and rewards of ownership pass to the customer and
the Company has the present right to payment, all
of which occurs at a point in time upon shipment or
delivery of the product.

The Company considers the terms of the contract
in determining the transaction price. The transaction
price is based upon the amount the Company
expects to be entitled to in exchange for transferring
of promised goods and services to the customer.
Transaction price excludes taxes and duties collected
on behalf of the government. Invoices are issued
according to contractual terms and are usually payable
as per the credit period agreed with the customer.

3.3.2 Construction contracts:

The Company enters into engineering, procurement
and construction contracts (‘EPC’) which are
fixed price contracts or variable price contracts.
Revenue is recognized from engineering, procurement
and construction contracts (‘EPC’) over the period of
time, as performance obligations are satisfied over
time due to continuous transfer of control to the
customer. EPC contracts are generally accounted
for as a single performance obligation as it involves
complex integration of goods and services.

The revenue is recognised to the extent of transaction
price allocated to the performance obligation satisfied.
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. Transaction price does not include any
significant financing component.

Costs to obtain a contract which are incurred
regardless of whether the contract was obtained are
charged-off in profit or 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.

The performance obligations are satisfied over time
as the work progresses. The Company recognises
revenue using input method (i.e percentage-of-
completion method), based primarily on contract
cost incurred to date compared to total estimated
contract costs. Changes to total estimated contract

costs, if any, are recognised in the period in which
they are determined as assessed at the contract
level. If the consideration in the contract includes
price variation clause or there are amendments in
contracts, the Company estimates the amount of
consideration to which it will be entitled in exchange
for work performed.

Due to the nature of work required to be performed on
many of the performance obligations, the estimation
of total revenue and cost at completion is complex,
subject to many variables and requires significant
judgement. Variability in the transaction price arises
primarily due to liquidated damages, price variation
clauses, changes in scope, incentives, discounts,
if any and claims for cost-overrun arising from
customer caused delays, suspension of projects,
which are various stages of negotiation, discussions,
arbitration, litigation with the customer. The Company
considers its experience with similar transactions and
expectations regarding the contract in estimating
the amount of variable consideration to which it will
be entitled and determining whether the estimated
variable consideration should be constrained.

The Company includes estimated amounts of claims
and variable consideration in the transaction price
when its recovery is assessed to be highly probable
that a significant reversal of cumulative revenue
recognised will not occur when the uncertainty
associated with the variable consideration is resolved.
The estimates of variable consideration and claims
are based largely on an assessment of anticipated
performance and all information (historical, current
and forecasted) that is reasonably available.
To make this assessment, management considers
the following factors, wherever considered necessary
- contractual tenability of the claims/variations,
status of the discussions/negotiations with the
customers, management expert’s assessment, legal
opinion, results of arbitration, Dispute Adjudication
Board (DAB) etc.

Progress billings are generally issued upon completion
of certain phases of the work as stipulated in the
contract. Billing terms of the over-time contracts
vary but are generally based on achieving specified
milestones. The difference between the timing of
revenue recognised and customer billings result in
changes to contract assets and contract liabilities.
Contractual retention amounts billed to customers are
generally due upon expiration of the contract period.

The contracts generally result in revenue recognised
in excess of billings which are presented as contract
assets on the statement of financial position.
Amounts billed and due from customers are classified
as trade receivables in the balance sheet when right to
consideration is unconditional and only the passage of
time is required before payment of the consideration
is due. The portion of the payments retained by
the customer until final contract settlement is not
considered a significant financing component since it
is usually intended to provide customer with a form
of security for Company’s remaining performance as
specified under the contract, which is consistent with
the industry practice.

Contract liabilities represent amounts billed to
customers in excess of revenue recognised till date.
A liability is recognised for advance payments, and it
is not considered as a significant financing component
since it is used to meet working capital requirements
at the time of project mobilization stage. The same
is presented as contract liability in the balance sheet.
Contract assets and liabilities are reported in a net
position on a contract-by-contract basis at the end of
each reporting period.

Estimates of revenues, costs or extent of progress
toward completion are revised if circumstances
change. Any resulting increases or decreases in
estimated revenues or costs are reflected in profit or
loss in the period in which the circumstances that give
rise to the revision become known to management.

For construction contracts the control is transferred
over time and revenue is recognised based on
the extent of progress towards completion of
the performance obligations. When it is probable
that total contract costs will exceed total contract
revenue, the expected loss is recognised as an
expense immediately.

