1. Corporate Information
Akme Fintrade (India) Limited (the 'Company') is a public company domiciled in India and incorporated on February 5,
1996 under the provisions of the Companies Act, 1956. The Company has received a Certificate of Registration from the
Reserve Bank of India ('RBI') on April 7,1999 to commence / carry on the business of Non-Banking Financial Institution
('NBFC'). The company has surrendered Deposit taking license and RBI has issued new certificate as on 5th Sept, 2019
as Non-Deposit Taking Systemically Important NBFC
As per RBI, vide the circular - 'Harmonization of different categories of NBFCs' issued on 22 February 2019 the Company
has been reclassified as "NBFC-Investment and Credit Company (NBFC-ICC)"
2. Basis of preparation
2.1 Statement of Compliance
The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the
Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time and notified under section 133
of the Companies Act, 2013 (the Act) along with other relevant provisions of the Act and the Master Direction - Non-
Banking Financial Company- Master Directions') issued by RBI. The financial statements have been prepared on a going
concern basis. The Company uses accrual basis of accounting except in case of significant uncertainties.
For all periods up to and including the year ended 31 March 2025, Company had prepared its financial statements
in accordance with accounting standards notified under Section 133 of the Companies Act 2013, read together with
paragraph 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules,
2016 and the NBFC Master Directions (hereinafter referred as 'Previous GAAP'). These financial statements for the
year ended 31 March 2024 are the fourth set of financial statements that the Company has prepared in accordance with
Ind AS. The Company has applied Ind AS 101 'First-time Adoption of Indian Accounting Standards', for transition from
previous GAAP to Ind AS.
2.2 Presentation of financial statements
The financial statements are presented in Indian Rupee (INR) which is also the functional currency of the Company.
The financial statements have been prepared on a historical cost basis, except for certain financial instruments that
are measured at fair value. The financial statements are prepared on a going concern basis, as 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.
The Balance Sheet, the Statement of Profit and Loss and Statement of Changes in Equity are presented in the format
prescribed under Division III of Schedule III to the Companies Act, 2013 as amended from time to time, for Non-Banking
Financial Companies ('NBFC') that are required to comply with Ind AS. The statement of cash flows has been presented
as per the requirements of Ind AS 7 Statement of Cash Flows.
The Company presents its Balance Sheet in order of liquidity.
The Company generally reports financial assets and financial liabilities on a gross basis in the Balance Sheet. They are
offset and reported net only when Ind AS specifically permits the same or it has an unconditional legally enforceable
right to offset the recognized amounts without being contingent on a future event. Similarly, the Company offsets
incomes and expenses and reports the same on a net basis when permitted by Ind AS specifically unless they are
material in nature.
2.3 Functional and presentation currency
These Financial information are presented in Indian Rupees (INR), which is also the Company's functional currency. All
amount have been rounded off to the nearest lakhs (two decimals), unless otherwise indicated.
2.5 Critical accounting estimates and judgements
The preparation of the Company's financial statements in conformity with Ind AS requires Management to make use
of estimates and judgments and assumptions. These estimates, judgements and assumptions affect the application
of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and
liabilities at the date of Restated Financial Information and reported amounts of revenues and expenses during the
period. Accounting estimates could change from period to period. Actual results could differ from those estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Appropriate changes in estimates are made
as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are
reflected in the Financial Information in the period in which changes are made and, if material, their effects are disclosed
in the notes to the Financial Information. Accounting estimates and judgments are used in various line items in the
financial statements for e.g.:
• Business model assessment [Refernoteno.3.4(i)]
• Fair value of financial instruments [Refer note no. 3.14 and34]
• Effective Interest Rate (EIR) [Refer note no. 3.1(i)]
• Impairment on financial assets [Refer note no. 3.4(i),6 and 35]
• Provisions and other contingent liabilities [Refer note no. 3.10 and 30]
• Provision for tax expenses [Refer note no. 3.6]
• Residual value and useful life of property, plant and equipment [Refer note no. 3.7(g)]
3. Summary of Significant Accounting Policies
This note provides a list of the significant accounting policies adopted in the preparation of these financial statements.
These policies have been consistently applied to all the years presented, unless otherwise stated.
