1. Company overview
Amforge Industries Limited (“the Company”) is a public limited Company domiciled and incorporated in India
on 21st April, 1971 under the Indian Companies Act, 1956. The registered office of the Company is located at
1118, Dalamal Tower, 11th Floor, Free Press Journal Marg, Nariman Point, Mumbai - 400021, Maharashtra,
India. The equity shares of the Company are listed on the Bombay Stock Exchange (BSE) in India.
Company details
The financial statements of the Company were authorised for issue by the Audit Committee and the Board of
Directors at respective meetings conducted on 27th May, 2025.
2. MATERIAL AND OTHER ACCOUNTING POLICIES INFORMATION AND KEY ACCOUNTING
ESTIMATES AND JUDGEMENTS:
2.1 Basis of Preparation of Financial Statements
These financial statements are the separate financial statements of the Company (financial statements) prepared
in accordance with the Indian Accounting Standards (‘Ind AS’) notified under Section 133 of the Companies
Act, 2013, read together with the Companies (Indian Accounting Standards) Rules, 2015, as amended.
The financial statements have been prepared on a historical cost basis, on the accrual basis of accounting except
for certain financial assets and liabilities which have been measured at fair value at the end of each accounting
period, as stated in the accounting policies set out below. The accounting policies have been applied consistently
over all the periods presented in these financial statements.
The financial statements are presented in INR in Thousands and all values are rounded off to the nearest
thousands unless otherwise stated.
2.2 Use of estimates
The preparation of financial statements in conformity with Indian Accounting Standards (IND AS) requires
management to make judgments, estimates, and assumptions that affect the application of accounting policies
and reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the year. Application of accounting estimates
involving complex and subjective judgments and the use of assumptions in these financial statements have been
disclosed. Actual results could differ from those estimates. Estimates and underlying assumptions are reviewed
on an ongoing basis. Any revision to accounting estimates are reflected in the financial statements in the period
in which changes are made and, if material, their effects are disclosed in the notes to financial statements.
2.3 Summary of material accounting policies information
a) Revenue recognition
All the income and expenditures are accounted on accrual basis unless otherwise stated.
Rental income arising from operating leases on investment properties is accounted for on a straight-line
basis over the lease terms and is included in other income in the statement of profit or loss.
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective
interest rates applicable (which is the rate that exactly discounts estimated future cash receipts through
the expected life of the financial asset to that asset’s net carrying amount on initial recognition).
Dividend income is recognised when the right to receive the dividend is established.
Revenue in respect of Liquidated Damages from contractors/ suppliers is recognised when determined as
not payable.
b) Financial instruments:
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.
Financial assets
Financial instruments with a contractual right to receive cash or another entity’s financial liability are
recognized as financial assets by the Company.
Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at
fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial
asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified into four categories:
> Debt instruments at amortised cost;
> Debt instruments, derivatives, and equity instruments at fair value through profit or loss (FVTPL);
> Equity instruments measured at fair value through other comprehensive income (FVTOCI);
> Debt instruments at fair value through Other Comprehensive Income (FVOCI).
Debt instruments at amortised cost
A ‘debt instrument’ is measured at the amortised cost if both the following conditions are met:
> The asset is held within a business model whose objective is to hold assets for collecting contractual
cash flows, 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.
This category is the most relevant to the Company. 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 profit or loss. The
losses arising from impairment are recognised in the profit or loss. This category generally applies to loans
trade receivables and other financial assets.
Debt instrument at FVTPL/FVOCI
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria
for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized
cost or FVTOCI criteria, as at FVTPL. However, such an election is allowed only if doing so reduces or
eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch’).
Debt instruments included within the FVTPL category are measured at fair value with all changes
recognized in the P&L.
Equity investments
All equity investments in the scope of Ind AS 109 are measured at fair value. Equity instruments which
are held for trading are classified as at FVTPL. For all other equity instruments, the Company may make
an irrevocable election to present in other comprehensive income subsequent changes in the fair value.
The Company makes such an election on an instrument by- instrument basis. The classification is made
on initial recognition and is irrevocable.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from
OCI to P&L, even on the sale of the investment. However, the Company may transfer the cumulative gain
or loss within equity.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial
assets) is primarily derecognised (i.e. removed from the Company’s balance sheet) when:
> The rights to receive cash flows from the asset have expired, or
> The Company has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party under a
‘pass-through’ arrangement and either (a) the Company has transferred substantially all the risks
and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all
the risks and rewards of the asset, but has transferred control of the asset.”
When the Company has transferred its rights to receive cash flows from an asset or has entered into
a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of
ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the
asset nor transferred control of the asset, the Company continues to recognise the transferred asset to the
extent of the Company’s continuing involvement. In that case, the Company also recognises an associated
liability. The transferred asset and the associated liability are measured on a basis that reflects the rights
and obligations that the Company has retained.
