e. Measurement of fair values
A number of the accounting policies and disclosures
require the measurement of fair values, for both financial
and non-financial assets and liabilities. The Company
has an established control framework with respect to
the measurement of fair values which is overseen by
the Chief Financial Officer (CFO). Significant valuation
issues are reported to the Company's audit committee.
Fair values are categorized into different levels in a fair
value hierarchy based on the inputs used in the valuation
techniques as follows.
Level 1: quoted prices (unadjusted) in active markets
for identical assets or liabilities.
Level 2: inputs other than quoted prices included in
Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived
from prices).
Level 3: inputs for the asset or liability that are not
based on observable market data (unobservable
inputs)
When measuring the fair value of an asset or a liability,
the Company uses observable market data as far as
possible. If the inputs used to measure the fair value
of an asset or a liability fall into different levels of the
fair value hierarchy, then the fair value measurement
is categorized in its entirely in the same level of the fair
value hierarchy as a lowest level input that is significant
to the entire measurement. The Company recognizes
transfers between levels of the fair value hierarchy at
the end of the reporting period during which the change
has occurred.
f. Current /Non-current classification
Based on the time involved between the acquisition of
assets for processing and their realisation in cash and
cash equivalent, the Company has identified 12 months
as its operating cycle for determining current and non¬
current classification of assets and liabilities in the
balance sheet.
3) Material accounting policies
The Company has applied the following accounting
policies to all years presented in the financial statements.
a. Revenue recognition
The Company generates revenue principally
from - Sale of products including scrap sales:
Revenue is recognised as per Ind AS 115 Revenue from
Contracts with Customers, when the contract entered
with a customer is within the scope of this standard and;
- When the contract is approved by the parties in
writing
- The rights and obligation of each party is identified in
the contract
- The contract has commercial substance and the
payment terms are defined
- When collectability of the resulting receivable is
reasonably assured
Revenue from sale of products is recognised on
satisfaction of a performance obligation by transferring
a promised good or service (i.e. an asset) to a customer.
An asset is transferred when (or as) the customer obtains
control of that asset. In case of products, when products
are delivered to dealers or when delivered to a carrier for
export sales, which is when the control including risks
and rewards and title of ownership pass to the customer
and when there are no longer any unfulfilled obligation.
The transaction price is the amount of consideration to
which the entity expects to be entitled in exchange for
transferring promised goods or services to a customer,
excluding amounts collected on behalf of third parties
(for example, some sales taxes) and net of discounts.
b. Dividend income, interest income or expense
Dividend income is recognized in profit or loss on the
date on which the Company's right to receive payment is
established.
Interest income or expense is recognized using the
effective interest 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:
Ý the gross carrying amount of the financial asset; or
Ý the amortized cost of the financial liability.
In calculating interest income and expense, the effective
interest rate is applied to the gross carrying amount of
the asset (when the asset is not credit-impaired) or to
the amortized cost of the liability. However, for financial
assets that have become credit-impaired subsequent
to initial recognition, interest income is calculated by
applying the effective interest rate to the amortized cost
of the financial asset. If the asset is no longer credit-
impaired, then the calculation of interest income reverts
to the gross basis.
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