Mar 31, 2023
A. Corporate Information
Reliance Industrial Infrastructure Limited ("the Company") is a listed entity incorporated in India, having its registered office at NKM International House, 5th Floor, 178 Backbay Reclamation, Behind LIC Yogakshema Building, Babubhai Chinai Road, Mumbai - 400 020, India.
The Company is mainly engaged in "Infrastructure and Support Services Activities" catering to Indian Customers.
B. Significant Accounting Policies
B.1 Basis of Preparation and Presentation
The Financial Statements have been prepared on the historical cost basis except for following assets and liabilities which have been measured at fair value amount:
(i) Certain financial assets and liabilities.
(ii) Defined benefit plans - plan assets.
The Financial Statements of the Company have been prepared to comply with the Indian Accounting Standards (''Ind AS''), including the rules notified under the relevant provisions of the Companies Act, 2013, (as amended from time to time) and Presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS Compliant Schedule III) as amended from time to time.
The Company''s Financial Statements are presented in Indian Rupees (?), which is its functional currency and all values are rounded to the nearest Lakh (? 00,000) except where otherwise indicated.
B.2 Summary of Significant Accounting Policies(a) Current and 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 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 treated 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.
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities
(b) Property, Plant and Equipment
Property, Plant and Equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its working condition for its intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably.
Property, Plant and Equipment which are significant to the total cost of that item of Property, Plant and Equipment and having different useful life are accounted separately.
Other Indirect Expenses incurred relating to project, net of income earned during the project development stage prior to its intended use, are considered as pre - operative expenses and disclosed under Capital Work - in - Progress.
Depreciation on Property, Plant and Equipment is provided using straight line method. Depreciation is provided based on useful life of the assets prescribed in Schedule II to the Companies Act, 2013 except that:
(i) the cost of Leasehold Land is amortised over the period of lease.
(ii) cost of Pipeline Corridor Structure is amortised over the residual life of the asset.
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.
Gains or losses arising from derecognition of Property, Plant and Equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
The Company, as a lessee, recognizes a right-of-use asset and a lease liability for its leasing arrangements, if the contract conveys the right to control the use of an identified asset.
The contract conveys the right to control the use of an identified asset, if it involves the use of an identified asset and the Company has substantially all of the economic benefits from use of the asset and has right to direct the use of the identified asset. The cost of the right-of-use asset shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs incurred. The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate.
For short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the lease term.
Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebates less accumulated amortisation/depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the Intangible Assets.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably.
Other Indirect expenses incurred relating to project, net of income earned during the project development stage prior to its intended use, are considered as pre - operative expenses and disclosed under Intangible Assets Under Development.
Gains or losses arising from derecognition of an Intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
Intangible Assets comprising of Software are amortised over the period of 5 to 10 years.
Cash and cash equivalents comprise of cash on hand, cash at banks, short-term deposits and short-term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Items of Inventories are measured at lower of cost or net realisable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs incurred in bringing them to their respective present location and condition. Cost of Inventories is determined on weighted average basis.
(g) Impairment of Non-Financial Assets - Property Plant and Equipment and Intangible Assets
The Company assesses at each reporting date as to whether there is any indication that any Property, Plant and Equipment and Intangible Assets or group of assets, called Cash Generating Units (CGU) may be impaired. If any such indication exists the recoverable amount of an asset or CGU is estimated to determine the extent of impairment, if any. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the CGU to which the asset belongs.
An impairment loss is recognised in the Statement of Profit and Loss to the extent, asset''s carrying amount exceeds its recoverable amount. The recoverable amount is higher of an asset''s fair value less cost of disposal and value in use. Value in use is based on the estimated future cash flows, discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specific to the assets.
The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
(h) Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, 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.
(i) Employee Benefits Expense
Short Term Employee Benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services.
Post-Employment Benefits
The Company recognizes contribution payable to the provident fund scheme as an expense, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.
