| 2. MATERIAL ACCOUNTING POLICIES
(a) Statement of Compliance
These Standalone financial statements (hereinafter referred
to as “financial statements") are prepared in accordance
with the Indian Accounting Standards (referred to as “Ind
AS") prescribed under section 133 of the Companies Act,
2013 (''the Act'') read with Companies (Indian Accounting
Standards) Rules as amended from time to time and other
relevant provisions of the Act and guidelines issued by
the Securities and Exchange Board of India (SEBI), as
applicable.
The financial statements are authorized for issue by the
Board of Directors of the Company at their meeting held on
6th May, 2025.
(b) Basis of Preparation and Presentation:
Basis of Preparation
The financial statements have been prepared on a historical
cost basis, except for the following assets and liabilities:
(i) Derivative Financial Instruments measured at fair
value
(i) Certain financial assets and liabilities measured at
fair value (refer accounting policy regarding financial
instruments)
(ii) Employee's Defined Benefit Plan as per actuarial
valuation
(iii) Assets held for sale measured at lower of carrying
value and fair value less costs to sell.
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
under current market conditions, regardless of whether
that price is directly observable or estimated using another
valuation technique. In determining the fair value of an
asset or a liability, the Company takes into account the
characteristics of the asset or liability if market participants
would take those characteristics into account when pricing
the asset or liability at the measurement date.
Functional and Presentation Currency
The financial statements are presented in Indian Rupees,
which is the functional currency of the Company and the
currency of the primary economic environment in which
the Company operates.
Classification of Assets and Liabilities into Current/
Non-Current
The Company has ascertained its operating cycle as
twelve months for the purpose of Current / Non-Current
classification of its Assets and Liabilities.
For the purpose of Balance Sheet, an asset is classified as
current if:
(i) It is expected to be realized, or is intended to be sold
or consumed, in the normal operating cycle; or
(iI) It is held primarily for the purpose of trading; or
(iiI) It is expected to realize the asset within twelve months
after the reporting period; or
(iV) The asset is a cash or cash equivalent unless it is
restricted from being exchanged or used to settle a
liability for at least twelve months after the reporting
period.
All other assets are classified as non-current.
Similarly, a liability is classified as current if:
(i) It is expected to be settled in the normal operating
cycle; or
(iI) It is held primarily for the purpose of trading; or
(Iii) It is due to be settled within twelve months after the
reporting period; or
(iV) The Company does not have an unconditional right
to defer the settlement of the liability for at least twelve
months after the reporting period. Terms of a liability
that could result in its settlement by the issue of equity
instruments at the option of the counterparty does
not affect this classification.
All other liabilities are classified as non-current.
(c) Property, Plant and Equipment (PPE):
The cost of an item of PPE is recognized as an asset if 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.
The PPE are stated at cost less accumulated depreciation
and accumulated impairment loss.
The initial cost of PPE comprises its purchase price,
including import duties and non-refundable purchase
taxes, and any directly attributable costs of bringing an
asset to working condition and location for its intended
use, including relevant borrowing costs and any expected
costs of decommissioning. Subsequent costs incurred are
included in the asset's carrying amount or recognized as
a separate asset, as appropriate, only when it is probable
that future economic benefits associated with the item will
flow to the Group and the cost of the item can be measured
reliably. All other repairs and maintenance cost are charged
to the Statement of Profit and Loss during the period in
which they were incurred.
Any gain or loss on disposal of an item of PPE is recognized
in statement of Profit and Loss.
If significant parts of an item of PPE have different useful
lives, then they are accounted for as separate items (major
components) of PPE.
Material items such as spare parts, stand-by equipment and
service equipment are classified as PPE when they meet
the definition of PPE as specified in Ind AS 16 - Property,
Plant and Equipment.
PPE except freehold land are stated at their cost of
acquisition/installation or construction net of accumulated
depreciation, and impairment losses, if any. Freehold land is
stated at cost less impairment losses, if any.
