1. COMPANY OVERVIEW
Vishal Mega Mart Limited (formerly known as Vishal
Mega Mart Private Limited) was incorporated on March
26, 2018 under the provisions of the Companies Act,
2013 with its registered office in Plot No 184, Fifth floor,
Platinum Tower, Platinum Tower, Gurugram, Udyog
Vihar, Haryana, 122016. The Company is in engaged in
the business of contract manufacturing and wholesale
trading of apparels, fast moving consumer goods and
general merchandise.
During the year, the Company has completed its
Initial Public Offer (IPO) and the equity shares of the
Company has been listed on National Stock exchange
of India Limited (NSE) and BSE Limited (BSE) on
December 18, 2024 (Refer Note 13A).
2. BASIS FOR PREPARATION AND MATERIAL
ACCOUNTING POLICIES
a. Application of new and revised Indian Accounting
Standards (Ind AS)
All the Ind AS issued and notified by the Ministry
of Corporate Affairs ('MCA') under the Companies
(Indian Accounting Standards) Rules, 2015 (as
amended) till the standalone financial statements
are authorised, have been considered in preparing
these standalone financial statements.
The MCA vide notifications dated August 12, 2024,
September 9, 2024, September 28 and May 7,
2025 notified the Companies (Indian Accounting
Standards) Amendments Rules, 2024; Companies
(Indian Accounting Standards) Second Amendment
Rules, 2024; Companies (Indian Accounting
Standards) Third Amendment Rules, 2024 and
Companies (Indian Accounting Standards)
Amendment Rules, 2025 respectively, which
amended certain accounting standards as given
below and are effective from the respective dates:
• Disclosure of fair value - amendments to
Ind AS 107. The amendment to Ind AS 107
have did not have any impact on the on the
standalone financial statements.
• Guidance on insurance contracts
- amendments to Ind AS 109. The
amendments did not have any impact on the
standalone financial statements.
• Scope of insurance contracts - amendments
to Ind AS 115. The amendments did not
have any impact on the standalone financial
statements.
• Accounting of sale and leaseback
transactions - amendments to Ind AS 116.
The amendments did not have any impact
on the standalone financial statements.
b. Statement of compliance
These standalone financial statements have
been prepared on accrual and going concern
basis in accordance with Indian Accounting
Standards ("Ind AS") as per the Companies
(Indian Accounting Standards) Rules, 2015
notified under Section 133 of the Companies Act,
2013, ("the Act"), the applicable provisions of the
Act, presentation requirements as per Division II
of Schedule III of the Act and other accounting
principles generally accepted in India.
These standalone financial statements of the
Company as at and for the year ended March 31,
2025 were approved and authorised for issue by
Board of Directors on April 29, 2025.
c. Overall considerations
These standalone financial statements have
been prepared on going concern basis using the
material accounting policies and measurement
bases summarised below.
These accounting policies have been used
throughout all periods presented in the standalone
financial statements, unless otherwise stated.
d. Functional and presentation currency
These standalone financial statements are
presented in Indian Rupees ('), which is also the
Company's functional currency. All amounts have
been presented in crores, up to two decimals,
unless otherwise indicated.
e. Basis of measurement
The standalone financial statements have been
prepared on the historical cost basis except for
the following items:
f. Use of estimates and judgements
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, liabilities, income
and expenses. Actual results may differ from
these estimates. An overview of the areas
that involved a higher degree of judgement or
complexity, and of items which are more likely
to be materially adjusted due to estimates and
assumptions turning out to be different than
those originally assessed is mentioned below.
Areas involving critical estimates or judgements
are:
• Recognition of deferred tax assets:
availability of future taxable profit against
which tax losses carried forward can be
used - Note 25;
• Estimation of current tax expense and
payable - Note 25;
• Estimation of defined benefit obligation -
Note 31;
• Recognition and measurement of provisions
and contingencies: key assumptions about
the likelihood and magnitude of an outflow
of resources - Note 33;
• Leases: whether an arrangement contains
a lease, determination of lease term,
measurement of right-of-use ("ROU") assets-
Note 32;
• Determine grant date fair value technique for
employee share option scheme - Note 26
• Impairment test of non-financial assets:
key assumptions underlying recoverable
amounts - Note 4
Detailed information about each of these
estimates and judgements is included in relevant
notes together with information about the basis
of calculation for each affected line item in the
standalone financial statements. Estimates
and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates
are recognised prospectively.
g. Measurement of fair values
A number of the Company's accounting policies
and disclosures require measurement of fair
values, for both financial and non-financial assets
and liabilities. Fair values are categorised into
different levels in a fair value hierarchy based on
the inputs used in the valuation techniques as
follows:
- Level 1: quoted prices (unadjusted) in active
markets for identical assets or liabilities.
