2. Material accounting policies information2.1 Basis of preparation(i) Statement of compliance
These Financial Statements of the Company have been
prepared in accordance with Indian Accounting Standards
('Ind AS') as per the Companies (Indian Accounting
Standards) Rules, 2015 notified under Section 133 of
Companies Act, 2013, ("the Act”), Companies (Indian
Accounting Standards) Rules as amended from time to
time and other relevant provisions of the Act.
The Financial Statements of the Company for the year
ended 31 March 2026 are approved for issue by the
Company's Audit Committee and the Board of Directors on
14 May 2026.
(ii) Functional and presentation currency
These Financial Statements are presented in Indian Rupees
(INR), which is also the Company's functional currency.
All amounts have been rounded-off to the nearest lakhs,
unless otherwise stated.
(iii) Basis of measurement
The Financial Statements have been prepared on the
historical cost basis except for the following items which
have been measured at fair value amount -
(iv) Use of estimates and judgements
In preparation of these Financial Statements, management
has made judgements, estimates, and assumptions
that affect the application of accounting policies and the
reported amounts of assets and liabilities, income and
expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on
an ongoing basis. Revision to accounting estimates are
recognized prospectively. In particular, information about
significant areas of estimation uncertainty and critical
judgments in applying accounting policies that have the
most significant effect on the amounts recognized in the
Financial Statements is included in the following notes.
Judgements
• Lease classification - Note 40
Estimates
• Recognition and estimation of tax expense including
deferred tax- Note 33
• Estimated impairment of financial assets and non¬
financial assets - Note 2.3(r) and (f)
• Assessment of useful life of property, plant and
equipment and intangible asset - Note 2.3(a) and (b)
• Estimation of obligations relating to employee
benefits: key actuarial assumptions - Note 38
• Valuation of Inventories - Note 2.3(g)
• Recognition and measurement of provision and
contingency: Key assumption about the likelihood
and magnitude of an outflow of resources - Note 37
(v) Current versus non-current classification
Based on the time involved between the acquisition of
assets for processing and their realization in cash and cash
equivalents, the Company has identified twelve months as
its operating cycle for determining current and non-current
classification of assets and liabilities in the balance sheet.
(vi) Measurement of fair values
A number of the Company's accounting policies and
disclosures require the measurement of fair values, for
both financial and non-financial assets and liabilities.
The Company has an established control framework with
respect to the measurement of fair values. The management
regularly reviews significant unobservable inputs and
valuation adjustments. If third party information, such
as broker quotes or pricing services, is used to measure
fair values, then the management assesses the evidence
obtained from the third parties to support the conclusion
that these valuations meet the requirements of Ind AS,
including the level in the fair value hierarchy in which the
valuations should be classified.
Significant valuation issues are reported to the Company's
audit committee.
Fair values are categorized 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.
Level 2: inputs other than quoted prices included in 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 (unobservable inputs).
When measuring the fair value of an asset or a liability,
the Company uses observable market data as far as
possible. 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 categorized
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.
Further information about the assumptions made in
measuring fair values is included in Note 45 - Financial
instrument.
2.2 Changes in material accounting policies
There are no significant changes in the material accounting
policies during the year.
2.3 Summary of material accounting policies information.a) Property, plant and equipmentRecognition and measurement
Freehold land is carried at historical cost less any
accumulated impairment losses, if any. All other items of
property, plant and equipment (including capital-work-in
progress) are measured at cost, which includes capitalized
borrowing costs, less accumulated depreciation and
accumulated impairment losses, if any.
Cost of an item of property, plant and equipment includes
its purchase price, import duties and non-refundable
purchase taxes, duties or levies, after deducting trade
discounts and rebates, any other directly attributable cost
of bringing the asset to its working condition for its intended
use and estimated cost of dismantling and removing the
items and restoring the site on which it is located. Refer to
note 2.1 (iv) regarding significant accounting judgements,
estimates and assumptions.
The cost of a self-constructed item of property, plant and
equipment comprises the cost of materials and direct
labour, any other costs directly attributable to bringing
the item to working condition for its intended use, and
estimated costs of dismantling and removing the item and
restoring the site on which it is located.
An item of property, plant and equipment and any significant
part initially recognized is de-recognized upon disposal or
when no future economic benefits are expected from its
use or disposal. Any gain or loss arising on de-recognition
of the asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is
included in the Statement of Profit and Loss when the asset
is derecognized.
