(a) Statement of compliance
The Company's financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 and the Indian
Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015 and amendments thereto
issued by Ministry of Corporate Affairs under section 133 of the Companies Act, 2013. In addition, the guidance notes/announcements
issued by the Institute of Chartered Accountants of India (ICAI) are also applied except where compliance with other statutory
promulgations require a different treatment. These financials statements have been approved for issue by the Board of Directors at its
meeting held on May 5, 2026.
(b) Basis of accounting
The Company maintains its accounts on accrual and going concern basis following historical cost convention, except for certain assets
and liabilities that are measured at fair value in accordance with Ind AS.
Fair value measurements are categorised as below based on the degree to which the inputs to the fair value measurements are
observable and the significance of the inputs to the fair value measurement in its entirety:
• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at
measurement date;
• Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the assets or liabilities, either directly
or indirectly;and
• Level 3 inputs are unobservable inputs for the valuation of assets or liabilities.
Above levels of fair value hierarchy are applied consistently and generally, there are no transfers between the levels of the fair value
hierarchy unless the circumstances change warranting such transfer.
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
(c) Presentation of financial statements
The Balance Sheet, the Statement of Profit and Loss and the Statement of Changes in Equity are prepared and presented in the format
prescribed in the Schedule III to the Companies Act, 2013 (the Act). The Statement of Cash Flows has been prepared and presented in
accordance with Ind AS 7 "Statement of Cash Flows". The disclosures with respect to items in the Balance Sheet and Statement of Profit
and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of the financial statements along with
the other notes required to be disclosed under Ind AS and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
as amended.
Amounts in the financial statements are presented in Indian Rupee in crore [1 crore = 10 million] rounded off to two decimal places as
permitted by Schedule III to the Act. Per share data are presented in Indian Rupee up to two decimals places.
(d) Operating cycle for current and non-current classification
Operating cycle for the business activities of the Company covers the duration of the specific project or contract or product line or
service including the defect liability period wherever applicable and extends up to the realisation of receivables (including retention
monies) within the agreed credit period normally applicable to the respective lines of business. Accordingly, assets and liabilities related
to specific projects or contracts are classified as current, based on its operating cycle. Assets and liabilities other than those relating to
specific project or contract or product line or service are classified as current if it is expected to realise or settle within 12 months after
the balance sheet date.
(e) Revenue recognition
Revenue from contracts with customers is recognised when a performance obligation is satisfied by transfer of promised goods or
services to customer.
For performance obligation satisfied over time, the revenue recognition is done using input method by measuring the progress towards
complete satisfaction of performance obligation. The progress is measured in terms of a proportion of actual cost incurred to-date,
to the total estimated cost attributable to the performance obligation as it best depicts the transfer of control that occurs as costs are
incurred.
The Company transfers control of a good or service over time and therefore satisfies a performance obligation and recognises revenue
over a period of time if one of the following criteria is met:
(a) the customer simultaneously consumes the benefit of the Company's performance or
(b) the customer controls the asset as it is being created/ enhanced by the Company's performance or
(c) there is no alternative use of the asset and the Company has either explicit or implicit right of payment considering legal
precedents,
In all other cases, performance obligation is considered as satisfied at a point in time.
(i) Revenue from operations
A. Revenue from sale of manufactured and traded goods including contracts for supply/commissioning of complex plant and
equipment is recognised as follows:
Revenue is recognised when the control of the same is transferred to the customer and it is probable that the Company will
collect the consideration to which it is entitled for the exchanged goods. Revenue from commissioning of complex plant and
equipment is recognised either 'over time' or 'in time' based on an assessment of the transfer of control as per the terms of
the contract.
B. Revenue from construction/project related activity is recognised as follows:
• Cost plus contracts: Revenue from cost plus contracts is recognised over time and is determined with reference to the
extent performance obligations have been satisfied. The amount of transaction price allocated to the performance
obligations satisfied represents the recoverable costs incurred during the period plus the margin as agreed with the
customer.
• Fixed price contracts: Contract revenue is recognised over time to the extent of performance obligation satisfied and
control is transferred to the customer. 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. With
respect to contracts, where the outcome of the performance obligation cannot be reasonably measured, but the costs
incurred towards satisfaction of performance obligation are expected to be recovered, the revenue is recognised only to
the extent of costs incurred.
