2 SIGNIFICANT ACCOUNTING POLICIES
a Basis of Preparation
These financial statements have been prepared in accordance with the Generally Accepted Accounting
Principles in India ('Indian GAAP') to comply with the Accounting Standards specified under Section 133 of
the Companies Act, 2013, as applicable. The financial statements have been prepared under the historical
cost convention on accrual basis, except for certain financial instruments which are measured at fair value.
Significant accounting judgements, accounting estimates and
b assumptions
The preparation of financial statements requires management to make certain judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities (including
contingent liabilities) and the accompanying disclosures. Estimates and underlying assumptions are
reviewed on an ongoing basis.
c Property, Plant and Equipment
Property, Plant and Equipment are stated at cost, less accumulated depreciation / amortisation. Costs
include all expenses incurred to bring the asset to its present location and condition.
Capital Work in Progress (CWIP)
Cost of assets not ready for intended use, as on the balance sheet date, is shown as CWIP. CWIP is stated
at cost, net of accumulated impairment loss, if any.
Advances given towards acquisition of assets (including CWIP) and outstanding at each balance sheet date
are disclosed appropriately.
d Intangible assets
Intangible assets are stated at cost, less accumulated amortisation. Costs include all expenses incurred to
bring the asset to its present condition.
e Depreciation and Amortization
Depreciation has been provided on the Fixed Asset on the WDV method and in accordance with the useful
life of the Asset as prescribed under Schedule II of the Companies Act, 2013.
f Impairment of assets
At each balance sheet date, the management reviews the carrying amounts of its assets included in each
cash generating unit to determine whether there is any indication that those assets were impaired. If any
such indication exists, the recoverable amount of the asset is estimated in order to determine the extent
of impairment. Recoverable amount is the higher of an asset's net selling price and value in use. In assessing
value in use, the estimated future cash flows expected from the continuing use of the asset and from its
disposal are discounted to their present value using a pre-tax discount rate that reflects the current market
assessments of time value of money and the risks specific to the asset. Reversal of impairment loss is
recognised as income in the statement of profit and loss.
g Leases
Assets taken on lease by the Company in its capacity as lessee, where the Company has substantially all the
risks and rewards of ownership are classified as finance lease. Such a lease is capitalised at the inception of
the lease at lower of the fair value or the present value of the minimum lease payments and a liability is
recognised for an equivalent amount. Each lease rental paid is allocated between the liability and the
interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.
Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with
the lessor, are recognised as operating leases. Lease rentals under operating leases are recognised in the
statement of profit and loss on a straight-line basis.
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Raw materials are carried at the lower of cost and net realisable value. Cost is determined on a weighted
average basis. Purchased goods-in-transit are carried at cost. Work-in-progress is carried at the lower of
cost and net realisable value. Stores and spare parts are carried at lower of cost and net realisable value.
Finished goods produced or purchased by the Company are carried at lower of cost and net realisable value.
Cost includes direct material and labour cost and a proportion of manufacturing overheads.
i Cash and cash equivalents
The Company considers all highly liquid financial instruments, which are readily convertible into known
amount of cash that are subject to an insignificant risk of change in value and having original maturities of
three months or less from the date of purchase, to be cash equivalents.
j Borrowing Cost
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset that
necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part
of the cost of the asset. Borrowing costs consist of interest and transaction costs that an entity incurs in
connection with the borrowing of funds.
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