1. CORPORATE AND GENERAL INFORMATION
DHENU BUILDCON INFRA LIMITED was incorporated on 21 August 1909 under the provisions of the Companies
Act, 1956, and is a Public Limited Company (the "Company") having its registered office at 204, Aar Pee Centre,
11th Road, Midc, Andheri East, ChakalaMidc, Mumbai, Maharashtra - 400093. The Company is primarily
engaged in the business of investment, financing, and trading in shares and securities. The equity shares of the
Company were listed BSE Limited.
We believe that we are well placed to leverage on the growth opportunities in the economy.
2. BASIS OF ACCOUNTING
2.1. Statement of Compliance
The financial statements of the Company have been prepared in accordance with the Indian Accounting
Standards (Ind AS) as prescribed under Section 133 of the Companies Act, 2013, read with the Companies
(Indian Accounting Standards) Rules, 2015, as amended from time to time, and other accounting principles
generally accepted in India.
These financial statements have been prepared under the historical cost convention with the exception of
certain assets and liabilities that are required to be carried at fair values under Ind AS.
2.2. Basis of Measurement
The Company maintains accounts on accrual basis following the historical cost convention, except for
followings:
2.2.1. All assets falling under Property Plant and Equipment (PPE) have been valued at Cost Less
Depreciation.
2.2.2. Certain Financial Assets and Liabilities is measured at Fair value/ Amortized cost (refer
accounting policy regarding financial instruments);
2.2.3. Defined Benefit Plans - Plan assets measured at fair value wherever applicable
2.3. Functional and Presentation Currency
The Financial Statements are presented in Indian Rupee (^), which is the functional currency of the Company
and the currency of the primary economic environment in which the Company operates. All amounts disclosed
in financial statements and notes have been rounded off to the nearest Lacs (with two places of decimal) as per
the requirements of Schedule III, unless otherwise stated.
2.4. Use of Estimates and Judgements
The preparation of financial statements in conformity with Ind AS requires judgments, estimates and
assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent
liabilities on the date of the financial statements and the reported amount of revenues and expenses during
the reporting period. Difference between the actual results and estimates are recognized in the period in which
the results are known/ materialized.
2.5. Presentation of Financial Statements
The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed in
the Schedule III to the Companies Act, 2013 ("the Act"). The Statement of Cash Flows has been prepared and
presented as per the requirements of Ind AS 7 "Statement of Cash flows". The disclosure requirements with
respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the
Act, are presented by way of notes forming part of the financial statements along with the other notes
required to be disclosed under the notified Indian Accounting Standards.
2.6. Operating Cycle for current and non-current classification
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 the Schedule III to the Companies Act, 2013 and Ind AS 1. The Company has
ascertained its operating cycle as twelve months for the purpose of current and non-current classification of
assets and liabilities.
2.6.3. Deferred Tax Assets and Liabilities are classified as non-current assets and liabilities
respectively.
2.7. Measurement of Fair Values
A number of the Company's accounting policies and disclosures require the measurement of fair values, for
both financial and non-financial assets and liabilities.
2.7.1. 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:
2.7.1.1. In the principal market for the asset or liability, or
2.7.1.2. 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.
2.7.2. The Company uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximizing the use of relevant observable
inputs and minimizing the use of unobservable inputs.
2.7.3. All assets and liabilities for which fair value is measured or disclosed in the financial statements
are categorized within the fair value hierarchy, described as follows, based on the input that is
significant to the fair value measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable and
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.
3. ACCOUNTING POLICIES
A summary of the significant accounting policies applied in the preparation of the financial statements are
as given below. These accounting policies have been applied consistently to all the periods presented in
the financial statements.
3.1. Property, Plant and Equipment
3.1.1. Recognition and Measurement:
Property (Land and Building), plant and equipment held for use in the production or/and supply of goods or
services, or for administrative purposes is stated in the balance sheet at Fair Market Value less any
accumulated depreciation and accumulated impairment losses (if any). Cost of an item of property, plant and
equipment acquired comprises its purchase price, including import duties and non-refundable purchase
taxes, after deducting any trade discounts and rebates, any directly attributable costs of bringing the assets
to its working condition and location for its intended use and present value of any estimated cost 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.
Profit or loss arising on the disposal of property, plant and equipment are recognized in the Statement of
Profit and Loss.
