(III) MATERIAL ACCOUNTING POLICIES:
Summary of the material accounting policies for preparation of financial statements as given below have
been applied consistently to all periods presented in the financial statements. These accounting policies are
formulated in a manner that results in financial statements containing relevant and reliable information about
the transactions, other events and conditions to which they apply. These policies need not be applied when the
effect of applying them is immaterial.
Up to March 31, 2015, Property, Plant and Equipment, Capital Work in Progress, Intangible Assets and Investment
Property were carried in the Balance Sheet in accordance with Indian GAAP. The Company had elected to avail the
exemption granted by IND AS 101, "First time adoption of IND AS" to regard those amounts as the deemed cost
at the date of transition to IND AS (i.e., as on April 1, 2015). Therefore, the carrying amount of Property, Plant and
Equipment, Capital Work in Progress, Intangible Assets and Investment Property as per the previous GAAP as at
April 1, 2015, were maintained on transition to Ind AS.
1.0 Property, Plant and Equipment (PPE)
a) An item of PPE is recognized as an asset if 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.
b) PPE are initially measured at cost of acquisition/construction including decommissioning or restoration
cost wherever required. The cost includes expenditure that is directly attributable to bringing the asset
to the location and condition necessary for it to be capable of operating in the manner intended by
management. In cases where final settlement of bills with contractors is pending, but the asset is
complete and available for operating in the manner intended by the management, capitalisation is
done on estimated basis subject to necessary adjustments, including those arising out of settlement
of arbitration/court cases.
c) Subsequent costs is recognized in the carrying amount of the asset when it is probable that future
economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item
can be measured reliably.
d) Expenditure incurred on renovation and modernization of power station on completion of the
originally estimated useful life of the power station is added to the cost of the related asset when it
meets the recognition criteria. PPE acquired as replacement of the existing assets are capitalized and
its corresponding replaced assets removed/ retired from active use are derecognized.
e) After initial recognition, Property, Plant and Equipment is carried at cost less accumulated depreciation/
amortisation and accumulated impairment losses, if any.
f) Deposits, payments made/ liabilities created provisionally towards compensation (including interest
on enhanced compensation till the date of award by the Court), rehabilitation & resettlement and other
expenses including expenditure on environment management plans relatable to land in possession
are treated as cost of land.
g) Assets over which the Company has control, though created on land not belonging to the Company,
are included under Property, Plant and Equipment.
h) Standby equipment and servicing equipment which meet the recognition criteria of Property, Plant
and Equipment are capitalized.
i) Spares parts (procured along with the Plant and Machinery or subsequently) which meet the
recognition criteria are capitalized. The carrying amount of those spare parts that are replaced is
derecognized when no future economic benefits are expected from their use or upon disposal. Other
spare parts are treated as "stores and spares" forming part of inventory.
j) Expenditure on major inspection and overhauls of generating unit is capitalized, when it meets the
asset recognition criteria. Any remaining carrying amount of the cost of the previous inspection and
overhaul is derecognized.
k) The cost of replacing part of an item of property, plant and equipment is recognized in the carrying
amount of the item if it is probable that the future economic benefits embodied within the part will
flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part
is derecognized regardless of whether the replaced part has been depreciated separately. If it is not
practicable to determine the carrying amount of the replaced part, the Company uses the cost of
the replacement as an indication of what the cost of replaced part was at the time it was acquired or
constructed. The costs of the day-to-day servicing of property, plant and equipment are recognized in
the statement of profit and loss as and when incurred.
l) An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected from its use. Any gain or loss arising on derecognition/ disposal of the asset
(calculated as the difference between the net disposal proceeds and the carrying amount of the asset)
is included in the Statement of Profit and Loss when the asset is derecognised.
2.0 Capital work in Progress (CWIP)
a) Expenditure incurred on assets under construction (including a project) is carried at cost under CWIP.
