Significant accounting policies:
Property, plant and equipment & capital work-in-progress:
Recognition and measurement:
Property, Plant and Equipment (PPE) are tangible items that are held for use in the production or supply of
goods and services, rental to others or for administration purposes and are expected to be used during more
than one period.
The cost of an item of Property, Plant and Equipment (including related subsequent costs) is being
recognised as an asset if and only if, It is probable that future economic benefit associated with item will flow
to the Company and cost of the item can be measured reliably.
Freehold lands are at cost.
Other items of property, plant and equipment are stated at original cost net of tax/ duty credit availed, less
accumulated depreciation and accumulated impairment losses. The cost of an asset includes the purchase
cost of material, including import duties and non-refundable taxes, and directly attributable costs of bringing
an asset to the location and condition of its intended use and trial run expenditure (Net of amount realised on
goods produced during trial run). For this purpose, cost includes carrying value as Deemed cost on the date
of transition. Interest on borrowings used to finance the construction of qualifying assets are capitalised as
part of the cost of the asset until such time that the asset is ready for its intended use.
Items of spare parts, stand by equipment's and servicing equipment which meet the definition of Property,
Plant and Equipment are capitalised. Other spare parts are carried as inventory and recognised in statement
of Profit & Loss on consumption. When parts of an item of PPE have different useful lives, they are accounted
for as separate components.
The carrying amount of an item of Property, Plant and Equipment shall be derecognised on disposal or when
no future economic benefits are expected from its use or disposal. When significant part of the property, plant
and equipment are required to be replaced at intervals, the company derecognized the replaced part and
recognized the new parts with its own associated useful life and depreciated it accordingly. Likewise when a
major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment if the
recognition criteria are satisfied. All other repair and maintenance cost are recognized in the statement of the
profit and loss as incurred. The present value of the expected cost for the decommissioning of the asset after
its use is included in the cost of the respective asset if the recognition criteria for a provision are met.
The cost and related accumulated depreciation are eliminated from the financial statement upon sale or
retirement of the asset and resultant gain or losses are recognized in the Statement of Profit and Loss.
Assets identified and technically evaluated as obsolete are retired from active use and held for disposal are
stated at the lower of its carrying amount and fair value less cost to sell.
Capital work-in-progress, representing expenditure incurred in respect of assets under development and not
ready for their intended use, are carried at cost. Cost includes related acquisition expenses, construction cost,
related borrowing cost and other direct expenditure, and trial run expenditure.
Subsequent Expenditure
Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with
the expenditure will flow to the Company.
Investment properties:
Investment properties are measured initially at cost, including transaction costs. Subsequent to initial
recognition, investment properties are stated at cost less accumulated depreciation and accumulated
impairment loss, if any. The cost includes the cost of replacing parts and borrowing costs for long-term
construction projects if the recognition criteria are met. When significant parts of the investment property are
required to be replaced at intervals, the Company depreciates them separately based on their specific useful
lives. All other repair and maintenance costs are recognized in the statement of profit & loss as & when
incurred.
Though the Company measures investment property using cost based measurement, the fair value of
investment property is disclosed in the notes. Fair values are determined based on an annual evaluation
performed by an accredited external independent valuers.
Investment properties are derecognized either when they have been disposed of or when they are
permanently withdrawn from use and no future economic benefit is expected from their disposal. The
difference between the net disposal proceeds and the carrying amount of the asset is recognized in statement
of profit & loss in the period of de-recognition.
Transfers are made to (or from) investment properties only when there is a change in use. Transfers between
investment property, owner-occupied property and inventories do not change the carrying amount of the
property transferred and they do not change the cost of that property for measurement or disclosure
purposes.
Intangible assets:
Intangible assets are recognized when it is probable that the future benefits that are attributable to the assets
will flow to the Company and the cost of the assets can be measured reliably.
Research costs are expensed as incurred. Development expenditures on an individual project are recognised
as an intangible asset when the company can demonstrate:
a) The technical feasibility of completing the intangible assets so that the asset will be available for use or
sale.
b) Its intention to complete and its ability and intention to use or sale the assets.
c) How the asset will generate future economic benefits.
d) The availability of resources to complete the asset.
e) The ability to measure reliably the expenditure during development.
During the period of development, the asset is tested for impairment annually.
Intangible assets acquired separately including patents and licenses, are measured on initial recognition at
cost/deemed cost. Following initial recognition, intangible assets are carried at cost less accumulated
amortization and accumulated impairment losses, if any. Amortisation of the assets begins when the asset is
available for use.
Depreciation and amortization:
The classification of plant and machinery into continuous and non-continuous process is done as per their
use and depreciation thereon is provided accordingly. Depreciation commences when the assets are
available for their intended use. Depreciation is calculated using the straight-line method to allocate their cost,
net of their residual values, over their estimated useful lives.
(*) Based on technical evaluation, the management believes that useful life as given above represents the
period over which management expects to use these assets. Hence, the useful life for these assets is
different from the useful life as prescribed under Part C of Schedule II of the Companies Act, 2013.
Computers (including accessories and peripherals) and temporary structures are depreciated fully in the year
of addition. All assets costing ' 5,000 or below are depreciated in one-year period.
Intangible assets are amortized on a straight-line basis over the estimated useful economic life of the assets.
The Company uses a rebuttable presumption that the useful life of intangible assets is ten years from the date
when the assets is available for use. The estimated useful lives, residual values and depreciation method are
reviewed at the end of each financial year and are given effect to wherever appropriate.
Cash and cash equivalents:
Cash and cash equivalents includes cash on hand and at bank, other short-term highly liquid investments
with original maturities of three months or less that are readily convertible to a known amount of cash and are
subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consists of cash and short term
deposits, as defined above, net of outstanding bank overdraft as they being considered as integral part of the
Company's cash management.
Earnings per share:
Basic earnings per share are calculated by dividing the net profit or loss (before other comprehensive income)
for the period attributable to equity shareholders by the weighted average number of equity shares
outstanding during the year. Diluted earnings per share are calculated by dividing the profit/(loss) for the year
(before other comprehensive income), adjusting the after tax effect of interest and other financing costs
associated with dilutive potential equity shares, attributable to the equity shareholders, by the weighted
average number of equity shares considered for deriving basic earnings per share and also the weighted
average number of equity shares which could be issued on the conversion of all dilutive potential equity
shares.
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