The Company pays gratuity to the employees whoever has completed five years of service with the company at the time of resignation/superannuation. The gratuity is paid @15 days salary for every completed year of service as per the Payment of Gratuity Act, 1972.
The gratuity liability amount is contributed to the approved gratuity fund formed exclusively for gratuity payment to the employees. The gratuity fund has been approved by respective Income Tax authorities.
The liability in respect of gratuity 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 employees'' services.
Re-measurement of Defined Benefit Plans in respect of post-employment are charged to the Other Comprehensive Income.
The tax expense for the period comprises of Current Tax and Deferred Income Tax. Tax is recognised in the Statement of Profit and loss, except to the extent that it relates to items recognised in Other Comprehensive Income or in Equity. In which case, the tax is also recognised in Other Comprehensive Income or in Equity.
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the Income Tax Authorities, based on tax rates and laws that are enacted at the Balance sheet date.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Financial Statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax assets are recognised to the extent it is probable that the taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax losses can be utilized.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of Deferred tax liabilities and assets are reviewed at the end of each reporting period.
(k) Foreign Currencies Transactions and Translation
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of 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 Statement of Profit and Loss except to the extent of exchange differences which are regarded as an adjustment to interest costs on foreign currency borrowings that are directly attributable to the acquisition or construction of qualifying assets which are capitalized as cost of assets.
Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of nonmonetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e. translation differences on items whose fair value gain or loss is recognised in Other Comprehensive Income or Statement of Profit and Loss are also recognised in Other Comprehensive Income or Statement of Profit and Loss,respectively).
In case of an asset, expense or income where a non-monetary advance is paid/received, the date of transaction is the date on which the advance was initially recognised. If there were multiple payments or receipts in advance, multiple dates of transactions are determined for each payment or receipt of advance consideration.
(l) Revenue Recognition
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration entitled in exchange for those goods or services. The Company is generally the principal as it typically controls the goods or services before transferring them to the customer.
Revenue from rendering of services is recognised over time by measuring the progress towards complete satisfaction of performance obligations at the reporting period.
Revenue is measured at the amount of consideration which the company expects to be entitled to in exchange for transferring distinct goods or services to a customer as specified in the contract, excluding amounts collected on behalf of third parties (for example taxes and duties collected on behalf of the government). Consideration is generally due upon satisfaction of performance obligations and a receivable is recognized when it becomes unconditional. Generally, the credit period varies between 0-30 days from the delivery of goods or services as the case may be.
Contract Balances :Trade Receivables
A receivable represents the Company''s right to an amount of consideration that is unconditional.
A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract.
Interest Income from a Financial Asset is recognised using effective interest rate method.
Dividend Income is recognised when the Company''s right to receive the amount has been established.
(m) Financial Instruments (i) Financial Assets
A. Initial Recognition and Measurement
All Financial Assets are initially recognized at fair value except for Trade Receivables which are accounted at transaction cost. 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 Assets are recognised using trade date accounting.
B. Subsequent Measurement
a) Financial Assets measured at Amortised Cost (AC)
A Financial Asset is 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.
b) Financial Assets measured at Fair Value Through Other Comprehensive Income (FVTOCI)
A Financial Asset is measured at FVTOCI 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.
c) Financial Assets measured at Fair Value Through Profit or Loss (FVTPL)
A Financial Asset which is not classified in any of the above categories are measured at FVTPL.
Financial assets are reclassified subsequent to their recognition, if the Company changes its business model for managing those financial assets. Changes in business model are made and applied prospectively from the reclassification date which is the first day of immediately next reporting period following the changes in business model in accordance with principles laid down under Ind AS 109 - Financial Instruments.
The Company has accounted for its investments in associates at cost.
All other equity investments 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''. However dividend on such Equity Investment are recognised in the Statement of Profit and Loss when the Company has rights to received is established.
E. Impairment of Financial Assets
In accordance with Ind AS 109, the Company uses ''Expected Credit Loss'' (ECL) model, for evaluating impairment of financial assets other than those measured at Fair Value Through Profit and Loss (FVTPL).
