2. Material Accounting Policies
2.1 Property, plant and equipment (including capital work-
in-progress):
Freehold land is carried at historical cost. All other items of
property, plant and equipment are stated at historical cost,
less accumulated depreciation and accumulated impairment
losses, if any. Historical cost includes expenditure that is
directly attributable to the acquisition of the items.
Subsequent costs are added to the asset's carrying amount
or recognized as a separate asset only if future economic
benefits are probable and the cost is reliably measurable.
Components accounted for separately are derecognized
when replaced. Other repairs and maintenance are expensed
as incurred.
Gains and losses on disposals are calculated by comparing
the proceeds with the carrying amount and are included in
profit or loss within other income/expenses.
Capital work-in-progress mainly comprises of new property,
plant and equipment. Expenditure incurred on assets in the
course of construction are capitalised under Capital work in
progress.
General and specific borrowing costs that are directly
attributable to the acquisition or construction of a qualifying
asset, are capitalised during the period of time that is required
to complete and prepare the asset for its intended use.
Qualifying assets are assets that necessarily takes substantial
period of time (twelve months or more) to get ready for their
intended use.
At the point when the construction of the asset is completed
and it is ready to be operated as per management's intended
use, the cost of construction is transferred to the appropriate
category of property, plant and equipment and depreciation
commences.
Depreciation is calculated using the straight-line method to
allocate the cost of the assets, net of their residual values,
over their estimated useful lives as follows:
Leasehold improvements are depreciated over the shorter
of their useful life or the lease term.
The useful life followed by the company is in line with those
specified by Schedule II to the Act.
The assets residual value and useful lives are reviewed and
adjusted, if appropriate, at the end of each reporting period.
2.2 Financial assets: Investments and other financial assets
i) Classification:
The Company classifies its financial assets in the following
measurement categories
• Those to be measured subsequently at fair value (either
through other comprehensive income or through profit
and loss)
• Those to be measured at amortised cost.
The classification depends on the entity's business model for
managing the financial assets and the contractual terms of
the cash flows.
The Company reclassifies debt investments when and only
when its business model for managing those assets changes.
ii) Initial recognition and derecognition
Regular way purchases and sales of financial assets are
recognised on trade-date, being the date on which the
Company commits to purchase or sale the financial asset.
Financial assets are derecognised when the rights to
receive cash flows from the financial assets have expired
or have been transferred and the Company has transferred
substantially all the risks and rewards of ownership.
iii) Measurement
At initial recognition, the Company measures a financial
asset (excluding trade receivables which do not contain
a significant financing component) at its fair value plus, in
the case of a financial asset not at fair value through profit
or loss, transaction costs that are directly attributable to
the acquisition of the financial asset. Transaction costs of
financial assets carried at fair value through profit or loss are
expensed in profit or loss.
Subsequent measurement (Debt instrument):
Subsequent measurement of debt instruments depends on
the Company's business model for managing the asset and
the cash flow characteristics of the asset. There are three
measurement categories into which the company classifies
its debt instruments, which is explained below.
(a) At amortised cost:
The Company measures its financial assets at amortised
cost only if both of the following criteria are met:
- the asset is held within a business model whose
objective is to collect the contractual cash flows, and
- the contractual terms give rise to cash flows that
are solely payments of principal and interest.
(b) At fair value through other comprehensive income
(FVOCI):
Debt instruments are measured at FVOCI where the
contractual cash flows are solely principal and interest
and the objective of the Company's business model is
achieved both by collecting contractual cash flows and
selling financial assets.
(c) At fair value through profit or loss:
Debt instruments that do not qualify for measurement
at amortised cost or FVOCI are measured at fair value
through profit or loss.
Interest income from financial assets at fair value
through profit or loss is disclosed as interest income
within other income. Interest income on financial
assets at amortised cost and financial assets at FVOCI
is calculated using the effective interest method is
recognised in the statement of profit and loss as part
of other income.
Subsequent measurement (Equity instrument):
The Company subsequently measures all equity
instruments at fair value. Where the Company's
management has elected to present fair value gains and
losses on equity instruments in other comprehensive
income, there is no subsequent reclassification of fair
value gains and losses to profit or loss following the
derecognition of the investment. Dividends from such
investments are recognized in profit or loss as other
income when the Company's right to receive payment
is established.
