1 (B). MATERIAL ACCOUNTING POLICIES1. Basis of Preparation of Financial Statements:
These financial statements are the separate
Financial Statements of the Company (also
called Standalone Financial Statements) have
been prepared in accordance with the Indian
Accounting Standards (hereinafter referred
to as the 'Ind AS')as notified by Ministry of
Corporate Affairs pursuant to Section 133of
the Companies Act, 2013('the Act') read with
the Companies (Indian Accounting standards)
Rules as amended from time to time and other
related provisions of the Act. The financial
statements of the Company are prepared on
accrual basis of accounting and Historical cost
convention except forthe following material
items that have been measured at fair value as
required by the relevant Ind AS:
(i) Certain financial assets and liabilities are
measured at Fair value (refernote 7below)
(ii) Defined benefit employee plan (refernote 14
below)
The accounting policies are applied consistently
to all the periods presented in the financial
statements. All assets and liabilities have been
classified as current ornon current as per
the Company's normal operating cycle and
other criteria set out in the Schedule III to the
Companies Act, 2013.
The financial statements are presented in INR,
the functional currency of the Company and is
rounded off to the nearest lakhs except otherwise
indicated.
2. Use of Estimates and judgments:
The preparation of the financial statements
requires the Management to make, judgments,
estimates and assumptions that affect the
reported amounts of assets and liabilities,
disclosure of contingent liabilities as at the
date of the financial statements and the
reported amounts of revenue and expenses
during the reporting period. The recognition,
measurement, classification or disclosure of an
item or information in the financial statements is
made relying on these estimates. The estimates
and judgments used in the preparation of the
financial statements are continuously evaluated
by the management and are based on historical
experience and various other assumptions and
factors (including expectations of future events)
that the management believes to be reasonable
under the existing circumstances. Actual results
may differ from those estimates. Any revision to
accounting estimates is recognised prospectively
in current and future periods.
Critical accounting judgments and key source of
estimation uncertainty
The Company is required to make judgments,
estimates and assumptions about the carrying
amount of assets and liabilities that are not
readily apparent from other sources. The
estimates and associated assumptions are
based on historical experience and other factors
that are considered to be relevant. The estimates
and underlying assumptions are reviewed on an
on-going basis.
(a) Recognition and measurement of defined benefit
obligations, key actuarial assumptions - refer
note 14below.
(b) Estimation of current tax expenses and
payable - refernote 15 below.
(c) Estimation of Right-of-Use and Lease Liabilities -
refernote 20below.
3. Property, plant and equipment (PPE)
Property, plant and equipment is stated at
acquisition cost net of accumulated depreciation
and accumulated impairment losses, if any.
The cost of an item of property, plant and
equipment comprises its purchase price,
including import duties and non-refundable
purchase taxes, after deducting trade discounts
and rebates, any directly attributable costs of
bringing the asset to its working condition for its
intended use and estimated costs of dismantling
and removing the item and restoring the item
and restoring the site on which it is located.
If significant parts of an item of property, plant
and equipment have different useful lives, then
they are accounted for as separate items (major
components) of property, plant and equipment.
Subsequent expenditure and subsequent costs
are included in the assets carrying amount or
recognized as a separate asset, as appropriate
only if it is probable that the future economic
benefits associated with the item will flow to the
Company and that the cost of the item can be
reliably measured.
Gains and losses on disposals are determined
by comparing proceeds with carrying amount.
These are included in the Statement of Profit and
Loss.
Assets that are subject to depreciation and
amortization are reviewed for impairment,
whenever events or changes in circumstances
indicate that carrying amount may not be
recoverable.
Property, plant and equipment which are
not ready for intended use as on the date of
Balance Sheet are disclosed as "Capital work-in¬
progress".
4. Intangible assets
Intangible assets are carried at cost less any
accumulated amortisation and accumulated
impairment losses, if any.
5. Depreciation and Amortization:
(a) Property plant and equipment (PPE)
Depreciation is provided on a pro-rata
basis on the straight line method based
on estimated useful life prescribed under
Schedule II to the Companies Act, 2013.
