Statement of Material Accounting Policies
A. General Information
Global Vectra Helicorp Limited ('the Company') was
incorporated in 1998 as a private limited company and was
subsequently listed on 27 October 2006 on the Bombay
Stock Exchange and the National Stock Exchange.
Global Vectra Helicorp Limited is the largest private
sector helicopter operator in India and provides helicopter
services to Oil and Gas Companies, State Governments,
Religious Tourism Services and various other niche rotary¬
wing services.
B. Basis of Preparation of Financial Statements
a) Statement of compliance with Ind AS
The financial statements of the Company comply with
all material aspects with Indian Accounting Standards
(Ind AS) notified under Section 133 of the Companies
Act, 2013 (the Act) [Companies (Indian Accounting
Standards) Rules, 2015] and other relevant provisions
of the Act.
The Financial statements are prepared in Indian
rupees rounded off to the nearest lakhs except for
share data, unless otherwise stated.
All assets and liabilities are classified as current or
non-current as per the company's normal operating
cycle and other criteria set out in Schedule III to the
Companies Act, 2013. Based on the nature of services
rendered to the customers and the time between the
deployment of resources and their realisation in cash
and cash equivalents, the company has ascertained
its operating cycle as 12 months for the purpose
of current/non-current classification of assets and
liabilities.
b) Recent pronouncements
Ministry of Corporate Affairs (“MCA”) notifies new
standards or amendments to the existing standards
under Companies (Indian Accounting Standards)
Rules as issued from time to time. During the year
ended March 31, 2025, MCA has notified Ind AS 117
- Insurance Contracts and amendments to Ind AS 116
- Leases, relating to sale and lease back transactions,
applicable from April 1, 2024. The Company has
assessed that there is no significant impact on its
financial statements.
On May 9, 2025, MCA notifies the amendments to
Ind AS 21 - Effects of Changes in Foreign Exchange
Rates. These amendments aim to provide clearer
guidance on assessing currency exchangeability and
estimating exchange rates when currencies are not
readily exchangeable. The amendments are effective
for annual periods beginning on or after April 1,
2025. Currently the Company does not have rating in
currencies which are not readily exchangeable.
c) Historical cost convention
The financial statements have been prepared on
a historical cost basis with the exception of certain
assets and liabilities that are required to be carried at
fair value by Ind AS.
d) Use of estimates and judgements
The preparation of the financial statements in
conformity with Ind AS, requires management to make
judgements, estimates and assumptions that affect
the application of accounting policies and the reported
amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the
estimates are revised.
The areas involving critical estimates and judgements
are:
i. Determination of the estimated useful lives and
residual value of property, plant and equipment
and intangible assets.
ii. Recognition and measurement of defined benefit
obligations, key actuarial assumptions.
iii. Impairment of financial assets
iv. Recognition of deferred tax assets and deferred
tax liabilities
v. Recognition and measurement of provisions
and contingencies, key assumptions about
the likelihood and magnitude of an outflow of
resources.
vi. Fair value of financial instruments and applicable
discount rate
vii. Measurement of Right of use asset and Lease
liablilities
viii. Key assumptions used in discounted cash flow
projections
ix. Estimation of provision of maintenance, redelivery
and overhaul cost of aircrafts
x. Estimation of incremental borrowing rate
xi Impairment of Property, plant and equipment and
Right of Use assets.
xii Determining major engine overhaul cost and
heavy maintenance cost as separate component
for owned aircrafts.
C. Summary of Material Accounting Policies
a) Property, plant and equipment
i) Recognition and measurement
Property, Plant and Equipment are stated at cost
of acquisition, including any attributable cost for
bringing the asset to its working condition for its
intended use, less accumulated depreciation and
impairment losses, if any.
The cost of Property, Plant and Equipment
comprises its purchase price, including import
duties and non-refundable taxes or levies and
any directly attributable cost of bringing the asset
to the location and in working condition for its
intended use; any trade discounts and rebates
are deducted in arriving at the purchase price.
Property, Plant and Equipment not ready for the
intended use on the date of Balance Sheet are
disclosed as “Capital work-in-progress”.
ii) Subsequent expenditure
Subsequent expenditure is capitalised only if
it is probable that the future economic benefits
associated with the expenditure will flow to the
company and cost of the item can be measured
reliably.
iii) Depreciation
Depreciation for the year is recognised in the
Statement of Profit and Loss.
