Note 1(A) Material Accounting Policies
a. Property, Plant and Equipment (PPE):
Property, plant and equipment are stated at acquisition
or construction cost less accumulated depreciation and
impairment loss. Cost comprises the purchase price and
any attributable cost of bringing the asset to itslocation
and working condition for its intended use, including
relevant borrowing costs and any expected costs of
decommissioning.
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.
An item of PPE is de-recognised upon disposal or when no
future economic benefits are expected to arise from the
continued use of the assets. Any gain or loss arising on
the disposal or retirement of an item of PPE, is determined
as the difference between the sales proceeds and the
carrying amount of the asset and is recognised in the
Statement of Profit and Loss.
If significant parts of an item of PPE have different useful
lives, then they are accounted for as separate items (major
components) of PPE. Capital work-in-progress includes
cost of property, plant and equipment under installation/
under development as at the reporting date.
b. 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.
c. Depreciation:
Depreciation is the systematic allocation of the
depreciable amount over its useful life. Depreciation on
Buildings and Plant & Machinery is provided on a straight¬
line basis over such useful lives as prescribed under
Schedule II to the Companies Act, 2013. Depreciation on all
other assets other than Buildings and Plant & Machinery
has been provided on Written Down Value method.
The Company has used the following useful lives of the
property, plant and equipment to provide depreciation.
Major assets class where useful life considered as
provided in Schedule II:
Also,
i) Where a significant component (in terms of cost)
of an asset has an estimated economic useful life
shorter than that of its corresponding asset, the
component is depreciated over its shorter life.
ii) Depreciation on additions is being provided on Pro
rata basis from the date of such additions.
iii) Depreciation on sale or disposal is provided on Pro
rata basis till the date of such sale or disposal.
iv) Depreciation on assets sold, discarded or demolished
during the year is being provided up to the month in
which such assets are sold, discarded or demolished.
v) Depreciation and amortization methods, useful lives
and residual values are reviewed at each financial
year end and adjusted prospectively.
vi) Leasehold lands are amortized over the period of the
lease.
Depreciable amount for PPE is the cost of PPE less its
estimated residual value. The useful life of PPE is the
period over which PPE is expected to be available for use by
the Company, or the number of production or similar units
expected to be obtained from the asset by the Company.
d. Intangible Assets and Amortization:
Intangible assets are recognized only if it is probable that
the future economic benefits attributable to asset will flow
to the Company and the cost of asset can be measured
reliably. The Company determines the useful life as the
period over which the future economic benefits will flow
to the Company after taking into account all relevant facts
and circumstances.
Intangible assets are measured at cost. Following initial
recognition, intangible asset is carried at acquisition/
development cost less accumulated amortization and
accumulated impairment loss if any. Cost of Intangible
asset includes purchase price including non - refundable
taxes and duties, borrowing cost directly attributable
to the qualifying asset and any directly attributable
expenditure on making the asset ready for its intended
use.
Intangible assets with finite lives are amortised over
the useful economic life and assessed for impairment
whenever there is an indication that the intangible
asset may be impaired. The amortisation period and
the amortisation method for an intangible asset with a
finite useful life are reviewed at least at the end of each
reporting period. Changes in the expected useful life or
the expected pattern of consumption of future economic
benefits embodied in the asset are considered to modify
the amortisation period or method, as appropriate, and
are treated as changes in accounting estimates. The
amortisation expense on intangible assets with finite lives
is recognised in the Statement of Profit and Loss unless
such expenditure forms part of carrying value of another
asset. Intangible assets are amortised on a straight-line
basis over their estimated useful lives.
Gains or losses arising from de-recognition of an intangible
asset are measured as the difference betweenthe net
disposal proceeds and the carrying amount of the asset
and are recognised in the Statement of Profitand Loss
when the asset is recognised.
e. Impairment of Non-Financial Assets:
At the end of each reporting period, the Company reviews
the carrying amounts of non-financial 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 Intangible assets with indefinite useful lives
and intangible assets not yet available for use are tested
for impairment at least annually, and whenever there is an
indication that the asset may be impaired.
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 Statement of Profit and
Loss, unless the relevant asset is carried at a revalued
amount, in which case the impairment loss is treated as a
revaluation decrease.
