3. Material Accounting Policies
3.1 Revenue Recognition
Revenue is recognised upon transfer of control of
promised products or services to customers for an
amount that reflects the consideration which the
Company expects to receive in exchange for those
products or services. Revenue excludes taxes or duties
collected on behalf of the government
• Revenue from sale of goods is recognised when
control of goods has been transferred to the buyer
and performance obligation has been achieved,
as per the terms of the sales. The company also
arranges transportation and insurance at the time
of dispatch and recover it from the customers and
accordingly recognize it as revenue.
• Revenue from providing services is recognised in the
accounting period in which services are rendered.
• Revenue from service is based on number of services
provided to the end of reporting period as a proportion
of the total number of services to be provided.
Revenue is measured based on the transaction price,
which is the consideration, adjusted for volume discounts,
performance bonuses, price concessions and incentives,
if any, as specified in the contract with the customer.
Revenue also excludes taxes collected from customers.
A liability is recognised where payments are received
from customers before transferring control of the goods
being sold or providing services to the customer.
The Company disaggregates revenue from contracts
with customers by nature of goods and service.
Dividend income is recorded when the right to receive
payment is established. Interest income is recognised
using the effective interest method.
Royalty income is recognised on accrual basis in accordance
with the substance of their relevant agreements.
3.2 Leasing
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.
The Company as a lessee
The Company's lease asset classes primarily consist of
leases for land and buildings. The Company assesses
whether a contract contains a lease, at inception of a
contract. A contract is, or contains, a lease if the contract
conveys the right to control the use of an identified
asset for a period of time in exchange for consideration.
To assess whether a contract conveys the right to
control the use of an identified asset, the Company
assesses whether: (i) the contract involves the use of an
identified asset (ii) the Company has substantially all of
the economic benefits from use of the asset through the
period of the lease and (iii) the Company has the right to
direct the use of the asset.
At the date of commencement of the lease, the
Company recognizes a right-of-use asset (“ROU") and a
corresponding lease liability for all lease arrangements in
which it is a lessee, except for leases with a term of twelve
months or less (short-term leases) and low value leases.
For these short-term and low value leases, the Company
recognizes the lease payments as an operating expense
on a straight-line basis over the term of the lease.
Certain lease arrangements includes the options to extend
or terminate the lease before the end of the lease term.
ROU assets and lease liabilities includes these options
when it is reasonably certain that they will be exercised.
The right-of-use assets are initially recognised at cost,
which comprises the initial amount of the lease liability
adjusted for any lease payments made at or prior to the
commencement date of the lease plus any initial direct
costs less any lease incentives. They are subsequently
measured at cost less accumulated depreciation and
impairment losses.
Right-of-use assets are depreciated from the
commencement date on a straight-line basis over the
shorter of the lease term and useful life of the underlying
asset. Right-of-use assets are evaluated for recoverability
whenever events or changes in circumstances indicate
that their carrying amounts may not be recoverable.
For the purpose of impairment testing, the recoverable
amount (i.e. the higher of the fair value less cost to sell
and the value-in-use) is determined on an individual asset
basis unless the asset does not generate cash flows that
are largely independent of those from other assets. In
such cases, the recoverable amount is determined for the
Cash Generating Unit (CGU) to which the asset belongs.
The lease liability is initially measured at amortised cost
at the present value of the future lease payments. The
lease payments are discounted using the interest rate
implicit in the lease or, if not readily determinable, using
the incremental borrowing rates in the country of domicile
of these leases. Lease liabilities are remeasured with a
corresponding adjustment to the related right-of-use
asset if the Company changes its assessment if whether
it will exercise an extension or a termination option.
Lease liability and ROU asset have been separately
presented in the Balance Sheet and lease payments have
been classified as financing cash flows.
Refer Note 7A for other disclosures.
3.3 Foreign currencies
I n preparing the standalone financial statements of
the Company, transactions in currencies other than the
Company's functional currency (foreign currencies) are
recognised at the rates of exchange prevailing at the
dates of the transactions. At the end of each reporting
period, monetary items denominated in foreign
currencies are translated at the rates prevailing at that
date. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not translated.
Exchange differences on monetary items are recognised
in the Statement of profit and loss in the period in which
they arise.
3.4 Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which
are assets that necessarily take a substantial period of
time to get ready for their intended use or sale, are added
to the cost of those assets, until such time as the assets
are substantially ready for their intended use or sale.
All other borrowing costs are recognised in the Statement
of profit and loss in the period in which they are incurred.
3.5 Government grants
Government grants are not recognised until there is
reasonable assurance that the Company will comply with
the conditions attached to them and that the grants will
be received.