3.1.2. Subsequent Measurement:
Subsequent costs are included in the asset's carrying amount, only when it is probable that future economic
benefits associated with the cost incurred 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 derecognized when
replaced.
Major Inspection/ Repairs/ Overhauling expenses are recognized in the carrying amount of the item of
property, plant and equipment as a replacement if the recognition criteria are satisfied. Any Unamortized part
of the previously recognized expenses of similar nature is derecognized.
3.1.3. Depreciation and Amortization:
Depreciation on Property, Plant & Equipment is provided on Straight Line Method in terms of life span of
assets prescribed in Schedule II of the Companies Act, 2013 or as reassessed by the Company based on the
technical evaluation.
In case the cost of part of tangible asset is significant to the total cost of the assets and useful life of that
part is different from the remaining useful life of the asset, depreciation has been provided on straight line
method based on internal assessment and independent technical evaluation carried out by external valuers,
which the management believes that the useful lives of the component best represent the period over
which it expects to use those components.
Depreciation on additions (disposals) during the year is provided on a pro-rata basis i.e., from (up to) the date
on which asset is ready for use (disposed of).
Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if
appropriate.
3.1.4. Disposal of Assets
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits
are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement
of an item of property, plant and equipment is determined as the difference between net disposal proceeds
and the carrying amount of the asset and is recognized in the statement of profit and loss.
3.1.5. Capital Work in Progress
Capital work-in-progress is stated at cost which includes expenses incurred during construction period, interest
on amount borrowed for acquisition of qualifying assets and ther expenses incurred in connection with project
implementation in so far as such expenses relate to the period prior to the commencement of commercial
production.
3.2. Leases
3.2.1. Determining whether an arrangement contains a lease
The determination of whether an arrangement is (or contains) a lease is based on the substance of the
arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfillment of the
arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right-of-use
(ROU) for the asset or assets, even if that right is not explicitly specified in an arrangement.
Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosures of leases for
both lessees and lessors. It introduced a single, on-balance sheet accounting model for lessees.
The Company is lessee mainly in Land & Building (Factory and Offices). It recognised all such arrangements as
right-of-use (ROU) asset and lessee as liability. The ROU is considered when company has all the right to drive
economic benefits from the use of underlying asset. The right-of-use (ROU) asset is measured by discounting
future lease payments to net present value (NPV). All lease payments during reporting period are recognised
either as operational lease or financial lease as per Ind AS 116. However low value leases and leases below 12
months are treated as operating lease only.
3.2.2. Company as lessor
Finance Lease
Leases which effectively transfer to the lessee substantially all the risks and benefits incidental to ownership of
the leased item are classified and accounted for as finance lease. Lease rental receipts are apportioned
between the finance income and capital repayment based on the implicit rate of return. Contingent rents are
recognized as revenue in the period in which they are earned.
Operating Lease
Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset
are classified as operating leases. Rental income from operating leases is recognized on a straight-line basis
over the term of the relevant lease except where scheduled increase in rent compensates the Company with
expected inflationary costs.
3.2.3. Company as lessee
Finance Lease
Finance Leases, which effectively transfer to the lessee substantially all the risks and benefits incidental to
ownership of the leased item, are capitalized at the lower of the fair value and present value of the
minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease Payments
under such leases are apportioned between the finance charges and reduction of the lease liability based on
the implicit rate of return. Finance charges are charged directly to the statement of profit and loss. Lease
management fees, legal charges and other initial direct costs are capitalized. If there is no reasonable
certainty that the Company will obtain the ownership by the end of lease term, capitalized leased assets
are depreciated over the shorter of the estimated useful life of the asset or the lease term.
Operating Lease
Assets acquired on leases where a significant portion of risk and reward is retained by the lessor are classified as
operating leases. Lease rental are charged to statement of profit and loss on a straight-line basis over the lease
term, except where scheduled increase in rent compensates the Company with expected inflationary costs.
3.3. Inventories
Inventories are valued at the lower of cost and net realizable value (NRV). Cost is measured by including, unless
specifically mentioned below, cost of purchase and other costs incurred in bringing the inventories to their
present location and condition. NRV is the estimated selling price in the ordinary course of business, less
estimated costs of completion and the estimated costs necessary to make the sale. Cost is ascertained on
weighted average basis for all inventories except for by products and scrap materials which are valued at
net realizable value.
3.4. Cash and Cash Equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits
with an original maturity of three months or less, which are subject to an insignificant risk of change in value.