3.1 Revenue Recognition
The Company earns revenue primarily from giving loans. Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition
criteria must also be met before revenue is recognized:
(i) Interest Income
The Company recognizes interest income using Effective Interest Rate (EIR) on all financial assets subsequently
measured at amortized cost or fair value through other comprehensive income (FVOCI). EIR is calculated by
considering all costs and incomes attributable to acquisition of a financial asset or assumption of a financial liability
and it represents a rate that exactly discounts estimated future cash payments/receipts through the expected life
of the financial asset/financial liability to the gross carrying amount of a financial asset or to the amortized cost of a
financial liability.
The Company recognizes interest income by applying the EIR to the gross carrying amount of financial assets
other than credit-impaired assets. In case of credit-impaired financial assets [as set out in note no. 3.4(i)] regarded
as 'stage 3', the Company stops recognizing interest income on these accounts till the account is credit impaired. If
the financial asset is no longer credit-impaired [as outlined in note no. 3.4(i)], the Company reverts to calculating
interest income on a gross basis.
Delayed payment interest (penal interest) levied on customers for delay in repayments/non-payment of contractual
cashflows is recognized on realization.
Interest on financial assets subsequently measured at fair value through profit or loss (FVTPL) is recognized at the
contractual rate of interest.
(ii) Dividend Income
Dividend income on equity shares is recognized when the Company's right to receive the payment is established
and it is probable that the economic benefits associated with the dividend will flow to the Company and the amount
of dividend can be measured reliably, which is generally when shareholders approve the dividend.
(iii) Other Revenue from Operations
The Company recognizes 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'. 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 recognizes revenue only on satisfactory completion of performance obligations. Revenue is
measured at fair value of the consideration received or receivable.
(a) Fees and Commission
The Company recognizes service and administration charges towards rendering of additional services to its
loan customers on satisfactory completion of service delivery.
Fees on value added services and products are recognized on rendering of services and products to the
customer.
Distribution income is earned by selling of services and products of other entities under distribution
arrangements. The income so earned is recognized on successful sales on behalf of other entities subject to
there being no significant uncertainty of its recovery.
Foreclosure charges are collected from loan customers for early payment/closure of loan and are recognized
on realization.
(b) Net Gain on Fair Value Changes
Financial assets are subsequently measured at fair value through profit or loss (FVTPL) or fair value through
other comprehensive income (FVOCI), as applicable. The Company recognizes gains/losses on fair value
change of financial assets measured as FVTPL and realized gains/losses on derecognition of financial asset
measured at FVTPL and FVOCI.
(c) Sale of Services
The Company, on de-recognition of financial assets where a right to service the derecognized financial assets
for a fee is retained, recognizes the fair value of future service fee income over service obligations cost on net
basis as service fee income in the statement of profit or loss and, correspondingly creates a service asset in
Balance Sheet. Any subsequent increase in the fair value of service assets is recognized as service income and
any decrease is recognized as an expense in the period in which it occurs. The embedded interest component
in the service asset is recognized as interest income in line with Ind AS 109 'Financial instruments'.
Other revenues on sale of services are recognized as per Ind AS 115 'Revenue from Contracts with Customers'
as articulated above in 'other revenue from operations'.
(d) Recoveries of financial assets written off
The Company recognizes income on recoveries of financial assets written off on realization or when the right
to receive the same without any uncertainties of recovery is established.
(iv) Taxes
Incomes are recognized net of the Goods and Services Tax/Service Tax, wherever applicable.
3.2 Expenditures
(i) Borrowing Costs
Borrowing costs are interest and other costs incurred in connection with the borrowings of funds. Borrowing costs directly
attributable to acquisition or construction of an asset which necessarily take a substantial period of time to get ready for
their intended use are capitalized as part of the cost of the asset. Other borrowings costs are recognized as an expense
in the statement of profit and loss account on an accrual basis using the effective interest method. [Refer note no. 3.1(i)].
(ii) Fees and Commission Expenses
Fees and commission expenses which are not directly linked to the sourcing of financial assets, such as commission/
incentive incurred on value added services and products distribution, recovery charges and fees payable for management
of portfolio etc., are recognized in the Statement of Profit and Loss on an accrual basis.
(iii) Taxes
Expenses are recognized net of the Goods and Services Tax/Service Tax, except where credit for the input tax is not
statutorily permitted.
3.3 Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, other short term, highly liquid investments with original maturities of
three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk
of changes in value.