Government grants are recognised in the Statement of
profit and loss on a systematic basis over the periods
in which the Company recognises the related costs
as expenses, if any, for which the grants are intended
to compensate.
3.6 Employee benefits
Defined contribution plans
A defined contribution plan is a post-employment
benefit plan under which the Company pays fixed
contributions into a separate entity and will have no
legal or constructive obligation to pay further amounts.
Payments to defined contribution plans are recognised
as an expense when employees have rendered service
entitling them to the contributions.
Defined benefit plans
For defined 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. Re-measurement, comprising
actuarial gains and losses and the return on plan assets
(excluding net interest), is reflected immediately in the
balance sheet with a charge or credit recognised in other
comprehensive income in the period in which they occur.
Re-measurement recognised in other comprehensive
income is reflected immediately in retained earnings and
is not reclassified to the Statement of profit and loss.
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 categorised
as follows:
• service cost (including current service cost,
past service cost, as well as gains and losses or
curtailments and settlements);
• net interest expense or income; and
• re-measurement
The Company presents the first two components of
defined benefit costs in the statement of profit and
loss in the line item Employee benefit expense and third
component is present in other comprehensive income.
The retirement benefit obligation recognised 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 plan or reductions in future contributions to the plans.
Short-term employee benefits
Liabilities recognised in respect of wages and salaries
and other short-term employee benefits are measured at
the undiscounted amount of the benefits expected to be
paid in exchange for the related service and are expensed
as the related services are provided.
Other long-term employee benefits
Liabilities recognised in respect of other long-term
employee benefits such as long term service awards and
compensated absences 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 based on the
actuarial valuation using the projected unit credit method
carried out at the year-end. Re measurement gain or
losses are recognised in the statement of profit and loss
in the period in which they arise.
3.7 Share-based payment arrangements
Equity-settled share-based payments to employees are
measured at the fair value of the equity instruments at
the grant date. Details regarding the determination of the
fair value of equity-settled share-based transactions are
set out in Note 40.
The fair value determined at the grant date of the
equity-settled share-based payments is expensed on
a straight-line basis over the vesting period, based on
the Company's estimate of equity instruments that
will eventually vest, with a corresponding increase in
equity. At the end of each reporting period, the Company
revises its estimate of the number of equity instruments
expected to vest. The impact of the revision of the original
estimates, if any, is recognised in the Statement of profit
and loss such that the cumulative expense reflects the
revised estimate, with a corresponding adjustment to the
Share option's outstanding account.
3.8 Taxation
I ncome tax expense represents the sum of the tax
currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for
the year. Taxable profit differs from profit before tax as
reported in the statement of profit and loss because of
items of income or expense that are taxable or deductible
in other years and items that are never taxable or
deductible. The Company's current tax is calculated
using tax rates that have been enacted by the end of the
reporting period.
Deferred tax
Deferred tax is recognised on temporary differences
between the carrying amounts of assets and liabilities
in the standalone financial statements and the
corresponding tax bases used in the computation of
taxable profit. Deferred tax liabilities are generally
recognised for all taxable temporary differences.
Deferred tax assets are generally recognised 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 utilised.
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 realised, 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.
Deferred tax assets and liabilities are offset if there is a
legally enforceable right to offset current tax liabilities
and assets and they are related to income taxes levied by
the same tax authority.
Current and deferred tax are recognised in the Statement
of profit and loss, except when they relate to items that
are recognised in other comprehensive income or directly
in equity, in which case, the current and deferred tax
are also recognised in other comprehensive income or
directly in equity respectively.
3.9 Property, plant and equipment
Property, plant and equipment (including furniture,
fixtures, vehicles, etc.) held for use in the production
or supply of goods or services, or for administrative
purposes, are stated in the balance sheet at cost less
accumulated depreciation and accumulated impairment
losses, if any. Cost of acquisition is inclusive of freight,
duties, taxes and other incidental expenses. Freehold
land is not depreciated.
Property, plant and equipment in the course of
construction for production, supply or administrative
purposes are carried at cost, less any recognised
impairment loss. Cost includes items directly attributable
to the construction or acquisition of the item of property,
plant and equipment and capitalised borrowing cost. Such
properties are classified to the appropriate categories
of property, plant and equipment when completed and
ready for intended use. Depreciation of these assets, on
the same basis as other property assets, commences
when the assets are ready for their intended use.