Such costs comprise purchase price of assets including import duties and non-refundable taxes (after
deducting trade discounts and rebates), expenditure in relation to survey and investigation activities
of projects, cost of site preparation, initial delivery and handling charges, installation and assembly
costs, etc.
b) Costs including employee benefits, professional fees, expenditure on maintenance and up-gradation
of common public facilities, depreciation on assets used in construction of project including Right-
of-Use assets, interest during construction and other costs that are directly attributable to bringing
the asset to the location and condition necessary for it to be capable of operating in the manner
intended by management are accumulated under "Expenditure Attributable to Construction (EAC)"
and subsequently allocated on systematic basis over major immovable assets, other than land and
infrastructure facilities on commissioning of projects. Net pre-commissioning income/ expenditure is
adjusted directly in the cost of related assets. Income on account of liquidated damages / interest on
advances to contractors during construction period is adjusted in the cost of related assets.
c) Capital Expenditure incurred for creation of facilities, over which the Company does not have control
but the creation of which is essential principally for construction of the project is accumulated
under "Expenditure Attributable to Construction" and carried under "Capital Work in Progress" and
subsequently allocated on a systematic basis over major immovable assets, other than land and
infrastructure facilities on commissioning of projects, keeping in view the "attributability" and the
"Unit of Measure" concepts in Ind AS 16- "Property, Plant and Equipment". Expenditure of such nature
incurred after completion of the project, is charged to the Statement of Profit and Loss.
3.0 Investment Property
Investment properties are initially measured at cost, including transaction costs. Subsequent to initial
recognition, investment properties are carried at cost less accumulated depreciation and accumulated
impairment loss, if any.
The Company measures investment property using cost based measurement and fair value of investment
property is disclosed in the notes.
Investment properties are derecognised either when they have been disposed off or when they are
permanently withdrawn from use and no future economic benefit is expected from their disposal. The
difference between the net disposal proceeds and the carrying amount of the asset is recognised in the
Statement of Profit and Loss in the period of derecognition. Any gain or loss arising on derecognition/
disposal of the asset is included in the Statement of Profit and Loss.
Transfers to or from investment property is made when and only when there is a change in use supported
by evidence.
4.0 Intangible Assets and Intangible Assets under Development
a) Expenditure on research is charged to expenditure as and when incurred. Expenditure on development
is capitalized only if the expenditure can be measured reliably, the product or process is technically
and commercially feasible, future economic benefits are probable and the Company intends to & has
sufficient resources to complete development and to use or sell the asset.
b) Intangible assets that are acquired by the Company and which have finite useful lives, are measured
on initial recognition at cost. Cost includes any directly attributable expenses necessary to make the
assets ready for its intended use. After initial recognition, intangible assets are carried at cost less any
accumulated amortisation and accumulated impairment losses.
c) Intangible assets under development represent expenditure incurred on intangible assets which are
in the development phase and are carried at cost less accumulated impairment loss, if any.
d) Subsequent costs are recognized as an increase in the carrying amount of the asset when it is probable
that future economic benefits deriving from the cost incurred will flow to the Company and the cost
of the item can be measured reliably.
e) An item of Intangible asset is derecognised upon disposal or when no future economic benefits are
expected from its use or disposal. Gains or losses arising from derecognition of an intangible asset are
measured as the difference between the net disposal proceeds and the carrying amount of the asset
and are recognised in the Statement of Profit and Loss when the asset is derecognised.
5.0 Foreign Currency Transactions
a) Transactions in foreign currency are initially recorded at the functional currency spot rate at the date
the transaction first qualifies for recognition. At each reporting date, monetary items denominated in
foreign currency are translated at the functional currency exchange rates prevailing on that date.
b) Exchange differences relating to PPE/capital work-in-progress arising out of transaction entered into
prior to April 1, 2004 are adjusted to the carrying cost of respective PPE/capital work-in-progress.
c) Exchange differences arising from translation of foreign currency borrowings entered into prior to
March 31, 2016 recoverable from or payable to beneficiaries in subsequent periods as per CERC Tariff
regulations are recognised as "Deferred Foreign Currency Fluctuation Recoverable/ Payable Account"
and adjusted from the year in which the same is recovered/ paid.
