NOTE 2: SIGNIFICANT ACCOUNTING POLICIES
This note provides a list of the significant accounting policies adopted in the preparation of these
Indian Accounting Standards (Ind-AS) financial statements. These policies have been consistently
applied to all the years except where newly issued accounting standard is initially adopted.
2.01 Basis of preparation of standalone Financial Statements
The standalone financial statements of the company have been prepared in accordance with Indian
Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules,
2015 (as amended from time to time) and presentation requirements of Division II of Schedule III to
the Companies Act, 2013 (Ind AS compliant schedule III) as applicable to these standalone financial
statements.
These standalone financial statements are presented in INR ^ and all values are rounded to the nearest
lakhs (^ 00,000) except when otherwise indicated.
The Company has prepared the standalone financial statements on the basis that it will continue to
operate as going concern. These policies have been consistently applied, unless otherwise stated.
The Standalone financial statements have been prepared on a historical cost basis, except for the
following assets / liabilities.
i. Employee defined benefit assets/ (liability) are recognised as the net total of the fair value of plan
assets, plus actuarial losses, less actuarial gains and the present value of the defined benefit
obligation.
2.02 Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current/non-current
classifications. An asset is treated as current when it is:
- Expected to be realised or intended to be sold or consumed in normal operating cycle
- Held primarily for purpose of trading
- Expected to be realised within twelve months after the reporting period, or
- Cash or cash 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.
A liability is current when:
- It is expected to be settled in normal operating cycle
- It is held primarily for 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 a least twelve months after
the reporting period.
All the other liabilities are classified as non-current.
The term of the liability that could, at the option of counterparty, result in its settlement by the issue
of equity instruments do not affect its classification.
Deferred tax assets and deferred tax 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.
2.03 Property, Plant and Equipment
On transition to Ind AS, the Company has elected to continue with the carrying value of its property
plant and equipment recognised as at 1st April, 2020, measured as per the previous GAAP, and use
that carrying value as the deemed cost of such property plant and equipment.
Property, plant & equipment are stated at cost, net of accumulated depreciation and accumulated
impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria
are met, directly attributable cost of bringing the asset to its working condition for the intended use.
Such cost includes the cost of replacing part of the plant and equipment.
The cost of self-constructed item of property, plant and equipment comprises the cost of materials
and direct labour, any other costs directly attributable to bringing the item to working condition for
its intended use.
PPE not ready for the intended use on the date of the Balance Sheet are disclosed as “Capital work-
in-progress". Capital work-in-progress includes cost of property, plant and equipment under
installation/under development as at the balance sheet date.
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying
amount of the item if it is probable that the future economic benefits embodied within the part will
flow to the Company and its cost can be measured reliably. The costs of repairs and maintenance are
recognised in the statements of profit and loss as and when incurred.
The Company identifies and determines cost of each component/part of the asset separately, if the
component/part has a cost which is significant to the total cost of the asset and has useful life that is
materially different from that of the remaining asset.
An item of property, plant and equipment and any significant part initially recognised is derecognised
upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or
loss arising on derecognition of the asset is included in the statement of Profit and Loss when the asset
is derecognised.
The residual values, useful lives and methods of depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted, if appropriate.
2.04 Depreciation
Depreciation is recognised using straight-line method so as to write off the cost of the assets (other
than freehold land and capital work-in-progress) less their residual values over their useful lives
specified in Schedule II to the Companies Act, 2013, or in the case of assets where the useful life was
determined by technical evaluation, over the useful life so determined.
Depreciation charged for impaired assets is adjusted in future periods in such a manner that the
revised carrying amount of the asset is allocated over its remaining useful life.
Depreciation method is reviewed at each financial year end to reflect the expected pattern of
consumption of the future economic benefits embodied in the asset. The estimated useful life and
residual values are also reviewed at each financial year end and the effect of any change in the
estimates of useful life/residual value is accounted on prospective basis. Depreciation on additions
to/deductions from, owned assets is calculated pro-rata to the period of use.
2.05 Investment Property
Properties, including those under construction, held to earn rentals and/or capital appreciation are
classified as investment property and are measured and reported at cost, including transaction costs
and borrowing cost capitalised for qualifying assets, in accordance with Company's accounting policy.
