2. Material accounting policies
a. Basis of preparation
The financial statements of the Company have
been prepared in accordance with Indian Recounting
Standards (inD RS) notified under the section 133 of
the Companies Rct 3013 (the Rct) read with Companies
(Indian Accounting Standards) Rule 3015 (as amended
from time to time) and other relevant provision of the
Rct. The financial statements have been prepared on
a historical cost basis, except for the following assets
and liabilities:
i) Certain financial assets and liabilities that are
measured at fair value
ii) Defined benefit plans-plan assets are measured
at fair value
The financial statements are presented in Indian
Rupees ('inR') and all values are rounded to nearest
crore (inR 00,00,000) upto two decimal places, except
when otherwise indicated.
b. Current versus non-current classification
The Company segregates assets and liabilities into
current and non-current categories for presentation
in the balance sheet after considering its normal
operating cycle and other criteria set out in Ind
RS 1, "Presentation of Financial Statements". For
this purpose, current assets and liabilities include
the current portion of non-current assets and
liabilities respectively.
Deferred tax assets and liabilities are always classified
as non-current.
The operating cycle is the time between the acquisition
of assets for processing and their realization in cash
and cash equivalents. The Company has identified
period up to twelve months as its operating cycle.
c. Property, plant and equipment
Property, Plant and equipment including capital work
in progress are stated at cost, less accumulated
depreciation and accumulated impairment losses,
if any. The cost comprises of purchase price, taxes,
duties, freight and other incidental expenses directly
attributable and related to acquisition and installation
of the concerned assets and are further adjusted by
the amount of tax credit availed wherever applicable.
The Company identifies and determines cost of
each component/ part of the asset separately, if the
component/ part have a cost which is significant to
the total cost of the asset and has useful life that is
materially different from that of the remaining asset.
Similarly, when significant parts of plant and equipment
are required to be replaced at intervals or when a major
inspection/overhauling is required to be performed,
such cost of replacement or inspection is capitalised
(if the recognition criteria is satisfied) in the carrying
amount of plant and equipment as a replacement cost
or cost of major inspection/overhauling, as the case
may be and depreciated separately based on their
specific useful life. Likewise, when a major inspection
is performed, its cost is recognised in the carrying
amount of the plant and equipment as a replacement
if the recognition criteria are satisfied. Rll other repair
and maintenance costs are recognised in Statement of
Profit and Loss as incurred. The present value of the
expected cost for the decommissioning of an asset
after its use is included in the cost of the respective
asset if the recognition criteria for a provision are met.
Subsequent expenditure related to an item of Property,
Plant & equipment is added to its book value only
if it increases the future benefits from the existing
asset beyond its previously assessed standard of
performance. Rll other expenses on existing items
of Property, Plant & equipment, including day-to¬
day repair and maintenance expenditure and cost of
replacing parts, are charged to the Statement of Profit
and Loss for the period during which such expenses
are incurred.
Items of stores and spares that meet the definition of
property, plant and equipment are capitalized at cost
and depreciated over their useful life. Otherwise, such
items are classified as inventories.
An item of property, plant and equipment and any
significant part initially recognised is derecognised
upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or
loss arising on derecognition 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 derecognised
The residual values, useful lives and methods of
depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted
prospectively, if appropriate.
Property, plant and equipment held for sale is valued
at lower of their carrying amount and net realizable
value. Any write-down is recognised in the statement
of profit and loss.
Depreciation on property, plant and equipment is
provided on pro-rata basis with reference to the date
of addition/disposal on straight-line method using the
useful lives of the assets estimated by management
based on technical evaluation; these rates are in
certain cases differ from the lives prescribed under
Schedule II of the Act.
Leasehold improvements are depreciated over the
lease period.
d. Intangible assets
Intangible assets acquired separately are measured on
initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less accumulated
amortization and accumulated impairment losses, if
any. Internally generated intangible assets, excluding
capitalized development costs, are not capitalized and
expenditure is reflected in the Statement of Profit and
Loss in the year in which the expenditure is incurred.
The useful lives of intangible assets are assessed as
either finite or indefinite.
