GSP Crop Science Ltd. நிறுவனத்தின் கணக்கியல் கொள்கைகள்

4. MATERIAL ACCOUNTING POLICIES

This note provides a list of material accounting
policies adopted in the preparation of these
Standalone Financial Statement. These policies
have been consistently applied.

4.1 Property, plant and equipment

Property, plant and equipment are stated
at cost of acquisition / construction less
accumulated depreciation, and accumulated
impairment loss (if any). Cost includes
all expenses related to acquisition and
installation of property, plant & equipment
which comprises its purchase price net of any
trade discounts and rebates, import duties

and other non-refundable taxes or levies and
any directly attributable cost on making the
asset ready for its intended use.

Machinery spares, which can be used only
in connection with an item of property, plant
and equipment and whose use is expected to
be irregular, are capitalised and depreciated
over the useful life of the principal item of
the relevant class of assets. Subsequent
expenditure on property plant and equipment
after its purchase / completion is capitalised
only if such expenditure results in an increase
in the future economic benefits from such
asset beyond its previously assessed
standard of performance. All other repair and
maintenance of revenue nature are charged
to statement of profit and loss during the
reporting period in which they are incurred.

An item of property, plant and equipment is
derecognised upon disposal or when no future
economic benefits are expected to arise from
the continued use of the asset. Any gain or
loss arising on the disposal or retirement of
an item of property, plant and equipment is
determined as the difference between the
sales proceeds and the carrying amount of
the asset and is recognised in statement of
profit or loss.

Capital Work in Progress:

Properties in the course of construction for
production, supply or administrative purposes
are carried at cost, less any recognised
impairment loss. Cost comprises direct cost,
related incidental expenses and for qualifying
assets, borrowing costs capitalised in
accordance with the Company''s accounting
policy. Such properties are classified as the
appropriate categories of property, plant and
equipment when completed and ready for
intended use.and depreciation commences
on the same basis.

Advances given towards acquisition and
construction of property, plant and equipment
outstanding at each balance sheet date are
disclosed as capital advance under other non
current assets.

4.2 Intangible Assets and Intangible Assets under
development:

Intangible assets with finite useful life that are
acquired separately are carried at cost less

accumulated amortisation and accumulated
impairment losses. Amortisation is recognised
on a straight-line basis over their estimated
useful life. The estimated useful life and
amortisation method are reviewed at the end
of each reporting period, with the effect of
any changes in estimate being accounted for
on a prospective basis.

An intangible asset is derecognised upon
disposal (i.e. at date the recipient obtains
control) or when no future economic benefits
are expected from its use or disposal. Any
gain or loss arise upon derecognition of assets
(calculated as the difference between the net
disposal proceeds and the carrying amount of
the assets) included in the statement of profit
and loss when the assets is derecognised.

Intangible Assets under development

Research costs are expensed as incurred.
Development expenditures on an individual
project recognised as an intangible asset
when the Company can demonstrate:

i. The technical feasibility of completing
the intangible asset so that the asset will
be available for use or sale

ii. Its intention to complete and its ability
and intention to use or sell the asset

iii. It is probable that future economic
benefits will flow to the Company and the
Company has control over the asset

Cost of Product Registration generally
comprises of costs incurred towards creating
product dossiers, fees paid to registration
consultants, application fees to the
government authorities, data compensation
costs, data call-in costs and fees for task¬
force membership.

In cases where data compensation is being
negotiated and is awaiting the finalization of
contractual agreements, the cost is initially
estimated by management and adjusted to
actual amounts once the agreements are
concluded.

4.3 Depreciation and amortisation

Depreciable amount for assets is the cost of
an asset, or other amount substituted for cost,
less its estimated residual value. Depreciation
on property, plant and equipment has been

provided on the written down value method
as per the useful life prescribed in Schedule II
to the Companies Act, 2013.

Amortisation:

Intangible assets are amortised over their
estimated useful life on straight line method
as follows:

4.4 Impairment of Non-Financial Assets

At the end of each reporting period, the
Company reviews the carrying amounts of its
tangible and intangible 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).

