Note: 2 Material Accounting Policies
2.1 Basis of preparation of Financial
Statements:
The Company has prepared these Standalone
Financial Statements which comprise the Balance
Sheet as at 31st March, 2026, the Statement of
Profit and Loss, the Statement of Cash Flows
and the Statement of Changes in Equity for the
year ended 31st March, 2026, and a summary
of the material accounting policies and other
explanatory information (together hereinafter
referred to as "Standalone Financial Statements").
2.1.1. Statement of Compliance
The Standalone Financial Statements have been
prepared and presented in accordance with Indian
Accounting Standards [Ind AS] notified under
section 133 of the Companies Act 2013 read with
Companies [Indian Accounting Standards] Rules,
2015, as amended and other relevant provisions
of the Companies Act, 2013.
First-time Adoption of Ind AS
These are Company's first Ind AS Financial
Statements. The date of transition to Ind AS is 1st
April 2024. The Company has availed first time
adoption exemption as per Ind AS 101- First-time
Adoption of Indian Accounting Standards (Refer
Note 2.17 for details).
Up to the year ended 31st March, 2025, the
Company prepared its standalone financial
statements in accordance with previous GAAP,
which includes Standards notified under the
Companies (Accounting Standards) Rules, 2006,
the relevant provisions of the Companies Act,
2013 ("the 2013 Act''), as applicable and guidelines
issued by the Securities and Exchange Board
of India (SEBI), as applicable. In these financial
statements for the year ended 31st March 2026,
the financial statements for previous year ended
31st March 2025 and Balance Sheet as at 1st April
2024, have been prepared and presented as per
Ind AS for like- to- like comparison.
The following Notes provides list of the Material
Accounting Policies adopted in the Preparation
of the Standalone Financial Statements. These
policies have been Consistently applied to all the
periods presented unless otherwise stated.
A. The Standalone Financial Statements have
been prepared and presented on the going
concern basis and at historical cost, except
for the following assets and liabilities which
have been measured at fair value:
- Certain financial assets and liabilities
measured at fair value.
- Net defined benefit (asset) / liability
measured as per actuarial valuation.
Fair value is the price that would be received
to sell an asset or paid to transfer a liability
in an orderly transaction between market
participants at the measurement date under
current market conditions, regardless of
whether that price is directly observable or
estimated using another valuation technique.
In determining the fair value of an asset or
a liability, the Company takes into account
the characteristics of the asset or liability
if market participants would take those
characteristics into account when pricing the
asset or liability at the measurement date.
B. Functional & Presentation Currency
The Company's standalone financial
statements are presented in Indian Rupees,
which is also the Company's functional
currency. All amounts have been rounded off
to the nearest lakhs and up to two decimals,
except where otherwise indicated.
C. Classification of Assets and Liabilities into
Current/Non-Current
All assets and liabilities are classified as current
or non-current as per the Company's normal
operating cycle, Ind AS-1 and other criteria
set out in Division II of Schedule III of the
Companies Act, 2013. Based on the nature of
project or contract and the time lag between
the acquisition of assets for processing and
their realisation in cash and cash equivalents,
12-month period has been considered by the
Company as its normal operating cycle.
Assets and liabilities, other than those relating
to project or contract, are classified as current
if it is expected to realise or settle within 12
months after the balance sheet date.
2.1.2.Use of Estimates
The preparation of Financial Statements in
conformity with recognition and measurement of
Indian Accounting Standard requires judgements,
estimates and assumptions to be made that affect
the application of accounting policies and reported
amount of assets and liabilities and disclosure of
contingent liabilities at the date of these Financial
Statements and the reported amount of revenues
and expenses during the reporting period. Actual
results may differ from these estimates.
Estimates and underlying assumptions are
reviewed at each Balance sheet date. Revisions to
accounting estimates are recognized in the period
in which the estimates are revised and future
period affected.
Difference, if any, between the actual results and
the estimates are recognised in the periods in
which the results are known.
The following are significant management
judgements in applying the accounting policies of
the Company that have the most significant effect.
i. Recognition of deferred tax assets
and liabilities:
Deferred Tax Assets and Liabilities are
recognised for deductible temporary
differences for which there is probability of
utilization against the future taxable profit.
