Provisions are recognised when the Company has a present obligation (legal or
constructive) as a result of a past events and it is probable that an outflow of
resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are discounted using a
current pre-tax rate that reflects, when appropriate, the risks specific to the liability.
When discounting is used, the increase in the provision due to the passage of time is
recognised as a finance cost.
• a present obligation arising from past events, when it is not probable that an
outflow of resources will be required to settle the obligation;
• a present obligation arising from past events, when no reliable estimate is possible
Provisions, contingent liabilities and contingent assets are reviewed at each balance
sheet date.
j. Leases
A contract is, or contains, a lease if the contract conveys the right to control the use of
an identified asset for a period of time in exchange for consideration.
The Company as a lessee
From 1 April 2019, leases are recognised as a right-of-use asset and a corresponding
liability at the date at which the leased asset is available for use by the Company.
Contracts may contain both lease and non-lease components. The Company allocates
the consideration in the contract to the lease and non-lease components based on
their relative stand-alone prices.
Assets and liabilities arising from a lease are initially measured on a present value
basis. Lease liabilities include the net present value of the following lease payments:
• fixed payments (including in -substance fixed payments), less any lease
incentives receivable
• variable lease payment that are based on an index or a rate, initially measured
using the index or rate as at the commencement date
• amounts expected to be payable under residual value guarantees, if any
• the exercise price of a purchase option if any, if the Company is reasonably
certain to exercise that option
• payment for penalties for terminating the lease, if the lease term reflects the
Company exercising that option
The lease payments are discounted using the interest rate implicit in the lease. If the
rate cannot be readily determined, which is generally the case for leases in the
Company, the lessee’s incremental borrowing rate is used, being the rate that the
individual lessee would have to pay to borrow the funds necessary to obtain an asset
of similar value to the right-of-use asset in a similar economic environment with similar
terms, security and conditions.
Lease payments are allocated between principal and finance cost. The finance cost is
charged to the statement of profit and loss over the lease period so as to produce a
constant periodic rate of interest on the remaining balance of the liability for each
period. Variable lease payments that depend on sales are recognised in the
statement of profit and loss in the period in which the condition that triggers those
payments occurs.
Right-of-use assets are generally depreciated over the shorter of the asset's useful life
and the lease term on a straight-line basis. If the Company is reasonably certain to
exercise a purchase option, the right-of-use asset is depreciated over the underlying
assets useful life.
Payments associated with short-term leases are recognised on a straight-line basis as
an expense in the statement of profit and loss. Short term leases are the leases with a
lease term of 12 months or less. Further, rental payments for the land where lease
period is considered to be indefinite or indeterminable, these are charged off to the
statement of profit and loss.
k. Earnings per share
Basic earnings per equity share is computed by dividing the net profit after tax
attributable to the equity shareholders by the weighted average number of equity
shares outstanding during the year. Diluted earnings per equity share is computed by
dividing adjusted net profit after tax by the aggregate of weighted average number of
equity shares and dilutive potential equity shares during the year.
l. Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand,
cheques 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.
m. Fair value measurement
The Company measures financial instruments such as derivatives and certain
investments, at fair value at each balance sheet date.
All assets and liabilities for which fair value is measured or disclosed in the financial
statements are categorized within the fair value hierarchy, described as follows,
based on the lowest level input that is significant to the fair value measurement as a
whole:
• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets
or liabilities
• Level 2 — Valuation techniques for which the lowest level input that is significant
to the fair value measurement is directly or indirectly observable
• Level 3 — Valuation techniques for which the lowest level input that is significant
to the fair value measurement is unobservable
For assets and liabilities that are recognized in the balance sheet on a recurring basis,
the Company determines whether transfers have occurred between levels in the
hierarchy by re-assessing categorization (based on the lowest level input that is
significant to the fair value measurement as a whole) at the end of each reporting
period.
For the purpose of fair value disclosures, the Company has determined classes of
assets and liabilities on the basis of the nature, characteristics and risks of the asset or
liability and the level of the fair value hierarchy as explained above.
n. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and
a financial liability or equity instrument of another entity.
(a) Financial assets
Classification
The Company classifies financial assets as subsequently measured at amortized cost,
fair value through other comprehensive income or fair value through profit or loss on the
basis of its business model for managing the financial assets and the contractual cash
flows characteristics of the financial asset.
Initial recognition and measurement
All financial assets are recognized initially at fair value plus, in the case of financial
assets not recorded at fair value through profit or loss, transaction costs that are
attributable to the acquisition of the financial asset.
Subsequent measurement
For purposes of subsequent measurement financial assets are classified in below
categories:
• Financial assets carried at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a
business model whose objective is to hold the asset in order to collect contractual cash
flows and the contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount
outstanding.
• Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive
income if it is held within a business model whose objective is achieved by both
collecting contractual cash flows and selling financial assets and the contractual terms of
the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding. The Company has made an
irrevocable election for its investments which are classified as equity instruments to
present the subsequent changes in fair value in other comprehensive income based on
its business model.
• Financial assets at fair value through profit or loss
A financial asset which is not classified in any of the above categories are subsequently
fair valued through profit or loss.
Derecognition
A financial asset is primarily derecognized when the rights to receive cash flows from the
asset have expired or the Company has transferred its rights to receive cash flows from
the asset.
Impairment of financial assets
The Company assesses impairment based on expected credit losses (ECL) model for
measurement and recognition of impairment loss on the financial assets that are trade
receivables or contract revenue receivables and all lease receivables.