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.
The Company includes variable consideration (including estimates amounts of claims) as part of transaction price when there
is a basis to reasonably estimate the amount of the variable consideration and when its recovery is highly probable and that
a significant reversal of cumulative revenue recognised will not occur when the uncertainty associated with the variable
consideration is resolved.
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 the financing component, if significant,
is separated from the transaction price and accounted as interest income.
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 and costs incurred to
fulfil a contract which are expected to be recovered are amortised over the period of execution of the contract in proportion to
the progress measured in terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable to the
performance obligation
Significant judgments are used in:
a. Determining the revenue to be recognised in case of performance obligation satisfied over a period of time; revenue
recognition is done by measuring the progress towards complete satisfaction of performance obligation
b. In estimation of total revenue and cost at completion considering the nature of work required to be performed on many
of the performance obligation are complex and are subject to many variables
c. Determining the expected losses, which are recognised in the period in which such losses become probable based on the
expected total contract cost as at the reporting date.
d. Determining the method to be applied to arrive at the variable consideration including variations and claims requiring
an adjustment to the transaction price. Variable consideration is recognised when the recovery of such consideration is
highly probable. The recognition and estimates of variable consideration including claims are based on Management's
assessment of contractual tenability of the claims/variations, discussions/negotiations with the customers, and legal
opinion where required.
Due to the nature of business of the Company, determining the revenue, measurement of progress, expected losses as
mentioned above, is subject to many variables and requires significant judgement. Variability in the transaction price arises
primarily due to price variation clauses, liquidated damages, changes in scope, claims etc which could be at various stages of
negotiation, discussions, litigation with the customer. Apart from other factors, Company also considers its experience with
similar transactions and expectations while recognising and estimating the amount of variable consideration to be considered.
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 "Excess of billing over
revenue". Amounts received before the related work is performed are disclosed in the Balance Sheet as contract liability and
termed as "Advances from customer". The amounts billed on customer for work performed and are unconditionally due for
payment i.e. only passage of time is required before payment falls due, are disclosed in the Balance Sheet as trade receivables.
The amount of retention money held by the customers pending completion of performance milestone is disclosed as part of
contract asset and is reclassified as trade receivables when it becomes due for payment.
The Company recognises impairment loss (termed as provision for expected credit loss 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.
C. Revenue from property development activities is recognised when performance obligation is satisfied, customer obtains control
of the property transferred and a reasonable expectation of collection of the sale consideration from the customer exists.
D. Revenue from rendering of services is recognised over time as the customer receives the benefit of the Company's performance
and the Company has an enforceable right to payment for services transferred
E. Revenue from contracts for rendering of engineering design services and other services which are directly related to the
construction of an asset is recognised on the same basis as stated in (B) above.
F. Commission income is recognised as the terms of the contract are fulfilled.
G. Course fees/subscription income is recognised over time as per the course/subscription duration and agreed terms.
H. 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 as per the terms of the contract
(ii) Other income
A. Interest income on investments and loans is accrued on a time basis by reference to the principal outstanding and the
effective interest rate including interest on investments classified as fair value through profit or loss or fair value through other
comprehensive income. Interest receivable on customer dues is recognised as income in the Statement of Profit and Loss on
accrual basis provided there is no uncertainty of realisation.
B. Dividend income is accounted in the period in which the right to receive the same is established
C. Government grants, which are revenue in nature and are towards compensation for the qualifying costs incurred by the
Company, are recognised as other income/reduced from underlying expenses in profit or loss in the period in which such
costs are incurred. Government grants related to an asset are reduced from the cost of an asset until the asset is ready to use
and the grant post that is presented as deferred income. Subsequently the grant is recognised as income in profit or loss on a
systematic basis over the expected useful life of the related asset. Government grant receivable in the form of duty credit scrips
is recognised as other income in the Statement of Profit and Loss in the period in which the export is done or the application is
made to the government authorities and to the extent there is no uncertainty towards its receipt
D. Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic
benefits will flow to the Company and the amount of income can be measured reliably.