The Company uses judgement to determine
the amount of Deferred Tax Liability /Asset
that can be recognised, based upon the likely
timing and level of future taxable profits and
business developments.
ii. Determination of the Estimated Useful
lives of tangible assets
Useful lives of assets are based on the life
prescribed in Schedule II of the Companies
Act, 2013. In cases, where the useful lives are
different from that prescribed in Schedule II,
they are 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,
manufacturer's warranties and maintenance
support. The charge in respect of periodic
depreciation is derived after determining an
estimate of an asset's expected useful life and
the expected residual value at the end of its
life. Management reviews the residual values,
useful lives and methods of depreciation at
each reporting period end and any revision to
these is recognised prospectively in current
and future periods.
iii. Recognition and Measurement of defined
Benefit Obligations
The defined benefit obligations measured
using actuarial valuation techniques. An
actuarial valuation involves making key
assumptions of life expectancies, discount
rate, trend in salary escalation and withdrawal
rates. Variation in these assumptions may
impact the defined benefit obligation.
iv. Impairment of assets
Significant judgment is involved in
determining the estimated future cash flows
from the Property, Plant and Equipment to
determine its value in use to assess whether
there is any impairment in its carrying amount
as reflected in the financials.
v. Recognition and measurement of
Other Provisions
The Recognition and measurement of Other
Provisions are based on the assessment of
the probability of an outflow of resources,
and on Past Experience and Circumstances
known at the Balance sheet Date. The actual
outflow of resources at a future date may
therefore vary from the amount included in
other provisions.
vi. Contingencies
Management judgement is required for
estimating the possible outflow of resources,
if any, in respect of contingencies, claim,
litigations etc. against the Company as it
is not possible to predict the outcome of
pending matters with accuracy.
2.2. Revenue Recognition
(a) Revenue from EPC Contracts
Performance obligations with reference to
EPC contracts are satisfied over the period
of time when the criteria for recognition
of revenue over time under Ind AS 115 are
met, and accordingly, revenue from such
contracts is recognized based on progress
of performance determined using the input
method with reference to the cost incurred
on contract and their estimated total
costs. 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.
Revenue, measured at transaction price,
is adjusted for variable consideration
including liquidated damages, price
variations, escalation, change in scope etc.,
wherever applicable, to the extent that it is
highly probable that a significant reversal
of cumulative revenue recognised will not
occur when the uncertainty associated with
such variable consideration is subsequently
resolved. Variation in contract work and
other claims are included to the extent that
the amount can be measured reliably and it
is highly probable that their inclusion will not
result in a significant reversal of cumulative
revenue recognised.
Estimates of revenue and costs are
reviewed periodically and revised, wherever
circumstances change. The effect of such
changes in estimates of revenue and
costs is recognized in the Statement of
Profit and Loss in the period in which the
estimates are revised.
The Company evaluates whether each
contract consists of a single performance
obligation or multiple performance
obligations. Where the Company enters into
multiple contracts with the same customer,
the Company evaluates whether the contracts
are to be combined in accordance with the
criteria specified under Ind AS 115. Due to the
nature of the work required to be performed
on many of the performance obligations,
the estimation of total revenue and cost at
completion is subject to many variables and
requires significant judgement. 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 in the
transaction price to the extent it is probable
that a significant reversal of cumulative
revenue recognised will not occur when the
uncertainty associated with the variable
consideration is resolved.
Progress billings are generally issued upon
completion of certain phases of the work as
stipulated in the contract. Billing terms of
the 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 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.
The contracts may 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 receivables
on the statement of financial position.
Contract liabilities represent amounts billed
to customers in excess of revenue recognised
till date. A liability is recognised for advance
payments. Such advance payments are
assessed for the existence of a significant
financing component based on the purpose,
timing and other relevant factors specified
under Ind AS 115. A significant financing
component is not considered to exist where
the payment terms are primarily intended
to provide the customer with protection
against the Company's failure to adequately
complete its obligations or where the practical
expedient under Ind AS 115 is applicable.
The same is presented as contract liability in
the balance sheet.
(b) Other operating revenue
Other operating revenue comprises income
arising from activities incidental or ancillary
to the Company's principal business
operations. Such revenue is recognised in
accordance with Ind AS 115 when the related
performance obligation is satisfied or when
control of the underlying goods or services is
transferred. It is measured at the transaction
price, net of GST and amounts collected on
behalf of third parties.