(b) Financial liabilities
Classification
The Company classifies all financial liabilities as subsequently measured at amortized
cost, except for financial liabilities at fair value through profit or loss. Such liabilities,
including derivatives that are liabilities, shall be subsequently measured at fair value.
Initial recognition and measurement
All financial liabilities are recognized initially at fair value and, in the case of loans and
borrowings and payables, net of directly attributable transaction costs. The Company’s
financial liabilities include trade and other payables, loans and borrowings including bank
overdrafts, and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described
below:
• Financial liabilities at amortised cost
After initial recognition, interest-bearing loans and borrowings are subsequently
measured at amortized cost using the EIR method. Gains and losses are recognized in
profit or loss when the liabilities are derecognized as well as through the EIR
amortization process.
Amortized cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is
included as finance costs in the statement of profit and loss.
• Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for
trading and financial liabilities designated upon initial recognition as at fair value through
profit or loss. Financial liabilities are classified as held for trading if they are incurred for
the purpose of repurchasing in the near term. This category also includes derivative
financial instruments entered into by the Company that are not designated as hedging
instruments in hedge relationships as defined by Ind AS 109. Separated embedded
derivatives are also classified as held for trading unless they are designated as effective
hedging instruments.
Gains or losses on liabilities held for trading are recognized in the statement of profit and
loss.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged
or cancelled or expires. When an existing financial liability is replaced by another from
the same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as the derecognition
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.
o. Unless specifically stated to be otherwise, these policies are consistently followed.
2.3 Significant accounting judgements, estimates and assumptions
The preparation of the Company’s financial statements requires management to make
judgements, estimates and assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and the accompanying disclosures, and the disclosure
of contingent liabilities at the date of the financial statements. Estimates and
assumptions are continuously evaluated and are based on management’s experience
and other factors, including expectations of future events that are believed to be
reasonable under the circumstances. Uncertainty about these assumptions and
estimates could result in outcomes that require a material adjustment to the carrying
amount of assets or liabilities affected in future periods.
In particular, the Company has identified the following areas where significant
judgements, estimates and assumptions are required. Further information on each of
these areas and how they impact the various accounting policies are described below
and also in the relevant notes to the financial statements. Changes in estimates are
accounted for prospectively.
Judgements
In the process of applying the Company’s accounting policies, management has made
the following judgements, which have the most significant effect on the amounts
recognized in the financial statements:
Contingencies
Contingent liabilities may arise from the ordinary course of business in relation to
claims against the Company, including legal, contractor, land access and other claims.
By their nature, contingencies will be resolved only when one or more uncertain future
events occur or fail to occur. The assessment of the existence, and potential quantum,
of contingencies inherently involves the exercise of significant judgments and the use
of estimates regarding the outcome of future events.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation
uncertainty at the reporting date that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial
year, are described below. The Company based its assumptions and estimates on
parameters available when the consolidated financial statements were prepared.
Existing circumstances and assumptions about future developments, however, may
change due to market change or circumstances arising beyond the control of the
Company. Such changes are reflected in the assumptions when they occur.
(a) Impairment of non-financial assets
The Company assesses at each reporting date whether there is an indication that an
asset may be impaired. If any indication exists, or when annual impairment testing for
an asset is required, the Company estimates the asset’s recoverable amount. An
asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of
disposal and its value in use. It is determined for an individual asset, unless the asset
does not generate cash inflows that are largely independent of those from other assets
or groups of assets. Where the carrying amount of an asset or CGU exceeds its
recoverable amount, the asset is considered impaired and is written down to its
recoverable amount.
In assessing value in use, the estimated future cash flows are 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. In determining fair value
less costs of disposal, recent market transactions are taken into account. If no such
transactions can be identified, an appropriate valuation model is used. These
calculations are corroborated by valuation multiples, quoted share prices for publicly
traded subsidiaries or other available fair value indicators.
(b) Defined benefit plans
The cost of the defined benefit plan and other post-employment benefits and the
present value of such obligation are determined using actuarial valuations. An actuarial
valuation involves making various assumptions that may differ from actual
developments in the future. These include the determination of the discount rate, future
salary increases, mortality rates and future pension increases. Due to the complexities
involved in the valuation and its long-term nature, a defined benefit obligation is highly
sensitive to changes in these assumptions. All assumptions are reviewed at each
reporting date.
(c) Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance
sheet cannot be measured based on quoted prices in active markets, their fair value is
measured using valuation techniques including the DCF model. The inputs to these
models are taken from observable markets where possible, but where this is not
feasible, a degree of judgment is required in establishing fair values. Judgements
include considerations of inputs such as liquidity risk, credit risk and volatility. Changes
in assumptions about these factors could affect the reported fair value of financial
instruments.
(d) Impairment of financial assets
The impairment provisions for financial assets are based on assumptions about risk of
default and expected loss rates. The Company uses judgments in making these
assumptions and selecting the inputs to the impairment calculation, based on
Company’s past history, existing market conditions as well as forward looking
estimates at the end of each reporting period.
2.4 Recent Accounting Pronouncement
Ministry of Corporate Affairs ("MCA”) notifies new standards or amendments to the
existing standards under Companies (Indian Accounting Standards) Rules as issued
from time to time. For the year ended March 31, 2025, MCA has not notified any new
standards or amendments to the existing standards applicable to the Company.
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