a) Statement of compliance and basis of
preparation
The standalone financial statements for the year
ended 31 March, 2026 have been prepared by the
Company in accordance with Indian Accounting
Standards ("Ind AS”) notified by the Ministry of
Corporate Affairs, Government of India under the
Companies (Indian Accounting Standards) Rules,
2015 (as amended) notified under Section 133
of the Companies Act, 2013, (the 'Act') and other
relevant provisions of the Act.
Further, the Company has complied with all
the directions related to Implementation of
Indian Accounting Standards prescribed for
Non-Banking Financial Companies (NBFCs)
in accordance with guidance/clarifications/
directions issued by RBI or other regulators are
implemented as and when they are issued/
applicable.
The standalone financial statements are prepared
and presented in the format prescribed in the
Division III of Schedule III of the Act.
A summary of the material accounting policy
information and other explanatory information
is in accordance with the Companies (Indian
Accounting Standards) Rules, 2015 (as
amended) as specified under Section 133 of the
Act including applicable Ind AS and accounting
principles generally accepted in India. The
Company consistently applies the following
accounting policies to all periods presented in
these standalone financial statements, unless
otherwise stated.
The Company has prepared the standalone
financial statements on the basis that it will
continue to operate as a going concern. The
Management is satisfied that the company
shall be able to continue its business for the
foreseeable future and no material uncertainty
exists that may cast significant doubt on the
going concern assumption. In making this
assessment, the Management has considered a
wide range of information relating to present and
future conditions, including future projections of
profitability, cash flows and capital resources
These standalone financial statements have been
approved by the Company's Board of Directors
and authorized for issue on 05 May, 2026.
b) Functional and Presentation currency
These standalone financial statements are
presented in Indian Rupees (INR), which is the
Company's functional currency. All amounts have
been denominated in crores and rounded off to
the nearest two decimal, except when otherwise
indicated. Amounts less than I 50,000/- are
presented as I 0.00 crores in the standalone
financial statements.
c) Historical cost convention
The standalone financial statements have been
prepared on a historical cost basis, except for the
following material items:
• Certain financial assets at Fair value through
other comprehensive income (FVTOCI).
• Financial instruments at Fair value through
profit and loss (FVTPL) that is measured at
fair value
• Net defined benefit (asset)/liability - fair value
of plan assets less present value of defined
benefit obligation
d) Measurement of fair values
A number of Company's accounting policies
and disclosures require the measurement
of fair values, for both, financial and non¬
financial assets and liabilities. The Company has
established policies and procedures with respect
to the measurement of fair values. 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 and liabilities.
- Level 2: Inputs other than quoted prices
included in Level 1 that are observable for the
asset or liability, either directly or indirectly.
- Level 3: Inputs for the asset or liability that
are not based on observable market data
(unobservable inputs).
e) Significant areas of estimation uncertainty,
critical judgements and assumptions in
applying accounting policies
In preparing these standalone financial
statements, management has made
judgements, estimates and assumptions that
affect the application of accounting policies and
the reported amounts of assets and liabilities
(including contingent liabilities and assets) as on
the date of the standalone financial statements
and the reported income and expenses for the
reporting period. Management believes that
the estimates used in the preparation of the
standalone financial statements are prudent
and reasonable. Actual results may differ from
these estimates.
Estimates and underlying assumptions
are reviewed on an ongoing basis.
Revisions to accounting estimates are
recognized prospectively.
Key sources of estimation of uncertainty at the
date of standalone financial statements, which
may cause a material adjustment to the carrying
amount of assets and liabilities within the next
financial year are included in the following notes:
- Note 49 - impairment of financial instruments:
determining inputs into the Expected Credit
Loss (ECL) model, including incorporation of
forward-looking information and assumptions
used in estimating recoverable cash flows
- Note 48 - determination of the fair value
of financial instruments with significant
unobservable inputs
- Note 41 - measurement of defined benefit
obligations: key actuarial assumptions
- Note 11 - recognition of deferred tax assets:
availability of future taxable profit against
which carry-forward tax losses can be used
Judgements:
Information about judgements made in applying
policies that have the most significant effects on
the amount recognized in the standalone financial
statements is included in the following note:
Classification of financial assets:
Assessment of the business model within which
the assets are held for sale, held for sale and
maturity, and held for maturity.
f) Revenue recognition
I) Interest income from financial assets (assets
on finance) is recognized on accrual basis
using Effective Interest Rate (‘EIR') method.
EIR is applied on future principal of amortized
cost of assets on finance. Interest income on
stage 3 assets is recognized on net basis, i.e.,
on non-credit impaired portion.