3.3.3 Sale of services:

Services rendered include tower testing and designing,
operating and maintenance and other services.

Revenue from providing services is recognised in the
accounting period in which the services are rendered.

I nvoices are issued according to contractual terms
and are usually payable as per the credit period
agreed with the customer. The Company assesses
whether it is acting as a principal or an agent under
the arrangement with customers and accordingly
revenue is recognized.

3.3.4 Other Operating Revenue:

Export benefits under Duty Drawback benefits and
Remission of Duties and Taxes on Export Products
Scheme (RoDTEP) are accounted as other operating
revenue on accrual basis as and when export of goods
take place, where there is a reasonable assurance
that the benefit will be received and the Company will
comply with all the attached conditions.

3.4 Foreign currency transactions

Items included in the standalone financial statements
of the Company are measured using the currency of the
primary economic environment in which the entity operates
(functional currency). For each branch and jointly controlled
operation situated outside India, the Company determines
the functional currency and items included in the financial
statements of each entity are measured using that functional
currency of that respective branch and jointly controlled
operation. The functional and presentation currency of the
Company is Indian Rupees (INR). The financial statements
are presented in Indian rupees (INR).

3.4.1 Accounting for transactions and balances in
foreign currencies

Foreign currency transactions are recorded in the
functional currency using the exchange rates at the
dates of the transactions. Foreign exchange gain
and losses resulting from the settlement of such
transactions and from translation of monetary assets
and liabilities denominated in foreign currency at the
year-end exchange rate are generally recognised in
profit or loss.

Non-monetary items that are measured in terms
of historical cost in foreign currencies are not
retranslated at year end.

I n case of consideration paid or received in advance
for foreign currency denominated contracts, the
related expense or income is recognised using the
rate on the date of transaction on initial recognition of
a related asset or liability.

Exchange differences on settlement or translation
of monetary items are recognised in the Statement
of Profit and Loss in the period in which they arise.
except for exchange differences on transactions
entered into in order to hedge certain foreign
currency risks (see Note 3.22 below for hedging
accounting policies);

3.4.2 Translation of foreign operations whose functional
currency is other than presentation currency:

1. Assets and liabilities, both monetary and non¬
monetary are translated at the rates prevailing at
the end of each reporting period and all resulting
exchange differences are accumulated in the
exchange differences on translation of foreign
operations in the statement of changes in equity.

2. Income and expense items are translated at the
exchange rates at the dates of the transactions
and all resulting exchange differences are
accumulated in the exchange differences on
translation of foreign operations in the statement
of changes in equity.

On the disposal of a foreign operation all of the
exchange differences accumulated in other
comprehensive income relating to that particular
foreign operation attributable to the owners of
the Company is reclassified in the statement of
profit and loss.

3.5 Interests in Jointly Controlled Operations (Refer
Note 49 )

A jointly controlled operation is a joint arrangement whereby
the parties that have joint control of the arrangement have
rights to the assets, and obligations for the liabilities,
relating to the arrangement. Joint control is the contractually
agreed sharing of control of an arrangement, which exists
only when decisions about the relevant activities require
unanimous consent of the parties sharing control.

When a Company undertakes its activities under jointly
controlled operations, the Company as a joint operator
recognises in relation to its interest in a jointly controlled
operation the assets, liabilities, revenues, and expenses
relating to its interest in a jointly controlled operation in
accordance with the applicable Ind AS.

When a Company transacts with a jointly controlled
operation in which a Company is a joint operator (such as a
sale or contribution of assets), the Company is considered
to be conducting the transaction with the other parties
to the jointly controlled operation, and gains and losses
resulting from the transactions are recognised in the
Company’s financial statements only to the extent of other
parties’ interests in the jointly controlled operation.

When a Company transacts with a jointly controlled
operation in which a Company is a joint operator (such as
a purchase of assets), the Company does not recognise its
share of the gains and losses until it resells those assets
to a third party.

3.6 Impairment of investments in subsidiaries

Investment in subsidiaries are carried at cost and are
tested for Impairment in accordance with Ind AS 36,
‘Impairment of assets’. The carrying amount of investment
is tested for impairment as a single asset by comparing
its recoverable amount with its carrying amount, any
impairment loss recognised reduces the carrying amount
of investment and is recognised in the Statement of Profit
and Loss. Investment in subsidiaries impaired in prior
years is reviewed at each balance sheet date to determine
whether there is any indication of a reversal of impairment
loss recognized in prior years.