Depreciation on Property, Plant and Equipment
over the useful lives of assets as prescribed under
Schedule II of the Act which in management's
opinion reflects the estimated useful economic
lives of Property, Plant and Equipment. The
estimated useful life of items of property, plant
and equipment is mentioned below:
* Leasehold improvements in the nature of
Administrative building are amortised over the
primary lease period or the useful life of the
assets, whichever is shorter.
Major components of helicopters which require
replacement at regular intervals are identified
and depreciated separately over their respective
estimated remaining useful life. Accordingly,
overhaul costs of engines and gear boxs are
depreciated over 5,000 hours and 4,000 hours
respectively, being their estimated useful life.
Items such as Inventory spares are classified as
Property, Plant and Equipment when they meet
the recognition criteria as set out in Ind AS 16 and
depreciated over 2,500 hours to 20,000 hours.
Depreciation for the year is recognised in the
statement of profit and loss. Losses arising
from retirement and gains or losses arising from
disposal of fixed assets which are carried at cost
are recognised in the Statement of Profit and
Loss.
The useful life is reviewed by the management at
each financial year-end and revised, if appropriate.
In case of a revision, the unamortised depreciable
amount is changed over the revised remaining
useful life.
b) Intangible assets
i) Recognition and measurement
Intangible assets are recognised at cost of
purchase including directly incidental related to
purchase and installation cost and are carried
at costs less accumulated amortisation and
impairment losses, if any. An intangible asset
is derecognised on disposal or when no future
economic benefits are expected from its use. Gain
or loss arising from derecognition of an intangible
asset is measured as the difference between the
net disposal proceeds and the carrying amount
of the intangible assets and is recognised in the
Statement of Profit and Loss.
ii) Subsequent cost
Subsequent costs are capitalised only when
it increases the future economic benefits from
the specific asset to which it relates. All other
expenditure on intangible assets is recognised in
the Statement of Profit and Loss, as incurred.
iii) Amortisation
The cost of intangible assets is amortised over
their estimated useful lives of three years using the
straight-line method. Amortisation is calculated on
a pro-rata basis for assets purchased/ disposed
during the period.
c) Impairment of asset
Assets are reviewed at each reporting date to
determine if there is any indication of impairment. For
assets in respect of which any such indication exists,
the asset's recoverable amount is estimated. An
impairment loss is recognised if the carrying amount
of an asset exceeds its recoverable amount.
Impairment losses are recognised in the Statement of
Profit and Loss. If at the balance sheet date there is
an indication that a previously assessed impairment
loss no longer exists or has decreased, the assets
is estimated. For assets other than goodwill, the
impairment loss is reversed to the extent that the
asset's carrying amount does not exceed the carrying
amount that would have been determined, net of
depreciation or amortisation, if no impairment loss
had been recognised. Such a reversal is recognised
in the Statement of Profit and Loss; however, in the
case of revalued assets, the reversal is credited
directly to revaluation surplus except to the extent that
an impairment loss on the same revalued asset was
previously recognised as an expense in the Statement
of Profit and Loss.
d) Helicopter Maintenance expenditure
Helicopter maintenance expenses including repairs
and maintenance that are required to be performed
at regular intervals as enforced by the Director
General of Civil Aviation (DGCA) and in accordance
with the maintenance programme laid down by the
manufacturers are debited to the statement of profit
and loss.
e) Other expenses
Expenses are accounted for on the accrual basis and
provisions are made for all known losses and liabilities.
f) Inventories
Inventories comprising of consumables and spares
supplies (other than those which meet the criteria of
property, plant and equipment) , are valued at lower
of cost and net realisable value. Cost of inventory
comprises of all cost of purchase after deducting
discount and other incidental cost incurred in bringing
the inventories to their present location and condition.
Cost are assigned to inventory on the First In First Out
basis.
NRV for stores and spares used in rendering of
services are not written down below cost except in
cases where the price of such materials have declined
and it is estimated that the cost of rendering of services
will exceed their selling price.
g) Cash and cash equivalents
Cash comprises cash on hand and demand deposits
with banks. Cash equivalents are short term deposits
with an original maturity of three months or less, which
are subject to an insignificant risk of changes in value.
h) Revenue recognition
Service income and reimbursement of expenses is
recognised as and when services are rendered in
accordance with the terms of the specific contracts, net
of all contractual deductions. Revenue is recognised
net of all taxes and levies.
