Note 2 : Summary of Material Accounting Policies2.1 Basis of Preparation and Statement of Compliance
These standalone financial statements have been
prepared under the provisions of the Companies Act ,
2013 ( 'Act' ), Indian Accounting Standards (Ind AS) as
prescribed under Section 133 of the Act read with Rule
3 of the Companies (Indian Accounting Standards)
Rules, 2015 and relevant amendment rules issued
thereafter and presentation requirements of Division
II of Schedule III to the Companies Act, 2013, (Act)
and guidelines issued by the Securities and Exchange
Board of India (SEBI).
The standalone financial statements have been
prepared on the historical cost basis except for certain
financial assets and liabilities that are measured at fair
values at the end of each reporting period.
Accounting policies have been consistently applied
except where a newly issued accounting standard is
initially adopted or a revision to an existing accounting
standard requires a change in the accounting policy
hitherto in use.
The standalone financial statements were authorized
for issue by the Company's Board of Directors on
27 May 2026.
2.2 Use of Estimates
The preparation of standalone financial statements
in conformity with Indian Accounting Standards
(Ind AS) requires management to make judgements,
estimates and assumptions that affect the reported
amounts of revenues, expenses, assets and liabilities
and disclosure of contingent liabilities at the end of the
reporting period. Although these estimates are based
upon management's best knowledge of current events
and actions, uncertainty about these assumptions and
estimates could result in the outcomes requiring a
material adjustment to the carrying amounts of assets
or liabilities in future period.
In particular, following are the significant areas of
estimation, uncertainty and critical judgements in
applying accounting policies that have the most
significant effect on the amounts recognised in
standalone financial statements:
a. Revenue from contracts with customers
A significant portion of the Company's business
relates to Industrial Projects contracts which are
accounted for using percentage of completion
method, recognizing revenue on the performance
as the contract progresses. This requires
management to make judgement with respect to
identifying contracts for which revenue needs to
be recognised over a period of time, depending
upon when the customer consumes the benefit,
when the control is passed to customer,
whether the asset created has an alternative
use and whether the Company has the right to
payment for performance completed till date,
either contractually or legally. The Company is
required to estimate costs to complete on fixed-
price contracts. Estimating costs to complete
such contracts requires the Company to make
estimates of future costs to be incurred, based on
work to be performed beyond the reporting date.
This estimate impacts revenues from operations,
unbilled revenue and unearned revenue.
b. Provision for onerous contracts
The Company provides for future losses where it
is considered highly probable that the contract
costs are likely to exceed revenues in future years.
Estimating these future losses involves a number
of assumptions about the likely levels of future
cost escalation over time.
c. Defined benefit plans
The present value of the post-employment benefit
obligation depends on a number of factors that are
determined using actuarial valuations. An actuarial
valuation involves making various assumptions
including determination of the discount rate,
future salary increases and mortality rates. Any
changes in these assumptions will impact upon
the carrying amount of post-employment benefit
obligations. Key assumptions and sensitivities
for post-employment benefit obligations are
disclosed in note 36.
d. Warranty provision
Provision is made for the estimated warranty
claims and after sales services in respect of
products sold based on the historical warranty
claim information and any recent trends that may
suggest future claims could differ from historical
amounts. The assumption made in current
period are consistent with those in the prior year.
Warranty provisions are discounted using a pre¬
tax discount rate which reflects current market
assessments of time value of money and risks
specific to the liability. Refer Note 23 for further
details.
e. Impairment of financial assets
The impairment provisions for financial assets
are based on assumptions about risk of default,
expected loss rates and timing of cash flows.
The Company uses judgment in making these
assumptions and selecting the inputs to the
impairment calculation, based on the Company's
past history, existing market conditions as well
as forward looking estimates at the end of each
reporting period.
As a practical expedient, the Company uses a
provision matrix to determine ECL impairment
allowance on portfolio of its trade receivables.
The provision matrix is based on its historically
observed default rates over the expected life
of the trade receivables and is adjusted for
forward-looking estimates. The Company follows
provisioning norms based on ageing of receivables
to estimate the impairment allowance under ECL.
For Computing the expected credit loss allowance
for other financial assets, the probability of
default is applied as per default matrix comprises
of exposure due, risk ranking of the grades for
similar industries, macro-economic parameters
relevant to the industry and financial status of the
entity involved.