The residual values, useful lives and method
of depreciation of property, plant and
equipment is reviewed at each financial
year end and adjusted prospectively, if
appropriate.
(b) Intangible assets
The useful lives of intangible assets are
assessed as either finite orindefinite. Finite-
life intangible assets are amortised on a
straight-line basis over the period of their
expected useful lives.
The amortisation period and the
amortisation method for finite life intangible
assets is reviewed at each financial year end
and adjusted prospectively, if appropriate.
For indefinite life intangible assets, the
assessment of indefinite life is reviewed
annually to determine whether it continues,
if not, it is impaired orchanged prospectively
on the basis of revised estimates.assessment
of indefinite life is reviewed annually to
determine whether it continues, if not, it is
impaired or changed prospectively on the
basis of revised estimates.
6. Investment Properties:
Property that is held forlong-term rental yields
or forcapital appreciation orboth, and that is
not occupied by the Company, is classified as
investment property. Investment property is
measured at its cost, including related transaction
costs and where applicable borrowing costs less
depreciation and impairment if any.
Depreciation on Investment Property is provided
using the written down value method based on
the useful lives specified in Schedule II to the
Companies Act, 2013.
7. Financial Instruments:
Financial assets - Initial recognition:
Financial assets are recognised when the
Company becomes a party to the contractual
provisions of the instruments. On initial
recognition, a financial asset is recognised at
fair value, in case of Financial assets which are
recognised at fair value through profit and loss
(FVTPL), its transaction cost are recognised in the
statement of profit and loss. In other cases, the
transaction cost are attributed to the acquisition
value of the financial asset.
Subsequent measurement:
Financial assets are subsequently classified and
measured at:
- amortised cost
- fairvalue through profit &loss (FVTPL)
- fairvalue through other comprehensive
income (FVTOCI)
The above classification is being determined
considering the:
(a) the entity's business model formanaging the
financial assets and
(b) the contractual cash flow characteristics of the
financial asset.
Financial assets are not reclassified subsequent
to their recognition, except if and in the period
the company changes its business model for
managing financial assets.
(i) Measured at amortised cost:
Financial assets are subsequently measured
at amortised cost if these financial assets
are held within a business whose objective
is to hold these assets in order to collect
contractual cash flows and the contractual
terms of the financial asset that give rise on
specified dates to cash flows that are solely
payments of principal and interest on the
principal amount outstanding.
(ii) Measured at fair value through other
comprehensive income (FVTOCI):
Financial assets are measured at FVTOCI,
if these financial assets are held within a
business model whose objective is achieved
by both collecting contractual cash flows
that give rise on specified dates to solely
payments of principal and interest on the
principal amount outstanding and by selling
financial assets. Fair value movements are
recognized in the other comprehensive
income (OCI). Interest income measured
using the Effective Interest Rate method
and impairment losses, if any are recognised
in the Statement of Profit and Loss. On
derecognition, cumulative gain or loss
previously recognised in OCI is reclassified
from the equity to 'other income' in the
Statement of Profit and Loss.
(iii) Measured at fair value through profit or loss
(FVTPL):
Financial assets other than equity
instrument are measured at FVTPL unless it
is measured at amortised cost orat FVTOCI
on initial recognition. Such financial assets
are measured at fairvalue with all changes
in fairvalue, including interest income and
dividend income if any, recognised in the
Statement of Profit and Loss.
Equity instruments:
On initial recognition, the Company can make
an irrevocable election (on an instrument-by¬
instrument basis) to present the subsequent
changes in fairvalue in other comprehensive
income pertaining to investments in equity
instruments. This election is not permitted
if the equity investment is held for trading.
These elected investments are initially
measured at fair value plus transaction
costs. Subsequently, they are measured at
fair value with gains and losses arising from
changes in fair value recognised in other
comprehensive income and accumulated
in the 'Reserve forequity instruments
through other comprehensive income'. The
cumulative gain or loss is not reclassified to
Statement of Profit and Loss on disposal of
the investments.
