Note 2.1 Basis of accounting and preparation of financial statements
These financial statements have been prepared in accordance with Indian Accounting Standards (“Ind
AS“) under the provisions of the Companies Act, 2013 (the “Act“), to the extent notified. The Ind AS are
prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards)
Rules, 2015 and the Companies (Indian Accounting Standards) Amendment Rules issued thereafter. The
financial statements have been prepared on the accrual basis of accounting and on a going concern basis,
and are presented in Indian Rupees, which is also the Company’s functional currency. All amounts have
been rounded to the nearest rupee, except where otherwise indicated.
Note 2.2 Historical cost convention
The Standalone Financial Statements have been prepared on a historical cost basis, except for the
following items which have been measured at fair value: Certain financial assets and financial liabilities
measured at fair value; Defined benefit plan assets measured at fair value; Assets held for sale, where
measured at fair value less costs to sell. 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 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
financial statements are categorised within the fair value hierarchy described in Ind AS 113 “Fair Value
Measurement11, based on the lowest level input that is significant to the fair value measurement as a
whole.
Note 2.3 Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current/non-current
classification.
An asset is classified as current when it is.
• expected to be realised, or intended to be sold or consumed, in the normal operating cycle;
• held primarily for the purpose of trading;
• expected to be realised within twelve months after the reporting date;
• or cash or a cash equivalent, unless restricted from being exchanged or used to settle a liability for at
least twelve months after the reporting date.
All other assets are classified as non-current.
A liability is classified as current when.
• it is expected to be settled in the normal operating cycle;
• it is held primarily for the purpose of trading;
• it is due to be settled within twelve months after the reporting date; or
• the Company does not have an unconditional right to defer settlement of the liability for at least twelve
months after the reporting date.
All other liabilities are classified as non-current. Deferred tax assets and liabilities are classified as non¬
current. Based on the nature of services provided by the Company, twelve months has been considered as
the operating cycle for the purpose of current/non-current classification of assets and liabilities.
Note 2.4 Critical accounting estimates and judgements
The preparation of these financial statements in conformity with the recognition and measurement
principles of Ind AS requires management to make judgements, estimates and assumptions that affect the
reported balances of assets and liabilities, disclosures relating to contingent liabilities as at the date of the
financial statements, and the reported amounts of income and expenses for the year presented. Actual
results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimates are revised and in any future periods
affected. The areas involving a higher degree of judgement or complexity, and items where assumptions
are significant to the financial statements, include:
• useful lives of property, plant and equipment, and intangible assets;
• impairment of assets and expected credit losses on financial assets;
• measurement of defined benefit obligations - actuarial assumptions including discount rate, salary
escalation and demographic assumptions;
• recognition of deferred tax assets to the extent recovery is probable;
• recognition and measurement of provisions and contingencies; and
• identification of lease term, including assessment of renewal/termination options under Ind AS 116.
Note 2.5 Property, plant and equipment
Items of property, plant and equipment are stated at cost, net of recoverable taxes, trade discounts and
rebates, less accumulated depreciation and impairment losses, if any. Such cost includes purchase price,
borrowing costs and any cost 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, net charges on foreign
exchange contracts and adjustments arising from exchange rate variations attributable to the assets.
In the case of land, the Company has availed the fair value as deemed cost on the date of transition to Ind
AS.
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. Where significant components of property, plant and
equipment have different useful lives, they are accounted for as separate items (major components).
Other indirect expenses incurred during the project development stage, net of income earned during such
stage, are considered as pre-operative expenses and disclosed under Capital Work-in-Progress until the
asset is ready for its intended use.
are expected from its use or disposal. Gains or losses arising from derecognition are measured as the
difference between the net disposal proceeds and the carrying amount, and are recognised in the
Statement of Profit and Loss.
Note 2.6 Depreciation
Depreciation on property, plant and equipment is provided using the straight-line method on the estimated
useful lives of the assets. The residual values, useful lives and depreciation method are reviewed at each
financial year-end and any changes are accounted for prospectively as a change in accounting estimate.
Depreciation on assets under construction commences only when the assets are ready for their intended
use.