Expected credit losses are measured through a loss allowance at an amount equal to :
(1) The 12 months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or
(2) Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument)
For Trade Receivables, the Company applies ''simplified approach'' which requires expected lifetime losses to be recognised from initial recognition of the receivables. The company uses historical default rates to determine impairment loss on the portfolio of Trade Receivables. At every reporting date these historical default rates are reviewed and changes in the forward looking estimates are analysed.
For other assets, the Company uses 12 months ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used.
A. Initial Recognition and Measurement
All Financial Liabilities are recognized at fair value and in case of borrowings, net of directly attributable cost. Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.
B. Subsequent Measurement
Financial liabilities are carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
(iii) Derecognition of Financial Instruments
The company derecognises a Financial Asset when the contractual rights to the cash flows from the Financial Asset expire or it transfers the Financial Asset and the transfer qualifies for derecognition under Ind AS 109. A Financial Liability (or a part of a financial liability) is derecognized from the company''s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
(iv) Offsetting
Financial Assets and Financial Liabilities are offset and the net amount is presented in the balance sheet when, and only when, the Company has a legally enforceable right to set off the amount and it intends, either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
(n) Earnings Per Share (EPS)
Basic earnings per share is calculated by dividing the net profit after tax by the weighted average number of equity shares outstanding during the year adjusted for bonus element in equity share. Diluted earnings per share adjusts the figures used in determination of basic earnings per share to take into account the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as at the beginning of the period unless issued at a later date.
C. Critical Accounting Judgments and Key Sources of Estimation Uncertainty.
The preparation of the Company''s Financial Statements requires management to make judgement, estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures. 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 next financial years.
a) Depreciation / Amortisation and useful lives of Property, Plant and Equipment / Intangible Assets
Property, Plant and Equipment / Intangible Assets are depreciated / amortised over their estimated useful lives, after taking into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets
annually in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives and residual values are based on the Company''s historical experience with similar assets and take into account anticipated technological changes. The depreciation / amortisation for future periods is revised if there are significant changes from previous estimates.
b) Recoverability of Trade Receivable
Judgements are required in assessing the recoverability of overdue Trade Receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability require the application of judgement to existing facts and circumstances, which can be subject to change. The carrying amounts of provisions and liabilities are reviewed regularly and revised to take account of changing facts and circumstances.
d) Impairment of Financial and Non-Financial Assets
The impairment provisions for Financial Assets are based on assumptions about risk of default and expected cash loss rates. The company uses judgement 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.
In case of non-financial assets the company estimates asset''s recoverable amount, which is higher of an asset''s or Cash GeneratingUnits (CGU''s) fair value less costs of disposal and its value in use.
In assessing value in use, the estimated future cash flows are discounted to their present value using 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.
e) Recognition of Deferred Tax Assets and Liabilities
Deferred tax assets and liabilities are recognised for deductible temporary differences and unused tax losses for which there is probability of utilisation against the future taxable profit. The Company uses judgement to determine the amount of deferred tax that can be recognised, based upon the likely timing and the level of future taxable profits and business developments.
f) Fair Value Measurement
For estimates relating to fair value of financial instruments refer note 27 of financial statements.
D. Standards Issued but not Effective
On March 31,2023, the Ministry of Corporate Affairs (MCA) has notified Companies (Indian Accounting Standards) Amendment Rules, 2023. This notification has resulted into amendments in the following existing accounting standards which are applicable to company from April 1,2023.
Ind AS 101 - First-time Adoption of Indian Accounting Standards
Ind AS 102 - Share-based Payment
Ind AS 103 - Business Combinations
Ind AS 107 - Financial Instruments Disclosures
Ind AS 109 - Financial Instruments
Ind AS 115 - Revenue from Contracts with Customers
Ind AS 1 - Presentation of Financial Statements
Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors
Ind AS 12 - Income Taxes
Ind AS 34 - Interim Financial Reporting
Application of above standards are not expected to have any significant impact on the company''s financial statements.