(f) Exceptional items
An item of income or expense which by its size, nature and incidence requires disclosure in order to improve an understanding of the
performance of the Company is treated as an exceptional item and disclosed as such in the financial statements.
(g) Property, plant and equipment (PPE)
PPE is recognised 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. PPE is stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation and
cumulative impairment, if any. All directly attributable costs related to the acquisition of PPE and borrowing costs in case of qualifying
assets are capitalised in accordance with the Company's accounting policy.
Own manufactured PPE is capitalised at cost including an appropriate share of overheads. All direct cost that are specifically attributable
to construction or acquisition of PPE or bringing the PPE to working condition are allocated and capitalised as a part of the cost of the
PPE
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 can be measured reliably.
PPE not ready for the intended use on the date of the Balance Sheet are disclosed as "capital work-in-progress". (Also refer to the
policies on leases, borrowing costs, impairment of assets and foreign currency transactions below).
Depreciation is recognised using straight-line method so as to write off the cost of the assets (other than freehold land and capital
work-in-progress) less their residual values over their useful lives specified in Schedule II to the Companies Act, 2013, or in the case of
assets where the useful life was determined by technical evaluation, over the useful life so determined.
Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised carrying amount of the asset is
allocated over its remaining useful life
Depreciation method is reviewed at each financial year end to reflect the expected pattern of consumption of the future economic
benefits embodied in the asset. The estimated useful life and residual values are also reviewed at each financial year end and the effect
of any change in the estimates of useful life/residual value is accounted on prospective basis.
Where cost of a part of the asset ("asset component") is significant to total cost of the asset and useful life of that part is different
from the useful life of the remaining asset then useful life of that significant part is determined separately and such asset component is
depreciated over its separate useful life
Depreciation on additions to/deductions from, owned assets is calculated pro rata from the period of put to use.
PPE is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on
derecognition is recognised in the Statement of Profit and Loss in the same period.
(h) Investment property
Properties, including those under construction, held to earn rentals and/or capital appreciation are classified as investment property and
are measured and reported at cost, including transaction costs and borrowing cost capitalised for qualifying assets, in accordance with
the Company's accounting policy. Policies with respect to depreciation, useful life and derecognition are followed on the same basis as
stated for Property, Plant and Equipment vide Note 1(ii)(g) above
(i) Intangible assets
Intangible assets are recognised when it is probable that the 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 stated at original cost net of tax/duty credits availed, if
any, less accumulated amortisation and cumulative impairment. All directly attributable costs and other administrative and other general
overhead expenses that are specifically attributable to acquisition of intangible assets are allocated and capitalised as a part of the cost
of the intangible assets.
Research and development expenditure on new products:
(i) Expenditure on research is expensed under respective heads of account in the period in which it is incurred.
(ii) Development expenditure on new products is capitalised as intangible asset, if all of the following can be demonstrated:
A. the technical feasibility of completing the intangible asset so that it will be available for use or sale;
B. the Company has intention to complete the intangible asset and use or sell it;
C. the Company has ability to use or sell the intangible asset;
D. the manner in which the probable future economic benefits will be generated including the existence of a market for output
of the intangible asset or intangible asset itself or if it is to be used internally, the usefulness of intangible assets;
E. the availability of adequate technical, financial and other resources to complete the development and to use or sell the
intangible asset; and
F. the Company has ability to reliably measure the expenditure attributable to the intangible asset during its development.
Development expenditure that does not meet the above criteria is expensed in the period in which it is incurred.
Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as "intangible assets under
development
Intangible assets are amortised on straight-line basis over the estimated useful life. The method of amortisation and useful life are
reviewed at the end of each financial year and the effect of any changes in the estimate being accounted for on a prospective basis.
Amortisation on impaired assets is provided by adjusting the amortisation charge in the remaining periods so as to allocate the
asset's revised carrying amount over its remaining useful life.
(j) Impairment of assets
As at the end of each financial year, the carrying amounts of PPE, investment property, intangible assets and investments in subsidiary,
associate and joint venture companies are reviewed to determine whether there is any indication that those assets have suffered an
impairment loss. If such indication exists, PPE, investment property, intangible assets and investments in subsidiary, associate and joint
venture companies are tested for impairment so as to determine the impairment loss, if any. Goodwill is tested for impairment each year.
Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined:
(i) in the case of an individual asset, at the higher of the fair value less costs of disposal and the value-in-use; and
(ii) in the case of a cash generating unit (the smallest identifiable group of assets that generates independent cash flows), at the higher
of the cash generating unit's fair value less costs of disposal and the value-in-use.
(The amount of value-in-use is determined as the present value of estimated future cash flows from the continuing use of an asset,
which may vary based on the future performance of the Company and from its disposal at the end of its useful life. For this purpose, the
discount rate (post-tax) is determined based on the weighted average cost of capital of the company suitably adjusted for risks specified
to the estimated cash flows of the asset).
If recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, such deficit is recognised
immediately in the Statement of Profit and Loss as impairment loss and the carrying amount of the asset (or cash generating unit) is
reduced to its recoverable amount
When an impairment loss recognised earlier is subject to full or partial reversal, the carrying amount of the asset (or cash generating
unit), except impairment loss allocated to goodwill, is increased to the revised estimate of its recoverable amount, such that the
increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss is recognised
for the asset (or cash generating unit) in prior years. A reversal of an impairment loss (other than impairment loss allocated to goodwill)
is recognised immediately in the Statement of Profit and Loss.
(k) Employee Benefits
(i) Short term employee benefits:
Employee benefits such as salaries, wages, short term compensated absences, bonus, ex-gratia and performance-linked rewards
falling due wholly within twelve months of rendering the service are classified as short-term employee benefits and are expensed in
the period in which the employee renders the service
(ii) Post-employment benefits:
A. Defined contribution plans: The Company's superannuation scheme, state governed provident fund scheme, employee state
insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/payable under the
schemes is recognised during the period in which the employee renders the service.
B. Defined benefit plans: The employees' gratuity fund schemes and employee provident fund schemes managed by board of
trustees established by the Company, the post-retirement medical care plan and the company pension plan represent defined
benefit plans. The present value of the obligation under defined benefit plans is determined based on actuarial valuation using
the Projected Unit Credit Method.
The obligation towards defined benefit plans is measured at the present value of the estimated future cash flows using a discount
rate based on the market yield on government securities of a maturity period equivalent to the weighted average maturity profile of
the defined benefit obligations at the Balance Sheet date.
Re-measurement, comprising actuarial gains and losses, the return on plan assets (excluding amounts included in net interest
on the net defined benefit liability or asset) and any change in the effect of asset ceiling (if applicable) is recognised in other
comprehensive income and is reflected in retained earnings and the same is not eligible to be reclassified to profit or loss
Defined benefit costs comprising current service cost, past service cost and gains or losses on settlements are recognised in the
Statement of Profit and Loss as employee benefits expense. Interest cost implicit in defined benefit employee cost is recognised in
the Statement of Profit and Loss under finance costs. Gains or losses on settlement of any defined benefit plan are recognised when
the settlement occurs. Past service cost is recognised as expense at the earlier of the plan amendment or curtailment and when the
Company recognises related restructuring costs or termination benefits.
In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to
recognise the obligation on a net basis.
(iii) Other long-term employee benefits:
The obligation recognised in respect of other long-term benefits is measured at present value of estimated future cash flows
expected to be made by the Company and is recognised in a similar manner as in the case of defined benefit plans vide (ii)(B)
above.
Long-term employee benefit costs comprising current service cost and gains or losses on curtailments and settlements,
re-measurements including actuarial gains and losses are recognised in the Statement of Profit and Loss as employee benefits
expenses. Interest cost implicit in long-term employee benefit cost is recognised in the Statement of Profit and Loss under finance
costs.
(iv) Termination benefits:
Termination benefits such as compensation under employee separation schemes are recognised as expense when the Company's
offer of the termination benefit can no longer be withdrawn or when the Company recognises the related restructuring costs
whichever is earlier.
(l) Leases
Assets taken on lease are accounted as right-of-use assets and the corresponding lease liability is recognised at the lease commencement
date.