II) The EIR is the rate that discounts the
estimated future cash flows through the
expected life of the financial instrument to
the gross carrying amount of the financial
asset. The interest income is recognized
on EIR method on a time proportion
basis applied on the carrying amount for
financial assets including credit impaired
financial assets.
III) The calculation of the effective interest rate
includes transaction costs and fees paid
or received that are an integral part of the
effective interest rate. Transaction costs
include incremental costs that are directly
attributable to the acquisition or issue of a
financial asset or financial liability.
IV) The ‘Amortized cost' of a financial asset is
the amount at which the financial asset is
measured on initial recognition minus the
principal repayments, plus or minus the
cumulative amortization using the effective
interest method of any difference between
that initial amount and the maturity
amount adjusted for any expected credit
loss allowance.
V) Income from direct assignment (sale)
transactions represents the present value
of excess interest spread receivables on de¬
recognized assets computed by discounting
net cash flows from such assigned pools on
the date of transactions (net off servicing
liability initially recognised)
VI) Penal and other charges are treated to
accrue on realization, due to uncertainty of
realization and is accounted for accordingly.
VII) For revenue recognition from leasing
transactions of the Company, refer Note 42
on Leases.
VIII) Income from collection and support services
is recognized over time as the services are
rendered as per the terms of the contract.
IX) Fair value changes from financial instrument
measured at FVTPL are recognized in
revenue from operations basis their fair
valuation and provision.
X) Dividend is recognized when the right to
receive the dividend is established.
XI) The Company recognises revenue from
contracts with customers (other than
financial assets to which Ind AS 109
'Financial instruments' is applicable)
based on a comprehensive assessment
model as set out in Ind AS 115 'Revenue
from contracts with customers'. Revenue
is measured at the transaction price
allocated to the performance obligation in
accordance with Ind AS 115. The Company
identifies contract(s) with a customer
and its performance obligations under
the contract, determines the transaction
price and its allocation to the performance
obligations in the contract and recognises
revenue only on satisfactory completion of
performance obligations.
Other income
All other items of income are accounted for on
accrual basis.
g) Finance Costs
Finance costs include interest expense
computed by applying the effective interest rate
on respective financial instruments measured at
Amortized cost. Financial instruments include
bank term loans, non-convertible debentures,
commercial papers, subordinated debts,
perpetual debts and exchange differences
arising from foreign currency borrowings to the
extent they are regarded as an adjustment to the
interest cost. Interest expense on lease liabilities
is computed by applying the notional borrowing
rate and has been included under finance costs.
It also includes discounting charges paid for
securitization transactions entered under ‘pass¬
through' arrangement.
h) Financial instruments
I) Initial recognition and measurement
Financial assets and financial liabilities are
recognized when the Company becomes a party
to the contractual provisions of the instruments.
Financial assets and financial liabilities are
initially measured at fair value. Transaction costs
and revenue that are directly attributable to
the acquisition or issue of financial assets and
financial liabilities (other than financial assets
and financial liabilities at fair value through profit
and loss) are added to or deducted from the fair
value of the financial assets or financial liabilities,
as appropriate, on initial recognition.
Transaction costs and revenues of financial
assets or financial liabilities carried at fair value
through the profit or loss account are recognized
immediately in the statement of profit and loss.
Trade Receivables are measured at transaction
price. Trade receivables and debt securities issued
are initially recognized when they are originated.
II) Classifications
Financial assets
On initial recognition, depending on the
Company's business model for managing the
financial assets and its contractual cash flow
characteristics, a financial asset is classified as
measured at;
- Amortized cost;
- fair value through other comprehensive
income (FVTOCI); or
- fair value through profit and loss (FVTPL).
Financial assets are not reclassified subsequent
to their initial recognition, except if and in the
period the Company changes its business model
for managing financial assets.
The classification depends on the entity's
business model for managing the financial assets
and the contractual terms of the cash flows.
Business model assessment
The Company makes an assessment of the
objective of the business model in which a
financial asset is held at a portfolio level because
this best reflects the way the business is managed
and information is provided to management.
At initial recognition of a financial asset, the
Company determines whether newly recognized
financial assets are part of an existing business
model or whether they reflect a new business
model. The frequency, volume and timing of
sales of financial asset in prior periods, the reason
for such sales and expectations about future
sales activity are important determining factors
of the business model. The Company reassess
its business models each reporting period to
determine whether the business models have
changed since the preceding period.