Intangible assets with finite lives are amortised over
the useful economic lives 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 least 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.
Intangible assets with indefinite useful lives are not
amortised, but are tested for impairment annually,
either individually or at the cash-generating unit level.
The assessment of indefinite life is reviewed annually
to determine whether the indefinite life continues to
be supportable. If not, the change in useful life from
indefinite to finite is made on a prospective basis.
Gains or losses arisi ng 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.
Intangible assets being specialised Software and
Technical Know-how are amortised on a straight
line basis over their useful life (estimated by the
management) of 3 to 5 years and 10 years respectively.
e. Leases
The Company assesses at contract inception whether
a contract is, or contains, a lease. That is, if the
contract conveys the right to control the use of an
identified asset for a period of time in exchange
for consideration.
Where the Company is lessee
The Company applies a single recognition and
measurement approach for all leases, except for
short-term leases and leases of low-value assets. The
Company recognises lease liabilities to make lease
payments and right-of-use assets representing the
right to use the underlying assets.
(i) Right of use assets
The Company recognises right-of-use assets at
the commencement date of the lease (i.e., the date
when the underlying asset is available for use).
Right-of-use assets are measured at cost, less any
accumulated depreciation and impairment losses,
and adjusted for any remeasurement of lease
liabilities. The cost of right-of-use assets includes
the amount of lease liabilities recognised, initial
direct costs incurred, and lease payments made
at or before the commencement date less any
lease incentives received. Right-of-use assets
are depreciated on a straight-line basis over
the shorter of the lease term and the estimated
useful lives of the assets, as follows:
I f ownership of the leased asset transfers to
the Company at the end of the lease term or the
cost reflects the exercise of a purchase option,
depreciation is calculated using the estimated
useful life of the asset.
The right-of-use assets are also subject to
impairment. Refer to the accounting policies in
section (g) Impairment of non-financial assets.
(ii) Lease Liabilities
At the commencement date of the lease, the
Company recognises lease liabilities measured at
the present value of lease payments to be made
over the lease term. The lease payments include
fixed payments (including in substance fixed
payments) less any lease incentives receivable,
variable lease payments that depend on an index
or a rate, and amounts expected to be paid under
residual value guarantees. The lease payments
also include the exercise price of a purchase
option reasonably certain to be exercised by
the Company and payments of penalties for
terminating the lease, if the lease term reflects
the Company exercising the option to terminate.
Variable lease payments that do not depend on
an index or a rate are recognised as expenses
(unless they are incurred to produce inventories)
in the period in which the event or condition that
triggers the payment occurs.
In calculating the present value of lease payments,
the Company uses its incremental borrowing rate
at the lease commencement date because the
interest rate implicit in the lease is not readily
determinable. After the commencement date, the
amount of lease liabilities is increased to reflect
the accretion of interest and reduced for the
lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there
is a modification, a change in the lease term,
a change in the lease payments (e.g., changes
to future payments resulting from a change in
an index or rate used to determine such lease
payments) or a change in the assessment of an
option to purchase the underlying asset.
Where the Company is the lessor-
Leases in which the Company does not transfer
substantially all the risks and rewards of ownership
of an asset are classified as operating leases. Assets
subject to operating leases are included in Property,
plant & equipment. Lease income on an operating
lease is recognized in the Statement of Profit and
Loss on a straight-line basis over the lease term. Costs,
including depreciation, are recognized as an expense
in the Statement of Profit and Loss.
Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition
exemption to its short-term leases contracts (i.e., those
leases that have a lease term of 12 months or less from
the commencement date and do not contain a purchase
option). It also applies the lease of low-value assets
recognition exemption to leases of office equipment
that are considered to be low value. Lease payments
on short-term leases and leases of low-value assets
are recognised as expense on a straight-line basis over
the lease term.
F. Borrowing costs
Borrowing cost includes interest, amortization
of ancillary costs incurred in connection with the
borrowings and exchange differences to the extent
they are regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition
or construction of an asset that necessarily takes a
substantial period of time to get ready for its intended
use are capitalized as part of the cost of the asset.