d) Exchange differences arising from settlement/ translation of monetary items denominated in
foreign currency entered into on or after April 1, 2016 to the extent recoverable from or payable to
the beneficiaries in subsequent periods as per CERC Tariff Regulations are recognized as 'Regulatory
Deferral Account Balances' during construction period and adjusted from the year in which the same
become recoverable from or payable to the beneficiaries.
e) Non-monetary items that are measured in terms of historical cost in a foreign currency are translated
using the exchange rate at the date of the transaction. Where the Company has paid or received
advance consideration in a foreign currency, the date of transaction for the purpose of determining
the exchange rate to use on initial recognition of the related asset, expense or income (or part of it),
is the date when the Company initially recognizes the non-monetary asset or non-monetary liability
arising from the payment or receipt of advance consideration.
6.0 Regulatory Deferral Accounts
a) The Company recognizes "Regulatory Deferral Account Balances" in respect of its regulated operations
in accordance with Ind AS 114 - 'Regulatory Deferral Accounts', read with the ICAI Guidance Note on
Rate Regulated Activities based on reasonable certainty regarding allowability through tariff by the
Electricity Regulator in accordance with the applicable regulatory framework."
b) Where an item of expenditure incurred during the period of construction of a project is recognised
as expense in the Statement of Profit and Loss i.e., not allowed to be capitalized as part of cost of
relevant PPE in accordance with Ind AS, but is nevertheless permitted by CERC to be recovered from
the beneficiaries in future through tariff, the right to recover the same is recognized as "Regulatory
Deferral Account balances."
c) Expense/ income recognised in the Statement of Profit and Loss to the extent recoverable from or
payable to the beneficiaries in subsequent periods as per CERC Tariff Regulations are recognised as
"Regulatory Deferral Account balances."
d) These Regulatory Deferral Account balances are adjusted from the year in which the same become
recoverable from or payable to the beneficiaries.
e) Regulatory Deferral Account balances are evaluated at each Balance Sheet date to ensure that the
underlying activities meet the recognition criteria and it is probable that future economic benefits
associated with such balances will flow to the entity. If these criteria are not met, the Regulatory
Deferral Account balances are derecognised.
f) Regulatory Deferral Account balances are tested for impairment at each Balance Sheet date.
7.0 Fair value measurement
At initial recognition, transaction price is the best evidence of fair value. However, when the Company
determines that transaction price does not represent the fair value, it uses inter-alia valuation techniques
that are appropriate in the circumstances and for which sufficient data are available to measure fair value,
maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All financial assets and financial liabilities for which fair value is measured or disclosed in the financial
statements are categorised within the fair value hierarchy. This categorisation is based on the lowest level
input that is significant to the fair value measurement as a whole:
• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable.
• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.
For financial assets and financial liabilities that are recognised at fair value on a recurring basis, the Company
determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation at the
end of each reporting period.
8.0 Investments in subsidiaries and joint ventures/Associates
Investments in equity shares of subsidiaries and joint ventures/associates are carried at cost less impairment
losses, if any in the value of the investments. Where an indication of impairment exists, considering entities
with common line of activities as a single cash generating unit, the carrying amounts of investments
are assessed and written down to its recoverable amount at the end of reporting period. On disposal of
investments in subsidiaries, associates and joint venture, the difference between net disposal proceeds and
the carrying amounts are recognized in the statement of profit and loss.
9.0 Financial assets other than investment in subsidiaries and joint ventures/associates
A financial asset includes inter-alia any asset that is cash, equity instrument of another entity or contractual
right to receive cash or another financial asset or to exchange financial asset or financial liability under
conditions that are potentially favourable to the Company. A financial asset is recognized when and only
when the Company becomes party to the contractual provisions of the instrument.
Financial assets of the Company comprise Cash and Cash Equivalents, Bank Balances, Investments in equity
shares of companies, Trade Receivables, Loan to employees, security deposit, claims recoverable, Contract
assets etc.
a) Classification
The Company classifies its financial assets in the following categories:
• At amortised cost,
• At fair value through other comprehensive income (FVTOCI), and
• At fair value through profit and loss
The classification depends on the following:
(a) The entity's business model for managing the financial assets and
(b) The contractual cash flow characteristics of the financial asset.
