Investor Presentaiton
176
5)
asset, the Group estimates the recoverable amount of the cash-
generating unit (CGU) to which the asset belongs. 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. The resulting impairment loss is
recognised in the Consolidated statement of profit and loss.
Recoverable amount is the higher of fair value less costs
of disposal and value in use. In assessing value in use, the
estimated future cash flows are 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 asset. In determining fair value less costs of disposal,
recent market transactions are taken into account. If no such
transactions can be identified, an appropriate valuation model
is used.
Where an impairment loss subsequently reverses, the carrying
amount of the asset or CGU is increased to the revised estimate
of its recoverable amount, but so that the increased carrying
amount does not exceed the carrying amount that would have
been determined had no impairment loss been recognised for
the asset or CGU in prior years. A reversal of an impairment
loss is recognised in the Consolidated statement of profit and
loss.
Inventories:
Inventories consisting of stores and spares, raw materials,
work in progress, stock in trade and finished goods are valued
at lower of cost and net realisable value. However, materials
held for use in production of inventories are not written down
below cost, if the finished products are expected to be sold
at or above cost. The cost is computed on FIFO basis except
for stores and spares which are on daily moving Weighted
Average Cost basis and is net of input tax credits under various
tax laws.
Goods and materials in transit include materials, duties and
taxes (other than those subsequently recoverable from tax
authorities) labour cost and other related overheads incurred in
bringing the inventories to their present location and condition.
6)
Traded goods includes cost of purchase and other costs
incurred in bringing the inventories to their present location
and condition.
Net realisable value is the estimated selling price in the
ordinary course of business, less estimated cost of completion
and estimated cost necessary to make the sale.
Inventory obsolescence is based on assessment of the future
uses. Obsolete and slow-moving items are subjected to
continuous technical monitoring and are valued at lower of
cost and estimated net realisable value. When Inventories
are sold, the carrying amount of those items are recognized
as expenses in the period in which the related revenue is
recognized.
Leases:
The Group has applied Ind AS 116 using the modified
retrospective approach.
The Group as a lessee
The Group's lease asset classes primarily consist of leases for
land, buildings and vehicles. The Group assesses whether a
contract contains a lease, at inception of a contract. A contract
is, or contains, a lease if the contract conveys the right to
control the use of an identified asset 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
Group assesses whether: (i) the contract involves the use of
an identified asset (ii) the Group has substantially all of the
economic benefits from use of the asset through the period of
the lease and (iii) the Group has the right to direct the use of
the asset.
At the date of commencement of the lease, the Group recognizes
a right-of-use asset ("ROU") and a corresponding lease liability
for all lease arrangements in which it is a lessee, except for leases
with a term of twelve months or less (short-term leases) and
low value leases. For these short-term and low value leases, the
Group recognizes the lease payments as an operating expense
on a straight-line basis over the term of the lease.View entire presentation