2. Material accounting policy information
The material accounting policy information applied by the
Company in the preparation of its standalone financial
statements are listed below. Such accounting policies have
been applied consistently to all the periods presented in
these standalone financial statements, unless otherwise
indicated below:
Recent Accounting Pronouncements:
Ministry of Corporate Affairs (“MCA”) notifies the
amendments to Ind AS 21 - Effects of Changes in Foreign
Exchange Rates. These amendments aim to provide clearer
guidance on assessing currency exchangeability and
estimating exchange rates when currencies are not readily
exchangeable. The amendments are effective for annual
periods beginning on or after April 01, 2025. The Company
is currently assessing the probable impact of these
amendments on its financial statements.
2.1. Basis of Preparation
The standalone financial statements of the Company have
been prepared in accordance with Indian Accounting
Standards (Ind AS) notified under the Companies (Indian
Accounting Standards) Rules, 2015 (as amended from time
to time).
The standalone financial statements have been prepared as
a going concern and on historical cost basis except for certain
financial assets and liabilities (refer accounting policy
regarding financial instruments) which have been measured
at fair value.
The functional and presentation currency of the Company
is Indian Rupee (“'”) which is the currency of the primary
economic environment in which the Company operates, and
all values are rounded to nearest crore except when
otherwise indicated.
2.2. Summary of material accounting policy information
a. Current versus non-current classification
The Company presents assets and liabilities in the
standalone balance sheet based on current/ non-current
classification. An asset is treated as current when it is:
i. Expected to be realised or intended to be sold or
consumed in normal operating cycle,
ii. Held primarily for the purpose of trading,
iii. Expected to be realised within twelve months after
the reporting period, or
iv. Cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for at
least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
i. It is expected to be settled in normal operating
cycle,
ii. It is held primarily for the purpose of trading,
iii. It is due to be settled within twelve months after
the reporting period, or
iv. There is no unconditional right to defer the
settlement of the liability for at least twelve months
after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non¬
current assets and liabilities.
Advance tax paid is classified as non-current assets.
The operating cycle is the time between the acquisition
of assets for processing and their realisation in cash
and cash equivalents. The Company has identified
twelve months as its operating cycle.
b. Fair value measurement of financial instruments
The Company measures financial instruments, such as,
derivatives at fair value at each balance sheet date using
valuation techniques.
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:
a) In the principal market for the asset or liability, or
b) 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 economic best interest.
A fair value measurement of a non-financial asset takes
into account a market participant's ability to generate
economic benefits by using the asset in its highest and
best use or by selling it to another market participant
that would use the asset in its highest and best use.
The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximising the use of relevant observable inputs and
minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured
or disclosed in the standalone financial statements are
categorised within the fair value hierarchy, described
as follows, based on the lowest level input that is
significant to the fair value measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active
markets for identical assets or liabilities.
Level 2 — Valuation techniques for which the lowest
level input that is significant to the fair value
measurement is directly or indirectly observable.
Level 3 — Valuation techniques for which the lowest
level input that is significant to the fair value
measurement is unobservable.
For assets and liabilities that are recognised in the
standalone financial statements on a recurring basis,
the Company determines whether transfers have
occurred between levels in the hierarchy by re-assessing
categorisation (based on the lowest level input that is
significant to the fair value measurement as a whole)
at the end of each reporting period.
c. Revenue from contracts with customer
The Company recognises revenue from contracts with
customers when it satisfies a performance obligation
by transferring promised goods or services to a
customer. The revenue is recognised to the extent of
transaction price allocated to the performance
obligation satisfied. Performance obligation is satisfied
over time when the transfer of control of asset (goods
or services) to a customer is done over time and in other
cases, performance obligation is satisfied at a point in
time. For performance obligation satisfied over time,
the revenue recognition is done by measuring the
progress towards complete satisfaction of performance
obligation. The progress is measured in terms of a
proportion of actual cost incurred to-date, to the total
estimated cost attributable to the performance
obligation.
Transaction price is the amount of consideration to
which the Company expects to be entitled in exchange
for transferring goods or services to a customer
excluding amounts collected on behalf of a third party.
Variable consideration is estimated using the expected
value method or most likely amount as appropriate in
a given circumstance. Payment terms agreed with a
customer are as per business practice and there is no
financing component involved in the transaction price.
