NOTE NO. 31 SIGNIFICANT ACCOUNTING POLICIES
• Basis of Preparation of Financial Statements
a) 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) read with section 133 of Companies Act, 2013 and presentation requirements of Division II of
schedule III to the Companies Act, 2013 (as amended).
b) The financial statements have been prepared on the historical cost basis except for the following assets and
liabilities which have been measured at fair value (as explained in the accounting policies below):
i. Derivative Financial Instruments
ii. Certain financial assets and liabilities
iii. Defined Benefit Plan's - Plan Assets
c) The financial statements are presented in INR () (Indian Rupees) which is also Company's functional currency
and all values are rounded to the nearest Lakh, except when otherwise indicated. Amounts less than INR 50,000
have been presented as 0.
• Disclosure of Accounting Policies
The Accounting Principles and policies, recognized as appropriate for measurement and reporting of the financial
performance and the financial position on Accrual Basis except otherwise disclosed using historical cost i.e. not
taking into account changing money values/impact of inflation, are applied in the preparation of the financial
statement and those which are considered material to the affairs are suitably disclosed. The statement on Significant
Accounting policy excludes disclosures regarding Accounting Standards in respect of which there are no material
transactions during the year.
• Valuation of Inventories
The Company has kept proper records of its inventories. The Cost of inventory is ascertained as the total of cost of
procurement, cost of conversions and cost of bringing inventories to its present location and conditions excluding
any abnormal cost, administrative, financial, and selling and storage cost. Net realizable value is calculated based on
the estimated sales price in the ordinary course of the business less estimated cost of completion and estimated cost
necessary to make a sale. Net realizable value is calculated based on the most reliable evidence at the time of
valuation. The comparison of cost and net realizable value is made the item by item or by a group of item.
Inventories are generally valued at cost or market value whichever is lower.
• Current versus Non-Current Classification
The Group presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset
is treated as current when it is:
o Expected to be realized or intended to be sold or consumed in the normal operating cycle
o Held primarily for trading
o Expected to be realized within twelve months after the reporting period, or
o 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:
o It is expected to be settled in the normal operating cycle
o It is held primarily for trading
o It is due to be settled within twelve months after the reporting period, or
o There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting
period.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The company classifies all other liabilities as non-current. The operating cycle is the time between the acquisition of
assets for processing and their realization in cash and cash equivalents. The company has identified twelve months
as its operating cycle.
• Cash and Cash Equivalents
The Company considers all highly liquid financial instruments, which are readily convertible into known amounts of
cash that are subject to an insignicant risk of change in value and having maturities of three months or less from the
date of purchase, to be cash equivalents.
• Leases
(i) General Description of Lease Arrangements
The Company enters into lease agreements for various assets such as office premises, machinery, and vehicles.
Under Ind AS 116, the Company recognizes a right-of-use asset and a corresponding lease liability for all leases,
except for short-term leases and leases of low-value assets, which are not recognized in the balance sheet. Lease
contracts generally have non-cancellable periods up to 12 months and may include options to extend or terminate
the lease. Renewal options, if exercised, are incorporated in the lease liability measurement when reasonably
certain.
(ii) Measurement of Lease Liabilities
At the commencement date of a lease, the Company measures the lease liability at the present value of lease
payments not paid at that date. Lease payments included in this measurement comprise fixed payments (less any
lease incentives receivable), variable lease payments that depend on an index or rate, amounts expected to be
payable under residual value guarantees, and any other payments likely to be incurred by the lessee. The lease
liability is subsequently measured at amortized cost using the effective interest rate method.
(iii) Right-of-Use Assets
Right-of-use assets are initially measured at cost, which comprises the lease liability adjusted for lease prepayments,
initial direct costs, and any lease incentives received. The right-of-use assets are subsequently depreciated over the
shorter of the lease term or the useful life of the underlying asset, unless the lease transfers ownership to the
Company.