If significant parts of an item of property, plant and
equipment have different useful lives, then they are
accounted for as separate items (major components) of
property, plant and equipment.
A property, plant and equipment is eliminated from the
Financial Statements on disposal or when no further benefit
is expected from its use and disposal. Assets retired from
active use and held for disposal are generally stated at
the lower of their net book value and net realizable value.
Any gain or losses arising from disposal of property, plant
and equipment is recognized in the Statement of Profit and
Loss.
Once classified as held-for-sale, property, plant and
equipment are no longer depreciated.
Gains or losses arising from de-recognition of fixed assets
are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are
recognized in the Statement of Profit and Loss when the
asset is derecognized.
Subsequent expenditure
Subsequent expenditure is capitalized only if it is probable
that the future economic benefits associated with the
expenditure will flow to the Company and the cost of the
item can be measured reliably.
Depreciation
Depreciation on property, plant and equipment is calculated
on a straight-line basis to allocate their cost, net of their
estimated residual values, over the estimated useful lives
and is recognized in the Statement of Profit and Loss. The
identified components are depreciated over their useful
life; the remaining asset is depreciated over the life of the
principal asset. Leasehold improvements are depreciated
over the primary lease period or the estimated useful life
of leasehold improvements, whichever is shorter. Freehold
land is not depreciated.
The management has considered lives as indicated in
Schedule II of the Act except for certain class of assets
where the life is estimated based on internal technical
assessment made by the management and has not
followed the schedule II. Also, assets costing INR 5,000 or
less are depreciated at the rate of 100%.
Depreciation methods, useful lives and residual values
are reviewed at each financial year end and adjusted, if
appropriate. Based on technical evaluation and consequent
advice, the management believes that its estimates of
useful lives as given above best represent the period over
which management expects to use these assets.
Depreciation on additions (disposals) is provided on a pro¬
rata basis i.e. from (up to) the date on which the asset is
ready for use (disposed of).
b) Intangible assetsRecognition and initial measurement
Intangible assets acquired separately are measured on
initial recognition at cost. The cost of an item of intangible
asset comprises its purchase price, including import
duties and other non-refundable taxes or levies and any
attributable costs of bringing the asset to its working
condition for its intended use. Any trade discount and
rebates are deducted in arriving at the purchase price.
Following initial recognition, intangible assets are carried
at cost less any accumulated amortisation and accumulated
impairment losses.
Internally generated intangibles, excluding capitalized
development costs, are not capitalized and the related
expenditure is reflected in the Statement of Profit or Loss
in the period in which the expenditure is incurred.
An intangible asset is derecognized on disposal or when
no future economic benefits are expected from its use
and disposal. Losses arising from retirement and gains
or losses arising from disposal of an intangible asset
are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are
recognized in the Statement of Profit and Loss.
Subsequent measurement
Subsequent expenditure is capitalized only when it
increases the future economic benefits embodied in the
specific asset to which it relates. All other expenditure is
recognized in Statement of Profit and Loss as incurred and
the cost of the item can be measured reliably.
Amortisation
Intangible assets with finite lives are amortised over
the useful economic life and assessed for impairment
whenever there is an indication that the intangible
asset may be impaired. The amortisation period and the
amortisation method for an intangible asset with a finite
useful life are reviewed at the end of each reporting period.
Changes in the expected useful life or the expected pattern
of consumption of future economic benefits embodied in
the asset are considered to modify the amortisation period
or method, as appropriate, and are treated as changes
in accounting estimates. The amortization expense on
intangible assets is recognized in the Statement of Profit
and Loss unless such expenditure forms part of carrying
value of another asset.
- Software
Softwares purchased by the Company are amortized on a
straight-line basis in 6 years.
- New product development
Amounts paid towards technical know-how fees and other
expenses for specifically identified projects/products
being development expenditure is carried forward based
on assessment of benefits arising from such expenditure.
Such expenditure is amortized over the period of expected
future sales from the related product, i.e. the estimated
period of 6 years on straight line basis based on past
trends, commencing from the month of commencement of
commercial production.
Gains or losses arising from derecognition of an intangible
asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset
and are recognized in the Statement of Profit and Loss
when the asset is derecognized.