Changes in the fair value of financial assets at fair value
through profit or loss are recognised in other income in
the statement of profit and loss. Impairment losses (and
reversal of impairment losses) on equity investments
measured at FVOCI are not reported separately from
other changes in fair value.
v) Investments in subsidiaries
The investments in subsidiaries are carried in the
standalone financial statements at historical cost.
Investment in each subsidiary is tested for Impairment
in accordance with Ind AS 36, 'Impairment of assets'
by comparing it's recoverable amount with its carrying
amount, and any impairment loss recognised reduces
the carrying amount of investment.
) Impairment of financial assets:
For trade receivables, the Company applies the
simplified approach required by Ind AS 109 Financial
Instruments, which requires expected lifetime losses
to be recognised from initial recognition of the
receivables. The amount of expected credit losses (or
reversal) that is required to adjust the loss allowance at
the reporting date is recognised as an impairment gain
or loss in the standalone statement of profit and loss.
The Company assesses on a forward-looking basis
the expected credit losses associated with financial
assets other than trade receivables. The impairment
methodology applied depends on whether there
has been a significant increase in credit risk. At each
reporting date, the company assesses whether the
credit risk on these financial instruments has increased
significantly since initial recognition. If, at the reporting
date, the credit risk on a financial instrument has
not increased significantly since initial recognition,
the Company measures the loss allowance for that
financial instrument at an amount equal to 12-month
expected credit losses. If, the credit risk on that financial
instrument has increased significantly since initial
recognition, the Company measures the loss allowance
for a financial instrument at an amount equal to the
lifetime expected credit losses.
2.3 Trade receivables
Trade receivables are amounts due from customers for goods
sold or services performed in the ordinary course of business
and reflects Company's unconditional right to consideration
(that is, payment is due only on the passage of time).
Trade receivables are recognized initially at the transaction
price as the company has applied practical expedient in
accordance with paragraph 63 of Ind AS 115. The Company
holds the trade receivables with the objective of collecting
the contractual cash flows and therefore measures them
subsequently at amortised cost using the effective interest
method, less loss allowance.
2.4 Inventories
Inventories are valued at the lower of cost and net realisable
value. The costs of individual items are determined on
weighted average basis. Costs incurred in bringing each
product to its present location and condition is accounted
for as follows:
a) Raw materials, traded goods, packing material, stores &
spares:
Cost includes cost of purchase and other costs incurred
in bringing the inventories to their present location and
condition.
b) Finished goods and work in progress:
Cost comprises of direct materials, direct labour, and an
appropriate proportion of variable and fixed overhead
expenditure, the latter being allocated on the basis of normal
operating capacity.
c) Product Waste is valued at estimated realizable value.
Slow moving, non-moving, obsolete and defective inventories
are duly provided based on estimate made by management
considering their condition and future sales forecasts.
2.5 Revenue Recognition
a) Sale of Products
The Company derives revenues primarily from sale of
products/goods. The Company has assessed revenue
contracts and revenue is recognized upon satisfying
performance obligations in accordance with provisions of
contract with the customer.
It recognizes revenue when control over the promised goods
are transferred to the customer at an amount that reflects the
consideration to which the Company expects to be entitled
in exchange of those goods. This is generally determined
when goods are shipped to the customer at specific location
in accordance with the agreed terms, following which the
customer has full discretion over responsibility, manner of
distribution and price to sell the goods and bears the risks
of obsolescence and loss in relation to the goods and there
is no unfulfilled obligation that would affect customer's
acceptance of the product. All the foregoing occurs at a
point in time upon shipment or delivery of the goods at the
specific location.
The Company considers terms of the contract/purchase
order in determining the transaction price. In most customer
contracts, the Company considers freight, duties, insurance
and handling activities as costs to fulfil the promise to transfer
the related goods depending upon the terms of contracts
and the customer payments for such activities are recorded
as a component of revenue. Revenue excludes any taxes and
duties collected on behalf of the government.