The following table summarizes the reconciliation of the carrying amount of right-of-use assets attributable to
operating leases (' In Lakh):
(iv) Lease Liabilities
The Company does not have any lease liabilities.
(v) Lease Expense
The lease pertains to lease of land which is a non-depreciable asset. Accordingly, no lease right is depreciated by
the Company.
6. Additional Disclosures
The Company's lease contracts contain options to extend and terminate the lease that have not been factored into
the measurement of lease liabilities or right-of-use assets, as the exercise of such options is not reasonably certain.
Any variable lease payments not included in the measurement of lease liabilities are recognized in profit or loss in
the period in which the obligation is incurred.
• Functional and Presentation Currency
These standalone financial statements are presented in Indian Rupees (INR) (), which is the functional currency of
the Company. All financial information presented in Indian Rupees has been rounded to the nearest Lakh, except
when otherwise indicated. Amounts less than INR 50,000 have been presented as 0.
• Employee Benefits
(i) Short term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the
amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a
result of past service provided by the employee and the obligation can be estimated reliably.
(ii) Defined contribution plans
Obligations for contributions to defined contribution plans are expensed as the related service is provided and the
Company will have no legal or constructive obligation to pay further amounts. Prepaid contributions are recognised
as an asset to the extent that a cash refund or a reduction in future payments is available.
(iii) Defined benefit plans
The Company's net obligation in respect of defined benefit plans is calculated separately for each plan by
estimating the amount of future benefit that employees have earned in the current and prior periods, discounting
that amount and deducting the fair value of any plan assets. The calculation of defined benefit obligations is
performed periodically by an independent qualified actuary using the projected unit credit method. When the
calculation results in a potential asset for the Company, the recognised asset is limited to the present value of
economic benefits available in the form of any future refunds from the plan or reductions in future contributions to
the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum
funding requirements.
Re-measurement of the net defined benefit liability, which comprise actuarial gains and losses and the return on
plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised
immediately in other comprehensive income (OCI). Net interest expense (income) on the net defined liability
(asset) is computed by applying the discount rate, used to measure the net defined liability (asset). Net interest
expense and other expenses related to defined benefit plans are recognised in the Statement of Profit and Loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in a benefit that relates to
past service or the gain or loss on curtailment is recognised immediately in Statement of Profit and Loss. The
Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.
(iv) Other long-term employee benefits
The Company's net obligation in respect of long-term employee benefits is the amount of future benefit that
employees have earned in return for their service in the current and prior periods. The obligation is measured
based on a periodical independent actuarial valuation using the projected unit credit method. Re-measurement are
recognised in Statement of Profit and Loss in the period in which they arise.
• Fair Value Measurement
The Company measures financial assets, at fair value at each balance sheet date. 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. The fair value measurement is based on the presumption that the transaction to sell the asset or
transfer the liability takes place either:
o In the principal market for the asset or liability, or
o In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value
measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits
by using the asset in its highest and best use or by selling it to another market participant that would use the asset in
its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, maximizing the use of relevant observable inputs and minimising the use of
unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value
measurement as a whole:
o Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
o Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable
o Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is
Unobservable
For assets and liabilities that are recognised in the financial statements regularly, the Company determines whether
transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level
input that is significant to the fair value measurement as a whole) at the end of each reporting period.
Company management determines the policies and procedures for recurring and non-recurring fair value
measurement. Involvement of external valuers is decided upon annually by Company management. The
management decodes after discussion with external valuers about valuation technique and inputs to use for each
case.
At each reporting date, the Company's management analyses the movements in the values of assets and liabilities
which are required to be re-measured or re-assessed as per the Company's accounting policies. For this analysis,
the Company verifies the major inputs applied in the latest valuation by agreeing on the information in the valuation
computation to contracts and other relevant documents.
The Company, in conjunction with the Company's external valuers, also compares the change in the fair value of
each asset and liability with relevant external sources to determine whether the change is reasonable. For fair value
disclosures, the Company has determined classes of assets and liabilities based on the nature, characteristics and
risks of the asset or liability and the level of the fair value hierarchy as explained above.