Initially the right-of-use asset is measured at cost which comprises the initial amount of the lease liability adjusted for any lease payments
made at or before the commencement date, 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, as reduced by any lease incentives received
The lease liability is initially measured at the present value of the lease payments, discounted using the Company's incremental borrowing
rate. It is remeasured when there is a change in future lease payments arising from a change in an index or a rate, or a change in the
estimate of the guaranteed residual value, or a change in the assessment of purchase, extension or termination option. When the lease
liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in
profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The right-of-use asset is measured by applying cost model i.e. right-of-use asset at cost less accumulated depreciation and cumulative
impairment, if any. The right-of-use asset is depreciated using the straight-line method from the commencement date to the end of the
lease term or useful life of the underlying asset whichever is earlier. Carrying amount of lease liability is increased by interest on lease
liability and reduced by lease payments made.
Lease payments associated with following leases are recognised as expense on straight-line basis:
(i) Low value leases; and
(ii) Leases which are short-term.
Assets given on lease are classified either as operating lease or as finance lease. A lease is classified as a finance lease if it transfers
substantially all the risks and rewards incidental to ownership of an underlying asset. Asset held under finance lease is initially recognised
in balance sheet and presented as a receivable at an amount equal to the net investment in the lease. Finance income is recognised over
the lease term, based on a pattern reflecting a constant periodic rate of return on Company's net investment in the lease. A lease which
is not classified as a finance lease is an operating lease.
The Company recognises lease payments in case of assets given on operating leases as income on a straight-line basis. The Company
presents underlying assets subject to operating lease in its balance sheet under the respective class of asset
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 lease liability) and recognises in Statement of Profit and Loss,
the gain or loss relating to the buyer-lessor's rights in the underlying asset (Also refer to policy on Property, Plant and Equipment vide
Note 1(ii)(g), above).
(m) Financial instruments
Financial assets and/or financial liabilities are recognised when the Company becomes party to a contract embodying the related financial
instruments. All financial assets, financial liabilities and financial guarantee contracts are initially measured at fair value except for trade
receivables not containing a significant financing component are initially measured at transaction price. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair
value through profit or loss) are added to or deducted from as the case may be, the fair value of such financial assets or liabilities, on
initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through
profit or loss are recognised in profit or loss.
In case of funding to subsidiary companies in the form of interest free or concession loans and preference shares, the excess of the
actual amount of the funding over initially measured fair value is accounted as an equity investment.
A financial asset and a financial liability is offset and presented on net basis in the balance sheet when there is a current legally
enforceable right to set-off the recognised amounts and it is intended to either settle on net basis or to realise the asset and settle the
liability simultaneously
(i) Financial assets:
A. All recognised financial assets are subsequently measured in their entirety either at amortised cost or at fair value as follows:
1. Investments in debt instruments that are designated as fair value through profit or loss (FVTPL) - at fair value. Debt
instruments at FVTPL is a residual category for debt instruments, if any, and all changes are recognised in profit or loss.
2. Investments in debt instruments that meet the following conditions are subsequently measured at amortised cost (unless
the same designated as fair value through profit or loss):
• The asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows;
and
• The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
3. Investment in debt instruments that meet the following conditions are subsequently measured at fair value through other
comprehensive income [FVTOCI] (unless the same are designated as fair value through profit or loss). Investment in debt
instruments that meet the following conditions are subsequently measured at fair value through other comprehensive
income [FVTOCI] (unless the same are designated as fair value through profit or loss)
• The asset is held within a business model whose objective is achieved both by collecting contractual cash flows and
selling financial assets; and
• The contractual terms of instrument give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
4. Investment in equity instruments issued by subsidiary, associate and joint venture companies are measured at cost less
impairment
5. Investment in preference shares of the subsidiary companies are treated as equity instruments if the same are either
convertible into equity shares or are redeemable out of the proceeds from a fresh issue of shares or from the profits of
the company. Investment in preference shares not meeting the aforesaid conditions are classified as debt instruments at
FVTPL.
6. Investments in equity instruments issued by other than subsidiaries are classified as at FVTPL, unless the related
instruments are not held for trading and the Company irrevocably elects on initial recognition to present subsequent
changes in fair value in Other Comprehensive Income
7. Trade receivables, security deposits, cash and cash equivalents, employee and other advances - at amortised cost.
B. For financial assets that are measured at FVTOCI, income by way of interest and dividend, provision for impairment and
exchange difference, if any, (on debt instrument) are recognised in profit or loss and changes in fair value (other than on
account of above income or expense) are recognised in other comprehensive income and accumulated in other equity. On
disposal of debt instruments at FVTOCI, the cumulative gain or loss previously accumulated in other equity is reclassified
to profit or loss. In case of equity instruments at FVTOCI, such cumulative gain or loss is not reclassified to profit or loss on
disposal of investments.
