C) Summary of Material Accounting Policies:
1) Property, Plant and Equipment (PPE):
The Company has elected to continue with the carrying value of Property, Plant and Equipment ('PPE')
recognised as of transition date measured as per the Previous GAAP and use that carrying value as its
deemed cost.
Property, Plant and Equipment are stated at cost less accumulated depreciation and accumulated
impairment losses if any, except for freehold land which is not depreciated.
Management has assessed applicability of Ind AS 40 - Investment Property to the Mall property. In
assessing such applicability, management has considered the ownership of assets, terms of license
agreements, various services provided to the licensees, etc. Based on such assessment, the management
has considered the Mall property as owner occupied property and hence classified as Property, Plant and
Equipment.
Expenditure on acquisition of PPE for Research and Development (R&D) is included in PPE and
depreciation thereon is provided as applicable.
Any gain or loss arising on the derecognition of an item of property, plant and equipment is determined as
the difference between the net disposal proceeds and the carrying amount of the asset and is recognized
in Profit or Loss aggregated with other income or other expense line item on net basis respectively.
The depreciable amount of an asset is determined after deducting its residual value. Depreciation on the
property, plant and equipment, is provided over the useful life of assets based on management estimates
which is in line with the useful life indicated in Schedule II to the Companies Act, 2013. Depreciation on
all assets is provided on straight line basis. Given below are the estimated useful lives for each class of
property, plant and equipment:
Further, the Company has identified and determined separate useful life for each major component of
fixed assets, if they are materially different from that of the remaining assets, for providing depreciation
in compliance with Schedule II of the Companies Act, 2013.
2) Intangible assets:
Intangible assets acquired separately are measured on initial recognition at cost. After initial recognition,
intangible assets are carried at cost less any accumulated amortisation and accumulated impairment
losses.
Software (not being an integral part of the related hardware) acquired for internal use are treated as
intangible assets.
Any gain or loss arising on the derecognition of an item of Intangible assets is determined as the difference
between the net disposal proceeds and the carrying amount of the asset and is recognized in Profit or
Loss aggregated with other income or other expense line item on net basis respectively.
3) Inventories:
Raw Materials, packing materials and stores and spares are valued at lower of cost and net realisable value.
However, materials held for use in production of inventories are not written down below cost, if the finished
products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials,
packing materials and stores and spares is determined on daily moving weighted average cost basis.
Work in progress and finished goods are valued at lower of cost and net realizable value. Cost includes
direct materials and labour and a proportion of manufacturing overheads based on normal operating
capacity.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated cost
of completion and estimated cost necessary to make the sale.
4) Leases:
Where the Company is a lessee-
The Company's lease asset classes primarily consist of leases for land and buildings. The Company
assesses whether a contract contains a lease, at inception of a contract.
At the date of commencement of the lease, the Company recognizes a right-of-use asset (“ROU”) and
a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a
term of twelve months or less (short-term leases) and low value leases. For these short-term and low
value leases, the Company recognizes the lease payments as an operating expense on a straight-line
basis over the term of the lease.
Lease term includes extension or termination options when it is reasonably certain that they will be
exercised
The right-of-use assets are initially recognized at cost and subsequently measured at cost less accumulated
depreciation and impairment losses.
Right-of-use assets are depreciated from the commencement date on a straight-line basis over the
shorter of the lease term and useful life of the underlying asset.
The lease liability is initially measured at the present value of the future lease payments. The lease
payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using
the incremental borrowing rates. Lease liabilities are remeasured with a corresponding adjustment to the
related right of use asset if the Company changes its assessment of whether it will exercise an extension
or a termination option.
Where the Company is a lessor-
Lease income from operating leases where the Company is a lessor is recognised in the Statement of
Profit and Loss on a straight- line basis over the lease term.
Management has assessed applicability of Ind AS 116 - Leases, to the Mall property. In assessing such
applicability, management has considered the ownership of assets, terms of license agreements, various
services provided to the licensees, etc. Since the licensee does not have the right to obtain substantially
all the economic benefits from the use of the asset or does not have complete right to direct the use of
the asset, the Management is of the view that Ind AS 116 - Leases is not applicable to the Mall property.
5) Government grants:
Government grants/subsidy are recognized when there is reasonable assurance that the Company will
comply with the conditions attached to them and that the grants/subsidy will be received.
Grants/subsidy related to income are recognized as income over the periods necessary to match them
with the costs for which they are intended to compensate on a systematic basis. Government grants/
subsidy that are receivable as compensation for expenses or losses already incurred or for the purpose
of providing immediate financial support with no future related costs are recognized in the Statement
of Profit and Loss in the period in which they become receivable. Grants/subsidy related to income are
presented under other income in the Statement of Profit and Loss except for grants/subsidy received
in the form of rebate or exemption which are deducted in reporting the related expense. Grant/subsidy
receivable against a specific fixed asset is deducted from the cost of the relevant fixed asset.
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