2. Material accounting policies:
2.1. Statement of Compliance
These financial statements have been prepared in accordance with the Indian Accounting Standards (referred
to as “Ind AS”) as prescribed under section 133 of the Companies Act, 2013 read with Companies (Indian
Accounting Standards) Rules as amended from time to time.
2.2. Basis of preparation and presentation
2.2.1. Historical cost convention
The financial statements have been prepared on the historical cost basis except for certain financial instruments
and defined benefit plans that are measured at fair values at the end of each reporting period.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date, regardless of whether that price is directly
observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability,
the Company takes into account the characteristics of the asset or liability if market participants would take those
characteristics into account when pricing the asset or liability at the measurement date.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1,2, or 3 based
on the degree to which the inputs to the fair value measurements are observable and the significance of the
inputs to the fair value measurement in its entirety, which are described as follows:
• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity
can access at the measurement date;
• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset
or liability, either directly or indirectly; and
• Level 3 inputs are unobservable inputs for the asset or liability.
2.2.2. Current non-current classification
All assets and liabilities have been classified as current or non-current as per the company's normal operating
cycle (twelve months) and other criteria set out in the Schedule III to the Act and Ind AS 1 Presentation of
financial statements.
Based on the nature of products and the time between the acquisition of assets for processing and their
realisation, the Company has ascertained its operating cycle as 12 months for the purpose of current / non¬
current classification of assets and liabilities.
Assets:
An asset is classified as current when it satisfies any of the following criteria:
• it is expected to be realised in, or is intended for sale or consumption in, the Company's normal operating
cycle;
• it is held primarily for the purpose of being traded;
• it is expected to be realised within twelve months after the reporting date; or
• it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at
least twelve months after the reporting date.
Liabilities:
A liability is classified as current when it satisfies any of the following criteria:
• it is expected to be settled in the Company's normal operating cycle;
• it is held primarily for the purpose of being traded;
• it is due to be settled within twelve months after the reporting date; or
• the Company does not have an unconditional right to defer settlement of the liability for at least twelve
months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its
settlement by the issue of equity instruments do not affect its classification.
All other assets/ liabilities are classified as non-current.
The aforesaid financial statement have been prepared in Indian Rupee (?) and denominated in Lakhs.
2.3. Investment in subsidiaries
Investments in subsidiaries are shown at cost. Where the carrying amount of an investment in greater than
its estimated recoverable amount, it is written down immediately to its recoverable amount and the difference
is transferred to the Statement of Profit and Loss. On disposal of investment, the difference between the net
disposal proceeds and the carrying amount is charged or credited to the Statement of Profit and Loss.
2.4. Revenue Recognition
Revenue is recognised upon transfer of control of promised products or services to customers in an amount that
reflects the consideration which the Company expects to receive in exchange for those products or services.
Sale of goods:
Revenue from the sale of goods is recognised at the point in time when control is transferred to the customer.
Revenue is measured at the fair value of the consideration received or receivable. The Company recognizes
revenues on sale of products, net of discounts, sales incentives, rebates granted, returns, sales taxes and
duties. Sale of products is presented gross of manufacturing taxes like excise duty wherever applicable.
Royalties:
Royalty revenue is recognised on an accrual basis in accordance with the substance of the relevant agreement
(provided that it is probable that the economic benefits will flow to the Company and the amount of revenue
can be measured reliably. Royalty arrangements that are based on production, sales and other measures are
recognised by reference to the underlying arrangement.
2.5. Leasing
The Company as 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.
For operating leases, rental income is recognized on a straight line basis over the term of the relevant lease.
The Company as lessee:
The Company's lease asset class consist of leases for land. The Company assesses whether a contract contains
a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control
the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract
conveys the right to control the use of an identified asset, the Company assesses whether:
(i) The contract involves the use of an identified asset
(ii) The Company has substantially all of the economic benefits from use of the asset through the period of the
lease and
(iii) The Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use asset (“ROU”) and a
corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of
twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the
Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the
lease.
Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term.
ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.
Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter
of the lease term and useful life of the underlying asset. Right-of-use assets are evaluated for recoverability
whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For
the purpose of impairment testing, there coverable amount (i.e. the higher of the fair value less cost to sell and
the value-in-use) is determined on an individual asset basis unless the asset does not generate cash-flows that
are largely independent of those from other assets. In such cases, the recoverable amount is determined for the
Cash Generating Unit (CGU) to which the asset belongs.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The
lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using
the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with
a corresponding adjustment to the related right-of-use asset if the Company changes its assessment if whether it
will exercise an extension or a termination option. Lease liability and ROU asset have been separately presented
in the Balance Sheet and lease payments have been classified as financing cash flows.
2.6. Foreign currencies
The functional currency of the Company is determined on the basis of the primary economic environment in
which it operates. The functional currency of the Company is Indian National Rupee (?).
The transactions in currencies other than the Company's functional currency (foreign currencies) are recognised
at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary
items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items
carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the
date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in
a foreign currency are not retranslated.
2.7. Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added
to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
Interest income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
2.8. Employee benefits
2.8.1. Retirement benefit costs and termination benefits
Payments to defined contribution retirement benefit plans are recognised as an expense when employees have
rendered service entitling them to the contributions.
For defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected
unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Re¬
measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable)
and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position
with a charge or credit recognised in other comprehensive income in the period in which they occur. Re¬
measurement recognised in other comprehensive income is reflected immediately in retained earnings and
will not be reclassified to profit or loss. Past service cost is recognised in profit or loss in the period of a plan
amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net
defined benefit liability or asset. Defined benefit costs are categorised as follows:
• service cost (including current service cost, past service cost, as well as gains and losses on curtailments
and settlements);
• net interest expense or income; and
• re-measurement
The Company presents the first two components of defined benefit costs in profit or loss in the line item
‘Employee benefits expenses'. Curtailment gains and losses are accounted for as past service costs.
The retirement benefit obligation recognised in the statement of financial position represents the actual deficit
or surplus in the Company's defined benefit plans. Any surplus resulting from this calculation is limited to the
present value of any economic benefits available in the form of refunds from the plans or reductions in future
contributions to the plans.
A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer
of the termination benefit and when the entity recognises any related restructuring costs.
2.8.2. Short-term and other long-term employee benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and
sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to
be paid in exchange for that service.
Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of
the benefits expected to be paid in exchange for the related service.
Liabilities recognised in respect of other long-term employee benefits are measured at the present value of
the estimated future cash outflows expected to be made by the Company in respect of services provided by
employees up to the reporting date.
2.9. Income Tax
The income tax expense or credit for the period is the tax payable on the current period's taxable income
based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable
to temporary differences and to unused tax losses.
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 countries where the company and its subsidiaries and associates
operate and generate taxable income. Management periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax authorities.
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 amount in the financial statement. 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 excepted to apply when the related deferred income tax assets is realized 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 assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and
tax liabilities are off set where the company has a legally enforceable right to offset and intends either to settle
on a net basis, or to realize the asset and settle the liability simultaneously.
Current and deferred tax is recognised in the Statement of profit and 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.
2.10. Property, plant and equipment
All items of property, plant and equipment are stated at cost less accumulated depreciation and impairment, if
any. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with
the Company's accounting policy and includes all other expenditure that is directly attributable to the acquisition
of the items.
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 the
cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate
asset is derecognised when replaced. All other repairs and maintenance are charged to the Statement of profit
and loss during the reporting period in which they are incurred.
Depreciation amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated
residual value.
Depreciation has been provided on the straight line method as per the useful life prescribed in Schedule II to the
Companies Act, 2013 except for computers (desktops, laptops, etc.) has been assessed for 6 years based on
technical advice, taking in to account the nature of the assets, the estimated usage of the asset, the operation
condition of the asset, past history of replacement, anticipated technological changes, manufacturers warranties
and maintenance support etc.
Estimated useful lives of the assets are as follows:
Class of assets Years
Buildings 60 years
Plant and machinery 6 - 15 years
Furniture and fixtures 10 years
Office equipment 5 - 15 years
Vehicles 8 years
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting
period, with the effect of any changes in estimate accounted for on a prospective basis.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits
are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement
of an item of property, plant and equipment is determined as the difference between the sales proceeds and the
carrying amount of the asset and is recognised in profit or loss.
