EPack Prefab Technologies Ltd. நிறுவனத்தின் கணக்கியல் கொள்கைகள்

1.4 Property, plant and equipment:

Recognition and measurement:

An item of property, plant and equipment that
qualifies as an asset is measured on initial recognition
at its cost. Following the initial recognition, all items of
property, plant and equipment are measured at cost,
less accumulated depreciation, and accumulated
impairment losses, if any.

The cost of an item of property, plant and equipment
comprises of its purchase price, including import
duties and non-refundable purchase taxes or levies,
directly attributable cost of bringing the item to its
working condition for its intended use and the initial
estimate of decommissioning, restoration and similar
liabilities, if any. Such cost also includes the cost of
replacing part of the property, plant and equipment
and borrowing costs for long-term construction
projects if the recognition criteria are met. Other
indirect expenses incurred relating to project, net of
income earned during the project development stage
prior to its intended use, are considered as pre¬
operative expenses and disclosed under capital work-
in-progress.

Items such as spare parts, stand-by equipment and
servicing equipment that meet the definition of
property, plant and equipment are capitalised at cost
and depreciated over their useful life.

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 equipment. The Company has
carried out technical analysis for identification of
significant components with different useful life with
that of useful life of the original assets to which it
belongs. However, based on technical analysis carried
out by the plant''s technical personnel, it has been
observed that the useful lives of significant
components are approximately equivalent to those of

the original assets to which they belong. Consequently,
separate useful lives are not assigned to significant
components. All the significant components are
depreciated based on the same useful life with that of
original assets to which it belongs.

Subsequent Expenditure:

Subsequent expenditure is capitalised only if it is
probable that the future economic benefits associated
with the expenditure will flow to the Company and cost
of the item can be measured reliably.

Depreciation:

Depreciation on items of property, plant and
equipment is provided to the extent of depreciable
amount on the Straight Line Method (SLM).
Depreciation is provided by the Company based on
useful life of the assets as prescribed in Schedule II to
the Companies Act, 2013 Freehold land is not
depreciated. Useful life considered for calculation of
depreciation for various classes of assets are as under:

The useful lives, residual values of each part of an item
of property, plant and equipment and the depreciation
methods are reviewed at the end of each reporting
period. If any of these expectations differs from
previous estimates, such change is accounted for as a
change in an accounting estimate and adjusted
prospectively.

De-recognition:

The carrying amount of an item of property, plant and
equipment is derecognised on disposal or when no
future economic benefits are expected from its use or
disposal.

Gains or losses arising from de-recognition of property,
plant and equipment are measured as the difference
between the net disposal proceeds and the carrying
amount of the asset and are recognised in the
statement of profit and loss when the asset is
derecognised.

1.5 Capital work-in-progress:

Projects under which tangible assets are not yet ready for their intended use and other capital work-in-progress are
carried at cost, comprising direct cost, related incidental expenses and attributable borrowing costs. Advances given
towards acquisition of fixed assets outstanding at each balance sheet date are disclosed as other non-current assets
(Capital Advances) and not included as a part of capital work-in-progress.

Costs incurred during the period of implementation of a project, till it is commissioned, is accounted as capital work-
in-progress and after commissioning the same is transferred/allocated to the respective item of property, plant and
equipment.

1.6 Investment property:Recognition and measurement:

Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the
Company, is classified as investment property. Policies with respect to depreciation, useful life and de-recognition are
followed on the same basis as stated for property, plant and equipment above.

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 external
independent valuer.

Transfer of property from investment property to the property, plant and equipment is made when the property is no
longer held for long term rental yields or for capital appreciation or both at carrying amount of the property
transferred.

1.7 Intangible assets:Recognition and Measurement:

Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the
assets will flow to the Company and the cost of the asset can be measured reliably. Intangible assets are initially
measured at cost. Such intangible assets are subsequently measured at cost less accumulated amortisation and any
accumulated impairment losses.