3.4 Financial Instruments
A financial instrument is defined as any contract that gives rise to a financial asset of one entity and a financial liability
or equity instrument of another entity. Trade receivables and payables, loan receivables, investments in securities and
subsidiaries, debt securities and other borrowings, preferential and equity capital etc. are some examples of financial
instruments.
Loans are recognized when funds are transferred to the customer account. Debt securities issued are initially recognized
when they are originated. All the other financial instruments are recognized on the date when the Company becomes
party to the contractual provisions of the financial instruments. For tradable securities, the Company recognizes the
financial instruments on settlement date.
The classification of financial instruments at initial recognition depends on their contractual terms and the business
model for managing the instruments. Financial instruments are initially measured at their fair value, except in the case
of financial assets and financial liabilities recorded at fair value through profit and loss (FVTPL), transaction costs are
added to, or subtracted from this amount.
(i) Financial Assets
Financial assets include cash, or an equity instrument of another entity, or a contractual right to receive cash or another
financial asset from another entity. Few examples of financial assets are loan receivables, investment in equity and debt
instruments, trade receivables and cash and cash equivalents.
Business model assessment
The Company determines its business model at the level that best reflects how it manages groups of financial
assets to achieve its business objective.
The Company's business model is not assessed on an instrument-by-instrument basis, but at a higher level of
aggregated portfolios and is based on observable factors such as:
a) How the performance of the business model and the financial assets held within that business model are
evaluated and reported to the Company's key management personnel.
b) The risks that affect the performance of the business model (and the financial assets held within that business
model) and, in particular, the way those risks are managed.
c) How managers of the business are compensated (for example, whether the compensation is based on the fair
value of the assets managed or on the contractual cash flows collected).
d) The expected frequency, value and timing of sales are also important aspects of the Company's assessment
The business model assessment is based on reasonably expected scenarios without taking 'worst case' or 'stress
case' scenarios into account. If cash flows after initial recognition are realised in a way that is different from the
Company's original expectations, the Company does not change the classification of the remaining financial assets
held in that business model, but incorporates such information when assessing newly originated or newly purchased
financial assets going forward.
SPPI test
As a second step of its classification process, the Company assesses the contractual terms of financial assets to
identify whether they meet SPPI test.
'Principal' for the purpose of this test is defined as the fair value of the financial asset at initial recognition and
may change over the life of financial asset (for example, if there are repayments of principal or amortisation of the
premium/ discount).
The most significant elements of interest within a lending arrangement are typically the consideration for the time
value of money and credit risk. To make the SPPI assessment, the Company applies judgement and considers
relevant factors such as the period for which the interest rate is set.
In contrast, contractual terms that introduce a more than the minimum exposure to risks or volatility in the contractual
cash flows that are unrelated to a basic lending arrangement do not give rise to contractual cash flows that are
solely payments of principal and interest on the amount outstanding. In such cases, the financial asset is required to
be measured at FVTPL.
Accordingly, financial assets are measured as follows based on the existing business model:
(a) Financial Assets carried at amortized cost
The Company measures its financial assets at amortized cost if both the following conditions are met:
• The asset is held within a business model of collecting contractual cash flows; and
• Contractual terms of the asset give rise on specified dates to cash flows that are sole Payments of Principal
and Interest (SPPI) on the principal amount outstanding.
Bank balances, Loans, Trade receivables and other financial investments that meet the above conditions are
measured at amortized cost.
The business model of the Company for assets subsequently measured at amortized cost category is to hold and
collect contractual cash flows. However, considering the economic viability of carrying the delinquent portfolios in
the books of the Company, it may sell these portfolios to banks and/or asset reconstruction companies.
After initial measurement, such financial assets are subsequently measured at amortized cost on effective interest
rate (EIR). For further details, refer note no. 3.1(i). The expected credit loss (ECL) calculation for debt instruments
at amortized cost is explained in subsequent notes in this section.
(b) Financial Assets at FVOCI
The Company subsequently classifies its financial assets as FVOCI, only if both of the following criteria are met:
• The objective of the business model is achieved both by collecting contractual cash flows and selling the
financial assets; and
• Contractual terms of the asset give rise on specified dates to cash flows that are Solely Payments of Principal
and Interest (SPPI) on the principal amount outstanding.
