1.1 Statement of compliance with Ind AS
The Financial Statements comply in all material respects with Indian Accounting Standards (“Ind
AS”) notified under Section 133 of the Companies Act, 2013 (“the Act”) read with Rule 3 of the
Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act,
as amended.
1.2 Basis of preparation
i. Historical cost convention
The Financial Statements have been prepared on a historical cost basis except for the
following:
a. Certain financial assets and liabilities: measured at fair value
b. Defined benefit plans: plan assets measured at fair value
c. Certain assets and liabilities classified as held for sale: measured at lower of cost or fair
value less cost of sales.
ii. The Financial Statements have been prepared on an accrual and going concern basis.
iii. The accounting policies are applied consistently to all the periods presented in the Financial
Statements. All assets and liabilities have been classified as current or non-current as per the
normal operating cycle of the Company and other criteria as set out in Division II of Schedule
III of the Act. Based on the nature of products and the time between acquisition of assets for
processing and their realization in cash and cash equivalents. The Company has ascertained
its operating cycle of 12 months for the purpose of the current or non-current classification
of assets and liabilities.
New and amended Ind ASs effective from April 01, 2025
The Ministry of Corporate Affairs (MCA] notifies new standards | amendments to the existing
standards under the Companies (Indian Accounting Standards) Rules as issued from time to time.
For the year ended on March 31, 2026, the Company applied for the first-time certain standards
and amendments, which are effective for annual periods beginning on or after April 01, 2025. The
Company has not early adopted any standard, interpretation or amendment that has been issued
but is not yet effective.
Ind AS 1- Presentation of Financial Statements:
Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants:
In August 2025, the MCA notified amendments to paragraphs 69 to 76 of Ind AS 1 to specify the
requirements for classifying liabilities as current or non-current. The amendments clarify:
a. What is meant by a right to defer settlement
b. That a right to defer must exist at the end of the reporting period
c. That classification is unaffected by the likelihood that an entity will exercise its deferral right
d. That only if an embedded derivative in a convertible liability is itself an equity instrument
would the terms of a liability not impact its classification
In addition, a requirement has been introduced to require disclosure when a liability arising from
a loan agreement is classified as non-current and the entity’s right to defer settlement is contingent
on compliance with future covenants within twelve months.
If there is a breach of a material covenant of a long term loan arrangement on or before the end of
the reporting period, resulting in the liability becoming payable on demand as at the reporting date,
and the lender agrees—after the reporting period but before the financial statements are approved
for issue—not to demand repayment for at least 12 months as a consequence of the breach, this
shall be treated as an adjusting event. Accordingly, the entity is not required to classify the liability
as current.
The amendments are effective for annual reporting periods beginning on or after 1 April 2025
retrospectively in accordance with Ind AS 8.
Ind AS 7- Statement of Cash Flows and Ind AS 107- Financial Instruments Disclosures:
Supplier Finance Arrangements:
In August 2025, the MCA notified amendments to Ind AS 7 Statement of Cash Flows and Ind AS 107
Financial Instruments: Disclosures to clarify the characteristics of supplier finance arrangements
and require additional disclosure of such arrangements. The disclosure requirements in the
amendments are intended to assist users of financial statements in understanding the effects of
supplier finance arrangements on an entity’s liabilities, cash flows and exposure to liquidity risk.
The amendments had no impact on the Company’s financial statements as the Company does not
have any supplier finance arrangements.
Ind AS 12- Income Taxes:
International Tax Reform—Pillar Two Model Rules
In August 2025, the MCA notified amendments to Ind AS 12 Income Taxes in response to the OECD’s
BEPS Pillar Two rules and include:
a. A mandatory temporary exception to the recognition and disclosure of deferred taxes arising
from the jurisdictional implementation of the Pillar Two model rules; and
b. Disclosure requirements for affected entities to help users of the financial statements better
understand an entity’s exposure to Pillar Two income taxes arising from that legislation,
particularly before its effective date.
The mandatory temporary exception - the use of which is required to be disclosed - applies
immediately. The remaining disclosure requirements apply for annual reporting periods beginning
on or after 1 April 2025, but not for any interim periods ending on or before 31 March 2026.
The amendments had no impact on the Company’s financial statements as the Company is not in
scope of the Pillar Two model rules.