(d) Expenditure during construction period:
Expenditure/ Income during construction period (including
financing cost related to borrowed funds for construction
or acquisition of qualifying PPE) is included under Capital
Work-in-Progress, and the same is allocated to the
respective PPE on the completion of their construction.
Advances given towards acquisition or construction of PPE
outstanding at each reporting date are disclosed as Capital
Advances under “Other non-current Assets".
(e) Depreciation:
Depreciation is the systematic allocation of the depreciable
amount of PPE over its useful life and is provided on a
straight-line basis over the useful lives as prescribed in
Schedule II to the Act or as per technical assessment.
Freehold land with indefinite life is not depreciated.
Depreciable amount for PPE is the cost of PPE less its
estimated residual value. The useful life of PPE is the period
over which PPE is expected to be available for use by the
Company, or the number of production or similar units
expected to be obtained from the asset by the Company.
In case of certain classes of PPE, the Company uses different
useful lives than those prescribed in Schedule II to the Act.
The useful lives have been assessed based on technical
advice, taking into account the nature of the PPE and the
estimated usage of the asset on the basis of management's
best estimation of obtaining economic benefits from those
classes of assets. The estimated useful lives, residual values
and the depreciation method are reviewed at the end of
each reporting period and the effect of any changes in the
estimates are accounted for on a prospective basis.
Depreciation on additions is provided on a pro-rata basis
from the month of installation or acquisition and in case of
Projects from the date of commencement of commercial
production. Depreciation on deductions/disposals is
provided on a pro-rata basis up to the month of deduction/
disposal.
Residual value for Air Conditioners, Furniture and Fittings,
Office Equipment's, Computers and servers is considered
Nil.
(f) Intangible Assets and Amortization:
Ý Internally generated Intangible Assets:
Expenditure pertaining to research is expensed as
incurred. Expenditure incurred on development is
capitalized if such expenditure leads to creation of an
asset, otherwise such expenditure is charged to the
Statement of Profit and Loss.
Ý Intangible Assets acquired separately:
Intangible assets that are acquired separately are
carried at cost less accumulated amortization and
accumulated impairment, if any. Cost comprises
the purchase price (net of tax / duty credits availed
wherever applicable) and any directly attributable
cost of bringing the assets to its working condition
for its intended use. The Company determines the
amortization period as the period over which the
future economic benefits will flow to the Company
after taking into account all relevant facts and
circumstances. The estimated useful life and
amortization method are reviewed periodically,
with the effect of any changes in estimate being
accounted for on a prospective basis.
Residual value for the intangible assets is considered
as Nil. An intangible asset is derecognized on
disposal, or when no future economic benefits are
expected from its use or disposal. Gains or losses
arising from derecognition of an item of intangible
asset are measured as the difference between the
net disposal proceeds and the carrying amount of
such item of intangible asset and are recognized
in the statement of profit & loss when the asset is
derecognized.
(g) Impairment of Non-Financial Assets:
At the end of each reporting period, the Company reviews
the carrying amounts of non-financial assets to determine
whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss (if any). When
it is not possible to estimate the recoverable amount of an
individual asset, the Company estimates the recoverable
amount of the cash-generating unit to which the asset
belongs. When a reasonable and consistent basis of
allocation can be identified, corporate assets are also
allocated to individual cash-generating units, or otherwise
they are allocated to the smallest group of cash-generating
units for which a reasonable and consistent allocation basis
can be identified.
Intangible assets with indefinite useful lives and intangible
assets not yet available for use are tested for impairment at
least annually, and whenever there is an indication that the
asset may be impaired.
Recoverable amount is the higher of fair value less costs
of disposal and value in use. 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 for which the estimates of future
cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating
unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (or cash-generating unit) is
reduced to its recoverable amount. An impairment loss is
recognized immediately in Statement of Profit and Loss,
unless the relevant asset is carried at a revalued amount, in
which case the impairment loss is treated as a revaluation
decrease.