For assets measured at fair value, gains and losses are either recorded in the Statement of Profit and
Loss or under 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.
b) Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded
at fair value through profit or Loss, transaction costs that are attributable to the acquisition of the
financial asset. Transaction costs of financial assets carried at fair value through profit or loss are
expensed in the Statement of Profit and Loss.
The Company measures trade receivables at their transaction price, if the trade receivables do not
contain a significant financing component.
c) Subsequent measurement
Debt instruments at amortised cost
A 'debt instrument' is measured at the amortised cost if both the following conditions are met:
i) The asset is held within a business model whose objective is to hold assets for collecting
contractual cash flows, and
ii) Contractual terms of the asset give rise on specified dates to cash flows that are Solely Payments
of Principal and Interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the
Effective Interest Rate (EIR) method. Amortised cost is calculated by taking into account any discount
or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation
is included in interest income in the Statement of Profit and Loss. Losses arising from impairment are
recognised in the Statement of Profit and Loss.
Debt instrument at Fair Value through Other Comprehensive Income (FVTOCI)
A 'debt instrument' is classified as at FVTOCI if both the following criteria are met:
i) The objective of the business model is achieved both by collecting contractual cash flows and
selling the financial assets, and
ii) The asset's contractual cash flows represent Solely Payments of Principal and Interest (SPPI).
Debt instruments at fair value through Other Comprehensive Income are measured at each reporting
date at fair value. Fair value movements are recognized in Other Comprehensive Income (OCI).
However, the Company recognizes interest income, impairment losses, reversals and foreign exchange
gain or loss in the Statement of Profit and Loss. On derecognition of the asset, cumulative gain or loss
previously recognised in OCI is reclassified from the equity to profit and loss. Interest income from
these financial assets is included in other income using the EIR method.
Equity investments:
All equity investments in entities other than subsidiaries and joint ventures/associates are measured at
fair value. Equity instruments which are held for trading, if any, are classified at Fair Value through Profit
or Loss (FVTPL). The Company classifies all other equity instruments at FVTOCI. The Company makes
such election on an instrument by- instrument basis. The classification is made on initial recognition
and is irrevocable.
All fair value changes of an equity instrument classified at FVTOCI, are recognized in OCI. There is no
subsequent reclassification of fair value gains and losses to the Statement of Profit and Loss. However,
the Company may transfer the cumulative gain or loss within equity. Dividends from such investments
are recognised in the Statement of Profit and Loss as "other income" when the company's right to
receive payments is established.
Equity instruments included within the FVTPL category, if any, are measured at fair value with all
changes recognized in the Statement of Profit and Loss.
Trade Receivables:
Trade receivables containing a significant financing component are subsequently measured at
amortised cost using the effective interest method.
d) Derecognition
A financial asset is derecognised only when:
i) The Company has transferred the rights to receive cash flows from the financial asset, or
ii) 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 Company 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
derecognised. Where the Company has not transferred substantially all risks and rewards of ownership
of the financial asset, the financial asset is not derecognised.
Where the Company has neither transferred a financial asset nor retains substantially all risks and
rewards of ownership of the financial asset, the financial asset is derecognised 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 recognised to the extent of continuing involvement in the financial asset.
On de-recognition, the difference between the carrying amount and the amount of consideration
received / receivable is recognized in the Statement of Profit and Loss.
e) Impairment of financial assets
In accordance with Ind AS 109, the Company applies Expected Credit Loss (ECL) model for measurement
and recognition of impairment loss on the following financial assets:
i) Financial assets that are debt instruments, and are measured at amortised cost.
ii) Financial assets that are debt instruments and are measured as at FVTOCI
iii) Contract Assets and Trade Receivables under Ind AS 115- Revenue from Contracts with Customers
iv) Lease Receivables under Ind AS 116- Leases.