Unbilled revenue included in 'other current financial
assets' represents services rendered for which billing
is pending at the end of the reporting period.
i) Other income
Interest income is recognized on a time proportion
basis taking into account the amount outstanding and
the rate applicable.
j) Leases
The Company assesses whether a contract is or
contains a lease at the inception of a contract. A
contract is, or contains, a lease if the contract conveys
the right to control the use of an identified asset for
a period of time in exchange for consideration. To
assess whether a contract conveys the right to control
the use of an identified asset, the Company assesses
whether (i) the contract involves the use of identified
asset; (ii) the Company has substantially all of the
economic benefits from the use of the asset through
the period of lease and (iii) the Company has right to
direct the use of the asset.
As a lessee
The Company accounts for each lease component
within the contract as a lease separately from non¬
lease components of the contract and allocates the
consideration in the contract to each lease component
on the basis of the relative stand-alone prices.
The Company recognizes 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 of 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 site on
which it is located, less any lease incentives received.
Certain lease arrangements include the option to
extend or terminate the lease before the end of the
contract end date. The right-of-use assets and lease
liabilities include these options when it is reasonably
certain that the option will be exercised.
The right-of-use asset is subsequently depreciated
using the straight-line method from the commencement
date to the earlier of the end of the useful life of the
right-of-use asset or the end of the lease term. The
estimated useful lives of right-of-use assets are
determined on the same basis as those of property,
plant and equipment. In addition, the right-of-use
asset is periodically reduced by impairment losses, if
any, and adjusted for certain re-measurements of the
lease liability.
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 interest
rate implicit in the lease or, if that rate cannot be readily
determined, the Company's incremental borrowing
rate. Generally, the Company uses its incremental
borrowing rate as the discount rate.
The Company determines its incremental borrowing
rate by obtaining interest rates from various external
financing sources and makes certain adjustments to
reflect the terms of the lease and type of the asset
leased.
Lease payments included in the measurement of the
lease liability comprise the following:
- fixed payments, including in-substance fixed
payments; and
- lease payments in an optional renewal period if
the Company is reasonably certain to exercise an
extension option
The lease liability is subsequently remeasured by
increasing the carrying amount to reflect interest on
the lease liability, reducing the carrying amount to
reflect the lease payments made and remeasuring the
carrying amount to reflect any reassessment or lease
modifications or to reflect revised in-substance fixed
lease payments.
Lease liability is further bifurcated into current and
non-current portion; the right of use asset have been
separately presented in the balance sheet and lease
payments have been classified as financing activities
in the statement of cash flow.
Short term leases and leases of low value assets
The Company has elected not to recognise right-of-
use assets and lease liabilities for short term leases
that have a lease term of less than or equal to 12
months with no purchase option and leases of low
value assets. The Company recognises the lease
payments associated with these leases as an expense
in statement of profit and loss over the lease term. The
related cash flows are classified as operating activities
in the statement of cash flow.
As a lessor
At inception or on modification of a contract that
contains a lease component, the Company allocates
the consideration in the contract to each lease
component on the basis of their relative stand-alone
selling prices. If the arrangement contains lease and
non-lease components, then the Company applies Ind
AS 115 to allocate the consideration in the contract.
When the Company acts as a lessor, it determines at
lease inception whether each lease is a finance lease
or an operating lease.
To classify each lease, the Company makes an
overall assessment of whether the lease transfers
substantially all of the risks and rewards incidental
to ownership of the underlying asset. If this is the
case, then the lease is a finance lease; if not, then it
is an operating lease. As a part of this assessment,
the Company considers certain indicators such as
whether the lease is for the major part of the economic
life of the asset.
Where the Company is an intermediate lessor, it
accounts for its interests in the head lease and the sub¬
lease separately. It assesses the lease classification
of a sub-lease with reference to the right-of-use asset
arising from the head lease, not with reference to
the underlying asset. If a head lease is a short-term
lease to which the Company applies the exemption
described above, then it classifies the sub-lease as an
operating lease.