Financial Assets included within the FVOCI category are measured at each reporting date at fair value with such
changes being recognized in other comprehensive income (OCI). The interest income on these assets is recognized
in profit or loss. The ECL calculation for debt instruments at FVOCI is explained in subsequent notes in this section.
Debt instruments such as long-term investments in Government securities to meet regulatory liquid asset
requirement of the Company's deposit program and mortgage loans portfolio where the Company periodically
resorts to partially selling the loans by way of assignment to willing buyers are classified as FVOCI.
On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified to profit or loss.
(c) Financial Assets at FVTPL
The Company classifies financial assets which are held for trading under FVTPL category. Held for trading assets
are recorded and measured in the Balance Sheet at fair value. Interest and dividend incomes are recorded in interest
income and dividend income, respectively according to the terms of the contract, or when the right to receive the
same has been established. Gains and losses on changes in fair value of debt instruments are recognized on net
basis through profit or loss.
The Company's investments into mutual funds, Government securities (trading portfolio) and certificate of
deposits for trading and short term cash flow management have been classified under this category.
(d) Equity investment designated under FVOCI
All equity investments in scope of Ind AS 109 ‘Financial Instruments' are measured at fair value. The Company has
strategic investments in equity for which it has elected to present subsequent changes in the fair value in other
comprehensive income. The classification is made on initial recognition and is irrevocable.
All fair value changes of the equity instruments, excluding dividends, are recognized in OCI and are available for
reclassification to profit or loss on derecognition of investments. Equity instruments at FVOCI are not subject to an
impairment assessment.
Derecognition of Financial Assets
The Company derecognizes a financial asset (or, where applicable, a part of a financial asset) when:
• The right to receive cash flows from the asset have expired; or
• The Company has transferred its right 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 an assignment arrangement and the
Company has transferred substantially all the risks and rewards of the asset. Once the asset is derecognized, the
Company does not have any continuing involvement in the same.
The Company transfers its financial assets through the partial assignment route and accordingly derecognizes the
transferred portion as it neither has any continuing involvement in the same nor does it retain any control. If the
Company retains the right to service the financial asset for a fee, it recognizes either a servicing asset or a servicing
liability for that servicing contract. A service liability in respect of a service is recognized at fair value if the fee to
be received is not expected to compensate the Company adequately for performing the service. If the fees to
be received is expected to be more than adequate compensation for the servicing, a service asset is recognized
for the servicing right at an amount determined on the basis of an allocation of the carrying amount of the larger
financial asset.
On derecognition of a financial asset in its entirety, the difference between:
• the carrying amount (measured at the date of derecognition) and
• the consideration received (including any new asset obtained less any new liability assumed) is recognized in
profit or loss.
Impairment of Financial Assets
In accordance with Ind AS 109, the Company uses ECL model, for evaluating impairment of financial assets other
than those measured at fair value through profit and loss (FVTPL). ECL are recognized for financial assets held
under amortized cost, debt instruments measured at FVOCI, and certain loan commitments.
Financial assets where no significant increase in credit risk has been observed are considered to be in 'stage V and
for which a 12 month ECL is recognized. Financial assets that are considered to have significant increase in credit
risk are considered to be in 'stage 2' and those which are in default or for which there is an objective evidence of
impairment are considered to be in 'stage 3'. Lifetime ECL is recognized for stage 2 and stage 3 financial assets.
At initial recognition, allowance (or provision in the case of loan commitments) is required for ECL towards default
events that are possible in the next 12 months, or less, where the remaining life is less than 12 months.
In the event of a significant increase in credit risk, allowance (or provision) is required for ECL towards all possible
default events over the expected life of the financial instrument ('lifetime ECL').
Financial assets (and the related impairment loss allowances) are written off in full, when there is no realistic prospect
of recovery.
Treatment of the different stages of financial assets and the methodology of determination of ECL.
(a) Credit Impaired (Stage 3)
The Company recognizes a financial asset to be credit impaired and in stage 3 by considering relevant objective
evidence, primarily whether:
• Contractual payments of either principal or interest are past due for more than 90 days;
• The loan is otherwise considered to be in default
Restructured loans (Except loan restructured under the RBI Covid 2.0 framework), where repayment terms are
renegotiated as compared to the original contracted terms due to significant credit distress of the borrower, are
classified as credit impaired. Such loans continue to be in stage 3 until they exhibit regular payment of renegotiated
principal and interest over a minimum observation period, typically 12 months- post renegotiation, and there are
no other indicators of impairment Having satisfied the conditions of timely payment over the observation period
these loans could be transferred to stage 1 or 2 and a fresh assessment of the risk of default be done for such loans.