Dividends on these investments in equity
instruments are recognised in Statement of
Profit and Loss when the Company's right
to receive the dividends is established, it
is probable that the economic benefits
associated with the dividend will flow to
the entity, the dividend does not represent
a recovery of part of cost of the investment
and the amount of dividend can be measured
reliably. Dividends recognised in Statement
of Profit and Loss are included in the 'Other
income' line item.
Impairment
The Company recognises a loss allowance
forExpected Credit Losses (ECL) on financial
assets that are measured at amortised cost
and at FVTOCI. The credit loss is difference
between all contractual cash flows that
are due to an entity 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 effective interest
rate. This is assessed on an individual
or collective basis after considering all
reasonable and supportable including that
which is forward looking.
The Company's trade receivables orcontract
revenue receivables do not contain significant
financing component and loss allowance
on trade receivables is measured at an
amount equal to life time expected losses
i.e. expected cash shortfall, being simplified
approach for recognition of impairment loss
allowance.
Under simplified approach, the Company
does not track changes in credit risk. Rather
it recognizes impairment loss allowance
based on the lifetime ECL at each reporting
date right from its initial recognition.
The Company uses a provision matrix to
determine impairment loss allowance on the
portfolio of trade receivables. The provision
matrix is based on its historically observed
default rates over the expected life of the
trade receivable and is adjusted for forward
looking estimates. At every reporting date,
the historical observed default rates are
updated and changes in the forward-looking
estimates are analysed.
For financial assets other than trade
receivables, the Company recognises
12-months expected credit losses forall
originated oracquired financial assets if at the
reporting date the credit risk of the financial
asset has not increased significantly since
its initial recognition. The expected credit
losses are measured as lifetime expected
credit losses if the credit risk on financial
asset increases significantly since its initial
recognition. If,in a subsequent period, credit
quality of the instrument improves such that
there is no longer significant increase in
credit risks since initial recognition, then the
Company reverts to recognizing impairment
loss allowance based on 12months ECL.
The impairment losses and reversals are
recognised in Statement of Profit and Loss.
For equity instruments and financial assets
measured at FVTPL, there is no requirement
of impairment testing.
De-recognition
The Company derecognises a financial asset
when the contractual rights to the cash fllows from
the financial asset expire, orit transfers rights
to receive cash flows from an asset, 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.
Financial Liabilities
Initial Recognition and measurement
Financial liabilities are recognised when the
Company becomes a party to the contractual
provisions of the instruments. Financial liabilities
are initially recognised at fair value net of
transaction costs for all financial liabilities not
carried at fairvalue through profit orloss.
The Company's financial liabilities includes
trade and other payables, loans and borrowings
including bank overdrafts.
Subsequent measurement : Financial liabilities
measured at amortised cost are subsequently
measured at using Effective Interest Rate (EIR)
method. Financial liabilities carried at fair value
through profit or loss are measured at fair value
with all changes in fair value recognised in the
Statement of Profit and Loss.
Loans & Borrowings: After initial recognition,
interest bearing loans and borrowings are
subsequently measured at amortised cost using
EIR method. Gains and losses are recognized in
profit &loss when the liabilities are derecognized
as well as through EIR amortization process.
Financial Guarantee Contracts : Financial
guarantee contracts issued by the Company
are those contracts that requires payment to
be made or to be reimbursed to the holder for a
loss it incurs because the specified debtor fails to
make payment when due in accordance with the
term of a debt instrument. Financial guarantee
contracts are recognized initially as a liability at
fair value, adjusted for transaction costs that
are directly attributable to the issuance of the
guarantee.
De-recognition
Afinancial liability is derecognised when the
obligation under the liability is discharged or
cancelled orexpires. When an existing financial
liability is replaced by another from the same
lender on substantially different terms, orthe
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
recognized in the statement of profit orloss.