Subsequent Expenditure:

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific
asset to which it relates. All other expenditure is recognised in statement of profit and loss in the period in which
expenditure is incurred.

Amortisation:

Intangible assets with finite lives are amortised over the estimated useful economic life using the Straight Line
Method (SLM). The amortisation expense on intangible assets with finite lives is recognised in the statement of profit
and loss. The estimated useful life of intangible assets as determined by the Company is mentioned as below:

1.8 Leases:

The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification
of a lease requires significant judgment.

The Company uses judgment in assessing whether a contract (or part of contract) include a lease, the lease term
(including anticipated renewals), the applicable discount rate, variable lease payments whether are in-substance
fixed. The judgment involves assessment of whether the asset included in the contract is a fully or partly identified
asset based on the facts and circumstances, whether the contract include a lease and non-lease component and if so,
separation thereof for the purpose of recognition and measurement, determination of lease term basis, inter alia the
non-cancellable period of lease and whether the lessee intends to opt for continuing with the use of the asset upon
the expiry thereof, and whether the lease payments are fixed are variable or a combination of both.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 to
use the asset or assets, even if that right is not explicitly
specified in an arrangement.

Right of Use Assets:

The Company recognises right-of-use assets at the
commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use
assets are measured at cost, less any accumulated
depreciation and accumulated impairment losses, and
adjusted for any re-measurement of lease liabilities.
The cost of right-of-use assets includes the amount of
lease liabilities recognised, initial direct costs incurred,
and lease payments made at or before the
commencement date less any lease incentives
received. Right-of-use assets are depreciated on a
straight-line basis over the unexpired period of lease.

Lease Liabilities:

At the commencement date of the lease, the Company
recognises lease liabilities measured at the present
value of lease payments to be made over the lease
term. The lease payments include fixed payments
(including in substance fixed payments) less any lease
incentives receivable, variable lease payments that
depend on an index

or a rate, and amounts expected to be paid under
residual value guarantees.

In calculating the present value of lease payments, the
Company uses its incremental borrowing rate at the
lease commencement date because the interest rate
implicit in the lease is not readily determinable. After
the commencement date, the amount of lease
liabilities is increased to reflect the accretion of interest
and reduced for the lease payments made. In addition,
the carrying amount of lease liabilities is re-measured if
there is a modification, a change in the lease term, or a
change in the lease payment.

Short-term leases and leases of low-value
assets:

The Company applies the short-term lease recognition
exemption to its short-term leases /rent (i.e. those
leases that have a lease term of 12 months or less from
the commencement date and do not contain a
purchase option). In addition, these leases also meet
the criteria for the low-value asset lease recognition
exemption, as the constituent components are
deemed to be of low individual value. Lease payments
on short-term leases and leases of low-value assets are
recognized as expense on a straight-line basis over the
lease term.

1.9 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.

The Company determines the classification of its
financial assets and liabilities at initial recognition. The
classification depends on the Company''s business
model for managing the financial assets and the
contractual terms of the cash flows.

A. Financial assets:

Initial recognition and measurement:

All financial assets are initially recognised at fair value.
Transaction costs that are directly attributable to the
acquisition or issue of financial assets, which are not at
fair value through profit or loss, are adjusted to the fair
value on initial recognition. Purchase and sale of
financial assets are recognised using trade date
accounting.

Subsequent measurement:

(a) Financial assets measured at amortised cost:

A financial asset is subsequently measured at
amortised cost if it meets the following criteria:

( i ) the asset is held within a business model whose
objective is to hold the asset in order to collect
contractual cash flows, and

( ii ) the contractual terms of the financial asset give rise on
a specified date to cash flows that are solely payments
of principal and interest on the principal outstanding.

( b ) Financial assets measured at fair value through
other comprehensive income (FVTOCI):

A financial asset is measured at FVTOCI if it meets the
following criteria:

( i ) the asset is held within a business model whose
objective is achieved by both collecting contractual
cash flows and selling financial assets, and

( ii ) the contractual terms of the financial asset give rise on
specified dates to cash flows that represents solely
payments of principal and interest on the principal
amount outstanding

The Company has made an irrevocable election for its
investments which are classified as equity instruments
to present the subsequent changes in fair value in
other comprehensive income based on its business
model.