The useful lives of Vessels, Barges and Speed Boats have been determined based on technical evaluation
carried out by management, supported by external technical experts where considered necessary.
Management believes that these useful lives best represent the period over which the assets are expected
to be used and may differ from those specified in Part C of Schedule II to the Companies Act, 2013. For other
categories of property, plant and equipment, the useful lives adopted are aligned with those prescribed in
Schedule II to the Companies Act, 2013.
Note 2.7 Intangible assets
Intangible assets are stated at cost of acquisition net of recoverable taxes, trade discounts and rebates,
less accumulated amortisation and impairment losses, if any. Such cost includes purchase price,
borrowing costs and any cost directly attributable to bringing the asset to its working condition for the
intended use.
Intangible assets are amortised on a straight-line basis over their estimated useful lives. The amortisation
period and amortisation method are reviewed at the end of each financial year and adjusted prospectively,
if appropriate.
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. Other indirect expenses incurred relating to proje115
development, net of income earned during such stage, are considered pre-operative expenses and
disclosed under Intangible Assets Under Development.
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.
Note 2.8 Impairment of non-financial assets
Property, plant and equipment and intangible assets that are subject to depreciation/amortisation are
reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
of an asset (or cash-generating unit) 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 to sell and value-in-use.
Value-in-use is determined based on estimated future cash flows discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset. Significant estimates used include projected revenues and operating margins, growth
rates, terminal values and discount rates.
An impairment loss is recognised in the Statement of Profit and Loss. A previously recognised impairment
loss (other than for goodwill) is reversed if there has been a change in the estimates used to determine the
recoverable amount, but only to the extent that the carrying amount of the asset does not exceed the
carrying amount that would have been determined had no impairment loss been recognised previously.
Note 2.9 Leases
The Company assesses, at contract inception, whether a contract is, or contains, a lease in accordance
with Ind AS 116 “Leases". A contract is, or contains, a lease if the contract conveys the right to control the
use of an identified asset fora period of time in exchange for consideration.
Company as a lessee
The Company applies a single recognition and measurement approach for all leases, except for short¬
term leases (lease term of twelve months or less) and leases of low-value assets, for which lease
payments are recognised as an expense in the Statement of Profit and Loss on astraight-line basis over the
lease term.
At the commencement date, the Company recognises a right-of-use (“ROU“) asset and a corresponding
lease liability.
(a) Right -of-use assets
The ROU asset is initially measured at cost, comprising the initial amount of the lease liability, lease
payments made at or before the commencement date (less lease incentives received), initial direct costs
incurred, and an estimate of costs to dismantle and remove the underlying asset or to restore the
underlying asset or site. ROU assets are subsequently measured at cost less accumulated depreciation,
accumulated impairment losses, and adjusted for any remeasurement of the lease liability.
(b) Lease liabilities
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be
readily determined, the Company’s incremental borrowing rate. Lease payments included in the
measurement of the lease liability comprise fixed payments (including in-substance fixed payments),
variable lease payments that depend on an index or rate, amounts expected to be paid under residual
value guarantees, the exercise price under a purchase option if reasonably certain to be exercised, and
payments of penalties for terminating the lease if the lease term reflects the Company exercising an
option to terminate.
After the commencement date, the lease liability is increased to reflect the accretion of interest and
reduced for the lease payments made. The carrying amount is remeasured when there is a change in future
lease payments arising from a change in an index or rate, a change in the estimate of the amount
expected to be payable under a residual value guarantee, or a reassessment of options to extend or
terminate the lease.
Presentation
ROU assets are presented as a separate line item in the balance sheet. Lease liabilities are presented
separately under financial liabilities (current and non-current as applicable). Interest expense on lease
liabilities is presented within finance costs, and depreciation of ROU assets within depreciation and
amortisation expense, in the Statement of Profit and Loss. Cash payments for the principal portion of lease
liabilities are presented within financing activities, and the interest portion within operating activities (or
financing activities, consistently applied), in the Statement of Cash Flows.