All other borrowing costs are expensed in the year
they occur.
g. 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. An asset's recoverable
amount is the higher of an asset's or cash-generating
unit's (CGU) fair value less costs of disposal and its
value in use. The 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 class of assets. Where
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 net selling price,
recent market transactions are taken into account, if
available. If no such transactions can be identified, an
appropriate valuation model is used.
The Company bases its impairment calculation on
detailed budgets and forecast calculations which are
prepared separately for each of the Company's cash¬
generating units to which the individual assets are
allocated. Impairment losses of continuing operations,
including impairment on inventories, are recognised in
the Statement of Profit and Loss.
For assets, an assessment is made at each reporting
date to determine whether there is an indication that
previously recognised 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 recognised 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 recognised.
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 recognised for the asset in prior years.
Such reversal is recognised in the Statement of Profit
and Loss.
Intangible assets with indefinite useful lives are tested
for impairment annually either individually or at the
CGU level, as appropriate, and when circumstances
indicate that the carrying value may be impaired.
After impairment, depreciation is provided on the
revised carrying amount of the asset over its remaining
useful life.
h. Government grants
Grants and subsidies from the government are
recognized when there is reasonable assurance that (i)
the Company will comply with the conditions attached
to them, and (ii) the grant/subsidy will be received.
When the grant or subsidy relates to revenue, it
is recognized as income on a systematic basis in
the Statement of Profit and Loss over the periods
necessary to match them with the related costs,
which they are intended to compensate. Where the
grant relates to an asset, it is recognised as income
in equal amounts over the expected useful life of the
related asset.
When the Company receives grants of non-monetary
assets, the asset and the grant are recorded at fair
value amounts and released to the Statement of Profit
and Loss over the expected useful life in a pattern of
consumption of the benefit of the underlying asset
i.e. by equal annual instalments. When loans or similar
assistance are provided by governments or related
institutions, with an interest rate below the current
applicable market rate, the effect of this favourable
interest is regarded as a government grant. The loan
or assistance is initially recognised and measured
at fair value and the government grant is measured
as the difference between the initial carrying value
of the loan and the proceeds received. The loan is
subsequently measured as per the accounting policy
applicable to financial liabilities.
i. Inventories
Raw materials, components, stores and spares are
valued at lower of cost and net realizable value.
However, materials 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.
Cost of raw materials, components, stores and spares
is determined on moving weighted average method.
Work-in-progress and finished goods are valued at
lower of cost and net realizable value. Cost includes
direct materials and labour and a proportion of
manufacturing overheads based on normal operating
capacity. Cost of finished goods is determined on
standard cost basis.
Traded goods are valued at lower of cost and net
realizable value. Cost of purchase and other costs
in bringing the inventories to their present location
and condition. Cost of traded goods is determined on
weighted average basis.
Saleable scrap, whose cost is not identifiable, is valued
at net realisable value.
Stores and Spares which do not meet the definition
of property, plant and equipment are accounted
as inventories.
Net realizable value is the estimated selling price in
the ordinary course of business, less estimated costs
of completion and estimated costs necessary to make
the sale.
j. Revenue from contract with customers
Revenue from contracts with customers is recognised
when control of the goods are transferred to the
customer at an amount that reflects the consideration
to which the Company expects to be entitled in
exchange for those goods. The Company has generally
concluded that it is the principal in its revenue
arrangements because it typically controls the goods
before transferring them to the customer.
The disclosures of significant accounting judgements,
estimates and assumptions relating to revenue from
contracts with customers are provided in Note 2.1.
Sale of Goods
Revenue from sale of goods is recognised at the point
in time when control of the goods is transferred to the
customer, generally on delivery of the goods.
The Company considers whether there are other
promises in the contract that are separate performance
obligations to which a portion of the transaction price
needs to be allocated (e.g., warranties, Sales points).
In determining the transaction price for the sale of
goods, the Company considers the effects of variable
consideration, the existence of significant financing
components, noncash consideration, and consideration
payable to the customer (if any).