Interest income is recognized by applying the EIR to the net amortized cost amount i.e. gross carrying amount less
ECL allowance.
(b) Significant Increase in Credit Risk (Stage 2)
An assessment of whether credit risk has increased significantly since initial recognition is performed at each
reporting period by considering the change in the risk of default of the loan exposure. Considering the market
in which company is primarily operating and the class of customers which primarily comes from rural background
where financial literacy is very poor and banking and collection facilities are not present at all places, management
considers that unless identified at an earlier stage, 60 days past due is considered as an indication of financial
assets to have suffered a significant increase in credit risk. Based on other indications such as borrowers frequently
delaying payments beyond due dates though not 60 days past due are included in stage 2 for mortgage loans.
The measurement of risk of defaults under stage 2 is computed on homogenous portfolios, generally by nature
of loans, tenors, underlying collateral, geographies and borrower profiles. The default risk is assessed using PD
(probability of default) derived from past behavioral trends of default across the identified homogenous portfolios.
These past trends factor in the past customer behavioral trends, credit transition probabilities and macroeconomic
conditions. The assessed PDs are then aligned considering future economic conditions that are determined to have
a bearing on ECL.
(c) Without Significant Increase in Credit Risk since Initial Recognition fStage 1)
ECL resulting from default events that are possible in the next 12 months are recognized for financial instruments
in stage 1. The Company has ascertained default possibilities on past behavioral trends witnessed for each
homogenous portfolio using application/behavioral score cards and other performance indicators, determined
statistically.
(d) Measurement of ECL
The assessment of credit risk and estimation of ECL are unbiased and probability weighted. It incorporates all
information that is relevant including information about past events, current conditions and reasonable forecasts of
future events and economic conditions at the reporting date. In addition, the estimation of ECL takes into account
the time value of money. Forward looking economic scenarios determined with reference to external forecasts of
economic parameters that have demonstrated a linkage to the performance of our portfolios over a period of time
have been applied to determine impact of macro-economic factors.
The Company has calculated ECL using three main components: a probability of default (PD), a loss given default
(LGD) and the exposure at default (EAD). ECL is calculated by multiplying the PD, LGD and EAD and adjusted for
time value of money using a rate which is a reasonable approximation of EIR.
• Determination of PD is covered above for each stage of ECL.
• EAD represents the expected balance at default, taking into account the repayment of principal and interest
from the Balance Sheet date to the date of default together with any expected drawdowns of committed facilities.
• LGD represents expected losses on the EAD given the event of default, taking into account, among other
attributes, the mitigating effect of collateral value at the time it is expected to be realized and the time value of
money.
A more detailed description of the methodology used for ECL is covered in the 'credit risk' section of note no. 35.
(e) Write-Qffs
Financial assets are written off when there is a significant doubt on recoverability in the medium term. If the amount
to be written off is greater than the accumulated loss allowance, the difference is first treated as an addition to the
allowance that is then applied against the gross carrying amount. Any subsequent recoveries are credited to the
statement of profit and loss.
(ii) Financial Liabilities
Financial liabilities include liabilities that represent a contractual obligation to deliver cash or another financial asset to
another entity, or a contract that may or will be settled in the entities own equity instruments. Few examples of financial
liabilities are trade payables, debt securities and other borrowings and subordinated debts.
Initial measurement
All financial liabilities are recognized initially at fair value and, in the case of borrowings and payables, net of directly
attributable transaction costs. The Company's financial liabilities include trade payables, other payables, debt securities
and other borrowings.
Subsequent measurement
After initial recognition, all financial liabilities are subsequently measured at amortized cost using the EIR [Refer note no.
3.1(i)]. Any gains or losses arising on derecognition of liabilities are recognized in the Statement of Profit and Loss.
Embedded derivatives
An embedded derivative is a component of a hybrid instrument that also includes a non-derivative host contract with
the effect that some of the cash flows of the combined instrument vary in a way similar to a standalone derivative.