When an impairment loss subsequently reverses, the
carrying amount of the asset (or a cash-generating unit)
is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does
not exceed the carrying amount that would have been
determined had no impairment loss been recognised
for the asset (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognised immediately
in the Statement of Profit and Loss, unless the relevant
asset is carried at a revalued amount, in which case the
reversal of the impairment loss is treated as a revaluation
increase.
f. Non-Current assets (or disposal Company)
classified as held for disposal:
Assets are classified as held for disposal and stated at
the lower of carrying amount and fair value less costs
to sell. To classify any Asset as “Asset held for disposal”
the asset must be available for immediate sale and its
sale must be highly probable. Such assets or Company
of assets are presented separately in the Balance Sheet,
in the line “Assets held for disposal”. Once classified as
held for disposal, intangible assets and PPE are no longer
amortised or depreciated.
The management must be committed to the sale/
distribution expected within one year from the date of
classification.
g. Inventories:
Raw materials, fuel, stores & spare parts and
packing materials:
Valued at lower of cost and net realisable value (NRV).
However, these items are considered to be realisable
at cost, if the finished products, in which they will be
used, are expected to be sold at or above cost. The cost
is computed on weighted average basis which includes
expenditure incurred for acquiring inventories like
purchase price, import duties, taxes (net of tax credit) and
other costs incurred in bringing the inventories to their
present location and condition.
Work-in- progress (WIP), finished goods, stock-
in-trade and trial run inventories:
Valued at lower of cost and NRV. Cost of Finished goods
and WIP includes cost of raw materials, cost of conversion
and other costs incurred in bringing the inventories to
their present location and condition. Cost of inventories is
computed on weighted average basis.
Waste/Scrap:
Waste/Scrap inventory is valued at NRV. Net realisable
value is the estimated selling price in the ordinary course
of business, less the estimated costs of completion and
the estimated costs necessary to make the sale.
Obsolete, defective, slow moving and unserviceable
inventories, if any, are duly provided for.
h. Borrowing Costs:
Borrowing costs that are directly attributable to the
acquisition, construction or development of a qualifying
asset are capitalized as part of the cost of the respective
asset till such time the asset is ready for its intended use.
A qualifying asset is an asset which necessarily takes a
substantial period of time to get ready for its intended
use. All other borrowing costs are expensed in the period
in which they occur.
Borrowing costs consist of interest, amortization of
discounts, hedge related cost incurred in connection with
foreign currency borrowings and exchange difference
arising from foreign currency borrowings to the extent
they are treated as an adjustment to the borrowing cost
and other costs that an entity incurs in connection with
the borrowing of funds.
Investment 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 the Statement of Profit and Loss in the
period in which they are incurred.
i. Revenue Recognition:
Revenue is recognized on the basis of approved contracts
regarding the transfer of goods to a customer for an
amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or
services.
Revenue from the sale of goods is recognized at a point
in time when the control over the product has been
transferred to the Customer. Control of the product
transfers upon shipment of the product to the customer
or when the product 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 product
shipped. Revenue towards satisfaction of a performance
obligation is measured at the amount of transaction price
allocated to that performance obligation, in accordance
with Ind AS115 “ Revenue from contract with customers”.
Amounts disclosed as revenue are net off returns, trade
allowances, rebates and indirect taxes.
Interest Income is recognised on a time proportion basis
taking into account the amount outstanding and the
interest rate applicable.
Export Incentives are accounted for to the extent
considered recoverable by the Management.
j. Lease:
The determination of whether an arrangement is
(or contains) a lease is based on the substance of
the arrangement at the inception of the lease. The
arrangement is, or contains, a lease if fulfilment of the
arrangement is dependent on the use of a specific asset,
or assets and the arrangement conveys a right or control
to use the asset, or assets even if that right is not explicitly
specified in an arrangement.
The arrangement conveys the right to control the use of
an identified asset, if it involves the use of an identified
asset and the Company has substantially all of the
economic benefits from use of the asset and has right to
direct the use of the identified asset. The cost of the right-
of-use asset shall comprise of the amount of the initial
measurement of the lease liability adjusted for any lease
payments made at or before the commencement date plus
any initial direct costs incurred. The right-of-use assets
is subsequently measured at cost less any accumulated
depreciation, accumulated impairment losses, if any and
adjusted for any remeasurement of the lease liability. The
right-of-use assets is depreciated using the straight-line
method from the commencement date over the shorter of
lease term or useful life of right-of-use asset.