When an impairment loss subsequently reverses, the
carrying amount of the asset (or a cash-generating unit) is
increased to the revised estimate of its recoverable amount,
but to the extent that the increased carrying amount does
not exceed the carrying amount that would have been
determined had no impairment loss been recognized for
the asset (or cash-generating unit) in prior years. A reversal
of an impairment loss is recognized immediately in the
Statement of Profit and Loss, unless the relevant asset is
carried at a revalued amount, in which case the reversal of
the impairment loss is treated as a revaluation increase.
(h) 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 and financial
liabilities are recognized when a Company becomes a
party to the contractual provisions of the instruments.
Initial Recognition:
Financial assets and financial liabilities are initially measured
at fair value. 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 profit or loss and ancillary costs related
to borrowings) 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 recognized immediately
in Statement of Profit and Loss.
Classification and Subsequent Measurement:
Financial Assets
The Company classifies financial assets as subsequently
measured at amortized cost, fair value through other
comprehensive income ("FVOCI") or fair value through
profit or loss ("FVTPL") on the basis of following:
Ý the entity's business model for managing the financial
assets and
Ý the contractual cash flow characteristics of the
financial asset.
Amortized Cost:
A financial asset shall be classified and measured at
amortized cost if both of the following conditions are met:
Ý the financial asset is held within a business model
whose objective is to hold financial assets in order to
collect contractual cash flows and
Ý the contractual terms of the financial asset give
rise on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.
In case of financial assets at amortized costs, interest
income, foreign exchange gain or loss and impairment are
recognized in Statement of Profit and Loss.
Fair Value through OCI:
A financial asset shall be classified and measured at fair value
through OCI if both of the following conditions are met:
Ý the financial asset is held within a business model
whose objective is achieved by both collecting
contractual cash flows and selling financial assets
and
Ý the contractual terms of the financial asset give
rise on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.
Where the Company has elected to present the fair value
gain on equity instruments in other comprehensive
income, there is no subsequent classification of fair value
gain or losses to profit and loss account. Dividend from
such instruments is recognized in profit and loss account
as other income where right to receive is established.
Fair Value through Profit or Loss:
A financial asset shall be classified and measured at
fair value through profit or loss unless it is measured at
amortized cost or at fair value through OCI.
All recognized financial assets are subsequently measured
in their entirety at either amortized cost or fair value,
depending on the classification of the financial assets.
Classification and Subsequent Measurement:
Financial liabilities
Financial liabilities are classified as either financial liabilities
at FVTPL or 'other financial liabilities'.
Financial Liabilities at FVTPL:
Financial liabilities are classified as at FVTPL when the
financial liability is held for trading or are designated upon
initial recognition as FVTPL:
Gains or Losses on liabilities held for trading are recognized
in the Statement of Profit and Loss.
Other Financial Liabilities:
Other financial liabilities (including borrowings and trade
and other payables) are subsequently measured at
amortised cost using the effective interest method.
Impairment of financial assets:
Financial assets, other than those at FVTPL, are assessed
for indicators of impairment at the end of each reporting
period. In case of trade receivables, the Company follows
the simplified approach permitted by Ind AS 109 -
Financial Instruments for recognition of impairment loss
allowance. The Company recognizes a loss allowance for
expected credit losses on financial asset. The Company's
trade receivables do not contain significant financing
component and loss allowance on trade receivables is
measured at an amount equal to life time credit expected
losses. The Company calculates the expected credit losses
on trade receivables using a provision matrix on the basis
of its historical credit loss experience and other credit
information available.
Derecognition of financial assets:
The Company derecognizes 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.
If the Company neither transfers nor retains substantially all
the risks and rewards of ownership and continues to control
the transferred asset, the Company recognizes its retained
interest in the asset and an associated liability for amounts
it may have to pay. If the Company retains substantially all
the risks and rewards of ownership of a transferred financial
asset, the Company continues to recognize the financial
asset and also recognizes associated liabilities.