Impairment of financial assets
In accordance with Ind AS 109, the Company applies the expected credit loss (ECL) model for measurement
and recognition of impairment loss on the following financial assets and credit risk exposure:
1) Financial assets that are debt instruments, and are measured at amortised cost e.g. deposits, loans,
trade receivables, bank balance, and other financial assets.
2) Trade receivables 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 a ‘simplified approach’ for recognition of impairment loss allowance on Trade
receivables.
The application of a simplified approach does not require the Company to track changes in credit risk.
Rather, it recognises impairment loss allowance based on lifetime Expected Credit Losses (ECLs) at each
reporting date, right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines
that whether there has been a significant increase in the credit risk since initial recognition. If credit risk
has not increased significantly, a 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, the credit quality
of the instrument improves such that there is no longer a significant increase in credit risk since initial
recognition, then the entity reverts to recognising impairment loss allowance based on a 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 all contractual cash flows
that are due to the Company in accordance with the contract and all the cash flows that the entity expects
to receive (i.e., all cash shortfalls), discounted at the original EIR.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/
expense in the statement ofprofit and loss (P&L). This amount is reflected under the head’s other expenses
in the statement of profit and loss. The balance sheet presentation for ECL on financial assets measured at
amortised cost is presented as an allowance, i.e., as an integral part of the measurement of those assets in
the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria,
the Company does not reduce impairment allowance from the gross carrying amount.
For assessing increases in credit risk and impairment loss, the Company combines financial instruments
based on shared credit risk characteristics to facilitate an analysis that is designed to enable significant
increases in credit risk to be identified on a timely basis.
Financial liabilities
Financial instruments with a contractual obligation to deliver cash or another financial asset are
recognised as a financial liability by the Company.
Initial recognition and measurement.
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or
loss; loans and borrowings; payables as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.
The Company’s financial liabilities include trade and other payables, loans, and borrowings including
bank overdrafts and derivative financial instruments.
Subsequent measurement.
The measurement of financial liabilities depends on their classification, as described below:
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised
cost using the EIR (effective interest rate) method. Gains and losses are recognised in profit or loss
when the liabilities are derecognised as well as through the EIR amortisation process. 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 as finance costs in the statement of profit and
loss.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or canceled or
expires. 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 statement of profit or loss.
Reclassification of financial assets offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the 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.
c) Investment Property
Property investments that are not intended to be occupied substantially for own use by, or in the operations
of the Company, have been classified as investment property. Investment properties are measured initially
at their cost including transaction cost and where applicable borrowing costs.
After initial recognition, investment properties are stated at cost less accumulated depreciation and
accumulated impairment loss, if any. Subsequent costs are included in the assets carrying amount or
recognised as a separate asset, as appropriate, only when it is probable that future economic benefits
associated with the item will flow to the Company and the cost of the item can be measured reliably. All
other repairs and maintenance are charged to profit or loss during the reporting period in which they are
incurred.
Though the Company measures investment property using cost-based measurement, the fair value of
investment property is disclosed in the notes. The Company depreciates its investment properties over
the useful life which is similar to that of Property, Plant, and Equipment.
Investment properties are derecognized 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. The
difference between the net disposal proceeds and the carrying amount of the asset is recognised in profit
or loss in the period of derecognition.
2.4 Other Accounting Policy Information
a) Property, Plant, and Equipments (‘PPE’)
Measurement at recognition: An item of property, plant, and equipment that qualifies as an asset
is measured on initial recognition at cost. Following initial recognition, items of property, plant, and
equipment are carried at their cost less accumulated depreciation and accumulated impairment losses.
The Company identifies and determines the cost of each part of an item of property, plant, and equipments
separately if the part has a cost that is significant to the total cost of that item of property, plant, and
equipment and has a useful life that is materially different from that of the remaining item.
The cost of an item of property, plant, and equipment comprises its purchase price including import
duties and other non-refundable purchase taxes or levies, directly attributable cost of bringing the asset
to its working condition for its intended use, and the initial estimate of decommissioning, restoration
and similar liabilities, if any. Any trade discounts and rebates are deducted in arriving at the purchase
price. Cost includes the cost of replacing a part of a plant and equipment if the recognition criteria are
met. Expenses directly attributable to the new manufacturing facility during its construction period are
capitalized if the recognition criteria are met. Expenditure related to plans, designs, and drawings of
buildings or plants and machinery is capitalized under relevant heads of property, plant, and equipment
if the recognition criteria are met.
Items such as spare parts, stand-by equipment, and servicing equipment that meet the definition of
property, plant, and equipment are capitalized at cost and depreciated over their useful life. Costs in nature
of repairs and maintenance are recognized in the Statement of Profit and Loss as and when incurred.