On de-recognition of such financial assets, cumulative
gain or loss previously recognised in other
comprehensive income is not reclassified from the
equity to statement of profit and loss.

(C) Financial assets measured at fair value through
profit or loss (FVTPL):

A financial asset which is not classified in any of the
above categories are measured at FVTPL.

Financial assets are reclassified subsequent to their
recognition, if the Company changes its business
model for managing those financial assets. Changes in
business model are made and applied prospectively
from the reclassification date which is the first day of
immediately next reporting period following the
changes in business model in accordance with
principles laid down under Ind AS 109 - Financial
Instruments.

(d) Investment in subsidiaries, associates and joint
ventures:

The Company has accounted for its investments in
subsidiaries, associates and joint venture at cost less
impairment loss (if any) in accordance with Ind AS 27 -
Separate Financial Statements.

( e ) Other equity investments:

All other equity investments are measured at fair value,
with value changes recognised in statement of profit
and loss, except for those equity investments for which
the Company has elected to present the value changes
in other comprehensive income. However, dividend on
such equity investments is recognised in statement of
profit and loss when the Company''s right to receive
payment is established.

Impairment of financial assets:

In accordance with Ind AS 109, the Company uses
''Expected Credit Loss'' (ECL) model, for evaluating
impairment of financial assets other than those
measured at Fair Value Through Profit and Loss
(FVTPL). Expected credit losses are measured through
a loss allowance at an amount equal to:

¦ The 12-months expected credit losses (expected credit
losses that result from those default events on the
financial instrument that are possible within 12 months
after the reporting date); or

¦ Full lifetime expected credit losses (expected credit
losses that result from all possible default events over
the life of the financial instrument).

For trade receivables the Company applies ''simplified
approach'' which requires expected lifetime losses to
be recognised from initial recognition of the
receivables. The Company uses historical default rates
to determine impairment loss on the portfolio of trade
receivables. At each reporting date these historical
default rates are reviewed and changes in the forward¬
looking estimates are analysed.

For other assets, the Company uses 12-months ECL
method to provide for impairment loss where there is
no significant increase in credit risk. If there is
significant increase in credit risk, full lifetime ECL
method is used.ment of profit and loss when the
Company''s right to receive payment is established.

B. Financial liabilities:

Initial recognition and measurement:

All financial liabilities are recognised at fair value and in
case of borrowings, net of directly attributable cost.
Fees of recurring nature are directly recognised in the
statement of profit and loss as finance cost.

Subsequent measurement:

Financial liabilities are carried at amortised cost using
the effective interest method. For trade and other
payables maturing within one year from the balance
sheet date, the carrying amounts approximate fair
value due to the short maturity of these instruments.

C. De-recognition of financial instruments:

The Company derecognises a financial asset when the
contractual rights to the cash flows from the financial
asset expire or it transfers the financial asset and the
transfer qualifies for de-recognition under Ind AS 109. If
the Company retains substantially all the risks and
rewards of ownership of a transferred financial asset,
the Company continues to recognize the financial
asset and the proceeds received are recognized as
borrowing.

A financial liability (or a part of a financial liability) is
derecognised from the balance sheet when the
obligation specified in the contract is discharged or
cancelled or expired.

D. Offsetting:

Financial assets and financial liabilities are offset and
the net amount is presented in the balance sheet
when, and only when, the Company has a legally
enforceable right to set off the amount and it intends,
either to settle them on a net basis or to realise the
asset and settle the liability simultaneously.

1.10 Fair value measurement:

The Company measures financial instruments, such as,
investments, derivatives at fair value 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,

¦ In the absence of a principal market, in the most
advantageous market for the asset or liability. The
principal or the most advantageous market must be
accessible by the Company.