At every reporting date, the historical observed
default rates are updated and changes in the
forward-looking estimates are assessed by an
independent registered valuer and are provided
for. Refer Note 50 for details of impairment
allowances recognised at the reporting date.
f. Deferred tax asset recognition
The extent to which deferred tax assets can be
recognised is based on an assessment of the
probability that future taxable income will be
available against which the deductible temporary
differences can be utilised. In addition, significant
judgement is required in assessing the impact of
any uncertainties in tax.
g. Legal contingencies
The Company receives various orders and
notices from tax authorities and other parties
in respect of direct and indirect taxes and other
claims. The outcome of these matters may have a
material effect on the financial position, results of
operations or cash flows.
Management regularly analyses current
information about these matters and provides
provisions for probable losses including the
estimate of legal expense to resolve such matters.
In making the decision regarding the need for loss
provisions, management considers the degree of
probability of an unfavorable outcome and the
ability to make a sufficiently reliable estimate of
the amount of loss. The filing of a suit or formal
assertion of a claim against the company or the
disclosure of any such suit or assertions does not
automatically indicate that a provision of a loss
may be appropriate.
h. Useful lives of property plant and equipment and
Intangible assets
The estimated useful lives of property plant
and equipment and intangible assets are based
on a number of factors including the effects
of obsolescence, internal assessment of user
experience and other economic factors (such
as the known technological advancements,
commercial obsolescence of the asset etc.). The
useful life of property plant and equipment and
intangible assets is reviewed on an ongoing basis.
i. Inventories
Management has estimated the net realizable
values of inventories, taking into account the
most reliable evidence available at each reporting
date.
The future realization of these inventories may be
affected by market driven changes.
2.3 Current versus non-current classification
The Company presents assets and liabilities in
the balance sheet based on current/ non-current
classification as per company's normal operating cycle
and other criteria set out in the Schedule III to the Act.
An asset is treated as current when it is:
• Expected to be realised or intended to be sold or
consumed in normal operating cycle
• Held primarily for the purpose of trading
• Expected to be realised within twelve months after
the reporting period, or
• 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:
• It is expected to be settled in normal operating
cycle
• It is held primarily for the purpose of trading
• It is due to be settled within twelve months after
the reporting period, or
• It does not have the right at the end of the reporting
period to defer the settlement of the liability for at
least twelve months after the reporting period
The Company classifies all other liabilities as non¬
current.
Deferred tax assets and liabilities are classified as non¬
current assets and liabilities.
The operating cycle is the time between the acquisition
of assets for processing and their realization in cash
and cash equivalents. Based on the nature of products
and services and the time between acquisition of assets
for processing and their realisation in cash and cash
equivalents, the company has ascertained its operating
cycle as 12 months for the purpose of current and non¬
current classification of assets and liabilities.
2.4 Revenue Recognition
The Company recognises revenue from contracts with
customers when it satisfies a performance obligation
by transferring promised goods or services to its
customers. 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.
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.
A. Sale of products and services
Revenue from the sale of manufactured and traded
goods is recognised when control of the goods
is transferred to the customer i.e. at the point of
sale / delivery to the customer at an amount that
reflects the consideration to which the Company
expects to be entitled in exchange for those
goods. Sale is net of sales returns, discounts and
goods & services tax.
Revenue from services rendered is recognised in
the accounting period in which the services are
rendered based on the arrangements/ agreements
with the concerned parties.
Revenue is measured at the transaction price.
Revenue is reduced for returns, trade allowances
for deduction, rebates, value added taxes and
amounts collected on behalf of third parties.
B. Revenue from Industrial Projects
Revenues are recognised over time to the extent
of performance obligation satisfied and control
is transferred to the customer. The company
recognises revenue over time as it performs
because of continuous transfer of control to
the customers. For all project contracts, this
continuous transfer of control to the customer is
supported by the fact that the customer typically
controls the work in process as evidenced either
by contractual termination clauses or by the rights
of the Company to payment for work performed to
date plus a reasonable profit to deliver products or
services that do not have an alternate use.
Contract revenue is recognised at allocable
transaction price which represents the cost of
work performed on the contract plus proportionate
margin, using the percentage of completion
method. Percentage of completion is the
proportion of cost of work performed to-date, to
the total estimated contract costs. The Company
uses cost based measure of progress (or input
method) for contracts because it best depicts the
transfer of control to the customer which occurs
as it incurs costs on contracts.
Contract Costs comprise of costs that directly
relate to specific contract, costs that are
attributable to contract activity in general and can
be allocated to contract and such other costs as
are specifically chargeable to the customer under
the terms of contract.