For the purpose of the statement of cash flows, cash and cash equivalents includes cash on hand, term
deposits and other short-term highly liquid investments, net of bank overdrafts as they are considered an
integral part of the Company's cash management. Bank overdrafts are shown within short-term borrowings in
the balance sheet.
3.5. Income Tax
The income tax expense or credit for the period is the tax payable on the current period's taxable income
based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable
to temporary differences, unused tax losses etc. Current and deferred tax is recognized in the statement of
profit & loss, except to the extent that it relates to items recognized in other comprehensive income or directly
in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity,
respectively.
3.5.1. Current Tax: -
Current tax liabilities (or assets) for the current and prior periods are measured at the amount expected to be
paid to (recovered from) the taxation authorities using the tax rates (and tax laws) that have been enacted or
substantively enacted, at the end of the reporting period.
3.5.2. Minimum Alternate Tax (MAT) credit: -
MAT Credit is recognized as an asset only when and to the extent there is convincing evidence that the
company will pay normal income tax during the specified period. In the year in which the Minimum Alternative
tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations
contained in guidance note issued by the Institute of Chartered Accountants of India, the said asset is created
by way of a credit to the Statement of profit and loss and shown as MAT Credit Entitlement. The Company
reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement
to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax
during the specified period.
3.5.3. Deferred Tax: -
Deferred Tax assets and liabilities is measured at the tax rates that are expected to apply to 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 by the end of the reporting period.
Deferred tax is recognized 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 (i.e., tax
base). Deferred tax is also recognized for carry forward of unused tax losses and unused tax credits.
Deferred tax assets are recognized 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 utilized.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period. The Company
reduces the carrying amount of a deferred tax asset to the extent that it is no longer probable that sufficient
taxable profit will be available to allow the benefit of part or that entire deferred tax asset to be utilized. Any
such reduction is reversed to the extent that it becomes probable that sufficient taxable profit will be available.
Deferred tax relating to items recognized outside the Statement of Profit and Loss is recognized either in other
comprehensive income or in equity. Deferred tax items are recognized in correlation to the underlying
transaction either in OCI or directly in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax
assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority
and the Company intends to settle its current tax assets and liabilities on a net basis.
3.6. Revenue Recognition
Revenue is recognized based to the extent it is probable that the economic benefit will flow to the company
and revenue can be reliably measured regardless of when the payment is being made. Revenue is measured at
the fair value of the consideration received or receivable, taking into account contractually defined terms of
payment, and excludes taxes & duties collected on behalf of the Government and is reduced for estimated
customer returns, rebates and other similar allowances.
Sale of Products: The Company recognizes revenue when the amount of revenue can be reliably measured, it is
probable that future economic benefits will flow to the Company and significant risk and reward incidental to
sale of products is transferred to the buyer, usually on delivery of the goods. Accruals for sales return,
chargeback and other allowances are provided at the point of sale based on the past experience.
Sale of Investments / Shares: Profit or loss on sale of investments (including shares and securities) is
recognized at the time of sale/transfer of securities. The difference between the sale consideration and the
carrying value of the investment is recognized in the Statement of Profit and Loss.
Revenue from rendering of services: Revenue from rendering of services is recognized on pro-rata basis over
the period of contract and when the performance of agreed contractual task has been completed
Interest Income: For all debt instruments measured either at amortized cost or at fair value through other
comprehensive income (FVTOCI), interest income is recorded using the effective interest rate (EIR). EIR is the
rate that exactly discounts the estimated future cash receipts over the expected life of the financial instrument
or a shorter period, where appropriate, to the gross carrying amount of the financial asset.
Interest income on loans is recognized on a time proportion basis taking into account the amount outstanding
and the rate applicable. Interest income is recognized on an accrual basis, except where recovery is uncertain
Interest income earned on Fixed Deposit Receipts (FDRs) with banks is recognized on a time proportion basis
considering the principal amount outstanding and the applicable rate of interest.
Other Income: Other items of income are accounted as and when the right to receive such income arises and it
is probable that the economic benefits will flow to the Company and the amount of income can be measured
reliably.
In respect of loan agreements, the income is accrued by applying the impact rate in the transaction on
declining balance on the amount financed for the period of the agreement.
Dividend income on investments is recognized when the right to receive the same is established.