Amortization method, useful lives and residual lives are
reviewed at the end of each financial year and adjusted, if
appropriate.
-Transition to Ind AS
The cost of property, plant and equipment at 1 April 2016,
the Company's date of transition to Ind AS, was determined
with reference to its carrying value recognised as per the
previous GAAP (deemed cost), as at the date of transition
to Ind AS.
c) Leases
The Company's lease asset classes primarily consist
of leases for Land and Buildings and computers. 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. This policy has been applied to contracts
existing and entered into on or after 1 April 2019.
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 commencement 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 re-measured 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 re-measured 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.
The Company has applied the practical expedient to
grandfather the definition of a lease on transition. This
means that it has applied Ind AS 116 to all the contracts
entered into before 1 April 2019 and identified as leases in
accordance with Ind AS 17.
d) Investment property
Recognition and initial measurement
Investment properties are properties held to earn rentals
or for capital appreciation or both but not for sale in the
ordinary course of business, use in the production or
supply of goods or services or for administrative purposes.
Investment properties are measured initially at their
cost of acquisition, including transaction costs. The cost
comprises purchase price, borrowing cost, if capitalization
criteria are met and directly attributable cost of bringing
the asset to its working condition for the intended use. Any
trade discount and rebates are deducted in arriving at the
purchase price. When significant parts of the investment
property are required to be replaced at intervals, the
Company depreciates them separately based on their
specific useful lives. Subsequent costs are included in
the asset's carrying amount or recognised as a separate
asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to
the Company. All other repair and maintenance costs are
recognised in statement of profit or loss as incurred.
The cost includes the cost of replacing parts and borrowing
costs for long-term construction projects if the recognition
criteria are met. When significant parts of the investment
property are required to be replaced at intervals, the
Company depreciates them separately based on their
specific useful lives. All other repair and maintenance costs
are recognised in profit or loss as incurred. Transfers are
made to (or from) investment property only when there is
a change in use. For a transfer from investment property to
owner-occupied property, the deemed cost for subsequent
accounting is the carrying value at the date of change in use.
Subsequent measurement (depreciation and useful lives)
Investment properties are subsequently measured at
cost less accumulated depreciation and accumulated
impairment losses, if any.
Depreciation on investment properties is provided on the
straight-line method over the useful lives of the assets as
follows:
Leasehold land (ROU assets) is amortized over the lease
period.
The management believes that these estimated useful
lives are realistic and reflect fair approximation of the
period over which the assets are likely to be used.
The residual values, useful lives and method of depreciation
are reviewed at the end of each financial year and adjusted
prospectively. Though the Company measures investment
property using cost based measurement, the fair value of
investment property is disclosed in the notes. Fair values
are determined based on an annual evaluation performed
by an accredited external independent valuer applying
valuation model acceptable internationally.
De-recognition
Investment properties are de-recognised either when
they have been disposed of or when they are permanently
withdrawn from use and no future economic benefit is
expected from their disposal. The difference between the
net disposal proceeds and the carrying amount of the asset
is recognised in the statement of profit or loss in the period
of de-recognition.
e) Borrowing Costs
Borrowing cost includes interest and other costs (including
exchange differences relating to foreign currency
borrowings to the extent that they are regarded as an
adjustment to interest costs), amortization of ancillary
costs incurred in connection with the arrangement of
borrowings.
Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily
takes a substantial period of time to get ready for its
intended use or sale are capitalized as part of the cost
of the respective asset. All other borrowing costs are
expensed in the period they are incurred.
f) Impairment of non-financial assets
The Company assesses, at each reporting date, whether
there is an indication that an asset may be impaired. If any
indication exists, or when annual impairment testing for
an asset is required, the Company estimates the asset's
recoverable amount.
For impairment testing, assets that do not generate
independent cash inflows are grouped together into
cash-generating units (CGUs). Each CGU represents the
smallest Group of assets that generates cash inflows that
are largely independent of the cash inflows of other assets
or CGUs.
An asset's recoverable amount is the higher of an individual
asset's or cash-generating unit's (CGU) fair value less
costs of disposal and its value in use. Recoverable
amount is determined for an individual asset, unless the
asset does not generate cash inflows that are largely
independent of those from other assets or group of assets.
When the carrying amount of an asset or CGU exceeds its
recoverable amount, the asset is considered impaired and
is written down to its recoverable amount.
