recognised outside statement of profit and loss (i.e. in OCI or equity depending upon the treatment of
underlying item).
Deferred tax liabilities are generally recognised in full for all taxable temporary differences. Deferred tax
assets are recognised to the extent that it is probable that the underlying tax loss, unused tax credits or
deductible temporary difference will be utilised against future taxable income. This is assessed based on
the Company's forecast of future operating results, adjusted for significant non-taxable income and
expenses and specific limits on the use of any unused tax loss or credit. Unrecognised 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.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted at the reporting date. Deferred tax relating to items recognised
outside the statement of profit and loss is recognised outside statement of profit and loss (in OCI or
equity depending upon the treatment of underlying item).
d. Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term
deposits 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.
e. Foreign currency transactions
The financial statements are presented in Indian Rupee ('INR' or 'Rs.') which is also the functional
currency of the Company.
Foreign currency transactions are translated into the functional currency using the exchange rates at
the dates of the transactions. 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 generally recognised in profit or loss.
Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the
statement of profit and loss, within finance costs. All other foreign exchange gains and losses are
presented in the statement of profit and loss on a net basis within other income/expenses, as the case
maybe.
f. Financial instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognized when the Company becomes a party to the
contractual provisions of the financial instrument and are measured initially at fair value adjusted for
transaction costs, except for those carried at fair value through profit or loss which are measured
initially at fair value. Subsequent measurement of financial assets and financial liabilities is described
below:
Non-derivative financial assets
Subsequent measurement
i. Financial assets carried at amortised cost - a financial asset is measured at the amortised
cost, if both the following conditions are met:
• The asset is held within a business model whose objective is to hold assets for collecting
contractual cash flows, and
• Contractual terms of the asset give rise on specified dates to cash flows that are solely
payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised
cost using the effective interest rate (EIR) method.
ii. Fair value through profit or loss - Assets that do not meet the criteria for amortised cost or
FVOCI are measured at fair value through profit or loss. A gain or loss on a debt investment
that is subsequently measured at fair value through profit or loss and is not part of a
hedging relationship is recognised in profit or loss and presented net in the statement of
profit and loss within other gains/(losses) in the period in which it arises. Interest income
from these financial assets is included in other income.
iii. Fair value through OCI- A financial assets measured at FVOCI if both of the following
conditions are met:
• The Company's business model objectives for managing the financial assets is achieved
both by collecting contractual cash flows and selling the financial assets, and
• The contractual terms of the financial assets given raise in specified dates to cash flows
that are solely payments.
g. Fair Value of Financial instruments
In determining the fair value of its financial instruments, the Company uses a variety of methods and
assumptions that are based on market conditions and risks existing at each reporting date. The methods
used to determine fair value include discounted cash flow analysis, available quoted market prices and
dealer quotes. All methods of assessing fair value result in general approximation of value, and such
may never actually be realized. For financial assets and liabilities maturing within one year from the
Balance Sheet and which are not carried at fair value, the carrying amounts approximate fair value due
to the short maturity of these instruments.
h. Property, plant and equipment ('PPE')
Recognition and initial measurement
Property, plant and equipment are stated at their cost of acquisition. The cost comprises purchase price,
taxes (non-recoverable) borrowing cost if capitalisation criteria are met and other expenses, directly
attributable cost of bringing the asset to its working condition for the intended use. Any trade discount
and rebates are deducted in arriving at the purchase price. Subsequent costs are included in the asset's
carrying amount 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 definition of asset is met. All
other repair and maintenance costs are recognised in the statement of profit or loss as incurred.
In case an item of property, plant and equipment is acquired on deferred payment basis, interest
expenses included in deferred payment is recognised as interest expense and not included in cost of
asset.
Subsequent measurement (depreciation and useful life)
Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its
estimated residual value. Depreciation on tangible fixed assets has been provided on the straight-line
method as per the useful life prescribed in Schedule II to the Companies Act, 2013.
