1.2 SIGNIFICANT ACCOUNTING POLICIES
a) Property, Plant and Equipment
(i) Recognition and measurement
The Company had applied for the one time transition exemption of considering the carrying cost on the transition date i.e. 1st
April, 2016 as the deemed cost under IND AS. Hence regarded thereafter as historical cost.
Free hold land is carried at cost. All other items of Property, Plant and Equipment are measured at cost (which includes capitalised
borrowing costs) less accumulated depreciation and accumulated impairment losses, if any. The cost of an item of Property, Plant
and Equipment comprises:
a) its purchase price, including import duties and nonrefundable purchase taxes, after deducting trade discounts and rebates.
b) any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating
in the manner intended by the management.
c) the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.
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 and depreciated accordingly. Any gain or loss on disposal of an item
of Property, Plant and Equipment is recognised in Statement of profit or loss.
(ii) Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will
flow to the Company.
(iii) Depreciation, Estimated useful life and estimated residual value
Depreciation is calculated using the Straight Line Method, pro rata to the period of use, taking into account useful lives and
residual value of the assets. The Company depreciates its property, plant and equipment over the useful life in the manner
prescribed in Schedule II to the Act and management believe that useful life of assets are same as those prescribed in Schedule II
to the Act. Depreciation is computed with reference to cost or revalued value as per previous GAPP as the case may be. The assets
residual value and useful life are reviewed and adjusted, if appropriate, at the end of each reporting period. Gains and losses on
disposal are determined by comparing proceeds with carrying amounts. These are included in the statement of Profit and Loss.
b) Investment Property
Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Company, is classified
as investment property. Investment property is measured initially at its cost, including related transaction costs and where applicable
borrowing costs. Subsequent expenditure is capitalised to the asset's carrying amount only when it is probable that future economic
benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliably. All other repairs
and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the
replaced part is derecognised. Investment properties are subsequently measured at cost less depreciation. Investment properties are
depreciated using the straight-line method over their estimated useful lives. Investment properties generally have a useful life of 25-40
years. The useful life has been determined based on technical evaluation performed by the management's expert.
De-recognition
Investment properties are de-recognised either when they have been disposed of or when they are permanently withdrawn from use
and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying
amount of the asset is recognised in the statement profit or loss in the period of de-recognition.
c) Intangible Assets
A Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a
business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost
less any accumulated amortization and accumulated impairment losses.
B Internally generated intangibles are not capitalised and the related expenditure is reflected in the Statement of Profit and Loss in
the period in which the expenditure is incurred.
C Trade Marks, Technical Know-how Fees and other similar rights are amortised over their estimated useful life.
D Capitalised cost incurred towards purchase/ development of software is amortised using straight line method over its useful life
of five years as estimated by the management at the time of capitalisation.
E Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at
the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life
continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
F An item of intangible asset 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 de-recognition of the asset [calculated as the difference between the net
disposal proceeds and the carrying amount of the asset] is included in the Statement of Profit and Loss when the asset is
derecognised.
d) 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. Financial instruments also include derivative contracts such as foreign currency foreign exchange forward contracts,
interest rate swaps and currency options.
(i) Financial Assets
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. Financial instruments also include derivative contracts such as foreign currency foreign exchange forward
contracts, interest rate swaps and currency options.
a) Classification
The Company classifies its financial assets in the following measurement categories:
- those to be measured subsequently at Fair Value Through Other Comprehensive Income-[FVTOCI], or Fair Value
Through Profit and Loss-[FVTPL] and - those measured at Amortised Cost.[AC]. The classification depends on the
Company's business model for managing the financial assets and the contractual terms of the cash flows.
b) Measurement
At initial recognition, the Company measures a financial asset at its fair value. Transaction costs of financial assets carried at
fair value through the Profit and Loss are expensed in the Statement of Profit and Loss.
In case of investments
i) In Equity instruments
- For subsidiaries, associates and Joint ventures - Investments are measured at cost and tested for impairment
periodically. Impairment (if any) is charged to the Statement of Profit and Loss.