2.11. Investment Property
Investment properties are properties held to earn rentals and/or for capital appreciation (including property
under construction for such purposes). Investment properties are measured initially at cost, including transaction
costs. Subsequent to initial recognition, investment properties are measured in accordance with Ind AS 16's
requirements for cost model.
An investment property is derecognised upon disposal or when the investment property is permanently
withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on
derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is included in profit or loss in the period in which the property is derecognised.
2.12. Intangible Assets
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated
amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over
their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of
each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.
Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated
impairment losses.
Useful lives of intangible assets
Estimated useful lives of the intangible assets are as follows:
Class of assets ......................... Years
Software ...................................6 years
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or
disposal, Gains or losses arising from derecognition of an intangible asset, measured as the difference between
the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset
is derecognised.
2.13. Impairment of tangible and intangible assets other than goodwill
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible
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. When a
reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual
cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which
a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs of disposal 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 the risks specific to the asset for which the
estimates of future cash flows have not been adjusted.
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 profit or 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
profit or loss.
2.14. Inventories
Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on a
first-in-first-out basis. Net realisable value represents the estimated selling price for inventories less all estimated
costs of completion and costs necessary to make the sale.
2.15. Property under development
Property under development represents leasehold land converted into stock-in-trade on the basis of lower of the
cost or fair value as valued by external valuers on the date of conversion.
2.16. Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a
past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can
be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the
obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its
carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a
third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and
the amount of the receivable can be measured reliably.
2.17. Cash and Cash Equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on
hand, overdrawn bank balances, bank overdraft, 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.
2.18. Financial instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual
provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and
financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial
assets or financial liabilities, as appropriate, on initial recognition.
2.19. Financial assets
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis.
Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within
the time frame established by regulation or convention in the marketplace.
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value,
depending on the classification of the financial assets.
Classification of financial assets
Debt instruments that meet the following conditions are subsequently measured at amortised cost (except for
debt instruments that are designated as at fair value through profit or loss on initial recognition):
• the asset is held within a business model whose objective is to hold assets in order to collect contractual
cash flows: and
• the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding.
Debt instruments that meet the following conditions are subsequently measured at fair value through other
comprehensive income (except for debt instruments that are designated as at fair value through profit or loss on
initial recognition):
• the asset is held within a business model whose objective is achieved both by collecting contractual cash
flows and selling financial assets: and
• the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding.
Interest income is recognised in profit or loss for FVTOCI debt instruments. For the purposes of recognising
foreign exchange gains and losses, FVTOCI debt instruments are treated as financial assets measured at
amortised cost. Thus, the exchange differences on the amortised cost are recognised in profit or loss and
other changes in the fair value of FVTOCI financial assets are recognised in other comprehensive income and
accumulated under the heading of 'Reserve for debt instruments through other comprehensive income'. When
the investment is disposed of, the cumulative gain or loss previously accumulated in this reserve is reclassified
to profit or loss.
All other financial assets are subsequently measured at fair value.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating
interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated
future cash receipts (including all fees and points paid or received that form an integral part of the effective
interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument,
or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
Income is recognised on an effective interest basis for debt instruments other than those financial assets classified
as at FVTPL. Interest income is recognised in profit or loss and is included in the "Other income" line item.
Financial assets at fair value through profit or loss (FVTPL)
Investments in equity instruments are classified as at FVTPL, unless the Company irrevocably elects on initial
recognition to present subsequent changes in fair value in other comprehensive income for investments in equity
instruments, which are not held for trading.
Debt instruments that do not meet the amortised cost criteria or FVTOCI criteria (see above) are measured
at FVTPL. In addition, debt instruments that meet the amortised cost criteria or the FVTOCI criteria but are
designated as at FVTPL are measured at FVTPL.