• Revenue Recognition
Revenue is recognised to the extent it is probable that the economic benefits will flow to the Company and that the
revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair
value of the consideration received or receivable, taking into account contractually defined terms of payment and
excluding taxes or duties collected on behalf of the government. The Company assesses its revenue arrangements
against specific criteria, i.e., whether it has exposure to the significant risks and rewards associated with the sale of
goods or the rendering of services, to determine if it is acting as a principal or as an agent.
Revenue is recognised, net of trade discounts, goods and service tax or other taxes, as applicable.
(i) Sale of Goods
Revenue from sale of goods is recognized in the statement of profit and loss when the significant risks and
rewards in respect of ownership of goods have been transferred to the buyer as per the terms of the respective
sales order and the Company neither continuing managerial involvement to the degree usually associated with
ownership nor effective control over the goods sold. Revenue from the sale of goods is measured at the fair
value of the consideration received or receivable, net of returns and allowances and discounts.
(ii) Interest Income
For all financial assets measured either at amortised cost, 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 the amortised cost of financial liability. When calculating the effective interest rate, the
group 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.
(i) Dividend Income
Dividend income from investments is recognised when the right to receive the payment is established which is
generally when shareholders approve the dividend.
• The Property, Plant and Equipment & Depreciation
(i) Recognition and Measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses if any.
The cost of an item of property, plant and equipment comprises - its purchase price, including import duties and non¬
refundable purchase taxes, after deducting trade discounts and rebates. - Any costs are directly attributable to bringing the
asset to the location and condition necessary for it to be capable of operating in the manner intended by management. -
the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the
obligation for which the Company incurs either when the item is acquired or as a consequence of having used the item
during a particular period for purposes other than to produce inventories during that period. - Income and expenses related
to the incidental operations, not necessary to bring the item to the location and condition necessary for it to be capable of
operating in the manner intended by management, are recognised in Statement of Profit and Loss. If significant parts of an
item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major
components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is
recognised in Statement of Profit and Loss. Capital work-in-progress in respect of assets which are not ready for their
intended use are carried at cost, comprising of direct costs, related incidental expenses and attributable interest.
(ii) Subsequent Expenditure
Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the
expenditure will flow to the Company.
(iii) Depreciation
The depreciable amount for assets is the cost of an asset or other amount substituted for cost, less its estimated residual
value. Depreciation on property, plant and equipment of the Company has been provided on the straight-line method as
per the useful life prescribed in Schedule II to the Act, except in respect of the following categories of assets, in whose
case the life of the assets has been assessed as under based on independent technical evaluation and management's
assessment thereof, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions
of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance
support, etc
Useful life is taken as per Schedule II of Companies Act, 2013.
Depreciation method, useful live and residual values are reviewed at each financial year-end and adjusted if appropriate.
Depreciation on additions (disposals) is provided on a pro-rata basis, i.e. from (up to) the date on which asset is ready for
use (disposed of).
(iv) De-recognition
An item of property, plant and equipment and any significant part initially recognized is de-recognised upon disposal or
when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on
the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales
proceeds and the carrying amount of the asset and is recognized in the Statement of Profit and Loss.
• Intangible Assets
(i) Recognition and Measurement
Intangible assets are carried at cost less accumulated amortization and impairment losses if any. The cost of an intangible
asset comprises of its purchase price, including any import duties and other taxes (other than those subsequently
recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its
intended use. Expenditure on research and development eligible for capitalization are carried as Intangible assets under
development where such assets are not yet ready for their intended use.
(ii) Subsequent Expenditure
Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the
expenditure will flow to the Company.
(iii) Amortization
Intangible assets are amortised over their estimated useful life on Straight Line Method.
The estimated useful lives of intangible assets and the amortization period are reviewed at the end of each financial year,
and the amortization method is revised to reflect the changed pattern if any
(iv) De-recognition
An intangible asset is de-recognized on disposal, or when no future economic benefits are expected from use or disposal.