Contract with a customer includes separate performance
obligation of reaching the goods to customer's warehouse
abroad. The amount of H11,783.27 lakhs (March 31, 2025:
H487.21 lakhs) attributable to such performance obligation
is embedded in the contract price for sale of products.
The Company recognises revenue for such performance
obligation over the period and accordingly, defers the
revenue recognition relating to such performance obligation
which is unsatisfied at the period-end.
The consideration in a contract includes a variable amount
in relation to discounts, rebates, quality related claims
and other deductions wherein the Company estimates
the amount of consideration to which it will be entitled
in exchange for transferring the goods to the customer.
The variable consideration is estimated at contract inception
and constrained until it is highly probable that a significant
revenue reversal in the amount of cumulative revenue
recognised will not occur when the uncertainty associated
with the variable consideration is subsequently resolved.
Revenue from sale of by-products are included in revenue.
As a practical expedient, the company do not adjust the
promised amount of consideration for the effects of a
significant financing component if the company expects,
at contract inception, that the period between when the
company transfers a promised good or service to a customer
and when the customer pays for that good or service will be
one year or less.
b) Sale of services
The Company's sale of services also includes job work services
to other customers. Revenue from providing such services is
recognised in the accounting period in which the services
are rendered upon satisfying performance obligations in
accordance with the terms of contract with the customer.
c) Export incentives:
Export incentives and subsidies (Rebate of State and Central
Levies and Taxes (RoSCTL), Remission of Duties and Taxes
on Export Products (RoDTEP) and duty drawback scheme)
are recognized when there is reasonable assurance that the
Company will comply with the conditions and the incentive
will be received. These are recognised on shipment for export
at the prescribed rates and is included in other operating
income.
d) Services to a Related Party:
This relates to support services towards certain business
functions provided to related party which is recognised over
the period.
2.6 Income Taxes
The income tax expense for the period is the tax payable on
the current period's taxable income based on the applicable
income tax rate for each jurisdiction adjusted by changes in
deferred tax assets and liabilities attributable to temporary
differences.
The current income tax charge is calculated on the basis of
the tax laws enacted or substantively enacted at the end
of the reporting period in the country where the Company
generate taxable income. Management periodically
evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to
interpretation and considers whether it is probable that a
taxation authority will accept an uncertain tax treatment.
The Company measures its tax balances either based on the
most likely amount or the expected value, depending on
which method provides a better prediction of the resolution
of the uncertainty.
Deferred income tax is provided in full, using the liability
method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in
the standalone financial statements. Deferred income tax is
not accounted for if it arises from initial recognition of an asset
or liability in a transaction other than a business combination
that at the time of the transaction affects neither accounting
profit nor taxable profit (tax loss) and does not give rise
to equal taxable and deductible temporary differences.
Deferred income tax is determined using tax rates (and laws)
that have been enacted or substantially enacted by the end
of the reporting period and are expected to apply when the
related deferred income tax asset is realised or the deferred
income tax liability is settled.
Deferred tax assets are recognised for all deductible
temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to
utilise those temporary differences and losses.
Deferred tax are not recognised for temporary differences
between the carrying amount and tax bases of investments
in subsidiaries where the Company is able to control the
timing of the reversal of the temporary differences and
it is probable that the differences will not reverse in the
foreseeable future.
Deferred tax assets and liabilities are offset where there is
a legally enforceable right to offset current tax assets and
liabilities and where the deferred tax balances relate to the
same taxation authority. Current tax assets and tax liabilities
are offset where the entity has a legally enforceable right to
offset and intends either to settle on a net basis, or to realise
the asset and settle the liability simultaneously.
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.
2.7 Leases
The Company as a lessee:
The Company leases land, buildings and Plant and machinery.
Rental contracts are typically made for fixed periods of one
month to 99 years.
Assets and liabilities arising from a lease are initially measured
on a present value basis. Lease liabilities include the net
present value of the following lease payments:
• fixed payments (including in-substance fixed payments),
less any lease incentives receivable
• variable lease payment that are based on an index or a
rate, initially measured using the index or rate as at the
commencement date
• amounts expected to be payable by the Company under
residual value guarantees
• the exercise price of a purchase option if the Company
is reasonably certain to exercise that option, and
• payments of penalties for terminating the lease, if the
lease term reflects the Company exercising that option.
