Page 125 - FBL AR 2019-20

CORPORATE STATUTORY FINANCIAL
OVERVIEW STATEMENTS STATEMENTS

Notes to the Standalone financial statements for the year ended March 31, 2020

Interest on income tax refund is recognised on receipt of refund order.
Dividend income is recognized when the Company’s right to receive payment is established which is generally when shareholders
approve the dividend.
Export Incentives:
Duty free imports of raw materials under Advance License for imports as per the Import and Export Policy are matched with the exports
made against the said licenses and net benefit / obligation is accounted by making suitable adjustments in raw material consumption.
The benefit under the Duty Drawback, Mercantile Export Incentive Scheme and other schemes as per the Import and Export policy
in respect of exports made under the said schemes is included as ‘Export Incentives’ under the head “Other Operating Revenue” in the
standalone statement of profit and loss and is accounted in the year of export.
(i) Property, plant and equipment (PPE)
The Company had applied for one time transition exemption of considering the carrying value on the transition date i.e. April 01, 2016
as the deemed cost under Ind AS for its property, plant and equipment.
Measurement at recognition:
Items of property, plant and equipment are stated in balance sheet at cost less accumulated depreciation and accumulated impairment
losses, if any. Freehold land is not depreciated. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in
accordance with the Company’s accounting policy.

Properties in the course of construction for production, supply or administrative purposes are carried at cost, less any recognised
impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Company’s
accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment when completed and
ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready
for their intended use. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items (major components) of property, plant and equipment.
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 property, plant and equipment and is recognised
in profit or loss.
Depreciation is recognised so as to write off the cost of assets (other than freehold land and capital work-in-progress) less their residual
values on straight-line method over their useful lives as indicated in Part C of Schedule II of the Companies Act, 2013 and based on
assessment / estimate made by management. Depreciation methods, useful lives and residual values are reviewed at the end of each
reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

The estimated useful lives of property, plant and equipment are as follows:
Assets Estimated useful life (in years)
Buildings 30-60
Lease hold improvements (included in buildings) 5-10
Plant and equipment 5-20
Office Equipment (included in plant and equipment) 5-6
Computers (included in plant and equipment) 3-6
Furniture and fixtures 6-10
Vehicles 8

(j) Investment property
The Company had applied for one time transition exemption of considering the carrying value on the transition date i.e. April 01, 2016
as the deemed cost under Ind AS for its investment property.
Investment properties are properties held to earn rentals and/or for capital appreciation (including property under construction for such
purposes). Investment properties are measured-initially at cost, including transaction costs. Subsequent to initial recognition, investment
properties are measured in accordance with Ind AS 16 requirements for cost model.

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