Generally, the Company is entering into fixed price
contracts with its customers. However, in very
few contracts, additional revenue is claimable
or revenue is reduced, based on variations in
prices of few of key raw material prices such as
steel, cement etc. Additional claims are raised on
customers for such variations in prices of such
materials, on pre-fixed terms and conditions
specified in these contracts with customers.
When it is probable that total contract costs will
exceed total contract revenue, the expected loss
is recognised as an expense immediately.
For contracts where the aggregate of contract cost
incurred to date plus recognised profits (or minus
recognised losses as the case may be) exceeds
the progress billing, the surplus is shown as
contract asset and termed as "Unbilled revenue".
For contracts where progress billing exceeds the
aggregate of contract costs incurred to-date plus
recognised profits (or minus recognised losses, as
the case may be), the surplus is shown as contract
liability and termed as "Unearned Revenue".
Amounts received before the related work is
performed are disclosed in the Balance Sheet as
contract liability and termed as "Advances from
customer".
C. Other operational revenue represents income
earned from the activities incidental to the
business and is recognised when the performance
obligation is satisfied and right to receive
the income is established. Foreign exchange
fluctuation is treated as other operating income
as the same mainly comprises of fluctuation on
trade receivables and trade payables.
D. Rental Income
Rental income from operating leases is recognized
on straight line basis over lease term.
E. Other Income
(i) Interest income is accounted on a time
proportion basis taking into account the
amount outstanding and the effective
interest rate (EIR). Effective Interest Rate is
the rate that exactly discounts estimated
future cash receipts through the expected
life of the financial asset to that asset's net
carrying amount on initial recognition.
(ii) Insurance Claims, export incentives,
escalation, etc. are accounted for as and
when the estimated amounts recoverable
can be reasonably determined as being
acceptable to the concerned authorities/
parties.
(iii) Dividend
Dividend income from investments is
recognised when the shareholder's right
to receive payment has been established
(provided that it is probable that the
economic benefits will flow to the Company
and the amount of income can be measured
reliably).
2.5 Inventories
Raw materials, Stores & Spares are valued at lower
of weighted average cost and net realisable value.
However, items held for use in the production are not
valued below cost if the finished goods in which these
will be incorporated are expected to be sold at or above
cost. Cost includes cost of purchase and other costs
incurred in bringing the inventories to their present
location and condition.
Finished goods and work in progress are valued at lower
of cost and net realizable value. Cost includes cost of
direct materials and applicable direct manufacturing
and administrative overheads but exclude borrowing
costs. Cost is determined on weighted average basis.
Net realizable value is the estimated selling price in the
ordinary course of business, less estimated costs of
completion and the estimated costs necessary to make
the sale.
Stock of projects including boughtouts are valued at
lower of cost and net realizable value. Cost of stock of
projects includes cost of purchase, cost of conversion
and other cost incurred in bringing the inventories to
their present location and condition.
2.6 Property, Plant & Equipment (PPE)Recognition
Property, plant and equipment are stated at cost,
net of accumulated depreciation and accumulated
impairment losses, if any.
Cost includes its purchase price (including import
duties and non-refundable purchase taxes), after
deducting trade discounts and rebates. It includes other
costs directly attributable to bringing the asset to the
location and condition necessary for it to be capable of
operating in the manner intended by management and
the borrowing costs for qualifying assets and the initial
estimate of restoration cost if the recognition criteria is
met.
Subsequent expenditures relating to property, plant
and equipment is capitalized only when it is probable
that future economic benefits associated with these
will flow to the Company and the costs of the item can
be measured reliably.
When significant parts of plant and equipment are
required to be replaced at intervals, the Company
depreciates them separately based on their specific
useful lives. Repairs and maintenance costs are
charged to the statement of profit and loss when
incurred.
Capital work-in-progress includes cost of property,
plant and equipment under installation / under
development as at the balance sheet date.
De-recognition
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 de-recognition of the asset (calculated as
the difference between the net disposal proceeds and
the carrying amount of the asset) is included in the
income statement when the asset is disposed.
2.7 Intangible Assets
An Intangible asset is recognized when it is probable
that the expected future economic benefits that are
attributable to the asset will flow to the Company; and
the cost of the asset can be measured reliably.
Intangible assets are acquired separately are
measured on initial recognition at cost. Following
initial recognition, intangible assets are carried at cost
less any accumulated amortization and accumulated
impairment losses.
