2. MATERIAL ACCOUNTING POLICIES:
2.01 Statement of Compliance
I n accordance with the notification issued by the
Ministry of Corporate Affairs, the Company has
adopted Indian Accounting Standards (referred to
as “Ind AS”) notified under the Companies (Indian
Accounting Standards) Rules, 2015.
2.02 Basis of preparation and presentation
The financial statements of the Company have
been prepared on an accrual basis and under
the historical cost convention except for certain
financial instruments and equity settled employee
stock options transactions that are within the scope
of Ind AS 102, which have been measured at fair
value. Historical cost is generally based on the fair
value of consideration given in exchange of goods
and services. 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, regardless of whether
that price is directly observable or estimated using
another valuation technique. In addition, for financial
reporting purposes, fair value measurements are
categorised into Level 1, 2 or 3 based on the degree
to which the inputs to the fair value measurements are
observable and the significance of the inputs to the
fair value measurement in its entirety. The accounting
policies are consistently applied by the Company
during the year and are consistent with those used in
previous year.
2.03 Use of estimate
"The preparation of these financial statements in
conformity with the recognition and measurement
principles of Ind AS requires the management of
the Company to make 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 expense for the
periods presented.
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 future periods are affected.
The management believes that the estimates used in
preparation of the financial statements are prudent
and reasonable. Future results could differ due to
these estimates and differences between actual
results and estimates are recognised in the periods in
which the results are known/materialise.
Key source of estimation of uncertainty at the date of
the financial statements, which may cause a material
adjustment to the carrying amounts of assets and
liabilities within the next financial year, is in respect of
impairment of investments, useful lives of property,
plant and equipment, valuation of deferred tax
liabilities and provisions and contingent liabilities.
Evaluation of satisfaction of performance obligation
for the purpose of revenue recognition
Determination of revenue under the satisfaction of
performance obligation necessarily involves making
estimates, some of which are of a technical nature,
concerning, where relevant, the timing of satisfaction
of performance obligation, costs to completion, the
expected revenues from the project or activity and
the foreseeable losses to completion. Estimates of
project income, as well as project costs, are reviewed
periodically. The Company recognises revenue when
the Company satisfies its performance obligation.
Impairment of investments
The Company reviews its carrying value of investments
carried at cost annually, or more frequently when there
is indication for impairment. If the recoverable amount
is less than its carrying amount, the impairment loss is
accounted for.
Useful lives of property, plant and equipment
The Company reviews the useful life of property,
plant and equipment at the end of each reporting
period. This reassessment may result in change in
depreciation expense in future periods.
Valuation of deferred tax assets
The Company reviews recognition of deferred tax at
the end of each reporting period. The policy for the
same has been explained under Note 2.09
Determination of lease term & discount rate
I nd AS 116 Leases requires lessee to determine the
lease term as the non-cancellable period of a lease
adjusted with any option to extend or terminate the
lease, if the use of such option is reasonably certain.
The Company makes assessment on the expected
lease term on lease by lease basis and thereby
assesses whether it is reasonably certain that any
options to extend or terminate the contract will be
exercised. In evaluating the lease term, the Company
considers factors such as any significant leasehold
improvements undertaken over the lease term, costs
relating to the termination of lease and the importance
of the underlying to the Company’s operations
taking into account the location of the underlying
asset and the availability of the suitable alternatives.
The lease term in future periods is reassessed
to ensure that the lease term reflects the current
economic circumstances.
The discount rate is generally based on the incremental
borrowing rate specific to the lease being evaluated or
for a portfolio of leases with similar characteristics
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