03 Material accounting Policies
3.1 Statement of Compliance
The Financial Statements have been prepared
in accordance with Indian Accounting Standards
notified under the Companies (Indian Accounting
Standards) Rules, 2015 and relevant amendment
rules issued thereafter.
The financial statements were authorised for the
issue by the Company's Board of Directors on 28th
May 2025.
3.2 Basis of Preparation and Presentation of
Financial Statements
These financial statements have been prepared on
the historical cost basis, except for certain financial
instruments which are measured at fair values at
the end of each reporting period, as explained in
accounting policies below. Historical cost is generally
based on the fair value of the consideration given in
exchange for goods and services.
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, regardless of whether that price
is directly observable or estimated using another
valuation technique. In estimating the fair value of an
asset or a liability, the Company takes into account
the characteristics of the asset or liability if market
participants would take those characteristics into
account when pricing the asset or liability at the
measurement date.
In addition, for financial reporting purposes, fair
value measurements are categorised into Level
1, 2, or 3 based on the degree to which the inputs
to the fair value measurements are observable
and the significance of the inputs to the fair value
measurement in its entirety, which are described as
follows:
• Level 1 inputs are quoted prices (unadjusted) in
active markets for identical assets or liabilities
that the entity can access at the measurement
date;
• Level 2 inputs are inputs, other than quoted prices
included within Level 1, that are observable for the
asset or liability, either directly or indirectly; or
• Level 3 inputs are unobservable inputs for the asset
or liability.
3.3 Use of Estimates
The preparation of the financial statements
requires the Management to make estimates and
assumptions considered in the reported amounts of
assets and liabilities (including contingent liabilities)
as of the date of the financial statements and the
reported income and expenses during the reporting
period. Examples of such estimates include provision
for doubtful debts/advances, provision for employee
benefits, useful lives of fixed assets, lease term,
provision for contingencies etc. Management
believes that the estimates used in the preparation of
the financial statements are prudent and reasonable.
Future results may vary from these estimates.
Estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting
estimates are recognized prospectively in the year in
which the estimate is revised and/or in future years,
as applicable.
3.4 Cash and Cash Equivalents (for the purpose of
Cash Flow Statement)
Cash comprises cash on hand, cheques and demand
drafts on hand, balances with banks in current
accounts / demand deposits. Cash equivalents are
short-term balances (with an original maturity of
three months or less from the date of acquisition),
highly liquid investments that are readily convertible
into known amounts of cash and which are subject to
insignificant risk of changes in value. Bank balances
other than the balance included in cash and cash
equivalents represents balance on account of margin
money deposit with banks and balances in earmarked
Escrow accounts.
3.5 Cash Flow Statement
Cash flows are reported using the indirect method,
whereby profit / (loss) before extraordinary items
and tax is adjusted for the effects of transactions of
non-cash nature and any deferrals or accruals of past
or future cash receipts or payments. The cash flows
from operating, investing and financing activities of
the Company are segregated based on the available
information.
3.6 Functional and Presentation Currency
Items included in the financial statements of the
Company are measured using the currency of
the primary economic environment in which the
Company operates (i.e. the "functional currency").
The financial statements are presented in Indian
Rupees (Rs.), the national currency of India, which
is the functional currency of the Company. All the
financial information have been presented in crores of
Indian Rupees except for share data and as otherwise
stated.
3.7 Operating Cycle
Based on the nature of products / activities of the
Company and the normal time between acquisition of
assets and their realization in cash or cash equivalents,
the Company has determined its operating cycle as 12
months for the purpose of classification of its assets
and liabilities as current and non-current.
3.8 Business Combinations
Business combinations in which control is acquired
are accounted for using the acquisition method,
other than those between entities subject to
common control. The consideration transferred in
a business combination is measured at fair value,
which is calculated as the sum of the acquisition date
fair values of the assets transferred by the Company,
liabilities incurred by the Company to the former
owners of the acquiree and the equity interests
issued by the Company in exchange of control of
the acquiree. Acquisition related costs are generally
recognised in Statement of Profit and Loss as incurred.
Contingent consideration, if any, is measured at its
acquisition date fair value. Subsequent changes to
the fair values are recognised in the Statement of
Profit and Loss unless such adjustments qualify as
measurement period adjustments in which such it is
adjusted to the cost of acquisition.