Company as a lessor
Leases in which the Company does not transfer substantially all the risks and rewards incidental to
ownership of an asset are classified as operating leases. Lease income from operating leases is recognised
on a straight-line basis over the lease term, unless the payments are structured to increase in line with
expected general inflation. Leases that transfer substantially all the risks and rewards incidental to
ownership are classified as finance leases; amounts due from lessees under finance leases are recognised
as receivables at amounts equal to the net investment in the lease.
Note 2.10 Financial instruments
(a) Financial assets - initial recognition and measurement
Financial assets are recognised when, and only when, the Company becomes a party to the contractual
provisions of the instrument. At initial recognition, financial assets are measured at fair value plus, in the
case of financial assets not measured at fair value through profit or loss, transaction costs that are directly
attributable to their acquisition. Transaction costs of financial assets carried at fair value through profit or
loss are expensed in the Statement of Profit and Loss.
(b) Classification and subsequent measurement -debt instruments
Debt instruments are subsequently measured at amortised cost, fair value through other comprehensive
income (“FVOCI“), or fair value through profit or loss (“FVTPL“), based on the Company’s business model
for managing the financial asset and the contractual cash flow characteristics of the asset:
• Amortised cost - assets held to collect contractual cash flows that are solely payments of principal
and interest (“SPPI“). Interest income is recognised using the effective interest method.
• FVOCI - assets held both to collect contractual cash flows and for sale, with cash flows meeting the
SPPI criterion. Fair value movements are recognised in OCI, except for interest, impairment and foreign
exchange gains/losses, which are recognised in profit or loss. On derecognition, the cumulative gain or
loss in OCI is reclassified to profit or loss.
• FVTPL-all other debt instruments. Changes in fair value are recognised in the Statement of Profit and
Loss.
(c) Equity instruments
Equity investments other than investments in subsidiaries, associates and joint ventures are measured at
fair value. The Company makes an irrevocable election at initial recognition, on an instrument-by¬
instrument basis, to present subsequent fair value changes in OCI (“FVOCI-equity“); otherwise, equity
investments are measured at FVTPL. For FVOCI-equity instruments, fair value gains and losses are not
subsequently reclassified to profit or loss on derecognition; dividends are recognised in profit or loss when
the right to receive payment is established.
(d) Derecognition of financial assets
A financial asset is derecognised when the contractual rights to the cash flows from the asset expire, or
when the asset and substantially all the risks and rewards of ownership are transferred. Where the
Company neither transfers nor retains substantially all the risks and rewards and retains control, the asset
continues to be recognised to the extent of the Company’s continuing involvement.
(e) Impairment of financial assets
The Company applies the expected credit loss (“ECL“) model under Ind AS 109 for measuring impairment
of financial assets carried at amortised cost and FVOCI debt instruments. For trade receivables and
contract assets, the Company applies the simplified approach and recognises lifetime ECL at each
reporting date from initial recognition. For other financial assets, ECL is measured at an amount equal to
12-month ECL, unless there has been a significant increase in credit risk since initial recognition, in which
case lifetime ECL is recognised.
(f) Financial liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL, loans and
borrowings, or payables. 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. After initial recognition,
interest-bearing borrowings and other financial liabilities are subsequently measured at amortised cost
using the effective interest method. Gains and losses are recognised in profit or loss when the liabilities are
derecognised, as well as through the effective interest rate amortisation process. A financial liability is
derecognised when the obligation under the liability is discharged, cancelled or expires.
(g) Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet
when, and only when, the Company currently has a legally enforceable right to set off the recognised
amounts and intends either to settle on a net basis, or to realise the asset and settle the liability
simultaneously.
(h) Derivatives
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
subsequently remeasured to fair value at the end of each reporting period. Changes in fair value of
derivatives that are not designated in a hedging relationship are recognised in the Statement of Profit and
Loss. During the years reported, no derivative was designated in a hedging relationship.
Note 2.11 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker (“CODM“), who is responsible for allocating resources and assessing
performance of the operating segments. The CODM reviews the Company’s performance as a single
business segment, namely ’shipping’. Accordingly, the Company has determined that it operates in a
single reportable segment for the purpose of Ind AS 108 “Operating Segments11. The geographical
information required under Ind AS 108 is disclosed separately, where applicable.