Intangible assets not ready for the intended use on the
date of the Balance Sheet are disclosed as "Intangible
assets under development".
The cost of an intangible asset comprises of its
purchase price, including import duties and non¬
refundable purchase taxes, after deducting trade
discounts and rebates; and any directly attributable
cost of preparing the asset for its intended use.
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 recognized in the statement of profit
or loss when the asset is derecognized.
2.8 Depreciation and Amortization
Depreciation is provided on Property, Plant & Equipment
as per the written down value method except in respect
of certain Plant & Machinery which are depreciated as
per straight line method, in the manner as prescribed
in Schedule II to the Companies Act, 2013, and as per
useful life estimated by the management from time to
time. Assets costing not more than ' 5,000/- are fully
depreciated in the year of their acquisition.
The management has estimated the following useful
lives of assets:
The asset's residual values, useful life and methods of
depreciation are reviewed at each financial year end
and adjusted prospectively.
Intangible assets are amortized over the useful
economic life which is reviewed at the end of each
reporting period. Based on this criteria, presently
amortisation rates applied to the Company's intangible
assets are as below:
Technical know-how 5 to 10 years
Computer software 5 years
Right-of-use assets are amortized on the straight-line
basis over the period of lease term.
Leasehold improvements are written off over the
shorter of its useful life or over the period of lease.
2.9 Impairment of Non-Financial Assets
The Company recognises impairment loss (termed as
provision for expected credit loss on contract assets
in the financial statements) on account of credit risk
in respect of a contract asset using expected credit
loss model on similar basis as applicable to trade
receivables.
If such assets are considered to be impaired, the
impairment to be recognized in the statement of profit
and loss is measured by the amount by which the
carrying value of the assets exceeds the estimated
recoverable amount of the asset.
The carrying amount of the asset is increased to
its revised recoverable amount, provided that this
amount does not exceed the carrying amount that
would have been determined (net of any accumulated
amortization or depreciation) had no impairment loss
been recognized for the asset in prior years.
Financial guarantees are issued by the Company to
secure the credit facilities extended to its subsidiary
companies by their lenders. These guarantees are to
reimburse the lenders of subsidiary companies in the
event of a default. The liability on account of impairment
is measured at the loss determined as per requirements
of Ind AS 109 and the same is recognised as Provision
for expected credit loss on these guarantees.
At each reporting date, the company assesses whether
the credit risk on these guarantees has increased
significantly since initial recognition. When making
the assessment, the company uses the change in the
risk of a default occurring over the expected life of
these guarantees instead of the change in the amount
of expected credit losses. To make that assessment,
the company compares the risk of a default occurring
on these guarantees as at the reporting date with the
risk of a default occurring on these guarantees as at
the date of initial recognition and consider reasonable
and supportable information, that is available without
undue cost or effort, that is indicative of significant
increases in credit risk since initial recognition.
The company measures the loss allowance for a
financial instrument at an amount equal to lifetime
expected credit losses in the previous reporting period
but determines at the current reporting date that
requirement is no longer met, the company measures
the loss allowance at an amount equal to 12-month
expected credit losses at the current reporting date.
.10 Non-current assets held for sale and discontinued
operations
The Company classifies non-current assets and
disposal groups as held for sale if their carrying
amounts will be recovered principally through a sale
rather than through continuing use. Non-current
assets and disposal groups classified as held for sale
are measured at the lower of their carrying amount
and fair value less costs to sell. Costs to sell are the
incremental costs directly attributable to the disposal
of an asset (disposal group), excluding finance costs
and income tax expense.
The Criteria for held for sale classification is regarded
as met when the sale is highly probable and the asset,
or disposal group, is available for immediate sale in its
present condition and is marketed for sale at a price
that is reasonable in relation to its current fair value.
The Management is also be committed to the sale,
which should be expected to qualify for recognition
as a completed sale within one year from the date of
classification.
Where a disposal group represents a separate major
line of business or geographical area of operations,
or is part of a single co-ordinated plan to dispose of
a separate major line of business or geographical
area of operations, then it is treated as a discontinued
operation. The post-tax profit or loss of the discontinued
operation together with the gain or loss recognised on
its disposal are disclosed as a single amount in the
statement of profit and loss, with all prior periods being
presented on this basis.
When a disposal group or component of the
business previously classified as held for sale or as a
discontinued operations, no longer meets the criteria
for such classification, the Company ceases to classify
the disposal group as held for sale and reclassifies
the results of the disposal group component within
continuing operations. The comparative periods are
represented where required.