Financial instruments at Amortized Cost
A financial asset is measured at amortized cost
only if both of the following conditions are met:
• It is held within a business model whose
objective is to hold assets in order to collect
contractual cash flows.
• The contractual terms of the financial asset
represent contractual cash flows that are solely
payments of principal and interest.
Financial assets at Fair Value through Other
Comprehensive Income (‘FVTOCI')
A financial asset is measured at FVTOCI only if
both of the following conditions are met:
• It is held within a business model whose
objective is achieved by both collecting
contractual cash flows and selling
financial assets.
• The contractual terms of the financial asset
represent contractual cash flows that are solely
payments of principal and interest.
Financial assets at Fair Value through Profit
and Loss (FVTPL)
Any financial instrument, which does not meet
the criteria for categorization as at amortized cost
or as FVOCI, is classified as at FVTPL.
Re-classification from Amortized Cost to FVOCI
If there are multiple sale transaction of portfolios
exceeding the prescribed threshold except as
allowed under Ind AS 109 i.e. for stress case
scenarios, and the management estimates that
the Company may continue to sell down the loan
assets for the purpose of meeting other business
objectives then such part of the loan assets (if
specifically identified) shall be re-classified to
FVOCI from Amortized Cost category.
Re-classification from FVOCI to Amortized Cost
If considerable time period has elapsed since
the past sale transaction and the management
estimates that there is a very limited probability
of selling down the portfolio in future, other than
stressed portfolio or other exceptions as allowed
under Ind AS 109, then such portfolio can be re¬
classified from FVOCI to Amortized Cost category.
Equity Investments
All equity investments other than equity
investments in subsidiaries/associates/joint
ventures are measured at FVTPL. These include
all equity investments in scope of Ind AS 109.
The Company accounts for its investments in
subsidiaries, associates and joint ventures at cost
less accumulated impairment, if any.
Financial liabilities and equity instruments
Debt and equity instruments issued by the
Company are classified as either financial
liabilities or as equity in accordance with the
substance of the contractual arrangements
and the definitions of a financial liability and an
equity instrument.
Financial liabilities are classified, at initial
recognition, as financial liabilities at amortized
cost or fair value through profit or loss,
as appropriate.
Equity instruments
An equity instrument is any contract that
evidences a residual interest in the assets of
an entity after deducting all of its liabilities.
Equity instruments issued by the Company
is recognized at the proceeds received, net of
directly attributable transaction costs.
III) Subsequent measurement
Amortized cost
Amortized cost is the amount at which the
financial asset or financial liability is measured
at initial recognition minus the principal
repayments, plus or minus the cumulative
amortization using the EIR method of discount
or premium on acquisition and fees or costs that
are an integral part of the EIR and, for financial
assets, adjusted for any loss allowance.
FVTPL
These assets are subsequently measured at
fair value. Net gains and losses, including any
interest or dividend income, are recognized in
the statement of profit and loss. The transaction
costs and fees are also recorded related to these
instruments in the statement of profit and loss.
FVTOCI
Financial assets that are held within a business
model whose objective is achieved by both,
selling financial assets and collecting contractual
cash flows that are solely payments of principal
and interest, are subsequently measured at fair
value through other comprehensive income. Fair
value movements are recognized in the other
comprehensive income (OCI). Interest income
measured using the EIR method and impairment
losses, if any are recognized in the statement of
profit and loss. On derecognition, cumulative
gain or loss (if any) previously recognized in OCI
is reclassified from the equity to ‘other income' in
the statement of profit and loss.
IV) De-recognition of financial assets and financial
liabilities
Financial assets
A financial asset (or, where applicable, a part of a
financial asset or part of a group of similar financial
assets) is primarily de-recognized (i.e. removed
from the Company's balance sheet) when:
• The rights to receive cash flows from the asset
have expired, or
• The Company has transferred its rights to
receive cash flows from the asset or has
assumed an obligation to pay the received
cash flows in full without material delay
to a third party under a ‘pass-through'
arrangement; and either (a) the Company
has transferred substantially all the risks and
rewards of the asset, or (b) the Company has
neither transferred nor retained substantially
all the risks and rewards of the asset, but has
transferred control of the asset
When the Company has transferred its rights to
receive cash flows from an asset or has entered
into a pass-through arrangement, it evaluates
if and to what extent it has retained the risks
and rewards of ownership. When it has neither
transferred nor retained substantially all of the
risks and rewards of the asset, nor transferred
control of the asset, the Company continues to
recognize the transferred asset to the extent
of the Company's continuing involvement. The
Company continues to recognize the assets on
finance on books which has been securitized
under pass through arrangement and does not
meet the de-recognition criteria.