The Company had elected to consider the carrying value of all its property, plant, and equipment
appearing in the Financial Statements prepared in accordance with Accounting Standards notified under
section 133 of the Companies Act, 2013, read together with Rule7 of the Companies (Accounts) Rules,
2014 and used the same as deemed cost in the opening Ind AS Balance Sheet prepared on 1st April 2020.
Derecognition
The carrying amount of an item of property, plant, and equipment is derecognized on disposal or when
no future economic benefits are expected from its use or disposal. The gain or loss arising from the
Derecognition of an item of property, plant, and equipment is measured as the difference between the net
disposal proceeds and the carrying amount of the item and is recognized in the Statement of Profit and
Loss when the item is derecognized.
Depreciation/ Amortisation
Depreciation on fixed assets has been provided at the rates prescribed in Schedule II of the Companies
Act, 2013 on the following basis:
Tangible fixed assets are depreciated on the Straight-line method with 5% salvage over the useful lives
in accordance with Schedule II of the Companies Act, 2013. The estimated useful lives of assets are as
follows:
Freehold land is not depreciated. Leasehold land and Leasehold improvements are amortized over the
period of the lease.
Impairment
Assets that have an indefinite useful life, for example, goodwill, are not subject to amortization and are
tested for impairment annually and whenever there is an indication that the asset may be impaired. Assets
that are subject to depreciation and amortization and assets representing investments in subsidiary and
associate companies are reviewed for impairment, whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. Such circumstances include, though are not limited to,
significant or sustained decline in revenues or earnings and material adverse changes in the economic
environment.
An impairment loss is recognized whenever the carrying amount of an asset or its cash-generating
unit (CGU) exceeds its recoverable amount. The recoverable amount of an asset is the greater of its fair
value less cost to sell and value in use. To calculate the value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current market rates and
the risk specific to the asset. For an asset that does not generate largely independent cash inflows, the
recoverable amount is determined by the CGU to which the asset belongs. Fair value less cost to sell is the
best estimate of the amount obtainable from the sale of an asset in an arm’s length transaction between
knowledgeable, willing parties, less the cost of disposal.
Impairment losses, if any, are recognized in the Statement of Profit and Loss and included in depreciation
and amortization expense. Impairment losses are reversed in the Statement of Profit and Loss only to
the extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined if no impairment loss had previously been recognized.
Intangible assets
Measurement at initial recognition: Intangible assets acquired separately are measured on initial
recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated
amortisation and accumulated impairment losses. Internally generated intangibles are not capitalised and
the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred. The
useful lives of intangible assets are assessed as either finite or indefinite.
Amortisation: Intangible assets with finite lives are amortised over the useful economic life and
assessed for impairment whenever there is an indication that the intangible asset may be impaired. The
amortisation period and the amortisation method for an intangible asset with a finite useful life are
reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected
pattern of consumption of future economic benefits embodied in the asset are considered to modify the
amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The
amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss
unless such expenditure forms part of the carrying value of another asset.
Intangible assets with indefinite useful lives are not amortised but are tested for impairment annually,
either individually or at the smallest cash-generating unit level. The assessment of indefinite life is
reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change
in useful life from indefinite to finite is made on a prospective basis.
Gains or losses arising from the derecognition of an intangible asset are measured as the difference between
the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of
profit and loss when the asset is derecognised.
Derecognition: The carrying amount of an intangible asset is derecognized on disposal or when no future
economic benefits are expected from its use or disposal. The gain or loss arising from the Derecognition
of an intangible asset is measured as the difference between the net disposal proceeds and the carrying
amount of the intangible asset and is recognized in the Statement of Profit and Loss when the asset is
derecognized.
The Company has elected to continue with the carrying value for all of its intangible assets as recognised
in the previous GAAP financial statements as at the date of transition to Ind AS, measured as per the
previous Indian GAAP, and use that as its deemed cost as at the date of transition after making necessary
adjustments in accordance with the relevant Ind AS, since there is no change in functional currency.
c) Impairment of non-financial assets
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired.
If any indication exists, or when annual impairment testing for an asset is required, the Company estimates
the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating
unit’s (CGU) fair value less costs of disposal and its value in use. The recoverable amount is determined
for an individual asset unless the asset does not generate cash inflows that are largely independent of
those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its
recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken
into account. If no such transactions can be identified, an appropriate valuation model is used. These
calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies,
or other available fair value indicators.
The Company bases its impairment calculation on detailed budgets and forecast calculations, which are
prepared separately for each of the Company’s CGUs to which the individual assets are allocated. These
budgets and forecast calculations generally cover a period of five years. For longer periods, a long-term
growth rate is calculated and applied to project future cash flows after the fifth year. To estimate cash
flow projections beyond periods covered by the most recent budgets/forecasts, the Company extrapolates
cash flow projections in the budget using a steady or declining growth rate for subsequent years, unless
an increasing rate can be justified. In any case, this growth rate does not exceed the long-term average
growth rate for the products, industries, or country or countries in which the entity operates, or for the
market in which the asset is used.
