management considers whether
it is probable that a taxation authority will accept
an uncertain tax treatment. The Company shall
reflect the effect of uncertainty for each uncertain
tax treatment by using either most likely method or
expected value method, depending on which method
predicts better resolution of the treatment.
Advance taxes and provisions for current income
taxes are presented in the balance sheet after off¬
setting advance tax paid and income tax provision
arising in the same tax jurisdiction and where the
relevant tax paying units intends to settle the asset
and liability on a net basis.
Deferred taxes
Deferred tax is provided using the liability method
on temporary differences between the tax bases of
assets and liabilities and their carrying amounts for
financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable
temporary differences, except:
i) When the deferred tax liability arises from the
initial recognition of goodwill or 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
profit and loss and does not give rise to equal
taxable and deductible temporary differences.
ii) In respect of taxable temporary differences
associated with investments in subsidiaries and
associates, when the timing of the reversal of
the temporary differences can be controlled and
it is probable that the temporary differences will
not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible
temporary differences, the carry forward of unused
tax credits and any unused tax losses. 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:
i) 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 profit
and loss and does not give rise to equal taxable
and deductible temporary differences.
ii) In respect of deductible temporary differences
associated with investments in subsidiaries
and associates, deferred tax assets are
recognised only to the extent that it is probable
that the temporary differences will reverse
in the foreseeable future and taxable profit
will be available against which the temporary
differences can be utilized.
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. Unrecognised
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 at
the tax rates that are expected to apply in the year
when the asset is realised or the liability is settled,
based on tax rates (and tax laws) that have been
enacted or substantively enacted at the reporting
date.
Deferred tax expense is recognised in statement of
profit and loss except to the extent that it relates to
items recognised outside profit and loss is recognised
in other comprehensive income.
Deferred tax assets and deferred tax liabilities are
offset if a legally enforceable right exists to set off
current tax assets against current tax liabilities and
the deferred taxes relate to the same taxable entity
and the same taxation authority.
m) Share based payments
Employees (including senior executives) of the
Company receive remuneration in the form of
share-based payments, whereby employees render
services as consideration for equity instruments
(equity-settled transactions).The cost of equity-
settled transactions is determined by the fair value at
the date when the grant is made using an appropriate
valuation model.
That cost is recognised, together with a
corresponding increase in share-based payment
(SBP) reserves in equity, over the period in which the
performance and/or service conditions are fulfilled
in employee benefits expense. The cumulative
expense recognised for equity-settled transactions
at each reporting date until the vesting date reflects
the extent to which the vesting period has expired
and the Company's best estimate of the number
of equity instruments that will ultimately vest. The
expense or credit in the statement of profit and loss
for a period represents the movement in cumulative
expense recognised as at the beginning and end of
that period and is recognised in employee benefits
expense.
Service and non-market performance conditions
are not taken into account when determining the
grant date fair value of awards, but the likelihood
of the conditions being met is assessed as part
of the Company's best estimate of the number of
equity instruments that will ultimately vest. Market
performance conditions are reflected within the
grant date fair value. Any other conditions attached
to an award, but without an associated service
requirement, are considered to be non-vesting
conditions. Non-vesting conditions are reflected in
the fair value of an award and lead to an immediate
expensing of an award unless there are also service
and/or performance conditions.
No expense is recognised for awards that do not
ultimately vest because non-market performance
and/or service conditions have not been met. Where
awards include a market or non-vesting condition,
the transactions are treated as vested irrespective
of whether the market or non-vesting condition is
satisfied, provided that all other performance and/or
service conditions are satisfied.
When the terms of an equity-settled award are
modified, the minimum expense recognised is the
expense had the terms had not been modified, if the
original terms of the award are met. An additional
expense is recognised for any modification that
increases the total fair value of the share-based
payment transaction or is otherwise beneficial to the
employee as measured at the date of modification.
Where an award is cancelled by the entity or by the
counterparty, any remaining element of the fair value
of the award is expensed immediately through profit
and loss.
The dilutive effect of outstanding options is reflected
as additional share dilution in the computation of
diluted earnings per share.
Further, the Company's employees are granted share
appreciation right (SARs), settled in cash. The liability
of SARs is measured initially and at the end of each
reporting period until settled, at the fair value of the
SARs by applying option pricing model, taking into
account the terms and conditions on which the SARs
were granted and the extent to which the employees
have rendered the services to date.
n) Segment reporting
Segments are identified based on the manner in
which the Chief Operating Decision Maker ('CODM')
decides about resource allocation and reviews
performance. Segment results that are reported to
the CODM include items directly attributable to a
segment as well as those that can be allocated on a
reasonable basis.
o) Earning per share
Basic earnings per share are calculated by dividing
the net profit and loss for the period attributable
to equity shareholders (after deducting preference
dividends and attributable taxes) by the weighted
average number of equity outstanding during the
period.
For the purpose of calculating diluted earnings
per share, the net profit and 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.
|