Variable consideration
If the consideration in a contract includes a variable
amount, the Company estimates the amount of
consideration to which it will be entitled in exchange
for transferring the goods to the customer. The
variable consideration is estimated at contract
inception and constrained until it is highly probable
that a significant revenue reversal in the amount of
cumulative revenue recognised will not occur when the
associated uncertainty with the variable consideration
is subsequently resolved. Some contracts for the sale
of goods provide customers with volume rebates. The
volume rebates give rise to variable consideration.
- Volume rebates
The Company provides retrospective volume
rebates to certain customers once the quantity
of products purchased during the period exceeds
a threshold specified in the contract. Rebates
are offset against amounts payable by the
customer. To estimate the variable consideration
for the expected future rebates, the Company
applies the most likely amount method for
contracts with a single-volume threshold and
the expected value method for contracts with
more than one volume threshold. The selected
method that best predicts the amount of variable
consideration is primarily driven by the number
of volume thresholds contained in the contract.
The Company then applies the requirements on
constraining estimates of variable consideration
and recognises a refund liability for the expected
future rebates.
- Significant financing component
The Company receives short-term advances
from its customers. Using the practical expedient
in Ind AS 115, the Company does not adjust the
promised amount of consideration for the effects
of a significant financing component if it expects,
at contract inception, that the period between the
transfer of the promised goods to the customer
and when the customer pays for that goods will
be one year or less.
Warranty obligations
The Company typically provides warranties for general
repairs of defects that existed at the time of sale, as
required by law. These assurance-type warranties are
accounted for under Ind AS 37 Provisions, Contingent
Liabilities and Contingent Assets. Refer to the
accounting policy on warranty provisions.
In some contracts, the Company provides warranty
to the customers. The warranty is accounted for as
a separate performance obligation and a portion of
the transaction price is allocated. The performance
obligation for the warranty service is satisfied based
on time elapsed.
Sales points programme
The Company has a sales point programme, which
allows customers to accumulate points that can be
redeemed for free products. The sales points give
rise to a separate performance obligation as they
provide a material right to the customer. A portion of
the transaction price is allocated to the sales points
awarded to customers based on relative stand-alone
selling price and recognised as a contract liability until
the points are redeemed. Revenue is recognised upon
redemption of points by the customer.
When estimating the stand-alone selling price of the
sales points, the Company considers the likelihood that
the customer will redeem the points. The Company
updates its estimates of the points that will be
redeemed on a quarterly basis and any adjustments
to the contract liability balance are charged
against revenue.
Sales of Services
Revenue from installation and maintenance services
are recognised at point of time upon completion
of services.
Trade receivables
A receivable represents the Company's right to an
amount of consideration that is unconditional (i.e.,
only the passage of time is required before payment of
the consideration is due). Refer to accounting policies
of financial assets - 'financial instruments - initial
recognition and subsequent measurement'.
Contract liabilities
A contract liability is the obligation to transfer goods
to a customer for which the Company has received
consideration (or an amount of consideration is due)
from the customer. If a customer pays consideration
before the Company transfers goods to the customer,
a contract liability is recognised when the payment
is made or the payment is due (whichever is earlier).
Contract liabilities are recognised as revenue when the
Company performs under the contract.
Refund liabilities
A refund liability is the obligation to refund some
or all of the consideration received (or receivable)
from the customer and is measured at the amount
the Company ultimately expects it will have to
return to the customer. The Company updates its
estimates of refund liabilities (and the corresponding
change in the transaction price) at the end of each
reporting period. Refer to above accounting policy on
variable consideration.
k. Other revenue streams
- Interest Income
For all debt instruments measured either at
amortised cost or at fair value through other
comprehensive income, interest income is recorded
using the effective interest rate (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 or to the amortised cost
of a financial liability. 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. Interest income is included in other
income in the statement of profit and loss.
- Export Benefits
Export benefits arising from Duty Drawback
scheme, Merchandise Export Incentive Scheme,
Focus Market Scheme are recognised on shipment
of direct exports. Revenue from exports benefits
measured at the fair value of consideration
received or receivable.
l. Foreign currency transactions and balances
The financial statements are presented in IDR, which
is the Company's functional currency.