(c) Other Income
- Interest income is accrued on a time
basis, by reference to the principal
outstanding and effective interest
rate applicable.
- Dividend income is recognised when
the right to receive the payment
is established.
2.3. Property, Plant & Equipment
(a) Property, Plant and Equipment are stated at
historical cost of acquisition/ construction less
accumulated depreciation and impairment
loss. Historical cost [Net of Input tax credit
received/ receivable] includes related
expenditure and pre-operative & project
expenses for the period up to completion
of construction/ assets are ready for its
intended use, if the recognition criteria are
met and the present value of the expected
cost for the decommissioning of an asset
after its use is included in the cost of the
respective asset, if the recognition criteria for
a provision are met.
(b) 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. The
carrying amount of any component accounted
for as a separate asset is derecognised when
replaced. All other repairs and maintenance
costs are charged to the statement of profit
and loss during the reporting period in which
they are incurred, unless they meet the
recognition criteria for capitalisation under
Property, Plant and Equipment.
(c) Where components of an asset are significant
in value in relation to the total value of the
asset as a whole, and they have substantially
different economic lives as compared
to principal item of the asset, they are
recognised separately as independent items
and are depreciated over their estimated
economic useful lives.
(d) Depreciation on tangible assets is provided
on "straight line method" based on the useful
lives as prescribed under Schedule II of the
Companies Act, 2013, taking into account the
nature of the PPE and the estimated usage of
the asset on the basis of management's best
estimation of obtaining economic benefits
from those classes of assets. Following
useful lives have been estimated based on
the management's assessment:
The management believes that these
estimated useful lives are realistic and reflect
fair approximation of the period over which
the assets are likely to be used. However,
management reviews the residual values,
useful lives and methods of depreciation
of Property, Plant and Equipment at each
reporting period end and any revision to
these is recognised prospectively in current
and future periods.
(e) Depreciation on impaired assets is calculated
on its revised carrying value, if any, on a
systematic basis over its remaining useful life.
(f) Depreciation on additions/ disposals
of the fixed assets during the year is
provided on pro-rata basis according to the
period during which assets are acquired/
installed/discarded.
(g) An item of Property, Plant and Equipment
and any significant part initially recognised
is derecognised upon disposal or when no
future economic benefits are expected from
its use or disposal. Any gain or loss arising
on de-recognition of the asset [calculated
as the difference between the net disposal
proceeds and the carrying amount of the
asset] is included in the Statement of profit
and loss when the asset is derecognised.
Expected cost for the decommissioning of an
asset after its use is included in the cost of the
respective asset, if the recognition criteria for
a provision are met.
2.4. Intangible Assets
(a) Intangible assets acquired separately are
measured on initial recognition at cost.
Following initial recognition, intangible
assets are carried at cost less any
accumulated amortisation and accumulated
impairment losses.
(b) Internally generated intangibles are not
capitalised, and the related expenditure is
reflected in the Statement of profit and loss
in the period in which the expenditure is
incurred.
(c) Intangible assets consists of Computer
Software which are amortized over the period
of their useful life or 3 years which is lower on
Straight line basis.
(d) An item of intangible asset initially recognised
is derecognised upon disposal or when no
future economic benefits are expected from
its use or disposal. Any gain or loss arising
on de-recognition of the asset [calculated
as the difference between the net disposal
proceeds and the carrying amount of the
asset] is included in the Statement of profit
and loss when the asset is derecognised.
The Property, Plant and Equipment and Intangible
Assets are tested for impairment whenever
events or changes in circumstances indicate that
the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by
which the asset's carrying amount exceeds its
recoverable amount. The recoverable amount is the
higher of an asset's fair value less costs of disposal
and value in use. For the purposes of assessing
impairment, the assets are grouped at the lowest
levels for which there are separately identifiable
cash flows which are largely independent of the
cash inflows from other assets or groups of assets
[cash generating units]. Non-financial assets other
than Goodwill that suffered an impairment loss are
reviewed for possible reversal of impairment at
the end of each reporting period. An impairment
loss is charged to the Statement of Profit and
Loss in the year in which an asset is identified as
impaired. The impairment loss recognised in prior
accounting period is reversed if there has been a
change in the estimate of recoverable amount.
2.5 Financial Instruments
A financial instrument is any contract that gives
rise to a financial asset of one entity and a
financial liability or equity instrument of another
entity. Financial assets and financial liabilities are
recognised when a Company becomes a party to
the contractual provisions of the instruments.