If the initial accounting for a business combination
is incomplete by the end of the reporting period in
which the combination occurs, the Company reports
provisional amounts for the items for which the
accounting is incomplete. Those provisional amounts
are adjusted during the measurement period, or
additional assets or liabilities are recognized, to
reflect new information obtained about facts and
circumstances that existed as of the acquisition date
that, if known, would have affected the amounts
recognized as of that date. The measurement period
is the period from the date of acquisition to the
date the Company obtains complete information
about facts and circumstances that existed as of
the acquisition date. The measurement period is
subject to a maximum of one year subsequent to
the acquisition date.
At the acquisition date, the identifiable assets
acquired and the liabilities assumed are recognised at
their fair value, except that
- Deferred tax assets or liabilities related to employee
benefits arrangements are recognised and measured
in accordance with Ind AS 12 Income taxes and Ind AS
19 Employee benefits respectively.
- liabilities or equity instruments related to share-
based payment arrangements of the acquiree or
share-based payment arrangements of the company
entered into to replace share-based payment
arrangements of the acquiree are measured in
accordance with Ind AS 102 at the acquisition date
(see below) and
- assets (or disposal groups) that are classified as held
for sale in accordance with Ind AS 105 are measured in
accordance with that Standard.
Intangible assets acquired in a business combination
and recognized separately from goodwill are initially
recognized at their fair value at the acquisition date.
Goodwill is measured as the excess of the sum of the
consideration transferred, the amount of any non¬
controlling interests in the acquiree (if any) over the
net of the acquisition date amounts of the identifiable
assets acquired and the liabilities assumed. Contracts
acquired in a business combination are assessed for
whether favorable or unfavorable relative to current
market terms and if such favorable or unfavorable
terms exist, the Company adjusts the effects of such
terms in the measurement of the related assets or
liabilities.
Non-controlling interests that are present ownership
interests and entitle their holders to a proportionate
share of the entity's net assets in the event of
liquidation may be initially measured either at fair
value or at the non-controlling interests' proportionate
share of the recognised amounts of the acquiree's
identifiable net assets. Contingent liabilities acquired
in a business combination are initially measured at
fair value at the date of acquisition.
When a business combination is achieved in stages,
the Company's previously held equity interest in
the acquiree is remeasured to its acquisition-date
fair value and the resulting gain or loss, if any, is
recognised in profit or loss. Amounts arising from
interests in the acquiree prior to the acquisition
date that have previously been recognised in other
comprehensive income are reclassified to profit or
loss where such treatment would be appropriate if
that interest were disposed of.
3.9 Property, Plant & Equipment
Property, Plant and Equipment are stated at cost
less accumulated depreciation and accumulated
impairment loss (if any). The cost of Property, Plant
and Equipment comprises its purchase price net of
any trade discounts and rebates and includes taxes,
duties, freight, incidental expenses related to the
acquisition and installation of the assets concerned
and is net Goods and Service Tax (GST), wherever
the credit is availed. Borrowing costs paid during
the period of construction in respect of borrowed
funds pertaining to construction / acquisition of
qualifying property, plant and equipment is adjusted
to the carrying cost of the underlying property,
plant and equipment.
Any part or components of property, plant and
equipment which are separately identifiable and
expected to have a useful life which is different
from that of the main assets are capitalized
separately, based on the technical assessment
of the Management.
Advances paid towards the acquisition of Property,
Plant and Equipment outstanding at each balance
sheet date are disclosed as "Capital Advances" under
Other Non Current Assets and cost of Property, Plant
and Equipment not ready to use before such date are
disclosed under "Capital Work- in- Progress".
Depreciation
Depreciable amount for assets is the cost of an asset
less its estimated residual value. The residual value is
5% of the original cost.
Depreciation on tangible property, plant and
equipment has been provided on the straight line
method (change in method of depreciation effective
from 1st April 2022) as per the useful life prescribed in
Schedule II to the Companies Act, 2013 except in cases
of certain assets where the management's estimate
of the useful life based on technical assessment is
less than the life prescribed in Schedule II in which
case depreciation is provided on the useful life as
assessed by the management.
Depreciation is accelerated on property, plant and
equipment, based on their condition, usability etc.,
as per the technical estimates of the Management,
where necessary.
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 the sales proceeds and the carrying amount
of the asset and is recognized in the Statement of
Profit and Loss.
3.10 Goodwill
Goodwill is measured as the excess of the sum of
the consideration transferred, the amount of any
non-controlling interests in the acquiree, and the fair
value of the acquirer's previously held equity interest
in the acquire (if any) over the net of the acquisition-
date amounts of the identifiable assets acquired and
the liabilities assumed.