- Level 2: inputs other than quoted prices
included in Level 1 that are observable for
the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
- Level 3: inputs for the asset or liability that
are not based on observable market data
(unobservable inputs).
When measuring the fair value of an asset or a
liability, the Company uses observable market
data as far as possible. If the inputs used to
measure the fair value of an asset or a liability fall
into different levels of the fair value hierarchy, then
the fair value measurement is categorised in its
entirety in the same level of the fair value hierarchy
as the lowest level input that is significant to the
entire measurement. The Company recognises
transfers between levels of the fair value hierarchy
at the end of the reporting period during which the
change has occurred. Further, information about
the assumptions made in measuring fair values is
included Note 27 - Financial instruments.
h. Current and non-current classification
All assets and liabilities are classified into current
and non-current.
Assets
An asset is classified as current when it satisfies
any of the following criteria:
(a) it is expected to be realised in, or is intended
for sale or consumption in, the Company's
normal operating cycle;
(b) it is held primarily for the purpose of being
traded;
(c) it is expected to be realised within 12 months
after the reporting date; or
(d) it is cash or cash equivalent unless it is
restricted from being exchanged or used to
settle a liability for at least 12 months after
the reporting date.
Current assets include the current portion of
non-current financial assets. All other assets are
classified as non-current.
Liabilities
A liability is classified as current when it satisfies
any of the following criteria:
(a) it is expected to be settled in the Company's
normal operating cycle;
(b) it is held primarily for the purpose of being
traded;
(c) it is due to be settled within 12 months after
the reporting date; or
(d) the Company does not have an unconditional
right to defer settlement of the liability for
at least 12 months after the reporting date.
Terms of a liability that could, at the option
of the counterparty, result in its settlement
by the issue of equity instruments do not
affect its classification.
Current liabilities include current portion of non¬
current financial liabilities. All other liabilities are
classified as non-current.
Deferred tax asset/liabilities are classified as
non-current.
Operating cycle
Operating cycle is the time between the
acquisition of assets for processing and their
realisation in cash or cash equivalents. Based
on the nature of products 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.
i. Financial instruments
Financial assets and financial liabilities are
recognised when the Company becomes a party
to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially
measured at fair value. However, trade receivables
that do not contain a significant financing
component are measured at transaction price in
accordance with Ind AS 115. Transaction costs
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 the Statement of 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 directly attributable to the
acquisition of financial assets or financial
liabilities at fair value through profit or loss are
recognised immediately in the Statement of profit
and loss.
Financial assets
All recognised financial assets are subsequently
measured in their entirety at either amortised
cost or fair value, depending on the classification
of the financial assets
Classification of financial assets
Debt instruments that meet the following
conditions are subsequently measured at
amortised cost (except for debt instruments
that are designated as at fair value through the
Statement of profit and loss on initial recognition):
• the asset is held within a business model
whose objective is to hold assets in order to
collect contractual cash flows; and
• the contractual terms of the instrument give
rise on specified dates to cash flows that are
solely payments of principal and interest on
the principal amount outstanding.
Debt instruments that meet the following
conditions are subsequently measured at fair
value through other comprehensive income
("FVTOCI") (except for debt instruments that are
designated as at fair value through profit or loss
on initial recognition):
• the asset is held within a business model
whose objective is achieved both by
collecting contractual cash flows and selling
financial assets; and
• the contractual terms of the instrument give
rise on specified dates to cash flows that are
solely payments of principal and interest on
the principal amount outstanding.
Interest income is recognised in the Statement of
profit and loss for FVTOCI debt instruments.
All other financial assets are subsequently
measured at fair value.
Income is recognised on an effective interest
basis for debt instruments other than those
financial assets classified as at FVTPL. Interest
income is recognised in the Statement of profit
and loss and is included in the "Other income" line
item.
