1. Material accounting policies
1.1 Basis of preparation of Standalone financial statements
The Standalone financial statements of the Company (hereinafter referred to as 'financial statements' in material
accounting policies) for the eighteen months period ended 31 March 2026 (refer note 61 for change of Financial Year)
have been prepared in accordance with Indian Accounting Standards (Ind AS) notified pursuant to 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.
The financial statements have been prepared and presented under the historical cost convention, except for derivative
instruments, defined benefit plans, employee share based payments and certain other financial assets and liabilities
which have been measured at fair value (refer accounting policy regarding financial instruments).
The financial statements are presented in ' (Indian Rupees), which is the functional currency and all values are rounded
to the nearest million (' 1,000,000), except when otherwise indicated.
1.2 Current versus non-current classification
All assets and liabilities have been classified as current or non-current as per the Company's operating cycle. Based on
the nature of business and the time between acquisition of assets for processing and their realisation in cash and cash
equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non-current
classification of assets and liabilities.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
1.3 Property, plant and equipment
Property, plant and equipment are stated at cost of acquisition less accumulated depreciation and impairment losses, if
any. The cost includes taxes, duties, freight and other incidental expenses related to the acquisition and installation of
the respective assets. Subsequent expenditure related to an item of property, plant and equipment is added to its book
value only if it increases the future economic benefits from the existing assets beyond its previously assessed standard
of performance.
Depreciation on property, plant and equipment is provided on a straight-line basis over the useful lives of assets estimated
by the management, taking into account the nature of the asset on technical evaluation of the useful life, which may not
necessarily be in alignment with the indicative useful lives prescribed by Schedule II to the Companies Act, 2013.
The following useful lives are considered :
If significant parts of property, plant and equipment have different useful lives, then they are accounted as separate
items (major components) of property, plant and equipment.
Items of property, plant and equipment that have been retired from active use and are held for disposal are stated at the
lower of their carrying value and estimated net realizable value and are disclosed separately in financial statements. Any
gain or loss on disposal of an item of property, plant and equipment is recognised in the Standalone Statement of Profit
and Loss.
Capital work-in-progress includes the cost of property, plant and equipment that are not ready for intended use 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".
1.4 Intangible assets and Goodwill
Intangible assets comprise of software, technical know-how, customer contracts and customer relationships. Intangible
assets are stated at cost of acquisition less accumulated amortisation and impairment losses, if any. These intangible
assets are amortised on straight-line basis based on the following useful lives, which in management's estimate
represents the period during which economic benefits will be derived from their use:
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually
for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired.
Research and Development
Research and development expenditure that do not meet the criteria for capitalization are recognized as an expense as
incurred. Development costs previously recognized as an expense are not recognized as an asset in a subsequent period.
1.5 Investment properties
Investments in land or buildings (including property under construction) which are held to earn rentals and/or for capital
appreciation are classified as investment properties. Investment properties are initially measured at cost, including
transaction costs. Subsequent to initial recognition, investment properties are stated at cost, net of accumulated
depreciation and accumulated impairment losses, if any.
The cost comprises purchase price and directly attributable cost of bringing the investment property to its working
condition capable for the intended use.
Depreciation on investment property is provided on a straight-line basis over the useful lives of assets estimated by the
management. Such classes of investment properties and their estimated useful lives are as under:
1.5 Investment properties (Continued)
Investment properties are derecognised either when they have been disposed of or when they are permanently withdrawn
from use and no future economic benefit is expected from their disposal. On disposal of an investment property,
the difference between its carrying amount and net disposal proceeds is recognised in the Standalone Statement of
Profit and Loss.
1.6 Revenue recognition
Revenue at point in time
Revenue from sale of products is recognised when control of the goods is transferred to the customer, which is usually
on dispatch or delivery of goods to the customer and there are no unfulfilled obligations that could affect the customer's
acceptance of the goods, at an amount (transaction price) that reflects the consideration to which the Company expects
to be entitled in exchange for those goods.
Revenue from services includes sale of spares in relation to the customer service business of the Company. Revenue from
spares is recognized on satisfaction of performance obligation to the customer at a point in time and is measured based
on the consideration specified in a contract with the customer.