2.5.1 Financial Assets:
a) Classification and Measurement:
The company classifies its financial assets in
the following measurement categories:
(i) those to be measured subsequently
at fair value (either through other
comprehensive income, or through
profit or loss), and
(ii) those measured at amortised cost.
The classification depends on the entity's
business model for managing the financial
assets and the contractual terms of
the cash flows.
For assets measured at fair value, gains
and losses will either be recorded in profit
or loss or other comprehensive income.
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 of Financial Assets:
At initial recognition, the company measures
a financial asset at its fair value plus (in
the case of a financial asset subsequently
not measured at fair value through profit
or loss) transaction costs that are directly
attributable to the acquisition of the financial
asset. However, trade receivables that do not
contain a significant financing component are
measured at transaction price. Transaction
costs of financial assets carried at fair value
through profit or loss are expensed in
profit or loss.
c) Subsequent Measurement:
(i) Amortised Cost:
A Financial Asset is measured at the amortized
cost if both the following conditions are met:
- The asset is held within a business model
whose objective is to hold assets for
collecting contractual cash flows, and
- 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 finance income in
the Statement of Profit and Loss. The losses
arising from impairment are recognised in
the Statement of profit and loss.
(ii) Fair Value through other comprehensive
income [FVTOCI]:
A financial asset shall be classified and
measured at fair value through OCI if both of
the following conditions are met:
- The financial asset is held within a
business model whose objective is
achieved by both collecting contractual
cash flows and selling financial assets and
- The contractual terms of the financial
asset give rise on specified dates to
cash flows that are solely payments of
principal and interest on the principal
amount outstanding.
Debt instruments included within the FVTOCI
category are measured initially as well as at
each reporting date at fair value. Fair value
movements are recognized in the 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 Statement of Profit and Loss.
Interest earned while holding FVTOCI debt
instrument is reported as interest income
using the EIR method.
(iii) Fair Value through Profit or Loss [FVTPL]:
- A financial asset shall be classified and
measured at fair value through profit or
loss unless it is measured at amortised
cost or at fair value through OCI.
- All recognised financial assets are
subsequently measured in their entirety
at either amortised cost or fair value,
depending on the classification of the
financial assets.
- For financial assets at FVTPL, net gains or
losses, including any interest or dividend
income, are recognised in the Statement
of Profit and Loss.
(iv) Equity Instruments:
All equity investments in scope of Ind AS 109
are measured at fair value. Equity instruments
which are held for trading are classified as at
FVTPL. For all other equity instruments, the
Company may make an irrevocable election
to present subsequent changes in the fair
value in other comprehensive income.
The Company has made such election on
an instrument-by-instrument basis. The
classification is made on initial recognition
and is irrevocable.
If the Company decides to classify an equity
instrument as at FVTOCI, then all fair value
changes on the instrument, excluding
dividends, are recognized in the OCI. There
is no recycling of the amounts from OCI
to Statement of Profit and Loss, even on
sale of investment. However, the Company
may transfer the cumulative gain or
loss within equity.
Equity instruments included within the FVTPL
category are measured at fair value with
all changes recognized in the Statement of
Profit and Loss.
(v) Investments in Subsidiary and
Joint Ventures:
I nvestments in Subsidiary & Joint Ventures
are carried at cost / deemed cost applied
on transition to Ind AS less accumulated
impairment losses, if any. Investment in joint
ventures are carried at cost and are tested
for impairment in accordance with IND AS 36,
'Impairment of assets.
Upon first-time adoption of Ind AS, the
Company has elected to measure its
investments in joint ventures at the Previous
GAAP carrying amounts as their deemed
costs on the date of transition to Ind AS
i.e., April 1, 2024.
d) Recognition
A financial asset is primarily derecognised
[i.e. removed from the Company's
balance sheet] when:
(i) The rights to receive cash flows from the
asset have expired, or
(ii) 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
either [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.
When the Company has transferred its rights
to receive cash flows from an asset or has
entered into a pass- through arrangement,
it evaluates if and to what extent it has
retained the risks and rewards of ownership.
