(c) Material accounting policies
(i) Foreign currency
Foreign currency transactions and
translation
Transactions in foreign currencies are
translated into the functional currency
of the Company at the exchange
rates on the date of the transactions.
Monetary assets and liabilities
denominated in foreign currencies
are translated into the functional
currency at the exchange rate at the
reporting date. Non-monetary assets
and liabilities that are measured at
fair value in a foreign currency are
translated into the functional currency
at the exchange rate when the fair value
was determined. Non-monetary assets
and liabilities that are measured based
on historical cost in a foreign currency
are translated at the exchange rate at
the date of the transaction. Exchange
differences are recognised in profit or
loss.
Foreign exchange gains and losses
that relate to borrowings and all other
foreign exchange gains and losses are
presented in the statement of Profit
and loss on net basis.
(ii) Financial Instruments
(a) Non derivative financial
instruments consist of:
• financial assets, which include
cash and cash equivalents,
trade receivables, unbilled
receivables, employee and
other advances, investments
in equity and eligible current
and noncurrent assets; and
• financial liabilities, which
include borrowings, trade
payables and eligible current
and noncurrent liabilities.
Non-derivative financial
instruments are recognised
initially at fair value. Subsequent
to initial recognition, non-derivative
financial instruments are measured
as described below:
Cash and cash equivalents.
The Company's cash and cash
equivalents consist of cash on
hand and in banks and demand
deposits with banks, which can be
withdrawn at any time, without
prior notice or penalty on the
principal. For the purposes of the
statement of cash flows, cash
and cash equivalents include cash
on hand, in banks and demand
deposits with banks, net of
outstanding bank overdrafts that
are repayable on demand and are
considered part of the Company's
cash management system. In the
balance sheet, bank overdrafts
are presented under borrowings
within current financial liabilities.
Investments
Financial instruments measured
at fair value through profit or loss
("FVTPL"):
Instruments that do not meet the
amortised cost or FVTOCI criteria
are measured at FVTPL. Financial
assets at FVTPL are measured
at fair value at the end of each
reporting period, with any gains or
losses arising on re-measurement
recognised in the statement of
profit and loss. The gain or loss
on disposal is recognised in the
statement of profit and loss.
Interest income is recognised in
the statement of profit and loss for
FVTPL debt instruments. Dividends
on financial assets at FVTPL is
recognised when the Company's
right to receive dividends is
established.
Investments in subsidiaries:
Investment in equity instruments
of subsidiaries are measured at
cost less impairment.
Other financial assets
Other financial assets are
non-derivative financial assets with
fixed or determinable payments
that are not quoted in an active
market. These comprise trade
receivables, unbilled receivables,
employee and other advances and
eligible current and noncurrent
assets. They are presented as
current assets, except for those
expected to be realised later than
twelve months after the reporting
date which are presented as
non-current assets. All financial
assets are initially recognised
at fair value and subsequently
measured at amortised cost using
the effective interest method, less
any impairment losses. However,
trade receivables and unbilled
receivables that do not contain a
significant financing component
are measured at the Transaction
Price.
Trade payables and other
liabilities
Trade payables are initially
recognised at transaction price,
and subsequently carried at
transaction price.
Other liabilities are initially
recognised at transaction price,
and subsequently carried at
amortised cost using the effective
interest method. For these
financial instruments, the carrying
amounts approximate fair value
due to the short-term maturity of
these instruments.
(b) Derecognition of financial
instruments
The Company derecognises
a financial asset when the
contractual rights to the cash
flows from the financial asset
expire or it transfers the financial
asset and the transfer qualifies for
derecognition under Ind AS 109. If
the Company retains substantially
all the risks and rewards of a
transferred financial asset, the
Company continues to recognise
the financial asset and recognises
a borrowing for the proceeds
received. A financial liability (or
a part of a financial liability) is
derecognised from the Company's
balance sheet when the obligation
specified in the contract is
discharged or cancelled or expires.
(c) 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
amounts and it intends either to
settle them on a net basis or to
realise the asset and settle the
liability simultaneously.
(iii) Property, plant and equipment
i. Recognition and measurement
Items of property, plant and
equipment are measured at
cost (cash price equivalent),
which includes capitalised
borrowing costs, less accumulated
depreciation, and accumulated
impairment losses, if any. If
payment is deferred beyond
normal credit terms, the
difference between the cash price
equivalent and the total payment
is recognised as interest over the
period of credit.
If significant parts of an item of
property, plant and equipment
have different useful lives, then
they are accounted for as separate
items (major components) of
property, plant and equipment.
Any gain or loss on disposal of
an item of property, plant and
equipment is recognised in profit
or loss.
Capital work in progress is stated
at cost and includes the cost of the
assets that are not ready for their
intended use at the Balance Sheet
date.