For the purpose of impairment testing, goodwill
acquired in a business combination is, from the
acquisition date, allocated to each of the Company's
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. 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. If the recoverable amount
of the cash generating unit is less than its carrying
amount, the impairment loss is allocated first to
reduce the carrying amount of any goodwill allocated
to the unit and then to the other assets of the unit
pro rata based on the carrying amount of each
asset in the unit. Any impairment loss for goodwill
is recognized in the Statement of Profit and Loss.
An impairment loss recognized for goodwill is not
reversed in subsequent periods.
Where goodwill has been allocated to a cash¬
generating unit and part of the operation within that
unit is disposed of, the goodwill associated with the
disposed operation is included in the carrying amount
of the operation when determining the gain or loss on
disposal. Goodwill disposed in these circumstances is
measured based on the relative values of the disposed
operation and the portion of the cash-generating
unit retained.
3.11 Intangible Assets
Intangible assets with finite useful lives that
are acquired separately are carried at cost less
accumulated amortization and accumulated
impairment losses (if any). The intangible assets are
amortized over their respective individual estimated
useful lives on a straight-line basis, commencing
from the date of asset available to Company for its
use. The useful life considered for the intangible
assets are as under:
(i) Software- Amortized over a period of 5 years
(ii) Non-compete - In respect of acquisitions,
with effect from 1st April 2023, are amortized
over the agreement term unless a shorter
useful life is warranted as per the nature of the
acquisition.
The estimated useful life and amortization method
are reviewed at the end of each reporting period, with
the effect of any changes in estimate being accounted
for on prospective basis. Intangible assets with
indefinite useful lives that are acquired separately are
carried at cost less accumulated impairment losses.
An Intangible asset is derecognized on disposal or
when no future economic benefits are expected
from use of disposal. Gains or losses arising from
derecognition of an intangible asset measured as the
difference between the net disposal proceeds and
the carrying amount of the asset as recognized in
profit or loss when the asset is derecognized.
3.12 Intangible Assets under Development
Product Development activities involve a plan or
design for the production of new or substantially
improved products and processes. Development
expenditures are capitalized only if development
costs can be measured reliably, the product or process
is technically and commercially feasible, future
economic benefits are probable, and the Company
intends to and has sufficient resources to complete
development and to use or sell the asset.
The expenditures to be capitalized include the cost
of materials and other costs directly attributable
to preparing the asset for its intended use. Other
development expenditures are recognized in the
statement of profit and loss as incurred.
3.13 Research and Development Expenditure
Expenditure on research activities are recognized as
expense in the period in which it is incurred.
An internally generated intangible asset arising from
development (or from development phase of an
internal project) is recognized if, and only if, all the
following have been demonstrated:
a) the technical feasibility of completing the
intangible assets so that it will be available for
use or sale;
b) the intention to complete the intangible asset
and use or sell it;
c) the ability to use or sell the intangible asset;
d) how the intangible asset will generate probable
future economic benefits;
e) the availability of adequate technical, financial
and other resources to complete the development
and to use or sell the intangible asset; and
f) the ability to reliably measure the expenditure
attributable to the intangible asset during its
development.
The amount initially recognized for internally-
generated intangible assets is the sum of the
expenditure incurred from the date when the
intangible asset first meets the recognition criteria
listed above. Where no internally-generated asset
can be recognized, development expenditure is
recognized in the statement of profit and loss in the
period in which it is incurred.
Subsequent to initial recognition, internally-
generated intangible assets are reported at cost
less accumulated amortization and accumulated
impairment losses, on the same basis as intangible
assets that are acquired separately.
3.14 Impairment of Tangible and Intangible Assets
At the end of each reporting period, the Company
reviews the carrying amounts of its tangible and
intangible assets to determine whether there is
any indication that those assets have suffered an
impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in
order to determine the extent of the impairment
loss (if any). Where it is not possible to estimate
the recoverable amount of an individual asset,
the Company estimates the recoverable amount
of the cash-generating unit to which the asset
belongs. Where a reasonable and consistent basis
of allocation can be identified, corporate assets are
also allocated to individual cash-generating units, or
otherwise they are allocated to the smallest group
of cash-generating units for which a reasonable and
consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and
intangible assets not yet available for use are tested
for impairment at least annually, and whenever there
is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less
costs to sell and value in use. In assessing value in
use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate
that reflects current market assessments of the time
value of money and the risks specific to the asset for
which the estimates of future cash flows have not
been adjusted.