Ind AS 21 - The Effects of Changes in Foreign Exchange Rates:
Lack of exchangeability:
The Ministry of Corporate Affairs (MCA] notified the Companies (Indian Accounting Standards)
Amendment Rules, 2025, which amend Ind AS 21, The Effects of Changes in Foreign Exchange Rates
to specify how an entity should assess whether a currency is exchangeable and how it should
determine a spot exchange rate when exchangeability is lacking. The amendments also require
disclosure of information that enables users of its financial statements to understand how the
currency not being exchangeable into the other currency affects, or is expected to affect, the entity’s
financial performance, financial position and cash flows. The amendments are effective for annual
reporting periods beginning on or after April 01, 2025. When applying the amendments, an entity
cannot restate comparative information. The amendments do not have a material impact on the
Company’s financial statements.
The Company has evaluated the new pronouncements | amendments, and there is no material
impact on its Financial Statements.
New and revised Ind AS issued but not yet effective
The new and amended standards that are notified by the Ministry of Corporate Affairs (MCA], but
not yet effective, up to the date of issuance of the Company’s financial statements, are disclosed
below. The Company will adopt these new and amended standards when they become effective.
Amendments to Ind AS 1 - Classification of Liabilities as Current or Non-current and Non-current
Liabilities with Covenants and Ind AS 10 Events after the Reporting Period:
Ind AS 10 has been amended to remove the previous treatment under which a lender’s post¬
reporting date waiver granted before the financial statements were approved for issue of a breach
of a material covenant in a long-term loan arrangement that occurred on or before the end of the
reporting period, resulting in the liability becoming payable on demand at the reporting date, was
regarded as an adjusting event.
For annual reporting periods beginning on or after April 01, 2026, any breach of a covenant
whether material or immaterial occurring on or before the reporting date will, in accordance with
Ind AS 1, require the related liability to be classified as current, unless the lender has granted a
waiver of the breach on or before the reporting date and has agreed not to demand repayment for
at least 12 months after the reporting date as a consequence of the breach. Such a waiver shall be
treated as an adjusting event.
The amendments are effective for annual reporting periods beginning on or after April 01, 2026
retrospectively in accordance with Ind AS 8.
1.3 Foreign currency transactions1.3.1 Functional and presentation currency
The items included in the Financial Statements of the Company are measured during the currency
of the primary economic environment in which the Company operates (the functional currency].
The Financial Statements of the Company are presented in Indian Rupees (T), which is also the
functional and presentation currency of the Company.
1.3.2 Transactions and balances
a] Transactions denominated in foreign currencies are recorded at the exchange rate prevailing
on the date of the transaction or that approximates the actual rate at the date of the transaction.
b] Foreign currency denominated monetary assets and liabilities are translated into the relevant
functional currency at exchange rates in effect at the Balance Sheet date.
c] Transaction gains or losses realized upon settlement of foreign currency transactions are
included in determining net profit for the period in which the transaction is settled.
d] Losses arising on account of transactions covered by the forward contract are recognised over
the period of the contract.
e] Monetary assets and liabilities at the end of the year are converted at exchange rates in effect
at the Balance Sheet date and the resultant gain or loss is accounted for in the Income Statement.
f] The Company has not used any derivative instrument including forward contracts which have
been used for hedging foreign currency exposure. The Company does not undertake any
speculative or trading activity through derivative instruments.
g] Non-monetary items that are measured at fair value and denominated in a foreign currency are
translated using the exchange rates at the date when the fair value was determined. Translation
differences on assets and liabilities carried at fair value are reported as part of the fair value gain
| (loss]. Non-monetary items that are measured in terms of historical cost in a foreign currency
are not revalued.
1.4 Revenue recognition1.4.1 Revenue from operations
The Company earns revenue primarily from sale of web-offset printing presses in India and
abroad. The Company also provides after-sales services and installation services.
Time of recognition: Revenue is recognised upon transfer of control of promised goods or
services to customers that reflects the consideration which the Company expects to receive in
exchange for those goods or services. There are two types of contracts, i.e., Composite Contract
where installation income is inclusive of the contract price and Recoverable Contract, where
installation income is charged separately.
