2. Material accounting policies

2.1 Basis of preparation

The Standalone Financial Statements have been
prepared in accordance with the Indian Accounting
Standards ('Ind AS') notified under the Companies
(Indian Accounting Standards) (Amendment)
Rules, 2015 (as amended from time to time)
under the provisions of the Act and Presentation
requirements of the Division II of the schedule III to
the Act (Ind AS Compliant Schedule III).

These financial statements have been prepared on
a historical cost basis except for certain financial
assets and liabilities which have been measured
at fair value (refer accounting policy regarding
financial instruments) and defined benefit plans.

The Company has prepared the financial
statements on the basis that it will continue to
operate as going concern.

During the year, the Group has changed its policy
for rounding off presentation in the results from Rs
in lakhs to Rs in Crore, as the Management believes
it would result in better presentation. Accordingly,
the financial statements are presented in Indian
Rupees (inr) and all values are rounded to the
rupees in Crore except when otherwise indicated.

Current versus non-current classification

The Company presents assets and liabilities
in the balance sheet based on current/ non¬
current classification.

An asset is treated as current when it is:

• Expected to be realized or intended to be sold
or consumed in normal operating cycle

• Held primarily for the purpose of trading

• Expected to be realized within twelve months
after the reporting period, or

• Cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for
at least twelve months after the reporting period

All other assets are classified as non-current.

A liability is treated as current when it is:

• Expected to be settled in normal operating cycle

• Held primarily for the purpose of trading

• Due to be settled within twelve months after the
reporting period, or

• There is no unconditional right to defer the
settlement of the liability for at least twelve
months after the reporting period

All other liabilities as classified as non-current.

The operating cycle is the time between the
acquisition of assets for processing and their
realisation in cash and cash equivalents. The
Company has identified twelve months as its
operating cycle.

Deferred tax assets and liabilities are classified as
non-current assets and liabilities.

2.2 Summary of material accounting policies

a. Investment in Subsidiary associate and joint
ventures

A subsidiary is an entity that is controlled by
another entity.

An associate is an entity over which the Company
has significant influence. Significant influence
is the power to participate in the financial and
operating policy decisions of the investee but is
not control or joint control over those policies.

A joint venture is a type of joint arrangement
whereby the parties that have joint control of the
arrangement have rights to the net assets of the
joint venture. These investments are accounted
at cost of acquisition less impairment, if any is
recognised through the Profit and Loss Account.
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 recorded in the
Statement of Profit and Loss.

When an impairment loss subsequently reverses,
the carrying amount of the Investment is increased
to the revised estimate of its recoverable amount,

so that the increased carrying amount does not
exceed the cost of the Investment. A reversal of an
impairment loss is recognized immediately in P&L.

b. Foreign currencies

The Company's Standalone financial statements
are presented in INR, which is also the Company's
functional currency.

Transaction and balances:

Transactions in foreign currencies are initially
recorded by the Company at functional currency
spot rates at the date the transaction first qualifies
for recognition.

Monetary assets and liabilities denominated
in foreign currencies are translated at the
functional currency spot rates of exchange at the
reporting date.

Exchange differences arising on translation /
settlement of foreign currency monetary items are
recognised in profit or loss in the period in which
they arise.

c. Revenue from contract with customers

Revenue from contracts with customers is
recognised when control of the services are
transferred to the customer at an amount that
reflects the consideration to which the Company
expects to be entitled in exchange for those
services. The Company has generally concluded
that it is the principal in its revenue arrangements,
because it typically controls the services before
transferring them to the customer.

Container freight station ('CFS') income

Income from Container Handling is recognised on
completion of performance obligation as per the
contract with customer.

I ncome from Ground Rent is recognised for the
period the container is lying in the Container
Freight Station as per the terms of arrangement
with the customers.

I ncome from auction sales, is recognised when
the Company auctions long standing cargo that
has not been cleared by customs. Revenue and
expenses for Auction sales are recognised when
auction is completed after obtaining necessary
approvals from appropriate authorities. Auction
sales include recovery of the cost incurred in
conducting auctions, accrued ground rent and
handling charges relating to long-standing cargo.