On de-recognition of a financial asset, the
difference between the carrying amount of the
asset (or the carrying amount allocated to the
portion of the asset de-recognized) and the sum
of the consideration received (including the value
of any new asset obtained less any new liability
assumed) is transferred to statement of profit
or loss.
Financial liabilities
The Company de-recognizes a financial liability
when its contractual obligations are discharged,
cancelled or expired. The difference between
the carrying amount of the financial liability
derecognized and the consideration paid and
payable is recognized in profit or loss.
Securitization and Assignment
In case of transfer of loans through securitization
and direct assignment transactions, the
transferred loans are de-recognized and
gains/losses are accounted for, only if the
Company transfers substantially all risks and
rewards specified in the underlying assigned
loan contract.
In accordance with the Ind AS 109, on de¬
recognition of a financial asset under assigned
transactions, the difference between the carrying
amount and the consideration received are
recognized in the statement of profit and loss.
Upon derecognition of financial assets in a
securitization transaction, where the Company
retains the servicing obligation and the servicing
fee is not expected to provide adequate
compensation, a servicing liability is recognized
at fair value in accordance with Ind AS 109.
Subsequent to initial recognition, the servicing
liability is measured in accordance with the
requirements applicable to financial liabilities
under Ind AS 109, and changes in estimates are
recognised in profit or loss.
Equity
Equity instruments issued by the Company are
recognized at the proceeds received, net of direct
issue costs.
V) Offsetting of financial instruments
Financial assets and financial liabilities are offset and
the net amount is reported in the balance sheet when
the Company has a legally enforceable right to offset
the recognized amounts and there is an intention to
settle on a net basis, or realize the asset and settle the
liability simultaneously.
VI) Impairment of Financial Assets
The Company recognizes loss allowances for
Expected Credit Loss (ECL) on all the financial
assets that are not measured at FVTPL:
ECL are probability weighted estimate of future
credit losses based on the staging of the financial
asset to reflect its credit risk. They are measured
as follows:
• Stage 1: financial assets that are not credit
impaired - as the present value of all cash
shortfalls that are possible within 12 months
after the reporting date.
• Stage 2: financial assets with significant
increase in credit risk but not credit impaired
- as the present value of all cash shortfalls that
result from all possible default events over the
expected life of the financial asset.
• Stage 3: financial assets that are credit
impaired - as the difference between the
gross carrying amount and the present value
of estimated cash flows.
The Company's policy for determining significant
increase in credit risk is set out in Note 50.
The Company has established a policy to perform
an assessment, at the end of each reporting
period, of whether a financial instrument's
credit risk has increased significantly since initial
recognition, by considering the change in the risk
of default occurring over the remaining life of the
financial instrument.
Management overlay is used to estimate the ECL
allowance in circumstances where management
believes that the existing inputs, assumptions
and model techniques do not factor the related
exception scenario or captures all the risk factors
relevant to the Company's lending portfolios.
To mitigate the credit risk on financial assets, the
Company seeks to use collateral, where possible
as per the powers conferred on the Non-Banking
Finance Companies under the Securitization
and Reconstruction of Financial Assets and
Enforcement of Securities Interest Act, 2002
(“SARFAESI").
Financial assets are fully provided for or written
off (either partially or in full) when there is no
reasonable expectation of recovering a financial
asset in its entirety or a portion thereof.
However, financial assets that are written off
could still be subject to enforcement activities
under the company's recovery procedures, taking
into account legal advice where appropriate. Any
recoveries made are credited to impairment loss
on actual realization from customer.
Impairment losses and releases are accounted for
and disclosed separately from modification losses
or gains that are accounted for as an adjustment
of the financial asset's gross carrying value.
For more details, refer Note 49.
Presentation of ECL allowance for financial
asset:
ECL allowance for financial asset measured at
Amortized cost or FVOCI is shown as a deduction
from the gross carrying amount of the assets.
Modification of financial assets
A modification of a financial asset occurs when
the contractual terms governing the cash flows
of a financial asset are renegotiated or otherwise
modified between initial recognition and maturity
of the financial asset. A modification affects the
amount and/or timing of the contractual cash
flows either immediately or at a future date.
i) Non-Current Assets Held for Sale
Non-current assets are classified as held for
sale if their carrying amount will be recovered
principally through a sale transaction rather than
through continuing use and a sale is considered
highly probable. They are measured at the lower
of their carrying amount and fair value less costs
to sell, except for assets such as deferred tax
assets, assets arising from employee benefits,
financial assets and contractual rights under
insurance contracts, which are specifically
exempt from this requirement.