When it has neither transferred nor retained
substantially all of the risks and rewards
of the asset, nor transferred control of the
asset, the Company continues to recognise
the transferred asset to the extent of the
Company's continuing involvement. In
that case, the Company also recognises an
associated liability. The transferred asset and
the associated liability are measured on a
basis that reflects the rights and obligations
that the Company has retained. When
the Company has transferred the risk and
rewards of ownership of the financial asset,
the same is derecognised.
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 and
credit risk exposure:
(i) Financial assets that are debt instruments
and are measured at amortised cost.
(ii) Trade receivables or any contractual right
to receive cash or another financial asset.
(iii) Financial assets that are debt instruments
and are measured as at FVTOCI.
The Company follows 'simplified approach'
for recognition of impairment loss allowance
on Point (ii) above.
The application of simplified approach
does not require the Company to
track changes in credit risk. Rather, it
requires the Company to recognise the
impairment loss allowance based on lifetime
ECLs at each reporting date, right from
its initial recognition. For recognition of
impairment loss on other financial assets
and risk exposure, the Company determines
that whether there has been a significant
increase in the credit risk since initial
recognition. If credit risk has not increased
significantly, 12-month ECL is used to provide
for impairment loss. However, if credit risk
has increased significantly, lifetime ECL
is used. If, in a subsequent period, credit
quality of the instrument improves such that
there is no longer a significant increase in
credit risk since initial recognition, then the
entity reverts to recognising impairment loss
allowance based on 12-month ECL. Lifetime
ECL are the expected credit losses resulting
from all possible default events over the
expected life of a financial instrument. The
12-month ECL is a portion of the lifetime
ECL which results from default events that
are possible within 12 months after the
reporting date. ECL is the difference between
all contractual cash flows that are due to the
Company in accordance with the contract and
all the cash flows that the entity expects to
receive [i.e., all cash shortfalls], discounted
at the original EIR. ECL impairment loss
allowance [or reversal] recognized during the
period is recognized as income/ expense in
the Statement of profit and loss. The balance
sheet presentation for various financial
instruments is described below:
Financial assets measured as at amortised
cost and contractual revenue receivables:
ECL is presented as an allowance, i.e., as an
integral part of the measurement of those
assets in the balance sheet, which reduces the
net carrying amount. Until the asset meets
write-off criteria, the Company does not
reduce impairment allowance from the gross
carrying amount. For assessing increase in
credit risk and impairment loss, the Company
combines financial instruments on the basis
of shared credit risk characteristics.
2.5.2 Financial Liabilities
a) Initial Recognition and Measurement:
Financial liabilities are classified, at initial
recognition, as financial liabilities at fair value
through profit or loss, loans and borrowings
or payables as appropriate. All financial
liabilities are recognised initially at fair value
and, in the case of loans and borrowings
and payables, net of directly attributable
transaction costs.
b) Subsequent Measurement:
Subsequently all financial liabilities are
measured at amortised cost, using EIR
method. Gains and losses are recognised
in Statement of profit and loss 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
costs in the Statement of profit and loss.
c) Derecognition of financial assets and
financial liabilities:
The Company derecognises a financial asset
when the contractual rights to the cash flows
from the asset expire or when it transfers
the financial asset and substantially all the
risks and rewards of ownership of the asset
to another party. If the Company neither
transfers nor retains substantially all the risks
and rewards of ownership and continues to
control the transferred asset, the Company
recognises its retained interest in the asset
and an associated liability for amounts it
may have to pay. If the Company retains
substantially all the risks and rewards of
ownership of a transferred financial asset, the
Company continues to recognise the financial
asset and also recognises an associated
liability for amounts it has to pay.
On derecognition of a financial asset, the
difference between the asset's carrying
amount and the sum of the consideration
received and receivable and the cumulative
gain or loss that had been recognised in OCI
and accumulated in equity is recognised in
the Statement of Profit and Loss.
The Company de-recognises financial
liabilities when and only when, the Company's
obligations are discharged, cancelled
or have expired.
The difference between the carrying amount
of the financial liability de-recognised and the
consideration paid and payable is recognised
in the Statement of Profit and Loss.
Changes in the fair value of financial assets at
fair value through profit or loss are recognised
in other gain/ (losses) in the statement of
profit and Loss.
d) Embedded Derivatives:
An embedded derivative is a component of
a hybrid [combined] instrument that also
includes a non-derivative host contract - with
the effect that some of the cash flows of the
combined instrument vary in a way similar to
a standalone derivative.