The Company measures the lease liability at the present
value of the lease payments that are not paid at the
commencement date of the lease. The lease payments
are discounted using the interest rate implicit in the lease,
if that rate can be readily determined. If that rate cannot
be readily determined, the Company uses incremental
borrowing rate.
For short-term and low value leases, the Company
recognises the lease payments as an operating expense
on a straight-line basis over the lease term.
k. Employee Benefit Expense:
Defined benefit plan:
The Company pays gratuity to the employees whoever has
completed five years of service with the Company at the
time of resignation/superannuation. The gratuity liability
amount is contributed to the approved gratuity fund
formed exclusively for gratuity payment to the employees.
The liability in respect of gratuity and other post¬
employment benefits is calculated using the Projected
Unit Credit Method and spread over the period during
which the benefit is expected to be derived from
employees’ services.
Re-measurement of defined benefit plans in respect
of post-employment are charged to the Other
Comprehensive Income. Re-measurement recognised
in Other Comprehensive Income ('OCI’) is reflected
immediately in retained earnings and will not be
reclassified to Statement of Profit and Loss.
The present value of the defined benefit plan liability is
calculated using a discount rate which is determined by
reference to market yields at the end of the reporting
period on government bonds.
The defined benefit obligation recognised in the Balance
Sheet 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.
Defined contribution plan:
Employee benefits in the form of contribution to
superannuation fund, provident fund managed by
Government authorities, Employee state Insurance
Corporation and Labour Welfare Fund are considered
as defined contribution plan and the same is charged
to Statement of Profit or Loss for the year when the
contributions to the respective funds are due.
Other long-term employee benefits:
The Company has a scheme for leave encashment for
employee, the liability for which is determined on the basis
of an actuarial valuation carried out at the end of the year
using Projected Unit Credit method.
Short Term Employee Benefits:
Short-term employee benefits are recognised as an
expense on accrual basis.
l. Income Taxes:
The tax expense for the period comprises current and
deferred tax. Tax is recognized in Statement of Profit
and Loss, except to the extent that it relates to items
recognized in the OCI or in equity. In which case, the tax is
also recognized in OCI or equity.
Current Tax:
Current tax assets and liabilities are measured at the
amount expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws used
to compute the amount are those that are enacted
or substantively enacted, at the reporting date in the
countries where the Company operates and generates
taxable income.
The management periodically evaluates positions taken
in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation
and established provisions, where appropriate.
Deferred Tax:
Deferred tax is recognized on temporary differences
between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases
used in the computation of taxable profit.
Deferred tax liabilities and assets are measured at the tax
rates that are expected to apply in the period in which the
liability is settled or the asset realised, based on tax rates
(and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.
Deferred tax assets and liabilities are offset if there is a
legally enforceable right to offset current tax liabilities
and assets, and they relate to income taxes levied by the
same tax authority, but they intend to settle current tax
liabilities and assets on a net basis or their tax assets and
liabilities will be realized simultaneously.
A deferred tax asset is recognized only to the extent that
it is probable that future taxable profits will be available
against which the temporary difference can be utilised.
Deferred tax assets are reviewed at each reporting date
and are reduced to the extent that it is no longer probable.
m. Foreign Currency Transactions:
Transactions denominated in foreign currencies are
recorded at the exchange rates prevailing on the date of
the transaction As at balance sheet date, foreign currency
monetary items are translated at closing exchange rate.
Foreign currency non-monetary items carried at fair value
are translated at the rates prevailing at the date when
the fair value was determined. Foreign currency non¬
monetary items measured in terms of historical cost are
translated using the exchange rate as at the date of initial
transactions.
Exchange difference arising on settlement or translation
of foreign currency monetary items are recognized as
income or expense in the year in which they arise except
to the extent exchange differences are regarded as an
adjustment to interest cost on those foreign currency
borrowings relating to assets under construction for
future productive use, which are included in the cost of
those assets when they are regarded as an adjustment to
interest costs on those foreign currency borrowings.
n. Financial Instruments:
A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity. Financial Assets &
Financial Liabilities are recognized when the Company
becomes party to contractual provisions of the relevant
instrument.