Revenue from the Fixed Price (Composite] Contract is allocated between supply of machine
obligation and installation obligation. The revenue from supply is recognized at a point in
time, when all the components of the machine are delivered to the customer. Revenue from
Installation income is recognised on a pro-rata basis.
Revenue from the recoverable Contract is recognised when all the components of the goods
are delivered to the customer. Income from Installation and after-sales services is recognised
on a pro-rata basis. Revenue from services is recognised over the period.
The Company uses judgment to determine an appropriate standalone selling price for a
performance obligation. The Company allocates the transaction price to each performance
obligation based on the relative standalone selling price of each distinct product or service
promised in the contract.
Revenue from services, including those embedded in the contract for the sale of goods, namely,
freight and insurance services, mainly in case of export sales, is recognised upon completion of
services.
Measurement of revenue: Revenue is measured at the fair value of the consideration received
or receivable, net of any trade discounts, volume rebates and any taxes or duties collected on
behalf of the Government which are levied on sales such as Goods and Services Tax (GST).
Discounts given include rebates, price reductions and other incentives given to customers. No
element of financing is deemed present as the sales are made with a payment term which is
consistent with market practice and the credit period is less than 12 months.
Eligible export incentives are recognised on an accrual basis in the year in which the precedent
conditions are met, and there is no significant uncertainty about the collectability of the
consideration.
1.4.2 Other income
Interest income from financial assets is recognised using the effective interest rate method. The
effective interest rate is the rate that exactly discounts estimated future cash receipts through
the expected life of the financial asset to the gross carrying amount of a financial asset. When
calculating the effective interest rate, the Company estimates the expected cash flows by
considering all the contractual terms of the financial instrument.
Dividends are recognised in the statement of profit and loss only when the right to receive
payment is established; it is probable that the economic benefits associated with the dividend
will flow to the Company and the amount of the dividend can be measured reliably.
1.5 Income taxes
The income tax expense or credit for the period is the tax payable on the taxable income of the
current period based on the applicable income tax rates adjusted by changes in deferred tax assets
and liabilities attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated based on the tax laws enacted or substantively enacted
at the end of the reporting period. Management periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax regulation is subject to interpretation. It
establishes provisions where appropriate based on amounts expected to be paid to the tax
authorities.
Minimum Alternate Tax (‘MAT’] under the provisions of the Income Tax Act, 1961 is recognised as
current tax in the Statement of Profit and Loss. The credit available under the Income Tax Act 1961
in respect of MAT paid is recognised as an asset only when and to the extent there is convincing
evidence that the Company will pay normal income tax during the period for which the MAT credit
can be carried forward for set off against the normal tax liability. Such an asset is reviewed at each
Balance Sheet date.
Deferred income tax is provided in full, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts. However, deferred tax
liabilities are not recognised if they arise from the initial recognition of Goodwill. Deferred income
tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction
other than a business combination that at the time of the transaction affects neither accounting
profit nor taxable profit | (tax loss]. Deferred income tax is determined using tax rates (and laws]
that have been enacted or substantially enacted by the Balance Sheet date and are expected to apply
when the related deferred income tax asset is realised, or the deferred income tax liability is settled.
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses
only if it is probable that future taxable amounts will be available to utilize those temporary
differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset
current tax assets and liabilities and when the deferred tax balances relate to the same taxation
authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable
right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability
simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items
recognised in Other Comprehensive Income or directly in equity. In this case, the tax is also
recognised in Other Comprehensive Income or directly in equity, respectively
1.6 Leases1.6.1 The Company as a lessee
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:
a. The contract involves the use of an identified asset
b. The Company has substantially all the economic benefits from use of the asset through
the period of the lease and
c. The Company has the right to direct the use of the asset.
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.
The right-of-use assets are initially recognized 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. The right-of-use asset
and lease liability are also adjusted to reflect any lease modifications or revised in-substance
fixed lease payments.
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 amortized 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. Lease liabilities
are re-measured with a corresponding adjustment to the related right of use asset if the Company
changes its assessment 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.
1.6.2 The Company as a lessor
Leases for which the Company is a lessor are classified as finance or operating leases. Whenever
the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee,
the contract is classified as a finance lease. All other leases are classified as operating leases.