Foreign currency transactions are initially recorded
at functional currency's spot rates at the date the
transaction first qualifies for recognition.
Foreign currency monetary items are translated
using the functional currency spot rates prevailing at
the reporting date. Don-monetary items, which are
measured in terms of historical cost denominated in
a foreign currency, are reported using the exchange
rate at the date of the transaction. Don-monetary
items, which are measured at fair value or other
similar valuation denominated in a foreign currency,
are translated using the exchange rate at the date
when such value was determined.
Exchange differences arising on the settlement or
translation of monetary items are recognized in the
Statement of Profit and Loss in the period in which
they arise.
m. Employee benefits
i. Short-term obligations
Liabilities for wages and salaries, including
non-monetary benefits that are expected to be
settled wholly within twelve months after the
end of the period in which the employees render
the related service are recognised in respect of
employee service upto the end of the reporting
period and are measured at the amount expected
to be paid when the liabilities are settled. The
liabilities are presented as current employee
benefit obligations in the Balance Sheet.
ii. Other long-term employee benefit
obligations
- Gratuity
Gratuity liability is defined benefit obligation
and is provided for on the basis of an actuarial
valuation on projected unit credit (PUC) method
made at the end of each financial year. The
Company's gratuity fund scheme is managed
by trust maintained with Insurance companies
to cover the gratuity liability of the employees
and premium paid to such insurance companies
is charged to the statement of profit and loss.
Remeasurements, comprising of actuarial gains
and losses, the effect of the asset ceiling,
excluding amounts included in net interest on
the net defined benefit liability and the return
on plan assets (excluding amounts included in
net interest on the net defined benefit liability),
are recognised immediately in the balance sheet
with a corresponding debit or credit to retained
earnings through OCI in the period in which they
occur. Remeasurements are not reclassified to
profit or loss in subsequent periods.
Net interest is calculated by applying the discount
rate to the net defined benefit liability or asset.
The Company recognises the following changes in
the net defined benefit obligation as an expense
in the statement of profit and loss:
Ý Service costs comprising current service
costs, past-service costs, gains and losses on
curtailments and non-routine settlements
Ý Net interest expense or income
- Provident fund and Superannuation fund
Retirement benefit in the form of Provident
Fund, ESI and Superannuation Fund are defined
contribution schemes. The Company has no
obligation, other than the contribution payable
to the fund. The Company recognizes contribution
payable through provident fund scheme as an
expense, when an employee renders the related
services. If the contribution payable to scheme
for service received before the balance sheet
date exceeds the contribution already paid, the
deficit payable to the scheme is recognised as
liability after deducting the contribution already
paid. If the contribution already paid exceeds the
contribution due for services received before the
balance sheet date, then excess is recognised
as an asset to the extent that the prepayment
will lead to, for example, a reduction in future
payment or a cash refund.
- Compensated Absences
Accumulated leave, which is expected to be
utilized within the next 12 months, is treated
as short-term employee benefit. The Company
measures the expected cost of such absences
as the additional amount that it expects to pay
as a result of the unused entitlement that has
accumulated at the reporting date.
The Company treats accumulated leave expected
to be carried forward beyond twelve months, as
long-term employee benefit for measurement
purposes. Such long-term compensated absences
are provided for based on the actuarial valuation
using the projected unit credit method at the year-
end. Actuarial gains/losses are immediately taken
to the Statement of Profit and Loss and are not
deferred. The Company presents the leave as a
current liability in the balance sheet, to the extent
it does not have an unconditional right to defer
its settlement for 12 months after the reporting
date. Where Company has the unconditional legal
and contractual right to defer the settlement for a
period beyond 12 months, the same is presented
as non-current liability.
n. Share based payments
Employees (including senior executives) of the
Company receive remuneration in the form of share-
based payments, whereby employees render services
as consideration for equity instruments (equity-settled
transactions).