Financial assets at fair value through profit or loss
(“FVTPL")
Investments in equity instruments are classified
as at FVTPL, unless the Company irrevocably
elects on initial recognition to present subsequent
changes in fair value in other comprehensive
income for investments in equity instruments
which are not held for trading.
Debt instruments that do not meet the amortised
cost criteria or FVTOCI criteria are measured at
FVTPL. In addition, debt instruments that meet
the amortised cost criteria or the FVTOCI criteria
but are designated as at FVTPL are measured at
FVTPL.
A financial asset that meets the amortised cost
criteria or debt instruments that meet the FVTOCI
criteria may be designated as at FVTPL upon
initial recognition if such designation eliminates
or significantly reduces a measurement or
recognition inconsistency that would arise from
measuring assets or liabilities or recognizing the
gains and losses on them on different bases. The
Company has not designated any debt instrument
as at FVTPL.
Financial assets at FVTPL are measured at fair
value at the end of each reporting period, with
any gains or losses arising on re-measurement
recognised in the Statement of profit and loss.
The net gain or loss recognised in the Statement
of profit and loss incorporates any dividend or
interest earned on the financial asset and is
included in the 'Other income' line item. Dividend
on financial assets at FVTPL is recognised when
the Company's right to receive the dividends is
established, it is probable that the economic
benefits associated with the dividend will flow
to the entity, the dividend does not represent a
recovery of part of cost of the investment and the
amount of dividend can be measured reliably.
Investments in subsidiaries
Investment in subsidiaries is carried at cost
in the standalone financial statements, less
accumulated impairment.
Impairment of financial assets
The Company applies the expected credit loss
model for recognizing impairment loss on
financial assets measured at amortised cost,
debt instruments at FVTOCI, trade receivables,
other contractual rights to receive cash or other
financial asset, and financial guarantees not
designated as at FVTPL.
Expected credit losses are the weighted average
of credit losses with the respective risks of default
occurring as the weights.
Offsetting
Financial assets and financial liabilities are offset
and the net amount presented in the standalone
balance sheet when, and only when, the Company
currently has a legally enforceable right to set off
the amounts and it intents either to settle them
on net basis or to realise the assets and settle the
liabilities simultaneously.
Derecognition of financial assets
The Company derecognises a financial asset
when the contractual rights to the cash flows from
the asset expire, or when it transfers the financial
asset and substantially all the risks and rewards
of ownership of the asset to another party.
Financial liabilities and equity instruments
Classification as debt or equity
Debt and equity instruments issued by 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.
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.
Financial liabilities
Financial liabilities that are not held-for-trading
and are not designated as at FVTPL are measured
at amortised cost at the end of subsequent
accounting periods. The carrying amounts
of financial liabilities that are subsequently
measured at amortised cost are determined
based on the effective interest method. Interest
expense that is not capitalised as part of costs of
an asset is included under 'Finance costs'.
The effective interest method is a method of
calculating the amortised cost of a financial
liability and of allocating interest expense over
the relevant period. The effective interest rate is
the rate that exactly discounts estimated future
cash payments (including all fees and points
paid or received that form an integral part of the
effective interest rate, transaction costs and other
premiums or discounts) through the expected life
of the financial liability.
All financial liabilities are subsequently measured
at amortised cost using the effective interest
method or at FVTPL.
Derecognition of financial liabilities
The Company derecognises financial liabilities
when, and only when, the Company's obligations
are discharged, cancelled or have expired.
Financial liabilities
Financial liabilities that are not held-for-trading
and are not designated as at FVTPL are measured
at amortised cost at the end of subsequent
accounting periods. The carrying amounts
of financial liabilities that are subsequently
measured at amortised cost are determined
based on the effective interest method. Interest
expense that is not capitalised as part of costs of
an asset is included under 'Finance costs'.
The effective interest method is a method of
calculating the amortised cost of a financial
liability and of allocating interest expense over
the relevant period. The effective interest rate is
the rate that exactly discounts estimated future
cash payments (including all fees and points
paid or received that form an integral part of the
effective interest rate, transaction costs and other
premiums or discounts) through the expected life
of the financial liability.