Policies with respect to depreciation, useful life and derecognition are followed on the same basis as
stated for Property, Plant and Equipment.
2.06 Impairment of Non-Financial Assets
As at the end of each financial year, the carrying amounts of PPE & investment property are reviewed
to determine whether there is any indication that those assets have suffered an impairment loss. If
such indication exists, PPE & investment property are tested for impairment so as to determine the
impairment loss, if any.
Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount.
Recoverable amount is determined:
i. In the case of an individual asset, at the higher of the fair value less costs of disposal and the
value-in-use; and
ii. In the case of a cash generating unit (the smallest identifiable group of assets that generates
independent cash flows), at the higher of the cash generating unit's fair value less costs of
disposal and the value-in-use.
(The amount of value-in-use is determined as the present value of the estimated future cash flows
from the continuing use of an asset, which may vary based on the future performance of the Company
and from its disposal at the end of its useful life. For this purpose, the discount rate (post-tax) is
determined based on the weighted average cost of capital of the company suitably adjusted for risks
specified to the estimated cash flows of the asset).
If recoverable amount of an asset is estimated to be less than its carrying amount, such deficit is
recognised immediately in the statement of Profit & Loss as impairment loss and the carrying amount
of the asset is reduced to its recoverable amount.
When an impairment loss recognised earlier is subject to full or partial reversal, the carrying amount
of the asset is increased to the revised estimate of its recoverable amount, such that the increased
carrying amount does not exceed the carrying amount that would have been determined had no
impairment loss is recognised for the asset in prior years. A reversal of the impairment loss is
recognised immediately in the Statement of Profit and Loss.
2.07 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.
i.) Financial Assets
The Company classifies its financial assets in the following measurement categories:
- those to be measured subsequently at fair value (either through other comprehensive income, or
through profit or loss)
- those measured at amortised cost
Subsequent Measurement
For purposes of subsequent measurement financial assets are classified in following categories:
- Financial assets at amortised cost (debt instruments)
- Financial assets at fair value through other comprehensive income (FVTOCI) with recycling of
cumulative gains and losses (debt instruments)
- Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses
upon derecognition (equity instruments)
- Financial assets at fair value through profit or loss
Financial assets at amortised cost (debt instruments)
A 'financial asset' is measured at the amortised cost if both the following conditions are met:
a) Business Model Test: The objective is to hold the financial asset to collect the contractual cash flows
(rather than to sell the instrument prior to its contractual maturity to realise its fair value changes)
and;
b) Cash flow characteristics test: The contractual terms of the financial asset give rise on specific
dates to cash flows that are solely payments of principal and interest on principal amount outstanding.
This category is most relevant to the Company. After initial measurement, such financial assets are
subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised
cost is calculated by taking into account any discount or premium on acquisition and fees or costs that
are an integral part of EIR. EIR is the rate that exactly discounts the estimated future cash receipts
over the expected life of the financial instrument or a shorter period, where appropriate, to the gross
carrying amount of the financial asset. When calculating the effective interest rate, the Company
estimates the expected cash flows by considering all the contractual terms of the financial instrument
but does not consider the expected credit losses. The EIR amortisation is included in other income in
profit or loss. The losses arising from impairment are recognised in the profit or loss. This category
generally applies to trade and other receivables.
Financial assets at fair value through OCI (FVTOCI) (debt instruments)
A 'financial asset' is classified as at the FVTOCI if both of the following criteria are met:
a) Business Model Test: The objective of financial instrument is achieved by both collecting
contractual cash flows and selling the financial assets; and
b) Cash flow characteristics test: The contractual terms of the Debt instrument give rise on specific
dates to cash flows that are solely payments of principal and interest on principal amount outstanding.