3.7 Impairment of financial assets

The Company recognizes loss allowances on a
forward-looking basis using the expected credit loss
(ECL) model for all the financial assets except for trade
receivables and contract assets. Loss allowance for all
financial assets is measured at an amount equal to lifetime
ECL. The Company recognises impairment loss on trade
receivables and contract assets using expected credit loss
model which involves use of a provision matrix constructed
on the basis of historical credit loss experience and adjusted
for forward-looking information as permitted under Ind AS
109. The expected credit loss is based on the ageing of the
days, the receivables due and the expected credit loss rate.
In addition, in case of event driven situation as litigations,
disputes, change in customer’s credit risk history, specific
provisions are made after evaluating the relevant facts and
expected recovery. The amount of expected credit losses
(or reversal) that is required to adjust the loss allowance at
the reporting date is recognized as an impairment gain or
loss in the Statement of Profit and Loss.

3.8 Leasing
As a lessee:

The Company assesses whether a contract is or contains
a lease, at inception of the contract. That is, if the contract
conveys the right to control the use of an identified asset
for a period of time in exchange for consideration.

The Company applies a single recognition and measurement
approach for all leases, except for short-term leases having
lease term of 12 months or less and leases of low-value
assets. The Company recognises lease liabilities to make
lease payments and right-of-use assets representing the
right to use the underlying assets.

Lease Liabilities:

At the commencement date of the lease, the Company
recognises lease liabilities measured at the present
value of lease payments to be made over the lease

term. and includes the net present value of the following
lease payments:

• Lease payments less any lease incentives receivable

• Variable lease payments that are based on an
index or a rate

• Amounts expected to be payable by the Company
under residual value guarantees, if any

• Exercise price of the purchase option, if the Company
is reasonably certain to exercise that option, and

• Payments of penalties for terminating the lease, if the
lease term reflects the Company exercising that option.

The lease payments are discounted using Company’s
incremental borrowing rate (since the interest rate
implicit in the lease cannot be readily determined).
Incremental borrowing rate is the rate of interest that the
Company would have to pay to borrow over a similar term,
and a similar security, the funds necessary to obtain an
asset of a similar value to the right-of-use asset in a similar
economic environment.

Variable lease payments that depend on any key variable
/ condition, are recognised in profit or loss in the period in
which the condition that triggers those payments occurs.

In case of sale and leaseback transactions, the Company
first considers whether the initial transfer of the underlying
asset to the buyer-lessor is a sale by applying the
requirements of Ind AS 115. If the transfer qualifies as a
sale and the transaction is at market terms, the Company
effectively derecognises the asset, recognises a ROU asset
and corresponding lease liability.

When the lease liability is remeasured, the corresponding
adjustment is reflected in the right-of-use asset or
Statement of profit and loss, as the case may be.

Right-of-use assets

The Company recognises right-of-use assets at the
commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are
measured at cost, less any accumulated depreciation and
impairment losses, and adjusted for any remeasurement
of lease liabilities. The cost of right-of-use assets
includes the following:

• The amount of the initial measurement of lease liability

• Any lease payments made at or before the
commencement date less any lease incentives received

• Any initial direct costs and

• Restoration costs.

Right-of-use assets are depreciated over the lease term on
a straight-line basis.

Short-term leases and leases of low-value assets

Payments associated with short-term leases of plant and
equipment, buildings and all leases of low-value assets are
recognised on a straight-line basis as an expense in profit
or loss. Short-term leases are leases with lease term of 12
months or less.

As a lessor:

Lease income from operating leases where the Company
is a lessor is recognised in income on a straight-line basis
over the lease term.

3.9 Borrowing costs

Borrowing costs include finance costs calculated using
the effective interest method in respect of assets acquired
on lease and exchange differences arising on foreign
currency borrowings, to the extent they are regarded as an
adjustment to finance costs.

Finance expenses are recognised immediately in the
Statement of Profit and Loss, unless they are directly
attributable to qualifying assets, which are assets that
necessarily take a substantial period of time to get ready for
their intended use or sale in which case they are capitalised
until such time as the assets are substantially ready for their
intended use or sale.

All other borrowing costs are recognised in the Statement
of Profit and Loss in the period in which they are incurred.

