2. MATERIAL ACCOUNTING POLICIES
2.1 Basis for preparation of Financial Statements:
Compliance with Ind AS:
The Financial Statements have been prepared
on a going concern basis and on accrual basis, in
accordance with Indian Accounting Standards (Ind
AS) notified under the Companies (Indian Accounting
Standards) Rules, 2015 as amended.
The financial statements were authorised for issue in
accordance with a resolution passed in the meeting
of the Board of directors held on May 7, 2025.
Historical Cost Convention:
The financial statements have been prepared on a
historical cost basis, except -
(a) certain financial assets and liabilities and
(b) defined benefit plans
Which are measured at fair value at the end of each
reporting period, as explained in the accounting
policies below.
The preparation of the financial statements requires
Management to make estimates and assumptions.
Actual results could vary from these estimates. The
estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the
estimate are revised if the revision affects only that
period or in the period of the revision and future
periods if the revision affects both current and
future years (refer Note 37 on accounting estimates,
assumptions and judgements).
Functional and presentation currency:
The financial statements are presented in Indian
' which is the functional currency of the Company
and all values are rounded to the nearest crores
(' 1,00,00,000), except when otherwise indicated.
2.2 Summary of Material Accounting Policies
1. Current versus non-current classification:
The Company presents assets and liabilities in
the balance sheet based on current/ non-current
classification. The Company has presented non-
current assets and current assets before equity, non¬
current liabilities and current liabilities in accordance
with Schedule III, Division II of Companies Act, 2013
notified by Ministry of Corporate Affairs (MCA).
An asset is classified as current when it satisfies any
of the following criteria:
• Expected to be realised or intended to be sold
or consumed in normal operating cycle;
• Held primarily for the purpose of trading;
• Expected to be realised 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 classified as current when:
• It is expected to be settled in normal operating
cycle;
• It is held primarily for the purpose of trading;
• It is 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 are classified as non-current.
Deferred tax assets and liabilities are 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 considered a period of twelve
months for classifying its assets and liabilities as
current and non-current.
2. Fair value measurement:
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. The fair value measurement is
based on the presumption that the transaction to sell
the asset or transfer the liability takes place either:
• In the principal market for the asset or liability,
or
• I n the absence of a principal market, in the
most advantageous market for the asset or
liability.
The fair value of an asset or a liability is measured
using the assumptions that, market participants
would use when pricing the asset or liability,
assuming that market participants act in their
economic best interest.
A fair value measurement of a non-financial asset
takes into account a market participant's ability to
generate economic benefits by using the asset in
its highest and best use or by selling it to another
market participant that would use the asset in its
highest and best use.
The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximising the use of relevant observable inputs
and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is
measured or disclosed in the financial statements are
categorised 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 / Published NAV (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 recognised in
the financial statements on a recurring basis,
the Company determines whether transfers have
occurred between levels in the hierarchy by re¬
assessing categorisation (based on the lowest level
input that is significant to the fair value measurement
as a whole) at the end of each reporting period.
External valuers are involved for valuation of
significant assets, such as properties and unquoted
financial assets, and significant liabilities as and
when required.
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.
This note summarises accounting policy for fair
value. Other fair value related disclosures are given
in the following notes:
• Disclosures for valuation methods, significant
estimates and assumptions (Note 37)
• Quantitative disclosures of fair value
measurement hierarchy (Note 41)
• Investment in unquoted equity shares (Note 7)
• Investment properties (Note 5)
• Financial instruments (including those carried
at amortised cost) (Note 42)
3. Revenue recognition:
Revenue is recognised when the company satisfies
the performance obligation by transferring the
promised services to the customers. Services are
considered as performed when the customer obtains
control, whereby the customer gets the ability to
direct the use of such services and substantially
obtains all benefits from services. When there
is uncertainty as to measurement or ultimate
collectability, revenue recognition is postponed until
such uncertainty is resolved.
Revenue is measured based on the transaction price
which is the fair value of the consideration received or
receivable, stated net of discounts, returns and taxes.
Transaction price is recognised based on the price
specified in the contract. Accumulated experience is
used to estimate and provide for the discounts / right
of return, using the expected value method.
The specific revenue recognition policies are as under:
a. Revenue from contracts with customers:
i. Revenue from Turnkey Contracts, which are either
Fixed Price or Cost-Plus contracts, is recognized
when the Company satisfies performance
obligation by transferring promised services to
the customer. The Company uses significant
judgements while determining the transaction
price allocated to performance obligations using
the expected cost-plus margin approach.