Debt instrument 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), except for the recognition of interest income, impairment gains or losses and foreign exchange
gains or losses which are recognised in statement of profit and loss and computed in the same manner
as for financial assets measured at amortised cost. The remaining fair value changes are recognised in
OCI. Upon derecognition, the cumulative fair value changes recognised in OCI is reclassified from the
equity to profit or loss.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the balance sheet at fair value with
net changes in fair value recognised in the statement of profit and loss. This category includes
derivative instruments and listed equity investments which the Company had not irrevocably elected
to classify at fair value through OCI. Dividends on listed equity investments are recognised in the
statement of profit and loss when the right of payment has been established.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar
financial assets) is primarily derecognised (i.e. removed from the Company's statement of financial
position) when:
- The rights to receive cash flows from the asset have expired, or
- the Company has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party under a “pass
through" arrangement and either;
a) the Company has transferred substantially all the risks and rewards of the asset, or
b) the Company has neither transferred nor retained substantially all the risks and rewards of the
asset, but has transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered 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 the associated liability are measured on a
basis that reflects the rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at
the lower of the original carrying amount of the asset and the maximum amount of consideration that
the Company could be required to repay.
Impairment of financial assets
In accordance with IND AS 109, the Company applies expected credit losses (ECL) model for
measurement and recognition of impairment loss on the following financial asset and credit risk
exposure:
- Financial assets measured at amortised cost;
- Trade receivables or any contractual right to receive cash or another financial asset that result from
transactions that are within the scope of Ind AS 115.
ECLs are based on the difference between the contractual cash flows due in accordance with the
contract and all the cash flows that the Company expects to receive, discounted at an approximation
of the original effective interest rate. The expected cash flows will include cash flows from the sale of
collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For recognition of impairment loss on financial assets other than
mentioned below and risk exposure, the Company determines that whether there has been a
significant increase in the credit risk since initial recognition. If credit risk has not increased
significantly, 12-month ECL is used to provide for impairment loss. For those credit exposures for
which there has been a significant increase in credit risk since initial recognition, a loss allowance is
required for credit losses expected over the remaining life of the exposure, irrespective of the timing
of the default (a lifetime ECL).
If, in a subsequent period, credit quality of the instrument improves such that there is no longer a
significant increase in credit risk since initial recognition, then the entity reverts to recognising
impairment loss allowance based on 12-month ECL.
The Company follows “simplified approach" for recognition of impairment loss allowance on trade
receivables or contract revenue receivables. Under the simplified approach, the Company does not
track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at
each reporting date, right from its initial recognition. The Company uses a practical expedient to
determine impairment loss allowance on the portfolio of trade receivables based on its historically
observed default rates over the expected life of 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.
ECL impairment loss allowance (or reversal) recognised during the period is recognised as income/
expense in the statement of profit and loss. The balance sheet presentation for various financial
instruments is described below:
a) Financial assets measured as at amortised cost, contractual revenue receivables and lease
receivables:
ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in
the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write off
criteria, the Company does not reduce impairment allowance from the gross carrying amount.
b) Debt instruments measured at FVTOCI:
For debt instruments measured at FVTOCI, the expected credit losses do not reduce the carrying
amount in the balance sheet, which remains at fair value. Instead, an amount equal to the
allowance that would arise if the asset was measured at amortised cost is recognised in other
comprehensive income as the accumulated impairment amount.
ii.) Financial Liabilities
Initial recognition and measurement of financial liabilities are classified at initial recognition as
financial liabilities at fair value through profit or loss, loans and borrowings, and payables, net of
directly attributable transaction costs. All financial liabilities are recognised initially at fair value and,
in the case of loans and borrowings and payables, net of directly attributable transaction costs. The
Company financial liabilities include loans and borrowings, trade payables, trade deposits, retention
money, liabilities towards services, sales incentive and other payables.
Subsequent measurement
For purposes of subsequent measurement, financial liabilities are classified in two categories:
- Financial liabilities at fair value through profit or loss
- Financial liabilities at amortised cost (loans and borrowings)
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 profit or 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 Company
that are not designated as hedging instruments in hedge relationship as defined by Ind AS 109. The
separated embedded derivate are also classified as held for trading unless they are designated as
effective hedging instruments.
Gains or losses on liabilities held for trading are recognised in the statement of profit and loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are
designated as such at the initial date of recognition, and only if the criteria in IND AS 109 are satisfied.
For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk
are recognised in OCI. These gains/loss are not subsequently transferred to profit and loss. However,
the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of
such liability are recognised in the statement of profit or loss. The Company has not designated any
financial liability as at fair value through profit and loss.
