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A Property, Plant and Equipment
All items of property, plant and equipment are stated at acquisition cost net of accumulated depreciation and
accumulated impairment losses, if any; Historical cost includes expenditure that is directly attributable to the
acquisition of the items. No CENVAT credit is avail on the assets capitalized.
Subsequent costs are included in the carrying amount of asset or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Company and the cost of
the item can be measured reliably. All other repairs and maintenance expenses are charged to the Statement of Profit
and Loss during the period in which they are incurred. Gains or losses arising on retirement or disposal of assets are
recognised in the Statement of Profit and Loss.
Property, plant and equipment which are not ready for intended use as on the reporting date are disclosed as Capital
work-in-progress'.
"On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and
equipment recognized as at 1 April 2017 measured as per the previous GAAP and use that carrying value as the
deemed cost of the property, plant and equipment"
B Depreciation / amortization on property, plant and equipment
Depreciable amount for Property, plant and equipment is the cost of an asset, less its residual value. Depreciation on
Property, plant and equipment is provided on the startight line method value method over the useful lives of assets as
prescribed under para C of Schedule II of the Companies Act, 2013.
Depreciation is calculated on a pro-rata basis from the date of acquisition/installation till the date, the assets are sold
or disposed off. Leasehold land is amortized over period of lease. Assets costing individually up to 5000 are written off
to statement of profit and Loss.
C Impairment of Property, plant and equipment
The carrying amounts of assets are reviewed at each Balance Sheet date to assess if there is any indication of
impairment based on internal / external factors. An impairment loss on such assessment will be recognised wherever
the carrying amount of an asset exceeds its recoverable amount. The recoverable amount of the assets is net selling
price or value in use, whichever is higher. While assessing value in use, the estimated future cash flows are discounted
to the present value by using weighted average cost of capital. A previously recognised impairment loss is further
provided or reversed depending on changes in the circumstances and to the extent that carrying amount of the assets
does not exceed the carrying amount that will be determined if no impairment loss had previously been recognised.
D De-recognition of property, plant and equipment
The carrying amount of an item of Property, plant and equipment is de-recognised on disposal or when no future
economic benefits are expected from its use or disposal. The gain or loss arising from the de-recognition of an item of
Property, plant and equipment is measured as the difference between the net disposal in proceeds and the carrying
amount of the item and is recognised in the statement of profit and loss when the item is de-recognised.
E Borrowings and Borrowing costs
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are removed from the
balance sheet when the obligation specified in the contract is discharged, cancelled or expired. Borrowings are
classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at
least 12 months after the reporting date.
Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are
capitalized 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 the statement of Profit and Loss in the period in
which they are incurred.
F Financial Instruments - Financial Asset
G Classification:
The Company classifies its financial assets in the following measurement categories:
( I ) Those to be measured subsequently at fair value (either through Other Comprehensive Income, or through profit or
loss)
( II ) Those measured at amortised cost
The classification depends on the business model of the entity for managing financial assets and the contractual terms
of the cash flows. For assets measured at fair value, gains and losses will either be recorded in Other Comprehensive
Income or profit or loss. For investments in debt instruments, this will depend on the business model in which the
investment is held.
2 Recognition and measurement:
( I ) Initial Recognition
Financial assets are recognised when the Company becomes a party to the contractual provisions of the instrument.
Financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value
through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Transaction costs
of financial assets carried at fair value through profit or loss are expensed in the Statement of Profit and Loss.
( II ) Subsequent Measurement:
After Initial recognition, financial assets are measured at ;
( I ) Financial assets carried at amortized cost
( II ) Financial assets at fair value through profit and loss
H Debt Instruments
( I ) Measured at amortized cost
Financial Assets that are held for collection of contractual cash flow where those cash flows represent solely payment
of principal and interest are measured at amortised cost. Interest income from these financial assets is included in
interest income using the Effective Interest Rate (EIR) method the amortisation of EIR and loss arising from impairment, if
any is recognised in the Statement of Profit and Loss.