If the carrying amount of the assets exceeds
the estimated recoverable amount, an
impairment is recognised for such excess
amount. The impairment loss is recognised
as an expense in the Statement of profit and
loss, unless the asset is carried at revalued
amount, in which case any impairment loss of
the revalued asset is treated as a revaluation
decrease to the extent a revaluation reserve
is available for that asset.

The recoverable amount is the greater of the
net selling price and their value in use. Value
in use is arrived at by discounting the future
cash flows to their present value based on an
appropriate discount factor.

When there is indication that an impairment
loss recognised for an asset (other than a
revalued asset) in earlier accounting periods
no longer exists or may have decreased, such
reversal of impairment loss is recognised
in the Statement of profit and loss, to the
extent the amount was previously charged
to the Statement of Profit and Loss. In case
of revalued assets such reversal is not
recognised.

4.5 Foreign Currency Transactions
Initial Recognition

Transactions in foreign currencies entered
into by the Company are accounted at
the exchange rates prevailing on the date
of the transaction or at rates that closely
approximate the rate at the date of the
transaction.

Measurement of foreign currency monetary
items at Balance Sheet Date

Foreign currency monetary items of the
Company, outstanding at the balance
sheet date are at the period end rates. Non¬
monetary items of the Company are carried
at historical cost.

Treatment of Exchange Differences

Exchange differences arising on settlement
/ restatement of foreign currency monetary
assets and liabilities of the Company are
recognised as income or expense in the
Statement of Profit and Loss.

4.6 Discontinued operations

Non-current assets and disposal Company
are classified as held for sale when:

i) They are available for immediate sale,

ii) Management is committed to a plan to
sell,

iii) It is unlikely that significant changes to
the plan will be made or that the plan will
be withdrawn,

iv) An active program to locate a buyer has
been initiated,

v) The asset or disposal Company is being
marketed at a reasonable price in
relation to its fair value and

vi) A sale is expected to complete within 12
months from the date of classification.

Non-current assets and disposal groups
classified as held for sale are measured at the
lower of:

i) Their carrying amount immediately
prior to being classified as held for
sale in accordance with the company''s
accounting policy; or

ii) Fair value less costs of disposal.

Following their classification as held for sale,
non-current assets (including those in a
disposal group) are not depreciated.

The results of operations disposed during
the reporting period are included in the
Standalone statement of profit and loss up to
the date of disposal.

A discontinued operation is a component
of the Company''s business that represents
a separate major line of business or
geographical area of operations with a view
to sale, that has been disposed of, has been
abandoned or that meets the criteria to be
classified as held for sale.

Discontinued operations are presented in the
Standalone statement of profit and loss as a
single line which comprises the post-tax profit
or loss of the discontinued operation along
with the post-tax gain or loss recognised on
the re-measurement to fair value less costs
to sell or on disposal of the assets or disposal
groups constituting discontinued operations.
A detailed note of the assets and liabilities of
the disposal group is given in Note-49 of the
Standalone Financial Statement

4.7 Inventories

Raw materials, packing materials, stores,
spares and consumables are valued at
lower of cost (net of refundable taxes and
duties) and net realizable value. The cost of
these items of inventory comprises of cost of
purchase, transit insurance, receiving charges
and other incidental costs incurred to bring
the inventories to their present location and
condition.

Work in progress and finished goods are
valued at lower of cost and net realizable
value. The cost of work in process and finished
goods includes the cost of direct material
consumed, cost of conversion and other
costs incurred to bring the inventories to their
present location and condition.

Cost of inventories is determined on
"Weighted Average" basis and is net of tax
credits and after providing for obsolescence
and other losses.

Net realizable value is the contracted selling
value reduced by the estimated costs
of completion and the estimated costs
necessary to make the sales.

4.8 Financial Instruments

A financial instrument is any contract that
gives rise to a financial asset for one entity
and a financial liability or equity instrument
for another entity.

Financial assets and liabilities are recognized
when the Company becomes a party to the
contractual provisions of the instrument.

Financial assets:

Classification

The Company classifies its financial assets in
the following measurement categories:

i) those to be measured subsequently
at fair value (either through other
comprehensive income, or through the
Statement of Profit and Loss), and

ii) those measured at amortized cost.

The classification depends on the entity''s
business model for managing the financial
assets and the contractual terms of the cash
flows.