Note 2.12 Inventories
In accordance with Ind AS 2 “Inventories11, materials, stores and consumables procured for the purpose of
vessel and barge repairs and maintenance are recognised as an expense at the point of consumption. The
Company expenses such items at the time of purchase asa matter of accounting policy, since the value of
unconsumed stores, spares and consumables held by the Company at the reporting date is not considered
material in the context of the financial statements. The Company reassesses this position at each
reporting date.
Note 2.13 Foreign currency transactions and translation
The functional and presentation currency of the Company is Indian Rupee (*).
Initial recognition
On initial recognition, foreign currency transactions are recorded by applying to the foreign currency
amount the exchange rate between the functional currency and the foreign currency at the date of the
transaction.
Subsequent measurement
At the reporting date, monetary items denominated in foreign currencies are translated using the closing
exchange rate. Non-monetary items measured at historical cost in a foreign currency are translated using
the exchange rate at the date of the transaction, and non-monetary items measured at fair value in a
foreign currency are translated using the exchange rates at the date the fair value is determined.
Exchange differences arising on settlement of monetary items, or on translation of such items at rates
different from those at which they were initially recorded during the period or in previous financial
statements are recognised in the Statement of Profit and Loss in the period in which they arise.
Note 2.14 Revenue recognition
Revenue from contracts with customers is recognised in accordance with Ind AS 115 “Revenue from
Contracts with Customers11. Revenue is recognised when the Company transfers control of goods or
services to a customer, in an amount that reflects the consideration to which the Company expects to be
entitled in exchange for those goods or services.
Five -step model
The Company applies the following five-step model in recognising revenue: (i) identify the contract with
the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price;
(iv) allocate the transaction price to the performance obligations in the contract; and (v) recognise
revenue when (or as) the Company satisfies a performance obligation.
Shipping and related services
Revenue from voyage charter, time charter, ship management and related services is recognised over
time, on a straight-line or output basis, as the customer simultaneously receives and consumes the
benefits provided by the Company’s performance. Where revenue is recognised over time, the Company
uses an appropriate measure of progress (output method based on time elapsed or services performed).
Revenue from incidental services rendered at a point in time is recognised when control of the service
transfers to the customer.
Variable consideration
Variable consideration, such as demurrage, despatch, performance incentives, price adjustments and
similar items, is estimated using the expected value method or the most likely amount method, whichever
better predicts the consideration to which the Company will be entitled. Variable consideration is included
in the transaction price only to the extent that it is highly probable that a significant reversal of cumulative
revenue recognised will not occur when the uncertainty associated with the variable consideration is
subsequently resolved.
Contract balances
A contract asset is the Company’s right to consideration in exchange for goods or services that the
Company has transferred to a customer when that right is conditional on something other than the
passage of time. A receivable represents the Company’s right to an amount of consideration that is
unconditional. A contract liability is the obligation to transfer goods or services to a customer for which the
Company has received consideration (or an amount of consideration is due) from the customer.
Other income
Interest income is recognised on a time-proportion basis using the effective interest method. Dividend
income is recognised when the Company’s right to receive payment is established. Insurance claims and
other items of income are recognised when the rightto receive payment is established and it is reasonably
certain that the amount will be received.
Note 2.15 Employee benefits
Short-term employee benefits
Short-term employee benefits, including salaries, wages, short-term compensated absences and
performance incentives, are measured on an undiscounted basis and are charged to the Statement of
Profit and Loss in the period in which the related service is rendered.
Defined contribution plans
The Company’s contributions to defined contribution plans, including provident fund and other statutory
schemes, are recognised as an expense in the period in which the employee renders the related service.
The Company has no further obligations beyond its contributions to such schemes.
Defined benefit plans
The Company’s liability towards defined benefit retirement schemes (including gratuity) is determined
using the projected unit credit method, with actuarial valuations being carried out at each reporting date
by independent qualified actuaries. The service cost and net interest on the net defined benefit
liability/(asset) are recognised as an expense within employee benefit expense. Past service cost is
recognised in the Statement of Profit and Loss when the plan amendment or curtailment occurs, or when
any related restructuring costs or termination benefits are recognised, whichever is earlier.
