3 Material Accounting Policies:
A summary of the material accounting policies applied in the preparation of the Standalone Financial Statements are as given below.
These accounting policies have been applied consistently to all periods presented in the Standalone Financial Statements.
3.(a) Financial Instruments:
a.1 Financial Assets:-
Recognition and initial measurement: -
Financial assets and financial liabilities are initially recognised when the Company becomes a party to the contractual
provisions of the instrument and are measured initially at fair value adjusted for transaction cost.
Subsequent measurement: -
Equity instrument and Mutual Fund: - All equity Instrument and mutual funds within scope of Ind-AS 109 are measured at
fair value. Equity instrument and Mutual fund which are held for trading are classified as at fair value through profit & loss
(FVTPL). For all other equity instruments, the Company decided to classify them as at fair value through other comprehensive
income (FVTOCI).
Debt instrument: - A 'debt instrument' is measured at the amortised cost if both the following conditions are met. The assets
are held within a business model whose objective is to hold assets for collecting contractual cash flows, and contractual terms
of the assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding. After initial measurement, such financial assets are subsequently measured at amortised cost using the
effective interest rate (EIR) method.
De- Recognition of financial Assets: -
A financial asset is primarily de-recognised when the rights to receive cash flows from the asset have expired or Company has
transferred its right to receive cash flow from the asset.
Impairment of financial assets: -
The Company determines whether there has been a significant increase in the credit risk since initial recognition and if credit
risk has increased significantly, impairment loss is provided.
a.2 Financial Liabilities : -
Recognition and initial measurement: -
All financial liabilities are recognised initially at fair value and transaction cost that is attributable to the acquisition of the
financial liabilities is also adjusted. Financial liabilities are classified at amortised cost.
Subsequent measurement: -
Subsequent to initial recognition, these liabilities are measured at amortised cost using the effective interest rate method.
De-recognition of financial liabilities
Financial liabilities are derecognized when the obligation under the liabilities are discharged or cancelled or expires.
Consequently, write back of unsettled credit balances is done on closure of the concerned project or earlier based on the
previous experience of Management and actual facts of each case and recognized in other Operating Revenues.
Further when an existing Financial liability is replaced by another from the same lender on substantially different terms, or
the terms of existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of
the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in
the Statement of Profit and Loss.
a.3 Off setting of financial instrument: -
Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if there is currently
enforceable legal right to offset the recognized amounts and there is an intention to settle on net basis, to realize the assets
and settle the liabilities simultaneously.
a.4 Impairment of Financial Assets: -
Equity instruments, Debt Instruments and Mutual Fund: - In accordance with Ind-AS 109, the Company applies Expected
Credit Loss model for measurement and recognition of impairment loss for financial assets. Expected Credit Loss 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 Company expects to receive.
Other Financial Assets: - The Company determines whether there has been a significant increase in the credit risk since
initial recognition and if credit risk has increased significantly, impairment loss is provided.
a.5 Expected Credit Loss (ECL): -
The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair
valued through profit or loss. Loss allowanceo on Loans with significant financing component is measured at an amount equal
to 12-month ECL. For all other financial assets, expected credit losses are measured at an amount equal to the lifetime 12-
month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are
measured at lifetime ECL.
The Company determines the allowance for credit losses based on historical loss experience adjusted to reflect current and
estimated future economic conditions. The Company considers current and anticipated future economic conditions relating to
industries the Company deals with and the countries where it operates.
The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the
amount that is required to be recorded is recognized as an impairment gain or loss in condensed consolidated statement of
comprehensive income.
3.(b) Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise of cash at bank and on hand and short- term deposits with an original
maturity of three months or less, which are subject to an insignificant risk of changes in value. For the purpose of the statement of
cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts if
they are considered an integral part of the Company's cash management.
3.(c) Investment property
Recognition and initial measurement
Investment properties are properties held to earn rentals or for capital appreciation, or both. Investment properties are measured
initially at their cost of acquisition. The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly
attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in
arriving at the purchase price.
Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Company. All other repair and maintenance costs are
recognized in statement of profit or loss as incurred.
Subsequent measurement (depreciation and useful lives)
Investment properties are subsequently measured at cost less accumulated depreciation and impairment losses. Depreciation on
investment properties is provided on the straight-line method, computed on the basis of useful lives (as set-out below) prescribed in
Schedule II to the Act. However no depreciation is being charged on land in accordance with IND AS 40.
De-recognition
Investment properties are de-recognized 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 recognized in profit or loss in the period of de-recognition.
3.(d) Property plant and equipment (PPE)
1.1. Initial recognition and measurement
Property, plant and equipments ("PPE") are measured at cost less accumulated depreciation/amortization and accumulated
impairment losses. Cost includes expenditure that is directly attributable to bringing the asset, inclusive of non-refundable taxes &
duties, to the location and condition necessary for it to be capable of operating in the manner intended by management.
When parts of an item of property, plant and equipments have different useful lives, they are recognized separately.
Spare parts are capitalized when they meet the definition of PPE, i.e. when the Company intends to use these for a period exceeding 12
months.
On transition to IND AS, the Company has elected to continue with the carrying value of all of its PPE recognized, measured as per the
previous GAAP and use that carrying value as the deemed cost of the PPE.
1.2. Depreciation
Depreciation on Property, Plant and Equipment, including assets taken on lease, other than freehold land is charged based on Written
down method on an estimated useful life as prescribed in Schedule II to the Companies Act, 2013.
Depreciation on additions to/deductions from property, plant and equipment during the year is charged on pro-rata basis from/up to
the date on which the asset is available for use/disposed.
In circumstance, where a PPE is abandoned, the cumulative capitalized costs relating to the property are written off in the same
period.
An item of Property, Plant and Equipment is derecognized upon disposal or when no future economic benefits are expected to arise
from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of Property, Plant and Equipment
are determined as a difference between the sale proceeds and the carrying amount of the asset and is recognized in the profit and loss.
At the end of each reporting period, the Company reviews the carrying amounts of tangible and intangible assets to determine
whether there is any indication that those assets have suffered an impairment loss.
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