Significant Accounting Policies
This note provides a list of the significant accounting policies adopted in the preparation of
these financial statements. These policies have been consistently applied to all the years
presented, unless otherwise stated. The financial statements are for the Anya Polytech &
fertilizers Limited (the 'Company')
Note: 3
(a) Basis of Preparation
1) Compliance with Ind AS
The financial statements comply in all material aspects with Indian Accounting Standards (Ind
AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian
Accounting Standards) Rules, 20151 and other relevant provisions of the Act
ii) Historical cost convention
The financial statements have been prepared on a historical cost basis, except for the defined
benefit plans i.e. gratuity which is stated as certified by an actuarial valuer. (Refer Note No 21).
ill) Functional and Presentation Currency
These Financial Information are presented m Indian rupees and all amounts disclosed in the
financial statements and notes have been rounded off to the nearest lakhs, unless otherwise
state. 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,
tv) Use of estimates and judgements
The preparation of Standalone financial information in conformity with Ind AS requires
management to make Judgments, estimates and assumptions, that affect the application of
accounting policies and the reported amounts of assets, liabilities, income and expenses at the
date of these financial statements and the reported amounts of revenues and expenses for the
years presented. Actual results may differ from these estimates. Estimates and underlying
assumptions are reviewed at each balance sheet date. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and future periods affected.
The estimates and assumptions that have a significant risk of causing a material adjustment to
the catrying amounts of assets and liabilities within the next financial year are discussed
below:
(a) Useful lives of property, plant and equipment and intangible assets
The Company reviews the useful lives of property, plant and equipment and intangible assets at
the end of each reporting period. This reassessment may result in change in depreciation and
amortisation expense In future periods.
(bj Defined Benefits and other long term benefits
Hie cost of the defined benefit plans such as gratuity is determined using actuarial valuations.
An actuarial valuation involves making various assumptions that may differ from actual
developments In the future. These Include the determination of the discount rate, future salary
increases and mortality rates. Due to the complexities involved in the valuation and its long¬
term nature, a defined benefit obligation Is highly sensitive to changes in these assumptions. All
assumptions arc reviewed at each year end. The principal assumptions are the discount and
salary growth rate. The discount rate is based upon the market yields available on government
bonds at the accounting date 'with a term that matches that of liabilities. Salary increase rate
takes into account inflation, seniority, promotion and other relevant factors on long-term basis
v) Current and Non-Current classification
The Company presents assets and liabilities In the Standalone Financial Statements based on
current/non-current classification
An asset Is treated as current when
• It is expected 10 be realized or intended to be sold or consumed in normal operating cycle;
• It is held primarily for the purpose of trading;
• It is expected to be realized within twelve months after the reporting period; or
• It is cash and cash equivalent unless restricted from being exchanged or used to settle a
liability for at least twelve months after the reporting period
The company classifies all other assets as Non-Current Assets-
• A liability 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 rcpoiting 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 Liability as Non-Current Liability
• Deferred tax assets and liabilities are classified as non-current assets and liabilities
respectively.
• The operating cycle is the time between the acquisition of assets for processing and their
realization In cash and cash equivalents. The Group has identified twelve months as its
operating cycle for the purpose of current- non-current classification of assets and
babilities.
Note: 4
Borrowing Costs
Borrowing cost Includes interest, amortization of ancillary costs incurred in connection with
the arrangement of borrowings.
Borrowing cost which arc not relatable to the qualifying asset are recognized as an expense in
the period in which they are incurred. Borrowing cost on specific loans, used on acquisition or
construction of fixed assets, which necessarily take a substantial period of time to be ready for
their intended use. are capitalised. Other borrowing costs are recognized as an expense in the
period in which they are incurred.
Note: 5
Property, Plant and Equipment and Intangible Assets
(a) Recognition and Measurement
The cost of an item of property, plant and equipment comprises its purchase pn.ee, including
import duties and other non-refundable taxes or levies, freight, any directly attributable cost of
bringing the asset to its working condition for its Intended use and estimated cost of
dismantling and restoring onsite; any trade discounts and rebates are deducted in arriving at
the purchase price.
Subsequent costs are included in the asset's 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 Group and the cost of the item can be measured reliably.
The carrying amount of any component accounted for as a separate asset is de-recognized
when replaced.
All other repairs and maintenance arc charged to profit or loss during the reporting period In
which they arc incurred.
Advances paid towards acquisition of property, plant and equipment outstanding at each
Balance Sheet date, are shown under other non-current assets and cost of assets not ready for
intended use before the year end, are shown as capital work-in-progress.