Remeasurement gains and losses of the net defined benefit liability/(asset) - comprising actuarial gains
and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling- are
recognised in Other Comprehensive Income in the period in which they arise and are not reclassified to
profit or loss subsequently.
Other long-term employee benefits
Liabilities for other long-term employee benefits, such as long-term compensated absences, are
measured at the present value of the estimated future cash outflows expected to be made by the
Company, using the projected unit credit method with actuarial valuations carried out at each reporting
date. Actuarial gains and losses on such other long-term benefits are recognised in the Statement of Profit
and Loss in the period in which they arise.
Key assumptions
The Company’s retirement benefit obligations are subject to a number of assumptions, including discount
rates, inflation and salary growth. Significant judgement is required in setting these assumptions; the
Company sets them based on its own experience, market trends and third-party actuarial advice. The
sensitivity of the obligations to changes in these assumptions is disclosed separately.
Note 2.16 Taxes on income
Income tax expense comprises current tax and deferred tax. Current and deferred tax are recognised in the
Statement of Profit and Loss, except when they relate to items that are recognised in Other Comprehensive
Income or directly in equity, in which case the related tax is also recognised in Other Comprehensive
Income or directly in equity, respectively.
Current tax
Current tax is the amount of tax payable on the taxable profit for the year, determined in accordance with
the applicable tax rates and the provisions of the Income-tax Act, 1961 and other applicable tax laws.
Current tax assets and liabilities are offset where the Company has a legally enforceable right to set off the
recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability
simultaneously.
Deferred tax
Deferred income tax is recognised using the balance sheet approach. Deferred tax assets and liabilities are
recognised for deductible and taxable temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements, except where the deferred tax arises from
the initial recognition of goodwill or of an asset or liability in a transaction that is not a business
combination and affects neither accounting profit nor taxable profit at the time of the transaction.
Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences and the carry-forward of unused tax credits and
unused tax losses can be utilised. The carrying amount of deferred tax assets is reviewed at each reporting
date and adjusted to reflect changes in probability.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset when
there is a legally enforceable right to set off current tax assets against current tax liabilities and when they
relate to income taxes levied by the same taxation authority on the same taxable entity.
Note 2.17 Borrowing costs
Borrowing costs include interest expense calculated using the effective interest method, finance charges
in respect of finance leases, and exchange differences arising from foreign currency borrowings to the
extent they are regarded as an adjustment to the interest cost. Borrowing costs that are directly
attributable to the acquisition, construction or production of a qualifying asset - i.e., an asset that
necessarily takes a substantial period of time to get ready for its intended use or sale- are capitalised as
part of the cost of that asset, in accordance with Ind AS 23. All other borrowing costs are recognised as an
expense in the period in which they are incurred.
Note 2.18 Exceptional items
The Company discloses certain financial information both including and excluding exceptional items.
Exceptional items are identified by virtue of either their size or their nature, so as to facilitate comparison
with prior periods and to assess underlying trends in the financial performance of the Company. Items that
may be considered exceptional include, but are not limited to, gains or losses on disposal of
assets/investments, impairment charges, exchange gains/(losses) on long-term borrowings or long-term
monetary assets, and changes in fair value of derivative contracts.
Note 2.19 Earnings per share
Basic earnings per share is computed by dividing the net profit or loss after tax attributable to equity
shareholders by the weighted average number of equity shares outstanding during the year, adjusted
retrospectively for any bonus issues and bonus elements in rights issues. Diluted earnings per share is
computed by dividing the net profit or loss after tax (as adjusted for dividend, interest and other charges to
expense or income, net of any attributable taxes, relating to the dilutive potential equity shares) by the
weighted average number of equity shares considered for deriving basic earnings per share plus the
weighted average number of equity shares which would be issued on the conversion of all dilutive potential
equity shares.
Note 2.20 Statement of cash flows
Cash flows are reported using the indirect method, whereby profit/(loss) before tax is adjusted for the
effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash
receipts or payments, and items of income or expense associated with investing or financing cash flows.
Cash flows for the year are classified by operating, investing and financing activities.
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