The Company follows the 'simplified approach' permitted under Ind AS 109, "Financial Instruments"
for recognition of impairment loss allowance based on life time expected credit loss from initial
recognition on contract assets, lease receivables and trade receivables resulting from transactions
within the scope of Ind AS 116 and Ind AS 115.
For all other financial assets, expected credit losses are measured at an amount equal to the 12-month
ECL, unless there has been a significant increase in credit risk from initial recognition, in which case
those financial assets are measured at lifetime ECL. Any increase or reversal of loss allowance computed
using ECL model, is recognized as an impairment gain or loss in the Statement of Profit and Loss.
10.0 Inventories
Inventories mainly comprise stores and spare parts to be used for maintenance of Property, Plant and
Equipment and are valued at cost or net realizable value (NRV) whichever is lower. The cost is determined
using weighted average cost formula and NRV is the estimated selling price in the ordinary course of
business, less the estimated costs necessary to make the sale.
Spares which do not meet the recognition criteria as Property, Plant and Equipment, including spare parts
individually costing up to Rs 10 Lakh are recognized as inventories.
Carbon Credits / Certified Emission Reductions (CERs)/ Verified Carbon Units (VCUs) are valued at lower of
cost and net realizable value.
The amount of any write-down of inventories to net realisable value and all losses of inventories is recognized
as an expense in the period in which write-down or loss occurs.
11.0 Dividends
Final dividends and interim dividends payable to the Company's shareholders are recognised as change in
equity in the period in which they are approved by the Company's shareholders and the Board of Directors
respectively.
12.0 Financial liabilities
The Company's financial liabilities include loans and borrowings, trade and other payables. A financial
liability is recognized when and only when the Company becomes party to the contractual provisions of
the instrument.
The Company's financial liabilities include loans and borrowings, trade and other payables. A financial
liability is recognized when and only when the Company becomes party to the contractual provisions of
the instrument.
a) Classification, initial recognition and measurement
Financial liabilities are recognised initially at fair value less transaction costs that are directly attributable
and subsequently measured at amortised cost. Financial liabilities are classified as subsequently
measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the
fair value at initial recognition is recognised in the Statement of Profit and Loss or in the carrying
amount of an asset if another standard permits such inclusion, over the period of the borrowings using
the effective rate of interest.
b) Subsequent measurement
After initial recognition, financial liabilities are subsequently measured at amortised cost using the EIR
method. Gains and losses are recognised in the Statement of Profit and Loss or in the carrying amount
of an asset if another standard permits such inclusion, when the liabilities are derecognised as well as
through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The EIR amortisation is included as finance cost in the
Statement of Profit and Loss.
c) Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled
or expired. When an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the derecognition of the original liability and the recognition
of a new liability. The difference in the respective carrying amounts is recognised in the Statement of
Profit and Loss.
d) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet
if there is a currently enforceable legal right to offset the recognised amounts and there is an intention
to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
e) Derivative financial instruments
(i) Derivative Financial Instruments not designated as Hedge
Derivative financial instruments that are held by the Company to hedge the foreign currency and
interest rate risk exposures and are not designated as hedges are accounted for at fair value through
profit or loss. Changes in fair value are recognised in the Statement of Profit and Loss.
(ii) Derivative Financial Instruments designated as Hedge:
The Company uses derivative financial instruments, such as call spread options, to manage foreign
exchange rate risks related to foreign currency loans. These derivatives are designated as fair value
hedges under hedge accounting rules, provided the following criteria are met:
i) Economic Relationship: There must be an economic relationship between the hedged item and
the hedging instrument.
ii) Credit Risk: Credit risk should not be the predominant factor influencing changes in value from
this economic relationship.
iii) Hedge Ratio: The hedge ratio must match the ratio derived from the actual quantities of the
hedged item and the hedging instrument used by the Company
Derivatives are initially recognized at fair value on the contract date and subsequently remeasured to
fair value at the end of each reporting period. Any gain or loss resulting from changes in the fair value
of derivatives designated as an effective hedging instrument and the gain or loss on the hedged item
attributable to the hedged risk is recognized in profit or loss, offsetting the impact of the hedging
instrument.