An impairment loss is recognized for any initial or
subsequent write-down of the asset to fair value
less costs to sell. A gain is recognized for any
subsequent increases in fair value less costs to sell
of an asset, but not in excess of any cumulative
impairment loss previously recognized. A gain or
loss not previously recognized by the date of the
sale of the non-current asset is recognized at the
date of de-recognition.
Non-current assets are not depreciated or amortized
while they are classified as held for sale. Interest
and other expenses attributable to the liabilities of a
disposal group classified as held for sale continue to
be recognized.
Non-current assets classified as held for sale are
presented separately from the other assets in the
balance sheet. The liabilities of a disposal group
classified as held for sale are presented separately
from other liabilities in the balance sheet.
j) Leases
I) The Company as lessor
Leases are classified as finance leases whenever
the terms of the lease transfer substantially all
the risks and rewards of ownership to the lessee.
All other leases are classified as operating leases.
Amounts due from lessees under finance leases
are recognized as receivables at the amount of the
Company's net investment in the leases. Finance
lease income is allocated to accounting periods
so as to reflect a constant periodic rate of return
on the Company's net investment outstanding in
respect of the leases.
Rental income from operating leases is
recognized on a straight-line basis over the lease
term. In certain lease arrangements, variable
rental charges are also recognized over and
above minimum commitment charges based on
usage pattern.
II) The Company as lessee
i) Right of use assets and Lease liability
The Company assesses whether a contract
is or contains a lease, at inception of a
contract. A contract is, or contains, a lease
if it conveys the right to control the use of
an identified asset for a period 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) t he 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.
Recognition and initial measurement
At the lease commencement date, the
Company recognizes a Right-of-Use ("RoU")
asset and equivalent amount of lease liability.
The right-of-use asset is measured at cost,
which is made up of the initial measurement
of the lease liability, any initial direct costs
incurred by the Company, an estimate of any
costs to dismantle and remove the asset at
the end of the lease (if any), and any lease
payments made in advance of the lease
commencement date (net of any incentives
received).
Subsequent measurement
The Company depreciates the right-of-use
assets on a straight-line basis from the lease
commencement date to the earlier of the
end of the useful life of the right-of-use asset
or the end of the lease term. The Company
also assesses the right-of-use asset for
impairment when such indicators exist.
At the lease commencement date, the
Company measures the lease liability at
the present value of the lease payments
unpaid at that date, discounted using the
interest rate implicit in the lease if that
rate is readily available or the notional
borrowing rate. Lease payments included
in the measurement of the lease liability
are made up of fixed payments (including
in substance fixed payments). Subsequent
to initial measurement, the liability will be
reduced for payments made and increased
for interest. It is re-measured to reflect any
reassessment or modification, or if there are
changes in the in-substance fixed payments.
When the lease liability is re-measured, the
corresponding adjustment is reflected in the
right-of-use asset or is recorded in statement
of profit and loss if the carrying amount of
the right-of-use asset has been reduced
to zero.
Presentation
Lease liability and right of use assets have
been separately presented in the balance
sheet and lease payments have been
classified as financing cash flows.
The Company has elected to account for
short-term leases and leases of low-value
assets using the practical expedients.
Instead of recognizing a right-of-use asset
and lease liability, the payments in relation to
these leases are recognized as an expense in
the statement of profit and loss on a straight¬
line basis over the lease term.
ii) De-recognition
An item of right of use assets and lease
liability is de-recognized upon termination
of lease agreement. Any difference between
the carrying amount of right of use asset and
lease liability is recognized in statement of
profit and loss.
k) Employee Benefits
l) Short term employee benefits
Short term employee benefits are expensed
as the related service is provided. A liability
is recognized for the amount expected
to be paid if the Company has a present
legal or constructive obligation to pay this
amount as a result of past service provided
by the employee and the obligation
can be estimated reliably. This includes
performance linked incentives. Short term
employee obligations are measured at
undiscounted basis.
II) Post-employment benefits
i) Defined contribution plans
A defined contribution plan is a post¬
employment benefit plan under which an
entity pays fixed contributions into a separate
entity and will have no legal or constructive
obligations to pay further amounts.
Provident Fund
Retirement benefit in the form of provident
fund is a defined contribution scheme.