De-recognition of PPE
The carrying amount of an item of property, plant and equipment shall be derecognized upon disposal
or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on
de-recognition of the asset (calculated as the difference between the net disposal proceeds and the
carrying amount of the asset) is included in the statement of profit and loss when the asset is
derecognised.
i. Capital work-in progress
Cost of material consumed and erection charges thereon along with other direct cost incurred by the
Company for the projects are shown as capital work-in-progress until capitalisation. Claims for price
variation / exchange rate variation in case of contracts are accounted for on acceptance / receipt of
claim.
j. Impairment of non-financial assets
At each reporting date, the Company assesses whether there is any indication based on
internal/external factors, that an asset may be impaired. If any such indication exists, the Company
estimates the recoverable amount of the asset. The recoverable amount is higher of an asset's fair value
less costs of disposal and value in use. For this purpose, assets are companied at the lowest levels for
which there are separately identifiable cash inflows which are largely independent of the cash inflows
from other assets or company of assets (cash generating units). If such recoverable amount of the asset
or the recoverable amount of the cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable amount and the reduction is treated
as an impairment loss and is recognised in the statement of profit and loss. If at the balance sheet date,
there is an indication that a previously assessed impairment loss no longer exists, the recoverable
amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of
depreciated historical cost and the same is accordingly reversed in the statement of profit and loss.
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement
and recognition of impairment loss for financial assets. ECL is the weighted-average of difference
between all contractual cash flows that are due to the Company in accordance with the contract and all
the cash flows that the Company expects to receive, discounted at the original effective interest rate,
with the respective risks of default occurring as the weights. When estimating the cash flows, the
Company is required to consider:
• All contractual terms of the financial assets (including prepayment and extension) over the
expected life of the assets.
• Cash flows from the sale of collateral held or other credit enhancements that are integral to the
contractual terms.
Trade receivables: In respect of trade receivables, the Company applies the simplified approach of Ind
AS 109, which requires measurement of loss allowance at an amount equal to lifetime expected credit
losses. Lifetime expected credit losses are the expected credit losses that result from all possible default
events over the expected life of a financial instrument.
Other financial assets: In respect of its other financial assets, the Company assesses if the credit risk on
those financial assets has increased significantly since initial recognition. If the credit risk has not
increased significantly since initial recognition, the Company measures the loss allowance at an amount
equal to 12-month expected credit losses, else at an amount equal to the lifetime expected credit
losses.
When making this assessment, the Company uses the change in the risk of a default occurring over the
expected life of the financial asset. To make that assessment, the Company compares the risk of a
default occurring on the financial asset as at the balance sheet date with the risk of a default occurring
on the financial asset as at the date of initial recognition and considers reasonable and supportable
information, that is available without undue cost or effort, that is indicative of significant increases in
credit risk since initial recognition. The Company assumes that the credit risk on a financial asset has not
increased significantly since initial recognition if the financial asset is determined to have low credit risk
at the balance sheet date.
De-recognition of financial assets
A financial asset is primarily de-recognised when the contractual rights to receive cash flows from the
asset have expired or the Company has transferred its rights to receive cash flows from the asset.
Non-derivative financial liabilities
Subsequent measurement
Subsequent to initial recognition, all non-derivative financial liabilities are measured at amortised cost
using the effective interest method.
De-recognition of financial liabilities
A financial liability is de-recognized when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the de-recognition of the original liability and the recognition of a new
liability. The difference in the respective carrying amounts is recognised in the statement of profit or
loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if
there is a currently enforceable legal right to offset the recognised amounts and there is an intention to
settle on a net basis, to realize the assets and settle the liabilities simultaneously.
k. Leases
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
Company as a lessee
The Company applies a single recognition and measurement approach for all leases, except for short¬
term leases and leases of low-value assets. The Company recognizes lease liabilities to make lease
payments and right-of-use assets representing the right to use the underlying assets.
Company
Overview
a) Right-of-use assets
The Company recognizes right-of-use assets at the commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of
right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and
lease payments made at or before the commencement date less any lease incentives received. Right-of-
use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated
useful lives of the assets.
b) Lease liabilities
At the commencement date of the lease, the Company recognizes lease liabilities measured at the
present value of lease payments to be made over the lease term. The lease payments include fixed
payments (including in-substance fixed payments) less any lease incentives receivable, variable lease
payments that depend on an index or a rate, and amounts expected to be paid under residual, value
guarantees. The lease payments also include the exercise price of a purchase option reasonably certain
to be exercised by the Company and payments of penalties for terminating the lease, if the lease term
reflects the Company exercising the option to terminate. Variable lease payments that do not depend
on an index or a rate are recognized as expenses in the period in which the event or condition that
triggers the payment occurs.