In case of leasehold land, any unearned increase not attributable to lessor and on which Group
has right to sell is recognized as own asset and hence the same was not amortized. Any
unearned increase not attributable to lessor when the asset is sold is valued at Fair Value and
no amortization is provided on the same.
(b) Subsequent Expenditure
Subsequent expenditure is recognised only if it is probable that the future economic benefits
associated with the expenditure will flow lo the Company and the cost of the Item can he
measured reliably.
Cc) Depreciation
Depredation is calculated using the written dowr value method to allocate their cost, net of
their residual values, over their estimated useful lives as per Schedule 11 of The Companies
Act,2013.
The useful lives have been determined as specified by Schedule II to the Companies Act; 2013.
The residual values arc not more than 5% of the original cost of the asset. The assets’ residual
values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting
period.
The company has revised the estimated useful life of Us Plam & Machinery from 15 years to 20
years. As a result of this change in estimate, the depreciation expense for the current financial
year has decreased by <70 lakhs compared to the amount calculated in the previous year based
on the earlier estimate
(d) Capital Work-in-progress
Cost of property, plant and equipment not ready for use as at the reporting date are disclosed
as capital work-in- progress.
*Capital work-in-progress amounting to 783.82 lakhs pertains to Plant & Machinery that is under
installation as of the end of the financial year.
**The company had advanced <2.36 crores to Kardatn Construction for the construction
of the HDPE Plant at Sbahjahanpur. Although the contractor did not complete the work
and failed to submit the relevant invoices, the management has considered it
appropriate to treat the amount as Capital Work-in-Progress (CWIP), as the construction
tvas substantially completed by the vendor.
(e) Capital advances
Advances paid towards the acquisition of property, plant and equipment, outstanding at each
balance sheet date Is classified as capital advances under “other non-current assets*.
De-recognition
An item of property, plant and equipment and any significant part initially recognized Is de¬
recognized upon disposal or when no future economic benefits are expected from its use or
disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is included in the
Standalone Statement of Profit and Loss when the asset is de-recognizcd.
Intangible Assets
a) Recognition and measurement
Intangible assets that arc acquired arc recognised only if it is probable that the expected future
economic benefits that are attributable to the asset will flow to the Group and the cost of assets
can be measured reliably. The Intangible assets are recorded at cost of acquisition including
incidental costs related to acquisition and are carried at cost less accumulated amortisation
and impairment losses, if any
Technical Knowhow
The expenditure incurred is amortised over the estimated period of benefit commencing with
the year of purchase of the technology
Development Expenditure
Development expenditure including regulatory cost and legal expenses leading to product
registration/ market authorisation relating to the new and/or improved product and/or
process development is capitalised only If development costs can be measured reliably, the
product or process is technically and commercially feasible, future economic benefits are
probable, and the Croup intends to and has sufficient resources to complete development and
to use the asset The expenditure capitalized includes the cost of materials, direct labour,
overhead costs that are directly attributable to preparing the asset for its intended use. and
directly attributable finance costs (in the same manner as in the case of property, plant and
equipment). Other development expenditure is recognised In the Statement of Profit and Loss
as incurred.
Software Expenditure
The expenditure Incurred Is amortized over the estimated economic life of the asset from the
year in which expenditure is incurred.
Others
The expenditure incurred is amortized over the estimated period of benefit Intangible assets
that are acquired (including goodwill recognized for business combinations) are measured
initially at cost After Initial recognition, an intangible asset Is carried at its cost less
accumulated amortization (for finite lives Intangible assets) and any accumulated
impairment loss. Subsequent expenditure is capitalized only when it increases the future
economic benefits from the specific asset to which it relates.
b) Subsequent Expenditure
Subsequent costs are capitalised only when it increases the future economic benefits
embodied In the specific asset to which It relates. All other expenditure on Intangible assets Is
recognised In the Standalone Statement of Profit and Loss, as Incurred
c) Amortisation
Amortisation is calculated to write off the cost of intangible assets less their estimated
residual values using the straight line method over their estimated useful lives and is
generally recognised in depredation and amortisation expense in the Standalone Statement
of Profit and Loss
d) Derecognition
An Item of intangible assets Is de-recognised upon disposal or when no future economic
benefits are expected from its use or disposal Any gain or loss arising on de-recognition of
the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is Included in the Standalone Statement of Profit and Loss when the
asset is derecognised.
Government Grants
Government grants are not recognised 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 are recognised In the Statement of Profit and Loss on a systematic basis
over the years in which the Group recognises as expenses the related costs for which the
grants are intended to compensate or when performance obligations are met
Government grants, whose primary condition is that the Company should purchase, construct
or otherwise acquire non-current assets and nonmonetary grants are recognised and
disclosed as ..deferred Income" under non- current liability in the Balance Sheet and
transferred to the Statement of Profit and Loss on a systematic and rational basis over the
useful lives of the related assets.