All financial liabilities are subsequently measured
at amortised cost using the effective interest
method or at FVTPL.
Derecognition of financial liabilities
The Company derecognises financial liabilities
when, and only when, the Company's obligations
are discharged, cancelled or have expired.
j. Property, plant and equipment
Recognition and measurement
Items of property, plant and equipment are
measured at cost, which includes capitalised
borrowing costs (if meeting the capitalisation
criteria), less accumulated depreciation and
accumulated impairment losses, if any. Cost of an
item of property, plant and equipment comprises
its purchase price, including import duties and non¬
refundable purchase taxes, after deducting trade
discounts and rebates, any directly attributable cost
of bringing the item to its working condition for its
intended use and estimated costs of dismantling
and removing the item and restoring the site on
which it is located. The cost of improvements to
leasehold premises, if recognition criteria are met,
have been capitalised and disclosed separately
under leasehold improvement. Any gain or loss
on disposal of an item of property, plant and
equipment is recognised in the statement of profit
and loss.
Cost of property, plant and equipment not ready
for use as at the reporting date are disclosed as
capital work-in-progress.
Subsequent expenditure
Subsequent expenditure is capitalised only if
it is probable that the future economic benefits
associated with the expenditure will flow to the
Company.
Depreciation
Depreciation is provided on the straight-line
method, over the estimated useful life of each
asset as determined by the management. The
useful lives prescribed in Schedule II to the Act
are considered as indicative useful lives.
The estimated useful lives of items of property,
plant and equipment are as follows:
Leasehold improvements are amortised over the
lease period.
Depreciation method, useful lives and residual
values are reviewed at each financial year-
end and adjusted, if appropriate. Based on
technical evaluation and consequent advice, the
management believes that its estimates of useful
lives as given above, best represent the period
over which management expects to use these
assets. Depreciation on additions/ (disposals) is
provided on a pro-rata basis, i.e., from/ (upto) the
date on which asset is ready for use/ (disposed
off).
The carrying amounts of assets are reviewed at
each Balance Sheet date to determine whether
there is any indication of impairment. If any such
indication exists, the recoverable amount of the
asset is estimated. For assets that are not yet
available for use, the recoverable is estimated
at each Balance Sheet date. An impairment loss
is recognised whenever the carrying amount
of an asset or cash-generating unit exceeds
its recoverable amount. Impairment losses are
recognised in the Statement of profit and loss.
An impairment loss is reversed if there has been
a change in the estimates used to determine
the recoverable amount. An impairment loss
is reversed only to the extent that the asset's
carrying amount does not exceed the carrying
amount that would have been determined net of
depreciation or amortisation, if no impairment
loss had been recognised.
Derecognition
Property, plant and equipment is derecognised
when no future economic benefits are expected
from their use or upon their disposal. Gains and
losses on disposal of an item of property, plant
and equipment are determined by comparing
the proceeds from disposal with the carrying
amount of property, plant and equipment, and are
recognised in the statement of profit and loss.
k. Goodwill and other intangible assets
Goodwill
The Company accounts for the business
combinations using the acquisition method
when control is transferred to the Company. The
consideration transferred in the acquisition is
generally measured at fair value as at the date the
control is acquired ("the acquisition date"), as are
the net identifiable assets (tangible and intangible
assets) acquired and any non-controlling interest
in the acquired business. Transaction costs are
expensed as incurred, except to the extent related
to the issue of debt or equity securities.
Goodwill is an asset representing the future
economic benefits arising from other assets
acquired in a business combination that are not
individually identified and separately recognised.
Goodwill is initially measured at cost, being the
excess of the aggregate of the consideration
transferred over the net identifiable assets
acquired and liabilities assumed, in accordance
with Ind AS 103 - Business Combinations.
Goodwill is considered to have indefinite useful
life and hence is not subject to amortisation but
tested for impairment at least annually, based on
a number of factors, including operating results,
business plans and future cash flows. After initial
recognition, goodwill is measured at cost less any
accumulated impairment losses.