Reimbursement of cost is netted off with the
relevant expenses incurred, if incurred on behalf
of the customers.

Interest income is recognised on time proportion
basis. Interest income is included in finance
income in the Statement of Profit and Loss.

Dividend income is recognised when the
Company's right to receive the payment is
established i.e. the date on which shareholders
approve the dividend.

Business support charges are recognized as and
when the related services are rendered.

Contract Balances

Contract balances include trade receivables,
contract assets and contract liabilities.

Trade receivables

A receivable represents the Company's right to
an amount of consideration that is unconditional
(i.e., only the passage of time is required before
payment of the consideration is due). Trade
receivables are separately disclosed in the
financial statements.

Contract assets

A contract asset is initially recognised for revenue
from services because the right to receive
the consideration is conditional on successful
completion of the service i.e. transfer of benefit
of services to the customer.. Upon completion
of services and acceptance by the customer,
the amount recognised as contract assets is
reclassified to trade receivables.

Contract asset includes the costs deferred for
Container freight stations operations relating to
import handling and transport activities where
the Company's performance obligation is yet to
be completed.

d. Taxes

Tax expense comprises current tax expense and
deferred tax.

Current Income tax

Current income tax assets and liabilities are
measured at the amount expected to be
recovered from or paid to the taxation authorities
in accordance with the applicable tax laws. The tax
rates and tax laws used to compute the amount
are those that are enacted or substantively
enacted, at the reporting date.

Current income tax relating to items recognised
outside the Statement of Profit and Loss is
recognised outside the Statement of Profit and
Loss (either in other comprehensive income or
in equity). Current tax items are recognised in
correlation to the underlying transaction either in
OCI or directly in equity.

Management periodically evaluates positions
taken in the tax returns with respect to situations
in which applicable tax regulations are subject to
interpretation and considers whether it is probable
that a taxation authority will accept an uncertain
tax treatment.

Deferred tax

Deferred tax is provided using balance sheet
approach on temporary differences between
the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes
at the reporting date.

Deferred tax liabilities are recognised for all taxable
temporary differences, except:

In respect of taxable temporary differences
associated with investments in subsidiary and
interests in joint ventures, when the timing of the
reversal of the temporary differences can be
controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all
deductible temporary differences and carry
forward of unused tax credits. Deferred tax assets
are recognised to the extent that it is probable
that taxable profit will be available against which
the deductible temporary differences and unused
tax credits.

The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced
to the extent that it is no longer probable that
sufficient taxable profit will be available to allow
all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are re-assessed
at each reporting date and are recognised to the
extent that it has become probable that future
taxable profits will allow the deferred tax asset to
be recovered.

Deferred tax assets and liabilities are measured
at the tax rates that are expected to apply in the
year when the asset is realised or the liability is
settled, based on tax rates (and tax laws) that
have been enacted or substantively enacted at
the reporting date.

Deferred tax relating to items recognised outside
statement of profit and loss is recognised
outside statement of profit and loss (either
in other comprehensive income or in equity).
Deferred tax items are recognised in correlation
to the underlying transaction either in OCI (Other
Comprehensive Income) or directly in equity.

The Company offsets deferred tax assets and
deferred tax liabilities if and only if it has a legally

enforceable right to set off current tax assets and
current tax liabilities and the deferred tax assets
and deferred tax liabilities relate to income taxes
levied by the same taxation authority on either the
same taxable entity or different taxable entities
which intend either to settle current tax liabilities
and assets on a net basis, or to realise the assets
and settle the liabilities simultaneously, in each
future period in which significant amounts of
deferred tax liabilities or assets are expected to
be settled or recovered.

Minimum Alternate Tax

According to section 115JAA of the Income Tax
Act, 1961, Minimum Alternative Tax ('MAT') paid
over and above the normal income tax in a
subject year is eligible for carry forward for fifteen
succeeding assessment years for set-off against
normal income tax liability. The MAT credit asset
is assessed against the normal income tax during
the specified period.