Initial Measurement:
At initial recognition, the Company measures a financial
asset and financial liabilities at its 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 and ancillary costs related to borrowings) are
added to or deducted from the fair value of the financial
assets or financial liabilities, as appropriate, on initial
recognition. Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities at fair
value through profit or loss are recognised immediately in
Statement of Profit and Loss.
Classification and Subsequent Measurement:
Financial Assets:
The Company classifies financial assets as subsequently
measured at amortised cost, fair value through other
comprehensive income (“FVOCI”) or fair value through
profit or loss (“FVTPL”) on the basis of following:
• the entity’s business model for managing the financial
assets; and
• the contractual cash flow characteristics of the
financial asset.
Amortised Cost:
A financial asset shall be classified and measured at
amortised cost if both of the following conditions are met:
• the financial asset is held within a business model
whose objective is to hold financial assets in order to
collect contractual cash flows; and
• the contractual terms of the financial 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. Amortised cost is
calculated by taking into account any discount or premium
on acquisition and fees or costs that are an integral part of
the EIR. The EIR amortisation is included in finance income
in the statement of profit or loss. The losses arising from
impairment are recognised in the statement of profit or
loss. This category generally applies to trade and other
receivables.
Fair Value through Other Comprehensive Income
('FVOCI’):
A financial asset shall be classified and measured at FVOCI
if both of the following conditions are met:
• the financial asset is held within a business model
whose objective is achieved by both collecting
contractual cash flows and selling financial
assets; and
• the contractual terms of the financial asset give
rise on specified dates to cash flows that are solely
payments of principal and interest (SPPI) on the
principal amount outstanding.
Financial Asset included within the FVOCI category are
measured initially as well as at each reporting date at fair
value. Fair value movements are recognised in the Other
Comprehensive Income (OCI). However, the Company
recognizes interest income, impairment losses & reversals
and foreign exchange gain or loss in the Statement of
Profit and Loss. On de-recognition of the asset, cumulative
gain or loss previously recognised in OCI is re-classified
from the equity to Statement of Profit and Loss. Interest
earned whilst holding FVTOCI debt instrument is reported
as interest income using the EIR method.
Fair Value through Profit or Loss ('FVTPL’):
FVTPL is a residual category for Financial Asset. Any
debt instrument, which does not meet the criteria for
categorization as at amortised cost or as FVOCI, is
classified as at FVTPL.
Financial Assets included within the FVTPL category are
measured at fair value with all changes recognized in the
Statement of Profit and Loss.
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.
Equity instruments:
All equity investments in scope of Ind-AS 109 are measured
at fair value. Equity instruments which are held for trading
are classified as at FVTPL. For all other equity instruments,
the Company decides to classify the same either as at
FVTOCI or FVTPL. The Company makes such election on an
instrument-by-instrument basis. Where the Company’s
management has elected to present fair value gains and
losses on equity investments in other comprehensive
income, there is no subsequent reclassification of fair
value gains and losses to the Statement of Profit and Loss.
Dividends from such investments are recognized in the
Statement of Profit and Loss as other income when the
Company’s right to receive payments is established.
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 Financial Assets, the Company applies 'simplified
approach’ as specified under Ind AS 109, which requires
expected lifetime losses to be recognised from initial
recognition of the receivables. The application of
simplified approach does not require the Company
to track changes in credit risk. The provision matrix is
prepared based on historically observed default rates over
the expected life of trade receivables and is adjusted for
forward-looking estimates. At each reporting date, the
historically observed default rates and changes in the
forward-looking estimates are updated.
Derecognition of Financial Instruments:
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 also 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 statement of profit or loss if such gain or
loss would have otherwise been recognised in statement
of 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 statement of
profit or loss if such gain or loss would have otherwise
been recognised in statement of 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.
Loans and Borrowings:
After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortised cost
using the Effective Interest Rate (EIR) method. Gains and
losses are recognised in the Statement of Profit and Loss,
when the liabilities are derecognised as well as through
the EIR amortisation process.
Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation
is included as finance costs in the Statement of Profit
and Loss.