Subsequent costs are included in the assets carrying
amount or recognised as a separate asset, as appropriate
only if it is probable that the future economic benefits
associated with the item will flow to the Company and
that the cost of the item can be reliably measured. The
carrying amount of any component accounted for as a
separate asset is derecognised when replaced. All other
repairs and maintenance are charged to statement of
profit and loss during the reporting period in which they
are incurred.
Depreciation of these assets, on the same basis as other
property assets, commences when the assets are ready
for their intended use.
Depreciation is recognised on the cost of assets (other
than freehold land and properties under construction)
less their residual values over their useful lives, using the
straight-line method. The estimated useful lives, residual
values and depreciation method are reviewed at the end
of each reporting period, with the effect of any changes in
estimate accounted for on a prospective basis.
Depreciation is charged on a pro-rata basis at the
straight line method based on the estimated useful
life and residual value determined by the management
based on a technical evaluation considering nature of
asset, past experience, estimated usage of the asset,
vendor's advice etc., which coincides with the useful life
as prescribed under Schedule II of the Companies Act
2013 other than moulds and dies which are depreciated
over a period of 3-8 years grouped under property, plant
and equipment.
An item of property, plant and equipment is derecognised
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 recognised in the
Statement of Profit and loss.
3.10 Intangible assets
Intangible assets acquired separately
Intangible assets with finite useful lives that are
acquired separately are carried at cost less accumulated
amortisation and accumulated impairment losses, if
any. Amortisation is recognised on a straight-line basis
over their estimated useful lives. The estimated useful
life and amortisation method are reviewed at the end
of each reporting period, with the effect of any changes
in estimate being accounted for on a prospective basis.
Intangible assets with indefinite useful lives that are
acquired separately are carried at cost less accumulated
impairment losses, if any.
Internally-generated intangible assets - research
and development expenditure
Expenditure on research activities is recognised as an
expense in the period in which it is incurred.
An internally-generated intangible asset arising from
development (or from the development phase of an
internal project) is recognised if, and only if, all of the
following have been demonstrated:
• the technical feasibility of completing the intangible
asset so that it will be available for use or sale;
• the intention to complete the intangible asset and
use or sell it;
• the ability to use or sell the intangible asset;
• how the intangible asset will generate probable
future economic benefits;
• the availability of adequate technical, financial and
other resources to complete the development and
to use or sell the intangible asset; and
• the ability to measure reliably the expenditure
attributable to the intangible asset during
its development.
The amount initially recognised 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 intangible asset can be recognised,
development expenditure is recognised 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
amortisation and accumulated impairment losses,
on the same basis as intangible assets that are
acquired separately.
An intangible asset is derecognised on disposal, or when
no future economic benefits are expected from use or
disposal. Gains or losses arising from de-recognition of
an intangible asset, measured as the difference between
the net disposal proceeds and the carrying amount of the
asset, and are recognised in the Statement of profit and
loss when the asset is derecognised.
Useful lives of intangible assets
Intangible assets such as expenditure on model fee etc.
are amortised on a straight line method over a period of 5
years and computer software are amortised on a straight
line method over a period of 6 years.
3.11 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). Recoverable amount is the
higher of fair value less costs of disposal and value in use.
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. 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.
For impairment testing, assets that don't generate
independent cash flows are grouped together into
cash generating units (CGU's). Each CGU represents the
smallest group of assets that generate cash inflows
that are largely independent of the cash inflows of other
assets or CGU's.
When 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. When 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.
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 recognised immediately in the Statement of profit and
loss. An impairment loss is reversed in the Statement of
Profit and Loss if there has been a change in the estimates
used to determine the recoverable amount. The carrying
amount of the asset is increased to its revised recoverable
amount, provided that this amount does not exceed the
carrying amount that would have been determined (net
of any accumulated depreciation) had no impairment loss
been recognised for the asset in prior years.
3.12 Inventories
I nventories are stated at the lower of cost and net
realisable value. Cost of inventories includes expenditure
incurred in acquiring the inventories, production or
conversion costs and other costs incurred in bringing
them to their present location and condition. Costs
of inventories are determined on a moving weighted
average. Finished goods and work-in-progress include
appropriate proportion of overheads. Net realisable value
represents the estimated selling price for inventories less
all estimated costs of completion and costs necessary to
make the sale.
3.13 Provisions
Provisions are recognised when the Company has a
present obligation (legal or constructive) as a result
of a past event, it is probable that the Company will be
required to settle the obligation, and a reliable estimate
can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate
of the consideration required to settle the present
obligation at the end of the reporting period, taking
into account the risks and uncertainties surrounding
the obligation. When a provision is measured using the
cash flows estimated to settle the present obligation, its
carrying amount is the present value of those cash flows
(when the effect of the time value of money is material).