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.
In determining fair value less costs of disposal, recent
market transactions are taken into account. If no such
transactions can be identified, an appropriate valuation
model is used. These calculations are corroborated by
valuation multiples, quoted share prices for publicly
traded companies or other available fair value indicators.
After impairment, depreciation is provided on the revised
carrying amount of the asset over its remaining useful life.
The Company bases its impairment calculation on detailed
budgets and forecast calculations, which are prepared
separately for each of the Company's CGUs to which
the individual assets are allocated. These budgets and
forecast calculations generally cover a period of five years.
For longer periods, a long-term growth rate is calculated
and applied to project future cash flows after the fifth year.
To estimate cash flow projections beyond periods covered
by the most recent budgets/forecasts, the Company
extrapolates cash flow projections in the budget using
a steady or declining growth rate for subsequent years,
unless an increasing rate can be justified. In any case, this
growth rate does not exceed the long-term average growth
rate for the products, industries, or country or countries in
which the entity operates, or for the market in which the
asset is used.
The Company's corporate assets do not generate
independent cash inflows. To determine impairment of a
corporate asset, recoverable amount is determined for the
CGUs to which the corporate asset belongs.
An impairment loss is recognized if the carrying amount
of an asset or CGU exceeds its estimated recoverable
amount. Impairment losses, if any, are recognized in
the Statement of Profit and Loss. Impairment losses
of continuing operations, including impairment on
inventories, are recognized in the Statement of Profit and
Loss, except for properties previously revalued with the
revaluation surplus taken to OCI. For such properties, the
impairment is recognized in OCI up to the amount of any
previous revaluation surplus.
In regard to assets for which impairment loss has been
recognized in prior period, the Company reviews at each
reporting date whether there is any indication that the loss
has decreased or no longer exists. An impairment loss is
reversed if there has been a change in the estimates used
to determine the recoverable amount. Such a reversal is
made only to the extent that the asset's carrying amount
does not exceed the carrying amount that would have
been determined, net of depreciation or amortization, if no
impairment loss had been recognized.
An assessment is made at each reporting date to determine
whether there is an indication that previously recognized
impairment losses no longer exist or have decreased. If
such indication exists, the Company estimates the asset's
or CGU's recoverable amount. A previously recognized
impairment loss is reversed only if there has been a
change in the assumptions used to determine the asset's
recoverable amount since the last impairment loss was
recognized. The reversal is limited so that the carrying
amount of the asset does not exceed its recoverable
amount, nor exceed the carrying amount that would have
been determined, net of depreciation, had no impairment
loss been recognized for the asset in prior years. Such
reversal is recognized in the Statement of Profit and Loss
unless the asset is carried at a revalued amount, in which
case, the reversal is treated as a revaluation increase.
g) Inventories
Inventories which includes raw materials, components,
stores and spares, work in progress, finished goods
and loose tools are valued at the lower of cost and net
realizable value. However, raw materials, components and
other items held for use in the production of inventories
are not written down below cost if the finished products
in which they will be incorporated are expected to be sold
at or above cost or in cases where material prices have
declined and it is estimated that the cost of the finished
products will exceed their net realisable value.
Costs incurred in bringing each product to its present
location and condition are accounted for as follows:
• Raw materials, components, stock in trade, stores
and spares, and loose tools: Cost includes cost of
purchase and other costs incurred in bringing the
inventories to their present location and condition.
The Cost of raw materials, components, stores and
spares and loose tools is determined on weighted
average basis.
• Finished goods and work in progress: Cost includes
cost of direct materials and labour and a proportion
of manufacturing overheads based on the normal
operating capacity. Cost is determined on weighted
average basis.
Net realizable value is the estimated selling price in
the ordinary course of business, less estimated costs of
completion and the estimated costs necessary to make
the sale. The net realizable value of work-in-progress is
determined with reference to the selling prices of related
finished products.
Raw materials and other supplies held for use in the
production of finished products are not written down
below cost except in cases when a decline in the price of
materials indicates that the cost of the finished products
shall exceed the net realisable value.