Intangible assets and amortisation
Recognition and measurement
Intangible assets that are acquired are recognised
only if it is probable that the expected future
economic benefits that are attributable to the
asset will flow to the Company and the cost of
assets can be measured reliably. The intangible
assets are recorded at cost of acquisition
including incidental costs related to acquisition
and are carried at cost less accumulated
amortisation and impairment losses, if any. Gain
or losses arising from derecognition of intangible
assets are measured as the difference between
the net disposal proceeds and the carrying
amount of the intangible asset and are recognised
in the Statement of profit and loss when the
asset is derecognised. Intangible assets with
finite useful lives that are acquired separately are
carried at cost less accumulated amortisation
and accumulated impairment losses.
Amortisation
Amortisation of intangible assets is calculated to
write off the cost of intangible assets less their
estimated residual values over their estimated
useful lives using the straight-line method and is
included in depreciation and amortisation in the
Statement of profit and loss.
Amortisation method, useful lives and residual
values are reviewed at the end of each financial
year and adjusted if appropriate. Amortisation
has been computed based on the following useful
lives:
Asset category Useful life
- Franchise contract, brands and trademarks
18 years
- Software 5 years
l. Revenue recognition
Revenue from sale of traded goods is recognised
upon transfer of control of promised products or
services to customers. Revenue from sale of goods
is recognised at a point in time, when the goods are
delivered and on acceptance of such goods.
Revenue is measured based on the transaction
price, which is the consideration, adjusted for
volume discounts, performance bonuses, price
concessions and incentives, if any, as specified
in the contract with the customer. Revenue also
excludes taxes collected from customers. The
Company disaggregates revenue from contracts
with customers on the basis of time, nature and
geography.
Revenue from services is recognised over time
by measuring progress towards satisfaction of
performance obligation for the services rendered.
Royalty revenue is recognised on an accrual
basis in accordance with the substance of the
relevant agreement (provided that it is probable
that economic benefits will flow to the Company
and the amount of revenue can be measured
reliably). This royalty revenue is based on sales
and is measured with reference to underlying
arrangement.
Shared service income is related to support
services which is recognised on cost plus markup
basis on the terms of underlying agreement.
Interest income on financial assets (including
deposits with banks) is recognised using
the effective interest rate method on a time
proportionate basis.
Dividend income is recorded when the right to
receive payment is established.
Payment terms
The sale of goods is typically made under credit
payment terms of 90 days.
Further, there are no financing component in
the contract with customer and no variable
consideration are involved in the transaction
price.
Contract assets and contract liabilities
The Company recognises contract liabilities for
consideration received in respect of unsatisfied
performance obligations and reports these
amounts as other current liabilities in the balance
sheet. Similarly, if the Company satisfies a
performance obligation before it receives the
consideration, the Company recognises either
a contract asset or a receivable in its balance
sheet, depending on whether something other
than the passage of time is required before the
consideration is due.
A contract asset is the right to consideration
in exchange for goods or services transferred
to the customer. If the Company performs by
transferring goods or services to a customer
before the customer pays consideration or before
payment is due, a contract asset is recognised
for the earned consideration when that right is
conditional on Company's future performance. A
contract liability is the obligation to transfer goods
or services 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 or services 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. The Company does not expect to have
any contracts where the period between the
transfer of the promised goods or services to the
customer and payment by the customer exceeds
one year. As a consequence, the Company does
not adjust any of the transaction prices for the
time value of money.
Trade receivables
Trade receivables are amounts due from
customers for goods sold in the ordinary course
of business and reflects Company's unconditional
right to consideration (that is, payment is due only
on the passage of time). Trade receivables are
recognised initially at the transaction price as they
do not contain significant financing components.
The Company holds the trade receivables with
the objective of collecting the contractual cash
flows and therefore measures them subsequently
at amortised cost using the effective interest
method, less loss allowance.
m. Cash and cash equivalents
Cash and cash equivalents in the balance
sheet comprise cash at banks and on hand and
short-term deposits with an original maturity of
three months or less, which are subject to an
insignificant risk of changes in value, that are
readily convertible to a known amount of cash
and subject to an insignificant risk of changes in
value.
n. Inventories
Inventories are stated at the lower of cost and
net realisable value. Cost of inventories includes
expenditure incurred in acquiring the inventories
and other costs incurred in bringing them to
their present location and condition. Costs of
inventories are determined on a weighted average
cost method. Net realisable value represents
the estimated selling price for inventories less
all estimated costs of completion and costs
necessary to make the sale.
o. Leases
The Company as a lessee
The Company executes leasing arrangements
for lease of buildings and office equipment. Such
arrangements are generally for a fixed period
but may have extension or termination options.