Income from operating leases where the Company is a lessor is recognised as income on a
straight-line basis over the lease term unless the receipts are structured to increase in line with
the expected general inflation to compensate for the expected inflationary cost increases. The
respective leased assets are included in the Balance Sheet based on their nature. Leases of
property, plant, and equipment where the Company as a lessor has substantially transferred all
the risks and rewards are classified as finance lease. The corresponding rent receivables, net of
interest income, are included in other financial assets. Each lease receipt is allocated between
the asset and interest income. The interest income is recognised in the income statement over
the lease period to produce a constant periodic rate of interest on the remaining balance of the
asset for each period.
Under combined lease agreements, land and building are assessed individually.
1.7 Property, plant and equipment
Freehold land is carried at historical cost. All other items of property, plant and equipment are
stated at acquisition cost net of accumulated depreciation and accumulated impairment losses, if
any. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Property, plant and equipment are stated at original cost net of tax / duty credit availed, less
accumulated depreciation and accumulated impairment losses, if any. All other repair and
maintenance costs are recognised in the statement of profit and loss as incurred.
Spare parts, stand-by equipment and servicing equipment are recognised as property, plant and
equipment if they are held for use in the production or supply of goods or services, for rental to
others, or for administrative purposes and are expected to be used during more than one period.
Capital work-in-progress includes cost of property, plant and equipment under installation / under
development as at the balance sheet date. Advances paid towards the acquisition of property, plant
and equipment outstanding at each Balance Sheet date is classified as ‘capital advances’ under other
non-current assets and the costs of assets not ready for the intended use before balance sheet date
are disclosed under ‘Capital work-in-progress’. Subsequent expenditures relating to property, plant
and equipment are capitalized only when it is probable that it increases the future economic
benefits associated with the asset beyond the previously assessed standard of performance and
these will flow to the Company and the cost of the item can be measured reliably.
The cost and related accumulated depreciation are eliminated from the financial statements upon
sale or retirement of the asset. Property plant and equipment are derecognized when there are no
economic benefits are likely to flow to the Company. The resultant gains or losses are recognised in
the Statement of Profit and Loss.
The assets residual values, useful lives and methods of depreciation are reviewed at each financial
year end, changes there in are considered as estimates and accordingly accounted for and adjusted
prospectively.
The cost of borrowing for assets taking substantial time to be ready for use is capitalised for the
period up to the time the asset is ready to use.
1.7.1 Depreciation
Depreciation on all assets of the Company is charged on straight line method over the useful life of
assets at the rates and in the manner provided in Schedule II of the Act for the proportion at period
of use during the year.
The Company depreciates its property, plant and equipment over the useful life in the manner
prescribed in Schedule II to the Act, and management believe that useful life of assets is same as
those prescribed in Schedule II to the Act. The residual values are not more than 5% of the original
cost of the asset.
The residual values, useful lives and method of depreciation of property, plant and equipment are
reviewed at each financial year end, changes there in are considered as change in an estimate and
accordingly accounted for prospectively.
1.8 Intangible assets
Intangible assets are amortized by straight line method over the estimated useful life of such assets.
The useful life is estimated based on the evaluation of future economic benefits expected of such
assets. Computer Software includes enterprise resource planning projects and other cost relating
to software which provides significant future economic benefits. These costs comprise of license
fees and the cost of system integration services.
Development expenditure qualifying as an intangible asset, if any, is capitalised, to be amortised
over the economic life of the product/patent.
Intangible assets are stated at cost less accumulated amortisation and impairment, if any. Intangible
assets are amortized by straight-line method over the estimated useful life of such assets.
Intangible assets
The useful life of an intangible asset that is not being amortised shall be reviewed each period to
determine whether events and circumstances continue to support an indefinite useful life
assessment for that asset. If they do not, the change in the useful life assessment from indefinite to
finite shall be accounted for as a change in an accounting estimate in accordance with IndAS8
“Accounting Policies, Changes in Accounting Estimates and Errors”.
The residual values, useful lives and method of depreciation of intangible assets are reviewed at
each financial year end, changes there in are considered as change in an estimate and accordingly
accounted for prospectively.
1.9 Investment property
Property that is held for long-term rental yields or for capital appreciation or both, and that is not
in use by the Company, is classified as investment property. Land held for a currently undetermined
future use is also classified as an investment property. Investment property is measured at its
acquisition cost, including related transaction costs and where applicable, borrowing costs.