Initial recognition and measurement

Financial assets are recognized when the
Company becomes a party to the contractual
provisions of the instrument. Financial assets
are recognized initially at fair value plus, in
the case of financial assets not recorded at
fair value through Profit and Loss (FVTPL),
transaction costs that are attributable to the
acquisition of the financial asset. Transaction
costs of financial assets carried at fair value
through Profit and Loss are expensed in the
Statement of Profit and Loss.

Subsequent measurement

After initial recognition, financial assets are
measured at:

• fair value (either through other
comprehensive income or through Profit
and Loss), or

• amortized cost

Derecognition of financial assets:

A financial asset (or, where applicable, a part
of a financial asset or part of a company
of similar financial assets) is primarily

derecognized (i.e., removed from the
Company''s balance sheet) when:

• The rights to receive cash flows from the
asset have expired, or

• The Company has transferred its rights
to receive cash flows from the asset

When the Company has transferred an
asset, the Company evaluates whether it has
transferred substantially all risks and rewards
of ownership of the financial asset. In such
cases, the financial asset is derecognized.
Where the Company has not transferred
substantially all risks and rewards of
ownership of the financial asset, the financial
asset is not derecognized.

Where the Company has neither transferred
a financial asset nor retains substantially all
risks and rewards of ownership of financial
asset, the financial asset is derecognised if
the Company has not retained control over
the financial asset. Where the Company
retains control of the financial asset, the asset
continues to be recognized to the extent of
continuing involvement in the financial asset.

Impairment of financial assets

At each balance sheet date, the Company
assesses whether a financial asset is to be
impaired. Ind AS 109 requires expected credit
losses to be measured through loss allowance.
The Company measures the loss allowance
for financial assets at an amount equal to
lifetime expected credit losses if the credit
risk on that financial asset has increased
significantly since initial recognition.

If the credit risk on a financial asset has
not increased significantly since initial
recognition, the Company measures the loss
allowance for financial assets at an amount
equal to 12-month expected credit losses.
The Company uses both forward-looking and
historical information to determine whether
a significant increase in credit risk has
occurred.

Income recognition

Interest income from financial assets is
recognized when it is probable that the
economic benefits will flow to the Company
and the amount of income can be measured
reliably.

Cash and cash equivalents

Cash and cash equivalents consists of cash
on hand, short demand deposits and highly
liquid investments that are readily convertible
into known amounts of cash and which are
subject to an insignificant risk of change in
value. Short term means investments with
original maturities/holding period of three
months or less from the date of investments.

Investments

Investments of Company are in mutual funds.
These investments are initially recorded at
fair value and classified as fair value through
profit or loss.

Trade receivables

Trade receivables are amounts due from
customers for the sale of goods or services
performed in the ordinary course of business.
Trade receivables are initially recognized at
their transaction price, which is considered to
be its fair value and are classified as current
assets as it is expected to be received within
the normal operating cycle of the business.

Financial liabilities:

Initial recognition and measurement

Financial liabilities are initially measured at
its fair value plus or minus, in the case of a
financial liability not at FVTPL, transaction
costs that are directly attributable to the
issue/origination of the financial liability.

Subsequent measurement

Financial liabilities are classified as measured
at amortized cost or FVTPL. A financial
liability is classified as FVTPL if it is classified
as held for trading, or it is a derivative or it
is designated as such on initial recognition.
Financial liabilities at FVTPL are measured at
fair value and net gains and losses, including
any interest expense, are recognized in the
Statement of Profit and Loss. Other financial
liabilities are subsequently measured at
amortized cost using the effective interest
method. Interest expense and foreign
exchange gains and losses are recognised in
the Statement of Profit and Loss. Any gain or
loss on derecognition is also recognised in the
Statement of Profit and Loss.

Classification as debt or equity

Debt and equity instruments issued by the
Company are classified as either financial
liabilities or as equity in accordance with the
substance of the contractual arrangements
and the definitions of a financial liability and
an equity instrument.

Equity instruments

An equity instrument is any contract that
evidences a residual interest in the assets of
an entity after deducting all of its liabilities.
No gain or loss is recognised in profit or loss
on the purchase, sale, issue or cancellation of
the Company''s own equity instruments.

