B. SIGNIFICANT ACCOUNTING POLICIES (1 -14)
1. BASIS OF PREPARATION
The financial statements have been prepared in accordance with India Accounting
Standards (Ind AS) notified under the Companies ( Indian Accounting Standards)
Rules,2015 and with Companies ( Indian Accounting Standards) (amendment)
Rules , 2016 and comply in all material aspects with the relevant provisions of the
Companies Act ,2013.
The financial statements have been prepared on a historical cost basis, except
for the following assets and liabilities which have been measured at fair value:
Certain financial assets and liabilities measured at fair value (refer accounting
policy regarding financial instruments)
The financial statements are presented in INR and all values are rounded to the
nearest lakhs (INR 00,000), except as otherwise indicated.
2. FIXED ASSETS
2.1 Property, Plant and Equipment
The cost of an item of property, plant and equipment is recognized as an asset if,
and only if:
(a) it is probable that future economic benefits associated with the item will flow to the
entity; and
(b) the cost of the item can be measured reliably.
Fixed Assets are stated at acquisition cost less accumulated depreciation / amor¬
tization ( except leasehold land) and cumulative impairment.
Technical know-how / license fee relating to plants/facilities are capitalised as part
of cost of the underlying asset.
Spare parts are capitalized when they meet the definition of PPE, i.e., when the
company intends to use these during more than a period of 12 months.
The acquisition of property, plant and equipment, directly increasing the future
economic benefits of any particular existing item of property, plant and equipment,
which are necessary for the Company to obtain the future economic benefits from
its other assets, are recognized as assets.
2.2 Capital stores are valued at cost. Specific provision is made for likely diminution
in value, wherever required.
2.3 Intangible Assets
Costs incurred on computer software purchased/developed resulting in future
economic benefits, are capitalised as Intangible Asset and amortised over a period
of three years beginning from the quarter in which such software is capitalised.
Gains or losses arising from derecognition of an intangible asset are measured
as the difference between the net disposal proceeds and the carrying amount of
the asset and are recognised in the statement of profit or loss when the asset is
derecognised
2.4 Depreciation/Amortization
Cost of tangible fixed assets (net of residual value) is depreciated on written
down value (WDV) method as per the useful life prescribed in Schedule II to the
Companies Act, 2013.
The Company depreciates components of the main asset that are significant in
value and have different useful lives as compared to the main asset separately.
The company depreciates general spares over the life of the spare from the date it
is available for use. Such depreciation of component capital spares are capitalised
through CWIP to the extent that such assets are used in the development of other
assets.
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.
3. LEASES
Company does not have any operating or finance leases.
4. IMPAIRMENT OF NON FINANCIAL ASSETS
Company assesses, at each reporting date, whether there is an indication that an
asset may be impaired. If any indication exists, or when annual impairment testing
for an asset is required, the Company estimates the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s or cash generating unit’s
fair value less costs of disposal and its value in use. Impairment is recognised
when the carrying amount of an asset exceeds recoverable amount.
5. BORROWING COST
Borrowing costs that are attributable to the acquisition and construction of the
qualifying asset are capitalised as part of the cost of such assets. A qualifying asset
is one that necessarily takes substantial period of time to get ready for intended
use. All other borrowing costs are charged to revenue
6. INVENTORIES
6.1 Inventories are valued at lower of cost or net realisable value. Specific provision is
made in respect of identified obsolete items. For this purpose, the cost of bought-
out inventories comprises of the purchase cost of the items, cost of conversion
and other costs including manufacturing overheads net of recoverable taxes
incurred in bringing them to their respective present location and condition. Cost
of finished goods, work in process, raw materials, chemicals, stores spares and
packing material, trading and other products are determined on weighted average
basis.
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