Lease payments to be made under reasonably certain
extension options are also included in the measurement of
the liability.
The lease payments are discounted using the interest rate
implicit in the lease. If that rate cannot be readily determined,
which is generally the case, the lessee's incremental
borrowing rate is used, being the rate that the individual
lessee would have to pay to borrow the funds necessary to
obtain an asset of similar value to the right-of-use asset in a
similar economic environment with similar terms, security
and conditions.
Any escalation/increment in the lease payments which are
fixed in nature, are included in the initial recognition of the
lease liability.
Lease payments are allocated between principal and finance
cost. The finance cost is charged to profit or loss over the
lease period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for each
period.
Right-of-use assets:
Right-of-use assets are measured at cost comprising the
following:
- the amount of the initial measurement of lease liability
- any lease payments made at or before the
commencement date less any lease incentives received
- any initial direct costs
- restoration costs
Right-of-use assets are generally depreciated over the shorter
of the asset's useful life and the lease term on a straight¬
line basis.
Right-of-use assets are subsequently measured at cost, less
any accumulated depreciation and impairment losses, and
adjusted for any remeasurement of lease liabilities.
Payments associated with short-term leases ofequipment and
all leases of low-value assets are recognised on a straight-line
basis as an expense in profit or loss. Short-term leases are
leases with a lease term of 12 months or less.
For the leases term determination, the following factors are
normally the most relevant:
• If there is significant penalty payments to terminate (or
not extend), the Company is typically reasonably certain
to extend (or not terminate).
• If any leasehold improvements are expected to have a
significant remaining value, the Company is typically
reasonably certain to extend (or not terminate)
• Otherwise, the Company considers the other factors
including historical lease duration and the costs and
business disruption required to replace the leased asset.
The Company as a lessor:
Leases for which the Company is a lessor is classified as a
finance or operating lease. Whenever the terms of the lease
transfer substantially all the risks and rewards of ownership
to the lessee, the contract is classified as a finance lease.
All other leases are classified as operating leases.
2.8 Employee benefits
i) Short-term employee benefits
Liabilities for salaries, wages, bonus, ex-gratia, and incentives
etc. that are expected to be settled wholly within 12 months
after the end of the period in which the employees render
the related service are recognised in respect of employees'
services up to the end of the reporting period and are
measured at the amounts expected to be paid when the
liabilities are settled.
ii) Post-employment benefits
a) Defined contribution plans
Central Government Provident fund Scheme is a
defined contribution plan. The Company has no further
payment obligations once the contributions have been
paid. The contribution paid /payable under the scheme
is recognized in the statement of profit and loss during
the period in which the employee renders the related
services.
b) Defined Benefit Plans
The employee Gratuity Fund scheme managed by a
Trust is a defined benefit plan.
The liability or asset recognised in the balance sheet
in respect of defined benefit plans is the present
value of the defined benefit obligation at the end of
the reporting period less the fair value of plan assets.
The defined benefit obligation is calculated annually by
actuary at the year end using the projected unit credit
method.
The present value of the defined benefit obligation
is determined by discounting the estimated future
cash outflows by reference to market yields at the end
of the reporting period on government bonds that
have terms approximating to the terms of the related
obligation.
The net interest cost is calculated by applying the
discount rate to the net balance of the defined benefit
obligation and the fair value of plan assets. This cost is
included in the finance cost in the statement of profit
and loss.
Remeasurement gains and losses arising from
experience adjustments and changes in actuarial
assumptions are recognised in the period in which
they occur, directly in other comprehensive income.
They are included in reserves and surplus in other
equity. Remeasurement gain or loss are not reclassified
to the statement of profit and loss in subsequent
periods.
iii) Other Long-term employee benefit
The Company has liabilities for compensated absences that
are not expected to be settled wholly within 12 months after
the end of the period in which the employees render the
related service. These obligations are therefore measured as
the present value of expected future payments to be made in
respect of services provided by employees up to the end of
the reporting period using the projected unit credit method.