All assets given on finance lease are shown as lease
receivables at an amount equal to net investment in
the lease. Principal component of the lease receipts is
adjusted against outstanding receivables and interest
income is accounted by applying the interest rate
implicit in the lease to the net investment.
The Company applies the derecognition and
impairment to the net investments in the lease.
The Company further regularly reviews estimated
unguaranteed residual values used in calculating the
gross investment in the lease.
Lease income from operating leases where the
Company is a lessor is recognized in income on a
straight-line basis over the lease term.
k) Foreign currency transactions and balances
i. 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
entity operates ('the functional currency'). The
financial statements are presented in Indian
Rupee (INR), which is the Company's functional
and presentation currency.
ii. Foreign currency Transactions and Balances
Transactions denominated in foreign currency are
recorded at the exchange rates prevailing on the
last date of preceding month. Exchange differences
arising on foreign exchange transactions settled
during the year are recognised in the Statement
of Profit and Loss for the year.
Monetary assets and liabilities denominated
in foreign currencies as at the balance sheet
date are translated into Indian rupees at the
closing exchange rates on that date. The
resultant exchange differences are recognised
in the Statement of Profit and Loss except that
exchange differences pertaining to long term
foreign currency monetary items outstanding
as on the transition date that are related to
acquisition of depreciable assets are adjusted in
the carrying amount of the related Property, Plant
and Equipment and Right of Use assets.
Gains / (losses) arising on translation of certain
lease liabilities which represents long-term
foreign currency monetary loans taken before
March 31, 2017 and used for acquisition of
depreciable right of use assets, are adjusted in
the cost of respective item of right of use assets.
The treatment will continue till the repayment of
the long-term foreign currency monetary loans
A foreign currency monetary item is classified as
long term if the asset or liability is expressed in a
foreign currency and it has an original maturity of
one year or more.
l) Financial Instruments:
A financial instrument is any contract that gives
rise to a financial asset of one entity and a financial
liability or equity instrument of another entity. Financial
instruments also include derivative contracts such as
embedded derivatives.
I. Financial Assets:
Classification
On initial recognition the Company classifies
financial assets as subsequently measured
at amortised cost, fair value through other
comprehensive income or fair value through profit
or loss on the basis of its business model for
managing the financial assets and the contractual
cash flow characteristics of the financial asset.
Initial recognition and measurement
All financial assets (not measured subsequently
at fair value through profit or loss) are recognised
initially at fair value plus transaction costs that
are attributable to the acquisition of the financial
asset. Purchases or sales of financial assets that
require delivery of assets within a time frame
established by regulation or convention in the
market place (regular way trades) are recognised
on the trade date, i.e., the date that the Company
commits to purchase or sell the asset.
Subsequent measurement
i) Financial assets at amortised cost
A 'financial asset' is measured at the
amortised cost if both the following conditions
are met:
i) the asset is held within a business
model whose objective is to hold assets
for collecting contractual cash flows, and
ii) contractual terms of the 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
amortised cost using the Effective Interest
Rate (EIR) method. Amortised cost is
calculated by taking into account any
discount or premium and fees or costs that
are an integral part of the EIR. The EIR
amortisation is included in interest income in
the Statement of Profit and Loss. The losses
arising from impairment are recognised
in the Statement of Profit and Loss. This
category generally applies to trade and other
receivables.
ii) Financial assets at FVTPL:
Financial assets included within the Fair
Value Through Profit and Loss (FVTPL)
are measured at fair value with all changes
recognised in the Statement of Profit and
Loss.
iii) Financial assets at Fair Value through
Other Comprehensive Income (OCI):
The assets are subsequently measured at
fair value. Net gains or losses are recognised
in other comprehensive income.
Derecognition
A financial asset (or, where applicable, a
part of a financial asset or part of a company
of similar financial assets) is primarily
derecognised (i.e. removed from the
Company's financial statements) when:
- The contractual rights to receive cash
flows from the financial asset have
expired, or
- It transfers the financial asset and the
transfer qualifies for derecognition.
The company transfers a financial asset if
either;
i) It transfers its contractual rights to
receive cashflows of the financial asset,
or
ii) It retains the contractual right to receive
the cashflows of the financial asset, but
assumes a contractual obligation to pay
the cash flows to one or more recipients
in an arrangement.