Minimum alternate tax (mat) paid in a year is
charged to the statement of profit and loss as
current tax for the year. The deferred tax asset
is recognised for MAT credit available only to
the extent that it is probable that the concerned
Company will pay normal income tax during the
specified period, i.e., the period for which MAT
credit is allowed to be carried forward. In the year
in which the Company recognizes MAT credit
as an asset, it is created by way of credit to the
statement of profit and loss and shown as part
of deferred tax asset. The Company reviews the
“MAT credit entitlement" asset at each reporting
date and writes down the asset to the extent that
it is no longer probable that it will pay normal tax
during the specified period.

e. Property, plant and equipment

Freehold land is carried at historical cost. Plant and
Equipment are stated at cost less accumulated
depreciation / amortisation and impairment loss,
if any. Cost comprises the purchase price and
any cost attributable to bringing the asset to its
working condition for its intended use. Borrowing
cost relating to acquisition of Plant and Equipment
which take substantial period of time to get ready
for its intended use are also included to the extent
they relate to the period till such assets are ready
to be put to use. Capital work in progress is stated
at cost less accumulated impairment loss, if any.

When significant parts of plant and equipment
are required to be replaced at intervals, the
Company depreciates them separately based on
their specific useful lives. Likewise, when a major
inspection is performed, its cost is recognised in

the carrying amount of the plant and equipment
as a replacement if the recognition criteria are
satisfied. All other repair and maintenance costs
are recognised in Statement of Profit and Loss
as incurred.

Depreciation

Depreciation is calculated on a straight-line
basis over the estimated useful lives of the assets
as follows:

The Company, based on internal assessment
and management estimate, depreciates certain
items of Plant and Machinery, Heavy Equipment
and Office Equipment over estimated useful lives
which are different from the useful life prescribed
in Schedule II to the Companies Act, 2013. The
management believes that these estimated useful
lives are realistic and reflect fair approximation
of the period over which the assets are likely to
be used.

An item of property, plant and equipment
and any significant part initially recognised is
derecognised upon disposal or when no future
economic benefits are expected from its use or
disposal. Any gain or loss arising on derecognition
of the asset (calculated as the difference between
the net disposal proceeds and the carrying
amount of the asset) is included in the statement
of profit and loss when the asset is derecognised.
The residual values, useful lives and methods of
depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted
prospectively, if appropriate.

f. Intangible assets

Intangible assets acquired separately are
measured on initial recognition at cost. The
cost of intangible assets acquired in a business
combination is their fair value at the date of
acquisition. Following initial recognition, intangible

assets are carried at cost less any accumulated
amortisation and accumulated impairment
losses. Internally generated intangibles, excluding
capitalised development costs, are not capitalised
and the related expenditure is reflected in profit
or loss in the period in which the expenditure
is incurred.

Amortisation

Intangible assets with finite lives are amortised
over the useful economic life and assessed for
impairment whenever there is an indication
that the intangible asset may be impaired. The
amortisation period and the amortisation method
for an intangible asset with a finite useful life are
reviewed at least at the end of each reporting
period. Changes in the expected useful life or
the expected pattern of consumption of future
economic benefits embodied in the asset are
considered to modify the amortisation period
or method, as appropriate, and are treated
as changes in accounting estimates. The
amortisation expense on intangible assets with
finite lives is recognised in the Statement of Profit
and Loss unless such expenditure forms part of
carrying value of another asset.

An intangible asset is derecognised upon disposal
(i.e., at the date the recipient obtains control) or
when no future economic benefits are expected
from its use or disposal. Any gain or loss arising
upon derecognition of the asset (calculated as the
difference between the net disposal proceeds and
the carrying amount of the asset) is included in
the statement of profit and loss when the asset
is derecognised.

g. 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 cash-generating unit's
(cgu) fair value less costs of disposal and its
value in use. Recoverable amount is determined
for an individual asset, unless the asset does not
generate cash inflows that are largely independent
of those from other assets or Company of assets.
When 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.