Costs to obtain a contract which are incurred regardless
of whether the contract was obtained are charged-off
in standalone statement of profit and loss immediately
in the period in which such costs are incurred.
Incremental costs of obtaining a contract, if any, and
costs incurred to fulfil a contract are amortised over
the period of execution of the contract in proportion
to the progress measured in terms of a proportion of
actual cost incurred to-date, to the total estimated cost
attributable to the performance obligation.
Significant judgments are used in:
1. Determining the revenue to be recognised in case
of performance obligation satisfied over a period
of time; revenue recognition is done by measuring
the progress towards complete satisfaction of
performance obligation. The progress is measured
in terms of a proportion of actual cost incurred
to-date, to the total estimated cost attributable to
the performance obligation.
2. Determining the expected losses, which are
recognised in the period in which such losses
become probable based on the expected total
contract cost as at the reporting date.
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 assets are transferred to receivables when the
rights become unconditional and contract liabilities are
recognized as and when the performance obligation is
satisfied.
Trade receivables
A receivable represents the Company's right to an
amount of consideration that is unconditional (i.e., only
the passage of time is required before payment of the
consideration is due). Refer to accounting policies of
financial assets in section (n) Financial instruments -
initial recognition and subsequent measurement.
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.
Income from management/ technical services
Income from management/ technical services is
recognised as per the terms of the agreement on the
basis of services rendered.
Interest income
Interest income is recognised on a time proportion basis
taking into account the amount outstanding and the
rate applicable except the interest income received from
customers for delayed payments which are accounted
on the basis of reasonable certainty / realisation.
For all debt instruments measured either at amortised
cost or at fair value through other comprehensive
income, interest income is recorded using the effective
interest rate (EIR). EIR is the rate that exactly discounts
the estimated future cash payments or receipts over
the expected life of the financial instrument or a shorter
period, where appropriate, to the gross carrying amount
of the financial asset or to the amortised cost of a
financial liability. When calculating the effective interest
rate, the Company estimates the expected cash flows
by considering all the contractual terms of the financial
instrument but does not consider the expected credit
losses. Interest income is included in other operating
income in the standalone statement of profit and loss.
Income from consultancy services
Income from consultancy services and business support
services are recognised on a pro-rata basis over the
period of the contract as and when services are
rendered.
Income from aviation academy
Income from aviation academy is recognised on a pro¬
rata basis over the period as and when services are
rendered.
Income from non-aeronautical operations
Non-Aeronautical operations are recognised on accrual
basis, net of Goods and Services Tax (GST), and
applicable discounts when services are rendered. The
main streams of non - aeronautical revenue includes
Duty free retail, Duty paid retail, car parking, retail and
retail related services.
Income from cargo operations
In case of cargo handling revenue, revenue from
outbound cargo is recognised at the time of acceptance
of cargo with respect to non-airline customers and at
the time of departure of aircraft with respect to airline
customers and revenue from inbound cargo is
recognised at the time of arrival of aircraft in case of
airline customers and at the point of delivery of cargo
in case of non-airline customers. Interest on delayed
receipts from customers is recognised on acceptance.
Construction revenue
Construction revenue and costs are recognised by
reference to the stage of completion of the construction
activity at the balance sheet date, as measured by the
proportion that contract costs incurred for work
performed to date bear to the estimated total contract
costs. Where the outcome of the construction cannot
be estimated reliably, revenue is recognised to the
extent of the construction costs incurred if it is probable
that they will be recoverable. When the outcome of
the contract is ascertained reliably, contract revenue is
recognised at cost of work performed on the contract
plus proportionate margin, using the percentage of
completion method i.e. over the period of time.
Percentage of completion is the proportion of cost of
work performed to-date, to the total estimated contract
costs. The estimated outcome of a contract is
considered reliable when all the following conditions
are satisfied:
i. The amount of revenue can be measured reliably,
ii. It is probable that the economic benefits associated
with the contract will flow to the Group,
iii. The stage of completion of the contract at the end
of the reporting period can be measured reliably,
iv. The costs incurred or to be incurred in respect of
the contract can be measured reliably.