IMPAIRMENT OF NON-FINANCIAL ASSETS
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation
and are tested annually for impairment or more frequently if events or changes in
circumstances indicate that they might be impaired. The Group’s non-flnancial assets other
than Inventories and deferred tax assets are reviewed at each reporting date to determine
whether there is any indication of impairment If any such indication exists, then the asset’s
recoverable amount Is estimated.
For impairment testing, assets that do not generate independent cash inflows (i.e. corporate
assets) arc grouped together into cash-generating units (CGUs). Each CGU represents the
smallest group of assets that generates cash inflows that are largely Independent of the cash
inflows of other assets or CGUs.
The recoverable amount of a CGU is the higher of its value in use and its fair value less costs to
selL Value In use is based on the estimated future cash flows, discounted to their present value
using a discount race that reflects current market assessments of the time value of money and
the risks specific to the CG.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds Its
estimated recoverable amount Impairment loss recognised in respect of a CGU is allocated first
to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the
carrying amount of the other assets of the CGU for group of CGUs) on a pro rata basis.
An impairment loss in respect of goodwill is not subsequently reversed. In respect of other
assets for which Impairment loss has been recognised In prior periods, the Group reviews at
reporting date whether there Is any Indication that the loss has decreased or no longer exists.
An impairment loss is reversed if there has been a change in the estimates used to determine
the recoverable amount. Such a reversal is made only to the extent that the asset's carrying
amount does not exceed the carrying amount that would have been determined, uei of
depreciation or amortisation, if no impairment loss had been recognised.
Note: 6
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
(A) FINANCIAL ASSETS
i) 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 Purchases or sales of financial assets that require delivery of
assets within a time frame established by regulation or convention in the marketplace (regular
way trades) are recognised on the trade date, i.e. the date that die Group commits to purchase
or sell the asset.
ii) Subsequent Measurement
For purposes of subsequentmeasuremenL financial assets are classified in four categories:
a) Debt instruments at amortised cost
A "debt instrument" is measured at the amortised cost if 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 ou specified dates to cash flows that are solely payments of
principal and interest (SPPl) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost
using the effective interest rate (EIR) method. The effective interest rate is the rate that exactly
discounts estimated future cash payments or receipts through the expected life of the financial
Instrument to the gross carrying amount of the financial asset or the 3tnortlsed cost of the
financial liability. 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 E1R amortisation is
included In other Income in the Statement of Profit and Loss. The losses arising from
Impairment arc recognised In the Statement of Profit and Loss. This category generally applies
to trade and other receivables,
b) Debt instrument at fair value through other comprehensive income (FVTOCI):
A "debt instrument" is classified as ax the FVTOCI if the objective of ihe business model is
achieved both by collecting contractual cash flows and selling the financial assets, and the
asset's contractual cash flows represent SPPI.
Debt instruments Included within the FVTOCI category are measured initially as well as at
each reporting date at fair value. Fair value movements are recognised in the other
comprehensive income (OCI). On de-rccogmtion of the asset, cumulative gain or loss
previously recognised in OC1 is reclassified to the Statement of Profit and Loss. Interest
earned whilst holding FVTOCI debt Instrument Is reported as Interest Income using the EIR
method
c) Debt Instrument, Derivatives and Equity instruments at fair value through profit or
loss (FVTPL)
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet
the criteria for categorization as at amortised cost or as FVOCI, is classified as at FVTPL In
addition, at initial recognition, the Group may irrevocably elect to designate a debt
instrument, which otherwise meets amortised cost or FVOCI criteria, as at FVTPL However,
such election is allowed only if doing so reduces or eliminates a measurement or recognition
inconsistency. Debt instruments included within the FVTPL category are measured at fair
value with all changes recognised in the Statement of Profit and Loss. Equity instruments
included within the FVTPL category’ are measured at fair value with all changes recognised in
the Statement of Profit and Loss. Dividend income from investments is recognised in
statement of profit and loss on the dale that the right to receive payment is established.
d) Equity instrument at FVTOCI
If the Company decides to classify' an equity Instrument as at FVTOCI. then all fair value
changes on the instrument, excluding dividends, are recognised in the OCI. There Is no
recycling of the amounts from OCI to the Statement of Profit and Loss, even on sale of
Investment However, the Group may transfer the cumulative gain or loss to retained earnings
iii) Impairment of Financial Assets
The Company recognises loss allowance using the expected credit loss (ECL) model for the
financial assets which are not fair valued through profit or loss. Loss allowance for trade
receivables with no significant financing component is measured at an amount equal to
lifetime ECL. For all financial assets with contractual cash flows other than trade receivable,
ECLs are measured at an amount equal to the 12-month ECL unless there has been a
significant Increase In credit risk from initial recognition in which case those arc measured at
lifetime ECL The amount of ECL (or reversal) that is required to adjust the loss allowance at
the reporting date is recognised as an impairment gain or loss in the Statement oi Profit and
Loss.