In accordance with Ind AS 116 - Leases, at
inception of the contract, the Company assesses
whether a contract is, or contains a lease. A lease
is defined as 'a contract, or part of a contract,
which conveys the right to control the use an
asset (the underlying 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:
• The contract involves the use of an identified
asset - this may be specified explicitly or
implicitly and should be physically distinct
or represent substantially all of the capacity
of a physically distinct asset. If the supplier
has a substantive substitution right, then the
asset is not identified;
• it has the right to obtain substantially all of
the economic benefits from use of the asset
throughout the period of use; and
• it has the right to direct the use of the asset.
Measurement and recognition of leases as a
lessee
The Company recognises a right-of-use asset
and a lease liability at the lease commencement
date. The right-of-use asset is initially measured
at cost, which comprises the initial amount of the
lease liability adjusted for any lease payments
made at or before the commencement date, plus
any initial direct costs incurred and an estimate
of costs to dismantle and remove the underlying
asset or to restore the underlying asset or the site
on which it is located, less any lease incentives
received.
The right-of-use assets is subsequently measured
at cost less any accumulated amortisation/
impairment losses, if any and adjusted for any
re-measurement of the lease liability. The right-
of-use assets is amortised using the straight¬
line method from the commencement date over
the shorter of lease term or useful life of right-
of-use asset. Right-of-use assets are tested for
impairment whenever there is any indication that
their carrying amounts may not be recoverable.
Impairment loss, if any, is recognised in the
Statement of profit and loss.
The lease liability is initially measured at the
present value of the lease payments that are not
paid at the commencement date, discounted
using the interest rate implicit in the lease or,
if that rate cannot be readily determined, the
Company's incremental borrowing rate. Generally,
the Company uses its incremental borrowing rate
as the discount rate.
Lease payments included in the measurement of
the lease liability comprise the following:
• Fixed payments, including in-substance
fixed payments;
• Variable lease payments that depend on an
index or a rate, initially measured using the
index or rate as at the commencement date;
• Amounts expected to be payable under a
residual value guarantee; and
• The exercise price under a purchase option
that the Company is reasonably certain to
exercise, lease payments in an optional
renewal period if the Company is reasonably
certain to exercise an extension option, and
penalties for early termination of a lease
unless the Company is reasonably certain
not to terminate early.
The lease liability is measured at amortised
cost using the effective interest method. It is
remeasured when there is a change in future
lease payments arising from a change in an index
or rate, if there is a change in the Company's
estimate of the amount expected to be payable
under a residual value guarantee, or if the
Company changes its assessment of whether it
will exercise a purchase, extension, or termination
option. When the lease liability is remeasured in
this way, a corresponding adjustment is made to
the carrying amount of the right-of-use asset or is
recorded in profit or loss if the carrying amount of
the right-of-use asset has been reduced to zero,
as the case may be.
The Company has elected not to apply the
requirements of Ind AS 116 - Leases to short¬
term leases of all assets that have a lease term
of 12 months or less and leases for which the
underlying asset is of low value. The lease
payments associated with these leases are
recognised as an expense in profit or loss on a
straight-line basis over the lease term.
p. Employee benefits
Short-term employee benefits
Short-term employee benefit obligations are
measured on an undiscounted basis and are
expensed as the related service is provided. A
liability is recognised 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 amount of obligation can be estimated
reliably.
Defined contribution plan
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 obligation to pay
further amounts. The Company makes specified
monthly contributions towards Government
administered provident fund scheme. Obligations
for contributions to defined contribution plans
are recognised as an employee benefit expense
in profit or loss in the periods during which the
related services are rendered by employees.
Defined benefit plan
A defined benefit plan is a post-employment
benefit plan other than a defined contribution
plan. The Company's net obligation in respect
of defined benefit plans is calculated separately
for each plan by estimating the amount of future
benefit that employees have earned in the current
and prior periods, discounting that amount and
deducting the fair value of any plan assets.