Contributions paid/payable to the recognized
provident fund, which is a defined
contribution scheme, are expensed as the
related service is rendered by an employee
and recognized as personnel expenses in
statement of profit and loss.
ii) Defined benefit plans
Gratuity
The Company's gratuity benefit scheme is
a defined benefit plan. The Company's net
obligation in respect of the gratuity benefit
scheme is calculated by estimating the
amount of future benefit that employees
have earned in return for their service in
the current and prior periods; that benefit is
discounted to determine its present value,
and the fair value of any plan assets, if any,
is deducted.
The present value of the obligation under
such defined benefit plan is determined
based on actuarial valuation using the
Projected Accrued Benefit Method (same
as Projected Unit Credit Method), which
recognizes each period of service as giving
rise to additional unit of employee benefit
entitlement and measures each unit
separately to build up the final obligation.
The obligation is measured at the present
value of the estimated future cash flows.
The discount rates used for determining the
present value of the obligation under defined
benefit plan, are based on the market yields
on Government securities as at the balance
sheet date. When the calculation results
in a potential asset for the Company, the
recognized asset is limited to the present
value of economic benefits available in the
form of any future refunds from the plan or
reductions in future contribution to the plan.
The change in defined benefit plan liability
is split into changes arising out of service,
interest cost and re-measurements and
the change in defined benefit plan asset
is split between interest income and re¬
measurements. Changes due to service cost
and net interest cost/income is recognized
in the statement of profit and loss. Re¬
measurements of net defined benefit liability/
(asset) which comprise of the below are
recognized in other comprehensive income:
• Actuarial gains and losses;
• The return on plan assets, excluding
amounts included in net interest on the
net defined benefit liabil ity/(asset)
II) Other long term employee benefits
Compensated absences
The employees of the Company are entitled
to compensated absences which are both
accumulating and non-accumulating in nature.
Compensated absences which are not expected
to occur within twelve months after the end of
the year in which the employee renders the
related service are recognised as a liability at the
present value of the defined benefit obligation
as at the balance sheet date. The expected cost
of accumulating compensated absences is
determined by actuarial valuation based on the
additional amount expected to be paid as a result
of the unused entitlement that has accumulated
at the balance sheet date. The expenses and
actuarial gain/loss on account of the above
benefit plans are recognized in the statement of
profit and loss on the basis of actuarial valuation.
IV) Share-based payment arrangements -
Employee Stock Options
Equity-settled share-based payments to
employees are measured at the fair value of the
equity instruments at the grant date. The fair
value determined at the grant date of the equity-
settled share-based payments is expensed on a
straight-line basis over the vesting period, based
on the Company's estimate of equity instruments
that will eventually vest, with a corresponding
increase in other equity.
In case, the company modifies the terms and
condition on which the equity instruments
were granted in a manner that is beneficial
to the employees, the incremental cost will
be recognized over the period starting from
the modification date till the date of vesting
if the modification occurs during the vesting
period. In case, modification occurs after the
vesting period, the incremental cost will be
recognized immediately.
V) Treasury Shares
The Company has created an ESOP Trust (the
‘Trust) for providing share-based payment to
its employees. The Company uses the Trust as
a vehicle for distributing shares to employees
under the Employee Stock Option Scheme. The
Trust purchase shares of the Company from
the market, for giving shares to employees. The
Company treats Trust as its extension and shares
held by the Trust are treated as treasury shares.
Own equity instruments that are re-acquired
(treasury shares) are recognized at cost and
deducted from other equity. No gain or loss is
recognized in the statement of profit and loss
on the purchase, sale, issue or cancellation of
the company's own equity instruments. Share
options exercised during the reporting period
are settled with treasury shares. Trust reserve
represents net of income over expenditure of
the Trust.
l) Derivative financial instruments
The Company enters into derivative financial
instruments, such as cross currency swaps to
manage exposures to interest rate risk and
foreign currency risk.
Such derivative financial instruments are initially
recognized at fair value on the date which
a derivative contract is entered into and are
subsequently re-measured at fair value at each
balance sheet date. Derivatives are carried as
financial assets when the fair value is positive
and as financial liabilities when the fair value
is negative.
Any gains or losses arising from changes in the
fair value of derivatives are taken directly to
the statement of profit and loss, except for the
effective portion of cash flow hedges, which is
recognised in OCI and later reclassified to the
statement of profit and loss (if any) when the
hedge item cash flows affects the statement of
profit and loss.