tv) Derecognition of Financial Assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar
financial assets) is primarily derecognised (Le., removed from the Restated Consolidated
Financial Information) when:
a) The rights to receive cash flow from the asset have expired, or
b) Vie Company has transferred its rights to recerve cash flow from the asset or has assumed an
obligation to pay the received cash flow In full without material delay to the third party under a
Ýpass-through" arrangement and cither (a) the Company has transferred substantially all the
risk and rewards of the assets, or (b) the Company has neither transferred nor retained
substantially all the risk and rewards of the asset but transferred control of the assets.
When the Company has transferred its rights to receive cash flows from an asset or has ontcred
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 thu
associated liability are measured on a basis that reflects the rights and obligations that the
Company has retained. Write off of financial assets The gross carrying amount of a financial
asset is written off when the Group has no reasonable expectations of recovermg a financial
asset in its entirety or a portion thereof. The Group expects no significant recovery from the
amount 'written off
FINANCIAL LIABILITIES
I) Initial Recognition and Measurement
Financial Liabilities are classified, at initial recognition, as unancial liabilities at fair value
through Profit or Loss and financial liabilities at amortised cost, as appropriate. All Financial
Liabilities are recognized initially at fair value and, in the case of liabilities subsequently
measured at amortised cost they are measured net of directly attributable transaction cost In
case of Financial Liabilities measured at fair value through Profit or Loss, transactions costs
directly attributable to the acquisition of financial liabilities are recognized immediately in the
statement of Profit or Loss. The Company's Financial Liabilities include trade and other
payables, loans and borrowings including financial guarantee contracts and derivative financial
Instruments.
II) Subsequent Measurement
a) Financial Liabilities at Fair Value through Profit or Loss
Financial Liabilities at fair value through profit or loss include financial liabilities held for
trading and financial liabilities designated upon Initial recognition as at fair value through the
Statement of Profit and Loss. Financial Liabilities are classified as held for trading if they are
incurred for the purpose of repurchasing in the near term. This category also includes
derivative financial instruments entered into by the Group that are not designated as hedging
Instruments In hedge relationships as defined by Ind AS 109. Gains or losses on liabilities held
for trading are recognised in the Statement of Profit and Loss.
b) Financial Liabilities at Amortised Cost
Financial Liabilities that are not held-for-tradlng and are not designated as at FVTPL are
measured at amortised cost at the end of subsequent accounting periods. The carrying
amounts of financial liabilities that are subsequently measured at amortised cost are
determined based on the effective Interest method. Gains and losses are recognised In the
Statement of Profit and Loss when the liabilities are derecognised as well as through the E1R
amortisation process. Amortised cost is calculated by taking into account any discount or
premium on acquisition and fees or cost that are an integral part of the E1R. The EiR
amortisation Is Included as finance costs In the Statement of Profit and Loss,
c) Financial Guarantee Contracts
Financial guarantee contracts issued by the Group are those contracts that require a payment
to be made to reimburse the holder for a loss It Incurs because the specified debtor falls to
make the payment when due in accordance with the terms of a debt instrument. Financial
guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction
cost that are directly attributable to the issuance of the guarantee. Subsequently, the liability is
measured at the higher of the amount of loss allowance determined as per Impairment
requirements of Ind AS 109 and the amount initially recognised less cumulative income
recognised in accordance with principles of Ind AS 115.
iii) Derecognition of Financial Liabilities
A financial liability is derecognised when the obligation under the liability is discharged or
cancelled 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 and Loss.
OFFSETTING OF FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are offset and the net amount presented in the Balance
Sheet when, and only when, ihe Company currently has a legally enforceable tight to set off the
amounts and it intends either to settle them on a net basis or to realise the asset and settle the
liability simultaneously.
INVENTORIES
Inventories are valued at lower of cost and net realisable value except scrap, which is valued at
net estimated realisable value.
The Company uses FIFO method to determine cost for all categories of inventories except for
goods in transit which Is valued at specifically identified purchase cost and other direct costs
incurred. Cost includes all costs of purchase, and other costs incurred in bringing the
inventories to their present location and condition inclusive of non-refundable (adjustable)
taxes wherever applicable. Net realisable value Is the estimated selling price to the ordinary
course of business, less estimated costs necessary' to make the sale. The comparison of cost and
net realisable value is made on an item-by-item basis.
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