Summary of Significant accounting policies
a) Current and Non-Current Classification
The Company presents assets and liabilities in
the Balance Sheet based on Current/Non-Current
classification.
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 the 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 the 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 at least twelve
months after the reporting period.
The Company classifies all other liabilities as non¬
current.
Deferred tax assets and liabilities are classified as non¬
current assets and liabilities.
b) Property, plant and equipment
An item of PPE that qualifies as an asset is measured
on initial recognition at cost. Following initial
recognition, items of PPE are carried at its cost
less accumulated depreciation and accumulated
impairment losses. The cost of an item of PPE
comprises of its purchase price including import
duties and other non-refundable purchase taxes or
levies, directly attributable cost of bringing the asset
to its working condition for its intended use and the
initial estimate of decommissioning, restoration and
similar liabilities, if any. Any trade discounts and
rebates are deducted in arriving at the purchase
price. Cost includes cost of replacing a part of a plant
and equipment if the recognition criteria are met.
Items such as, spare parts, stand-by equipment and
servicing equipment that meet the definition of PPE
are capitalized at cost and depreciated over their
useful life. Costs in nature of repairs and maintenance
are recognized in the Statement of profit and loss as
and when incurred.
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, recognises 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. The contract conveys the right
to control the use of an identified asset, if it involves
the use of an identified asset and the Company has
substantially all of the economic benefits from use
of the asset and has right to direct the use of the
identified asset. The cost of the right-of-use asset shall
comprise of the amount of the initial measurement
of the lease liability adjusted for any lease payments
made at or before the commencement date plus any
initial direct costs incurred. The right-of-use assets is
subsequently measured at cost less any accumulated
depreciation, accumulated impairment losses, if any
and adjusted for any remeasurement of the lease
liability. The right-of-use assets is depreciated 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 recognises the lease payments as an
operating expense on a straight-line basis over the
lease term.
d) Cash and Cash Equivalents
Cash and cash equivalents comprise of cash on hand,
cash at banks, short-term deposits.
e) Impairment of Non-Financial Assets
The Company assesses at each reporting date as to
whether there is any indication that any Property,
Plant and Equipment and Intangible Assets or
group of Assets, called Cash Generating Units (CGU)
may be impaired. If any such indication exists, the
recoverable amount of an asset or CGU is estimated
to determine the extent of impairment, if any. When
it is not possible to estimate the recoverable amount
of an individual asset, the Company estimates the
recoverable amount of the CGU to which the asset
belongs.
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