- For Other than subsidiaries, associates and Joint venture - Investments are measured at FVTOCI.
ii) In Mutual fund
Measured at FVTPL.
iii) In Debt instruments
The Company measures the debts instruments at Amortised Cost. Assets that are held for collection of contractual
cash flows where those cash flows represent solely payment of principal and interest [SPPI] are measured at amortised
cost. Gain or loss on a debt instrument that is subsequently measured at amortised cost and is not part of the hedging
relationship, is recognised in profit or loss when the asset is derecognised or impaired. Interest income from these
financial assets is included in finance income using the Effective interest rate method.
c) Derecognition of financial assets
A financial asset is derecognised only when:
- The Company has transferred the rights to receive cash flows from financial asset, or
- Retains the contractual rights to receive the cash flows of the financial assets, but assumes a contractual obligation to
pay the cash flows to one or more recipients."
Where the Company has transferred an asset and has transferred substantially all risks and rewards of ownership of the
financial asset, the financial asset is derecognised.
Where the Company has not transferred substantially all risks and rewards of ownership of the financial asset, the financial
asset is not derecognised.
Where the Company has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of
the financial asset, the financial asset is derecognised if the Company has not retained the control of the financial asset.
Where the Company retains the control of the financial asset, the asset is continued to be recognised to the extent of
continuing involvement in the financial asset.
d) Impairment of financial assets
In accordance with Ind-AS 109, the Company applies Expected Credit Loss (ECL) Model for measurement and recognition
of impairment loss on the following financial assets and credit risk exposure:
a) Financial assets that are debt instruments and are measured at amortised cost e.g., loans, debt securities, deposits, and
bank balance.
b) Trade receivables
The Company follows 'simplified approach' for recognition of impairment loss allowance on:
- Trade receivables which do not contain a significant financing component.
The application of simplified approach does not require the Company to track changes in credit risk. Rather, it
recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
- For recognition of impairment loss on other financial assets and risk exposure, the Company determines
whether there has been a significant increase in the credit risk since initial recognition. ECL is used to provide for
impairment loss."
(ii) Financial Liabilities
a) Classification
The Company classifies its financial liabilities in the following measurement categories:
- those to be measured subsequently at FVTPL and
- those measured at Amortised Cost (AC)"
The classification depends on the Company's business model for managing the financial assets and the contractual terms
of the cash flows.
b) Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL or AC.
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's financial liabilities include trade and other payables, loans and borrowings including bank overdrafts,
financial guarantee contracts and derivative financial instruments. For trade and other payables maturing within one year
from the balance sheet date, the carrying amount approximate to fair value due to the short maturity of these instruments.
c) Financial liabilities at FVTPL
Financial liabilities at FVTPL include 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 relationships as defined by Ind-AS 109. Separated embedded derivatives 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 profit or loss.
Financial liabilities designated upon initial recognition at FVTPL are designated at the initial date of recognition, 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 recognized in OCI. These gains/loss are not subsequently transferred to statement of profit or 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.
d) Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the Effective
Interest Rate (EIR) method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as
through the EIR amortisation process. AC is calculated by taking into account any discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.
This category generally applies to interest-bearing loans and borrowings.
e) 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 mounts is recognised in the statement of profit or loss.
f) Offsetting of financial instruments
Financial 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. The legally enforceable right must not be contingent on future events and must be
enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the
counterparty.
g) Derivative financial instruments
The Company uses derivative financial instruments, such as forward currency contracts, interest rate swaps and forward
commodity contracts to hedge its foreign currency risks, interest rate risks and commodity price risks respectively. Such derivative
financial instruments are initially recognised at Fair Value on the date on which a derivative contract is entered into and are
subsequently re-measured at Fair Value. Derivatives are carried as financial assets when the Fair Value is positive and as financial
liabilities when the Fair Value is negative.
e) Inventories
Inventories are measured at the lower of cost and net realisable value after providing for obsolesce, if any, except for realisable by¬
products which are measured at net realisable value. The cost (Net of Input Tax Credit availed ) of inventories is determined using
the first-in first out (FIFO) method and includes expenditure incurred in acquiring inventories, production or conversion and
other costs incurred in bringing them to their respective present location and condition. In the case of manufactured inventories
and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity. The
comparison of cost and Net Realisable value is made on an item by item basis. Net realisable value is estimated selling price in
the ordinary course of business, less estimated cost of completion and the estimated costs necessary to make the sale. The net
realisable value of work in progress is determined with reference to selling prices of finished products.
f) Trade Receivable
Trade receivable are recognised initially at Fair Value and subsequently measured at AC using the effective interest method less
provision for impairment. As per Ind AS 109 the Company has applied ECL for recognising the allowance for doubtful debts.