Derivatives embedded in all other host
contracts are accounted for as separate
derivatives and recorded at fair value if their
economic characteristics and risks are not
closely related to those of the host contracts
and the host contracts are not held for
trading or designated at fair value though
profit or loss. These embedded derivatives
are measured at fair value with changes in
fair value recognised in Statement of profit
and loss, unless designated as effective
hedging instruments.
2.5.3 Reclassification of Financial Assets &
Liabilities:
The Company determines classification of financial
assets and liabilities on initial recognition. After
initial recognition, no reclassification is made
for financial assets which are equity instruments
and financial liabilities. For financial assets which
are debt instruments, a reclassification is made
only if there is a change in the business model
for managing those assets. Changes to the
business model are expected to be infrequent.
The Company's senior management determines
change in the business model as a result of external
or internal changes which are significant to the
Company's operations. Such changes are evident
to external parties. A change in the business
model occurs when the Company either begins
or ceases to perform an activity that is significant
to its operations. If the Company reclassifies
financial assets, it applies the reclassification
prospectively from the reclassification date which
is the first day of the immediately next reporting
period following the change in business model as
per Ind AS 109.
2.5.4 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.
2.6 Fair Value Measurements:
Fair value is the price that would be received to
sell an asset or paid to transfer a liability in an
orderly transaction between market participants
at the measurement date. The fair value
measurement is based on the presumption that
the transaction to sell the asset or transfer the
liability takes place either:
(a) In the principal market for the asset
or liability, or
(b) In the absence of a principal market, in
the most advantageous market for the
asset or liability.
The principal or the most advantageous market
must be accessible by the Company. The fair
value of an asset or a liability is measured using
the assumptions that market participants would
use when pricing the asset or liability, assuming
that market participants act in their economic
best interest. A fair value measurement of a
non-financial asset takes into account a market
participant's ability to generate economic benefits
by using the asset in its highest and best use or
by selling it to another market participant that
would use the asset in its highest and best use.
The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximising the use of relevant observable inputs
and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is
measured or disclosed in the standalone financial
statements are categorised within the fair value
hierarchy, described as follows, based on the
lowest level input that is significant to the fair
value measurement as a whole:
a. Level 1 - Quoted [unadjusted] market
prices in active markets for identical assets
or liabilities.
b. Level 2 - Valuation techniques for which
the lowest level input that is significant to
the fair value measurement is directly or
indirectly observable.
c. Level 3 - Valuation techniques for which the
lowest level input that is significant to the
fair value measurement is unobservable.
For assets and liabilities that are recognised in the
standalone financial statements on a recurring
basis, the Company determines whether transfers
have occurred between levels in the hierarchy
by re-assessing categorisation [based on the
lowest level input that is significant to the fair
value measurement as a whole] at the end of each
reporting period.
2.7 Taxes on Income:
Tax Expense consists of Current Tax
and Deferred Tax
2.7.1 Current Tax:
(a) Current tax is measured at the amount
expected to be paid on the basis of reliefs
and deductions available in accordance with
the provisions of the Income Tax Act, 1961.
The tax rates and tax laws used to compute
the amount are those that are enacted or
substantively enacted, at the reporting date.
(b) Current tax items are recognised in co¬
relation to the underlying transaction either
in Profit and Loss, OCI or directly in equity.
2.7.2 Deferred Tax:
(a) Deferred tax is provided using the balance
sheet liability method on temporary
differences between the tax bases of assets
and liabilities and their carrying amounts
for financial reporting purposes at the
reporting date.
(b) Deferred tax liabilities are recognised for all
taxable temporary differences.
(c) Deferred tax assets are recognised for all
deductible temporary differences, the carry
forward of unused tax losses. Deferred tax
assets are recognised to the extent that it is
probable that taxable profit will be available
against which the deductible temporary
differences, the carry forward of unused tax
credits and unused tax losses can be utilized.
(d) The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced
to the extent that it is no longer probable that
sufficient taxable profit will be available to
allow all or part of the deferred tax asset to be
utilized. Unrecognised deferred tax assets are
re-assessed at each reporting date and are
recognised to the extent that it has become
probable that future taxable profits will allow
the deferred tax asset to be recovered.
(e) Deferred tax assets and liabilities are
measured at the tax rates [and tax laws] that
have been enacted or substantively enacted
at the reporting date and are expected to
apply in the year when the asset is realised or
the liability is settled.