3.7. Employee Benefits
3.7.1. Short Term Benefits
Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the
related services are provided. Liabilities for wages and salaries, including non-monetary benefits that are
expected to be settled wholly within twelve months after the end of the period in which the employees render
the related service are recognized in respect of employees' services up to the end of the reporting period.
3.7.2. Other Long-Term Employee Benefits
The liabilities for earned/privilege leave that are not expected to be settled wholly within twelve months
are measured as the present value of the expected future payments to be made in respect of services
provided by employees up to the end of the reporting period using the projected unit credit method. The
benefits are discounted using the government securities (G-Sec) at the end of the reporting period that
have terms approximating to the terms of related obligation. Remeasurement as the result of experience
adjustment and changes in actuarial assumptions are recognized in statement of profit and loss.
3.7.3. Post-Employment Benefits
The Company operates the following post-employment schemes:
a) Defined Contribution Plan
• Defined contribution plans such as Provident Fund, Employee State Insurance
etc. are charged to the statement of profit and loss as and when incurred and
paid to Authority.
b) Defined Benefit Plans
• The liability or asset recognized in the Balance Sheet in respect of defined
benefit plans is the present value of the defined benefit obligation at the end of
the reporting period less the fair value of plan assets. 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. The defined benefit obligation is calculated
annually by Actuaries using the projected unit credit method.
• The liability recognized for defined benefit plans is the present value of the
defined benefit obligation at the reporting date less the fair value of plan
assets, together with adjustments for unrecognized actuarial gains or losses
and past service costs. The net interest cost is calculated by applying the
discount rate to the net balance of the defined benefit obligation and the fair
value of plan assets. The benefits are discounted using the government
securities (G-Sec) at the end of the reporting period that have terms
approximating to the terms of related obligation.
• Remeasurement of the net defined benefit obligation, which comprise actuarial
gains and losses, the return on plan assets (excluding interest) and the effect
of the asset ceiling, are recognized in other comprehensive income.
Remeasurement recognized in other comprehensive income is reflected
immediately in retained earnings and will not be reclassified to the statement
of profit and loss.
3.8. Foreign Currency Transactions
3.8.1. Foreign currency (other than the functional currency) transactions are translated into the
functional currency using the spot rates of exchanges at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated at the
functional currency spot rate of exchanges at the reporting date.
3.8.2. Foreign exchange gains and losses resulting from the settlement of such transactions and
from the translation of monetary assets and liabilities are generally recognized in profit or
loss in the year in which they arise except for exchange differences on foreign currency
borrowings relating to assets under construction for future productive use, which are
included in the cost of those qualifying assets. When they are regarded as an adjustment to
interest costs on those foreign currency borrowings, the balance is presented in the
Statement of Profit and Loss within finance costs.
3.9. Borrowing Costs
3.9.1. Borrowing Costs consists of interest and other costs that an entity incurs in connection with
the borrowings of funds. Borrowing costs also includes foreign exchange difference to the
extent regarded as an adjustment to the borrowing costs.
3.9.2. Borrowing costs directly attributable to the acquisition or construction of a qualifying asset
are capitalized as a part of the cost of that asset that necessarily takes a substantial period of
time to complete and prepare the asset for its intended use or sale.
3.9.3. Transaction costs in respect of long-term borrowing are amortized over the tenure of
respective loans using Effective Interest Rate (EIR) method. All other borrowing costs are
recognized in the statement of profit and loss in the period in which they are incurred.
3.10. 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.
3.11. Financial Assets
3.11.1. Recognition and Initial Measurement:
All financial assets are initially recognized when the company becomes a party to the contractual provisions of the
instruments. A financial asset is initially measured at fair value plus, in the case of financial assets not recorded at
fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
3.11.2. Classification and Subsequent Measurement: For purposes of subsequent measurement,
financial assets are classified in four categories:
• Measured at Amortized Cost;
• Measured at Fair Value through Other Comprehensive Income (FVTOCI);
• Measured at Fair Value through Profit or Loss (FVTPL); and
• Equity Instruments designated at Fair Value through Other Comprehensive Income
(FVTOCI).
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the
Company changes its business model for managing financial assets.
3.12.2.1 Measured at Amortized Cost: A debt instrument is measured at the amortized cost if both the
following conditions are met:
1. The asset is held within a business model whose objective is achieved by both
collecting contractual cash flows; and
2. 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.