On derecognition of a financial asset, other than equity
investments classified as FVOCI, in its entirety, the
difference between the asset's carrying amount and the
sum of the consideration received and receivable and the
cumulative gain or loss that had been recognized in other
comprehensive income and accumulated in equity is
recognized in profit or loss if such gain or loss would have
otherwise been recognized in profit or loss on disposal of
that financial asset.
On derecognition of equity instruments classified as FVOCI,
accumulated gains or loss recognized in OCI is transferred
to retained earnings.
(i) Financial liabilities and equity instruments:
Ý Classification as debt or equity
Debt and equity instruments issued by the Company
are classified as either financial liabilities or as equity
in accordance with the substance of the contractual
arrangements and the definitions of a financial liability
and an equity instrument.
Ý Equity instruments
An equity instrument is any contract that evidences
a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments
issued by a Company are recognized at the proceeds
received.
(j) Derecognition of Financial Liabilities:
The Company de-recognizes financial liabilities when and
only when, the Company's obligations are discharged,
cancelled or have expired. The difference between the
carrying amount of the financial liability de-recognized and
the consideration paid and payable is recognized in the
statement of profit and loss.
(k) Offsetting of Financial Instruments
Financial assets and financial liabilities are offset and the
net amount presented in the balance sheet when, and only
when, the company currently has a legally enforceable
right to set off the amounts and it intends either to settle
them on a net basis or to realize the asset and settle the
liability simultaneously.
(l) Inventories:
Inventories are valued as follows:
Ý Raw materials, Fuel, Store & Spare Parts and
Packing materials
Raw materials are valued at lower of cost and net
realizable value (NRV). However, these items are
considered to be realizable at cost, if the finished
products, in which they will be used, are expected
to be sold at or above cost. Fuel, Stores & Spare
parts and Packing materials are valued at cost. Cost
is determined on weighted average basis. The cost
of inventory comprises its purchase price, including
non-refundable purchase taxes, and any directly
attributable costs related to the inventories.
Ý Work-in- progress (WIP), finished goods, stock-
in-trade and trial run inventories:
Valued at lower of cost and NRV. Cost of Finished
goods and WIP includes cost of raw materials, direct
labour, other direct costs and related production
overheads upto the relevant stage of completion. Cost
of inventories is computed on weighted average basis.
Ý Waste / Scrap:
Waste / Scrap and Byproduct inventory is valued at
NRV.
Net realizable value is the estimated selling price in the
ordinary course of business, less the estimated costs
of completion and the estimated costs necessary to
make the sale.
(m) Cash and cash equivalents:
Cash and cash equivalents in the Balance Sheet comprise
cash at bank, cheques and cash in hand and short-term
deposits with banks that are readily convertible into cash
which are subject to insignificant risk of changes in value
and are held for the purpose of meeting short-term cash
commitments.
(n) Assets held for Sale:
Non-current assets are classified as held for sale if their
carrying amount will be recovered principally through a
sale transaction rather than through continuing use and
sale is considered highly probable. They are measured at
the lower of its carrying amount and fair value less costs to
sell.
An impairment loss is recognized for any initial or
subsequent write-down of the assets to fair value less cost
to sell. A gain is recognized for any subsequent increases in
fair value less cost to sell of an asset, but not in excess of any
cumulative impairment loss previously recognized.
No depreciation or amortization is charged for assets
classified as held for sale.
(o) Borrowing Costs:
General and specific borrowing costs that are attributable
to the acquisition, construction or production of a
qualifying asset are capitalized as part of the cost of such
asset till such time the asset is ready for its intended use and
borrowing costs are being incurred. A qualifying asset is an
asset that necessarily takes a substantial period of time to
get ready for its intended use. All other borrowing costs are
recognized as an expense in the period in which they are
incurred.