Hedge Accounting
The Company makes use of derivative financial
instruments, such as cross currency swaps to
manage exposures to interest rate risk and
foreign currency risk. At the inception of a hedge
relationship, the Company formally designates
and documents the hedge relationship to which
the Company wishes to apply hedge accounting
and the risk management objective and strategy
for undertaking the hedge. The documentation
includes the Company's risk management
objective and strategy for undertaking hedge,
the hedging/economic relationship, the hedged
item or transaction, the nature of the risk being
hedged, hedge ratio and how the Company
would assess the effectiveness of changes in
the hedging instrument's fair value in offsetting
the exposure to changes in the hedged item's
cash flows attributable to the hedged risk. Such
hedges are expected to be highly effective in
achieving offsetting changes in cash flows and
are assessed on regular intervals to determine
that hedge is effective throughout the financial
reporting periods for which they were designated.
Hedges that meet the criteria for hedge
accounting and qualify as cash flow hedges are
accounted as follows:
Cash Flow Hedge
A cash flow hedge is a hedge of the exposure to
variability in cash flows that is attributable to a
particular risk associated with a recognised asset
or liability and could affect profit or loss.
For designated and qualifying cash flow hedges,
the effective portion of the cumulative gain or loss
on the hedging instrument is initially recognised
directly in OCI within equity (cash flow hedge
reserve). The ineffective portion (if any) of the gain
or loss on the hedging instrument is recognised
immediately as finance cost in the statement of
profit and loss.
When the hedged cash flow affects the statement
of profit and loss, the effective portion of the gain
or loss on the hedging instrument is recorded in
the corresponding income or expense line of the
statement of profit and loss.
When a hedging instrument expires, is sold,
terminated, exercised, or when a hedge no
longer meets the criteria for hedge accounting,
any cumulative gain or loss recognised in OCI
is subsequently transferred to the statement of
profit and loss on ultimate recognition of the
underlying hedged forecast transaction. When
a forecast transaction is no longer expected
to occur, the cumulative gain or loss that was
reported in OCI is immediately transferred to the
statement of profit and loss.
m) Income Taxes
Income-tax expense comprises of current tax
(i.e. amount of tax for the period determined in
accordance with the income tax law) and deferred
tax charge or credit (reflecting the tax effects of
temporary differences between tax base and
book base). It is recognized in statement of profit
and loss except to the extent that it relates to
a business combination, or items recognized
directly in equity or in OCI.
I) Current tax
Current tax is measured at the amount expected
to be paid in respect of taxable income for the
year in accordance with the Income Tax Act,
1961. Current tax comprises the tax payable
on the taxable income or loss for the year and
any adjustment to the tax payable in respect
of previous years. It is measured using tax
rates enacted or substantively enacted at the
reporting date.
The amount of current tax reflects the best
estimate of the tax amount expected to be paid
after considering the uncertainty, if any, related
to income taxes.
Current tax assets and liabilities are offset only if,
the Company:
- has a legally enforceable right to set off the
recognized amounts; and
- intends either to settle on a net basis, or to realize
the asset and settle the liability simultaneously.
II) Deferred tax
Deferred tax is recognized in respect of
temporary differences between the carrying
amounts of assets and liabilities for financial
reporting purposes and the amounts used for
taxation purposes.
Deferred tax assets are reviewed at each
reporting date and based on management's
judgement, are reduced to the extent that it is no
longer probable that the related tax benefit will
be realized; such reductions are reversed when
the probability of future taxable profits improves.
Unrecognized deferred tax assets are reassessed
at each reporting date and recognized to the
extent that it has become probable that future
taxable profits will be available against which
they can be used.
Deferred tax is measured at the tax rates that are
expected to be applied to temporary differences
when they reverse, using tax rates 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 assets and liabilities are offset only if
the Company:
- has a legally enforceable right to set off current
tax assets against current tax liabilities; and
- the deferred tax assets and the deferred tax
liabilities relate to income taxes levied by the
same taxation authority.
n) Property, plant and equipment and
Investment property
Recognition and measurement
Property, plant and equipment (PPE) held for
use or for administrative purposes, are stated
in the balance sheet at cost less accumulated
depreciation and accumulated impairment
losses. The cost includes non-refundable taxes,
duties, freight and other incidental expenses
related to the acquisition and installation of
the respective assets. PPE is recognized when
it is probable that future economic benefits
associated with the item will flow to the
Company. Subsequent expenditure on PPE
after its purchase is capitalized if it is probable
that the future economic benefits will flow to
the enterprise.
Properties in the course of construction for
production, supply or administrative purposes
are carried at cost, less accumulated depreciation
and recognized impairment loss. Such properties
are classified to the appropriate categories of
property, plant and equipment when completed
and ready for intended use. Depreciation of
these assets, on the same basis as other property
assets, commences when the assets are ready for
their intended use.