If the recoverable amount of an asset (or cash¬
generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset
(or cash-generating unit) is reduced to its recoverable
amount. An impairment loss is recognized
immediately in the Statement of Profit and Loss,
unless the relevant asset is carried at a revalued
amount, in which case the impairment loss is treated
as a revaluation decrease.
When an impairment loss subsequently reverses,
the carrying amount of the asset (or a cash
generating unit) is increased to the revised estimate
of its recoverable amount, but so that the increased
carrying amount does not exceed the carrying
amount that would have been determined had no
impairment loss been recognized for the asset (or
cash generating unit) in prior years. A reversal of an
impairment loss is recognized immediately in profit
or loss.
The Company's policy for impairment of Goodwill is
given in Note 3.10 above.
3.15 Inventories
Inventory of Traded Goods comprising Opticals,
Pharmaceutical Products, Contact Lenses and
Accessories and Consumables are valued at lower
of cost ascertained using the First-in-First-out
method and net realizable value. Cost includes
cost of purchase, freight, taxes, duties and other
charges incurred for bringing the goods to the
present location and condition and are net of
GST credit, wherever credit has been availed.
Consumption of Surgical Lens including other
consumables mainly comprises of IOL(intraocular
lenses) and the respective cost is disclosed in
Statement of Profit & Loss under "Consumption of
Surgical Lens including other consumables".
Net realizable value represents the estimated selling
price for inventories less all estimated costs of
completion and costs necessary to make the sale
Due allowance is estimated and made for unusable/
non-saleable/ expired items of inventory wherever
necessary, based on the past experience of the
Company and such allowances are adjusted against
the inventory carrying value.
3.16 Revenue Recognition
(i) Revenue from Operations
Revenue is measured at the fair value of the
consideration received or receivable. Revenue is
recognized upon transfer of control of promised
products or services to customers in an amount
that reflects the consideration we expect to receive
in exchange for those products or services. Sales
and Service Income exclude Goods and Service Tax
(GST) and are net of trade / volume discounts, where
applicable.
Sale of products comprising Sale of Optical Frames
and Lens, Pharmaceutical Products, Contact Lens and
related accessories and food items is recognised on
delivery of items to the customers and when control
on goods is passed on to the customers.
Sale of services comprising Income from Consultation,
Surgeries, Treatments and Investigations performed
are recognised when performance obligation is
satisfied at a point in time, on rendering the related
services.
Other Operating Income comprises medical support
services provided by the Company and is recognised
on rendering the related services.
(ii) Other Income
Interest income from a financial asset is recognized
when it is probable that the economic benefits will
flow to the Company and the amount of income can
be measured reliably. Interest income is accrued on a
time basis, by reference to the principal outstanding
and at the effective interest rate applicable, which is
the rate that exactly discounts estimated future cash
receipts through the expected life of the financial
asset to that asset's net carrying amount on initial
recognition. Dividend Income is accounted for when
right to receive it is established.
(iii) Cross Charges
The Company incur expenses such as salaries,
software development and depreciation on common
assets etc on behalf of the group company and share
the common resources for the group functions.
Such expenses, which are incurred for the group,
are identified, and cross-charged between the
companies.
3.17 Foreign Currency Transactions
Initial Recognition:
On initial recognition, all foreign currency
transactions are recorded by applying to the foreign
currency amount the exchange rate between the
reporting currency and the foreign currency at the
date of the transaction.
Subsequent Recognition:
As at the reporting date, non monetary items which
are carried in terms of historical cost denominated in
a foreign currency are reported using the exchange
rate at the date of the transaction.
Treatment of Exchange Differences:
All monetary assets and liabilities in foreign currency
are restated at the end of accounting period at the
closing exchange rate and exchange differences on
restatement of all monetary items are recognized in
the Statement of Profit and Loss.
3.18 Employee Benefits
Retirement benefit costs and termination benefits:
(i) Defined Benefit Plans:
Employee defined benefit plans include gratuity.
Payments to defined contribution retirement
benefit plans are recognised as an expense when
employees have rendered service entitling them to
the contributions.
For defined benefit retirement benefit plans, the
cost of providing benefits is determined using the
projected unit credit method, with actuarial valuations
being carried out at the end of each annual reporting
period. Remeasurement, comprising actuarial gains
and losses, the effect of the changes to the asset
ceiling (if applicable) and the return on plan assets
(excluding net interest), is reflected immediately in
the balance sheet with a charge or credit recognized
in other comprehensive income in the period in which
they occur. Remeasurement recognized in other
comprehensive income is reflected immediately in
retained earnings and is not reclassified to profit or
loss. Past service cost is recognized in the Statement
of profit or loss in the period of a plan amendment.