Derivative financial instruments
The Company uses derivative financial
instruments, such as forward foreign exchange
contracts, to hedge its foreign currency risks.
Such derivative financial instruments are initially
recognised at fair value on the date on which
a derivative contract is entered into and are
subsequently remeasured at fair value, with
changes in fair value recognised in Statement of
Profit and Loss.
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.
8. Fair Value Measurement
The Company measures financial instruments,
such as, derivatives, investments 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:
(a) In the principal market for the asset or
liability, or
(b) 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 fairvalue 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 orby 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 forwhich fair
value is measured ordisclosed 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:
(i) Level 1 -Quoted (unadjusted) market prices
in active markets foridentical assets or
liabilities.
(ii) Level 2 -Valuation techniques forwhich the
lowest level input that is significant to the fair
value measurement is directly orindirectly
observable.
(iii) Level 3 -Valuation techniques forwhich the
lowest level input that is significant to the
fairvalue 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 on the basis of the nature, characteristics
and risks of the asset orliability and the level of
the fairvalue hierarchy as explained above.
9. Inventory
Inventories are valued at the lower of cost and
net realisable value. Cost is computed on First-in¬
First-Out (FIFO) basis. Cost of finished goods and
work-in-progress include all costs of purchases,
conversion costs and other costs incurred in
bringing the inventories to their present location
and condition. The net realisable value is the
estimated selling price in the ordinary course of
business less the estimated costs of completion
and estimated costs necessary to make the sale.
10. Cash and Cash Equivalents:
Cash and Cash equivalents include cash and
Cheque in hand, bank balances, demand
deposits with banks and other short-term highly
liquid investments that are readily convertible to
known amounts of cash and which are subject
to an insignificant risk of changes in value where
original maturity is three months or less.
11. Foreign Currency Transactions:
a) Initial Recognition
Transactions in foreign currency are recorded
at the exchange rate prevailing on the date
of the transaction. Exchange differences
arising on foreign exchange transactions
settled during the year are recognized in the
Statement of Profit and Loss of the year.
b) Measurement of Foreign Currency Items at
the Balance Sheet Date
Foreign currency monetary items of the
Company are restated at the closing
exchange rates. Non monetary items are
recorded at the exchange rate prevailing
on the date of the transaction. Exchange
differences arising out of these transactions
are charged to the Statement of Profit and
Loss.
12. Revenue Recognition:
Revenue is measured at the value of the
consideration received or receivable. Amounts
disclosed as revenue are net of returns, trade
allowances, rebates, discounts, loyalty discount,
value added taxes and amounts collected on
behalf of third parties.
The Company recognises revenue when the
amount of revenue can be reliably measured,
it is probable that future economic benefits will
flow to the Company and specific criteria have
been met foreach of the Company's activities as
described below :
Sale of Goods
Revenues are recognized at a point in time when
control of the goods passes to the buyer, usually
upon either at the time of dispatch ordelivery.
In case of export sale, it is usually recognised
based on the shipped-on board date as per bill
of lading.
Rendering of Services
Income from services rendered is recognised
based on agreements /arrangements with the
customers as the service is performed /rendered.
Interest
Revenue is recognised on a time proportion basis
taking into account the amount outstanding
and the interest rate applicable and based on
Effective interest rate method.
Dividend
Dividend Income is recognized when right to
receive the same is established.
13. Investment in subsidiaries
Investments in equity shares of subsidiaries are
recorded at cost and reviewed forimpairment
at each reporting date. Where an indication
of impairment exists, the carrying amount of
the investment is assessed and written down
immediately to its recoverable amount. On
disposal of investments in subsidiaries, the
difference between net disposal proceeds and
the carrying amounts are recognised in the
Statement of Profit and Loss.
14. Employee Benefits:
The Company has provided following post¬
employment plans:
(a) Defined benefit plans such a gratuity and
(b) Defined contribution plans such as Provident
fund
a) Defined-benefit plan:
The liability orasset recognised in the balance
sheet in respect of defined benefit gratuity plan
is the present value of defined benefit obligations
at the end of the reporting period less fair value
of plan assets. The defined benefit obligations
is calculated annually by actuaries through
actuarial valuation using the projected unit credit
method.