Revenue over time
Revenue from contracts with customers (Product, project and services) is recognized over the period of time if any of the
below mentioned criteria is met:
1. The Customer simultaneously receives and consumes the benefits as the Company performs. The same includes
plant operations and maintenance, customer services, etc.
2. The Company's performance creates or enhances an asset that the customer controls as the asset is created or
enhanced.
3. The Company's performance does not create an asset with an alternative use to the Company and the Company
has an enforceable right to payment for performance completed to date.
When the outcome of a project contract can be estimated reliably and the contracts fulfill over the period of time
revenue criteria, revenue is recognized using input method based on the percentage of costs incurred to date compared
to the total estimated contract costs. The Company uses input method because it best depicts the transfer of control to
the customer which occurs as it incurs costs on contracts. Further, revenue from services such as annual maintenance
contracts, integrated plant operations and upgradation services are recognized over time using straight line or input
method, which best depicts the transfer of control to the customer, as applicable.
Transaction price for projects is the amount which the entity expects to receive from customer in exchange for transferring
promised goods or services to a customer, excluding amounts collected on behalf of third parties. The Company includes
certain variable considerations as part of transaction price such as price escalations, performance related incentives and
penalties including liquidated damages. The amount of variable consideration is estimated considering the expected
value method or most likely amount method as appropriate in a given circumstance to the extent it is highly probable
that the significant reversal of revenue will not occur.
An expected loss on the project contract is recognised as an expense immediately. Contract revenue earned in excess
of billing has been reflected as "Contract assets" and billing in excess of contract revenue has been reflected under
"Contract liabilities" in the Standalone Balance Sheet. Contract assets and liabilities are netted off at contract level.
The amount of retention money held by the customers pending completion of performance is disclosed as part of contract
asset and is reclassified as trade receivables when it has unconditional right to consideration. A right to consideration is
unconditional if only the passage of time is required before payment of that consideration is due.
Multiple performance obligations
If a contract contains more than one distinct product or service, the transaction price is allocated to each performance
obligation based on relative Standalone selling prices. If Standalone selling prices are not observable, the Company
reasonably estimates those. Revenue is recognized for each performance obligation either at a point in time or over
time, as appropriate. In the Company's case, typically such multiple performance obligations include supply of products,
projects and services.
Refund Liabilities
Refund liabilities are the obligation to refund part or all of the consideration received (or receivable) from the customer.
1.6 Revenue recognition (Continued)
The liability is measured at the amount the Company ultimately expects it will have to return to the customer.
The Company updates its estimate of refund liabilities (and the corresponding change in the transaction price) at the end
of each reporting period.
Refund liabilities include:
a. Trade and Quantity discounts which are based on the terms and conditions agreed with the customer.
b. Liquidated damages which are provided based on contractual terms when the delivery / commissioning dates of
an individual project have exceeded or are likely to exceed the delivery / commissioning dates as per the respective
contracts.
Revenue is stated exclusive of Goods and Services Tax and net of consideration payable to customers, including refund
liabilities.
Payment terms in revenue contract is dependent on the nature of contract and terms and conditions agreed with the
customers and may vary significantly. Contracts may have financing component which are appropriately recognised in
the financial statements.
For the significant judgements used in determining revenue, refer Judgements in note 2(a).
Commission Income
Commission income is recognised as and when the terms of the contract are fulfilled along with the proof of shipment
being received from the supplier.
Export Incentives
Export incentives are recognized, when the right to receive the credit is established on export of goods in accordance
with the underlying scheme and there is no significant uncertainty regarding the realisability of the incentive.
1.7 Interest income
Interest income on financial assets at amortised cost is recognised on time proportion basis using the effective interest
rate method, based on the underlying interest rates.
1.8 Dividend income
Dividends are recognised when the right to receive payment is established. This is applied even if they are paid out of
pre-acquisition profits unless the dividend clearly represents a recovery of cost of the investment.
1.9 Inventories
Inventories comprise all costs of purchase, conversion and other costs incurred in bringing the inventories to their present
location and condition.