The comparison of cost and net realizable value is made on
an item-by-item basis.
h) Foreign currency transactions
Transactions in foreign currencies are initially recorded by
the Company at functional currency spot rates at the date
the transaction first qualifies for recognition or an average
rate if the average rate approximates the actual rate at
the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are translated at the
functional currency spot rates of exchange at the reporting
date. Exchange differences arising on settlement or
translation of monetary items are recognized in Statement
of Profit and Loss.
Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated using
the exchange rates at the dates of the initial transactions.
Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the
date when the fair value is determined. The gain or loss
arising on translation of non-monetary items measured
at fair value is treated in line with the recognition of the
gain or loss on the change in fair value of the item (i.e.,
translation differences on items whose fair value gain or
loss is recognized in OCI or the Statement of Profit and
Loss are also recognized in OCI or the Statement of Profit
and Loss, respectively).
i) Revenue from contracts with customers
Revenue is recognized to the extent that it is probable
that the economic benefits will flow to the Company and
the revenue can be reliably measured, regardless of when
the payment is being made. Revenue is measured at the
fair value of the consideration received or receivable,
taking into account contractually defined terms of payment
and excluding taxes or duties collected on behalf of the
government.
Goods and Services Tax (GST) is not received by the
Company on its own account. Rather, it is a tax collected
on value added to the commodity by the seller on behalf of
the government. Accordingly, it is excluded from revenue.
The specific recognition criteria described below must also
be met before revenue is recognized.
Sale of goods
The Company recognized revenue when (or as) a
performance obligation was satisfied, i.e. when 'control'
of the goods underlying the particular performance
obligation were transferred to the customer. Transfer of
control coincides with the terms agreed with the customer
i.e. either on dispatch or when the goods are delivered and
have been accepted by the customer at their premises.
Further, revenue from sale of goods is recognized based
on a 5-Step Methodology which is as follows:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligation in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance
obligations in the contract
Step 5: Recognise revenue when (or as) the entity satisfies
a performance obligation
Revenue is measured based on the transaction price,
which is the consideration, adjusted for discounts, and
price concessions, if any, as specified in the contract with
the customer. Revenue also excludes taxes collected from
customers.
Contract assets are recognised when there is excess
of revenue earned over billings on contracts. Contract
assets are classified as unbilled receivables (only act of
invoicing is pending) when there is an unconditional right
to receive cash, and only passage of time is required, as
per contractual terms.
Unearned or deferred revenue is recognised when there is
billings in excess of revenues.
Contracts are subject to modification to account for changes
in contract specifications and requirements. The Company
reviews modifications to contract in conjunction with the
original contract, basis which the transaction price could be
allocated to a new performance obligation, or transaction
price of an existing obligation could undergo a change. In the
event transaction price is revised for existing obligation, a
cumulative adjustment is accounted for.
Rendering of services (including business support income
Revenue from services is recognized on rendering of
services to customer in accordance with the terms of
contract with the customer.
j) Income tax
Income tax expense comprises current and deferred tax. It
is recognized in Statement of Profit and Loss except to the
extent that it relates to a business combination or to an item
recognized directly in equity or in other comprehensive
income.
Current tax
Current tax comprises the expected tax payable or
receivable on the taxable income or loss for the year and
any adjustment to the tax payable or receivable in respect
of previous years. The amount of current tax reflects the
best estimate of the tax amount expected to be paid or
received after considering the uncertainty, if any, related
to income taxes.
Current income tax assets and liabilities are measured
at the amount expected to be recovered from or paid to
the taxation authorities. The tax rates and tax laws used
to compute the amount are those that are enacted or
substantively enacted, at the reporting date.
Current income tax relating to items recognized outside
profit or loss is recognized outside profit or loss (either
in other comprehensive income or in equity). Current
tax items are recognized in correlation to the underlying
transaction either in OCI or directly in equity. Management
periodically evaluates positions taken in the tax returns
with respect to situations in which applicable tax
regulations are subject to interpretation and establishes
provisions where appropriate.
Current tax assets and current tax liabilities are offset
only if there is a legally enforceable right to set off the
recognized amounts, and it is intended to realise the asset
and settle the liability on a net basis or simultaneously.
Deferred tax
Deferred tax is provided using the Balance sheet method
on temporary differences between the tax bases of assets
and liabilities and their carrying amounts for financial
reporting purposes at the reporting date.
Deferred tax is also recognised in respect of carried
forward tax losses and tax credits.