Equity-settled transactions
The cost of equity-settled transactions is determined
by the fair value at the date when the grant is
made using an appropriate valuation model. That
cost is recognised as employee benefits expense
in the statement of profit and loss together with a
corresponding increase in other equity as 'Share based
payments reserve' in lines with requirement as per
Ind AS 102 (Share based payments), over the period
in which the performance and/or service conditions
are fulfilled. The cumulative expense recognised for
equity settled transactions at each reporting date
until the vesting date reflects the extent to which
the vesting period has expired and the Company's
best estimate of the number of equity instruments
that will ultimately vest. The statement of profit and
loss expense or credit for a period represents the
movement in cumulative expense recognised as at the
beginning and end of that period and is recognised in
employee benefits expense.
Service and non-market performance conditions are not
taken into account when determining the grant date
fair value of awards, but the likelihood of the conditions
being met is assessed as part of the Company's best
estimate of the number of equity instruments that
will ultimately vest. Market performance conditions
are reflected within the grant date fair value. Any
other conditions attached to an award, but without
an associated service requirement, are considered to
be non-vesting conditions. Non-vesting conditions are
reflected in the fair value of an award and lead to an
immediate expensing of an award unless there are
also service and/or performance conditions.
No expense is recognised for awards that do not
ultimately vest because non-market performance
and/or service conditions have not been met. Where
awards include a market or non-vesting condition,
the transactions are treated as vested irrespective
of whether the market or non-vesting condition is
satisfied, provided that all other performance and/or
service conditions are satisfied.
When the terms of an equity-settled award are
modified, the minimum expense recognised is the
expense had the terms had not been modified, if the
original terms of the award are met. An additional
expense is recognised for any modification that
increases the total fair value of the share-based
payment transaction, or is otherwise beneficial to the
employee as measured at the date of modification.
Where an award is cancelled by the entity or by the
counterparty, any remaining element of the fair value
of the award is expensed immediately through profit
or loss.
The dilutive effect of outstanding options is reflected
as additional share dilution in the computation of
diluted earnings per share.
o. Income taxes
Tax expense comprises current and deferred tax. Current
income-tax is measured at the amount expected to be
paid to or recovered from 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 recognised outside Statement of Profit and Loss
is recognised outside Statement of Profit and Loss
(either in other comprehensive income or 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.
Deferred tax is provided using the liability 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 measured using the tax rates
and the tax laws enacted or substantively enacted
at the reporting date. Deferred tax relating to items
recognised outside Statement of Profit and Loss is
recognised outside Statement of Profit and Loss
(either in other comprehensive income or in equity).
Deferred tax liabilities are recognized for all taxable
temporary differences. Deferred tax assets are
recognized for all deductible temporary differences,
the carry forward of unused tax credits and any
unused tax losses. Deferred tax assets are recognised
to the extent that it is probable that taxable profit will
be available against which the deductible temporary
differences, and the carry forward of unused tax
credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed
at each reporting date and reduced to the extent that
it is no longer probable that sufficient taxable profit
will be available to allow all or part of the deferred
tax asset to be utilised. Unrecognised deferred tax
assets are re-assessed at each reporting date and are
recognised to the extent that it has become probable
that future taxable profits will allow the deferred tax
asset to be recovered.
p. Segment reporting
Identification of segments
The Company's operating businesses are organized
and managed separately according to the nature of
products and services provided, with each segment
representing a strategic business unit that offers
different products and serves different markets.
The analysis of geographical segments is based on
the areas in which the customers of the Company
are located.
Allocation of common costs
Common allocable costs are allocated to each segment
on a case to case basis applying the ratio, appropriate
to each relevant case. Revenue and expenses, which
relate to the enterprise as a whole and are not allocable
to segment on a reasonable basis, are included under
the head "Unallocated".
Unallocated items
Unallocated items include general corporate income
and expense items which are not allocated to any
business segment.
Segment accounting policies
The Company prepares its segment information in
conformity with the accounting policies adopted for
preparing and presenting the financial statements of
the Company as a whole.
q. Earnings Per Share
Basic earnings per share are calculated by dividing the
net profit or loss for the year attributable to equity
shareholders by the weighted average number of
equity shares outstanding during the year.
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 year are adjusted for
the effects of all dilutive potential equity shares.
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