Raw materials, work-in-progress, finished goods and traded goods are carried at the lower of cost and net realisable
value. Cost is determined on the basis of the weighted average method.
The net realisable value of work-in-progress and finished goods is determined with reference to the estimated selling
price less estimated cost of completion and estimated costs necessary to make the sale. Raw materials held for the
production of finished goods are not written down below cost except in case where material prices have declined and it
is estimated that the cost of the finished product will exceed its net realisable value. Provisions are made for slow moving
and obsolete inventories based on estimates made by the Company.
1.10 Leases
The Company's lease asset classes primarily consist of leases for land and buildings, vehicles and plant and equipment.
Vehicles taken on lease have been provided to the employees of the Company. The Company assesses whether a contract
is (or contains) a lease, at inception of a contract. A contract is (or contains), a lease if the contract conveys the right to
control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract
conveys the right to control the use of an identified asset, the Company assesses whether:
(i) the contract involves the use of an identified asset;
(ii) the Company has substantially all the economic benefits from use of the asset through the period of the lease;
(iii) the Company has the right to direct the use of the asset.
1.10 Leases (Continued)
Where the Company is the lessee :
At the date of commencement of the lease, the Company recognises a Right-of-Use asset ("ROU") and a corresponding
Lease Liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less
(short term leases) and leases of low value assets. For these short term and leases of low value assets, the Company
recognises the lease payments as an operating expense on a straight-line basis over the term of the lease.
The ROU assets are initially recognised at cost, which comprises the initial amount of the lease liability adjusted for
any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease
incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses, if any.
Contracts may contain both lease and non-lease components. The Company allocates the consideration in the contract
to the lease and non-lease components based on their stand-alone prices. However, for leases of real estate for which
the Company is a lessee, it has elected not to separate lease and non-lease components and instead accounts for these
as a single lease component.
ROU 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.
The lease liability is initially measured 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. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease
liability, reducing the carrying amount to reflect the lease payments made.
A lease liability is remeasured upon the occurrence of certain events such as re-assessment of the lease term or a change
in an index rate used to determine lease payments. The remeasurement normally also adjusts the ROU assets and impact
of gain/loss on modification is given in the Standalone Statement of Profit and Loss.
Lease liability and ROU asset have been separately presented in the Standalone Balance Sheet and Lease payments have
been classified as financing cash flows.
Where the Company is the lessor :
Assets subject to operating leases are included in property, plant and equipment and investment properties. Lease
income is recognised in the Standalone statement of Profit and loss on a straight-line basis over the lease term. Costs,
including depreciation are recognised as an expense in the Standalone statement of Profit and loss. Initial direct costs
such as legal costs, brokerage costs, etc. are recognised immediately in the Standalone Statement of Profit and Loss.
Sub-lease
When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately.
It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease.
To classify sub-lease, the Company makes an overall assessment of whether the lease transfers substantially all of the
risks and rewards incidental to ownership of the underlying asset. If substantially all of the risks and rewards incidental
to ownership are transferred, then sub-lease is classified as a finance lease; or otherwise, it is classified as an operating
lease.
If sub-lease is operating lease, then rental income is accounted for on a straight-line basis over the lease terms.
If sub-lease is finance lease, then Company derecognises the right of use asset on the head lease and recognises a net
investment in the sub-lease.
1.11 Employee benefits
a. Short-term employee benefits
All employee benefits payable wholly within twelve months of rendering the service are classified as short-term
employee benefits. Benefits such as salaries, wages and short-term compensated absences, etc. and the expected
cost of ex-gratia and variable compensation are recognised in the period in which the employee renders the
related service.
1.11 Employee benefits (Continued)
b. Post-employment and other long-term benefits
(i) Defined contribution plans: The Company's approved superannuation scheme and employee state insurance
scheme are defined contribution plans. The Company's contribution payable under the schemes is recognised
as expense in the Standalone Statement of Profit and Loss during the period in which the employee renders
the related service.