Warranties
The estimated liability for product warranties is recorded
when products are sold. These estimates are established
using historical information on the nature, frequency,
average cost of warranty claims and management
estimates regarding possible future incidence based
on corrective actions on product failures. The timing of
outflows will vary as and when warranty claim will arise-
being typically two to five years.
3.14 Financial instruments
Financial assets and financial liabilities are recognised
when the Company becomes a party to the contractual
provisions of the instruments.
Financial assets except for trade receivables that do
not have a significant financing component which are
measured at transaction price and financial liabilities
are initially measured at fair value. Transaction costs
that are directly attributable to the acquisition or issue
of financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value
through the Statement of profit and loss) are added to
or deducted from the fair value of the financial assets or
financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition
of financial assets or financial liabilities at fair value
through the Statement of profit and loss are recognised
immediately in the Statement of profit and loss.
3.15 Financial assets
All recognised financial assets are subsequently
measured in their entirety at either amortised cost
or fair value, depending on the classification of the
financial assets
Classification of financial assets
Debt instruments that meet the following conditions
are subsequently measured at amortised cost (except
for debt instruments that are designated as at fair
value through the Statement of profit and loss on initial
recognition):
• the asset is held within a business model whose
objective is to hold assets in order to collect
contractual cash flows; and
• the contractual terms of the instrument give rise
on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.
Debt instruments that meet the following conditions
are subsequently measured at fair value through other
comprehensive income (''FVTOCI") (except for debt
instruments that are designated as at fair value through
the Statement of profit and loss on initial recognition):
• the asset is held within a business model whose
objective is achieved both by collecting contractual
cash flows and selling financial assets; and
• the contractual terms of the instrument give rise
on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.
Interest income is recognised in the Statement of profit
and loss for FVTOCI debt instruments.
All other financial assets are subsequently measured at
fair value.
Effective interest method
The effective interest method is a method of calculating
the amortised cost of a debt instrument and of allocating
interest income over the relevant period. The effective
interest rate is the rate that exactly discounts estimated
future cash receipts (including all fees and points paid
or received that form an integral part of the effective
interest rate, transaction costs and other premiums
or discounts) through the expected life of the debt
instrument, or, where appropriate, a shorter period, to
the net carrying amount on initial recognition.
Income is recognised on an effective interest basis for
debt instruments other than those financial assets
classified as at FVTPL. Interest income is recognised in
the Statement of profit and loss and is included in the
"Other income" line item.
Financial assets at fair value through the Statement
of profit and loss (FVTPL)
I nvestments in equity instruments are classified as at
FVTPL, unless the Company irrevocably elects on initial
recognition to present subsequent changes in fair value
in other comprehensive income for investments in equity
instruments which are not held for trading.
Debt instruments that do not meet the amortised cost
criteria or FVTOCI criteria are measured at FVTPL. In
addition, debt instruments that meet the amortised cost
criteria or the FVTOCI criteria but are designated as at
FVTPL are measured at FVTPL.
A financial asset that meets the amortised cost criteria
or debt instruments that meet the FVTOCI criteria may
be designated as at FVTPL upon initial recognition if
such designation eliminates or significantly reduces a
measurement or recognition inconsistency that would
arise from measuring assets or liabilities or recognising
the gains and losses on them on different bases. The
Company has not designated any debt instrument as
at FVTPL.
Financial assets at FVTPL are measured at fair value at
the end of each reporting period, with any gains or losses
arising on re-measurement recognised in the Statement
of profit and loss. The net gain or loss recognised in the
Statement of profit and loss incorporates any dividend or
interest earned on the financial asset and is included in
the 'Other income' line item. Dividend on financial assets
at FVTPL is recognised when the company's right to
receive the dividends is established, it is probable that the
economic benefits associated with the dividend will flow
to the entity, the dividend does not represent a recovery
of part of cost of the investment and the amount of
dividend can be measured reliably.
Investments in subsidiaries and associates
Investment in subsidiaries and associates are carried at
cost in the standalone financial statements.
Impairment of financial assets
The Company applies the expected credit loss for
recognising impairment loss on financial assets measured
at amortised cost, debt instruments at FVTOCI, trade
receivables, other contractual rights to receive cash
or other financial asset, and financial guarantees not
designated as at FVTPL.
The Company determines the allowance for credit losses
based on historical loss experience adjusted to reflect
current and estimated future economic conditions.