An embedded derivative causes some or all of the cash flows that otherwise would be required by the contract to be
modified according to a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index
or prices or rates, credit rating or credit index, or other variable, provided that, in the case of a non-financial variable,
it is not specific to a party to the contract. A derivative that is attached to a financial instrument, but is contractually
transferable independently of that instrument, or has a different counterparty from that instrument, is not an embedded
derivative, but a separate financial instrument.
Derivatives embedded in all other host contracts are accounted for as separate derivatives and recorded at fair value if
their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are
not held for trading or designated at fair value though profit or loss. These embedded derivatives are measured at fair
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value with changes in fair value recognized in profit or loss, unless designated as effective hedging instruments.
Derecognition measurement
The Company derecognizes a financial liability when the obligation under the liability is discharged, cancelled or expired,
(iii) Reclassification of financial assets and liabilities
The Company does not reclassify its financial assets subsequent to their initial recognition, apart from the exceptional
circumstances in which the Company acquires, disposes of, or terminates a business line. Financial liabilities are never
reclassified. The Company did not reclassify any of its significant financial assets or liabilities in the year ended March 31,
2025 and March 31,2024.
(Iv) Offsetting of Financial Instruments
Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet only if there is an
enforceable legal right to offset the recognized amounts with an intention to settle on a net basis or to realize the assets
and settle the liabilities simultaneously.
3.5 Investment in Subsidiaries
The Company does not have any Subsidiary.
3.6 Taxes
(i) Current Tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation
authorities, in accordance with the Income Tax Act, 1961 and the Income Computation and Disclosure Standards (ICDS)
prescribed therein. The tax rates and tax laws used to compute the amount are those that are enacted or substantively
enacted, at the reporting date.
Current tax relating to items recognized outside profit or loss is recognized in correlation to the underlying transaction
either in OCI or directly in other equity. Management periodically evaluates positions taken in the tax returns with
respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where
appropriate.
(ii) DeferreldTax
Deferred tax is provided using the Balance Sheet approach on temporary differences between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognized for all taxable temporary differences and deferred tax assets are recognized for
deductible temporary differences to the extent that it is probable that taxable profits will be available against which the
deductible temporary differences can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized.
Unrecognized deferred tax assets, if any, are reassessed at each reporting date and are recognized to the extent that it
has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at
the reporting date.
Deferred tax relating to items recognized outside profit or loss is recognized either in OCI or in other equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
3.7 Property, Plant and Equipment
Property, plant and equipment are carried at historical cost of acquisition less accumulated depreciation and impairment
losses, consistent with the criteria specified in Ind AS 16 'Property, Plant and Equipment'.
Depreciation on property, plant and equipment
(a) Depreciation is provided on a pro-rata basis for all tangible assets on straight line method over the useful life
of assets.
(b) Useful lives of assets are determined by the Management by an internal technical assessment except where
such assessment suggests a life significantly different from those prescribed by Schedule II - Part C of the
Companies Act, 2013 where the useful life is as assessed and certified by a technical expert.
(c) Depreciation on leasehold improvements is provided on straight line method over the primary period of lease
of premises or 5 years whichever is less.
(d) Depreciation on addition to assets and assets sold during the year is being provided for on a pro rata basis with
reference to the month in which such asset is added or sold as the case may be.
(e) Assets having unit value up to Rs. 5,000 is depreciated fully in the financial year of purchase of asset.
(f) An item of property, plant and equipment and any significant part initially recognized is derecognized upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on
derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is included under other income in the Statement of Profit and Loss when the asset is
derecognized.
(g) The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at
each financial year end and adjusted prospectively, if appropriate.
3.8 Intangible assets and amortization thereof
Intangible assets, representing software'sare initially recognized at cost and subsequently carried at cost lessaccumulated
amortization and accumulated impairment. The intangible assets are amortized using the straight-line method over
a period of five years, which is the Management's estimate of its useful life. The useful lives of intangible assets are
reviewed at each financial year end and adjusted prospectively, if appropriate.
3.9 Impairment of non-financial assets
An assessment is done at each Balance Sheet date to ascertain whether there is any indication that an asset may be
impaired. If any such indication exists, an estimate of the recoverable amount of asset is determined. If the carrying value
of relevant asset is higher than the recoverable amount, the carrying value is written down accordingly.
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