2 Significant Accounting Policies :a. Property, plant and equipment; Capital work-in-progress & Intangible assets:
i. Property, plant and equipment & intangible assets are stated at their original cost of
acquisition / installation ( net of GST credits wherever applicable) net of accumulated
depreciation, amortization and impairment losses-if any. Subsequent expenditures
are included in the asset’s carrying amount or recognized 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 to the item can be measured
reliably. All repairs and maintenance expenses on assets are charged to profit or loss
during the reporting period in which they are incurred.
ii. Property, plant and equipment or intangible assets not ready for the intended use
on the date of balance sheet are disclosed as “Capital Work-in-Progress”. Advances
given towards acquisition/construction of fixed assets outstanding at each Balance
sheet date are shown under “Capital Work-in-Progress”.
iii. An item of property, plant and equipment and any significant part initially recognized is
derecognized upon disposal or when no future economic benefits are expected from
its use or disposal. Any gain or loss arising on derecognition of the asset (calculated
as the difference between the net disposal proceeds and the carrying amount of the
asset) is included in the income statement when the asset is derecognized.
iv. The residual values, useful lives and methods of depreciation of property, plant &
equipment and intangible assets are reviewed in each financial year and adjusted
prospectively, if appropriate.
b. Depreciation:
i. Tangible Assets :
I. Depreciation on assets is provided on straight line method at the rates and in the
manner prescribed in Schedule II to the Companies Act, 2013.
II. Depreciation on additions to Property, plant & equipment and intangible assets
is provided on a pro-rata basis from the date of acquisition or installation, and
in the case of a new project, from the date of commencement of commercial
production.
III. Depreciation on assets sold, discarded, demolished or scrapped is provided up
to the date on which the said asset is sold, discarded, demolished or scrapped.
ii. Intangible Assets :
I. Intangible assets with finite lives are amortized on straight line method over the
useful economic life and assessed for impairment whenever there is an indication
that the intangible asset may be impaired.
II. The amortization period and the amortization method for an intangible asset with
a finite useful life are reviewed at least at the end of each reporting period.
Transition to Ind AS :
On transition to Ind AS, the Company has elected to continue with the carrying value
of all of its Property, plant and equipment and Intangible assets recognized as at 1st
April 2016 measured as per the previous IGAAP and use that carrying value as the
deemed cost of respective assets.
Impairment of non-financial assets :
The carrying amounts of other non-financial assets are reviewed at each Balance
Sheet date if there is any indication of impairment based on internal/external factors.
An impairment loss, if any is recognized in the statement of profit and loss wherever
the carrying amount of an asset exceeds its recoverable amount. The recoverable
amount is greater of the assets net selling price and value in use. In assessing value
in use, the estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value
of money and risk specific to the assets. A previously recognized impairment
loss if any, is increased or reversed depending on the changes in circumstances,
however the carrying value after reversal is not increased beyond the carrying value
that would have prevailed by charging usual depreciation/amortization if there was no
impairment.
c. Inventories :
i. Raw Material / Components :
Lower of cost and net realizable value. However, materials and other items held for use
in the 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 is
determined on First in First out (FIFO) basis.
ii. Stores & Spare parts are valued at Cost.
iii. Finished goods and Work in Progress :
Lower of cost and net realizable value. Cost is determined on absorption basis and include
material, labour and production overheads. Material cost for the purpose of valuation is
ascertained on First in First out (FIFO) basis.
Net realizable value is the estimated selling price in the ordinary course of business,
less estimated costs of completion and estimated costs necessary to make the sale.
Cost includes all charges in bringing the goods to the point of sale. Work-in-progress and
finished goods include appropriate proportion of overheads.
d. Financial Instruments :
The presentation of financial instruments is as per applicable Ind-AS.
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