When the Company has transferred its
rights to receive cash flows from an asset,
it evaluates if and to what extent it has
retained the risks and rewards of ownership.
When it has neither transferred nor retained
substantially all of the risks and rewards
of the asset, nor transferred control of the
asset, the Company, continues to recognise
the transferred asset to the extent of the
Company's continuing involvement. In that
case, the Company also recognises an
associated liability. The transferred asset
and the associated liability are measured
on a basis that reflects the rights and
obligations that the Company has retained.
Continuing involvement that takes the form
of a guarantee over the transferred asset is
measured at the lower of the original carrying
amount of the asset and the maximum
amount of consideration that the Company
could be required to repay.
Impairment of financial assets (Other than
fair value)
In accordance with Ind AS 109, the Company
applies Expected Credit Loss (ECL) model for
measurement and recognition of impairment
loss on the following financial assets and
credit risk exposure:
i) Financial assets that are debt
instruments, and are measured at
amortised cost e.g., loans, debt
securities, deposits, and bank balance.
ii) Trade receivables.
The Company recognises impairment loss
allowance on trade receivables which do not
contain a significant financing component.
The changes (incremental or reversal) in loss
allowance computed using ECL model, are
recognised as an impairment gain or loss in
the Statement of Profit and Loss.
II. Financial Liabilities
Classification
The Company classifies all financial liabilities
as subsequently measured at amortised cost,
except for financial liabilities measured at fair
value through profit or loss. Such liabilities,
including derivatives that are liabilities, shall be
subsequently measured at fair value with changes
in fair value being recognised in the Statement of
Profit and Loss.
Initial recognition and measurement
Financial liabilities are classified, at initial
recognition, as financial liabilities at fair value
through profit or loss or at amortised cost (loans
and borrowings, and payables), or as derivatives
designated as hedging instrument in an effective
hedge, as appropriate.
All financial liabilities are recognised initially at fair
value and, in the case of loans and borrowings and
payables, net of directly attributable transaction
costs.
The Company's financial liabilities include trade
and other payables, loans and borrowings
including bank overdrafts and derivative financial
instruments.
Financial liabilities at fair value through profit
or loss
Financial liabilities at fair value through profit or
loss include financial liabilities held for trading
and financial liabilities designated upon initial
recognition as at fair value through profit or
loss. Financial liabilities are classified as held
for trading if they are incurred for the purpose of
repurchasing in the near term.
Financial liabilities designated upon initial
recognition at fair value through profit or loss are
designated at the initial date of recognition, and
only if the criterias in Ind AS 109 are satisfied.
For liabilities designated as Fair value through
Profit and loss (FVTPL), fair value gains/ losses
attributable to changes in own credit risk are
recognized in Other Comprehensive income
(OCI).
Loans and borrowings
After initial recognition, interest-bearing loans
and borrowings are subsequently measured at
amortised cost using the EIR method. Gains and
losses are recognised in Statement of Profit and
Loss when the liabilities are derecognised.
Amortised cost is calculated by taking into
account any discount or premium on acquisition
and fees or costs that are an integral part of the
EIR. The EIR amortisation is included as finance
costs in the Statement of Profit and Loss.
This category generally applies to interest-bearing
loans and borrowings.
All other borrowing costs are charged to the
Statement of Profit and Loss for the period for
which they are incurred.
Derecognition
A financial liability is derecognised when the
obligation under the liability is discharged or
cancelled or expires. When an existing financial
liability is replaced by another from the same
lender on substantially different terms, or the terms
of an existing liability are substantially modified,
such an exchange or modification is treated as
the derecognition of the original liability and the
recognition of a new liability. The difference in the
respective carrying amounts is recognised in the
Statement of Profit and Loss.
Embedded Derivatives
If the hybrid contract contains a host that is a
financial asset within the scope Ind-AS 109,
the Company does not separate embedded
derivatives. Rather, it applies the classification
requirements contained in Ind AS 109 to the
entire hybrid contract. Derivatives embedded
in all other host contracts are accounted for as
separate derivatives and recorded at fair value
if their economic characteristics and risks are
not closely related to those of the host contracts
and the host contracts are not held for trading
or designated at fair value through profit or loss.
These embedded derivatives are measured at
fair value with changes in fair value recognised
in profit or loss, unless designated as effective
hedging instruments. Reassessment only occurs
if there is either a change in the terms of the
contract that significantly modifies the cash flows.