(ii) Defined benefit plans and other long-term benefits: The Company's gratuity, pension and medical benefit
schemes are defined benefit plans. Compensated absences, retention bonus, silver jubilee and star awards
are other long-term benefits. The present value of the obligation under such defined benefit plans and other
long-term benefits are determined based on actuarial valuation using the 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. In case of funded plans, the fair value of the plan assets is
reduced from the gross obligation under the defined benefit plans to recognize the obligation on a net basis.
Provident fund has been considered as a defined benefit plan since any additional obligations on account of
investment risk and interest rate risk are required to be met by the Company.
In case of defined benefit plans, comprising gratuity, pension, post-retirement medical benefits and provident
fund, remeasurement comprising of actuarial gains and losses, the return on plan assets (excluding amounts
included in net interest on the net defined benefit liability or asset) and any change in the effect of asset ceiling
(wherever applicable) is recognized in other comprehensive income (OCI) and is reflected in retained earnings and
is not eligible to be reclassified to profit or loss. In case of other long term benefits, all remeasurements including
actuarial gain or loss are charged to the Standalone statement of Profit and Loss.
The Company recognizes following items in the net defined benefit obligation as an expense in the Standalone
statement of Profit and Loss:
• Service cost including current service cost, past service cost - plan amendments and gains and losses on
curtailments and settlements; and
• Net interest expense or income.
For the purpose of presentation, the allocation between current and non-current provisions has been made as
determined by an actuary, as applicable.
Provision for compensated absences are presented as current liabilities, as the Company does not have an
unconditional right to defer settlement for at least 12 months after the reporting period, regardless of when the
actual settlement is expected to occur.
1.12 Share-based payment
Share-based payment consists of share awards of the Ultimate Holding Company to the employees of the Company,
which subsequently makes a recharge to the Company. These awards are predominantly designed as equity-settled
transactions as the ultimate obligation to settle the transaction is on the Ultimate Holding Company. The costs of stock
awards granted to the employees of the Company are measured at the fair value of the stock awards granted of the
Ultimate Holding Company. For each stock award, the measurement of fair value is performed on the grant date.
The cost is recognised in the statement of profit or loss, together with a corresponding increase in stock awards reserve
in equity, over the period in which the service conditions are fulfilled. At the end of each reporting period upto the date
of settlement, the Company remeasures the fair value of the liability based on the share price of the Ultimate Holding
Company with a corresponding adjustment to equity.
1.13 Financial instruments
Financial assets and/or financial liabilities are recognised when the Company becomes party to a contract embodying the
related financial instruments.
Initial recognition and measurement
On initial recognition, financial assets are recognised at fair value except trade receivables which are recognized at
transaction price which do not contain a significant financing component. In case of financial assets which are recognised
at fair value through Profit and loss (FVTPL), its transaction costs are recognised in the Standalone statement of Profit
and Loss. In other cases, the transaction costs are added to the acquisition value of the financial asset.
1.13 Financial instruments (Continued)
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in the below categories:
a. Financial assets at amortised cost;
b. Financial assets including derivatives at fair value through profit or loss (FVTPL); and
c. Financial assets at fair value through other comprehensive income (FVTOCI).
d. Equity investment in subsidiaries and associate
For trade and other receivables maturing within one year from the Balance Sheet date, the carrying amounts approximate
fair value, due to the short maturity of these instruments.
a. Financial assets at amortised cost
Financial assets are subsequently measured at amortised cost if these financial assets are held within a business
where the objective is to hold these assets in order to collect contractual cash flows 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.
After initial measurement, such financial assets are subsequently measured at amortised cost using the Effective
Interest Rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance
income in the Standalone statement of Profit and Loss. The losses arising from impairment are recognised in the
Standalone statement of Profit and Loss. This category generally applies to trade and other receivables, loans and
other financial assets.
b. Financial Assets including derivatives at fair value through profit or loss (FVTPL)
Financial assets are measured at fair value through Profit and loss unless it is measured at amortised cost or at fair
value through other comprehensive income on initial recognition. The transaction costs directly attributable to
the acquisition of financial assets at fair value through profit or loss are immediately recognised in the Standalone
statement of Profit and Loss.
c. Financial Assets at fair value through other comprehensive income (FVTOCI)
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a
business where the 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.
d. Equity investment in subsidiaries and associate
Investment in equity instruments issued by the subsidiaries is measured at cost less impairment.