( II ) Measured at fair value through profit or loss (FVTPL)
A financial asset not classified as either amortised cost or FVTOCI, is classified as Fair Value through Profit or Loss
(FVTPL). Such financial assets are measured at fair value with all changes in fair value, including interest income and
dividend income if any, recognised as other income in the Statement of Profit and Loss
( III ) Measured at fair value through other comprehensive income (FVTOCI)
"Financial assets that are held within a business model whose objective is achieved by both, selling financial assets and
collecting contractual cash flows that are solely payments of principal and interest, are subsequently measured at fair
value through Other Comprehensive Income (FVTOCI). Fair value movements are recognised in the OCI. Interest income
measured using the EIR method and impairment losses, if any are recognised in the Statement of Profit and Loss.
On de-recognition, cumulative gain/ (loss) previously recognised in OCI is reclassified from the equity to other income in
the Statement of Profit and Loss"
I Impairment of financial assets
The Company assesses on a forward looking basis the expected credit losses (ECL) associated with its financial assets
carried at amortised cost and FVTPL. The impairment methodology applied depends on whether there has been a
significant increase in credit risk.
For trade receivable only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments,
which requires expected lifetime losses to be recognised from initial recognition of such receivables.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial
instrument. ECL 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 entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR.
When estimating the cash flows, an entity is required to consider all contractual terms of the financial instrument
(including prepayment, extension, call and similar options) over the expected life of the financial instrument.
J De-recognition of financial assets
A financial asset is de-recognised only when the Company
( I ) has transferred the rights to receive cash flows from the financial asset or
( II ) retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to
pay the cash flows to one or more recipients.
"Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and
rewards of ownership of the financial asset. In such cases, the financial asset is de-recognised. Where the entity has not
transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not de-recognised"
Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the
financial asset, the financial asset is de-recognised if the Company has not retained control of the financial asset. Where
the Company retains control of the financial asset, the asset is continued to be recognised to the extent of continuing
involvement in the financial asset.
K Financial Liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the financial liability is held for trading or are designated upon initial
recognition as FVTPL. Gains or losses on financial liabilities held for trading are recognised in the Statement of Profit and
Loss.
L Other Financial liabilities
( I ) Classification as debt or equity
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the
contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
( II ) Initial recognition and measurement
Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument.
Financial liabilities are initially measured at the fair value.
( III ) Subsequent measurement
Financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Financial
liabilities carried at fair value through profit or loss is measured at fair value with all changes in fair value recognized in
the Statement of Profit and Loss.
( IV ) De-recognition:
A financial liability is de-recognised when the obligation specified in the contract is discharged, cancelled or expires.
M Off-setting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the Balance Sheet where there is a legally
enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset
and settle the liability 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.
N Equity instruments
The Company measures all its investments in equity instruments other than those in subsidiary companies, at fair value.
The management of the Company has elected to present fair value gains and losses on such equity investments as at
the transition date in profit and loss and there is change subsequent reclassification of these fair value gains and losses
to the Statement of Profit and Loss, and Changes in the fair value of financial assets at fair value through profit or loss
are recognised in the Statement of Profit and Loss.
Dividends from such investments continue to be recognized in profit or loss as other income when the right to receive
payment is established.
Impairment losses (and reversal of impairment losses) on equity investments measured at FVTPL are not reported
separately from other changes in fair value.
O Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term deposit with
original maturity upto three months, which are subject to insignificant risk of changes in value.
For the purpose of presentation in the statement of cash flows, cash and cash equivalents consists of cash and short¬
term deposit, as defined above, net of outstanding bank overdraft, if any; as they are considered as an integral part of
Company's cash management.
P Inventories
Stock in trade is valued at lower of cost and net reliasable value. Cost is determind on weighted average cost method,
which is determined on their specific individual costs which includes only purchase cost.
Q Revenue Recognition
"Revenue is the gross inflow of economic benefits received/receivable by the entity on its own account. revenue is
recognised to the extent that it is probable that the economic benefits will flow to the Company and 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, net of returns and allowances, trade discounts and volume rebates, taking into
account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.