Deferred tax is not recognised for temporary differences on
the initial recognition of assets or liabilities in a transaction
that:
- is not a business combination; and
- at the time of the transaction (i) affects neither accounting
nor taxable profit or loss and (ii) does not give rise to equal
taxable and deductible temporary differences
Deferred tax liabilities are recognized for all taxable
temporary differences.
Deferred tax assets are recognised for unused tax losses,
unused tax credits and deductible temporary differences
to the extent that it is probable that future taxable profits
will be available against which they can be used. Future
taxable profits are determined based on the reversal of
relevant taxable temporary differences. If the amount of
taxable temporary differences is insufficient to recognise
a deferred tax asset in full, then future taxable profits,
adjusted for reversals of existing temporary differences, are
considered, based on the business plans of the Company.
Deferred tax assets are reviewed at each reporting date
and are reduced to the extent that it is no longer probable
that the related tax benefit will be realised; such reductions
are reversed when the probability of future taxable profits
improves.
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply in the year when the asset
is realized or the liability is settled, based on tax rates (and
tax laws) that have been enacted or substantively enacted
at the reporting date.
The measurement of deferred tax reflects the tax
consequences that would follow from the manner in which
the Company expects, at the reporting date, to recover or
settle the carrying amount of its assets and liabilities.
Deferred tax relating to items recognized outside profit
or loss is recognized outside profit or loss (either in other
comprehensive income or in equity). Deferred tax items
are recognized in correlation to the underlying transaction
either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a
legally enforceable right exists to set off current tax assets
against current tax liabilities and they relate to income
taxes levied by the same tax authority on the same taxable
entity, or on different tax entities, but they intend to settle
current tax liabilities and assets on a net basis or their tax
assets and liabilities will be realized simultaneously.
k) Recognition of Interest income
Interest income is recognized using the effective interest
method ('EIR').
EIR is the rate that exactly discounts the estimated future
cash payments or receipts over the expected life of the
financial instrument or a shorter period, where appropriate,
to the gross carrying amount of the financial asset (when
the asset is not credit-impaired). When calculating the
effective interest rate, the Company estimates the expected
cash flows by considering all the contractual terms of the
financial instrument (for example, prepayment, extension,
call and similar options) but does not consider the expected
credit losses. However, for financial assets that have
become credit-impaired subsequent to initial recognition,
interest income is calculated by applying the effective
interest rate to the amortised cost of the financial asset. If
the asset is no longer credit- impaired, then the calculation
of interest income reverts to the gross basis.
l) Government grants
The Company is entitled for export incentives which are
recognised as income when the right to receive credit as
per the terms of the scheme is established in respect of the
exports made, and where there is no significant uncertainty
regarding the ultimate collection of the relevant export
proceeds. These are presented as other operating revenue
in the Statement of Profit and Loss.
m) Recognition of interest expense
Interest expense is recognized using effective interest
method.
The 'effective interest rate' is the rate that exactly discounts
estimated future cash payments through the expected life
of the financial instrument to the amortized cost of the
financial liability.
In calculating interest expense, the effective interest rate
is applied to the amortized cost of the liability.
n) Segment reporting
Basis for segmentation
An operating segment is a component of the Company
that engages in business activities from which it may
earn revenues and incur expenses, including revenues
and expenses that relate to transactions with any of the
Company's other components, and for which discrete
financial information is available. The Company is primarily
engaged in manufacturing and assembling of automotive
components. All operating segments' operating results
are reviewed regularly by the Company's Chief Operating
Decision Maker ("CODM") to make decisions about
resources to be allocated to the segments and assess their
performance. CODM believes that these are governed by
same set of risks and returns hence CODM reviews as one
balance sheet component.
o) Earnings per share (EPS)
Basic earnings / (loss) per share are calculated by
dividing the net profit or loss for the year attributable to
the shareholders of the Company by the weighted average
number of equity shares outstanding at the end of the
reporting period. The weighted-average number of equity
shares outstanding during the period and for all periods
presented is adjusted for bonus element in the rights issue
to existing shareholders that have changed the number
of equity shares outstanding, without a corresponding
change in resources
For the purpose of calculating diluted earnings per share,
the net profit or loss for the year attributable to equity
shareholders and the weighted average number of shares
outstanding during the period are adjusted for the effects
of all dilutive potential equity shares, except where the
results will be anti-dilutive.
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