Investment property is stated at cost less accumulated depreciation and impairment, if any.
1.10 Impairment of non-financial assets
The carrying amounts of non-financial assets are reviewed at each Balance Sheet date to assess if
there is any indication of impairment based on internal / external factors. An impairment loss on
such assessment is recognised wherever the carrying amount of an asset exceeds its recoverable
amount. The recoverable amount of the assets is net selling price or value in use, whichever is
higher. While assessing value in use, the estimated future cash flows are discounted to the present
value by using weighted average cost of capital. A previously recognised impairment loss is further
provided or reversed depending on changes in the circumstances and to the extent that carrying
amount of the assets does not exceed the carrying amount that would have been determined if no
impairment loss had previously been recognised. An impairment loss is charged to the Statement
of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss
recognised in the prior accounting period is reversed if there has been a change in the estimate of
recoverable amount.
Goodwill, intangible assets having indefinite useful life and intangible assets currently not in use by
the Company are tested for impairment annually and whenever there are indicators of
impairments.
Reversal of impairment of Goodwill is not recognized.
1.11 Cash and cash equivalents
Cash and cash equivalents include cash in hand, cash in bank, cheques on hand, demand deposits
with bank and other short-term (three months or less from the date of acquisition], highly liquid
investments that are readily convertible into cash and which are subject to an insignificant risk of
changes in value.
1.12 Trade receivable
Trade receivables are initially recognised as per Ind AS 115 “Revenue from Contracts with
Customers” and these assets are held at amortised cost. Also, refer note 1.15.12.
1.13 Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the
end of the financial year which are unpaid. Trade and other payables are presented as current
liabilities unless payment is not due within 12 months after the reporting period. They are
recognised initially at their fair value and subsequently measured at amortised cost using the
effective interest method.
1.14 Inventories
Raw materials and components, packing materials, purchased finished goods, work-in-progress,
finished goods manufactured, fuel, stores and spares other than specific spares for machinery are
valued at cost or net realisable value whichever is lower. The cost of inventories is ascertained on
a weighted average basis.
Work-in-progress includes the cost of purchase, an appropriate share of the cost of conversion and
other overhead incurred in bringing the inventory to its present location and condition and
measured at a lower of cost or net realisable value.
'Cost' comprises all costs of purchase, costs of conversion and other costs incurred in bringing the
inventory to the present location and condition. Due allowances are made for slow moving and
obsolete inventories based on estimates made by the Company.
Finished products are valued at lower of cost and net realisable value Cost is computed including
material, labour and overheads related to the manufacturing operations. Items such as spare parts,
stand-by equipment and servicing equipment which is not property, plant and equipment get
classified as inventory.
1.15 Financial Instruments1.15.1 Financial assets
The Company classifies its financial assets in the following measurement categories:
i. Those to be measured subsequently at fair value (either through Other Comprehensive Income
or through profit or loss]
ii. Those to be measured at amortised cost
The classification depends upon the business model of the entity for managing financial assets
and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in Statement of Profit
and Loss or Other Comprehensive Income. For investments in debt instruments, this depends on
the business model in which the investment is held. For investments in equity instruments, this
depends on whether the Company has made an irrevocable election at the time of initial
recognition to account for the equity investment at fair value through Other Comprehensive
Income.
1.15.2 Initial recognition and measurement
The Company recognizes financial assets and financial liabilities when it becomes a party to the
contractual provisions of the instrument. All financial assets and liabilities are recognized at fair
value on initial recognition, except for trade receivables which are initially measured at
transaction price. Transaction costs that are directly attributable to the acquisition or issue of
financial assets and financial liabilities that are not carried at fair value through profit or loss are
added to the fair value on initial recognition. Transaction costs of financial assets carried at fair
value through profit or loss are expensed in the Statement of Profit and Loss.