Gains or losses arising from de-recognition of any intangible asset are measured as the difference between net disposal
proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is
de-recognized.
• Capital Work in Progress
Expenditure related to and incurred during implementation (net of incidental income) of capital projects to get the
assets ready for intended use is included under “Capital Work in Progress (including related inventories)”. The same is
allocated to the respective items of property plant and equipment on completion of construction / erection of the capital
project / property, plant and equipment. Capital work in progress is stated at cost, net of accumulated impairment loss,
if any.
• Financial Instruments
(i) Recognition and measurement
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 asset (except for trade receivable) and financial liability is initially measured at fair value. Transaction costs that
are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and
financial liabilities at fair value through profit and loss) are added to or deducted from the fair value of the financial assets
or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of
financial assets or financial liabilities at fair value through profit and loss are recognised immediately in the Statement of
Profit and Loss.
(ii) Offsetting
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a legally
enforceable right (not contingent on future events) to off-set the recognized amounts and there is an intention to settle on a
net basis, or to realize the assets and settle the liabilities simultaneously.
• Financial Assets
(i) Initial recognition and measurement
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or
convention in the market place (regular way trades) are recognized on the trade date, i.e. the date that the Company
commits to purchase or sell the asset.
(ii) Subsequent measurement
For purposes of subsequent measurement, financial assets are classified based on assessment of business model in
which they are held. This assessment is done for portfolio of the financial assets. The relevant categories are as below:
(iii) Financial assets measured at amortized cost
Financial assets that meet the following conditions are subsequently measured at amortized cost using effective interest
rate (EIR) method (except for debt instruments that are designated as at fair value through profit or loss on initial
recognition):
• the asset is held within a business model whose objective is to hold assets in order to collect contractual
cash flows; and
• Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount outstanding.
• The effective interest rate method is a method of calculating the amortized cost of financial assets and of
allocating interest income over the relevant period The effective interest rate is the rate that exactly
discounts estimated future cash receipts (including all fees and transaction costs and other premiums or
discounts) through the expected life of the financial assets, or where appropriate, a shorter period, to the
gross carrying amount on initial recognition.
• Interest is recognized on an effective interest rate basis for debt instruments other than those financial
assets classified as at Fair Value through Profit and Loss (FVTPL).
• Financial assets measured at fair value through other comprehensive income (FVTOCI). A financial asset
is measured at FVTOCI if it meets both of the following conditions and is not designated as at FVTPL:
• The asset is held within a business model whose objective is achieved by both collecting contractual cash
flows and selling financial assets; and the contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(iv) Financial assets measured at fair value through profit and loss (FVTPL)
Financial assets which are not measured at amortized cost or FVTOCI and are held for trading are measured at FVTPL.
Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising
on re-measurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any dividend
or interest earned on the financial asset.
• Business model assessment
The Company makes an assessment of the objectives of the business model in which a financial asset is
held because it best reflects the way business is managed and information is provided to management.
The assessment of business model comprises the stated policies and objectives of the financial assets,
management strategy for holding the financial assets, the risk that affects the performance etc. Further
management also evaluates whether the contractual cash flows are solely payment of principal and
interest considering the contractual terms of the instrument.
• De-recognition of financial assets
The Company derecognizes a financial asset when the contractual rights to the cash flows from the
financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in
which substantially all of the risks and rewards of ownership of the financial asset are transferred or in
which the Company neither transfers nor retains substantially all of the risks and rewards of ownership
and does not retain control of the financial asset.
On de-recognition of a financial asset in its entirety, the difference between the asset's carrying amount
and the sum of the consideration received and receivable and the cumulative gain or loss that had been
recognized in other comprehensive income and accumulated in equity is recognized in the Statement of
Profit and Loss if such gain or loss would have otherwise been recognized in the Statement of Profit and
Loss on disposal of that financial asset.
