15.15 Provisions, Contingent Liabilities and Contingent Assets
Under Indian GAAP, the Group has accounted for provisions, including long-term provision,
at the undiscounted amount. In contrast, Ind AS 37 requires that where the effect of time
value of money is material, the amount of provision should be the present value of the
expenditures expected to be required to settle the obligation. The discount rate(s) should
reflect risks for which future cash flow estimates have been adjusted. Ind AS 37 also provides
that where discounting is used, the carrying amount of a provision increases in each period
to reflect the passage of time. This increase is recognized as borrowing cost. Contingent
liabilities are not recognised but are disclosed in the financial statements. Contingent assets
are neither recognised nor disclosed in the financial statements.
15.16 Operating Cycle
Based on the nature of activities of the company and normal time between acquisition of
assets and their realisation of cash and cash equivalent, the company has determined
operating cycle as 12 months for the purpose of classification of its assets and liabilities as
non-current and current.
15.17 Other comprehensive income
Under Indian GAAP, the Group has not presented other comprehensive income (OCI)
separately. Hence, it has reconciled Indian GAAP profit or loss to profit or loss according to
Ind AS. Furthermore, Ind AS profit or loss is reconciled to total comprehensive income as
per Ind AS.
15.18 Cash Flow Statement
Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for
the effects of transactions of non cash nature and any deferrals or accruals of past or future
cash receipts or payments. The Cash flows from regular revenue generating, investing and
financing activities of the Company are segregated.
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