Financial liabilities at amortised cost (Loans and borrowings)
After initial recognition, interest-bearing borrowings are subsequently measured at amortised cost
using the Effective interest rate method. Gains and losses are recognised in profit or loss when the
liabilities are derecognised as well as through the Effective interest rate amortisation process.
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 Effective interest rate. The Effective interest rate amortisation
is included as finance costs in the statement of profit and loss.
Trade Payables
These amounts represent liabilities for goods and services provided to the Company prior to the end
of financial year which are unpaid. The amounts are unsecured and are usually payable basis varying
trade term. Trade and other payables are presented as current liabilities unless payment is not due
within 12 months after the reporting period. They are recognised initially at fair value and
subsequently measured at amortised cost using Effective interest rate method.
Derecognition
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
Financials 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.
2.08 Inventories
a) Basis of valuation:
Inventories are valued at lower of cost and net realisable value. The comparison of cost and net
realisable value is made on an item-by-item basis.
b) Method of valuation:
Costs incurred in bringing each product to its present location and condition are accounted for as
follows:
- Cost of raw materials has been determined by using First in First out (FIFO) method and comprises
all costs purchase, duties, taxes (other than those subsequently recoverable from tax authorities)
and all other costs incurred in bringing the inventories to their present location and condition.
- Cost of finished goods and work-in-progress includes direct labour and an appropriate share of
fixed and variable production overheads. Fixed production overheads are allocated on the basis
of normal capacity of production facilities.
- Cost of stock in trade has been determined by using First in First out (FIFO) method and comprises
all costs purchase, duties, taxes (other than those subsequently recoverable from tax authorities)
and all other costs incurred in bringing the inventories to their present location and condition.
- Scrap / by products are valued at net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated
costs of completion and the estimated costs necessar6y to make the sale.
Obsolete inventories are identified and written down to net realisable value. Slow moving and
defective inventories are identified and provided to net realisable value.
2.09 Income Taxes
The income tax expense or credit for the period is the tax payable on the current period's taxable
income based on the applicable income tax rate adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences and to unused tax losses. Tax expense for the year
comprises of current tax and deferred tax.
a) Current income tax
Current income tax, assets and liabilities are measured at the amount expected to be paid to or
recovered from the taxation authorities in accordance with the Income Tax Act, 1961 and the Income
Computation and Disclosure Standards (ICDS) enacted in India by using tax rates and the tax laws that
are enacted at the reporting date.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at the end of the reporting period. The company measures its tax balances either based on
the most likely amount or the expected value, depending on which method provides a better
prediction of the resolution of the uncertainty.
Current income tax relating to item recognised in other comprehensive income or equity is recognised
in correlation to the underlying transactions either in OCI or directly in equity.
b) Deferred tax
Deferred tax is provided in full using the liability method on temporary differences arising between
the tax base of asset and liabilities and their carrying amounts in the financial statements. However,
deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of
unused tax credits and any unused tax losses. Deferred tax assets are recognised 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 utilised.
The carrying amount of deferred tax assets is reviewed at each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of
the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each
reporting date and are recognised to the extent that it has become probable that future taxable profits
will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted at the reporting date.
Deferred tax relating to item recognised in other comprehensive income or equity are recognised in
correlation to the underlying transaction in OCI or equity.
2.10 Revenue from contract with customers
Revenue from sales of products
Revenue from sale of products is recognised at the point in time when control of the goods is
transferred to the customer, generally on delivery of the goods and there are no unfulfilled
obligations.
Sale of service
The company recognises revenue from sales of services over period of time, because the customer
simultaneously receives and consumes the benefits provided by the company. Revenue from services
related activities is recognised as and when services are rendered and on the basis of contractual
terms with parties.
2.11 Other Income
Interest Income
For all debt instruments measured either at amortised cost or at fair value through other
comprehensive income, interest income is recorded using the effective interest rate (EIR). EIR is the
rate that exactly discounts the estimated future cash payments or receipts over the expected life of
the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the
financial asset or to the amortised cost of a financial liability. When calculating the effective interest
rate, the Company estimates the expected cash flows by considering all the contractual terms of the
financial instrument (for example, prepayment, extension, call and similar options) but does not
consider the expected credit losses. Interest income is included in other income in the statement of
profit and loss.