(f) Deferred tax items are recognised in co¬
relation to the underlying transaction either
in profit or loss or OCI or directly in equity.
(g) Deferred tax assets and deferred tax liabilities
are offset if a legally enforceable right exists
to set off current tax assets against current
tax liabilities.
2.8 Inventories
Inventories include Project material and stores
purchased for execution of contracts and operation
activities are valued at lower of cost or net
realizable value after providing for obsolescence
and other losses, where considered necessary on
an item-by-item basis. Cost is determined on First
in First out (FIFO) basis.
2.9 Cash and Cash Equivalents:
Cash and cash equivalents comprise cash on hand,
balances with banks, and cash equivalents. Cash
equivalents include highly liquid investments with
an original maturity of three months or less from
the date of acquisition that are readily convertible
into known amounts of cash and are subject to an
insignificant risk of changes in value.
Bank deposits with an original maturity of more
than three months but not more than twelve
months are disclosed as "Bank balances Other
than cash and cash equivalent", while deposits
with an original maturity of more than twelve
months are disclosed under "Other financial
assets- non-current".
2.10 Borrowing Costs:
Borrowing costs that are directly attributable to
the acquisition, construction or production of a
qualifying asset are capitalised as part of the cost
of that asset. Capitalisation of borrowing costs
commences when expenditures for the asset
are being incurred, borrowing costs are being
incurred and activities necessary to prepare the
asset for its intended use or sale are in progress,
and ceases when substantially all such activities
are complete. All other borrowing costs are
recognised as an expense in the period in which
they are incurred. Borrowing costs comprise
interest and other costs incurred in connection
with the borrowing of funds, including exchange
differences to the extent regarded as an
adjustment to borrowing costs.
2.11 Leases
2.11.1 As a Lessee:
For any new contracts entered into, the Company
considers whether a contract is or contains a lease
in accordance with Ind AS 116. A lease is defined
as 'a contract, or part of a contract, that conveys
the right to use an asset [the underlying asset] for
a period of time in exchange for consideration.
2.11.2 Measurement and recognition of leases
as a lessee:
At lease commencement date, the Company
recognizes a right-of-use asset and a lease liability
on the balance sheet. The right-of-use asset is
measured at cost, which is made up of the initial
measurement of the lease liability, any initial
direct costs incurred by the Company, an estimate
of any costs to dismantle and remove the asset
at the end of the lease, and any lease payments
made in advance of the lease commencement
date [net of any incentives received]. The Company
depreciates the right-of-use assets on a straight¬
line basis from the lease commencement date to
the earlier of the end of the useful life of the right-
of-use asset or the end of the lease term. The
Company also assesses the right-of-use asset for
impairment when such indicators exist.
ownership of the underlying asset and classified
as an operating lease if it does not.
At the commencement date, the Company
measures the lease liability at the present value
of the lease payments unpaid at that date,
discounted using the interest rate implicit in
the lease if that rate is readily available or the
Company's incremental borrowing rate. Lease
payments included in the measurement of the
lease liability are made up of fixed payments
[including in substance fixed], variable payments
based on an index or rate, amounts expected to
be payable under a residual value guarantee and
payments arising from options reasonably certain
to be exercised.
Subsequent to initial measurement, the liability
will be reduced for payments made and increased
for interest It is remeasured to reflect any
reassessment or modification, or if there are
changes to the in-substance fixed payments.
When the lease liability is remeasured, the
corresponding adjustment is reflected in the right-
of-use asset, or profit and loss if the right-of-use
asset is already reduced to zero. On the statement
of financial position, right-of-use assets have
been included in property, plant and equipment
and lease liabilities have been included in other
financial liabilities, wherever applicable.
2.11.3 Short Term leases and leases of low-value assets:
The Company has elected not to recognise right-
of use assets and lease liabilities for short-term
leases that have a lease term of 12 months or
lower and leases of low value assets. The Company
recognises the lease payments associated with
these leases as an expense on a straight-line
basis over the lease term. The related cash
flows are presented as operating activities in the
Statement of Cash Flows.
2.11.4 As a lessor:
As a lessor the Company classifies its leases
as either operating or finance leases. A lease
is classified as a finance lease if it transfers
substantially all the risks and rewards incidental to
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