Provisions
Provisions are recognised when the Company
has a present legal or constructive obligation
as a result of past events, it is probable that an
outflow of resources will be required to settle
the obligation and the amount can be reliably
estimated. These are reviewed at each year end
and reflect the best current estimate. Provisions
are not recognised for future operating losses.
Where there are a number of similar obligations,
the likelihood that an outflow will be required
in settlement is determined by considering the
class of obligations as a whole. A provision is
recognised even if the likelihood of an outflow
with respect to any one item included in the
same class of obligations may be small.
Provisions are measured at the present value
of best estimate of the Management of the
expenditure required to settle the present
obligation at the end of the reporting period.
The discount rate used to determine the present
value is a pre-tax rate that reflects current market
assessments of the time value of money and the
risks specific to the liability. The increase in the
provision due to the passage of time is recognised
as interest expense.
s) Contingent Liabilities:
Contingent liabilities are disclosed when there
is a possible obligation arising from past events,
the existence of which will be confirmed only by
the occurrence or non-occurrence of one or more
uncertain future events not wholly within the
control of the Company or a present obligation
that arises from past events where it is either
not probable that an outflow of resources will
be required to settle the obligation or a reliable
estimate of the amount cannot be made.
t) Employee benefits:
Short-term employee benefits:
All employee benefits payable within 12 months
of service such as salaries, wages, bonus, ex-gratia,
medical benefits etc. are recognised in the year in
which the employees render the related service
and are presented as current employee benefit
obligations within the Balance Sheet. Termination
benefits are recognised as an expense as and
when incurred.
Short-term leave encashment is provided at
undiscounted amount during the accounting
period based on service rendered by employees.
Compensation payable under Voluntary
Retirement Scheme is being charged to
Statement of Profit and Loss in the year of
settlement.
Other long-term employee benefits:
The liabilities for earned leave and sick leave
are not expected to be settled wholly within
12 months after the end of the period in which
the employees render the related service. They
are therefore measured as the present value of
expected future payments to be made in respect
of services provided by employees up to the end
of the reporting period using the projected unit
credit method. The benefits are discounted using
the market yields at the end of the reporting
period that have terms approximating to the
terms of the related obligation. Remeasurements
as a result of experience adjustments and changes
in actuarial assumptions are recognised in profit
or loss.
The obligations are presented as current liabilities
in the Balance Sheet if the entity does not have
an unconditional right to defer settlement for
at least 12 months after the reporting period,
regardless of when the actual settlement is
expected to occur.
Defined contribution plan:
Contributions to defined contribution schemes
such as contribution to Provident Fund,
Superannuation Fund, Employees' State
Insurance Corporation, National Pension Scheme
and Labours Welfare Fund are charged as an
expense to the Statement of Profit and Loss based
on the amount of contribution required to be
made as and when services are rendered by the
employees. The above benefits are classified as
Defined Contribution Schemes as the Company
has no further defined obligations beyond the
monthly contributions.
Defined benefit plan:
Gratuity:
Gratuity liability is a defined benefit obligation and
is computed on the basis of an actuarial valuation
by an actuary appointed for the purpose as per
projected unit credit method at the end of each
financial year. The liability or asset recognised in
the Balance Sheet in respect of defined benefit
pension and gratuity plans is the present value of
the defined benefit obligation at the end of the
reporting period less the fair value of plan assets.
The present value of the defined benefit obligation
is determined by discounting the estimated
future cash outflows by reference to market yields
at the end of the reporting period on Government
bonds that have terms approximating to the
terms of the related obligation.
The net interest cost is calculated by applying the
discount rate to the net balance of the defined
benefit obligation and the fair value of plan assets.
This cost is included in employee benefit expense
in the Statement of Profit and Loss.
Remeasurements gains and losses arising from
experience adjustments and changes in actuarial
assumptions are recognised in the period in
which they occur directly in Other Comprehensive
Income. They are included in retained earnings in
the Statement of changes in equity and in the
Balance Sheet.
Changes in the present value of the defined benefit
obligation resulting from plan amendments or
curtailments are recognised immediately in profit
or loss as past service cost.
u) Research and Development expenditure:
Research and Development expenditure is
charged to revenue under the natural heads
of account in the year in which it is incurred.
Research and Development expenditure on
property, plant and equipment is treated in the
same way as expenditure on other property, plant
and equipment.
v) Earnings per share:
Earnings per share (EPS) is calculated by dividing
the net profit or loss for the period attributable
to Equity Shareholders by the weighted average
number of Equity shares outstanding during
the period. Earnings considered in ascertaining
the EPS is the net profit for the period and any
attributable tax thereto for the period.
w) Contributed equity:
Equity shares are classified as equity. Incremental
costs directly attributable to the issue of new
shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
Critical estimates and judgements
Preparation of the Financial Statements requires
use of accounting estimates which, by definition,
will seldom equal the actual results. This Note
provides an overview of the areas that involved a
higher degree of judgements or complexity, and
of items which are more likely to be materially
adjusted due to estimates and assumptions
turning out to be different than those originally
assessed. Detailed information about each of
these estimates and judgements is included in
relevant notes together with information about
the basis of calculation for each affected line item
in the Financial Statements.
The areas involving critical estimates or
judgements are:
i) Estimation of useful life of tangible assets
ii) Estimation of defined benefit obligation
Estimates and judgements are continually
evaluated. They are based on historical experience
and other factors, including expectations of future
events that may have a financial impact on the
Company and that are believed to be reasonable
under the circumstances
x Regrouped/ Recast/Reclassified
Figures of earlier year have been reclassified to
conform to Ind AS presentation requirement.
y Rounding off.
Figures less than 50000 have been rounded off.
z. Authorisation for issue of the Financial
statement
The Consolidated Financial Statements were
authorised for issue by the Board of Directors on
May 27th, 2023.
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