172 / 236
170
Notes on the consolidated financial statements
for the year ended 31 March 2017
substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective asset.
All other borrowing costs are expensed in the period in which they occur.
g. Impairment of non-financial assets
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any
indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable
amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) fair value less costs of
disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of
an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable
amount.
Impairment losses of continuing operations, including impairment on inventories, are recognised in the statement of profit
and loss.
h. Inventories
Items of inventories are measured at lower of cost and net realizable value after providing for obsolescence, wherever
considered necessary. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including
manufacturing overheads incurred in bringing them to their respective present location and condition. Cost of raw material,
stores and spares, packing materials, trading and other products are determined on weighted average basis.
i. Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the
revenue can be reliably measured, regardless of when the payment is being made. Revenue from operations includes sale
of goods, services and excise duty, adjusted for discounts (net).
Dividend income is recognized when the right to receive payment is established.
Interest income is recognized on a time proportion basis taking into account the amount outstanding and the interest rate
applicable.
j. Foreign currency transactions
The Company’s financial statements are presented in INR, which is also its functional currency.
Foreign currency transactions are initially recorded in functional currency using the exchange rates at the date the
transaction.
At each balance sheet date, foreign currency monetary items are reported using the exchange rate prevailing at the year
end.
Exchange differences arising on settlement or translation of monetary items are recognised in statement of profit and loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange
rates at the dates of the initial transactions.
k. Taxes on income
Current tax
Current tax is measured at the amount expected to be paid/ recovered to/from 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.
Current income tax relating to items recognised directly in equity/other comprehensive income is recognised under the
respective head and not in the statement of profit & loss. Management periodically evaluates positions taken in the tax