46 iv) Recent account ing pronouncements effective from April 01, 2022: MCA notifies new standards or amendment to the exist ing standards under the Companies (Indian Accounting Standards) Rules as issued from time to time. On March 23, 2022, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2022, as below. Ind AS 16 – Property, Plant and Equipment: The amendment clarifies that excess of net sale proceeds of items produced over the cost of testing, if any, shall not be recognised in the profit or loss but deducted from the directly attributable costs considered as part of cost of an item of property, plant, and equipment. The effective date for adoption of this amendment is annual periods beginning on or after April 01, 2022. The Company has evaluated the amendment and there is no impact on its Financial Statements. Ind AS 37 - Provisions, contingent liabilities and contingent assets: The amendment specifies that the cost of fulfilling a contract comprises the costs that relate directly to the contract. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples may be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contracts (an example may be the allocation of depreciation charge for an item of property, plant and equipment used in fulfilling the contract ). The effective date for adoption of this amendment is annual periods beginning on or after April 01, 2022, although early adoption is permitted. The Company has evaluated the amendments and the impact is not expected to be material. c) Property, plant and equipment Property, plant and equipment are carried at cost of acquisition | construction, including incidental expenses directly attributable to the acquisition | construction activity, as the case may be, less accumulated depreciation, amortisation and impairment as necessary as per cost model. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arrive from the continued use of the assets. Any gain or loss arising on disposal or retirement of an item of PPE is determined as the difference between the sales proceeds and the carrying amount of the assets and is recognised in profit and loss. Depreciation i) Depreciation is being provided on a pro-rata basis on the ‘straight-line method’ over the estimated useful lives of the assets. ii) Depreciation is calculated on a pro-rata basis fromthedateof acquisition | installation till the date the assets are sold or disposed off. iii) Useful lives of the assets as prescribed under part C of Schedule II to the Companies Act, 2013 are applied. iv) The property, plant and equipment acquired under finance leases is depreciated over the useful lives of the assets or over the shorter of the useful lives of the assets and the lease term if there is no reasonable certainty that the group will obtain ownership at the end of the lease term. v) The residual values are not more than 5% of the original cost of the asset. The residual values and useful lives of the assets are reviewed and adjusted if appropriate, at the end of each reporting period. d) Intangible assets Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amor tisation and impairment. Amortisation Computer software cost is amortised over a period of six years using straight-line method.
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