Note 2 - Material Accounting Policies
This note provides a list of the significant accounting policies adopted in the preparation of these Financial Statements.
Accounting policies have been consistently applied to all the years presented except where a newly issued accounting
standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy
hitherto in use.
1. Basis of Preparation and Presentation
The Financial Statements have been prepared on the historical cost basis except for Certain Financial Assets and
Liabilities (including derivative instruments) which have been measured at fair value amount
The Financial Statements of the Company have been prepared to comply with the Indian Accounting standards
(‘Ind AS’), including the Rules notified under the relevant provisions of the Companies Act, 2013, (as amended
from time to time) and Presentation and disclosure requirements of Division II of Schedule III to the Companies
Act, 2013, (Ind AS Compliant Schedule III) as amended from time to time. The Company follows indirect method
prescribed in Ind AS 7 - Statement of Cash Flows for presentation of its cash flows.
The Company’s Financial Statements are presented in Indian Rupees, which is also its functional currency and all
values are rounded to the nearest Lakhs (00,000), except when otherwise indicated.
2. Summary of Material Accounting Policies
(a) Current and Non-Current Classification
The Company presents assets and liabilities in the Balance Sheet based on Current/ Non-Current classification
considering an operating cycle of 12 months being the time elapsed between deployment of resources and the
realization/ settlement in cash and cash equivalents there against.
(b) Property, Plant and Equipment
Property, Plant and Equipment are stated at cost, net of recoverable taxes, trade discount and rebates less
accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and
any cost directly attributable to bringing the assets to its working condition for its intended use, net charges on
foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.
Depreciation on Property, Plant and Equipment is provided using written down value method on depreciable
amount except in case of certain assets of furniture and fixtures which are depreciated using straight line
method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the
Companies Act, 2013.
The residual values, useful lives and methods of depreciation of Property, Plant and Equipment are reviewed
at each financial year end and adjusted prospectively, if appropriate.
(c) Leases
The Company, as a lessee, recognizes a right-of-use asset and a lease liability for its leasing arrangements, if
the contract conveys the right to control the use of an identified asset. Initially the right of use assets measured
at cost which comprises initial cost of the lease liability adjusted for any lease payments made at or before the
commencement date plus any initial direct costs incurred. Subsequently measured at cost less any accumulated
depreciation/amortization, accumulated impairment losses, if any and adjusted for any remeasurement of the
lease liability.
The right-of-use assets is depreciated/ amortized using the straight-line method from the commencement date
over the shorter of lease term or useful life of right-of-use asset. 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.
For short-term and low value leases, the Company recognizes the lease payments as an operating expense on
a straight-line basis over the lease term.
(d) Intangible Assets
Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebates less
accumulated amortization/depletion and impairment losses, if any. Such cost includes purchase price,
borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended
use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations
attributable to the Intangible Assets.
The Company assesses if useful life of an intangible asset is finite or indefinite. A summary of
amortization/depletion policies applied to the Company ’ s Intangible Assets to the extent of depreciable amount
is as follows:
The amortization period and the amortization method for Intangible Assets with a finite useful life are reviewed
at each reporting date.
(e) Inventory
Items of inventories are measured at lower of cost and net realizable value after providing for obsolescence, if
any, except in case of byproducts which are valued at net realizable value.
Cost of finished goods, work-in-progress and raw materials are determined on First in First Out (FIFO) basis.
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