Impairment losses of continuing operations are recognised in the statement of profit and loss
For assets, an assessment is made at each reporting date to determine whether there is an indication that
previously recognised impairment losses no longer exist or have decreased. If such indication exists, the
Company estimates the asset’s or CGU’s recoverable amount. A previously recognised impairment loss
is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable
amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount
of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss has been recognised for the asset in prior years.
Such reversal is recognised in the statement of profit or loss.
d) Taxes
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or
paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are
enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss
(either in other comprehensive income or in equity). Current tax items are recognised in correlation
to the underlying transaction either in OCI or directly in equity. Management periodically evaluates
positions taken in the tax returns with respect to situations in which applicable tax regulations are subject
to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except when the deferred tax
liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a
business combination and, at the time of the transaction, affects neither the accounting profit nor taxable
profit or loss.
“Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused
tax credits, and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable
that taxable profit will be available against which the deductible temporary differences and the carry
forward of unused tax credits and unused tax losses can be utilised, except:
> When the deferred tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the
time of the transaction, affects neither the accounting profit nor taxable profit or loss.
> In respect of deductible temporary differences associated with investments in subsidiaries,
associates, and interests in joint ventures, deferred tax assets are recognised only to the extent that
it is probable that the temporary differences will reverse in the foreseeable future and taxable profit
will be available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are
recognised to the extent that it has become probable that future taxable profits will allow the deferred tax
asset to be recovered.
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. 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 Sales/value-added
taxes paid on the acquisition of assets or on incurring expenses.
Expenses and assets are recognised net of the amount of sales/ value-added taxes paid, except:
When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority,
in which case, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the
expense item, as applicable.
> When receivables and payables are stated with the amount of tax included;
> The net amount of tax recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the balance sheet.
e) Fair value measurement
The Company measures financial instruments at fair value at each balance sheet date. 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. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place either:
> In the principal market for the asset or liability, or
> In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company. The fair value of an
asset or a liability is measured using the assumptions that market participants would use when pricing the
asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to
generate economic benefits by using the asset in its highest and best use or by selling it to another market
participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximising the use of relevant observable inputs and minimising
the use of unobservable inputs.
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
based on the nature, characteristics, and risks of the asset or liability and the level of the fair value
hierarchy as explained above. This note summarises accounting policy for fair value.
f) Retirement and other employee benefits
Retirement benefit in the form of provident fund and other funds is a defined contribution scheme. The
Company has no obligation, other than the contribution payable to the provident fund. The Company
recognizes the contribution payable to the provident fund scheme as an expense when an employee
renders the related service. If the contribution payable to the scheme for service received before the
balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized
as a liability after deducting the contribution already paid. If the contribution already paid exceeds the
contribution due for services received before the balance sheet date, then the excess is recognized as an
asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash
refund.
The Company operates a defined benefit gratuity plan, which requires contributions to be made to a
separately administered fund. The cost of providing benefits under the defined benefit plan is determined
using the projected unit credit method Remeasurements, comprising of actuarial gains and losses, the
effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability
and the return on plan assets (excluding amounts included in net interest on the net defined benefit
liability), are recognised immediately in the balance sheet with a corresponding debit or credit to retained
earnings through OCI in the period in which they occur Remeasurements are not reclassified to profit or
loss in subsequent periods. Past service costs are recognised in profit or loss on the earlier of:
1. The date of the plan amendment or curtailment, an
2. The date that the Company recognises related restructuring costs
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The
Company recognises the following changes in the net defined benefit obligation as an expense in the
consolidated statement of profit and loss:
1. Service costs comprising current service costs, past-service costs, gains and losses on curtailments
and non-routine settlements; and
2. Net interest expense or income.
Accumulated leave, which is expected to be utilised within the next 12 months, is treated as a short-term
employee benefit. The Company measures the expected cost of such absences as the additional amount
that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.
The Company treats accumulated leave expected to be carried forward beyond twelve months, as a long¬
term employee benefit for measurement purposes. Such long-term compensated absences are provided
for based on the actuarial valuation using the projected unit credit method at the year-end. Actuarial
gains/losses are immediately taken to the statement of profit and loss and are not deferred. The Company
presents the leave as a current liability in the balance sheet, to the extent it does not have an unconditional
right to defer its settlement for 12 months after the reporting date.
Short-term employee benefits including salaries, bonuses, and commissions payable within twelve
months after the end of the period in which the employees render the related services and non-monetary
benefits (such as medical care) for current employees are estimated and measured on an undiscounted
basis.
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