2.11 Employee Benefits(i) Provident Fund
The Company makes contribution to the
recognised provident fund trust for its employees
which is operated by the Company, which is a
defined benefit plan to the extent that the Company
has an obligation to make good the shortfall, if
any, between the return from the investments
of the trust and the notified interest rate. The
Company's obligation in this regard is determined
by an independent actuary and provided for if the
circumstances indicate that the Trust may not
be able to generate adequate returns to cover
the interest rates notified by the Government.
Company's contribution to the provident fund is
charged to Statement of Profit and Loss.
For defined benefit plans, the cost of providing
benefits is determined using the Projected
Unit Credit method, with actuarial valuations
being carried out at each balance sheet date.
Remeasurements, comprising of actuarial
gains and losses, the effect of the asset ceiling,
excluding amounts included in net interest on
the net defined benefit liability and the return on
plan assets (excluding amounts included in net
interest on the net defined benefit liability), are
recognised immediately in the balance sheet
with a corresponding debit or credit to retained
earnings through OCI in the period in which they
occur. Remeasurements are not reclassified
to statement of profit and loss in subsequent
periods.
Past service costs are recognised in statement of
profit and loss on the earlier of:
• The date of the plan amendment or
curtailment, and
• The date that the Company recognises
related restructuring costs
Net interest is calculated by applying the discount
rate to the net defined benefit liability or asset.
The Company recognises the following changes
in the net defined benefit obligation as an expense
in the statement of profit and loss:
• Service costs comprising current service
costs, past-service costs, gains and losses
on curtailments and non-routine settlements;
and
• Net interest expense or income
When the benefits of a plan are changed or
curtailed, the resulting change in the benefit that
relates to the past service ('past service cost')
or the gain or loss on curtailment is recognised
immediately in the statement of profit and loss.
The Company recognises the gains and losses
on the settlement of a defined benefit plan when
settlement occurs.
(ii) Gratuity
The Company operates a Gratuity Fund Trust
which in turn has taken Group Gratuity cum
Life Assurance policies with the Life Insurance
Corporation of India for all the employees. Gratuity
is a post-employment benefit and is in the nature
of a defined benefit plan.
The liability determined by actuarial valuation
using projected credit method is recognised in
the balance sheet in respect of gratuity is the
present value of the defined benefit/obligation at
the balance sheet date less the fair value of plan
assets, together with adjustment for unrecognized
actuarial gains or losses and past service costs.
Gains and losses through re-measurements of the
net defined benefit liability/(asset) are recognized
in other comprehensive income.
(iii) Leave Encashment
The expected cost of accumulated leaves is
determined by actuarial valuation performed by
an independent actuary at each balance sheet
date using projected unit credit method on the
amount expected to be paid/ availed as a result
of the unused entitlement that has accumulated
at the balance sheet date. The Company treats
the accumulated leave, which is expected to be
utilised or paid in next twelve months, as short¬
term employee benefits. The Company treats
accumulated leaves expected to be carried
forward beyond twelve months, as long-term
employee benefits for measurement purposes.
Any gains and losses on actuarial valuation are
recognised as expense in the statement of profit
and loss.
(iv) Retirement Benefits
National Pension Scheme: Contributions towards
pension is made to various funds and such
benefits are classified as defined contribution
scheme as the Company does not carry any
further obligations, apart from the contributions
made on the monthly/yearly basis.
(v) Pension
Liability on account of pension payable to
employees covered under Company's erstwhile
Pension scheme (since discontinued) has been
accounted for on accrual basis based on actuarial
valuation.
(vi) Superannuation Benefit
The Company operates a Superannuation Scheme
Trust which in turn has taken Group Gratuity cum
Life Assurance policies with the Life Insurance
Corporation of India. The Company makes
contribution to superannuation fund, for the
employees who have opted for this scheme, which
is a post-employment benefit in the nature of a
defined contribution plan and contribution paid or
payable is recognized as an expense in the period
in which services are rendered by the employee.
(vii) Other Short-Term Benefits
Expense in respect of other short-term benefits
is recognized in Statement of Profit and Loss, on
the basis of the amount paid or payable for the
period during which services are rendered by the
employee.