3.10 Employee benefits

3.10.1 Post Employment Benefits:

(a) Defined Contribution Plans:

Payments to defined contribution retirement
benefit scheme for eligible employees in the
form of superannuation fund and provident fund
are recognised as expense when employees
have rendered services entitling them to the
contributions. The Company has no further
payment obligation once the contributions have
been paid. The contributions are accounted for as
defined contribution plans and the contributions
are recognised as employee benefit expenses
when they are incurred.

(b) Defined Benefit Plans:

The Company has established ‘KEC International
Limited Provident Fund’ in respect of employees
other than factory workers, to which both the

employee and the employer make contribution
equal to 12% of the employee’s basic salary.
The Company’s contribution to the provident
fund for all employees are charged to the
Statement of Profit and Loss. In case of any
liability arising due to shortfall between the
return from its investments and the administered
interest rate, the same is required to be provided
for by the Company.

The defined benefit plan of Company and
its jointly controlled operations at India i.e.
gratuity plan, provides for lump sum payment
to vested employees on retirement / separation
of an amount equivalent to 15 days salary for
completed years of service and on death while
in employment an amount equivalent to 15
days salary for anticipated years of service in
terms of Gratuity scheme of the Company or as
per payment of the Gratuity Act, whichever is
higher. Vesting occurs upon completion of five
years of service.

In case of jointly controlled operation at
Al-Sharif Group and KEC Ltd Company and
Saudi Arabia (Al Sharif JV), the defined benefit
plan i.e. End Service Benefit (ESB), provides
for lump sum payment to vested employees
on resignation/ termination or retirement based
on an amount equivalent to 15 days salary up
to 5 years and one month salary from 6th year
onwards for each completed year of service or
part thereof on proportionate basis according to
the law applicable in Saudi. Vesting occurs upon
completion of two years of service.

The cost of providing benefits is determined
using the projected unit credit method, with
actuarial valuations being carried out at the end
of each annual reporting period.

3.10.2 Long-term employee benefit:

Compensated absences:

Company has liabilities for earned leave that are
not expected to be settled wholly within 12 months
after the end of the period in which the employees
render the related service. These obligations are
therefore measured as the present value of expected
future payments to be made in respect of services
provided by employees up to the end of the reporting
period using the projected unit credit method.
The benefits are discounted using the appropriate
market yields at the end of the reporting period that

have terms approximating to the terms of the related
obligation. Remeasurements as a result of experience
adjustments and changes in actuarial assumptions
are recognised in profit or loss.

The Obligations are presented as either current
or non-current liabilities on the balance sheet,
depending on whether the entity has an unconditional
right to defer settlement for at least twelve months
after the reporting period. If the entity lacks this
unconditional right, regardless of when settlement
is expected to occur, the obligations are classified
as current liabilities. Conversely, if there exists an
unconditional right to defer settlement for more
than twelve months after the reporting period, the
obligations are presented as non-current liabilities on
the balance sheet.

3.10.3 Short-term employee benefit:

Short term employee benefits such as salaries,
wages, short term compensated absences, bonus,
ex gratia and performance linked rewards including
non-monetary benefits that are expected to be settled
wholly within 12 months after the end of period in
which the employees rendered the related services
are recognised in respect of employee services up
to the end of reporting period and are measured at
the amounts expected to be paid when the liabilities
are settled. The liabilities are presented as current
employee benefits obligations in the balance sheet.

Liabilities recognised in respect of short-term
employee benefits are measured at the undiscounted
amount of the benefits expected to be paid in
exchange for the related service.

3.11 Taxation

The income tax expense or credit for the period is the tax
payable on the current period’s taxable income based on
the applicable income tax rate for each jurisdiction adjusted
by changes in deferred tax assets and liabilities attributable
to temporary differences and to unused tax losses.

3.11.1 Current tax

The Company’s current tax is calculated using
tax rates that have been enacted or substantively
enacted by the end of the reporting period in the
countries where the Company, its branches and
jointly controlled operations operate and generate
taxable income.

Management periodically evaluates positions taken
in tax returns with respect to situations in which

applicable tax regulations is subject to interpretations.
It establishes provisions, where appropriate, on
the basis of amounts expected to be paid to the
tax authorities.