• Impairment of financial assets
The Company applies the expected credit loss model for recognizing impairment loss on financial assets
measured at amortized cost, trade receivables and other contractual rights to receive cash or other
financial asset, including inter corporate deposits.
Expected credit loss is the difference between all contractual cash flows that are due to the Company in
accordance with the contract and all the cash flows that the Company expects to receive (i.e. all cash
shortfalls), discounted at the original effective interest rate. The Company estimates cash flows by
considering all contractual terms of the financial instrument through the expected life of that financial
instrument.
The Company assesses at each balance sheet date whether a financial asset or a Group of financial
assets is impaired. Ind AS 109, ‘Financial Instruments' requires expected credit losses to be measured
through a loss allowance. The Company recognizes credit loss allowance using the lifetime expected
credit loss model. The Company measures the loss allowance for a financial instrument at an amount
equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased
significantly since initial recognition. If the credit risk on a financial instrument has not increased
significantly since initial recognition, the Company measures the loss allowance for that financial
instrument at an amount equal to 12-month expected credit losses.
The Company's financial assets comprise of investments, cash and cash equivalents, trade receivables,
other bank balances, interest accrued on bank deposits / others, security deposits, interoperate deposits,
other receivables and derivative financial instruments. These assets are measured subsequently at
amortized cost except for derivative assets and short term investment in mutual funds which are
measured at FVTPL.
• Financial Liabilities and Equity Instruments
(i) Classification as debt or equity
Debt and equity instruments (including perpetual securities) issued by the Company are classified as either
financial liabilities or as equity in accordance with the substance of the contractual arrangements and the
definitions of a financial liability and an equity instrument.
(ii) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds
received, net of direct issue costs.
(iii) Unsecured perpetual securities
Unsecured perpetual securities (“securities”) are the securities with no maturity or redemption and are
repayable only at the option of the borrower. The distribution on this debt is cumulative and at the discretion
of the borrower, where the borrower has an unconditional right to defer the same. The Company classifies
these instruments as equity under Ind AS 32.
• Financial liabilities
(i) Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss,
loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge,
as appropriate.
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.
The Company's financial liabilities include trade and other payables, loans and borrowings including bank
overdrafts and interoperate deposits, financial guarantee contracts and derivative financial instruments.
(ii) Subsequent measurement
All financial liabilities are measured at amortized cost using the effective interest method or at FVTPL.
(iii) Financial liabilities at amortized cost
Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured at
amortized cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that
are subsequently measured at amortized cost are determined based on the effective interest method. Interest
expense that is not capitalized as part of costs of an asset is included in the ‘Finance costs' line item in the
Statement of Profit and Loss.
The effective interest method is a method of calculating the amortized cost of a financial liability and of
allocating interest expense over the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash payments (including all fees and points paid or received that form an integral
part of the effective interest rate, transaction costs and other premiums or discounts) through the expected
life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial
recognition.
Trade and other payables are recognized at the transaction cost, which is its fair value, and subsequently
measured at amortized cost. Similarly, interest bearing loans (inter corporate deposits), trade credits and
borrowings (including bonds) are subsequently measured at amortized cost using effective interest rate
method. Trade credits include Buyer's credit, Foreign Letter of Credit and Inland Letter of Credit.
(iv) Financial liabilities at fair value through profit or loss (FVTPL)
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition as FVTPL. Financial liabilities are classified as held for trading if
these are incurred for the purpose of repurchasing in the near term.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on re-measurement
recognized in profit or loss. The net gain or loss recognized in profit or loss incorporates any interest paid on
the financial liability.
(v) Fair Values are determined in the manner designed in note above.
• De-recognition of financial liabilities
The Company derecognizes financial liabilities when, and only when, the Company's obligations are
discharged, cancelled or have expired. An exchange with a lender of debt instruments with substantially
different terms is accounted for as an extinguishment of the original financial liability and the recognition
of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability
is accounted for as an extinguishment of the original financial liability and the recognition of a new
financial liability. The difference between the carrying amount of the financial liability de-recognized and
the consideration paid and payable is recognized in the Statement of Profit and Loss.