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 best economic i nterest.
The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximizing the use of relevant observable inputs and
minimizing the use of unobservable inputs. All assets
and liabilities for which fair value is measured or
disclosed in the Standalone Financial Statements are
categorized within the fair value hierarchy, described
as follows, which gives highest priority to quoted prices
in active markets and the lowest priority to
unobservable inputs.

Level 1 — Quoted (unadjusted) market prices in active
markets for identical assets or liabilities.

Level 2 — Valuation techniques for inputs other than
quoted prices included within level 1 that are
observable for the asset or liability either directly or
indirectly.

Level 3 — Valuation techniques for inputs that are
unobservable for the asset or liability.

For the purpose of fair value disclosures, the Company
has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the asset
or liability and the level of the fair value hierarchy as
explained above.

1.11 Impairment of nonfi inancial assets:

The Company''s non-financial assets, other than
inventories and deferred tax assets, are reviewed at
each reporting date to determine whether there is any
indication of impairment. If any such indication exists,
then the asset''s recoverable amount is estimated.

For impairment testing, assets that do not generate
independent cash inflows are grouped together into
cash generating units (CGUs). Each CGU represents the
smallest group of assets that generates cash inflows
that are largely independent of the cash inflows of
other assets or CGUs.

The recoverable amount of a CGU (or an individual
asset) is the higher of its value in use and its fair value
less costs to sell. Value in use is based on the estimated
future cash flows, 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 CGU (or the asset).

The Company''s corporate assets (e.g., central office
building for providing support to various CGUs) do not
generate independent cash inflows. To determine
impairment of a corporate asset, recoverable amount is
determined for the CGUs to which the corporate asset
belongs.

An impairment loss is recognised if the carrying
amount of an asset or CGU exceeds its estimated
recoverable amount. Impairment losses are
recognised in the statement of profit and loss except
for properties previously revalued with the revaluation
surplus taken to other comprehensive income. For
such properties, the impairment is recognised in other
comprehensive income up to the amount of any
previous revaluation surplus. An impairment loss in
respect of assets for which impairment loss has been
recognised in prior periods, the Company reviews at
each reporting date whether there is any indication
that the loss has decreased or no longer exists. An
impairment loss is reversed if there has been a change
in the estimates used to determine the recoverable
amount. Such a reversal is made only to the extent that
the asset''s carrying amount does not exceed the
carrying amount that would have been determined,
net of depreciation or amortisation, if no impairment
loss had been recognised.

1.12 Foreign currencies transactions and
translation:

Functional and Presentation Currency:

Items included in the Ind AS financial statements are
measured using the currency of the primary economic
environment in which the entity operates (''the
functional currency''). The Company''s Ind AS Financial
Statements are presented in Indian Rupee (INR) which
is also the Company''s functional and presentation
currency.

Initial recognition:

On initial recognition, transactions in foreign
currencies entered by the Company are recorded in the
functional currencies, by applying to the foreign
currency rate, the spot exchange rate between the
functional currency and the foreign currency at the
date of the transaction. Exchange differences arising
on foreign exchange transactions settled during the
year are recognised in the statement of profit and loss.

Measurement of foreign currency items at
reporting date:

Foreign currency monetary items (monetary assets
and liabilities) of the Company are translated at the
closing exchange rates. Non-monetary items that are
measured at historical cost in a foreign currency, are
translated using the exchange rate at the date of the
transaction. Non-monetary items that are measured at
fair value in a foreign currency, are translated using the
exchange rates at the date when the fair value is
measured.

Exchange differences arising out of these translations
are recognised in the statement of profit and loss.

1.13 Cash and cash equivalents:

The Company considers all highly liquid financial
instruments, which are readily convertible into known
amounts of cash that are subject to an insignificant risk
of change in value and having original maturities of
three months or less from the date of purchase, to be
cash equivalents. Cash and cash equivalents consist of
balances with banks which are unrestricted for
withdrawal and usage.