After initial measurement, such financial assets are subsequently measured at amortized cost using the
effective interest rate (EIR) method. Amortized 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 amortization is included in
finance income in the statement of profit or loss. The losses arising from impairment are recognized in the
profit or loss. This category generally applies to trade receivables, cash and bank balances, loans and other
financial assets of the company.
3.12.2.2 Measured at FVTOCI: A debt instrument is measured at the FVTOCI if both the
following conditions are met:
1 The objective of the business model is achieved by both collecting contractual cash
flows and selling the financial assets; and
2 The asset's contractual cash flows represent SPPI.
3 Debt instruments meeting these criteria are measured initially at fair value plus
transaction costs. They are subsequently measured at fair value with any gains or
losses arising on remeasurement recognized in other comprehensive income,
except for impairment gains or losses and foreign exchange gains or losses. Interest
calculated using the effective interest method is recognized in the statement of
profit and loss in investment income.
3.12.2.3 Measured at FVTPL: FVTPL is a residual category for debt instruments. Any debt
instrument, which does not meet the criteria for categorization as at amortized cost
or as FVTOCI, is classified as FVTPL. In addition, the company may elect to designate
a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at
FVTPL. Debt instruments included within the FVTPL category are measured at fair
value with all changes recognized in the statement of profit and loss. Equity
instruments which are, held for trading are classified as at FVTPL.
3.12.2.4 Equity Instruments designated at FVTOCI: For equity instruments, which has not been
classified as FVTPL as above, the company may make an irrevocable election to
present in other comprehensive income subsequent changes in the fair value. The
company makes such election on an instrument-by-instrument basis. The classification
is made on initial recognition and is irrevocable. In case the company decides to
classify an equity instrument as at FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognized in the OCI. There is no recycling of the
amounts from OCI to P&L, even on sale of investment.
3.11.3. Derecognition:
The Company derecognizes a financial asset on trade date only when the contractual rights to the cash flows
from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of
ownership of the asset to another entity.
3.12.4 Impairment of Financial Assets:
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is
impaired. Ind AS - 109 requires expected credit losses to be measured through a loss allowance. The company
recognizes impairment loss for trade receivables that do not constitute a financing transaction using expected
credit loss model, which involves use of a provision matrix constructed on the basis of historical credit loss
experience. For all other financial assets, expected credit losses are measured at an amount equal to the 12
month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on
the financial asset has increased significantly since initial recognition.
3.12. Financial Liabilities
3.12.1. Recognition and Initial Measurement:
Financial liabilities are classified, at initial recognition, as at fair value through profit or loss, loans and
borrowings, payables or as derivatives, as appropriate. All financial liabilities are recognized initially at fair
value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
3.12.2. Subsequent Measurement:
Financial liabilities are measured subsequently at amortized cost or FVTPL. A financial liability is classified as
FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition.
Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense,
are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using
the effective interest rate method. Interest expense and foreign exchange gains and losses are recognized in
profit or loss. Any gain or loss on de-recognition is also recognized in profit or loss.
3.12.3. Financial Guarantee Contracts:
Financial guarantee contracts issued by the company are those contracts that require a payment to be made to
reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in
accordance with the terms of a debt instrument. Financial guarantee contracts are recognized initially as a
liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the
guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as
per impairment requirement of Ind AS 109 and the amount recognized less cumulative amortization.
3.12.4. Derecognition:
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.
3.12.5. Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet when there is a
legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or
realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on
future events and must be enforceable in the normal course of business and in the event of default, insolvency
or bankruptcy of the counterparty
3.13. Earnings Per Share
Basic Earnings per share (EPS) amounts are calculated by dividing the profit for the year attributable to equity
holders by the weighted average number of equities shares outstanding during the year. Diluted EPS amounts
are calculated by dividing the profit attributable to equity holders adjusted for the effects of potential equity
shares by the weighted average number of equities shares outstanding during the year plus the weighted
average number of equity shares that would be issued on conversion of all the dilutive potential equity shares
into equity shares.
3.14. Impairment of Non-Financial Assets
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired.
An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value being higher
of value in use and net selling price. Value in use is computed at net present value of cash flow expected over
the balance useful lives of the assets. For the purpose of assessing impairment, assets are grouped at the
lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash
inflows from other assets or group of assets (Cash Generating Units - CGU).
An impairment loss is recognized as an expense in the Statement of Profit and Loss in the year in which an
asset is identified as impaired. The impairment loss recognized in earlier accounting period is reversed if there
has been an improvement in recoverable amount.
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