A financial asset that meets the amortised cost criteria or debt instruments that meet the FVTOCI criteria may
be designated as at FVTPL upon initial recognition if such designation eliminates or significantly reduces a
measurement or recognition inconsistency that would arise from measuring assets or liabilities or recognising
the gains and losses on them on different bases, The Company has not designated any debt instrument as at
FVTPL.
Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or
losses arising on remeasurements recognised in profit or loss. The net gain or loss recognised in profit or loss
incorporates any dividend or interest earned on the financial asset and is included in the 'Other income' line
item. Dividend on financial assets at FYTPL is recognised when the Company's right to receive the dividends
is established, it is probable that the economic benefits associated with the dividend will flow to the entity, the
dividend does not represent a recovery of part of cost of the investment and the amount of dividend can be
measured reliably.
Investments in equity instruments at FVTOCI
On initial recognition, the Company can make an irrevocable election (on an instrument-by-instrument basis) to
present the subsequent changes in fair value in other comprehensive income pertaining to investments in equity
instruments. This election is not permitted if the equity investment is held for trading. These elected investments
are initially measured at fair value plus transaction costs.
Subsequently, they are measured at fair value with gains and losses arising from changes in fair value
recognised in other comprehensive income and accumulated in the 'Reserve for equity instruments through
other comprehensive income'. The cumulative gain or loss is not reclassified to profit or loss on disposal of the
investments.
A financial asset is held for trading if:
• it has been acquired principally for the purpose of selling it in the near term; or
• on initial recognition it is part of a portfolio of identified financial instruments that the Company manages
together and has a recent actual pattern of short-term profit-taking; or
• it is a derivative that is not designated and effective as a hedging instrument or a financial guarantee.
The Company has equity investment in an entity which is not held for trading. The Company has elected the
FVTOCI irrevocable option for this investment (see note 10). Fair value is determined in the manner described
in note 37.
Dividends on these investments in equity instruments are recognised in profit or loss when the Company's right
to receive the dividends is established, it is probable that the economic benefits associated with the dividend win
flow to the entity, the dividend does not represent a recovery of part of cost of the investment and the amount
of dividend can be measured reliably. Dividends recognised in profit or loss is included in the 'Other income' line
item.
Interest and dividend income
Dividend income is recorded when the right to receive payment is established. Interest income is recognised
using the effective interest method.
Impairment of financial assets
The Company assesses on a forward-looking basis the expected credit losses associated with its assets. The
impairment methodology applied depends on whether there has been a significant increase in credit risk.
For trade receivables or any contractual right to receive cash or another financial asset that result from
transactions that are within the scope of Ind AS 18, the Company always measures the loss allowance at an
amount equal to lifetime expected credit losses.
Derecognition of financial assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire,
or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to
another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership
and continues to control the transferred asset, the Company recognises its retained interest in the asset and
an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and
rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset
and recognises a collateralised borrowing for the proceeds received.
On derecognition of a financial asset in its entirety, the difference between the asset's carrying amount and the
sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in
other comprehensive income and accumulated in equity is recognised in profit or loss if such gain or loss would
have otherwise been recognised in profit or loss on disposal of that financial asset.
On derecognition of a financial asset other than in its entirety (e.g. when the Company retains an option to
repurchase part of a transferred asset), the Company allocates the previous carrying amount of the financial asset
between the part it continues to recognise under continuing involvement, and the part it no longer recognises
on the basis of the relative fair values of those parts on the date of the transfer. The difference between the
carrying amount allocated to the part that is no longer recognised and the sum of the consideration received for
the part no longer recognised and any cumulative gain or loss allocated to it that had been recognised in other
comprehensive income is recognised in profit or loss if such gain or loss would have otherwise been recognised
in profit or loss on disposal of that financial asset. A cumulative gain or loss that had been recognised in other
comprehensive income is allocated between the part that continues to be recognised and the part that is no
longer recognised on the basis of the relative fair values of those parts.
2.20. Financial liabilities and equity instruments
Classification as debt or equity
Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in
accordance with the substance of the contractual arrangements and the definitions of a financial liability and an
equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting
all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of
direct issue costs.
Repurchase of the Company's own equity instruments is recognised and deducted directly in equity. No gain
or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company's own equity
instruments.