The benefits are discounted using the appropriate market
yields at the end of the reporting period on government
bonds that have terms approximating to the terms of the
related obligation. Remeasurements as a result of experience
adjustments and changes in actuarial assumptions are
recognised in profit or loss.
The obligations are presented as current liabilities in the
balance sheet as the Company does not have a right to defer
settlement for at least twelve months after the reporting
period, regardless of when the actual settlement is expected
to occur.
2.9 Contingent liabilities
A contingent liability is a possible obligation that arises
from past events whose existence will be confirmed by the
occurrence or non-occurrence of one or more uncertain
future events beyond the control of the Company or a
present obligation that arises from past events where
either it is not probable that an outflow of resources will be
required to settle the obligation or a reliable estimate cannot
be made. The Company does not recognise a contingent
liability but discloses its existence in the financial statements.
When there is a possible obligation or a present obligation
in respect of which likelihood of outflow of resources
embodying economic benefits is remote, no provision or
disclosure is made.
2.10 Derivative financial instruments and hedge accounting
The Company enters into derivative contracts to hedge
foreign currency risk on unexecuted firm commitments
and highly probable forecast transactions. Derivatives held
include foreign exchange forward contracts and options.
The hedging transaction entered into by the Company
is within the overall scope of the Foreign Exchange Risk
Management Policy of the company as approved by
the Board from time to time. All derivative contracts are
recognised on the Balance Sheet and measured at fair value.
Derivatives are only used for economic hedging purposes
and not as speculative investments.
Derivatives which are not designated for hedge accounting
are measured at fair value through profit or loss (FVTPL).
Mark to Market for these instruments is classified as current
assets or liabilities if they are anticipated to be settled within
12 months following the reporting period.
Derivatives are initially recognised at fair value on the date
a derivative contract is entered into and are subsequently
re-measured to their fair value at the end of each reporting
period. The accounting for subsequent changes in fair
value depends on whether the derivative is designated as a
hedging instrument, and if so, the nature of the item being
hedged.
Derivatives are carried as financial assets when the fair value
is positive and as financial liabilities when the fair value is
negative.
The Company designates certain derivatives as either
hedges of a particular risk associated with the cash flows of
recognised assets and liabilities or highly probable forecast
transactions (cash flow hedges).
At inception of the hedging relationship, the Company
documents the economic relationship between hedging
instruments and hedged items including whether the
changes in the cash flows of the hedging instrument are
expected to offset changes in cash flows of hedged items.
The Company documents its risk management objective and
strategy for undertaking its hedge transactions.
Furthermore, at the inception of the hedge and on an
ongoing basis, the Company documents whether the
hedging instrument is highly effective in offsetting changes
in fair values or cash flows of the hedged item attributable
to the hedged risk.
Cash flow hedges
The Company applies hedge accounting to manage foreign
currency risk associated with highly probable forecasted
sales and purchases in foreign currencies. Under Ind AS 109,
the Company designates foreign exchange forward and
option contracts as cash flow hedges to offset the variability
in cash flows arising from these forecasted transactions.
Hedge effectiveness is assessed using dollar offset approach,
ensuring the hedge is highly effective in offsetting changes
in cash flows.
The effective portion of changes in the fair value of
derivatives that are designated and qualify as cash flow
hedges is recognised in other comprehensive income
and accumulated under the heading of cash flow
hedging reserve within equity. The gain or loss relating to
the ineffective portion is recognised immediately in the
Statement of Profit and Loss within other income/other
expenses.
For cash flow hedging relationships that span multiple
reporting periods, the ineffectiveness for the period is
calculated as the difference between the cumulative
ineffectiveness as at reporting date (based on the 'lesser
of' the cumulative change in the fair value of the hedging
instrument and the hedged item), and the cumulative
ineffectiveness reported in prior periods.