Borrowing cost includes interest expense, loan processing
charges, amortization of discounts, hedge related cost
incurred in connection with foreign currency borrowings,
ancillary costs incurred in connection with borrowing
of funds and exchange difference arising from foreign
currency borrowings to the extent they are regarded as an
adjustment to the Interest cost.
Investment income earned on the temporary investment
of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs
eligible for capitalization.
(p) Government Grants and Subsidies:
Government grants are not recognized until there is reasonable
assurance that the Company will comply with the conditions
attached to them and that the grants will be received.
Government grants, related to assets, are recognized in the
Statement of Profit and Loss on a systematic basis over the
expected useful life of the related assets.
(q) Leases:
Company as a Lessee
The company recognizes right-of-use asset representing
its right to use the underlying asset for the lease term at
the lease commencement date. The cost of the right-of-
use asset measured at inception shall comprise of the
amount of the initial measurement of the lease liability
adjusted for any lease payments made at or before the
commencement date less any lease incentives received,
plus any initial direct costs incurred. The right-of-use asset
is depreciated from the commencement date on a straight¬
line basis over the shorter of the lease term and useful life
of the underlying 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 recognized in the statement of profit and loss.
The Company measures the lease liability at the present
value of the lease payments that are not paid at the
commencement date of the lease. The lease payments are
discounted using the interest rate implicit in the lease, if that
rate can be readily determined. If that rate cannot be readily
determined, the company uses incremental borrowing rate.
The lease payments shall include fixed payments, variable
lease payments, residual value guarantees, exercise price
of a purchase option where the Company is reasonably
certain to exercise that option and payments of penalties
for terminating the lease, if the lease term reflects the lessee
exercising an option to terminate the lease.
The Company elected to use the recognition exemptions
for lease contracts that, at the commencement date, have
a lease term of 12 months or less and do not contain a
purchase option ('short-term leases') and lease contracts for
which the underlying asset is of low value (low-value assets)
Company as a Lessor
Leases for which the Company is a lessor is classified as a
finance or operating lease. Whenever the terms of the lease
transfer substantially all the risks and rewards of ownership
to the lessee, the contract is classified as a finance lease. All
other leases are classified as operating leases.
The Company recognizes lease payments received under
operating leases as income on a straight- line basis over the
lease term.
(r) Derivative financial instruments:
The Company enters into derivative financial instruments
viz. foreign exchange forward contracts to manage foreign
exchange risks. The Company does not hold derivative
financial instruments for speculative purposes.
Derivatives are initially recognized at fair value at the date the
derivative contracts are entered into and are subsequently
remeasured to their fair value at the end of each reporting
period. The resulting gain or loss is recognized in statement
of profit and loss immediately excluding derivatives
designated as cashflow hedge.
(s) Hedge accounting:
The Company designates certain hedging instruments
in respect of foreign currency risk, interest rate risk and
commodity price risk as cash flow hedges. At the inception
of the hedge relationship, the entity documents the
relationship between the hedging instrument and the
hedged item, along with its risk management objectives
and its strategy for undertaking various hedge transactions.
Furthermore, at the inception of the hedge and on an
ongoing basis, the Company documents whether the
hedging instrument is highly effective in offsetting changes
in fair values or cash flows of the hedged item attributable
to the hedged risk.
The effective portion of changes in the fair value of the
designated portion of derivatives that qualify as cash flow
hedges is recognized in OCI and accumulated under
equity. The gain or loss relating to the ineffective portion is
recognized immediately in the statement of profit and loss.
Amounts previously recognized in OCI and accumulated in
equity relating to effective portion as described above are
reclassified to Statement of Profit and Loss in the periods
when the hedged item affects the Statement of Profit or
Loss, in the same line as the recognized hedged item.
However, when the hedged forecast transaction results in
the recognition of a non-financial asset or a non-financial
liability, such gains and losses are transferred from equity
and included in the initial measurement of the cost of the
non-financial asset or non-financial liability.