Derecognition of financial liabilities

Financial liability is derecognized when
the obligation specified in the contract
is discharged, cancelled or expires. The
difference between the carrying amount of
the financial liability derecognized and the
consideration paid and payable is recognised
in profit or loss.

Trade Payables and Acceptances

Trade payables are amounts due to vendors
for purchase of goods or services acquired
in the ordinary course of business and are
classified as current liabilities to the extent
it is expected to be paid within the normal
operating cycle of the business.

The Company enters into deferred payment
arrangements (acceptances) whereby lenders
such as banks and other financial institutions
make payments to MSME suppliers for
purchases made by the Company. The banks
and financial institutions are subsequently
repaid by the Company at a later date
providing working capital benefits. These
arrangements are in the nature of credit
extended in normal operating cycle and these
are recognised as Acceptances. Interest
borne by the Company on such arrangements
is accounted as finance cost.

Offsetting financial instruments:

Financial assets and liabilities are off-set and
the net amount is reported in the Balance
Sheet where there is a legally enforceable
right to offset the recognised amounts and
there is an intention to settle on a net basis

or realise the asset and settle the liability
simultaneously. The legally enforceable right
must not be contingent on future events and
must be enforceable in the normal course
of business and in the event of default,
insolvency or bankruptcy of the Company or
the counterparty.

Equity Share capital

Financial instruments issued by the Company
are classified as equity only to the extent that
they do not meet the definition of a financial
liability or financial asset.

The Company''s ordinary shares are classified
as equity instruments.

4.9 Derivative financial instruments

The Company enters into derivative financial
instruments in form of foreign exchange
forward contracts to manage its exposure to
foreign exchange rate risks.

Derivatives are initially recognised at fair
value at the date the derivative contracts
are entered into and are subsequently
remeasured to their fair value at the end of
each reporting period. The resulting gain or
loss is recognised in profit or loss immediately
unless the derivative is designated and
effective as a hedging instrument, in which
event the timing of the recognition in profit
or loss depends on the nature of the hedging
relationship and the nature of the hedged
item.

4.10 Revenue from contracts with customers

As per Ind AS 115 "Revenue from contracts with
customers"- A contract with a customer exists
only when the parties to the contract have
approved it and are committed to perform
their respective obligations, the Company
can identify each party''s rights regarding the
distinct goods or services to be transferred
("performance obligations"), the Company
can determine the transaction price for
the goods or services to be transferred, the
contract has commercial substance and it
is probable that the Company will collect the
consideration to which it will be entitled in
exchange for the goods or services that will
be transferred to the customer. Revenues are
recorded in the amount of consideration to
which the Company expects to be entitled in
exchange for performance obligations upon
transfer of control to the customer and is
measured at the amount of transaction price
allocated to that performance obligation.

The transaction price of goods sold and
services rendered is net of estimated
incentives, returns, rebates, and applicable
trade discounts, allowances, Goods and
Services Tax (GST) and amounts collected on
behalf of third parties.

Sale of goods

Based on the contractual terms with the
customers, revenue from sale of goods is
recognised at the point in time when control
is transferred to the customer either on
dispatch of goods or goods accepted by the
customers at their premises.

Revenue is measured based on the transaction
price, which is the consideration, adjusted for
volume discounts, rebates, scheme allowances,
price concessions, incentives, and returns,
if any, as specified in the contracts with the
customers. Revenue excludes taxes collected
from customers on behalf of the government.
Accruals for discounts/incentives and
returns are estimated (using the most likely
method) based on accumulated experience
and underlying schemes and agreements
with customers. Due to the short nature of
credit period given to customers, there is no
financing component in the contract.

For contracts that permit the customer to
return an item, revenue is recognised to
the extent that it is highly probable that
a significant reversal in the amount of
cumulative revenue recognised will not occur.

Therefore, the amount of revenue recognised
is adjusted for expected returns. In these
circumstances, a refund liability and a right to
recover returned goods asset are recognised.

The Company reviews its estimate of expected
returns at each reporting date.

The right to recover returned goods asset is
measured at the former carrying amount of
the inventory. The refund liability is included
in current provisions and the right to recover
returned goods is included in other current
assets.