Provision is made for all losses incurred to the balance
sheet date. Variations in contract work, claims and
incentive payments are recognised to the extent that it
is probable that they will result in revenue and they are
capable of being reliably measured. Expected loss, if
any, on a contract is recognised as expense in the period
in which it is foreseen, irrespective of the stage of
completion of the contract. For contracts where
progress billing exceeds the aggregate of contract costs
incurred to-date and recognised profits (or recognised
losses, as the case may be), the surplus is shown as the
amount due to customers.
Amount received before the related work is performed
are disclosed in the standalone balance sheet as a
liability towards advance received. Amounts billed for
work performed but yet to be paid by the customers
are disclosed in the standalone balance sheet as trade
receivables.
Dividends
Dividend income is recognised when the Company's
right to receive the payment is established, which is
generally when shareholders approve the dividend.
d. Service Concession Arrangements
The Company constructs or upgrades infrastructure
(construction or upgrade services) used to provide a
public service and operates and maintains that
infrastructure (operation services) for a specified period
of time. These arrangements may include Infrastructure
used in a public-to-private service concession
arrangement for its entire useful life.
Under Appendix C to Ind AS 115 - Service Concession
Arrangements, these arrangements are accounted for
based on the nature of the consideration. The intangible
asset model is used to the extent that the operator
receives a right (i.e. a concessionaire) to charge users
of the public service. The financial model is used when
the operator has an unconditional contractual right to
receive cash or other financial assets from or at the
direction of the grantor for the construction service.
When the unconditional right to receive cash covers
only part of the service, the two models are combined
to account separately for each component. If the
operator performs more than one service (i.e.
construction, upgrade services and operation services)
under a single contract or arrangement, consideration
received or receivable is allocated by reference to the
relative fair values of the service delivered, when the
amount are not separately identifiable.
The intangible asset is amortised over the shorter of
the estimated period of future economic benefits which
the intangible assets are expected to generate or the
concession period, from the date they are available for
use.
An asset carried under concession arrangements is
derecognised on disposal or when no future economic
benefits are expected from its future use or disposal.
The Company recognises a financial asset to the extent
that it has an unconditional right to receive cash or
another financial asset from or at the direction of the
grantor.
e. Taxes on income
Current income tax
Tax expense for the year comprises current and deferred
tax. The tax currently payable is based on taxable profit
for the year. Taxable profit differs from net profit as
reported in the standalone statement of profit and loss
because it excludes items of income or expense that
are taxable or deductible in other years and it further
excludes items that are never taxable or deductible.
Current income tax assets and liabilities are measured
at the amount expected to be recovered from or paid
to the taxation authorities. The Company's liability for
current tax is calculated using the tax rates and tax laws
that have been enacted or substantively enacted by the
end of the reporting period.
Current income tax relating to items recognised outside
standalone statement of profit or loss is recognised
outside profit or loss (either in other comprehensive
income or in equity). Current tax items are recognised
in correlation to the underlying transaction either in
OCI or directly in equity. Management periodically
evaluates positions taken in the tax returns with respect
to situations in which applicable tax regulations are
subject to interpretation and establishes provisions
where appropriate.
Deferred tax
Deferred tax is the tax expected to be payable or
recoverable on differences between the carrying values
of assets and liabilities in the standalone financial
statements and the corresponding tax bases used in
the computation of the taxable profit and is accounted
for using the balance sheet liability model. Deferred
tax liabilities are generally recognised for all the taxable
temporary differences. In contrast, deferred tax assets
are only recognized to the extent that is probable that
future taxable profits will be available against which
the temporary differences can be utilised.
Deferred tax assets are recognized for all deductible
temporary differences, carry forward of unused tax
credits and unused tax losses, to the extent that it is
probable that taxable profit will be available against
which the deductible temporary differences, and the
carry forward of unused tax credits and unused tax
losses can be utilized.
The carrying amount of deferred tax assets is reviewed
at each balance sheet date and reduced to the extent
that it is no longer probable that sufficient taxable profit
will be available to allow all or part of the deferred tax
asset to be utilized.
Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply in the year when
the asset is realized or the liability is settled, based on
tax rates (and tax laws) that have been enacted or
substantively enacted at the balance sheet date.
Deferred tax relating to items recognised outside
standalone statement of profit or loss is recognised
outside profit or loss (either in other comprehensive
income or in equity). Deferred tax items are recognised
in correlation to the underlying transaction either in
OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset
if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred
taxes relate to the same taxable entity and the same
taxation authority.