Offsetting of financial instruments
Financial assets and financial liabilities are offset
and the net amount is reported in the balance
sheet if there is a currently enforceable legal right
to offset the recognised amounts and there is an
intention to settle on a net basis, to realise the
assets and settle the liabilities simultaneously.
Hedge Accounting
The Company enters into USD and EUR sales
contracts with Indian customers to hedge its risks
associated with foreign currency fluctuations in
USD and EUR on certain lease payments and
payments on account of external commercial
borrowings and maintenance expenses.
The Company treats such arrangements as
embedded derivatives. The Company designates
such contracts in a cash flow hedging relationship
by applying the hedge accounting principles.
These contracts are stated at fair value at each
reporting date and a derivative asset or liability is
recognised on the balance sheet.
Changes in the fair value of these contracts are
designated and effective as cash flow hedges
for the changes only on account of spot element
of foreign exchange fluctuation risk on lease
payments and external commercial borrowings
for foreign currency fluctuations in USD and EUR
respectively.
Further, the balance portion of the fair value of
these embedded derivative contracts, if not
already designated in a hedge, are designated as
a cash flow hedge of highly probable future cash
flows on account of maintenance expenditure in
respective foreign currencies.
The fair value of such hedged embedded
derivative contracts are recognised directly
in Other Comprehensive Income ('OCI') and
accumulated in “ Effective portion of cash flow
hedges” under Other equity, net of applicable
deferred income taxes. Any ineffective portion
of changes in the fair value of the derivative is
recognised immediately in profit or loss. The fair
value of the remaining portion of the separated
embedded derivative contracts that is not
designated as hedges is recognised immediately
in the Statement of Profit and Loss.
Amounts accumulated in the “Effective portion
of cash flow hedges” are reclassified to the
Statement of Profit and Loss to the extent of
the spot revaluation of the lease liability and
borrowings at the end of every reporting period
end and in case of the hedge against future
expenses, amounts are reclassified in the same
period during which the forecasted transaction
affects Statement of Profit and Loss.
Hedge accounting is discontinued when the
hedging instrument expires or is sold, terminated,
or exercised, or no longer qualifies for hedge
accounting. When hedge accounting for cash
flow hedges is discontinued, the amount that
has been accumulated in the hedging reserve
remains in equity and it is reclassified to the
statement of profit and loss in the same period or
periods as the hedged expected future cash flows
affect the statement profit and loss. If the hedged
future cash flows are no longer expected to occur,
then the amounts that have been accumulated in
other equity are immediately reclassified to profit
or loss.
m) Fair value measurement
'Fair value' is the price that would be received on
selling of an asset or paid to transfer a liability, in an
orderly transaction between market participants at the
measurement date in the principal market or, in its
absence, the most advantageous market to which the
Company has access to at that date.
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.
When one is available, the Company measures the
fair value of an instrument using the quoted price in an
active market for that instrument. A market is regarded
as active if transactions for the asset or liability take
place with sufficient frequency and volume to provide
pricing information on an ongoing basis. If there is no
quoted price in an active market, then the Company
uses valuation techniques that maximise the use of
relevant observable inputs and minimise the use of
unobservable inputs. The chosen valuation technique
incorporates all of the factors that market participants
would take into account in pricing a transaction.
The best evidence of the fair value of a financial
instrument on initial recognition is normally the
transaction price (i.e. the fair value of the consideration
given or received).
If the inputs used to measure the fair value of an
asset or a liability fall into different levels of the fair
value hierarchy, then the fair value measurement is
categorised in its entirety in the same level of the
fair value hierarchy as the lowest level input that is
significant to the entire measurement.
The Company recognizes transfers between levels
of the fair value hierarchy at the end of the reporting
period during which the change has occurred.
Fair values are categorised into different levels in a
fair value hierarchy based on the inputs used in the
valuation techniques as follows:
- Level 1: quoted prices (unadjusted) in active
markets for identical assets or liabilities that the
entity can assess at the measurement date..
- Level 2: inputs other than quoted prices included
within Level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices).