Offsetting
Financial assets and financial liabilities are offset and
the net amount presented in the balance sheet when,
and only when, the Company currently has a legally
enforceable right to set off the amounts and it intents
either to settle them on net basis or to realise the assets
and settle the liabilities simultaneously.
Derecognition of financial assets
The Company derecognises a financial asset 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 party.
3.16 Financial liabilities and equity instruments
Classification as debt or equity
Debt and equity instruments issued by Company are
classified as either financial liabilities or as' equity
in accordance with the substance of the contractual
arrangements and the definitions of a financial liability
and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a
residual interest in the assets of an entity after deducting
all of its liabilities.
Financial liabilities
Financial liabilities that are not held-for-trading and
are not designated as at FVTPL are measured at
amortised cost at the end of subsequent accounting
periods. The carrying amounts of financial liabilities
that are subsequently measured at amortised cost are
determined based on the effective interest method.
Interest expense that is not capitalised as part of costs of
an asset is included under 'Finance costs'.
The effective interest method is a method of calculating
the amortised cost of a financial liability and of
allocating interest expense over the relevant period. The
effective interest rate is the rate that exactly discounts
estimated future cash payments (including all fees and
points paid or received that form an integral part of
the effective interest rate, transaction costs and other
premiums or discounts) through the expected life of the
financial liability.
All financial liabilities are subsequently measured at
amortised cost using the effective interest method or
at FVTPL.
Derecognition of financial liabilities
The Company derecognises financial liabilities when, and
only when, the Company's obligations are discharged,
cancelled or have expired.
3.17 Derivative financial instruments
The Company enters into a variety of derivative financial
instruments to manage its exposure to foreign exchange
rate risks, including foreign exchange forward contracts,
option contracts, etc.
Foreign currency derivatives are initially recognised at
fair value at the date the derivative contracts are entered
into and are subsequently re-measured to their fair
value at the end of each reporting period. The resulting
gain or loss is recognised in the Statement of profit and
loss immediately unless the derivative is designated and
effective as a hedging instrument, in which event the
timing of the recognition in the Statement of profit and
loss depends on the nature of the hedging relationship
and the nature of the hedged item.
3.18Cash 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
natu re and any deferrals or accruals of past or futu re cash
receipts or payments. The cash flows from operating,
investing and financing activities of the Company are
segregated based on the available information.
3.19 Earnings per share
Basic earnings per share is computed by dividing the
profit after tax by the weighted average number of equity
shares outstanding during the year/period.
Diluted earnings per share is computed by dividing
the profit after tax as adjusted for dividend, interest
and other charges to expense or income relating to the
dilutive potential equity shares, by the weighted average
number of equity shares considered for deriving basic
earnings per share and the weighted average number
of equity shares which could have been issued on the
conversion of all dilutive potential equity shares.
3.20 Contingent liabilities and contingent assets
A contingent liability exists when there is a possible but
not probable obligation, or a present obligation that may,
but probably will not, require an outflow of resources, or
a present obligation whose amount cannot be estimated
reliably. Contingent liabilities do not warrant provisions,
but are disclosed unless the possibility of outflow of
resources is remote. Contingent assets are neither
recognised nor disclosed in the standalone financial
statements. However, contingent assets are assessed
continually and if it is virtually certain that an inflow of
economic benefits will arise, the asset and related income
are recognised in the period in which the change occurs.
4. Critical accounting judgements and key
sources of estimation uncertainty
I n the application of the Company accounting policies,
which are described in note 3, the management of the
Company are required to make judgements, estimates
and assumptions about the carrying amounts of assets
and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are
based on historical experience and other factors that are
considered to be relevant. Actual results may differ from
these estimates.
The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates
are recognised prospectively.
The following are the areas of estimation uncertainty and
critical judgements that the management has made in the
process of applying the Company's accounting policies
and that have the most significant effect on the amounts
recognised in the standalone financial statements:-
(a) Recoverability of intangible asset
Capitalisation of cost in intangible assets under
development is based on management's judgement
that technological and economic feasibility is
confirmed and asset under development will
generate economic benefits in future. Based
on evaluations carried out, the Company's
management has determined that there are no
factors which indicates that these assets have
suffered any impairment loss.
(b) Defined benefit plans
The cost of the defined benefit plan and other
post-employment benefits and the present value
of such obligation are determined using actuarial
valuations. An actuarial valuation involves making
various assumptions that may differ from actual
developments in the future. These include the
determination of the discount rate, future salary
increases, mortality rates and future pension
increases. Due to the complexities involved in
the valuation and its long-term nature, a defined
benefit obligation is sensitive to changes in these
assumptions. All assumptions are reviewed at each
reporting date.
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