1.15.3 Subsequent measurement
After initial recognition, financial assets are measured at:
i. Fair Value (either through Other Comprehensive Income (FVOCI) or through Statement of
Profit or Loss (FVTPL)or
ii. Amortised cost
1.15.4 Non-derivative financial instruments
i) Financial assets carried at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model
whose objective is to hold the asset in order to collect contractual cashflows and the contractual
terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding, using the EIR method less
impairment, if any the amortisation of EIR and loss arising from impairment, if any is
recognised in the Statement of Profit and Loss.
ii) Financial assets at fair value through other comprehensive income (FVOCI)
A financial asset is subsequently measured at fair value through other comprehensive income
if it is held within a business model whose objective is achieved by both collecting contractual
cash flows and selling financial assets and the contractual terms of the financial asset give rise
on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding. Fair value movements are recognised in the Other
Comprehensive Income (OCI]. The Company has made an irrevocable election for its
investments, which are classified as equity instruments, to present the subsequent changes in
fair value in other comprehensive income based on its business model. Further, in cases where
the Company has made an irrevocable election based on its business model, for its investments
which are classified as equity instruments, the subsequent changes in fair value are recognized
in other comprehensive income. On de-recognition, cumulative gain or loss previously
recognised in OCI is not reclassified to Statement of Profit and Loss but reclassified from equity
to retained earnings.
iii) Financial assets at fair value through profit or loss (FVTPL)
A financial asset not classified as either amortised cost or FVOCI, is classified as FVTPL. Such
financial assets are measured at fair value with all changes in fair value, including interest
income and dividend income if any, recognised as ‘other income’ in the Statement of Profit and
Loss.
1.15.5 Financial liabilities
Classification as debt or equity
Financial liabilities and equity instruments issued by the Company are classified according to the
substance of the contractual arrangements entered and the definitions of a financial liability and
an equity instrument.
1.15.6 Initial recognition and measurement
Financial liabilities are recognised when the Company becomes a party to the contractual
provisions of the instrument. Financial liabilities are initially measured at fair value.
1.15.7 Subsequent measurement
Financial liabilities are subsequently measured at amortised cost using the effective interest rate
method. Financial liabilities carried at fair value through profit or loss are measured at fair value
with all changes in fair value recognised in the Statement of Profit and Loss.
1.15.8 De-recognition
Financial liability is de-recognised when the obligation specified in the contract is discharged,
cancelled, or expires.
1.15.9 De-recognition of financial instruments
A financial asset is de-recognised only when: -
i] The Company has transferred the rights to receive cash flows from the financial asset or
ii) Retains the contractual rights to receive the cash flows of the financial asset but assumes
a contractual obligation to pay the cash flows to one or more recipients.
Where the Company has transferred an asset, it evaluates whether it has transferred
substantially all risks and rewards of ownership of the financial asset. In such cases, the financial
asset is de-recognised. Where the Company has not transferred substantially all the risks and
rewards of ownership of the financial asset, the financial asset is not de-recognised.
Where the Company has neither transferred a financial asset nor retains substantially all risks
and rewards of ownership of the financial asset, the financial asset is de-recognised if the
Company has not retained control of the financial asset. Where the Company retains control of
the financial asset, the asset continues to be recognised to the extent of continuing involvement
in the financial asset.
1.15.10 Impairment of financial assets
The Company recognizes loss allowance using the expected credit loss (ECL) model for financial
assets which are not fair valued through profit or loss. Loss allowance for trade receivables with
no significant financing component is measured at an amount equal to lifetime ECL. For all other
financial assets, ECLs are measured at an amount equal to 12-month ECL, unless there has been
a significant increase in credit risk for initial recognition in which case those are measured at life
time ECL. The amount of ECLs (or reversal) that is required to adjust the loss allowance at the
reporting date is recognized as an impairment gain or loss in Statement of Profit and Loss
1.16 Off-setting financial instruments
Financial assets and liabilities are offset, and the net amount is reported in the Balance Sheet where
there is a legally enforceable right to offset the recognised amounts and there is an intention to
settle on a net basis or realise the asset and settle the liability simultaneously The legally
enforceable right must not be contingent on future events and must be enforceable in the normal
course of business and in the event of default, insolvency or bankruptcy of the Company or the
counter party.
1.17 Borrowing costs
General and specific borrowing costs that are directly attributable to the acquisition, construction
or production of a qualifying asset are capitalised during the period that is required to complete
and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take
a substantial period to get ready for their intended use or sale. Investment income earned on the
temporary investment of specific borrowing spending their expenditure on qualifying assets is
deducted from the borrowing costs eligible for capitalisation. Other borrowing costs are expensed
in the period in which they are incurred.
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