Investment Property consists of building let out
to earn rentals. The Company follows cost model
for measurement of investment property.
Depreciation and amortization expense
Depreciation on PPE is provided using the
straight line method at the rates specified in
Schedule II to the Act. Depreciation is calculated
on a pro-rata basis from the date of installation till
the date the assets are sold or disposed.
Depreciation on vehicles given on operating
lease is provided on straight line method at rates
based on tenure of the underlying lease contracts
not exceeding 8 years. These leases are having
residual value greater than 5%, Company has
justification in place for considering the same.
For the following class of assets, based on internal
assessment, the management believes that
the useful lives as given below best represent
the period over which management expects
to use these assets. Hence the useful lives for
these assets are different from the useful lives as
prescribed under Part C of Schedule II of the Act:
The estimated useful lives, residual values and
depreciation method are reviewed at the end
of each reporting period, with the effect of
any changes in estimate accounted for on a
prospective basis.
During the year ended 31 March 2026, the
Company has changed the estimated useful life
of Laptops from 4 years to 5 years. Accordingly,
the balance written down value of said Laptops
had been depreciated over the revised remaining
useful life from the date of change.
De-recognition
An item of PPE or investment property is de¬
recognized upon disposal or when no future
economic benefits are expected to arise from
the continued use of the asset. Any gain or loss
arising on the disposal or retirement of an item of
PPE or investment property is determined as the
difference between the sales proceeds and the
carrying amount of the asset and is recognized in
statement of profit and loss.
Capital work-in-progress
PPE not ready for the intended use on the date
of the balance sheet are disclosed as "capital
work-in-progress” and carried at cost, comprising
direct cost, related incidental expenses and
attributable interest.
I ndividual assets costing less than or equal to
H 5,000/- are depreciated in full in the month
of acquisition.
o) Intangible assets
Recognition and measurement
Intangible assets with finite useful lives that
are acquired separately are capitalized and
carried at cost less accumulated amortization
and impairment losses, if any. Cost includes
non-refundable taxes, duties, freight and other
incidental expenses related to the acquisition and
installation of the respective assets. Intangible
assets are recognized when it is probable that the
future economic benefits that are attributable to
the asset will flow to the Company.
Expenditure on internally developed software is
recognized as an asset when the Company is able
to demonstrate that the product is technically and
commercially feasible, its intention and ability to
complete the development and use the software
in a manner that will generate future economic
benefits, and that it can reliably measure the
costs to complete the development.
The costs of i nternal ly developed softwa re include
all costs directly attributable to developing the
software and capitalized borrowing costs, and
are Amortized over its useful life.
Amortization
Amortization of intangible assets is recognized
on a straight-line basis over a period up to 6 years,
which is the Management's estimate of its useful
life. The estimated useful life and amortization
method are reviewed at the end of each reporting
period, with the effect of any changes in estimate
being accounted for on a prospective basis.
De-recognition
An intangible asset is de-recognized on disposal,
or when no future economic benefits are
expected from use or disposal. Gains or losses
arising from de-recognition of an intangible
asset, measured as the difference between the
net disposal proceeds and the carrying amount
of the asset, are recognized in statement of profit
and loss when the asset is de-recognized.
Intangible assets under development
Intangible assets not ready for the intended use
on the date of balance sheet are disclosed as
"Intangible assets under development.
p) Impairment of non-financial assets
The Company's non - financial assets including
deferred tax is assessed at each balance sheet
date whether there is any indication that an asset
may be impaired. If any such indication exists, the
Company estimates the recoverable amount of
the asset. If such recoverable amount of the asset
or the recoverable amount of the cash generating
unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced
to its recoverable amount. The reduction is
treated as an impairment loss and is recognized in
the statement of profit and loss. If at the balance
sheet date there is an indication that a previously
assessed impairment loss no longer exists, the
recoverable amount is reassessed and the asset
is reflected at the recoverable amount subject
to a maximum of depreciated historical cost.
A reversal of an impairment loss is recognized
immediately in the statement of profit and loss.
q) Foreign Currency Transactions
Transactions in currencies other than Company's
operational currency are recorded on initial
recognition using the exchange rates prevailing
on the date of the transaction. At each Balance
Sheet date, foreign currency monetary items
are reported at the rates prevailing at the year
end and exchange differences that arise on
settlement of monetary items or on reporting
of monetary items at the closing spot rate are
recognized in the statement of profit and loss
in the period in which they arise. Non-monetary
items that are measured in terms of historical
cost in foreign currency are not retranslated.
|