Sale of Services

Revenue from sale of services is recognised
at the period of time as per the terms of the
contract with customers.

Other Income

Interest income is accrued on a time basis,
according to the principal outstanding and at
the interest rate applicable.

Other items of income are accounted as
and when the right to receive arises and it is
probable that the economic benefits will flow
to the Company and the amount of income
can be measured reliably.

Export Benefits

Export benefits are accounted for in the
period of exports based on eligibility and
when there is no uncertainty in receiving the
same.

Insurance Claim

Insurance claims are accounted for based on
claims admitted and to the extent that there
is no uncertainty in receiving the claims.

Contract balances
Contract assets

A Contract asset is the right to consideration
in exchange for goods or services transferred
to the customer. If the Company performs by
transferring goods or services to a customer
before the customer pays consideration or
before payment is due, a contract asset is
recognised for the earned consideration that
is conditional.

Contract liabilities

A contract liability is the obligation to transfer
goods or services to a customer for which
the Company has received consideration (or
an amount of consideration is due) from the
customer. If a customer pays consideration
before the Company transfers goods or
services to the customer, a contract liability
is recognised when the payment is made or
the payment is due (whichever is earlier).
Contract liabilities are recognised as
revenue when the Company performs under
the contract.

Assets and liabilities arising from returns

Returnable asset

Returnable asset represents the Company''s
right to recover the goods expected to be
returned by customers. The asset is measured
at the former carrying amount of the inventory,
less any expected costs to recover the goods,
including any potential decrease in the value
of the returned goods. The Company updates
the measurement of the asset recorded for
any revisions to its expected level of returns,
as well as any additional decrease in the value
of the returned products.

Refundable Liabilities

A Refundable Liabilities is the obligation
to refund some or all of the consideration
received (or receivable) from the customer
and is measured at the amount the Company
ultimately expects it will have to return to the
customer.

The Company updates its estimates of
Refundable Liabilities (and the corresponding
change in the transaction price) at the end
of each reporting period. Refer to above
accounting policy on variable consideration.

4.11 Employee Benefits

Post Employment Employee Benefits

Retirement benefits to employees comprise
payments to government provident funds,
gratuity fund, Compensated Absences.

Defined contribution plans

The Company''s contribution to provident
fund and employee state insurance scheme
are considered as defined contribution plans
and is charged as an expense based on the
amount of contribution required to be made
and when services are rendered by the
employees.

Defined benefit plans

For defined benefit plans in the form of
gratuity fund, the cost of providing benefits
is determined using the Projected Unit Credit
method, with actuarial valuations being
carried out at each balance sheet date.
Remeasurement, comprising actuarial gains
and losses, the effect of the changes to the
asset ceiling (if applicable) and the return

on plan assets (excluding net interest), is
reflected immediately in the balance sheet
with a charge or credit recognised in other
comprehensive income in the period in which
they occur. Remeasurement recognised in
other comprehensive income is reflected
immediately in retained earnings and is not
reclassified to statement of profit or loss.

Past service cost is recognised in statement
of profit or loss in the period of a plan
amendment. Net interest is calculated by
applying the discount rate at the beginning of
the period to the net defined benefit liability
or asset.

Defined benefit costs are categorised as
follows:

a. service cost (including current service
cost, past service cost, as well as
gains and losses on curtailments and
settlements);

b. net interest expense or income; and

c. remeasurement

The Company presents the first two
components of defined benefit costs in
statement of profit or loss in the line item
''Employee benefits expense''. Curtailment
gains and losses are accounted for as past
service costs.

The retirement benefit obligation recognised
in the standalone 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.

A liability for a termination benefit is
recognised at the earlier of when the entity
can no longer withdraw the offer of the
termination benefit and when the entity
recognises any related restructuring costs.

Other long-term employee benefits

Compensated absences, which are not
expected to occur within twelve months
after the end of the period in which the
employee renders the related service are
recognised as a liability at the present value
of the defined benefit obligation as at the

balance sheet date. The liabilities of earned
leaves which are not expected to be settled
within 12 months after the end of the period
in which the employee render the related
service, are measured at the present value
of expected future payments to be made in
respect of services provided by employees
up to the end of the reporting period using
the projected unit cost method based on
actuarial valuations.