PPE is derecognised upon disposal
or when no future economic
benefits are expected from its use
or disposal. Any gain or loss arising
on derecognition is recognised in
the Statement of Profit and Loss in
the same period.
ii. Subsequent expenditure
Subsequent expenditure is
capitalised only if it is probable
that the future economic benefits
associated with the expenditure
will flow to the Company.
iii. Depreciation
Depreciation is calculated on cost
of items of property, plant and
equipment less their estimated
residual values over their esti mated
useful lives using the straight-line
method and is generally recognised
in the statement of profit and loss.
Freehold land is not depreciated.
Depreciation on property, plant
and equipment is provided over the
useful life of assets as assessed by
the management are in line with
useful lives prescribed in Schedule
II to the Companies Act 2013, as
follows -
Depreciation method, useful lives
and residual values are reviewed
at each financial year-end and
adjusted if appropriate.
Depreciation on additions
(disposals) is provided on a
pro-rata basis i.e. from (up to) the
date on which the asset is ready
for use (disposed of).
(iv) Intangible assets
Intangible assets acquired separately
are measured at cost of acquisition.
Following initial recognition,
intangible assets are carried at
cost less accumulated amortisation
and impairment losses, if any. The
amortisation of an intangible asset
with a finite useful life reflects the
manner in which the economic benefit
is expected to be generated. The
estimated useful life of amortisable
intangibles is reviewed and where
appropriate is adjusted, annually.
The estimated useful lives of the
amortisable intangible assets are
considered as 10 years.
(v) Discontinued Operations and Asset
classified as held for sale.
The Company classifies non-current
assets as held for sale if their carrying
amounts will be recovered principally
through a sale rather than through
continuing use.
Non-current assets held for sale are
measured at the lower of their carrying
amount and the fair value less costs to
sell. Assets and liabilities classified as
held for sale are presented separately
in the balance sheet.
Property, plant, and equipment once
classified as held for sale are not
depreciated or amortised.
Discontinued operation is a component
of the Company that has been
disposed of or classified as held for
sale and represents a major line of
business. The results of discontinued
operation are presented separately in
the Statement of Profit and Loss for all
the periods presented.
(vi) Investment property
Investment properties are measured
initially at cost, including transaction
costs. Subsequent to initial recognition,
investment properties will be stated at
cost less accumulated depreciation and
accumulated impairment loss, if any.
The Company depreciates building
component of investment property
over 30 years from the date of original
purchase.
Though the Company measures
investment property using cost-
based measurement, the fair value
of investment property is disclosed in
the notes. Fair values are determined
based on an evaluation performed by
an accredited external independent
valuer applying a valuation model
recommended by the International
Valuation Standards Committee.
(vii) Impairment
i. Impairment of Financial assets
The Company applies the expected
credit loss model for recognizing
impairment loss on financial assets
measured at amortised cost, trade
receivables, unbilled receivables,
contract assets, and other financial
assets. Expected credit loss is the
difference between the contractual
cash flows and the cash flows
that the entity expects to receive
discounted using the effective
interest rate.
Loss allowances for trade
receivables, unbilled receivables,
contract assets are measured
at an amount equal to lifetime
expected credit loss. Lifetime
expected credit losses are the
expected credit losses that result
from all possible default events
over the expected life of a financial
instrument. Lifetime expected
credit loss is computed based on
a provision matrix which takes
in to account risk profiling of
customers and historical credit loss
experience adjusted for forward
looking information.
ii. Impairment of non-financial
assets
The Company's non-financial
assets such as property, plant
and equipment, inventories and
deferred tax assets, are reviewed
at each reporting date to determine
whether there is any indication of
impairment. If any such indication
exists, then the asset's recoverable
amount is estimated.
For impairment testing, assets
that do not generate independent
cash inflows are grouped together
into cash-generating units (CGUs).
Each CGU represents the smallest
group of assets that generates
cash inflows that are largely
independent of the cash inflows of
other assets or CGUs.
The recoverable amount of a CGU
(or an individual asset) is the
higher of its value in use and its
fair value less costs to sell. Value
in use is based on the 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 CGU (or the asset).
An impairment loss is recognised
if the carrying amount of an asset
or CGU exceeds its estimated
recoverable amount. Impairment
losses are recognised in the
statement of profit and loss.
In respect of assets for which
impairment loss has been
recognised in prior periods,
the Company reviews at each
reporting date whether there is
any indication that the loss has
decreased or no longer exists.
An impairment loss is reversed
if there has been a change in
the estimates used to determine
the recoverable amount. Such a
reversal is made only to the extent
that the asset's carrying amount
does not exceed the carrying
amount that would have been
determined, net of depreciation
or amortisation, if no impairment
loss had been recognised.