C. A financial asset is primarily derecognised when:
1. the right to receive cash flows from the asset has expired, or
2. the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the
received cash flows in full without material delay to a third party under a pass-through arrangement; and (a) the
Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred
nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
On derecognition of a financial asset in its entirety, the difference between the carrying amount at the date of
derecognition and the consideration received is recognised in profit or loss.
D. Impairment of financial assets: For trade receivable, the Company applies the simplified approach of Ind AS 109, which
requires measurement of loss allowance at an amount equal to lifetime expected credit losses. Impairment loss on trade
receivables is recognised using expected credit loss model, which involves use of a provision matrix constructed on the basis
of historical credit loss experience as permitted under Ind AS 109 and is adjusted for forward looking information. Impairment
loss on investments is recognised when the carrying amount exceeds its recoverable amount. For all other financial assets,
expected credit losses are recognised based on the difference between the contractual cashflows and all the expected cash
flows, discounted at the original effective interest rate. ECLs are measured at an amount equal to 12-month expected credit
losses or at an amount equal to lifetime expected credit losses if the credit risk on the financial asset has increased significantly
since initial recognition.
(ii) Financial liabilities:
A. Financial liabilities, including derivatives and embedded derivatives, which are designated for measurement at FVTPL are
subsequently measured at fair value. Financial guarantee contracts are subsequently measured at the amount of impairment
loss allowance or the amount recognised at inception net of cumulative amortisation, whichever is higher. All other financial
liabilities including loans and borrowings are measured at amortised cost using Effective Interest Rate (EIR) method.
B. A financial liability is derecognised when the related obligation expires or is discharged or cancelled.
(iii) The Company designates certain hedging instruments, such as derivatives, embedded derivatives and in respect of foreign currency
risk, certain non-derivatives, as either fair value hedges, cash flow hedges or hedges of net investments in foreign operations.
Hedges of foreign exchange risk on firm commitments are accounted as cash flow hedges.
A. Fair value hedges: Changes in fair value of the designated portion of derivatives that qualify as fair value hedges are
recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are
attributable to the hedged risk.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no
longer qualifies for hedge accounting.
B. Cash flow hedges: In case of forward contracts the forward element/foreign currency basis spread and the spot element are
separated and only the change in the value of the spot element is designated as hedging instrument. In case of options the
intrinsic value and time value are separated and only the change in intrinsic value is designated as hedging instrument.
Accounting of spot element/intrinsic value of options: The changes in the fair value of hedge instruments that are designated
and qualify as cash flow hedges is recognised in other comprehensive income and accumulated in equity as 'hedging reserve'.
Amounts previously recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss in
the periods when the hedged item affects profit or loss, in the same head as the hedged item.
Accounting of forward element/foreign currency basis spread/time value of options: The changes in fair value is recognised in other
comprehensive income and accumulated in equity as "cost of hedging reserve". For a transaction related hedged item, the amounts
accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same head
as the hedged item. For a time related hedged item, the time value on the date on which the hedged item affects profit or loss are
reclassified to profit or loss as a reclassification adjustment on a straight-line basis over the period of the hedging instrument.
The cash flow hedges are allocated to the forecast transactions on gross exposure basis. Where the hedged forecast transaction
results in the recognition of a non-financial asset, such gains/losses are transferred from hedge reserve (but not as reclassification
adjustment) and included in the initial measurement cost of the non-financial asset
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer
qualifies for hedge accounting. Any gain or loss recognised in other comprehensive income and accumulated in equity at that
time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast
transaction is no longer expected to occur, the gain or loss accumulated in equity is recognised in profit or loss.