Investment in equity instruments issued by the associate is measured at fair value through profit or loss.
Derecognition
A financial asset is primarily derecognised when:
a. the right to receive cash flows from the asset has expired, or
b. 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
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.
On derecognition of a financial asset in its entirety, the differences between the carrying amounts measured at the
date of derecognition and the consideration received is recognised in the Standalone statement of Profit and Loss.
1.13 Financial instruments (Continued)
Impairment of financial assets
The Company applies the expected credit loss (ECL) model for recognition and measurement of impairment losses on the
following financial assets and credit risk exposures:
a. Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, deposits, and bank
balance.
b. Financial assets that are debt instruments and are measured as at FVTOCI.
c. Lease receivables under Ind AS 116.
d. Trade receivables, contract assets or any contractual right to receive cash or another financial asset that result from
transactions that are within the scope of Ind AS 115.
The Company follows the simplified approach for recognition of impairment loss allowance on trade receivables and
contract assets. The application of the simplified approach does not require the Company to track changes in credit
risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial
recognition. As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on
trade receivables and contract assets.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines whether there
has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly,
twelve-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL
is used. If in a subsequent period, credit quality of the instrument improves such that there is no longer a significant
increase in credit risk since initial recognition, then the Company reverts to recognising impairment loss allowance based
on twelve-month ECL.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial
instrument. The twelve-month ECL is a portion of the lifetime ECL which results from default events that are possible
within twelve months after the reporting date.
ECL is the difference between net of all contractual cash flows that are due to the Company in accordance with the
contract and all the cash flows that the Company expects to receive (i.e., all cash shortfalls), discounted at the original
EIR.
Impairment of non-financial assets
The Company assesses at each Balance Sheet date whether there is any indication that an asset or a group of assets (cash
generating unit) may be impaired. If any such indication exists, the Company estimates the recoverable amount of the
asset or cash generating unit.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss (FVTPL),
payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
On initial recognition, financial liabilities are recognised at fair value. In case of financial liabilities which are recognised
at fair value through profit or loss (FVTPL), its transaction costs are recognised in the Standalone statement of Profit and
loss. In other cases, the transaction costs are added to the acquisition or issue of the financial liabilities.
The Company's financial liabilities include trade and other payables and derivative financial instruments.
Subsequent measurement
Financial liabilities, including derivatives and embedded derivatives, which are designated for measurement at FVTPL are
subsequently measured at fair value. All other financial liabilities such as deposits are measured at amortised cost using
EIR method.
1.13 Financial instruments (Continued)
For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate
fair value, due to the short maturity of these instruments.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expired. When
an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms
of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the
original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in
the Standalone statement of Profit and Loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the Standalone Balance Sheet if there
is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis,
to realise the assets and settle the liabilities simultaneously.
1.14 Foreign currency transactions
The Company is exposed to currency fluctuations on foreign currency transactions. Transactions denominated in foreign
currency are recorded at the exchange rate prevailing on the date of transactions.
Exchange differences arising on foreign exchange transactions settled during the year are recognised in the Standalone
statement of Profit and Loss for the year.
Translation
Monetary assets and liabilities in foreign currency, which are outstanding as at the year-end, are translated at the year-
end at the closing exchange rate and the resultant exchange differences are recognised in the Standalone statement of
Profit and loss. Non-monetary items are stated in the Standalone Balance Sheet using the exchange rate at the date of
the transaction / date when fair value was determined.
Derivative instruments and hedge accounting
The Company's exposure to foreign currency fluctuations relates to foreign currency assets, liabilities and forecasted cash
flows. The Company limits the effects of foreign exchange rate fluctuations by following established risk management
policies including the use of derivatives like forward contracts. The Company enters forward exchange contracts, where
the counterparty is a bank. The hedging strategy is used for mitigating the currency fluctuation risk and the Company
does not use the forward exchange contracts for trading or speculative purpose. The Company uses forward contracts
to mitigate its risks associated with foreign currency fluctuations having underlying transaction and relating to firm
commitments or highly probable foreign currency forecasted purchase and sale transactions.