2.12 Leases
As a Lessee
The Company has lease contracts for various items
of building, plant, machinery, vehicles and other
equipment. The Company classifies its leases as
finance lease or operating lease. A lease is classified
as a finance lease if it transfers substantially all of
the risks and rewards incidental to ownership of the
leased asset to the Company, otherwise it is classified
as an operating lease. Finance lease is capitalized at
the commencement of the lease at the fair value of
the leased property or, if lower, at the present value
of the minimum lease payments. Lease payments
are apportioned between interest (recognized as
finance costs) and reduction of the lease liability. In an
operating lease, the leased property is not capitalized,
and the lease payments are recognized as rent expense
in the statement of profit or loss on a straight-line basis
over the lease term. Any prepaid rent and accrued rent
are recognized under prepayments and trade and other
payables, respectively.
In the statement of financial position, lease liability is
included under other financial liability and ROU assets
is included in property, plant and equipment's and the
payment of principal portion of lease liabilities has
been classified as financing cash flows.
The Company assesses whether a contract contains
a lease at the inception of the 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 Company assesses whether: (1)
the contract involves the use of an identified asset,
(2) the Company has substantially all of the economic
benefits from the use of the asset through the period of
the lease, and (3) the Company has the right to direct
the use of the asset.
At the date of commencement of the lease, the
Company recognizes a ROU asset and a corresponding
lease liability for all lease arrangements under which it
is a lessee, except for short-term leases and low value
leases.
For short-term leases and low value leases, the
Company recognizes the lease payments as an expense
on a straight-line basis over the term of the lease.
The lease arrangements include options to extend or
terminate the lease before the end of the lease term.
ROU assets and lease liabilities include these options
when it is reasonably certain that they will be exercised.
The ROU assets are initially recognized at cost, which
comprises the initial amount of the lease liability
adjusted for any lease payments made at or prior to the
commencement date of the lease plus any initial direct
costs incurred and an estimate of costs to dismantle
and remove the underlying asset or to restore the
underlying asset or the site on which it is located less
any lease incentives received.
The right-of-use asset is subsequently depreciated
using the straight-line method from the 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 estimated
useful lives of right-of-use assets are determined on
the same basis as those of property and equipment. In
addition, the right-of-use asset is periodically reduced
by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.
The lease liability is initially measured at the present
value of the future lease payments, discounted
using the interest rate implicit in the lease or, if that
rate cannot be readily determined, the Company's
incremental borrowing rate.
Lease payments included in the measurement of the
lease liability comprise the fixed payments (including
in substance fixed), variable payments based on an
index or rate, amounts expected to be payable under
a residual value guarantee and payments arising from
options reasonably certain to be exercised. Subsequent
to initial measurement, the liability will be reduced for
payments made and increased for interest.
As a Lessor
Leases in which the Company does not transfer
substantially all the risks and rewards of ownership
of an asset are classified as operating leases. Lease
income from operating leases where the Company is a
lessor is recognized in income on a straight-line basis
over the lease term unless the receipts are structured
to increase in line with expected general inflation
to compensate for the expected inflationary cost
increases. The respective leased assets are included in
the balance sheet based on their nature.
2.13 TaxesCurrent income tax
Current income tax assets and liabilities are measured
at the amount expected to be recovered from or paid/
payable to the taxation authorities. The tax rates and
tax laws used to compute the amount are those that are
enacted, or substantively enacted at the reporting date.
Current income tax is charged at the end of reporting
period to statement of profit & loss.
Deferred Tax
Deferred tax is provided using the balance sheet
approach on temporary differences at the reporting
date between the tax bases of assets and liabilities and
their carrying amounts for financial reporting purpose
at reporting date.
Deferred income tax assets and liabilities are measured
using tax rates and tax laws that have been enacted or
substantively enacted at the reporting date.
Such deferred tax assets and liabilities are not
recognized if the temporary difference arises from
the initial recognition of assets and liabilities in a
transaction that affects neither the taxable profit nor
the accounting profit.
The carrying amount of deferred tax assets is reviewed
at each reporting 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.
Unrecognized deferred tax assets are re-assessed at
each reporting date and are recognized to the extent
that it has become probable that future taxable profits
will allow the deferred tax asset to be recovered.
Deferred tax relating to items recognized in Other
Comprehensive Income is recognized in Other
Comprehensive Income.
2.14 Borrowing Cost
As per Ind AS 23, Borrowing costs directly attributable
to the acquisition, construction or production of a
qualifying asset are capitalized as part of the cost of
the asset. All other borrowing costs are expensed in the
period in which they occur. Borrowing costs consist of
interest and other costs that the Company incurs in
connection with the borrowing of funds.
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