Where Company has offered extended credit period [ECP] to the debtors, the said amount is recorded at present value, with
corresponding credit in the statement of profit and loss over the tenure of the extended credit period.
g) Cash and Cash Equivalent
For the purpose of presentation in the statement of the cash flows, cash and cash equivalent includes the cash and cheques in
hand, deposits held at call with financial institutions other short term, highly liquid investments with original maturity 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.
h) Contributed Equity
Equity shares are classified as equity. Incidental costs directly attributable to the issue of new shares or options are shown in
equity as a deduction, net of tax, from the proceeds.
I) Dividends
Provision is made for the amount of any dividend declared, in the year in which it is approved by shareholders.
II) Earnings per share
(i) Basic earnings per share
Basic earnings per shares is calculated by dividing Profit/(Loss) attributable to equity holders (adjusted for amounts directly
charged to Reserves) before/after Exceptional Items (net of tax) by Weighted average number of Equity shares, (excluding
treasury shares).
(ii) Diluted earnings per share
Diluted earnings per shares is calculated by dividing Profit/(Loss) attributable to equity holders (adjusted for amounts
directly charged to Reserves) before/after Exceptional Items (net of tax) by Weighted average number of Equity shares
(excluding treasury shares) considered for basic earning per shares including dilutive potential Equity shares.
i) Borrowing
Borrowings are initially recognised at Fair Value, net of transaction costs incurred. Borrowings are subsequently measured at Amortised
cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over
the period of borrowings using the effective interest method. Processing/Upfront fee are treated as prepaid asset and netted off from
borrowings. The same is amortised over the period of the facility to which it relates. Preference shares are classified as liabilities. The
dividends on these preference shares, if approved, by shareholders in the forthcoming Annual General Meeting, are recognised in
profit or loss as finance costs, in the year when approved. Borrowings are derecognised from the balance sheet when the obligation
specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of the financial liability that
has been extinguished or transferred to another party and the consideration paid including any non-cash assets transferred or liability
assumed, is recognised in Statement of profit or loss as other gains or (losses). Borrowings are classified as current liabilities unless the
Company has an unconditional right to defer the settlement of liabilities for at least twelve months after the reporting period. Where
there is a breach of a material provision of a long term loan arrangement on or before the end of the reporting period with the effect
that the liability becomes payable on demand on the reporting date, the same is classified as current unless the lender agreed, after the
reporting period and before the approval of financial statements for issue, not to demand payment as a consequence of the breach.
j) Trade and Other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid
at the period end. 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 their Fair Value and subsequently measured at amortised cost using the effective
interest method.
k) Foreign Currency Transactions
Transactions in foreign currencies are translated into the functional currencies of the Company at the exchange rate prevailing at the
date of the transactions. Monetary assets (other than investments in companies registered outside India) and liabilities denominated
in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Investments in companies
registered outside India are converted at rate prevailing at the date of acquisition. Non-monetary assets and liabilities that are measured
at Fair Value in a foreign currency are translated into the functional currency at the exchange rate when the Fair Value was determined.
Non-monetary items that are measured based on historical cost in a foreign currency are not translated. Difference on account of
changes in foreign currency are generally charged to the statement of profit & loss.
l) Revenue Recognition
Revenue is recognized on satisfaction of performance obligation upon transfer of control of promised products or services to customers
in an amount that reflects the consideration the Company expects to receive in exchange for those products or services.
The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the
customer and payment by the customer exceeds one year. As a consequence, it does not adjust any of the transaction prices for the
time value of money.
The Company satisfies a performance obligation and recognises revenue over time, if one of the following criteria is met:
1 The customer simultaneously receives and consumes the benefits provided by the Company's performance as the Group
performs; or
2 The Company's performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or
3 The Company's performance does not create an asset with an alternative use to the Company and an entity has an enforceable
right to payment for performance completed to date.
For performance obligations where one of the above conditions are not met, revenue is recognised at the point in time at which the
performance obligation is satisfied.
(i) Sale of goods
Revenue is recognised on the basis of customer contracts and the performance obligation contained therein. Revenues is
recognised at a point in time when the control to the buyer of goods or services is transferred to a customer.Control lies with the
customer if the customer can independently determine the use of and consume the benefit derived from a product or service
Revenue from product deliveries are recognised at a point in time based on an overall assessment of the existence of a right to
payment, the allocation of ownership rights, the transfer of risks and rewards, and acceptance by the customer. The goods are
often sold with volume discounts/ pricing incentives and customers have a right to return damaged products.