In calculating the present value of lease payments, the Company uses its incremental borrowing rate at
the lease commencement date because the interest rate implicit in the lease is not readily
determinable. After the commencement date, the amount of lease liabilities is increased to reflect the
accretion of the interest and reduced for the lease payments made. In addition, the carrying amount of
lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease
payments or a change in the assessment of an option to purchase the underlying asset.
c) Short-term lease ad lease of low-value assets
The Company applies the short-term lease recognition exemption to its short-term leases (i.e., those
lease that have a lease term of 12 months or less from the commencement date and do not contain a
purchase option). It also applies the lease of low-value assets recognition exemption that are
considered to be low value. Lease payments on short-term lease and lease of low-value assets are
recognized as expense on a straight-line basis over the lease term.
Company
Overview
l. Borrowing costs
Borrowing costs directly attributable to the acquisitions, construction or production of a qualifying asset
are capitalised during the period of time that is necessary to complete and prepare the asset for its
intended use or sale. Other borrowing costs are expensed in the period in which they are incurred and
reported in finance costs.
A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended
use. Capitalisation of borrowing costs is suspended in the period during which the active development is
delayed due to, other than temporary, interruption.
m. Provisions, contingent liabilities and contingent assets
Provisions are recognised when present obligations as a result of a past event will probably lead to an
outflow of economic resources and amounts can be estimated reliably. Timing or amount of the outflow
may still be uncertain. A present obligation arises when there is a presence of a legal or constructive
commitment that has resulted from past events, for example, legal disputes or onerous contracts.
Provisions are not recognised for future operating losses.
Provisions are measured at the estimated expenditure required to settle the present obligation, based
on the most reliable evidence available at the reporting date, including the risks and uncertainties
associated with the present obligation. Provisions are discounted to their present values, where the
time value of money is material.
Any reimbursement that the Company can be virtually certain to collect from a third party with respect
to the obligation is recognised as a separate asset. However, this asset may not exceed the amount of
the related provision.
All provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.
In those cases where the outflow of economic resources as a result of present obligations is considered
improbable or remote, no liability is recognised.
Contingent liability is disclosed for:
• Possible obligations which will be confirmed only by future events not wholly within the control
of the Company or
• Present obligations arising from past events where it is not probable that an outflow of
resources will be required to settle the obligation or a reliable estimate of the amount of the
obligation cannot be made.
Contingent assets are not recognised. However, when inflow of economic benefits is probable, related
asset is disclosed.
2. Basis of preparation and significant accounting policies
Basis of preparation
The financial statements have been prepared on accrual and going concern basis under historical cost
convention except for certain financial instruments and plan assets, which are measured at fair values.
The significant accounting policies and measurement bases have been summarised below.
Current versus non-current classification
All assets and liabilities have been classified as current or non-current as per the Company's normal
operating cycle and as per terms of agreements wherever applicable. Deferred tax assets and liabilities
are classified as non-current assets and non-current liabilities, as the case may be.
a. Revenue recognition and presentation:
Revenue arises mainly from the sale of manufactured and traded goods.
To determine whether to recognize revenue, the Company follows a 5-step process:
1. Identifying the contract with a customer
2. Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the performance obligations
5. Recognizing revenue when/as performance obligation(s) are satisfied.
Revenue is measured at fair value of consideration received or receivable, after deduction of any trade
discounts, volume rebates and any taxes or duties collected on behalf of the government which are
recognised outside statement of profit and loss (i.e. in OCI or equity depending upon the treatment of
underlying item).
Deferred tax liabilities are generally recognised in full for all taxable temporary differences. Deferred tax
assets are recognised to the extent that it is probable that the underlying tax loss, unused tax credits or
deductible temporary difference will be utilised against future taxable income. This is assessed based on
the Company's forecast of future operating results, adjusted for significant non-taxable income and
expenses and specific limits on the use of any unused tax loss or credit. Unrecognised 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.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted at the reporting date. Deferred tax relating to items recognised
outside the statement of profit and loss is recognised outside statement of profit and loss (in OCI or
equity depending upon the treatment of underlying item).
d. Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term
deposits 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.
e. Foreign currency transactions
The financial statements are presented in Indian Rupee ('INR' or 'Rs.') which is also the functional
currency of the Company.
Foreign currency transactions are translated into the functional currency using the exchange rates at
the dates of the transactions. 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 generally recognised in profit or loss.
Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the
statement of profit and loss, within finance costs. All other foreign exchange gains and losses are
presented in the statement of profit and loss on a net basis within other income/expenses, as the case
maybe.
f. Financial instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognized when the Company becomes a party to the
contractual provisions of the financial instrument and are measured initially at fair value adjusted for
transaction costs, except for those carried at fair value through profit or loss which are measured
initially at fair value. Subsequent measurement of financial assets and financial liabilities is described
below:
Non-derivative financial assets
Subsequent measurement
i. Financial assets carried at amortised cost - a financial asset is measured at the amortised
cost, if both the following conditions are met:
• The asset is held within a business model whose objective is to hold assets for collecting
contractual cash flows, and
• Contractual terms of the asset give rise on specified dates to cash flows that are solely
payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised
cost using the effective interest rate (EIR) method.
ii. Fair value through profit or loss - Assets that do not meet the criteria for amortised cost or
FVOCI are measured at fair value through profit or loss. A gain or loss on a debt investment
that is subsequently measured at fair value through profit or loss and is not part of a
hedging relationship is recognised in profit or loss and presented net in the statement of
profit and loss within other gains/(losses) in the period in which it arises. Interest income
from these financial assets is included in other income.
iii. Fair value through OCI- A financial assets measured at FVOCI if both of the following
conditions are met:
• The Company's business model objectives for managing the financial assets is achieved
both by collecting contractual cash flows and selling the financial assets, and
• The contractual terms of the financial assets given raise in specified dates to cash flows
that are solely payments.
g. Fair Value of Financial instruments
In determining the fair value of its financial instruments, the Company uses a variety of methods and
assumptions that are based on market conditions and risks existing at each reporting date. The methods
used to determine fair value include discounted cash flow analysis, available quoted market prices and
dealer quotes. All methods of assessing fair value result in general approximation of value, and such
may never actually be realized. For financial assets and liabilities maturing within one year from the
Balance Sheet and which are not carried at fair value, the carrying amounts approximate fair value due
to the short maturity of these instruments.
h. Property, plant and equipment ('PPE')
Recognition and initial measurement
Property, plant and equipment are stated at their cost of acquisition. The cost comprises purchase price,
taxes (non-recoverable) borrowing cost if capitalisation criteria are met and other expenses, directly
attributable cost of bringing the asset to its working condition for the intended use. Any trade discount
and rebates are deducted in arriving at the purchase price. Subsequent costs are included in the asset's
carrying amount 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 definition of asset is met. All
other repair and maintenance costs are recognised in the statement of profit or loss as incurred.
In case an item of property, plant and equipment is acquired on deferred payment basis, interest
expenses included in deferred payment is recognised as interest expense and not included in cost of
asset.
Subsequent measurement (depreciation and useful life)
Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its
estimated residual value. Depreciation on tangible fixed assets has been provided on the straight-line
method as per the useful life prescribed in Schedule II to the Companies Act, 2013.
De-recognition of PPE
The carrying amount of an item of property, plant and equipment shall be derecognized upon disposal
or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on
de-recognition of the asset (calculated as the difference between the net disposal proceeds and the
carrying amount of the asset) is included in the statement of profit and loss when the asset is
derecognised.
i. Capital work-in progress
Cost of material consumed and erection charges thereon along with other direct cost incurred by the
Company for the projects are shown as capital work-in-progress until capitalisation. Claims for price
variation / exchange rate variation in case of contracts are accounted for on acceptance / receipt of
claim.
j. Impairment of non-financial assets
At each reporting date, the Company assesses whether there is any indication based on
internal/external factors, that an asset may be impaired. If any such indication exists, the Company
estimates the recoverable amount of the asset. The recoverable amount is higher of an asset's fair value
less costs of disposal and value in use. For this purpose, assets are companied at the lowest levels for
which there are separately identifiable cash inflows which are largely independent of the cash inflows
from other assets or company of assets (cash generating units). If such recoverable amount of the asset
or the recoverable amount of the cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable amount and the reduction is treated
as an impairment loss and is recognised in the statement of profit and loss. If at the balance sheet date,
there is an indication that a previously assessed impairment loss no longer exists, the recoverable
amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of
depreciated historical cost and the same is accordingly reversed in the statement of profit and loss.