The Company recognises the following changes
in the net defined benefit obligation as an
expense in the statement of profit and loss:
(a) Service costs comprising current service
costs, past-service costs, gains and losses
on curtailment and non-routine settlements;
and
(b) Net interest expense orincome"
The net interest cost is calculated by applying
the discount rate to the net balance of the
defined benefit obligation and fair value of plan
assets. This cost is included in employee benefit
expenses in the statement of the profit &loss.
Re-measurement comprising of actuarial gains
and losses arising from
(a) Re-measurement of Actuarial (gains)/losses
(b) Return on plan assets, excluding amount
recognized in effect of asset ceiling
(c) Re-measurement arising because of change
in effect of asset ceiling
are recognised in the period in which they
occur directly in Other comprehensive
income. Re-measurement are not reclassified
to profit orloss in subsequent periods.
Ind AS19 requires the exercise of judgment
in relation to various assumptions including
future pay rises, inflation and discount rates
and employee and pensioner demographics.
The Company determines the assumptions
in conjunction with its actuaries, and
believes these assumptions to be in line with
best practice, but the application of different
assumptions could have a significant effect
on the amounts reflected in the income
statement, other comprehensive income
and balance sheet. There may be also
interdependency between some of the
assumptions.
b) Defined-contribution plan:
Under defined contribution plans, provident
fund, the Company pays pre-defined amounts
to separate funds and does not have any
legal or informal obligation to pay additional
sums. Defined Contribution plan comprise of
contributions to the employees' provident fund
with the government, superannuation fund
and certain state plans like Employees' State
Insurance and Employees' Pension Scheme. The
Company's payments to the defined contribution
plans are recognised as expenses during the
period in which the employees perform the
services that the payment covers.
15. Taxes on Income:
Income tax comprises current and deferred
tax. Income tax expense is recognized in the
statement of profit and loss except to the
extent it relates to items directly recognized
in equity or in other comprehensive income.
Current tax is based on taxable profit for the
year. Taxable profit is different from accounting
profit due to temporary differences between
accounting and tax treatments, and due to
items that are never taxable or tax deductible.
Tax provisions are included in current liabilities.
Interest and penalties on tax liabilities are
provided for in the tax charge. The Company
offsets, the current tax assets and liabilities
(on a year on year basis) where it has a legally
enforceable right and where it intends to settle
such assets and liabilities on a net basis or to
realise the assets and liabilities on net basis.
Deferred income tax is recognized using the
balance sheet approach. Deferred income
tax assets and liabilities are recognized for
deductible and taxable temporary differences
arising between the tax base of assets and
liabilities and their carrying amount in financial
statements. Deferred income tax asset are
recognized 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 utilized. Deferred tax assets are
not recognised where it is more likely than not
that the assets will not be realised in the future.
The carrying amount of deferred income 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 orpart of the deferred income tax asset
to be utilized. Deferred income tax assets and
liabilities are measured at the tax rates that are
expected to apply in the period when the asset
is realized orthe liability is settled, based on tax
rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Deferred tax items are recognised in correlation
to the underlying transaction either in OCI or
directly in equity.
16. Borrowing Cost:
General and specific borrowing costs that
are directly attributable to the acquisition,
construction or production of qualifying assets
are capitalized as a part of Cost of that assets,
during the period till all the activities necessary to
prepare the Qualifying assets forits intended use
orsale are complete during the period of time that
is required to complete and prepare the assets
forits intended use orsale. Qualifying assets are
assets that necessarily take a substantial period
of time to get ready fortheir intended use orsale.
Other borrowing costs are recognized as an
expense in the period in which they are incurred.
17. Segment Reporting:
Operating segments are reported in a manner
consistent with the internal reporting provided to
the chief operating decision maker.
