2.1 Property, plant and equipment
(i) Recognition and measurement Accounting policy
Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any. The cost of an item of property, plant and
equipment comprises: • Its purchase
price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates.
• Costs directly attributable to acquisition are capitalized until the property, plant and equipment are ready for use, as intended by the Management.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major
components) of property,plant and equipments. Property, plant and equipment which are not ready to intended use as on the date of Balance sheet are
disclosed as Capital work-in-progress (if any). The charge in respect of periodic depreciation is derived after determining an estimate of an asset's
expected useful life and the expected residual value at the end of its life. Any gain or loss on disposal of an item of PPE is recognized in statement of
Profit and Loss.The Company depreciates property, plant and equipment over their estimated useful lives using the straight-line method.
Depreciation
i. a. Depreciation is systematic allocation of the depreciable amount of PPE over its useful life and is and provided in a straight-line-basis over the
useful lives as prescribed in Schedule II to the Act or as per technical assessment.
b. Depreciable amount for PPE is the cost of PPE less its estimates residual value. The useful life of PPE is the period over which PPE is expected to be
available for use by the company.
c. Where a significant component (in terms of cost) of an asset has an estimated economic useful life shorter than that of its corresponding assets, the
component s depreciated over its shorter life.
d. The Company, based on technical assessment made by technical expert and management estimate, depreciates certain items of property, plant and
equipment over estimated useful lives which are different from the useful life prescribed in schedule II to the Companies Act, 2013. The management
believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.
ii. Depreciation on additions is provided on a pro-rata basis from the month of installation or acquisition and in case of Projects from the date of
commencement of commercial production.
iii. Depreciation on assets sold, discarded or demolished during the year is being provided upto the month in which such assets are sold, discarded or
demolished.
Impairment
Property, plant and equipment 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, the recoverable 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.
If such assets are considered to be impaired, the impairment to be recognized in the Statement of Profit and Loss is measured by the amount by which
the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the Statement of Profit and
Loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised
recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated
depreciation) had no impairment loss been recognized for the asset in prior years.
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.
(i) Initial Recognition
Financial assets (except Trade receivables)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
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 recognized immediately in Statement of Profit and Loss.
Trade receivables not containing any significant financing component are measured at transaction price.
(ii) Classification and Subsequent Measurement: Financial Assets
The Company classifies financial assets as subsequently measured at amortized cost.
Amortized Cost:
A financial asset shall be classified and measured at amortized 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 on the principal
amount outstanding
• In case of financial assets at amortized costs, interest income, foreign exchange gain or loss and impairment are recognized in Statement of Profit and
(iii) Impairment of financial assets:
Financial assets, are assessed for indicators of impairment at the end of each reporting period. The Company recognized a loss allowance for expected
(iv) Classification and Subsequent Measurement: Financial liabilities
Financial liabilities are classified as measured at amortized cost. A financial liability is classified as at FVPTL if it is classified as held for trading or it is
(v) Derecognition of financial assets and financial liabilities financial assets.
The Company de-recognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the right to
receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred
or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial
assets
If the Company enters into transactions whereby it transfers assets recognized on its balance sheet but retains either all or substantially all of the risks
and rewards of the transferred assets, the transferred assets are not derecognized
The Company de-recognizes 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-recognized and the consideration paid and payable is recognized in the statement of
profit and loss.
2.3 Revenue recognition
i. Revenue from operation
In accordance with IND AS 115 (Revenue from Contracts with Customers), the company recognizes revenue when it transfers control of goods or
services to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services.
ii. Commission Income
Commission income is derived from acting as an agent in transactions where the company facilitates sales of products or services
on behalf of another party.
iii. Interest income
Revenue is recognized on a time proportion basis taking into account the amount outstanding on effective interest rate.
iv. Other Income
Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic benefits will flow to the
2.4 Income Tax
(i) Current tax
Current income 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 Group
operates and generates taxable income.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or
in equity)
Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates
positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions
where appropriate.
(ii) Deferred Tax
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes
Deferred tax assets are recognized for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that
future taxable profits will be available against which they can be used. Deferred tax assets and deferred tax liabilities are reviewed at each reporting
date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or
substantively enacted at the reporting date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax
liability is settled.
Deferred tax relating to items recognized outside profit or losses are recognized as a part of these items (either in other comprehensive income or in
equity).
Deferred tax assets and liabilities are offset only if: a) The entity has a legally enforceable right to set off current tax assets against current tax liabilities;
and b) The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.
2.5 Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks, 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. Cash
and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage.
|