Revenue from sales is based on the price in the sales contracts, net of discounts. Historical experience, specific contractual terms
and future expectations of sales are used to estimate and provide for damage claims. No element of financing is deemed present
as the sales are made with the normal credit terms as per prevalent trade practice and credit policy followed by the Company
ond normal credit terms.
(ii) Sale of Services
Revenue from services is recognised when agreed contractual task has been completed.
(iii) Rental Income
Rental income from investment property is recognised on the basis of lease terms on straight line basis and is included under
Other income in statement of profit and loss account.
(iv) Other Income
a) Dividend income is recognised when right to receive dividend is established.
b) Interest and other income are recognised on accrual basis on time proportion basis and measured at effective interest rate."
v) Export Incentives
Export incentives under various schemes notified by government are accounted for in the year of exports based on eligibility
and when there is no uncertainty in receiving the same and is included in revenue in the statement of profit and loss due to its
operating nature.
(vi) Insurance Claims
Claims receivable on account of insurance are accounted for to the extent the Company is virtually certain of their ultimate
collection
m) Government Grants
(i) Grants from the Government are recognised at their Fair Value where there is a reasonable assurance that the grant will be
received and the Company will comply with all the attached conditions.
(ii) Government grant relating to purchase of Property, Plant and Equipment are included in ''Other current/ non-current liabilities"
as Government Grant - Deferred Income and are credited to Profit or loss on a straight line basis over the expected life of the
related asset and presented within ''Other Operating revenue".
n) employee Benefits
(i) During Employment benefits
(a) Short term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised 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) Post-Employment benefits
(a) Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which Company pays fixed contribution into a
separate entity and will have no legal or constructive obligation to pay future amounts. The Company makes specified
monthly contributions towards government administered Provident Fund scheme. Obligations for contributions to defined
contribution plans are expensed as the related service is provided. Prepaid contributions are recognised as an asset to the
extent that a cash refund or a reduction in future payments is available.
(b) Defined benefit plans
The Company pays gratuity to the employees who have has completed five years of service with the company at the time
when employee leaves the Company. The gratuity is paid as per the provisions of Payment of Gratuity Act, 1972. The gratuity
liability amount is contributed to the approved gratuity fund formed exclusively for gratuity payment to the employees. The
liability in respect of gratuity and other post-employment benefits is calculated using the Projected Unit Credit Method and
spread over the periods during which the benefit is expected to be derived from employees' services. Re-measurement of
defined benefit plans in respect of post-employment are charged to Other Comprehensive Income.
(c) Termination Benefits
Termination benefits are payable when employment is terminated by the Company before the normal retirement date or
when an employee accepts voluntary redundancy in exchange for these benefits. In case of an offer made to encourage
voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the
offer. Benefits falling due more than twelve months after the end of reporting period are discounted to the present value.
o) Income Tax
Income tax expense comprises current and deferred tax. Tax is recognised in statement of profit and loss, except to the extent that
it relates to items recognised in the other comprehensive income or in equity. In such cases, the tax is also recognised in the other
comprehensive income or in equity.
(a) Current Tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities,
based on tax rates and laws that are enacted or subsequently enacted at the Balance sheet date.
Current tax assets and liabilities are offset only if, the Company:
a) has a legally enforceable right to set off the recognised amounts; and
b) intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously."
(b) Deferred Tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities and assets are
measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on
tax rates (and tax laws) that have enacted or subsequently enacted by the end of the reporting period. The carrying amount of
deferred tax liabilities and assets are reviewed at the end of each reporting period. Deferred tax is recognised to the extent that
it is probable that future taxable profit will be available against which they can be used.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company
expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if:
a) the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and
b) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the
same taxable Company."
p) Borrowing Costs
General and specific Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset
that necessarily takes a substantial period of time to get ready for its intended use are capitalised as part of the cost of that asset till
the date it is ready for its intended use or sale. Other borrowing costs are recognised as an expense in the period in which they are
incurred. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying
assets is deducted from the borrowing cost eligible for capitalisation.All other borrowing costs are charged to the statement of profit
and loss for the period for which they are incurred.
q) Leases
At the inception it is assessed, whether a contract is a lease or contains a lease. A contract is a lease or contains a lease if it conveys the
right to control the use of an identified asset, for a period of time, in exchange for consideration.
To assess whether a contract conveys the right to control the use of an identified asset, company assesses whether the contract
involves the use of an identified asset. Use may be specified explicitly or implicitly.