The Organisation for Economic Co-operation and
Development (OECD) has published the model rules for
global minimum tax (Pillar Two model rules). Pillar Two
legislation has been enacted, or substantively enacted,
in certain jurisdictions where the Company operates.
The Company is within the scope of the OECD Pillar
Two model rules and has evaluated the potential
exposure to global minimum tax. The Company
does not expect any material financial impact for the
current period except UAE in which, the Company
has recognized current tax expense based on Global
Anti-Base Erosion Rules(GloBE) computations.
The evaluation of the potential exposure is based
on the most recent country-by-country reporting,
and financial statements for the constituent entities
within the Company.

3.11.2 Deferred tax

Deferred tax is recognised on temporary differences
between the carrying amounts of assets and liabilities
in the financial statements and the corresponding
tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all
taxable temporary differences. Deferred tax assets
are generally recognised for all deductible temporary
differences to the extent that it is probable that taxable
profits will be available against which those deductible
temporary differences can be utilised. Such deferred
tax assets and liabilities are not recognised if the
temporary difference arises from the initial recognition
(other than in a business combination) of assets and
liabilities in a transaction that affects neither the
taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable
temporary differences associated with interests in
jointly controlled operations and foreign branches
except where it is probable that the temporary
difference will not reverse in the foreseeable future.
Deferred tax assets arising from deductible temporary
differences associated with such interests are only
recognised to the extent that it is probable that there
will be sufficient taxable profits against which to utilise
the benefits of the temporary differences, and they are
expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed
at the end of each reporting period and reduced to

the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of
the asset to be recovered.

Deferred tax liabilities and assets are measured at
the tax rates that are expected to apply in the period
in which the liability is settled or the asset realised,
based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the
reporting period.

The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from
the manner in which the Company expects, at the
end of the reporting period, to recover or settle the
carrying amount of its assets and liabilities.

Deferred tax assets are not recognised for temporary
differences between the carrying amount and tax
bases of investments in subsidiaries, branches and
associates and interest in joint arrangements where
it is not probable that the differences will reverse in
the foreseeable future and taxable profit will not be
available against which the temporary differences
can be utilised.

Deferred tax assets and liabilities are offset when there
is legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances
relate to the same taxation authority. Current tax
assets and liabilities are offset when entity has legally
enforceable right to offset and intends either to settle
on a net basis, or to realise the asset and settle the
liability simultaneously.

Deferred tax assets are recognised for all deductible
temporary differences, unused tax losses and
credits only if, it is probable that future taxable
amounts will be available to utilise those temporary
differences and losses.

3.11.3 Current and deferred tax for the year

Current and deferred tax are recognised in the
Statement of Profit and Loss, except when they relate
to items that are recognised in other comprehensive
income or directly in equity, in which case, the
current and deferred tax are also recognised
in other comprehensive income or directly in
equity respectively.

3.12 Property, plant and equipment

Property, plant and equipment (except freehold land) held

for use in the production or supply of goods or services,

or for administrative purposes, are stated in the balance
sheet 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. All other repairs and maintenance are charged to
Statement of profit and loss during the reporting period in
which they are incurred. Freehold land is not depreciated.

Depreciation is recognised so as to write off the cost of
assets (other than freehold land and properties under
construction) less their residual values over their useful
lives, using the straight-line method. The estimated useful
lives, residual values and depreciation method are reviewed
at the end of each reporting period, with the effect of any
changes in estimate accounted for on a prospective basis.

Depreciation on Property, Plant and Equipment has been
provided on the straight-line method as per the useful life
specified in Schedule II to the Companies Act, 2013, except
in the case of assets where the useful life was determined
based on technical advice. The estimate of the useful life
of the assets has been based on technical advice, taking
into account the nature of the asset, the estimated usage
of the asset, the operating conditions of the asset, past
history of replacement, anticipated technological changes,
etc. The estimated useful life of these Property, Plant and
Equipment is mentioned below:

An item of property, plant and equipment is derecognised
upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset.
Any gain or loss arising on the disposal or retirement of
an item of property, plant and equipment is determined as
the difference between the sales proceeds and the carrying
amount of the asset and is recognised in the Statement of
Profit and Loss.

Investment properties:

Investments in freehold land which are held to earn rentals
and/or for capital appreciation are classified as investment
properties. Investment properties are initially measured
at cost, including transaction costs. Subsequent to initial
recognition, investment properties are stated at cost, net
of accumulated depreciation and accumulated impairment
losses, if any.

