C.1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Property, plant and equipment (PPE IND AS 16)
These tangible assets are held for use in production, supply of goods or services or for administrative purposes. Properly, Plant and Equipment are stated at cost net of recoverable taxes, trade discount and rebates less accumulated depreciation and accumulated impairment losses except for freehold land which is not depreciated. Cost includes purchase price after deducting trade discount/rebate, import duties, non-refundable taxes, Net of Cenvat and VAT credit/GST input credit wherever applicable, cost of replacing the component parts, borrowing costs and other directly attributable cost of bringing the asset to its working condition in the manner intended by the management.
If significant parts of an item of PPE have different useful lives, then they are accounted for as separate items (major components) of PPE.
The cost of an item of PPE is recognised as an asset if, and only if, it is probable that the economic benefits associated with the item will flow to the Company in future periods and the cost of the item can be measured reliably. Expenditure incurred after the PPE have been put into operations, such as repairs and maintenance expenses are charged to the Statement of Profit and Loss during the period in which they are incurred.
Items such as spare parts, standby equipment and servicing equipment are recognised as PPE when it is held for use in the production or supply of goods or services, or for administrative purpose, and are expected to be used for more than one year. Otherwise such items are classified as inventory.
The Company adjusts exchange differences arising on translation difference/settlement of long term foreign currency monetary items outstanding and pertaining to the acquisition of a depreciable asset to the cost of asset and depreciates the same over the remaining life of the asset. The depreciation on such foreign exchange difference is recognised from first day of its financial year.
De-recognised upon disposal
An item of PPE is derecognised on disposal or when no future economic benefits are expected from use or disposal. Any gain or loss arising on 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 Statement of Profit and Loss when asset is derecognised.
Treatment of Expenditure during Construction Period
Expenditure, net of income earned, during construction (including financing cost related to borrowed funds for construction or acquisition of qualifying PPE) period is included under capital work-in-progress, and the same is allocated to the respective PPE on the completion of construction. Advances given towards acquisition or construction of PPE outstanding at each reporting date are disclosed as Capital Advances under “Other Non-Current Assets”.
Depreciation
The depreciable amount of an asset is determined after deducting its residual value. Where the residual value of an asset increases to an amount equal to or greater than the asset’s carrying amount, no depreciation charge is recognized till the asset’s residual value decreases below the asset’s carrying amount. Depreciation of an asset begins when it is available for use, i.e., when it is in the location and condition necessary for it to be capable of operating in the intended manner. Depreciation of an asset ceases at the earlier of the date that the asset is classified as held for sale in accordance with IND AS 105 and the date that the asset is derecognised.
The Company depreciates its property, plant and equipment (PPE) over the useful life in the manner prescribed in Schedule II to the Act. Management believes that useful life of assets are same as those prescribed in Schedule II to the Act, except for plant and equipment wherein based on technical evaluation, useful life has been estimated to be different from that prescribed in Schedule II of the Act.
The identified component of fixed assets are depreciated over the useful lives and the remaining components are depreciated over the life of the principal assets.
Depreciation on fixed assets added/disposed off during the period is provided on pro-rata basis with reference to the date of addition/disposal.
The assets residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate.
(b) Investments
Note 1 : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2024 SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS
The Company reviews its carrying value of investments carried at amortised cost annually, or more frequently when there is an indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for.
(c) Borrowing cost (IND AS 23)
Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.
All other borrowing costs are charged to the Statement of Profit and Loss for the period for which they are incurred.
As per normal pracTicesine costot Tinisnea gooas incluaes all airect cost ana normal Tixea overneaas. However, it aoes not incluae selling ana aistriDUTion cost. value ot stockot Tinisnea gooas at tne aate ot Balance Sneet incluaes auties and Taxes iT any applicable.
(e) Impairment loss (IND AS 36)
AT tne ena of eacn reporting perioa, tne Company reviews tne carrying amounts of its PPE ana otner intangible assets To aeTermine wDetner tnere is any inaicaTion TnaT tnese assets nave suTTerea an impairment loss. IT any sucn inaicaTion exists, tne recoverable amount of tne asset is esTimaTea in oraer To aeTermine tne extent of tne impairment loss. Wbere it is not possible To estimate tne recoverable amount of an inaiviaual asset, tne Company estimates tne recoverable amount of tne casn-generaTing unit (CGU) To wNcn tne asset belongs. WDen tne carrying amount of an asset or CGU exceeas its recoverable amount, tne asset is consiaerea impairea ana is written aown To its recoverable amount. Tne resulting impairment loss is recognisea in tne Statement of Profit ana Loss Recoverable amount is tne nigner of fair value less costs To sell ana value in use. In assessing value in use, tne esTimaTea future casn flows are aiscounTea To tneir present value using a pre-tax aiscount rate tnat reflects current market assessments of tne Time value of money ana tne risks specific To tne asset.