(iv) Compound financial instruments issued by the Company which can be converted into fixed number of equity shares at the option
of the holders irrespective of changes in the fair value of the instrument are accounted by recognising the liability and the equity
components separately. The liability component is initially recognised at the fair value of a comparable liability that does not have
an equity conversion option. The equity component is initially recognised at the difference between the fair value of the compound
financial instrument as a whole and the fair value of the liability component. The directly attributable transaction costs are allocated
to the liability and the equity components in proportion to their initial carrying amounts. Subsequent to initial recognition, the
liability component of the compound financial instrument is measured at amortised cost using the effective interest method. The
equity component of a compound financial instrument is not remeasured subsequently.
(n) Inventories
Inventories are valued after providing for obsolescence, as under:
(i) Raw materials, components, construction materials, stores, spares and loose tools at lower of weighted average cost or net
realisable value. However, these items are considered to be realisable at cost if the finished products in which they will be used, are
expected to be sold at or above cost.
(ii) Manufacturing work-in-progress at lower of weighted average cost including related overheads or net realisable value. In some
cases, manufacturing work-in-progress are valued at lower of specifically identifiable cost or net realisable value. In the case of
qualifying assets, cost also includes applicable borrowing costs vide policy relating to borrowing costs.
(iii) Finished goods and stock-in-trade (in respect of goods acquired for trading) at lower of weighted average cost or net realisable
value. Cost includes costs of purchases, costs of conversion and other costs incurred in bringing the inventories to their present
location. Taxes which are subsequently recoverable from taxation authorities are not included in the cost.
(iv) Completed property/work-in-progress (including land) in respect of property development activity at lower of specifically identifiable
cost or net realisable value.
Assessment of net realisable value is made at each reporting period end and when the circumstances that previously caused inventories
to be written-down below cost no longer exist or when there is clear evidence of an increase in net realisable value because of changed
economic circumstances, the write-down, if any, in the past period is reversed to the extent of the original amount written-down so that
the resultant carrying amount is the lower of the cost and the revised net realisable value.
(o) Cash and bank balances
Cash and bank balances include fixed deposits, margin money deposits, earmarked balances with banks and other bank balances which
have restrictions on repatriation. Short-term and liquid investments being subject to more than insignificant risk of change in value, are
not included as part of cash and cash equivalents.
(p) Securities premium
(i) Securities premium includes:
A. The difference between the face value of the equity shares and the consideration received in respect of shares issued.
B. The fair value of the stock options which are treated as expense, if any, in respect of shares allotted pursuant to Stock Options
Scheme
(ii) The issue expenses of securities which qualify as equity instruments are written off against securities premium.
(q) Borrowing Costs
Borrowing costs include finance costs calculated using the effective interest method, finance charges 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.
In cases where hedging instruments are acquired for protection against exchange rate risk related to borrowings and are accounted
as hedging a time-period related hedge item, the borrowing costs also include the amortisation of premium element of the forward
contract and foreign currency basis spread as applicable, over the period of the hedging instrument
Borrowing costs net of any investment income from the temporary investment of related borrowings that are attributable to the
acquisition, construction or production of a qualifying asset are capitalised/inventorised as part of cost of such asset till such time the
asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready
for its intended use or sale. All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
(r) Share-based payment arrangements
The stock options granted to employees in terms of the Company's Stock Options Schemes, are measured at the fair value of the options
at the grant date. The fair value of the options is treated as discount and accounted as employee compensation cost over the vesting
period on a straight-line basis. The amount recognised as expense in each year is arrived at based on the number of grants expected to
vest. If a grant lapses after the vesting period, the cumulative discount recognised as expense in respect of such grant is transferred to
the general reserve within equity.
The fair value of the stock options granted to employees of the Company by the Company's subsidiaries is accounted as employee
compensation cost over the vesting period and where such fair value is not recovered by the subsidiaries, the same is treated as dividend
declared by them. The share- based payment equivalent to the fair value as on the date of grant of employee stock options granted to
key managerial personnel is disclosed as a related party transaction in the year of grant.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.
(s) Foreign currencies
(i) The functional currency and presentation currency of the Company is Indian Rupee.