Provisions for estimated losses, if any, on
uncompleted contracts are recorded in the
period in which such losses become probable
based on the expected contract estimates at
the reporting date.
ii. Revenue from sale of products is recognized
when performance obligations are satisfied.
Performance obligations are satisfied when the
customer obtains control of the products.
iii. Revenue from services is recognized when the
Company satisfies the performance obligation by
transferring promised services to the customers.
Contract assets are recognized when there
is an excess of revenue earned over billings
on contracts. Contract assets are classified
as unbilled receivables when there is an
unconditional right to receive cash, and only
passage of time is required, as per contractual
terms. Unearned revenue (“Contract Liability”)
is recognized when there is billing in excess of
revenue.
b. Dividend income is recognized when the right
to receive dividend is established.
c. Income such as interest and rent is recognized
as per contractually agreed terms on time
proportion basis.
4. Property, plant and equipment:
On transition to Ind AS,the Company has opted to continue
with the previous GAAP carrying values as deemed cost
for all items of plant, property and equipment.
Tangible Assets are stated at the cost of acquisition
less accumulated depreciation and impairment
losses, if any. The cost includes purchase price (after
deducting trade discounts and rebates), including
non-refundable taxes and duties and any costs
directly attributable to bringing the asset to the
location and condition necessary for it to be capable
of operating in the manner intended by Management.
When significant parts of Property, 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 criterias are
satisfied. All other repair and maintenance costs are
recognised in the statement of profit and loss.
Advances paid towards acquisition of fixed assets are
disclosed as Capital Advances under Other non-current
assets and cost of assets not ready for use before the
year-end, is disclosed as capital work in progress.
Depreciation on Fixed Assets is provided to the extent
of depreciable amount on Straight Line Method over the
useful life of the assets and in the manner prescribed
in schedule II to the Companies Act, 2013 except in
respect of following Fixed Assets where the assessed
useful life is different than that prescribed in Schedule II.
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.
5. Investment properties:
On transition to Ind AS, the Company has opted to
continue with the previous GAAP carrying values as
deemed cost for investment properties.
Investment properties are measured initially at cost,
including transaction costs. Subsequent to initial
recognition, investment properties are stated at cost
less accumulated depreciation and accumulated
impairment loss, if any.
The Company, based on assessment made by
technical expert and Management estimate,
depreciates the building over estimated useful life
of 58 years which is different from the useful life
prescribed in Schedule II to the Companies Act, 2013.
The Management believes that this estimated useful
life is realistic and reflects fair approximation of the
period over which the asset is likely to be used.
Though the Company measures investment property
using cost-based measurement, the fair value of
investment property is disclosed in the notes. Fair
values are determined based on an annual evaluation
performed by an accredited external independent valuer.
Investment properties are derecognised 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. 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.
6. Intangible assets:
On transition to Ind AS, the Company has opted to
continue with the previous GAAP carrying values as
deemed cost for all items of Intangible assets.
Intangible assets acquired separately are measured
on initial recognition at cost. Following initial
recognition, intangible assets are carried at cost
less accumulated amortisation and accumulated
impairment losses, if any.
The useful lives of intangible assets are assessed
as either finite or indefinite. There are no intangible
assets assessed with indefinite useful life.
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 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.
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 Company amortises intangible assets using
the straight-line method based on useful lives as
prescribed in Schedule II.
7. Inventories:
a. Inventories including Work-in-process and
stores and spares are valued at the lower of
cost and net realizable value.
b. Inventory of Consumables is valued at cost
c. Cost of inventories is generally ascertained on
first in first out basis.
Cost includes cost of purchase and other costs
incurred in bringing inventories to their present
location and condition. Net realisable value is the
estimated selling price in the ordinary course of
business, less estimated costs of completion and
the estimated costs necessary to make the sale.
8. Impairment of Non-Financial Assets:
At each balance sheet date, the Company assesses
whether there is any indication that any property, plant
and equipment and intangible asset may be impaired
and if any such indication exists, the recoverable
amount of the asset is estimated in order to determine
the extent of the impairment loss (if any).
For the purpose of impairment testing, the recoverable
amount is determined on an individual asset basis
unless the asset does not generate cash flows that
are largely independent of those from other assets. In
such cases, the recoverable amount is determined for
the cash generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less
costs of disposal and value in use. 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 for which the
estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash
generating unit) is estimated to be less than its
carrying amount, the carrying amount of the
asset (or cash generating unit) is reduced to
its recoverable amount. An impairment loss is
recognised immediately in the Statement of profit
and loss. The impairment loss recognised in prior
accounting period is reversed if there has been a
change in the estimate of recoverable amount.
9. Foreign currencies:
The Company's financial statements are presented
in ' which is also its functional currency.