Amounts previously recognised in other comprehensive
income and accumulated in equity relating to effective
portion as described above are reclassified to the Statement
of Profit and Loss in the periods when the hedged item
affects profit or loss, in the same line as the recognised
hedged item, hereby aligning the timing of the hedge's
impact with the underlying transaction. However, when the
hedged forecast transaction results in the recognition of a
non-financial asset or a non-financial liability, such gains and
losses are transferred from equity (but not as a reclassification
adjustment) and included in the initial measurement of the
cost of the non-financial asset or non-financial liability as a
basis adjustment.
When option contracts are used to hedge forecast
transactions, the gains or losses relating to the effective
portion of the change in intrinsic value of the options are
recognised in the cash flow hedging reserve within equity.
The changes in the time value of the options that relate to
the hedged item ('aligned time value') are recognised within
other comprehensive income in the costs of hedging reserve
within equity.
When a hedging instrument expires, or is sold or terminated,
or when a hedge no longer meets the criteria for hedge
accounting, any cumulative deferred gain or loss and
deferred costs of hedging in equity at that time remains in
equity and is recognized when the forecasted transaction is
ultimatelty recognized in the Statement of Profit and Loss.
When the forecast transaction is no longer expected to occur,
the cumulative gain or loss and deferred costs of hedging
that were reported in equity are immediately reclassified to
profit or loss within other income/other expenses.
If the hedge ratio for risk management purposes is no
longer optimal but the risk management objective remains
unchanged and the hedge continues to qualify for hedge
accounting, the hedge relationship will be rebalanced by
adjusting either the volume of the hedging instrument or
the volume of the hedged item so that the hedge ratio
aligns with the ratio used for risk management purposes.
Any hedge ineffectiveness is calculated and accounted
for in profit or loss at the time of the hedge relationship
rebalancing.
Fair value hedge
The Company employs fair value hedge accounting to
mitigate the risk of changes in the fair value of foreign
currency debtors and creditors expected to be realized in the
future. Upon sales or purchase, the cash flow hedge against
forecasted sales or purchase converts into fair value hedge
against outstanding debtor or creditor balances in foreign
currency exposure. The forward and option contracts are
continued to hedge against fluctuations in the fair value of
these receivables and payables.
Hedge effectiveness is assessed using dollar offset approach,
upon comparison of key parameters like notionals, maturity
date and underlying currency of the hedging instrument
and hedged item. Gains or losses on the hedging instrument
and adjustments to the carrying amount of the hedged
receivables and payables are recognized in profit or loss,
aligning the impact of currency fluctuations with the
economic impact of the hedge.
2.11 Government Grants
Government grants are recognised at fair value where there
is reasonable assurance that the grant will be received, and
all attached conditions will be complied with.
Government grants relating to the purchase of property,
plant and equipment are recognized once reasonable
certainty is established and are included in non-current
liabilities as deferred income and are credited to the
statement of profit or loss on a straight-line basis over the
remaining expected lives of the related assets and presented
within other income.
2.12 Foreign currency translation
a. 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 entity operates ('the functional
currency'). The Company financial statements are presented
in Indian Rupee (INR), which is also the functional and the
presentation currency of the Company.
b. Transactions and balances
Foreign currency transactions are translated and recorded
into the functional currency using the exchange rates
prevailing on the date of the transaction. Foreign exchange
gains and losses 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 recognized in Statement of Profit
and Loss.
Non-monetary items that are measured at historical cost in
a foreign currency are translated using the exchange rates
at the date of initial transactions.
3. Other Accounting Policies
3.1 Intangible assets
Separately acquired intangible assets are shown at historical
cost, less any accumulated amortisation and accumulated
impairment losses, if any. They have a finite useful life and are
subsequently carried at cost less accumulated amortisation
and impairment losses.
The Company amortises intangible assets using the
straight-line method over their estimated useful lives as
follows-
The assets useful lives are reviewed, and adjusted if
appropriate, at the end of each reporting period.
Gains and losses on derecognition are determined by
comparing proceeds with carrying amount. These are
included in profit or loss within other income/other expenses.
Expenditure incurred for getting the trademark and patents
registered in the Company's name (which generally takes four
to five years) are capitalized under Intangible assets under
development. At the point when the trademarks and patents
are registered in the Company's name, the relevant costs are
transferred to the appropriate category of intangible assets
and amortisation commences. Further, software capitalized
during the year includes costs related to customisation and
implementation of software.