The cost comprises purchase price and directly attributable
cost of bringing the investment property to its working
condition capable for the intended use. Freehold land
considered as investment property by the Company is
not depreciated.

Investment properties are derecognised either when they
have been disposed of or when they are permanently
withdrawn from use and no future economic benefit is
expected from their disposal. On disposal of an investment
property, the difference between its carrying amount and
net disposal proceeds is recognised in the statement of
profit and loss.

Capital work-in-progress

Capital work-in-progress comprises the cost of assets that
are not yet ready for their intended use at the year end and
are stated at historical cost and impairment, if any.

$.13 Intangible assets

3.13.1 Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired
separately are carried at cost less accumulated
amortisation and accumulated impairment losses,
if any. Amortisation is recognised on a straight-line
basis over their estimated useful lives. The estimated
useful life and amortisation method are reviewed at
the end of each reporting period, with the effect of
any changes in estimate being accounted for on a
prospective basis.

3.13.2 Intangible assets acquired in a business
combination

Intangible assets acquired in a business combination
are initially recognised at their fair value at the
acquisition date (which is regarded as their cost).

Subsequent to initial recognition, intangible assets
acquired in a business combination are reported at
cost less accumulated amortisation and accumulated
impairment losses, if any on the same basis as
intangible assets that are acquired separately.

3.13.3 Research and development costs

Research expenditure and development expenditure
that do not meet the criteria mentioned in Ind AS
38 are recognised as an expense as incurred.
Development costs previously recognised as
an expense are not recognised as an asset in a
subsequent period.

3.13.4 Derecognition of intangible assets

An intangible asset is derecognised on disposal, or
when no future economic benefits are expected
from use or disposal. Gains or losses arising from
derecognition of an intangible asset, measured as
the difference between the net disposal proceeds
and the carrying amount of the asset are recognised
in the Statement of Profit and Loss when the asset
is derecognised.

3.13.5 Useful lives of intangible assets

Brand in respect of the power transmission business
acquired under the High Court approved Composite
Scheme of Arrangement in an earlier year is amortised
by the Company in terms of the said Scheme over
its useful life, which based on an expert opinion is
estimated to be 20 years. Non-compete fees paid
on acquisition of Spur Infrastructure Private Limited
are amortized on straight line basis over the term of
non-compete agreement i.e. 3 years.

Computer Software are amortised on straight
line basis over the estimated useful life ranging
between 4-6 years.

3.14 Impairment of Non-current assets

At the end of each reporting period, the Company
reviews the carrying amounts of its Property, plant and
equipment, intangible and other non-current assets to
determine whether there is any indication that those assets
have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated
in order to determine the extent of the impairment loss (if
any). When it is not possible to estimate the recoverable
amount of an individual asset, the Company estimates the
recoverable amount of the cash-generating unit to which
the asset belongs.

Recoverable amount is the higher of fair value less costs to
sell and value in use.

If the recoverable amount of an asset (or cash-generating
unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (or cash-generating unit) is

reduced to its recoverable amount. An impairment loss is
recognised immediately in the Statement of Profit and Loss.

When an impairment loss subsequently reverses, the
carrying amount of the asset (or a 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 been recognised for
the asset (or cash-generating unit) in prior years. A reversal
of an impairment loss is recognised immediately in the
Statement of Profit and Loss.

3.15 Investments

Investment in equity shares of subsidiaries are
measured at cost.

Investments in equity instruments are measured at fair
value through other comprehensive income.

The Company classifies its financial assets in the
measurement categories as those to be measured
subsequently at fair value (through other comprehensive
income or through profit and loss) and those measured
at amortised cost. The classification depends on the
Company’s business model for managing the financial
asset and the contractual terms of the cash flows.

Investment in preference shares of subsidiaries are
classified as equity since the Company has the option
of early conversion with fixed ratio and also there is no
requirement for mandatory dividend payment.

3.16 Inventories

Inventories (Raw material, work-in-progress, finished
goods, stores and spares) are stated at the lower of cost
and net realisable value. Cost of inventory is determined on
a weighted average basis. Net realisable value represents
the estimated selling price for inventories less all estimated
costs of completion and costs necessary to make the sale.
Scrap is valued at net realisable value.

Cost of work-in-progress and finished goods includes
material cost, labour cost, and manufacturing overheads
absorbed on the basis of normal capacity of production.