De-recognition of Financial Liabilities:
The Company de-recognises financial liabilities when and
only when, the Company’s obligations are discharged,
cancelled or have expired. The difference between the
carrying amount of the financial liability de-recognised
and the consideration paid and payable is recognised in
Statement of Profit and Loss.
Classification and Subsequent Measurement:
Financial Liabilities:
Fair Value Measurement:
The Company measures financial instruments, such
as investments (other than equity investments
inSubsidiaries, Joint Ventures and Associates) and
derivatives at fair values at each Balance Sheet date.
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.
The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability
takes place either: In the principal market for the asset or
liability, or In the absence of a principal market, in the most
advantageous market for the asset or liability.
The fair value of an asset or a liability is measured using
the assumptions that market participants would use
when pricing the asset or liability, assuming that market
participants act in their economic best interest.
A fair value measurement of a non-financial asset takes
into account a market participant’s ability to generate
economic benefits by using the asset in its highest and
best use or by selling it to another market participant that
would use the asset in its highest and best use.
The Company uses valuation techniques that are
appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximising the
use of relevant observable inputs and minimising the use
of unobservable inputs.
All assets and liabilities (for which fair value is measured
or disclosed in the financial statements) are categorised
within the fair value hierarchy, described as follows, based
on the lowest level input that is significant to the fair value
measurement as a whole:
Level 1 - Quoted (unadjusted) market prices in active
markets for identical assets or liabilities.
Level 2 - Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
directly or indirectly observable other than quoted prices
included in level 1.
Level 3 - Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
unobservable.
For assets and liabilities that are recognised in the
financial statements on a recurring basis, the Company
determines whether transfers have occurred between
levels in the hierarchy by re-assessing categorisation
(based on the lowest level input that is significant to the
fair value measurement as a whole) at the end of each
reporting period.
The Management determines the policies and
procedures for both recurring fair value measurement,
such as derivative instruments and unquoted financial
assets measured at fair value, and for non-recurring
measurement, such as assets held for disposal in
discontinued operations.
At each reporting date, Management analyses the
movements in the values of assets and liabilities, which
are required to be remeasured or re-assessed as per
the Company’s accounting policies. For this analysis,
the Management verifies the major inputs applied in
the latest valuation by agreeing the information in the
valuation computation to contracts and other relevant
documents.
Financial Liabilities:
Financial liabilities are classified, at initial recognition as
fair value through profit or loss:
• Loans and borrowings,
• Payables, or
• as derivatives designated as hedging instruments in
an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value,
and in the case of loans and borrowings and payables
are recognised net of directly attributable transaction
costs. The Company’s financial liabilities include trade
and other payables, loans and borrowings, including bank
overdrafts, financial guarantee contracts and derivative
financial instruments.
Subsequent Measurement:
The measurement of financial liabilities depends on their
classification, as described below:
Financial Liabilities at FVTPL:
Financial liabilities at FVTPL include financial liabilities
held for trading and financial liabilities designated upon
initial recognition as at FVTPL. Financial liabilities are
classified as held for trading, if they are incurred for the
purpose of repurchasing in the near term. This category
also includes derivative financial instruments entered
into by the Company, that are not designated as hedging
instruments in hedge relationships as defined by Ind AS
109. Separated embedded derivatives are also classified
as held for trading, unless they are designated as effective
hedging instruments.
Gains or losses on liabilities held for trading are
recognised in the Statement of Profit and Loss. Financial
liabilities, designated upon initial recognition at FVTPL, are
designated as such at the initial date of recognition, and
only if the criteria in Ind AS 109 are satisfied.
o. Government Grant:
Government Grants are recognised where there is
reasonable assurance that the grant will be received
and all attached conditions will be complied with. When
the grant relates to an asset, it is recognised as income
in equal amounts over the expected useful life of the
related asset When the Company receives grants of non¬
monetary assets, the asset and the grant are recorded
at fair value amounts and released to Statement of
Profit & loss over the expected useful life in a pattern
of consumption of the benefit of the underlying asset.
When loans or similar assistance are provided by the
government or related institutions, with an interest rate
below the current applicable market rate, the effect of this
favourable interest is regarded as a government grant. The
loan or assistance is initially recognised and measured at
fair value and the government grant is measured as the
difference between initial carrying value of the loan and the
proceeds received. The loan is subsequently measured as
per the accounting policy applicable to financial liabilities.
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