Short-term employee benefits

A liability is recognised for benefits accruing
to employees in respect of wages and salaries
and other short term employee benefits in
the period the related service is rendered
at the undiscounted amount of the benefits
expected to be paid in exchange for that
service.

4.12 Borrowing Costs

Borrowing costs include interest as per the
effective interest rate and amortisation of
ancillary costs incurred. Costs in connection
with the borrowing of funds to the extent not
directly related to the acquisition of qualifying
assets are charged to the Statement of Profit
and Loss over the tenure of the loan.

Borrowing costs directly attributable to
the acquisition, construction or production
of qualifying assets, which are assets that
necessarily take a substantial period of time
to get ready for their intended use or sale, are
added to the cost of these assets, until such
time as the assets are substantially ready for
their intended use or sale.

4.13 Leases - Company as a Lessee

At inception of a contract, the Company
assesses whether a contract is or contains a
lease. A contract is or contains a lease if the
contract conveys the right to control the use
of an identified assets for a period of time
in exchange for consideration. To assess
whether a contract conveys the right to control
the use of an identified asset the Company
assesses whether contract involves the use of
an identified asset, the Company has a right
to obtain substantially all of the economic
benefits from the use of the asset throughout
the period of use and the Company has the
right to direct the use of the asset.

At the commencement date, right-of-use
asset is recognized at cost which includes
present value of lease payments adjusted
for any payments made on or before the
commencement of lease and initial direct
cost, if any. It is subsequently measured
at cost less accumulated depreciation,
accumulated impairment losses, if any and
adjusted for any remeasurement of the lease
liability. Right of-use asset is depreciated
using the straight-line method from the
commencement date over the earlier of
useful life of the asset or the lease term. Right-
of-use assets are tested for impairment
whenever there is any indication that their
carrying amounts may not be recoverable.
Impairment loss, if any, is recognized in the
statement of profit and loss.

At the inception date, lease liability is
recognised at present value of lease payments
that are not made at the commencement
of lease. Lease liability is subsequently
measured by adjusting the carrying amount
to reflect interest, lease payments and
remeasurement, if any.

Lease payments are discounted using the
incremental borrowing rate or interest
rate implicit in the lease if the rate can be
determined.

The Company has elected not to apply the
requirements of Ind AS 116 to leases that has a
term of 12 months or less and leases for which
the underlying asset is of low value.

4.14 Taxes on Income

Current tax is the amount of tax payable on
the taxable income for the year as determined
in accordance with the applicable tax rates
and the provisions of the Income Tax Act, 1961
and other applicable tax laws.

Deferred tax is recognised on temporary
differences between the carrying amounts
of assets and liabilities in the standalone
financial statements and the corresponding
tax bases used in the computation of taxable
profit. Deferred tax liabilities are generally
recognised for all taxable temporary
differences. Deferred tax assets are generally
recognised for all deductible temporary
differences to the extent that it is probable
that taxable profits will be available against
which those deductible temporary differences

can be utilised. Such deferred tax assets and
liabilities are not recognised if the temporary
difference arises from the initial recognition
(other than in a business combination) of
assets and liabilities in a transaction that
affects neither the taxable profit nor the
accounting profit. In addition, deferred tax
liabilities are not recognised if the temporary
difference arises from the initial recognition
of goodwill. The Company offsets deferred
tax assets and deferred tax liabilities if it has
a legally enforceable right and these relate to
taxes on income levied by the same governing
taxation laws.

The carrying amount of deferred tax assets is
reviewed at the end of each reporting period
and reduced to the extent that it is no longer
probable that sufficient taxable profits will be
available to allow all or part of the asset to be
recovered. Deferred tax assets and liabilities
are measured using the tax rates and tax
laws that have been enacted or substantively
enacted by the balance sheet date.

Current and deferred tax are recognised in
statement of profit or loss, except when they
relate to items that are recognised in other
comprehensive income or directly in equity,
in which case, the current and deferred tax
are also recognised in other comprehensive
income or directly in equity respectively.

Advance taxes and provisions for current
income taxes are presented in the balance
sheet after off-setting advance taxes paid
and income tax provisions arising in the same
tax jurisdiction and the Company intends to
settle the asset and liability on a net basis
year wise.