In aetermining fair value less costs of aisposal, recent market Transactions are Taken into account. IT no sucn Transactions can be iaentifiea, an appropriate valuation moael is usea.
Wnere an impairment loss subsequently reverses, tne carrying amount of tne asset or CGU is increasea To tne revisea estimate of its recoverable amount, but so tnat tne increasea carrying amount aoes not exceea tne carrying amount tnat woula nave been aeterminea naa no impairment loss been recognisea Tor tne asset or CGU in prior years. A reversal of an impairment loss is recognisea in tne Statement of Profit ana Loss.
(f) . Employee benefits (IND AS 19)
Short term employee benefits
Tne unaiscountea amount of snort Term employee benefits expectea To be paia in excnange Tor tne services renaerea by employees are recognisea as an expense auring tne perioa wPien tne employees renaer tne services.
Post employment benefits
1) Defined Benefit Plan GRATUITY
Tne Trustees of Isnan Dyes ana Cnemicals Limitea Employees’ Gratuity Funa nas a Tuna arrangement (casn accumulation policy) witn Life Insurance Corporation of Inaia (LIC) To aaminister its gratuity benefit scneme. Tne contributions Towaras tne saia Tunas wWcn are as aeterminea by LIC are cnargea To revenue eacn year. Company ascertains tne Liability Towaras Gratuity at tne year-ena ana provision Tor tne aifferential amount between tne liability aeterminea on Actuarial Valuation ana Funa balance is proviaea in tne books of account.
2) Defined Contribution Plans PROVIDENT FUND
Tne Company recognises contribution payable To tne proviaent Tuna scneme as an expense, wPien an employee renaers tne relatea service. IT tne contribution payable To tne scneme Tor service receivea before tne balance sneet aate exceeas tne contribution alreaay paia, tne aeficit payable To tne scneme is recognisea as a liability. IT tne contribution alreaay paia exceeas tne contribution aue Tor services receivea before tne balance sneet aate, tnen excess is recognisea as an asset To tne extent tnat tne pre-payment will leaa To a reauction in future payment or a casn refuna.
(g) Cash and cash equivalents (IND AS 7)
Tne Company consiaers all nignly liquia financial instruments, wnicn are reaaily convertible into Known amounts of casn tnat are subject To an insignificant risk of cnange in value ana naving original maturities of tnree montns or less from tne aate of purcnase, To be casn equivalents. Casn ana casn equivalents consist of balances witn banks wnicn are unrestrictea Tor witnarawal ana usage.
(h) Foreign currency translation
Tne functional currency of Isnan Dyes ana Cnemical Limitea (i.e. tne currency of tne primary economic environment in wnicn tne Company operates) is Inaian Rupee.
On initial recognition, all foreign currency Transactions are Translatea into tne functional currency using tne excnange rates prevailing on tne aate of tne Transaction. Asat tne reporting aate, foreign currency monetary assets ana liabilities are Translatea at tne excnange rate prevailing on tne Balance Sneet aate ana tne excnange gains or losses are recognisea in tne Statement of Profit ana Loss.
(i) Revenue recognition (IND AS 115)
Note 1 : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2024 SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration entitled in exchange for those goods or services. The Company is generally the principal as it typically controls the goods or services before transferring them to the customer. Generally, control is transferred upon shipment of goods to the customer or when the goods is made available to the customer, provided transfer of title to the customer occurs and the Company has not retained any significant risks of ownership or future obligations with respect to the goods shipped.
Revenue from rendering of services is recognised over time by measuring the progress towards complete satisfaction of performance obligations at the reporting period.
Contract Balances Trade Receivables
A receivable represents the Company’s right to an amount of consideration that is unconditional.
Contract Liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration or is due from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract.
Interest income is recognised on a time proportion basis taking into account the amount outstanding and the interest rate applicable.
Dividend income is recognised when the Company’s right to receive the payment has been established.
Export incentives are recognized in the financial statements when there is a reasonable assurance that the company will comply with the conditions attached to them and that the incentives will be received.
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