25.1 Corporate and General Information
JITF Infralogistics Limited is domiciled and incorporated in India. The Company's main object
is to carry on the business of rail, water and urban infrastructure in and outside India and to act
as technical, engineering, management consultants and/or provider of managerial and technical
manpower services.
25.2 Basis of preparation
The Annual financial statement have been prepared complying with all Indian Accounting
Standards notified under Section 133 of the Companies Act 2013 (‘Act'), read with the Companies
(Indian Accounting Standard) Rules, 2015, as amended and other relevant provision of the Act.
The Company has consistently applied the accounting policies used in the preparation for all
periods presented.
The material accounting policies used in preparing the standalone financial statements are set
out in Note no. 25.3 of the Notes to the standalone financial Statements.
25.3 Material Accounting Policies
25.3.1 Basis of Measurement
The financial statements have been prepared on accrual basis and under the historical cost
convention except following which have been measured at fair value:
• financial assets and liabilities except certain Investments and borrowings carried at
amortised cost,
• defined benefit plans - plan assets measured at fair value,
25.3.2 Use of Estimates
The preparation of the financial statements requires management to make estimates and
assumptions. Actual results could vary from these estimates. The estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision effects only that period
or in the period of the revision and future periods if the revision affects both current and future
years (refer Note no. 24.4 on critical accounting estimates, assumptions and judgements).
25.3.3 Property, Plant and equipment
Property, Plant and Equipment are carried at cost less accumulated depreciation and
accumulated impairment losses, If any. Cost includes expenditure that is directly attributable to
the acquisition of the items.
Assets are depreciated to the residual values on a straight line basis over the estimated useful
lives based on technical estimates which are different from one specified in Schedule II to the
Companies Act, 2013. Assets residual values and useful lives are reviewed at each financial year
end considering the physical condition of the assets and benchmarking analysis or whenever
there are indicators for review of residual value and useful life. Changes in the expected useful
life of assets are treated as change in accounting estimates. Estimated useful lives of the assets
are as follows
The 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 the
asset and is recognised in the Statement of Profit and Loss on the date of disposal or retirement.
25.3.4 Intangible Assets
Identifiable intangible assets are recognised a) when the Company controls the asset, b) it is
probable that future economic benefits attributed to the asset will flow to the Company and c)
the cost of the asset can be reliably measured.
Computer software s are capitalised at the amounts paid to acquire the respective license for
use and are amortised over the period of license, generally not exceeding five years on straight
line basis. The assets' useful lives are reviewed at each financial year end.
25.3.5 Cash and cash equivalents
Cash and cash equivalents includes cash on hand and at bank, deposits held at call with banks,
other short-term highly liquid investments with original maturities of three months or less that are
readily convertible to a known amount of cash and are subject to an insignificant risk of changes
in value and are held for the purpose of meeting short-term cash commitments.
25.3.6 Employee benefits
a) Short term employee benefits are recognized as an expense in the Statement of Profit
and Loss of the year in which the related services are rendered. Liabilities for wages and
salaries, including non-monetary benefits that are expected to be settled wholly within 12
months after the end of the period in which the employees render the related service are
recognised in respect of employees' services up to the end of the reporting period and are
measured at the amounts expected to be paid when the liabilities are settled. The liabilities
are presented as current employee benefit obligations in the balance sheet.
b) Leave encashment being a short term benefit is accounted for using the projected unit
credit method, on the basis of actuarial valuations carried out by third party actuaries at
each Balance Sheet date. Actuarial gains and losses arising from experience adjustments
and changes in actuarial assumptions are charged or credited to profit and loss in the
period in which they arise.
c) Contribution to Provident Fund, a defined contribution plan, is made in accordance with the
statute, and is recognised as an expense in the year in which employees have rendered
services.
d) The liability or asset recognised in the balance sheet in respect of gratuity plans is the
present value of the defined benefit obligation at the end of the reporting period less the
fair value of plan assets. The defined benefit obligation is calculated annually by actuaries
using the projected unit credit method.
The present value of the defined benefit obligation denominated in Indian Rupees ('?) is
determined by discounting the estimated future cash outflows by reference to market yields at
the end of the reporting period on government bonds that have terms approximating to the terms
of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined
benefit obligation and the fair value of plan assets. This cost is included in employee benefit
expense in the statement of profit and loss.
Re-measurement gains and losses arising from experience adjustments and changes in actuarial
assumptions are recognised in the period in which they occur, directly in other comprehensive
income. They are included in retained earnings in the statement of changes in equity and in the
balance sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments
or curtailments are recognised immediately in profit or loss as past service cost.
The Company operates defined benefit plans for gratuity, which requires contributions to be
made to a separately administered fund. Funds are managed by a trust. The trust has taken
policies from an insurance company.