An assessment is made at each reporting date
to determine whether there is an indication that
previously recognised impairment losses no
longer exist or have decreased. If such indication
exists, the Company estimates the asset's or CGU's
recoverable amount. A previously recognised
impairment loss is reversed only if there has been
a change in the assumptions used to determine
the asset's recoverable amount since the last
impairment loss was recognised. The reversal
is limited so that the carrying amount of the
asset exceeds neither its recoverable amount
nor the carrying amount that would have
been determined, net of depreciation, had no
impairment loss been recognised for the asset
in prior years. Such reversal is recognised in the
Statement of Profit and Loss unless the asset is
carried at a revalued amount, in which case, the
reversal is treated as a revaluation increase.

h. Borrowing costs

Borrowing costs includes interest and amortisation
of ancillary cost in connection with borrowed
funds over the period of loans which are incurred
in connection with arrangements of borrowings.

Borrowing costs directly attributable to the
acquisition, construction or production of an
asset that necessarily takes a substantial period
of time to get ready for its intended use or sale
are capitalised as part of the cost of the asset. All
other borrowing costs are expensed in the period
in which they occur.

i. Leases

The Company assesses at contract inception
whether a contract is, or contains, a lease. That
is, if the contract conveys the right to control the
use of an identified asset for a period of time in
exchange for consideration.

Company as a lessee

The Company applies a single recognition and
measurement approach for all leases, except
for short-term leases and leases of low-value
assets. The Company recognises lease liabilities
to make lease payments and right-of-use assets
representing the right to use the underlying assets.

i) Right-of-use assets

The Company recognises right-of-use assets
at the commencement date of the lease (i.e.,
the date the underlying asset is available
for use). Right of-use assets are measured
at cost, less any accumulated depreciation
and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost
of right-of-use assets includes the amount

of lease liabilities recognised, initial direct
costs incurred, and lease payments made at
or before the commencement date less any
lease incentives received.

Right of use assets are depreciated on a
straight line basis over the shorter of lease
term and the estimated useful lives of
the assets.

The Company does not have any Right-of-use
assets which are depreciated on a straight¬
line basis for the period shorter of the lease
term. The right-of- use assets are also subject
to impairment. Refer to the accounting
policies in section for Impairment of non¬
financial assets.

ii) Lease Liabilities

At the commencement date, the Company
recognises lease liabilities measured at
the present value of lease payments to be
made over the balance lease term. The lease
payments include fixed payments (including
in substance fixed payment) less any lease
incentive receivable, variable lease payments
that depends on an index or a rate, and
amounts expected to be paid under residual
value guarantees. Variable lease payments
that do not depend on an index or a rate
are recognised as expenses (unless they
are incurred to produce inventories) in the
period in which the event or condition that
triggers the payment occurs. In calculating
the present value of lease payments, the
Company uses its incremental borrowing rate
at the lease commencement date because
the interest rate implicit in the lease is not
readily determinable.

After the transition date, the amount of lease
liabilities is increased to reflect the accretion of
interest and reduced for the lease payments
made. In addition, the carrying amount of
lease liabilities is remeasured if there is a
modification, a change in the lease term, a
change in the lease payments (e.g., changes
to future payments resulting from a change in
an index or rate used to determine such lease
payments) or a change in the assessment of
an option to purchase the underlying asset.

iii) Short-term leases and leases of low-value assets

The Company applies the short-term lease
recognition exemption to its short-term leases
i.e., those leases that have a lease term of 12
months or less from commencement date. In

making this assessment, the Company also
factors below key aspects:

a. The assessment is conducted on an
absolute basis and is independent of
the size, nature of circumstances of
the lessee.

b. The assessment is based on the value
of the asset when new, regardless of the
asset's age at the time of the lease.

c. The lessee can benefit from the use of the
underlying asset either independently
or in combination with other readily
available resources, and the asset is not
highly dependent on or interrelated with
other assets.

d. I f the asset is subleased or expected to
be subleased, the head lease does not
qualify as a lease of a low-value asset.

Lease payments on short-term leases and
leases of low-value assets are recognised as
expense over the lease term.