Transactions and balances
Transactions in foreign currencies are initially
recorded at the exchange rate prevailing on the date
of the transaction.
Monetary assets and liabilities denominated in
foreign currencies are translated at the functional
currency closing rates of exchange at the reporting
date. Exchange differences arising on settlement or
translation of monetary items are recognised in the
Statement of Profit and Loss.
Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated
using the exchange rates at the dates of the initial
transactions.
10. Employee Benefits:
Short Term Employee Benefits
The undiscounted amount of short-term employee
benefits expected to be paid in exchange for the
services rendered by the employees are recognised
as an expense during the year when the employees
render the services.
Post-Employment Benefits
Defined Contribution Plan
A defined contribution plan is a post-employment
benefit plan under which the Company pays
specified contributions to a separate entity. The
Company makes specified monthly contributions
towards Provident Fund, Pension Scheme. The
Company's contribution is recognised as an expense
in the Statement of Profit and Loss during the period
in which the employee renders the related service.
Defined Benefit Plan
The liability in respect of defined benefit plans and
other post-employment benefits is calculated using
the Projected Unit Credit Method and spread over the
period during which the benefit is expected to be
derived from employee's services.
Re-measurement of defined benefit plans in respect
of post-employment and other long-term benefits
are charged to the other Comprehensive Income.
11. 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
(i) Initial recognition and measurement
All financial assets are initially recognised at
fair value.
Financial assets and financial liabilities are
recognised when the Company becomes
a party to the contractual provisions of the
financial instrument and are measured initially
at fair value, except for trade receivables which
are initially measured at transaction price.
Transaction costs that are directly attributable to
the acquisition or issue of financial assets, which
are not at fair value through profit or loss are
adjusted to the fair value on initial recognition.
Purchase and sale of financial asset is recognised
using trade date accounting i.e. the date that the
Company commits to purchase or sell the asset.
(ii) Subsequent measurement
(a) Financial Assets carried at amortised
cost (AC)
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 the
contractual cash flows and the contractual
terms of the financial asset give rise on
the 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. Amortised 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 amortisation is included
in finance income in the profit or loss.
The losses arising from impairment are
recognised in the profit or loss. This category
applies to Trade and other receivables,
Security deposits, Other advance, Loan
and advances to related parties, Unbilled
Income, Interest Receivable etc.
(b) Financial Assets at Fair Value through
Other Comprehensive Income (FVTOCI)
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 assets give rise on
specified dates to cash flows that are
solely payments of principal and interest
on the principal amount outstanding.
The Company does not have any financial
assets which are fair valued through
Other Comprehensive Income (FVTOCI).
(c) Financial Assets at Fair Value through
profit or loss (FVTPL)
A financial asset which is not classified in
any of the above categories is subsequently
fair valued through profit or loss
(iii) Equity investments
All equity investments other than investment
in Subsidiaries and Associates are measured
at fair value, with value changes recognised in
Statement of Profit and loss except for those
equity investments for which the Company has
elected to present the value changes in 'other
comprehensive income'
The Company does not have any equity
investments which are fair value through Other
Comprehensive Income (FVTOCI)
The Company makes such election on
an instrument-by-instrument basis. The
classification is made on initial recognition and
is irrevocable.
(iv) Derecognition
A financial asset (or, where applicable, a part
of a financial asset or part of a group of similar
financial assets) is primarily derecognised 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 or has
assumed an obligation to pay the received
cash flows in full without material delay
to a third party under a 'pass-through'
arrangement and either (a) the Company has
transferred substantially all the risks and
rewards of the asset, or (b) the Company has
neither transferred nor retained substantially
all the risks and rewards of the asset, but has
transferred control of the asset.
(v) Impairment of financial assets
The Company assesses impairment based on
expected credit loss (ECL) model to the following
Financial assets at amortised cost
Financial assets measured at fair value through
Profit or Loss Account
The Company follows simplified approach
for recognition of impairment loss allowance.
The application of simplified approach does
not require the Company to track changes in
credit risks. Rather, it recognises impairment
loss allowance based on lifetime ECL at each
reporting date, right from its initial recognition.
The Company uses historical cost experience
to determine the impairment loss allowance
on the portfolio of trade receivables. At every
reporting date, the historically observed default
rates are updated and changes in the forward
looking estimates are analysed.
For recognition of impairment loss on other
financial assets and risk exposure, the
Company determines whether there has been
a significant increase in the credit risk since
initial recognition. If credit risk has not increased
significantly, 12-month ECL is used to provide
for impairment loss. However, if credit risk has
increased significantly, lifetime ECL is used. If, in
a subsequent period, credit quality of instrument
improves such that there is no longer a significant
increase in credit risk since initial recognition, then
the Company reverts to recognising impairment
loss allowance based on 12-month ECL.