18. Earnings Per Share:
Basic earnings per shares are calculated by
dividing the net profit or loss after tax for the
period attributable to equity shareholders by
the weighted average number of equity shares
outstanding during the period. For the purpose
of calculating diluted earnings per share, the net
profit or loss for the period attributable to the
equity shareholders and the weighted average
number of shares outstanding during the period
is adjusted for the effects of all dilutive potential
equity shares.
19. Measurement of EBITDA
The Company has opted to present earnings
before interest (finance cost), tax, depreciation
and amortisation (EBITDA) as a separate line
item on the face of the Statement of Profit and
Loss forthe period. The Company measures
EBITDA based on profit/(loss) from continuing
operations.
20. Leases:
The Company has adopted Ind AS116-Leases
using the modified retrospective method. The
Company has applied the standard to its leases
with the cumulative impact recognised on the
date of initial application.
The Company's lease asset classes primarily
consist of leases for Land, Buildings and Plant
& Machinery. The Company assesses whether
a contract is or contains a lease, at inception
of a contract. A contract is, or contains, a lease
if the contract conveys the right to control the
use of an identified asset for a period of time in
exchange for consideration. To assess whether
a contract conveys the right to control the use
of an identified asset, the Company assesses
whether:
(a) the contract involves the use of an identified
asset
(b) the Company has substantially all of the
economic benefits from use of the asset
through the period of the lease and
(c) the Company has the right to direct the use
of the asset.
At the date of commencement of the lease,
the Company recognises a right-of-use asset
("ROU") and a corresponding lease liability for
all lease arrangements in which it is a lessee,
except forleases with a term of twelve months or
less (short term leases) and leases of low value
assets. For these short term and leases of low
value assets, the Company recognises the lease
payments as an operating expense on a straight¬
line basis over the term of the lease.straight-line
basis over the term of the lease.
The right-of-use assets are initially recognised at
cost, which comprises the initial amount of the
lease liability adjusted forany lease payments
made at or prior to the commencement date
of the lease plus any initial direct costs less
any lease incentives. They are subsequently
measured at cost less accumulated depreciation
and impairment losses, if any. Right-of-use
assets are depreciated from the commencement
date on a straight-line basis over the shorter of
the lease term and useful life of the underlying
asset.
The lease liability is initially measured at the
present value of the future lease payments.
The lease payments are discounted using the
interest rate implicit in the lease or,if not readily
determinable, using the incremental borrowing
rates. The lease liability is subsequently
remeasured by increasing the carrying amount
to reflect interest on the lease liability, reducing
the carrying amount to reflect the lease
payments made. A lease liability is remeasured
upon the occurrence of certain events such as a
change in the lease term or a change in an index
or rate used to determine lease payments. The
remeasurement normally also adjusts the leased
assets.
Lease liability and ROU asset have been
separately presented in the Balance Sheet and
lease payments have been classified as financing
cash flows.
21. Current / non current classification
The Company presents assets and liabilities in
the balance sheet based on current / non-current
classification.
An asset is treated as current when it is:
- Expected to be realised orintended to be
sold orconsumed in normal operating cycle
- Held primarily forthe purpose of trading
- Expected to be realised within twelve months
after the reporting period, or
- Cash orcash equivalent unless 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.
Aliability is current when:
- It is expected to be settled in normal
operating cycle
- It is held primarily for the purpose of trading
- It is due to be settled within twelve months
after the reporting period, or
- There is no unconditional right to defer the
settlement of the liability for at least twelve
months after the reporting period
The company classifies all other liabilities as
non-current.
Deferred tax assets and liabilities are classified
as non-current assets and liabilities.
The operating cycle is the time between the
acquisition of assets for processing and their
realisation in cash and cash equivalents. The
company has identified twelve months as its
operating cycle.
22. Events after reporting date
Where events occurring after the Balance Sheet
date provide evidence of conditions that existed
at the end of the reporting period, the impact
of such events is adjusted within the Financial
Statements. Otherwise, events after the Balance
Sheet date of material size or nature are only
disclosed.
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