Net interest is calculated by applying the discount
rate at the beginning of the period to the net defined
benefit liability or asset.
Defined benefit costs are categorized as
follows:
- Service cost (including current service cost,
past service cost, as well as gains and losses on
curtailments and settlements);
- Net interest expense or income; and
- Remeasurement
The Company presents the first two components
of defined benefit costs in profit or loss in the line
item ‘Employee benefits expense'. Curtailment
gains and losses are accounted for as past service
costs.
The retirement benefit obligation recognized in the
balance sheet represents the actual deficit or surplus
in the Company's defined benefit plans. Any surplus
resulting from this calculation is limited to the
present value of any economic benefits available in
the form of refunds from the plans or reductions in
future contributions to the plans.
A liability for a termination benefit is recognized at
the earlier of when the entity can no longer withdraw
the offer of the termination benefit and when the
entity recognizes any related restructuring costs.
The Company makes contribution to a scheme
administered by the insurer to discharge gratuity
liabilities to the employees.
Short-term and other long-term employee benefits.
A liability is recognized for benefits accruing to
employees in respect of wages and salaries, annual
leave and sick leave in the period the related service is
rendered at the undiscounted amount of the benefits
expected to be paid in exchange for that service.
Liabilities recognized in respect of short term
employee benefits are measured at the undiscounted
amount of the benefits expected to be paid in
exchange for the related service.
Liabilities recognized in respect of other long term
employee benefits are measured at the present value
of the estimated future cash outflows expected to be
made by the Company in respect of services provided
by employees up to the reporting date.
(ii) Defined Contribution Plans
Employeedefinedcontributionplansincludeprovident
fund and Employee state insurance.
Provident Fund and Employee State Insurance:
All employees of the Company receive benefits from
Provident Fund and Employee's State Insurance,
which are defined contribution plans. Both, the
employee and the Company make monthly
contributions to the plan, each equaling to a specified
percentage of employee's applicable emoluments.
The Company has no further obligations under the
plan beyond its monthly contributions. The Company
contributes to the Employee Provident Fund and
Employee's State Insurance scheme maintained by
the Central Government of India and the contribution
thereof is charged to the Statement of Profit and
Loss in the year in which the services are rendered by
the employees.
3.19 Borrowing Costs
Borrowing costs include interest, amortization of
ancillary costs incurred and exchange differences
arising from foreign currency borrowings to the extent
they are regarded as an adjustment to the interest
cost. Costs in connection with the borrowing of funds
to the extent not directly related to the acquisition of
qualifying assets are charged to the Statement of
Profit and Loss over the tenure of the loan. Borrowing
costs, allocated to and utilized for qualifying assets,
pertaining to the period from commencement of
activities relating to construction / development of
the qualifying asset upto the date of capitalization
of such asset are added to the cost of the assets.
Capitalization of borrowing costs is suspended and
charged to the Statement of Profit and Loss during
extended periods when active development activity
on the qualifying assets is interrupted.
Interest income earned on the temporary investment
of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing
costs eligible for capitalization. All other borrowing
costs are recognized in profit or loss in the period in
which they are incurred.
3.20 Government Grants, Subsidies and Export
Incentives
Government grants and subsidies are recognized
when there is reasonable assurance that the Company
will comply with the conditions attached to them and
the grants / subsidies will be received. Government
grants whose primary condition is that the Company
should purchase, construct or otherwise acquire
capital assets are presented by deducting them
from the carrying value of the assets. The grant is
recognized as income over the life of a depreciable
asset by way of a reduced depreciation charge.
Export benefits, if any, are accounted for in the year
of exports based on eligibility and when there is no
uncertainty in receiving the same.
Government grants in the nature of promoters'
contribution like investment subsidy, where no
repayment is ordinarily expected in respect thereof,
are accounted in Reserves and Surplus in Other
Equity. Government grants in the form of non¬
monetary assets, given at a concessional rate, are
recorded on the basis of their acquisition cost. In case
the non-monetary asset is given free of cost, the
grant is recorded at a nominal value.
Other government grants and subsidies are
recognized as income over the periods necessary
to match them with the costs for which they are
intended to compensate, on a systematic basis.