At the inception of each hedge, the Company undertakes a formal documentation process to clearly
define the hedged item and the hedging instrument. This documentation outlines the specific risk
or risks being hedged and establishes the hedge ratio, which reflects the proportionate relationship
between the hedged item and the hedging instrument. Additionally, the documentation includes a
detailed explanation of how the hedging relationship meets the effectiveness requirements as per the
Company's risk management strategy.
For derivatives qualifying as fair value hedges:
i) Hedged Item Adjustment: The carrying amount of the hedged item is adjusted for the gain or
loss attributable to the hedged risk. This adjustment is recognized in the Statement of Profit and
Loss, providing a natural offset to the changes in the fair value of the hedging instrument.
ii) Effective Portion: The effective portion of the hedge, which is the extent to which the hedging
instrument offsets changes in fair value of the hedged item, is recognized in the Statement of
Profit and Loss.
iii) Ineffective Portion: Any ineffective portion of the hedge is also recognized immediately in the
Statement of Profit and Loss under Other Income or Other Expenses.
iv) Intrinsic and Time Value: Changes in the intrinsic value of options used in fair value hedges are
recognized in the Statement of Profit and Loss. Changes in the time value component are initially
recorded in Other Comprehensive Income (OCI) and accumulated in a separate component
of equity. Over the life of the hedging relationship, this time value component is gradually
amortized, aligning with the expiration of the hedge.
Hedge accounting is discontinued when the hedging instrument expires, is terminated, or exercised,
or when the hedging relationship no longer qualifies for hedge accounting due to failing to meet the
necessary criteria.
Option Premium Payable:
The Company utilizes call spread options as hedging instruments to mitigate foreign exchange rate
risks associated with foreign currency loans. The option premium payable is a critical component of the
derivative's fair value measurement, initially recognized as part of the derivative instrument's fair value
at the contract date. This premium represents the cost incurred to acquire the options. The derivative's
fair valuation at each reporting date includes an unamortized component of the option premium
payable. This component is carried forward in the Cost of Hedge Reserve within Other Comprehensive
Income. Throughout the duration of hedging relationship, the option premium is systematically
amortized, aligning with the expiration of the hedge. For hedged items relating to capital expenditure
projects, the amortized portion of the option premium is capitalized as Capital Work in Progress
(CWIP), ensuring that the premium cost is appropriately allocated to the asset being constructed or
developed, thereby matching the expenditure with the asset's future economic benefits.
f) Financial Guarantee Contracts
Financial guarantee contracts issued by the Company are those contracts that require a payment to be
made to reimburse the lender for a loss it incurs because the specified debtor fails to make a payment
when due in accordance with the terms of a debt instrument. Financial guarantee contracts are
recognized initially as a liability at fair value, adjusted for transaction costs that are directly attributable
to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount
of loss allowance determined as per impairment requirements of Ind AS 109 - 'Financial Instruments'
and the amount recognized less the cumulative amount of income recognized in accordance with the
principles of Ind AS 115 'Revenue from Contracts with Customers.
13.0 Government Grants
a) The benefits of a government loan at a below market rate of interest is treated as a Government
Grant. The loan is initially recognised and measured at fair value and the grant is measured as the
difference between the initially recognized amount of the loan and the proceeds received. The loan is
subsequently measured as per the accounting policy applicable to financial liabilities and the grant is
recognized initially as Government Grant and subsequently amortised in the Statement of Profit and
Loss on a systematic basis over the useful life of the asset.
b) Monetary grants from the government for creation of assets are initially recognised when there is
reasonable assurance that the grant will be received and the company will comply with the conditions
associated with the grant. The Grant so recognised is subsequently amortised in the Statement of
Profit and Loss over the useful life of the related assets.
c) Government grant related to income is recognised in the Statement of Profit and Loss on a systematic
basis over the periods in which the entity recognises as expenses the related costs for which the grants
are intended to compensate.
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