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement
and recognition of impairment loss for financial assets. ECL is the weighted-average of difference
between all contractual cash flows that are due to the Company in accordance with the contract and all
the cash flows that the Company expects to receive, discounted at the original effective interest rate,
with the respective risks of default occurring as the weights. When estimating the cash flows, the
Company is required to consider:
• All contractual terms of the financial assets (including prepayment and extension) over the
expected life of the assets.
• Cash flows from the sale of collateral held or other credit enhancements that are integral to the
contractual terms.
Trade receivables: In respect of trade receivables, the Company applies the simplified approach of Ind
AS 109, which requires measurement of loss allowance at an amount equal to lifetime expected credit
losses. Lifetime expected credit losses are the expected credit losses that result from all possible default
events over the expected life of a financial instrument.
Other financial assets: In respect of its other financial assets, the Company assesses if the credit risk on
those financial assets has increased significantly since initial recognition. If the credit risk has not
increased significantly since initial recognition, the Company measures the loss allowance at an amount
equal to 12-month expected credit losses, else at an amount equal to the lifetime expected credit
losses.
When making this assessment, the Company uses the change in the risk of a default occurring over the
expected life of the financial asset. To make that assessment, the Company compares the risk of a
default occurring on the financial asset as at the balance sheet date with the risk of a default occurring
on the financial asset as at the date of initial recognition and considers reasonable and supportable
information, that is available without undue cost or effort, that is indicative of significant increases in
credit risk since initial recognition. The Company assumes that the credit risk on a financial asset has not
increased significantly since initial recognition if the financial asset is determined to have low credit risk
at the balance sheet date.
De-recognition of financial assets
A financial asset is primarily de-recognised when the contractual rights to receive cash flows from the
asset have expired or the Company has transferred its rights to receive cash flows from the asset.
Non-derivative financial liabilities
Subsequent measurement
Subsequent to initial recognition, all non-derivative financial liabilities are measured at amortised cost
using the effective interest method.
De-recognition of financial liabilities
A financial liability is de-recognized when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the de-recognition of the original liability and the recognition of a new
liability. The difference in the respective carrying amounts is recognised in the statement of profit or
loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if
there is a currently enforceable legal right to offset the recognised amounts and there is an intention to
settle on a net basis, to realize the assets and settle the liabilities simultaneously.
k. Leases
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
Company as a lessee
The Company applies a single recognition and measurement approach for all leases, except for short¬
term leases and leases of low-value assets. The Company recognizes lease liabilities to make lease
payments and right-of-use assets representing the right to use the underlying assets.
a) Right-of-use assets
The Company recognizes right-of-use assets at the commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of
right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and
lease payments made at or before the commencement date less any lease incentives received. Right-of-
use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated
useful lives of the assets.
b) Lease liabilities
At the commencement date of the lease, the Company recognizes lease liabilities measured at the
present value of lease payments to be made over the lease term. The lease payments include fixed
payments (including in-substance fixed payments) less any lease incentives receivable, variable lease
payments that depend on an index or a rate, and amounts expected to be paid under residual, value
guarantees. The lease payments also include the exercise price of a purchase option reasonably certain
to be exercised by the Company and payments of penalties for terminating the lease, if the lease term
reflects the Company exercising the option to terminate. Variable lease payments that do not depend
on an index or a rate are recognized as expenses in the period in which the event or condition that
triggers the payment occurs.
In calculating the present value of lease payments, the Company uses its incremental borrowing rate at
the lease commencement date because the interest rate implicit in the lease is not readily
determinable. After the commencement date, the amount of lease liabilities is increased to reflect the
accretion of the interest and reduced for the lease payments made. In addition, the carrying amount of
lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease
payments or a change in the assessment of an option to purchase the underlying asset.
c) Short-term lease ad lease of low-value assets
The Company applies the short-term lease recognition exemption to its short-term leases (i.e., those
lease that have a lease term of 12 months or less from the commencement date and do not contain a
purchase option). It also applies the lease of low-value assets recognition exemption that are
considered to be low value. Lease payments on short-term lease and lease of low-value assets are
recognized as expense on a straight-line basis over the lease term.
l. Borrowing costs
Borrowing costs directly attributable to the acquisitions, construction or production of a qualifying asset
are capitalised during the period of time that is necessary to complete and prepare the asset for its
intended use or sale. Other borrowing costs are expensed in the period in which they are incurred and
reported in finance costs.
A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended
use. Capitalisation of borrowing costs is suspended in the period during which the active development is
delayed due to, other than temporary, interruption.
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