- Level 3: inputs for the asset or liability that are
not based on observable market data (i.e.
unobservable inputs).
n) Employee benefit
i. Short-term employee benefits
The short-term employee benefits expected to
be paid in exchange for the services rendered by
employees is recognised during the period when
the employee renders the service. These benefits
are expected to occur within twelve months
after the end of the reporting period in which the
employee renders the related services.
ii. Post-employment benefits
Defined Contribution Plan
Employee benefits in the form of Provident Fund,
Employee State Insurance Fund contributions
are considered as defined contribution plans and
the contributions are charged to the Statement
of Profit and Loss for the period when the
contributions to the respective funds are due.
Defined Benefit Plan
The Company's net obligation in respect of
gratuity is calculated by estimating the amount
of future benefit that employees have earned in
return for their service in the current and prior
periods. That benefit is discounted to determine
its present value, and the fair value of any plan
assets is deducted. The present value of the
obligation under such defined benefit plan is
determined based on actuarial valuation by an
independent actuary using the Projected Unit
Credit Method, which recognizes each period
of service as giving rise to additional unit of
employee benefit entitlement and measures each
unit separately to build up the final obligation. The
obligation is measured at the present value of the
estimated future cash flows. The discount rates
used for determining the present value of the
obligation under defined benefit plan are based
on the market yields on Government securities as
at the Balance Sheet date.
Remeasurement gains and losses arising from
experience adjustments and changes in actuarial
assumptions are recognised in the Balance Sheet
with a corresponding debit or credit to retained
earnings through Other Comprehenssive Income
in the period in which they occur. Remeasurements
are not reclassified to profit or loss in subsequent
periods
iii. Compensated absences
Provision for compensated absences cost has
been made based on actuarial valuation using
projected unit credit method by an independent
actuary at Balance Sheet date.
The employees are entitled to compensated
absences. The employees can carry-forward a
portion of the unutilized accrued compensated
absence and utilise it in future periods or receive
cash compensation at termination of employment
for the unutilised accrued compensated
absence. The Company records an obligation
for compensated absences in the period in which
the employee renders the services that increase
this entitlement. The Company measures the
expected cost of compensated absence as the
additional amount that the Company expects to
pay as a result of the unused entitlement that has
accumulated at the balance sheet date.
iv. Other long term employee benefits
Provision for Other long term employee benefits
are charged to statement of profit and loss
determined on actuarial valuation using Projected
Unit Credit Method.
Other long term employee benefits shall be
payable to an employee after successful
completion of specific period. The purpose of this
type of incentive is to retain employees on long
term basis.
o) Tax Expenses
Tax expense comprises of current tax and deferred
tax. It is recognised in the Statement of Profit and Loss
except to the extent that it relates to items recognised
in other comprehensive income or directly in equity.
Current tax
Current tax is determined as the amount of tax payable
or recoverable in respect of taxable income or loss
for the year and any adjustment to the tax payable
in respect of previous years. It is measured using tax
rates that are enacted or substantively enacted at the
reporting date.
Current tax assets and current tax liabilities are offset
only if there is a legally enforceable right to set off the
recognised amounts, and it is intended to realise the
asset and set off the liability on a net basis.
Deferred taxes
Deferred tax is recognised in respect of temporary
differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the
amounts used for taxation purposes.
Deferred tax assets are recognised to the extent that it
is probable, that future taxable profits will be available
against which they can be used. Therefore, in case of
a history of recent losses, the Company recognises a
deferred tax asset only to the extent it has sufficient
taxable temporary differences or there is convincing
other evidence that sufficient taxable profit will be
available against which such deferred tax asset can
be realised.
Unrecognised deferred tax assets are reassessed at
each reporting date and recognised to the extent that
it has become probable that future taxable profits will
be available against which they can be used. Deferred
tax is measured at the tax rates that are expected to be
applied to deferred tax assets when they are realised
or deferred tax liabilities when they are settled, using
tax rates enacted or substantively enacted at the
reporting date.
Deferred tax assets and liabilities are offset if there is a
legally enforceable right to offset current tax liabilities
and current tax assets and the deferred tax assets and
deferred tax liabilities relate to income taxes levied by
the same tax authority on the Company and intend to
settle on net basis.
p) Earnings per share (‘EPS’)
Basic and diluted earnings per share are computed
by dividing the net profit attributable to equity
shareholders for the year, by the weighted average
number of equity shares outstanding during the year.
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