Rental Income
Rental income is accounted for on a straight-line basis over the lease terms unless the receipts are
structured to increase in line with expected general inflation to compensate for the lessor's expected
inflationary cost increases and is included in other income in the statement of profit and loss.
2.12 Retirement and other employee benefits
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled
wholly within twelve months after the end of the period in which the employees render the related
service are recognised in respect of employee service up to the end of the reporting period and are
measured at the amount expected to be paid at undiscounted value when the liabilities are settled.
The liabilities are presented as current employee benefit obligations in the balance sheet.
Defined benefit plan - Gratuity
The Employees' Gratuity Fund Scheme, which is defined benefit plan, is managed by Trust with its
investments maintained with Life insurance Corporation of India. The liabilities with respect to
Gratuity Plan are determined by actuarial valuation on projected unit credit method on the balance
sheet date, based upon which the company contributes to the gratuity scheme. The difference, if any,
between the actuarial valuation of the gratuity of employees at the year end and the balance of funds
is provided for an assets / (liability) in the books. Net interest is calculated by applying the discount
rate to the net benefit liability or asset. The company recognises the following changes in the net
defined benefit obligation under Employee benefit expense in statement of profit or loss.
a) Service costs comprising current service cost, past service costs, gain and losses on curtailments
and non-routine settlements.
b) Net interest expense or income.
Remeasurements, comprising of actuarial gains and losses, the effect of asset ceiling, excluding
amounts included in net interest on the net defined benefit liability and the return on plan assets
(excluding amounts included in net interest on the net defined benefit liability), are recognised
immediately in the balance sheet with a corresponding debit or credit to retained earnings through
other comprehensive income in the period in which they occur. Remeasurements are not reclassified
to profit or loss in subsequent periods.
Defined contribution plan - Provident fund and employee state insurance
Retirement benefit in the form of provident fund is a defined contribution scheme. The company has
no obligation, other than the contribution payable to the provident fund. The company recognises
contribution payable through provident fund scheme as an expense, when an employee renders the
related services. If the contribution payable to scheme for service received before the balance sheet
date exceeds the contribution already paid, the deficit payable to the scheme is recognised as liability
after deducting the contribution already paid. If the contribution already paid exceeds the
contribution due for services received before the balance sheet date, then excess is recognised as an
asset to the extent that the prepayment will lead to.
2.13 Earnings per Share
Basic earnings per share are 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.
The weighted average number of equity shares outstanding during the period is adjusted for events
such as bonus issue, bonus element in a right issue, share split, and reverse share split (consolidation
of share) that have changed the number of equity shares outstanding, without a corresponding change
in resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period
attributable to equity shareholders and weighted average number of shares outstanding during the
period are adjusted for the effect of all potential dilutive equity shares.
2.14 Borrowing Costs
Borrowing cost includes interest and other costs incurred in connection with the borrowing of funds
and charged to statement of profit and loss on the basis of effective interest rate (EIR) method.
Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the
borrowing cost.
Borrowing cost directly attributable to the acquisition, construction or production of an asset that
necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised
as part of the cost of the respective asset. All other borrowing costs are recognised as expense in the
period in which they occur.
2.15 Exceptional Items
Exceptional items are transactions which due to their size or incidence are separately disclosed to
enable a full understanding of the company's financial performance. Items which may be considered
exceptional are significant restructuring charges, gains or losses on disposal of investments in
subsidiaries, associate and joint venture and impairment losses/ write down or reversal in value of
investment in subsidiaries, associate and joint venture and significant disposal of fixed assets etc.
2.16 Cash and cash equivalent
Cash and cash equivalent in the balance sheet comprise cash at banks and short term deposits with
an original maturity of three months or less, that are readily convertible to a known amount of cash
and subject to an insignificant risk of changes in value.
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes
cash on hand, deposit held at call with financial institutions, other short term, highly liquid
investments with original maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value. Cash credits are
shown within borrowings in current liabilities in the balance sheet.
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