( I ) Sale of Shares
Revenue from sale of shares is recognised at the time of transaction
( II ) Interest Income
Interest income is recognised by applying (EIR) to the gross carrying amount of financial assets other than credit-impaired
assets and financial assets classified as measured at FVTPL, taking into account the amount outstanding and the
applicable interest rate. Interest income is recognised on non-performing assets at net of ECL.
(a) As the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial
asset to the gross carrying amount of a financial asset
(b) By considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar
options) in estimating the cash flows
(c) Including all fees paid or received between parties to the contract that are an integral part of the effective interest
rate, transaction costs, and all other premiums or discounts
( III ) Dividend Income Dividend income is recognised when the right to receive the payment is established
( IV ) Net gain on Fair value changes
Any differences between the fair values of financial assets classified as FVTPL held by the Company on the balance sheet
date is recognised as an unrealised gain / loss. In cases there is a net gain in the aggregate, the same is recognised in
"Net gains on fair value changes" under Revenue from operations and if there is a net loss the same is disclosed as "Net
loss on fair value changes" under Expenses in the Statement of Profit and Loss.
R Foreign currency transactions
( I ) Functional and presentation currency
Items included in the Financial Statements of the Company are measured using the currency of the primary economic
environment in which the Company operates ('functional currency'). The Financial Statements of the Company are
presented in Indian currency (INR), which is also the functional and presentation currency of the Company.
( II ) Transactions and Translation
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the
transactions. Monetary items denominated in foreign currencies at the year-end are restated at closing rates.
Non-monetary items which are carried in terms of historical cost denominated in foreign currency are reported using the
exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets
and liabilities carried at fair value are reported as part of the fair value gain/ (loss)
Foreign exchange gain/(loss) resulting from the settlement of such transactions and from the translation of monetary
assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in profit or
loss
All foreign exchange gain / (loss) are presented in the Statement of Profit and Loss on a net basis within other income/
(expense)
S Employee Benefits
Short-term employee benefits
All employee benefits payable within 12 months of service such as salaries, wages, bonus, ex-gratia, medical benefits etc.
are recognised in the year in which the employees render the related service and are presented as current employee
benefit obligations within the Balance Sheet.
T Income Tax
Tax expense comprises of current and deferred tax.
( I ) Current tax:
Current tax is the amount of income taxes payable in respect of taxable profit for a period in accordance with Income Tax
Act, 1961.
Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable
tax regulations are subject to interpretation and establishes provisions where appropriate.
( II ) Deferred tax:
Deferred tax assets and liabilities are recognized using the balance sheet approach for all temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable
that the related tax benefit will be realized.
Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or
substantively enacted at the balance sheet date and are expected to apply to taxable income in the year in which
those temporary differences are expected to be recovered or settled.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits
and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable hat taxable profit will
be available against which the deductible temporary differences, and the carry forward of unused tax credits and
unused tax losses can be utilized.
Unrecognized deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it
has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in
Other Comprehensive Income or directly in equity. In this case, the tax is also recognised in Other Comprehensive
Income or directly in equity, respectively.
U Earnings per share
Earnings per share (EPS) are calculated by dividing the net profit or loss (excluding other comprehensive income) for
the period attributable to Equity Shareholders by the weighted average number of Equity shares outstanding during
the period. Earnings considered in ascertaining the EPS is the net profit for the period.
Diluted EPS is determined by dividing the profit / (loss) after tax attributable to equity shareholders for the period
by weighted average number of equity shares and potential equity shares outstanding during the year, except
where the results are anti-dilutive.
V Leases
( I ) As a lessee
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as
lessee are classified as operating leases. Payments made under operating leases (net of any incentives received
from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease unless the
payments are structured to increase in line with expected general inflation to compensate expected inflationary
cost increases for the lessor.
( II ) As a lessor
Lease income from operating leases where the Company is a lessor is recognised as income on a straight-line basis
over the lease term unless the receipts are structured to increase in line with expected general inflation to
compensate for the expected inflationary cost increases. The corresponding rent receivables, net of interest income,
are included in other financial assets. Each lease receipt is allocated between the asset and interest income.
The interest income is recognised in the Statement of Profit and Loss over the lease period so as to produce a
constant periodic rate of interest on the remaining balance of the asset for each period.
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