The calculation of defined benefit obligation is
performed annually by a qualified actuary using
the projected unit credit method. When the
calculation results in a potential asset for the
Company, the recognised 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 contributions to the plan ('the
asset ceiling'). In order to calculate the present
value of economic benefits, consideration is
given to any minimum funding requirements.
Remeasurements of the net defined benefit
liability, which comprise actuarial gains and
losses, are recognised in OCI. The Company
determines the net interest expense (income)
on the net defined benefit liability (asset) for
the period by applying the discount rate used
to measure the defined benefit obligation at
the beginning of the annual period to the then-
net defined benefit liability (asset), taking into
account any changes in the net defined benefit
liability (asset) during the period as a result of
contributions and benefit payments. Net interest
expense and other expenses related to defined
benefit plans are recognised in profit or loss.
When the benefits of a plan are changed or
when a plan is curtailed, the resulting change in
benefit that relates to past service ('past service
cost' or 'past service gain') or the gain or loss on
curtailment is recognised immediately in profit or
loss. The Company recognises gains and losses
on the settlement of a defined benefit plan when
the settlement occurs.
Other long-term benefits
The Company's net obligation in respect of
long-term employee benefits other than post¬
employment benefits is 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 related
assets is deducted. The obligation is measured
on the basis of an annual independent actuarial
valuation using the projected unit credit method.
Remeasurements gains or losses are recognised
in profit or loss in the period in which they arise.
Share based payments
The grant-date fair value of equity-settled share-
based payment arrangements granted to the
eligible employees under the Employee Share
Option Plan ('ESOP') is recognised as an employee
share option scheme expense in the profit or loss,
in relation to options granted to the employees,
over the vesting period of the awards. For share-
based payment awards with market conditions,
the grant-date fair value of the share-based
payment is measured to reflect such conditions
and there is no true-up for differences between
expected and actual outcomes. At the end of
each period, the Company revises its estimates
of the number of options that are expected to be
vested based on the non-market performance
conditions at the vesting date.
q. Income taxes
Income-tax comprises current and deferred tax. It
is recognised in profit or loss except to the extent
that it relates to an item recognised directly in
equity or in other comprehensive income.
Current tax
Current tax comprises the expected tax payable
or receivable on the taxable income or loss for
the year and any adjustment to the tax payable
or receivable in respect of previous years. The
amount of current tax reflects the best estimate
of the tax amount expected to be paid or received
after considering the uncertainty, if any, related to
income taxes. It is measured using tax rates (and
tax laws) enacted by the reporting date.
Current tax assets and current tax liabilities are
offset only if there is a legally enforceable right to
set off the recognised amounts, and it is intended
to realise the asset and settle the liability on a net
basis or simultaneously.
Deferred tax
Deferred tax is recognised in respect of temporary
differences between the carrying amounts of
assets and liabilities for financial reporting
purposes and the corresponding amounts used
for taxation purposes.
Deferred tax is also recognised in respect of
carried forward tax losses and tax credits.
Deferred tax is not recognised for:
- temporary differences arising on the initial
recognition of assets or liabilities in a
transaction that affects neither accounting
nor taxable profit or loss at the time of the
transaction.
- taxable temporary differences arising on the
initial recognition of goodwill.
Deferred tax assets are recognised to the extent
that it is probable that future taxable profits will
be available against which they can be used. The
existence of unused tax losses is strong evidence
that future taxable profit may not be available.
Therefore, in case of a history of recent losses, the
Company recognises a deferred tax asset only to
the extent that it has sufficient taxable temporary
differences or there is convincing other evidence
that sufficient taxable profit will be available
against which such deferred tax asset can be
realised. Deferred tax assets - unrecognised or
recognised, are reviewed at each reporting date
and are recognised/ reduced to the extent that it
is probable/ no longer probable respectively that
the related tax benefit will be realised.
Deferred tax is measured at the tax rates that are
expected to apply to the period when the asset
is realised or the liability is settled, based on the
laws that have been enacted or substantively
enacted by the reporting date.
The measurement of deferred tax reflects the tax
consequences that would follow from the way
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
if there is a legally enforceable right to offset
current tax liabilities and assets, and they relate to
income taxes levied by the same tax authority on
the same taxable entity, or on different tax entities,
but they intend to settle current tax liabilities and
assets on a net basis, or their tax assets and
liabilities will be realised simultaneously.
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