3.21 Segment Reporting
Operating segments reflect the Company's
management structure and the way the financial
information is regularly reviewed by the Company's
Chief operating decision maker (CODM). The CODM
considers the business from both business and product
perspective based on the dominant source, nature of
risks and returns and the internal organization and
management structure. The operating segments
are the segments for which separate financial
information is available and for which operating
profit / (loss) amounts are evaluated regularly by the
executive Management in deciding how to allocate
resources and in assessing performance.
The accounting policies adopted for segment
reporting are in line with the accounting policies
of the Company. Segment revenue, segment
expenses, segment assets and segment liabilities
have been identified to segments on the basis of
their relationship to the operating activities of the
segment.
Inter-segment revenue, where applicable, is
accounted on the basis of transactions which are
primarily determined based on market / fair value
factors. Revenue, expenses, assets and liabilities
which relate to the Company as a whole and are
not allocable to segments on reasonable basis are
included under "unallocated revenue / expenses /
assets / liabilities".
3.22 Leases
The Company's lease asset classes consists of
leases for buildings . The Company, at the inception
of a contract, assesses whether the contract is a
lease or not lease. A contract is, or contains, a lease
if the contract conveys the right to control the
use of an identified asset for a time in exchange
for a consideration.
The Company recognises a right-of-use asset and a
lease liability at the lease commencement date. The
right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability
adjusted for any lease payments made at or before
the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle
and remove the underlying asset or to restore the
underlying asset or the site on which it is located, less
any lease incentives received.
The right-of-use asset is subsequently depreciated
using the straight-line method from the commence¬
ment date to the end of the lease term.
The lease liability is initially measured at the
present value of the lease payments that are not
paid at the commencement date, discounted using
the Company's incremental borrowing rate. It is
remeasured when there is a change in future lease
payments arising from a change in an index or rate,
if there is a change in the Company's estimate of
the amount expected to be payable under a residual
value guarantee, or if the Company changes its
assessment of whether it will exercise a purchase,
extension or termination option. When the lease
liability is remeasured in this way, a corresponding
adjustment is made to the carrying amount of the
right-of-use asset, or is recorded in profit or loss if the
carrying amount of the right-of-use asset has been
reduced to zero.
The Company has elected not to recognise right-of-
use assets and lease liabilities for short-term leases
that have a lease term of 12 months or less and leases
of low-value assets. The Company recognises the
lease payments associated with these leases as an
expense over the lease term.
3.23 Earnings Per Share
Basic earnings per share is computed using the
weighted average number of equity shares
outstanding during the period.
Diluted EPS is computed by dividing the net profit
after tax by the weighted average number of equity
shares considered for deriving basic EPS and also
weighted average number of equity shares that
could have been issued upon conversion of all dilutive
potential equity shares.
Potential equity shares are deemed to be dilutive only
if their conversion to equity shares would decrease
earnings per share from continuing operations.
Dilutive potential equity shares are deemed converted
as of the beginning of the period, unless issued at a
later date. The dilutive potential equity shares are
adjusted for the proceeds receivable had the shares
been actually issued at fair value (i.e. average market
value of the outstanding shares). Dilutive potential
equity shares are determined independently for
each period presented. The number of equity shares
and potentially dilutive equity shares are adjusted
for share splits / reverse share splits and bonus
shares, as appropriate.
3.24 Taxes on Income
Income tax expense represents the sum of the tax
currently payable and deferred tax.
Current tax expense for the year is ascertained on the
basis of assessable profits computed in accordance
with the provisions of the Income-tax Act, 1961.
Minimum Alternate Tax (MAT) paid as current tax
expense in accordance with the tax laws, which gives
future economic benefits in the form of adjustment
to future income tax liability, is considered as tax
credit and recognized as deferred tax asset when
there is reasonable certainty that the Company
will pay normal income tax in the future years and
future economic benefit associated with it will flow
to the Company. The carrying amount is reviewed at
the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of
the asset to be recovered.
Deferred tax is recognized on temporary differences
between the carrying amounts of assets and liabilities
in the Financial Statements and the corresponding
tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognized for all
taxable temporary differences. Deferred tax assets
are generally recognized for all deductible temporary
differences to the extent that it is probable that
taxable profits will be available against which those
deductible temporary differences can be utilized. Such
deferred tax assets and liabilities are not recognized
if the temporary difference arises from the initial
recognition (other than in a business combination)
of assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is
reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to
allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at
the tax rates that are expected to apply in the period
in which the liability is settled or the asset realized,
based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the
reporting period.
The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from
the manner in which the Company expects, at the
end of the reporting period, to recover or settle the
carrying amount of its assets and liabilities.
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