The forward exchange contracts are re-measured at fair value at each reporting date with the resultant gains/ losses
thereon being recorded in Standalone statement of Profit and loss, except that are designated as hedges.
Commodity risk is mitigated by entering into future contracts to hedge against fluctuation in commodity prices.
The Company designates some of the foreign currency forward contracts in a cash flow hedging relationship by applying
the hedge accounting principles.
These forward contracts are stated at fair value at each reporting date. Changes in the effective portion of fair value of
these forward contracts that are designated as hedges of future cash flows are recognised directly in OCI and reflected in
cash flow hedge reserve, net of applicable deferred income taxes and the ineffective portion is recognised immediately
in the Standalone statement of Profit and Loss.
Amounts accumulated in cash flow hedge reserve are reclassified to the Standalone statement of Profit and loss in the
periods during which the forecasted transaction materialises.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer
qualifies for hedge accounting. For forecasted transactions, any cumulative gain or loss on the hedging instrument
recognised in cash flow hedge reserve is retained there until the forecasted transaction occurs.
If the forecasted transaction is no longer expected to occur, the net cumulative gain or loss recognised in cash flow
hedge reserve is immediately transferred to the Standalone Statement of Profit and Loss for the period.
1.15 Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
1.15 Fair value measurement (Continued)
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the
fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement
as a whole:
• Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
• Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable.
• Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines
whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest
level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that
are based on market conditions and risks existing at each reporting date. The methods used to determine fair value
includes discounted cash flow analysis, available quoted market prices and dealer quotes. All methods of assessing fair
value result from general approximation of value and the same may differ from the actual realised value.
1.16 Taxation
Income-tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the income-
tax law) and deferred tax charge or credit (reflecting the tax effect of temporary differences) computed in accordance
with the relevant provisions of the Income Tax Act, 1961. Current tax and deferred tax are recognised in the Standalone
statement of Profit and Loss, except when they relate to items that are recognised in OCI or directly in equity, in which
case, the current and deferred tax are also recognised in other comprehensive income or directly in equity, respectively.
The current tax payable is based on taxable profit for the year. The Company's current tax is calculated using tax rates
that have been enacted or substantively enacted, by the end of the reporting period. Advance taxes and provisions for
current income taxes are presented in the Standalone Balance Sheet after off-setting advance tax paid and income tax
provision arising in the same tax jurisdiction for the same assessment year and where the relevant taxpaying units intend
to settle the asset and liability on a net basis.
Deferred tax is provided using the Balance Sheet method on temporary differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes at the reporting date.
The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax
rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are generally
recognised for all deductible temporary differences to the extent it is probable that taxable profits will be available
against those deductible temporary differences and can be realised. Deferred tax assets are reviewed as at each Balance
Sheet date and written down to the extent it is no longer probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax liabilities are not recognized for temporary differences between the carrying amount and tax base
of investments in subsidiaries and associate where the Company is able to control the timing of the reversal of the
temporary differences and it is not probable that the differences will reverse in foreseeable future and taxable profit will
not be available against which the temporary difference can be utilised.
Deferred tax assets are not recognized for temporary differences between the carrying amount and tax base of
investments in subsidiaries and associate where it is probable that the differences will not reverse in foreseeable future.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and
the relevant entity intends to settle its current tax assets and liabilities on a net basis.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other
comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either
in OCI or directly in equity.
Uncertain tax positions are reflected in the overall measurement of the Company's tax expense and are based on the
most likely amount or the expected value arrived by the Company, which provides a better prediction of the resolution
of uncertainty. Uncertain tax positions are monitored and updated as and when new information becomes available,
typically upon examination or action by the taxing authorities or through statute expiration and judicial precedent.
1.17 Earnings per share
Basic earnings per share are computed by dividing the net profit attributable to equity shareholders for the year, 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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