25.3.7 Financial instruments - initial recognition, subsequent measurement and impairment
A financial instrument is any contract that gives rise to a financial asset of one entity and a
financial liability or equity instrument of another entity.
a. Financial Assets
Financial Assets are classified at amortised cost or fair value through Other Comprehensive
Income or fair value through Profit or Loss, depending on its business model for managing
those financial assets and the assets contractual cash flow characteristics.
For assets measured at fair value, gains and losses will either be recorded in profit or loss
or other comprehensive income. For investments in debt instruments, this will depend on
the business model in which the investment is held. For investments in equity instruments,
this will depend on whether the company has made an irrevocable election at the time
of initial recognition to account for the equity investment at fair value through other
comprehensive income.
The company reclassifies debt investments when and only when its business model for
managing these assets changes.
For impairment purposes significant financial assets are tested on an individual basis,
other financial assets are assessed collectively in groups that share similar credit risk
characteristics.
Measurement
At initial recognition, the Company measures a financial asset at its fair value plus, in the
case of a financial asset not at fair value through profit or loss, transaction costs that are
directly attributable to the acquisition of the financial asset. Transaction costs of financial
assets carried at fair value through profit or loss are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when
determining whether their cash flows are solely payment of principal and interest.
Trade receivables
A receivable is classified as a ‘trade receivable' if it is in respect to the amount due
from customers on account of goods sold or services rendered in the ordinary course
of business. Trade receivables are recognised initially at transaction value except trade
receivable that contains significant financing component that are subsequently measured
at amortised cost using the effective interest method, less provision for impairment. For
some trade receivables the Company may obtain security in the form of guarantee,
security deposit or letter of credit which can be called upon if the counterparty is in default
under the terms of the agreement.
Impairment
Impairment is made on the expected credit losses, which are the present value of the
cash shortfalls over the expected life of financial assets. The impairment methodology
applied depends on whether there has been a significant increase in credit risk. The
estimated impairment losses are recognised in a separate provision for impairment and
the impairment losses are recognised in the Statement of Profit and Loss within other
expenses.
Subsequent changes in assessment of impairment are recognised in provision for
impairment and the change in impairment losses are recognised in the Statement of Profit
and Loss within other expenses.
For foreign currency trade receivable, impairment is assessed after reinstatement at
closing rates.
Individual receivables which are known to be uncollectible are written off by reducing
the carrying amount of trade receivable and the amount of the loss is recognised in the
Statement of Profit and Loss within other expenses.
Subsequent recoveries of amounts previously written off are credited to other Income.
Investment in equity shares
Investment in equity securities are initially measured at fair value. Any subsequent fair
value gain or loss is recognized through Profit or Loss if such investments in equity
securities are held for trading purposes. The fair value gains or losses of all other equity
securities are recognized in Other Comprehensive Income. Where the company's
management has elected to present fair value gains and losses on equity investments in
other comprehensive income, there is no subsequent reclassification of fair value gains
and losses to profit and loss. Dividends from such investments are recognized in profit
and loss as other income when the company's right to receive payments is established.
Impairment losses (and reversal of impairment losses) on equity investments measured at
FVOCI are not reported separately from other changes in fair value.
De-recognition of financial asset
A financial asset is derecognized only when
• The company has transferred the rights to receive cash flows from the financial asset
or
• Retains the contractual rights to receive the cash flows of the financial asset, but
assumes a contractual obligation to pay the cash flows to one or more recipients.
Where the entity has transferred an asset, the company evaluates whether it has transferred
substantially all risks and rewards of ownership of the financial asset. In such cases, the
financial asset is derecognized. Where the entity has not transferred substantially all risks
and rewards of ownership of the financial asset, the financial asset is not derecognized.
Where the entity has neither transferred a financial asset nor retains substantially all risks
and rewards of ownership of the financial asset, the financial asset is derecognized if
the company has not retained control of the financial asset. Where the company retains
control of the financial asset, the asset is continued to be recognized to the extent of
continuing involvement in the financial asset.
b) Financial Liabilities
At initial recognition, all financial liabilities other than fair valued through profit and loss are
recognised initially at fair value less transaction costs that are attributable to the issue of
financial liability. Transaction costs of financial liability carried at fair value through profit or
loss is expensed in profit or loss.
i. Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for
trading. The Company has not designated any financial liabilities upon initial measurement
recognition at fair value through profit or loss. Financial liabilities at fair value through
profit or loss are at each reporting date at fair value with all the changes recognized in the
Statement of Profit and Loss.
ii. Financial liabilities measured at amortized cost
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred.
Borrowings are subsequently measured at amortised cost. Any difference between the
proceeds (net of transaction costs) and the redemption amount is recognised in profit or
loss over the period of the borrowings using the effective interest method. Fees paid on the
establishment of loan facilities are recognised as transaction costs of the loan to the extent
that it is probable that some or all of the facility will be drawn down. In this case, the fee is
deferred until the draw down occurs. To the extent there is no evidence that it is probable
that some or all of the facility will be drawn down, the fee is capitalised as a prepayment
for liquidity services and amortised over the period of the facility to which it relates.