Use should be physically distinct or represent substantially all of the capacity of a physically distinct asset.
If the supplier has a substantive substitution right, then the asset is not identified.
Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use.
Company has the right to direct the use of the asset.
In cases where the usage of the asset is predetermined the right to direct the use of the asset is determined when the company has
the right to use the asset or the company designed the asset in a way that predetermines how and for what purpose it will be used.
Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use
1 Company has the right to direct the use of the asset.
2 In cases where the usage of the asset is predetermined the right to direct the use of the asset is determined when the company
has the right to use the asset or the company designed the asset in a way that predetermines how and for what purpose it will
be used.
At the commencement or modification of a contract, that contains a lease component, company allocates the consideration in the
contract, to each lease component, on the basis of its relative standalone prices. For leases of property, it is elected not to separate
non-lease components and account for the lease and non-lease components as a single lease component.
As a Lessee:
Company recognizes a right-of-use asset and a lease liability at the lease commencement date.
Right-of-use asset (ROU):
The right-of-use asset is initially measured at cost. Cost comprises of the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, any initial direct costs incurred by the lessee, an estimate of costs to dismantle
and remove the underlying asset or to restore the underlying asset or the site on which it is located less any lease incentives received.
After the commencement date, a lessee shall measure the right-of-use asset applying cost model, which is Cost less any accumulated
depreciation and any accumulated impairment losses and also adjusted for certain re-measurements of the lease liability.
Right-of-use asset is depreciated using straight-line method from the commencement date to the end of the lease term. If the lease
transfers the ownership of the underlying asset to the company at the end of the lease term or the cost of the right-of-use asset reflects
company will exercise the purchase option, ROU will be depreciated over the useful life of the underlying asset, which is determined
based on the same basis as property, plant and equipment.
Lease liability:
Lease liability is initially measured at the present value of lease payments that are not paid at the commencement date. Discounting
is done using the implicit interest rate in the lease, if that rate cannot be readily determined, then using company's incremental
borrowing rate. Incremental borrowing rate is determined based on entity's borrowing rate adjusted for terms of the lease and type of
the asset leased.
Lease payments included in the measurement of the lease liability comprises of fixed payments (including in substance fixed payments),
variable lease payments that depends on an index or a rate, initially measured using the index or rate at the commencement date,
amount expected to be payable under a residual value guarantee, the exercise price under a purchase option that the company is
reasonably certain to exercise, lease payments in an optional renewal period if the company is reasonably certain to exercise an
extension option, and penalties for early termination of a lease unless the company is reasonably certain not to terminate early.
Lease liability is measured at amortised cost using the effective interest method. Lease liability is re-measured when there is a change
in the lease term, a change in its assessment of whether it will exercise a purchase, extension or termination option or a revised in¬
substance fixed lease payment, a change in the amounts expected to be payable under a residual value guarantee and a change in
future lease payments arising from change in an index or rate.
When the lease liability is re-measured corresponding adjustment is made to the carrying amount of the right-of-use asset. If the
carrying amount of the right-of-use asset has been reduced to zero it will be recorded in statement of profit and loss.
Right-of-use asset is presented as a separate category under "Non-current assets" and lease liabilities are presented under "Financial
liabilities" in the balance sheet.
Company has elected not to recognise right-of-use assets and lease liabilities for short term leases. The lease payments associated with
these leases are recognised as an expense on a straight-line basis over the lease term.
Lessor
At the commencement or modification of a contract, that contains a lease component, company allocates the consideration in the
contract, to each lease component, on the basis of its relative standalone prices.
At the inception of the lease, it is determined whether it is a finance lease or an operating lease. If the lease transfers substantially all of
the risks and rewards incidental to ownership of the underlying asset, then it is a financial lease, otherwise it is an operating lease.
If the lease arrangement contains lease and non-lease components, then the consideration in the contract is allocated using the
principles of IND AS 115. The company tests for the impairment losses at the year end. Payment received under operating lease is
recognised as income on straight line basis, over the lease term.
The accounting policies applicable to the company as a lessor, in the comparative period, were not different from IND AS 116.
r) Non- Current assets held for sale
Non-Current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather
than through continuing use and sale is considered highly probable. They are measured at lower of their (a.) carrying amount and (b.)
Fair Value less cost to sell. Non-current assets are not depreciated or amortised when they are classified as held for sale.
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