(viii) Employee benefits
i. Short term employee benefits
Short-term employee benefit
obligations are measured on
an undiscounted basis and are
expensed as the related service is
provided. A liability is recognised
for the amount expected to be paid
e.g. under short-term cash bonus,
if the Company has a present legal
or constructive obligation to pay
this amount as a result of past
service provided by the employee,
and the amount of obligation can
be estimated reliably.
ii. Post-employment benefits
(defined benefit plans)
The Company provides for
retirement benefits in the form of
Gratuity. A defined benefit plan is
a post-employment benefit plan
other than a defined contribution
plan. The Company's net obligation
in respect of defined benefit plans
is calculated separately for each
plan by estimating the amount of
future benefit that employees have
earned in the current and prior
periods, discounting that amount
and deducting the fair value of any
plan assets.
The calculation of defined benefit
obligation is performed annually
by a qualified actuary using the
projected unit credit method.
When the calculation results in a
potential asset for the Company,
the recognised asset is limited
to the present value of economic
benefits available in the form of
any future refunds from the plan or
reductions in future contributions
to the plan ('the asset ceiling').
In order to calculate the present
value of economic benefits,
consideration is given to any
minimum funding requirements.
Re-measurements of the net
defined benefit liability, which
comprise actuarial gains and
losses, the return on plan assets
(excluding interest) and the
effect of the asset ceiling (if any,
excluding interest), are recognised
in OCI. The Company determines
the net interest expense (income)
on the net defined benefit liability
(asset) for the period by applying
the discount rate used to measure
the defined benefit obligation at
the beginning of the annual period
to the then-net defined benefit
liability (asset), taking into account
any changes in the net defined
benefit liability (asset) during the
period as a result of contributions
and benefit payments. Net interest
expense and other expenses
related to defined benefit plans
are recognised in profit or loss.
When the benefits of a plan are
changed or when a plan is curtailed,
the resulting change in benefit
that relates to past service ('past
service cost' or 'past service gain')
or the gain or loss on curtailment
is recognised immediately in profit
or loss. The Company recognises
gains and losses on the settlement
of a defined benefit plan when the
settlement occurs.
iii. Defined contribution plans
The Company makes defined
contribution to Government
Employee Provident Fund, and
Superannuation Scheme, which
are recognised in the Statement of
Profit and Loss on accrual basis.
A defined contribution plan is a
post-employment benefit plan
under which an entity pays fixed
contributions into a separate
entity and will have no legal or
constructive obligation to pay
further amounts. The Company
makes specified monthly
contributions towards Government
administered provident
fund scheme. Obligations
for contributions to defined
contribution plans are recognised
as an employee benefit expense in
profit or loss in the periods during
which the related services are
rendered by employees.
Prepaid contributions are
recognised as an asset to the
extent that a cash refund or a
reduction in future payments is
available.
(ix) Revenue Recognition
The Company derives revenue
primarily from crane hiring services
and other ancillary services
associated with crane hiring.
The Company is also involved in
providing turnkey solutions of
equipment erection ("EPC").
Revenue is measured based on
the considerations specified in
a contract with a customer. The
Company recognises revenue
when it transfers control over
service to a customer.
The following table provides information
about the nature and timing of the
satisfaction of performance obligations
in contracts with customers, including
significant payment terms, and the
related revenue recognition policies.
(x) Income tax
Income tax comprises current
and deferred tax. It is recognised
in profit or loss except to the
extent that it relates to an item
recognised directly in equity or in
other comprehensive income
i. Current income tax
Tax on income for the current
period is determined on the basis
of taxable income and tax credits
computed in accordance with
the provisions of the Income Tax
Act,1961 and using estimates and
judgments based on the expected
outcome of assessments/appeals
and the relevant rulings in the areas
of allowances and disallowances.
Current tax assets and current tax
liabilities are offset only if there is
a legally enforceable right to set
off the recognised amounts, and it
is intended to realise the asset and
settle the liability on a net basis or
simultaneously.
ii. Deferred tax
Deferred income tax is provided
in full, using the balance
sheet approach, on temporary
differences between the carrying
amounts of assets and liabilities for
financial reporting purposes and
the corresponding amounts used
for taxation purposes. Deferred
tax is also recognised in respect of
carried forward tax losses and tax
credits.
Deferred tax liabilities are
generally recognised for all
taxable temporary differences
except where the Company is
able to control the reversal of
the temporary difference and it
is probable that the temporary
difference will not reverse in the
foreseeable future.
Deferred tax assets - unrecognised
or recognised, are reviewed at
each reporting date and are
recognised/reduced to the extent
that it is probable/no longer
probable respectively that the
related tax benefit will be realised.
Deferred tax is measured at the
tax rates that are expected to
apply to the period when the asset
is realised or the liability is settled,
based on the laws that have been
enacted or substantively enacted
by the reporting date.
Deferred tax assets and liabilities
are offset if there is a legally
enforceable right to offset current
tax liabilities and assets, and they
relate to income taxes levied by
the same tax authority.
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