Hedge accounting is discontinued prospectively when
the hedging instrument expires or is sold, terminated,
or exercised, or when it no longer qualifies for hedge
accounting. Any gain or loss recognized in OCI and
accumulated in equity at that time remains in equity and
is recognized when the forecast transaction is ultimately
recognized the Statement of Profit and Loss. When a
forecast transaction is no longer expected to occur, the gain
or loss accumulated in equity is recognized immediately in
the Statement of Profit and Loss.
(t) Revenue Recognition:
Sale of goods:
The company derives revenue primarily from manufacturing
and selling of Synthetic Yarn and related goods.
Revenue on sales of goods are recognized when the
customer obtains control of the specified goods which is
generally on dispatch/delivery of goods.
To recognize revenues, company applies the following five
step approach: (1) identify the contract with a customer,
(2) identify the performance obligations in the contract,
(3) determine the transaction price (net of variable
consideration), (4) allocate the transaction price (net of
variable consideration) to the performance obligations
in the contract, and (5) recognize revenues when a
performance obligation is satisfied.
The Company accounts for variable considerations like,
volume discounts, rebates and pricing incentives to
customers as reduction of revenue on a systematic and
rational basis over the period of the contract. Revenues
are shown net of goods and services tax and applicable
discounts and allowances.
The Company does not expect to have any contracts where
the period between the transfer of goods and payment by
customer exceeds one year. Hence, the Company does not
adjust revenue for the time value of money.
Government grants in the nature of export incentives
are accounted for in the period of export of goods if the
entitlements can be estimated with reasonable accuracy
and conditions precedent to claim are reasonably expected
to be fulfilled.
Other Income:
Ý Dividend Income is accounted for when the right to
receive the income is established.
Ý Interest income is recognized on time proportion
basis taking into account the amount outstanding on
effective interest rate.
Ý Difference between the sale price and carrying value
of investment is recognized in statement of profit or
loss on sale / redemption on investment on trade date
of transaction.
(u) Employee benefits:
Gratuity:
Gratuity being defined benefit plan, the cost of providing
benefits is determined using the projected unit credit
method, with actuarial valuations being carried out at the
end of each annual reporting period. Re-measurement,
comprising actuarial gains and losses, the effect of the
changes to the asset ceiling (if applicable) and the return on
plan assets (excluding net interest), is reflected immediately
in the Balance Sheet with a charge or credit recognized
in Other Comprehensive Income (OCI) in the period in
which they occur. Re-measurement recognized in OCI is
reflected immediately in retained earnings and will not be
reclassified to Statement of Profit and Loss. Past service
cost is recognized in the Statement of Profit and Loss in the
period of a plan amendment. Net interest is calculated by
applying the discount rate at the beginning of the period
to the net defined benefit liability or asset. The costs are
categorized as follows:
Ý service cost (including current service cost,
past service cost, as well as gains and losses on
curtailments and settlements);
Ý net interest expense or income; and
Ý re-measurement
The present value of the gratuity liability is calculated using a
discount rate which is determined by reference to market yields
at the end of the reporting period on government bonds.
The defined benefit obligation recognized in the Balance
Sheet represents the actual deficit or surplus in the
Company's defined benefit plans. Any surplus resulting
from this calculation is limited to the present value of any
economic benefits available in the form of refunds from the
plans or reductions in future contributions to the plans.
Superannuation:
The company has Defined Contribution Plan for Post¬
Employment benefits in the form of Superannuation
schemes for eligible employees. The scheme is
administered through Life Insurance Corporation (LIC)
and Trust which is administered by the Trustees. In respect
of this scheme, the Company has no further obligation
beyond its contributions.
Employee's Family Pension
The Company has Defined Contribution Plan for Post¬
Employment benefits in the form of family pension for
eligible employees, which is administered by the Regional
Provident Fund Commissioner. Company has no further
obligation beyond its contributions.