• Financial guarantee contracts
Financial guarantee contracts issued by the Company are those contracts that require a payment to be
made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment
when due in accordance with the terms of a debt instrument. Financial guarantee contracts are
recognized initially as a liability at fair value through profit or loss, adjusted for transaction costs 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 recognized less cumulative amortization.
• Derivative financial instruments
(i) Initial recognition and subsequent measurement
The Company enters into a variety of derivative financial instruments to manage its exposure to interest
rate and foreign exchange rate risks, including foreign exchange forward contracts, interest rate swaps,
cross currency swaps, principal only swap and coupon only swap. Derivatives are initially measured at
fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein
are generally recognized in the Statement of Profit and Loss as Foreign Exchange (Gain) / Loss except
those relating to borrowings, which are separately classified under Finance Cost as (Gain) /Loss on
derivative contracts and those pertaining to the effective portion of cash flow hedges, which is recognized
in OCI and later reclassified to profit or loss when the hedge item affects profit or loss or treated as basis
adjustment if a hedged forecast transaction subsequently results in the recognition of a non-financial
asset or non-financial liability. Derivatives are carried as financial assets when the fair Value is positive
and as financial liabilities when the fair value is negative.
(ii) Embedded Derivatives
Derivatives embedded in non-derivative host contracts that are not financial assets within the scope of Ind AS
109 “Financial Instruments” except for the effective portion of cash flow hedges (refer note 3(s)) are treated
as separate derivatives when their risks and characteristics are not closely related to those of the host
contracts and the host contracts are not measured at FVTPL. These embedded derivatives are measured at
fair value with changes in fair value recognized in Statement of Profit and Loss.
Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows
that would otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss
category.
• Non-Current Assets Held for Sale
Assets are classified as held for sale and stated at the lower of carrying amount and fair value less costs to sell if the
asset is available for immediate sale and its sale is highly probable. Such assets or group of assets are presented
separately in the Balance Sheet as “Assets Classified as Held for Sale”. Once classified as held for sale, intangible
assets and property, plant and equipment are no longer amortised or depreciated.
• Impairment of Assets
The carrying values of assets/cash generating units at each balance sheet date are reviewed for impairment if any
indication of impairment exists. The following intangible assets are tested for impairment each financial year even if
there is no indication that the asset is impaired:
i) an intangible asset that is not yet available for use; and
ii) an intangible asset that is having an indefinite useful life.
If the carrying amount of the assets exceeds the estimated recoverable amount, an impairment is recognised for
such excess amount. The impairment loss is recognised as an expense in the Statement of Profit and Loss unless
the asset is carried at a revalued amount, in which case any impairment loss of the revalued asset is treated as a
revaluation decrease to the extent a revaluation reserve is available for that asset. The recoverable amount is the
greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows
to their present value based on an appropriate discount factor. When there is indication that an impairment loss
recognized for an asset (other than a revalued asset) in earlier accounting periods no longer exists or may have
decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss, to the extent the
amount was previously charged to the Statement of Profit and Loss. In the case of revalued assets, such reversal is
not recognised.
• Foreign Currency Transactions
Transactions in foreign currency are recorded at the approximate exchange rate prevailing on the date of
transactions. Foreign currency monetary assets and monetary liabilities not covered by forwarding exchange
contracts are translated at year-end exchange rates and profit and loss so determined and realized exchange
gains/losses are recognised in purchase proceed of imports. The company has made The Company has made
Foreign Exchange Gain of 8,95,630 (PY Gain ' 15,16,012).
• Government Grants and Subsidies
The company recognizes the Government grants only when there is reasonable assurance that:
a) The enterprise will comply with the conditions attached to them and
b) The grant will be received.
During the year, the company has not received any grant/subsidy.
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