Financial liabilities
All financial liabilities are subsequently measured at amortised cost using the effective interest method or at
FVTPL.
Financial liabilities at FVTPL:
Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is designated
as at FVTPL.
A financial liability is classified as held for trading if:
• It has been incurred principally for the purpose of repurchasing it in the near term; or
• on initial recognition it is part of a portfolio of identified financial instruments that the Company manages
together and has a recent actual pattern of short-term profit-taking; or
• it is a derivative that is not designated and effective as a hedging instrument.
A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial
recognition if:
• such designation eliminates or significantly reduces a measurement or recognition inconsistency that would
otherwise arise;
• the financial liability forms part of a Company of financial assets or financial liabilities or both, which
is managed and its performance is evaluated on a fair value basis, in accordance with the Company's
documented risk management or investment strategy, and information about the grouping is provided
internally on that basis; or
• it forms part of a contract containing one or more embedded derivatives, and Ind AS 109 permits the entire
combined contract to be designated as at FVTPL in accordance with Ind AS 109.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement
recognised in Statement of Profit and Loss. The net gain or loss recognised in Statement of Profit and Loss
incorporates any interest paid on the financial liability and is included in the ‘other gains and losses' line item
in the Statement of Profit and Loss. The Company derecognises financial liabilities when, and only when, the
Company's obligations are discharged, cancelled or they expire. The difference between the carrying amount of
the financial liability derecognised and the consideration paid and payable is recognised in Statement of Profit
and Loss.
Other financial liabilities:
Other financial liabilities (including borrowings and trade and other payables) are subsequently measured at
amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating
interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated
future cash payments (including all fees and points paid or received that form an integral part of the effective
interest rate, transaction costs and other premiums or discounts) through the expected life of the financial
liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
Derecognition of financial liabilities
The Company derecognises financial liabilities when, and only when, the Company's obligations are discharged,
cancelled or have expired. An exchange between with a lender of debt instruments with substantially different
terms is accounted for as an extinguishment of the original financial liability and the recognition of a new
financial liability, Similarly, a substantial modification of the terms of an existing financial liability (whether or not
attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial
liability and the recognition of a new financial liability. The difference between the carrying amount of the financial
liability derecognised and the consideration paid and payable is recognised in profit or loss.
2.21. Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Board of
Directors, they constitute as CODM.
2.22. Earnings Per Share
Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number of
equity shares outstanding during the year. The weighted average number of equity shares outstanding during
the year is adjusted for treasury shares, bonus issue, bonus element in a rights issue to existing shareholders,
share split and reverse share split (consolidation of shares).
Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for dividend, interest
and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity
shares, by the weighted average number of equity shares considered for deriving basic earnings per share and
the weighted average number of equity shares which could have been issued on the conversion of all dilutive
potential equity shares including the treasury shares held by the Company to satisfy the exercise of the share
options by the employees.
3. Critical estimates and judgements
In the course of applying the policies outlined in all notes above, the Company is required to make judgements,
estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from
other sources. The estimates and associated assumptions are based on historical experience and other factors
that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognized in the period in which the estimate is revised if the revision affects only that period, or in the
period of the revision and future period, if the revision affects current and future period.
A. Key sources of estimation uncertainty
i. Useful lives of property, plant and equipment and intangible assets
Management reviews the useful lives of property, plant and equipment and intangible assets at least
once a year. Such lives are dependent upon an assessment of both the technical lives of the assets
and also their likely economic lives based on various internal and external factors including relative
efficiency and operating costs. Accordingly depreciable lives are reviewed annually using the best
information available to the management.
ii. Impairment of investments in subsidiaries
Determining whether the investments in subsidiaries are impaired requires an estimate in the value
in use of investments. In considering the value in use, the Directors have anticipated the future
commodity prices, capacity utilization of plants, operating margins, mineable resources and availability
of infrastructure of mines, discount rates and other factors of the underlying businesses/ operations
of the investee companies. Any subsequent changes to the cash flows due to changes in the above-
mentioned factors could impact the carrying value of investments.
|