Provident Fund
Contribution towards provident fund for certain employees
is made to the regulatory authorities, where the Company
has no further obligations. Such benefits are classified as
Defined Contribution Scheme as the Company does not
carry any further obligations, apart from the contributions
made on a monthly basis.
In respect of certain employees, Provident Fund
contributions are made to the Trust set up and administered
by the Company. If the board of trustees are unable to pay
interest at the rate declared by the government under Para
60 of the Employees provident fund scheme, 1972 for the
reason that the return on investment is less or for any other
reason, then the deficiency shall be made good by the
Company making interest shortfall a defined benefit plan.
Accordingly, the Company obtains actuarial valuation and
having regard to the assets of the fund and the return on
investments, the Company does not expect any deficiency
as at the year end. If there is a deficiency as at any Balance
Sheet date, then, the same will be recognized in the
Statement of Profit and Loss in the year in which it arises.
Other Short-term and other long-term employee
benefits
Liabilities for wages, salaries and bonus (as per the payment
of bonus Act, 1965) including non-monetary benefits that
are expected to be settled wholly within 12 months after the
end of the period in which the employees and workmen
render the related service are recognized in respect of
employee's services up to the end of the reporting period
and are measured at the amount expected to be paid when
the liabilities are settled.
Compensated Absences
The Accumulated compensated absences, which are
expected to be availed or encashed within 12 months from
the end of the year are treated as short term employee
benefits. The obligation towards the same is measured
at the expected cost of accumulating compensated
absences as the additional amount expected to be paid as
a result of the unused entitlement as at the year end.
Accumulated compensated absences, which are expected
to be availed or encashed beyond 12 months from the
end of the year are treated as other long-term employee
benefits. The company's liability is actuarially determined
(using the Projected Unit Credit method) at the end of each
year. Actuarial losses/gains are recognized in the Statement
of Profit and Loss in the year in which they arise.
(v) Foreign Currency transactions:
In preparing the financial statements of the Company,
transactions in currencies other than the Company's
functional currency (i.e. foreign currencies) are recognised
at the rates of exchange prevailing at the dates of the
transactions. At the end of each reporting period, monetary
items denominated in foreign currencies are translated at
the rates prevailing at that date. Non-monetary items carried
at fair value that are denominated in foreign currencies
are translated at the rates prevailing at the date when the
fair value was determined. Non-monetary items that are
measured in terms of historical cost in a foreign currency
are translated using the exchange rate as at the date of
initial transactions.
Exchange differences on monetary items are recognised in
the Statement of Profit and Loss in the period in which they
arise except for exchange differences on foreign currency
borrowings relating to assets under construction for future
productive use, which are included in the cost of those
assets when they are regarded as an adjustment to interest
costs on those foreign currency borrowings.
(w) Income Taxes:
Income Tax expenses comprise current tax and deferred
tax charge or credit.
Current Tax is measured on the basis of estimated taxable
income for the current accounting period in accordance
with the applicable tax rates and the provisions of the
Income-tax Act, 1961 and other applicable tax laws.
Deferred tax is provided, on all temporary differences at
the reporting date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting
purposes. Deferred tax assets and liabilities are measured
at the tax rates that are expected to be applied to the
temporary differences when they reverse, based on the
laws that have been enacted or substantively enacted at
the reporting date. Tax relating to items recognized directly
in equity or OCI is recognized in equity or OCI and not in the
Statement Profit and Loss.
Current tax assets and liabilities are offset when there is a
legally enforceable right to set off recognized amount and
there is intention to settle the assets and liabilities on net basis.
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.
(x) Earnings Per Share:
The basic Earnings Per Share (“EPS") is computed
by dividing the net profit / (loss) after tax for the year
attributable to the equity shareholders by the weighted
average number of equity shares outstanding during the
year.
For the purpose of calculating diluted earnings per share,
net profit / (loss) after tax for the year attributable to the
equity shareholders and the weighted average number of
equity shares outstanding during the year are adjusted for
the effects of all dilutive potential equity shares.
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