Deferred tax assets include Minimum Alternative Tax
('MAT') paid in accordance with the tax laws in India,
which is likely to give future economic benefits in the
form of availability of set off against future income tax
liability. Accordingly, MAT is recognized as deferred tax
asset in the standalone balance sheet when the asset
can be measured reliably and it is probable that the
future economic benefit associated with the asset will
be realized.
In the year in which the Company recognises MAT credit
as an asset, it is created by way of credit to the
standalone statement of profit and loss shown as part
of deferred tax asset. The Company reviews the “MAT
credit entitlement” asset at each reporting date and
writes down the asset to the extent that it is no longer
probable that it will pay normal tax during the specified
period.
f. Property, plant and equipment
Freehold land is carried at historical cost and is not
depreciated. All other items of property, plant and
equipment are stated at historical cost less accumulated
depreciation and accumulated impairment losses, if any.
Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Subsequent costs are included in the asset's carrying
amount or recognised as a separate asset, as
appropriate, only when it is probable that future
economic benefits associated with the item will flow to
the Company and the cost of the item can be measured
reliably. The carrying amount of any component
accounted for as a separate assets is derecognised when
replaced. All other repairs and maintenance are charged
to standalone statement of profit and loss during the
reporting period in which they are incurred.
The Company identifies and determines cost of each
component/ part of the asset separately, if the
component/ part has a cost which is significant to the
total cost of the asset having useful life that is materially
different from that of the remaining asset. These
components are depreciated over their useful lives; the
remaining asset is depreciated over the life of the
principal asset.
#Leasehold improvements are depreciated over the
period of lease or estimated useful life, whichever is
lower, on straight line basis.
* The Company, based on technical assessment made
by the technical expert and management estimate,
depreciates certain items of plant and equipment over
estimated useful lives which are different from the useful
life prescribed in Schedule II to the Companies Act,
2013.
Further, the management has estimated the useful lives
of asset individually costing ' 5,000 or less than one
year or those indicated in schedule II, whichever is lower.
The management believes that these estimated useful
lives are realistic and reflect fair approximation of the
period over which the assets are likely to be used.
The residual values, useful lives and methods of
depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted
prospectively, if appropriate.
An item of property, plant and equipment and any
significant part initially recognised is derecognised upon
disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss
arising on derecognition of the asset (calculated as the
difference between the net disposal proceeds and the
carrying amount of the asset) is included in the
standalone statement of profit and loss when the asset
is derecognised.
g. Intangible assets
Intangible assets acquired separately are measured on
initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less any
accumulated amortisation and accumulated impairment
losses, if any.
The useful lives of intangible assets are assessed as
either finite or indefinite.
Intangible assets with finite lives are amortised over
the useful economic life and assessed for impairment
whenever there is an indication that the intangible asset
may be impaired. The amortisation period and the
amortisation method for an intangible asset with a finite
useful life are reviewed at least at the end of each
reporting period with the effect of any change in the
estimate being accounted for on a prospective basis.
Changes in the expected useful life or the expected
pattern of consumption of future economic benefits
embodied in the asset are considered to modify the
amortisation period or method, as appropriate, and are
treated as changes in accounting estimates. The
amortisation expense on intangible assets with finite
lives is recognised in the standalone statement of profit
and loss unless such expenditure forms part of carrying
value of another asset.
Gains or losses arising from derecognition of an
intangible asset are measured as the difference between
the net disposal proceeds and the carrying amount of
the asset and are recognised in the standalone
statement of profit and loss when the asset is
derecognised.
For right to operate cargo facility, refer note 2.2(d)
h. Inventories
Stock in trade - Traded goods are valued at lower of
cost or net realisable value. Cost (Other than Goods-
in-transit) is determined on a moving weighted average
basis and includes all applicable costs incurred in
bringing goods to their present location and condition.
The net realisable value is the estimated selling price in
the ordinary course of business less the estimated costs
of completion and estimated costs necessary to make
the sale.
i. Borrowing cost
Borrowing costs consist of interest and other costs that
an entity incurs in connection with the borrowing of
funds including interest expense calculated using the
effective interest method. Borrowing cost also includes
exchange differences to the extent regarded as an
adjustment to the borrowing costs.
Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily
takes a substantial period of time to get ready for its
intended use or sale are capitalised as part of the cost
of the asset until such time as the assets are substantially
ready for the intended use or sale. All other borrowing
costs are expensed in the period in which they occur.
j. Leases
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.
A lease is classified at the inception date as a finance
lease or an operating lease.
The Company as a lessee
The Company enters into leasing arrangements for
various assets. The assessment of the lease is based on
several factors, including, but not limited to, transfer of
ownership of leased asset at end of lease term, lessee's
option to extend/purchase etc.
At lease commencement date, the Company recognises
a right of use asset and a lease liability in the standalone
balance sheet. The right of use asset is measured at
cost, which is made up of the initial measurement of
the lease liability, any initial direct costs incurred by
the Company, an estimate of any costs to dismantle
and remove the asset at the end of the lease (if any),
and any lease payments made in advance of the lease
commencement date (net of any incentives received).
The Company depreciates the right-of-use assets on a
straight-line basis from the lease commencement date
to the earlier of the end of the useful life of the right-
of-use asset or the end of the lease term. The Company
also assesses the right-of-use asset for impairment
when such indicators exist. At lease commencement
date, the Company measures the lease liability at the
present value of the lease payments unpaid at that date,
discounted using the interest rate implicit in the lease
if that rate is readily available or the Company's
incremental borrowing rate. Lease payments included
in the measurement of the lease liability are made up
of fixed payments (including in substance fixed
payments) and variable payments based on an index
or rate. Subsequent to initial measurement, the liability
will be reduced for payments made and increased for
interest. It is re-measured to reflect any reassessment
or modification, or if there are changes in in-substance
fixed payments. When the lease liability is re-measured,
the corresponding adjustment is reflected in the rig ht-
of-use asset. The Company has elected to account for
short-term leases using the practical expedients. Instead
of recognising a right-of-use asset and lease liability,
the payments in relation to these are recognised as an
expense in standalone statement of profit and loss on
a straight-line basis over the lease term.
The Company as a lessor
Leases are classified as finance leases when substantially
all of the risks and rewards of ownership transfer from
the Company to the lessee. Amounts due from lessees
under finance leases are recorded as receivables at the
Company's net investment in the leases. Finance lease
income is allocated to accounting periods so as to
reflect a constant periodic rate of return on the net
investment outstanding in respect of the lease.
Leases in which the Company does not transfer
substantially all the risks and rewards of ownership of
an asset are classified as operating leases. Rental income
from operating lease is recognised on a straight-line
basis over the term of the relevant lease. Initial direct
costs incurred in negotiating and arranging an
operating lease are added to the carrying amount of
the leased asset and recognised over the lease term on
the same basis as rental income.
k. Impairment of non-financial assets
As at the end of each accounting year, the Company
reviews the carrying amounts of its property, plant and
equipment and intangible assets to determine whether
there is any indication that those assets have suffered
an impairment loss. If such indication exists, the said
assets are tested for impairment so as to determine
the impairment loss, if any. The intangible assets with
indefinite life are tested for impairment each year.
Impairment loss is recognised when the carrying
amount of an asset exceeds its recoverable amount.
Recoverable amount is determined:
(i) in the case of an individual asset, at the higher of
the fair value less costs of disposal and the value
in use; and
(ii) in the case of a cash generating unit (a Company
of assets that generates identified, independent
cash flows), at the higher of the cash generating
unit's net fair value less costs of disposal and the
value in use.
(The amount of value in use is determined as the present
value of estimated future cash flows from the continuing
use of an asset and from its disposal at the end of its
useful life. For this purpose, the discount rate (pre-tax)
is determined based on the weighted average cost of
capital of the Company suitably adjusted for risks
specified to the estimated cash flows of the asset).
For this purpose, a cash generating unit is ascertained
as the smallest identifiable group of assets that
generates cash inflows that are largely independent of
the cash inflows from other assets or group of assets.
If recoverable amount of an asset (or cash generating
unit) is estimated to be less than its carrying amount,
such deficit is recognised immediately in the standalone
statement of profit and loss as impairment loss and
the carrying amount of the asset (or cash generating
unit) is reduced to its recoverable amount.
When an impairment loss subsequently reverses, the
carrying amount of the asset (or cash generating unit)
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 is recognised for
the asset (or cash generating unit) in prior years. A
reversal of an impairment loss is recognised
immediately in the standalone statement of profit and
loss.
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