B. Financial liabilities
(i) Initial recognition and measurement
Financial liabilities are classified, at initial
recognition, as financial liabilities at fair value
through profit or loss, loans and borrowings,
payables, or as derivatives designated as hedging
instruments in an effective hedge, as appropriate.
All financial liabilities are recognised 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, financial guarantee
contracts and derivative financial instruments.
(ii) Subsequent measurement
The measurement of financial liabilities depends
on their classification, as described below:
(a) 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 financial liabilities held
for trading are recognised in the profit or
loss.
Financial liabilities designated upon initial
recognition at fair value through profit
or loss are designated as such at the
initial date of recognition, and only if the
criteria in Ind AS 109 are satisfied. For
liabilities designated as FVTPL, fair value
gains/ losses attributable to changes
in own credit risk is recognized in OCI.
These gains/ losses are not subsequently
transferred to Profit and Loss. However,
the Company may transfer the cumulative
gain or loss within equity. All other changes
in fair value of such liability are recognised
in the statement of profit and loss.
The Company has not designated any
financial liability as at fair value through
profit or loss.
(b) Loans and borrowings
After initial recognition, interest-bearing
loans and borrowings are subsequently
measured at amortised cost using the EIR
method. Gains and losses are recognised
in profit or loss when the liabilities are
derecognized.
Amortised 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
amortisation is included as finance costs
in the statement of profit and loss.
(c) Financial guarantee contracts
Financial guarantee contracts issued
by the Company are those contracts
that require a payment to be made
to reimburse the holder for a loss it
incurs because the specified debtor
fails to make a payment when due in
accordance with the terms of a debt
instrument. Financial guarantee contracts
are recognised initially as a liability at fair
value, adjusted for transaction costs that
are directly attributable to the issuance
of the guarantee. Subsequently, the
liability is measured at the higher of the
amount of loss allowance determined
as per impairment requirements of Ind
AS 109 and the amount recognised less
cumulative amortisation.
(iii) Derecognition
A financial liability is derecognised 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
recognised in the statement of profit and loss.
(iv) Embedded derivatives
An embedded derivative is a component of a
hybrid (combined) contract that also includes a
non-derivative host contract - with the effect
that some of the cash flows of the combined
instrument vary in a way similar to a stand-alone
derivative. An embedded derivative causes some
or all of the cash flows that otherwise would be
required by the contract to be modified according
to a specified interest rate, financial instrument
price, commodity price, foreign exchange rate,
index of prices or rates, credit rating or credit
index, or other variable, provided in the case of
a non-financial variable that the variable is not
specific to a party to the contract. Reassessment
only occurs if there is either a change in the
terms of the contract that significantly modifies
the cash flows that would otherwise be required
or a reclassification of a financial asset out of the
fair value through profit or loss.
If the hybrid contract contains a host that is a
financial asset within the scope of Ind AS 109,
the Company does not separate embedded
derivatives. Rather, it applies the classification
requirements contained in Ind AS 109 to the
entire hybrid contract. Derivatives embedded
in all other host contracts are accounted for as
separate derivatives and recorded at fair value
if their economic characteristics and risks are
not closely related to those of the host contracts
and the host contracts are not held for trading
or designated at fair value though profit or loss.
These embedded derivatives are measured at
fair value with changes in fair value recognised
in profit or loss, unless designated as effective
hedging instruments.
(v) Reclassification of financial assets
The Company determines classification of
financial assets and liabilities on initial recognition.
After initial recognition, no reclassification is made
for financial assets which are equity instruments
and financial liabilities. For financial assets
which are debt instruments, a reclassification is
made only if there is a change in the business
model for managing those assets. Changes
to the business model are expected to be
infrequent. The Company's senior Management
determines changes in the business model as
a result of external or internal changes which
are significant to the Company's operations.
Such changes are evident to external parties. A
change in the business model occurs when the
Company either begins or ceases to perform
an activity that is significant to its operations.
If the Company reclassifies financial assets, it
applies the reclassification prospectively from
the reclassification date which is the first day of
the immediately next reporting period following
the change in business model. The Company
does not restate any previously recognised gains,
losses (including impairment gains or losses) or
interest.
C. Offsetting of financial instruments
Financial assets and financial liabilities
are offset, and the net amount is reported
in the balance sheet if there is a currently
enforceable legal right to offset the recognised
amounts and there is an intention to settle on
a net basis, to realise the assets and settle the
liabilities simultaneously.
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