3.2 Borrowing costs
Borrowing costs other than mentioned in Note 2.1 of material
accounting policies are expensed in the period in which they
are incurred.
3.3 Borrowings
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 the Statement of Profit and Loss
over the period of the borrowings using the effective interest
method.
Borrowings are removed from the balance sheet when the
obligation specified in the contract is discharged, cancelled
or expired. The difference between the carrying amount of
a financial liability that has been extinguished or transferred
to another party and the consideration paid, including
any non-cash assets transferred or liabilities assumed, is
recognised in profit or loss.
3.4 Financial guarantee contracts
Financial guarantee contracts are recognised as a financial
liability at the time the guarantee is issued. The liability is
initially measured at fair value and subsequently at the
higher of
(i) the amount determined in accordance with the
expected credit loss model as per Ind AS 109 and
(ii) the amount initially recognised less, where appropriate,
cumulative amount of income recognised in
accordance with the principles of Ind AS 115.
The fair value of financial guarantees is determined based on
the present value of the difference in cash flows between the
contractual payments required under the debt instrument
and the payments that would be required without the
guarantee, or the estimated amount that would be payable
to a third party for assuming the obligations.
3.5 Impairment of non-current assets
At the end of each reporting period, the Company reviews
the carrying amounts of its property, plant and equipment,
intangible assets and right of use assets to determine whether
there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the
extent of the impairment loss (if any). When it is not possible
to estimate the recoverable amount of an individual asset,
the Company estimates the recoverable amount of the
cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to
sell and value in use.
If the recoverable amount of an asset (or cash-generating
unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (or cash-generating unit) is
reduced to its recoverable amount. An impairment loss is
recognised immediately in the Statement of Profit and Loss.
When an impairment loss subsequently reverses, the
carrying amount of the asset (or a cash-generating unit) is
increased to the revised estimate of its recoverable amount,
but so that the increased carrying amount does not exceed
the carrying amount that would have been determined
had no impairment loss been recognised for the asset
(or cash-generating unit) in prior years. A reversal of an
impairment loss is recognised immediately in the Statement
of Profit and Loss.
3.6 Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits
held at call with financial institutions, other short-term, highly
liquid investments with original maturities 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. Bank overdrafts are shown within borrowings in
current liabilities in the balance sheet and for the purpose of
presentation in the statement of cash flow, bank overdrafts
is classified as cash and cash equivalents.
3.7 Other Income
Lease Income:
Lease agreements where the risks and rewards incident to
the ownership of an asset substantially vest with the lessor
are recognized as operating leases.
Lease income from operating leases where the Company
is a lessor is recognised in income on a straight-line basis
over the lease term. Initial direct costs incurred in obtaining
an operating lease are added to the carrying amount of the
underlying asset and recognised as expense over the lease
term on the same basis as lease income. The respective
leased assets are included in the balance sheet based on
their nature.
Other income:
All other income is accounted on accrual basis when no
significant uncertainty exists regarding the amount that will
be received.
3.8 Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to equity shareholders of the Company by the
weighted average number of equity shares outstanding
during the financial year, adjusted for bonus elements in
equity shares issued during the year and excluding treasury
shares, if any.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into
account the after income tax effect of interest and other
financing costs associated with dilutive potential equity
shares, and the weighted average number of additional
equity shares that would have been outstanding assuming
the conversion of all dilutive potential equity shares.
3.9 Segment reporting
Operating segments are reported in a manner consistent
with the internal reporting provided to the chief operating
decision maker ("CODM").
The CODM of Indo Count Industries Limited is responsible
for allocating resources and assessing performance of the
operating segment. Executive Directors have been identified
as CODM.
3.10 Trade and other payables
These amounts represent liabilities for goods and services
provided to the Company prior to the end of the financial
year which are unpaid. The amounts are unsecured and are
usually paid within 30 days of recognition. Trade and other
payables are presented as current liabilities unless payment
is not due within 12 months after the reporting period.
They are recognized initially at their transaction value which
represents their fair value and subsequently measured at
amortised cost using the effective interest method.
|