Borrowings are derecognised from the balance sheet when the obligation specified in the
contract is discharged, cancelled or expired. The difference between the carrying amount
of a financial liability that has been extinguished or transferred to another party and the
consideration paid, including any non-cash assets transferred or liabilities assumed, is
recognised in profit or loss as other gains/(losses).
Borrowings are classified as current liabilities unless the company has unconditional right
to defer settlement of the liability for at least twelve months after reporting period.
Trade and other payables
A payable is classified as 'trade payable' if it is in respect of the amount due on account of
goods purchased or services received in the normal course of business. These amounts
represent liabilities for goods and services provided to the Company prior to the end
of financial year which are unpaid. Trade and other payables are presented as current
liabilities unless payment is not due within 12 months after the reporting period. They are
recognised initially at their fair value and subsequently measured at amortised cost using
the effective interest method.
De-recognition of financial liability
A financial liability is derecognised when the obligation under the liability is discharged or
cancelled or expires. The difference between the carrying amount of a financial liability that
has been extinguished or transferred to another party and the consideration paid, including
any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as
other income or finance costs.
25.3.8 Equity share capital
Ordinary shares are classified as equity. Incremental costs net of taxes directly attributable to
the issue of new equity shares are reduced from retained earnings, net of taxes.
25.3.9 Borrowing costs
General and specific borrowing costs that are directly attributable to the acquisition, construction
or production of a qualifying asset are capitalised during the period of time that is required to
complete and prepare the asset for its intended use or sale. Qualifying assets are assets that
necessarily take a substantial period of time to get ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
Other borrowing costs are expensed in the period in which they are incurred.
25.3.10 Taxation
Income tax expenses or credit for the period comprised of tax payable on the current period's
taxable income based on the applicable income tax rate, the changes in deferred tax assets and
liabilities attributable to temporary differences and to unused tax losses, minimum alternative tax
(MAT) and previous year tax adjustments.
Tax is recognised in the Statement of Profit and Loss, except to the extent that it relates to
items recognised directly in equity or other comprehensive income, in such cases the tax is also
recognised directly in equity or in other comprehensive income. Any subsequent change in direct
tax on items initially recognised in equity or other comprehensive income is also recognised in
equity or other comprehensive income, such change could be for change in tax rate.
The current income tax charge or credit is calculated on the basis of the tax law enacted
after considering allowances, exemptions and unused tax losses under the provisions of the
applicable Income Tax Laws. Current tax assets and current tax liabilities are off set, and
presented as net.
Deferred income tax is recognised, using the liability method, on temporary differences arising
between the tax base of assets and liabilities and their carrying amounts in the financial
statements. Deferred income tax is determined using tax rates and laws that have been enacted
or substantially enacted by the end of the reporting period and are expected to apply when the
related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax
assets are recognised for all deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and
losses. Deferred tax assets and deferred tax liabilities are off set, and presented as net.
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 profits will be available against
which the temporary differences can be utilised.
The Company recognises Credit of MAT as an asset when there is reasonable certainty that the
Company will pay normal income tax during the specified period, i.e., the period for which MAT
credit is allowed to be carried forward. In the year in which the MAT credit becomes eligible to be
recognised as an asset, the said asset is created by way of a credit to the statement of profit and
loss account and included in the deferred tax assets. The carrying amount of MAT is reviewed
at each balance sheet date.
25.3.11 Revenue recognition and other operating income
Revenue towards satisfaction of a performance obligation is measured at the amount of
transaction price (net of variable consideration) allocated to that performance obligation. The
transaction price of goods sold and services rendered is net of variable consideration.
a) Sale of services
Revenue from logistics services is accounted on accrual basis depending upon risk and
rewards transferred.
b) Other Income
Interest
Interest income is recognised on a time proportion basis taking into account the amount
outstanding and the rate applicable.
Dividend
Dividend income is recognised when the right to receive dividend is established.
25.3.12 Earnings per share
Basic earnings per share is computed using the net profit for the year attributable to the
shareholders' and weighted average number of shares outstanding during the year. The
weighted average numbers of shares also includes fixed number of equity shares that are
issuable on conversion of compulsorily convertible preference shares, debentures or any other
instrument, from the date consideration is receivable (generally the date of their issue) of such
instruments.
Diluted earnings per share is computed using the net profit for the year attributable to the
shareholder' and weighted average number of equity and potential equity shares outstanding
during the year including share options, convertible preference shares and debentures, except
where the result would be anti-dilutive. Potential equity shares that are converted during the
year are included in the calculation of diluted earnings per share, from the beginning of the year
or date of issuance of such potential equity shares, to the date of conversion.
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