(ii) Transactions in currencies other than the Company's functional currency are recorded on initial recognition using actual exchange
rate or a rate that approximates with it at the transaction date. At each Balance Sheet date, foreign currency monetary items are
reported at the closing spot rate. Non-monetary items that are measured in terms of historical cost in foreign currency are not
translated. Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each Balance
Sheet date at the closing spot rate are recognised in the Statement of Profit and Loss in the period in which they arise except for:
A. exchange differences on foreign currency borrowings relating to assets under construction for future productive use, are
included in the cost of those assets when such exchange differences are regarded as an adjustment to finance costs on those
foreign currency borrowings; and
B. exchange differences on transactions entered into to hedge certain foreign currency risks.
(iii) exchange rate as of the date on which the non-monetary asset or non-monetary liability is recognised on payment or receipt of
advance consideration is used for initial recognition of related asset, expense or income.
(iv) Financial statements of foreign operations whose functional currency is different than Indian Rupees are translated into Indian
Rupees as follows:
A. assets and liabilities for each Balance Sheet presented are translated at the closing rate at the date of that Balance Sheet;
B. income and expenses for each income statement are translated at average exchange rate for the reporting period; and
C. all resulting exchange differences are recognised in other comprehensive income and accumulated in equity as foreign currency
translation reserve for subsequent reclassification to profit or loss on disposal of such foreign operations.
(t) Accounting and reporting of information for Operating Segments
Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating decision
making body in the Company to make decisions for performance assessment and resource allocation.
The reporting of segment information is the same as provided to the management for the purpose of the performance assessment and
resource allocation to the segments.
Segment accounting policies are in line with the accounting policies of the Company. In addition, the following specific accounting
policies have been followed for segment reporting:
i) Segment revenue includes sales and other operational revenue directly identifiable with/allocable to the segment including inter
segment revenue.
ii) Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result.
iii) Most of the common costs are allocated to segments mainly on the basis of the respective segment revenue estimated at the
beginning of the reporting period.
iv) Income and expense not allocable to segments is included in "Unallocable corporate income net of expenditure".
v) Segment result represents profit before interest and tax and includes margins on inter-segment capital jobs, which are reduced in
arriving at the profit before tax of the Company.
vi) Segment result includes the finance costs incurred on interest bearing advances with corresponding credit included in "Unallocable
corporate income net of expenditure".
vii) Segment results are not adjusted for any exceptional item.
viii) Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable corporate assets and
liabilities represent the assets and liabilities that relate to the Company as a whole.
ix) Segment non-cash expenses forming part of segment expenses also includes the fair value of the employee stock options which is
accounted as employee compensation cost [Note 1(ii)(r) above] and is allocated to the segment.
x) Segment revenue resulting from transactions with other business segments is accounted on the basis of transfer price which are
either determined to yield a desired margin or agreed on a negotiated basis.
(u) Taxes on income
Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the
provisions of the Income Tax Act,1961 and using estimates and judgments based on the expected outcome of assessments/appeals and
the relevant rulings in the areas of allowances and disallowances. The computation reflects the effect of uncertainty for each item of
allowance and disallowance as appropriate either by
i. expected value method which sums the probability-weighted amounts in a range of possible outcomes or
ii. the most likely amount in a range of possible outcomes.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Company's financial
statements and the corresponding tax bases used in computation of taxable profit and quantified using the tax rates as per laws enacted
or substantively enacted as on the Balance Sheet date.
Deferred tax liabilities are generally recognised for all taxable temporary differences including the temporary differences associated with
investments in subsidiaries and associates, and interests in joint ventures, except where the Company is able to control the reversal of
the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets are generally recognised for all taxable temporary differences to the extent that is probable that taxable profits will be
available against which those deductible temporary differences can be utilised. 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.
The Company has applied mandatory exception of recognising and disclosing information about deferred tax assets and liabilities related
to Pillar Two income taxes as required by Ind AS 12 (as amended).
Transaction or event which is recognised outside profit or loss, either in other comprehensive income or in equity, is recorded along with
the tax as applicable.
(i) Interests in joint operations
The Company as a joint operator recognises in relation to its interest in a joint operation, its share of the assets/liabilities held/
incurred jointly with the other parties of the joint arrangement. Revenue is recognised for its share of revenue from the sale of
output by the joint operation. Expenses are recognised for its share of expenses incurred jointly with other parties as part of the
joint arrangement.
Interests in joint operations are included in the segments to which they relate
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