Mar 31, 2018
A. SIGNIFICANT ACCOUNTING POLICIES
A.1 BASIS OF PREPARATION AND PRESENTATION
The Financial Statements have been prepared on the historical cost basis except for following assets and liabilities which have been measured at fair value amount:
(i) Certain Financial Assets and Liabilities.
(ii) Defined benefit plans - Plan Assets.
The Financial Statements of the Company have been prepared to comply with the Indian Accounting standards (''Ind AS''), including the rules notified under the relevant provisions of the Companies Act, 2013.
Company''s Financial Statements are presented in Indian Rupees (''), which is also its functional currency and all values are rounded to the nearest lakh ('' 00,000), except when otherwise indicated.
B.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Property, Plant and Equipment
Property, Plant and Equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its working condition for its intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably.
Property, Plant and Equipment which are significant to the total cost of that item of Property, Plant and Equipment and having different useful life are accounted separately.
Other Indirect Expenses incurred relating to project, net of income earned during the project development stage prior to its intended use, are considered as pre - operative expenses and disclosed under Capital Work - in - Progress.
Depreciation on property, Plant and Equipment is provided based on useful life of the assets prescribed in Schedule II to the Companies Act, 2013 except that the cost of Leasehold Land is amortised over the period of lease.
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.
Gains or losses arising from derecognition of Property, Plant and Equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
(b) Leases
Leases are classified as finance leases whenever the terms of the lease, transfers substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating lease.
Leased Assets: Assets held under finance leases are initially recognised as Assets of the Company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.
Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately in Statement of Profit and Loss, unless they are directly attributable to qualifying assets, in which case they are capitalized. Contingent rentals are recognised as expenses in the periods in which they are incurred.
A leased asset is depreciated over the useful life of the asset ranging from 18 years to 99 years. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.
Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term except where another systematic basis is more representative of time pattern in which economic benefits from the leased assets are consumed.
(c) Intangible Assets
Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebates less accumulated amortisation/depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the Intangible Assets.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably.
Other Indirect expenses incurred relating to project, net of income earned during the project development stage prior to its intended use, are considered as pre - operative expenses and disclosed under Intangible Assets Under Development.
Gains or losses arising from derecognition of an Intangible Asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
Intangible assets comprising of Software are amortised over the period of 5 to 10 years.
(d) Inventories
Inventories are measured at lower of cost or net realisable value. Cost of inventories comprises of cost of purchase, cost of conversion and other costs incurred in bringing them to their respective present location and condition. Cost is determined on weighted average basis.
(e) Impairment of Non-Financial Assets - Property, Plant and Equipment and Intangible Assets
The Company assesses at each reporting date as to whether there is any indication that any Property, Plant and Equipment and Intangible Assets or group of assets, called Cash Generating Units (CGU) may be impaired. If any such indication exists, the recoverable amount of an asset or CGU is estimated to determine the extent of impairment, if any. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the CGU to which the asset belongs.
An impairment loss is recognised in the Statement of Profit and Loss to the extent, asset''s carrying amount exceeds its recoverable amount. The recoverable amount is higher of an asset''s fair value less cost of disposal and value in use. Value in use is based on the estimated future cash flows, discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specific to the assets.
The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
(f) Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, 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.
(g) Employee Benefits Expense
Short Term Employee Benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services.
Post-Employment Benefits
Defined Contribution Plans
The Company recognizes contribution payable to the provident fund scheme as an expense, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.
Defined Benefit Plans
The Company pays gratuity to the employees who have completed five years of service with the Company at the time of resignation/superannuation. The gratuity is paid @15 days salary for every completed year of service as per the Payment of Gratuity Act, 1972.
The gratuity liability amount is contributed to the approved gratuity fund formed exclusively for gratuity payment to the employees. The gratuity fund has been approved by respective Income Tax authorities.
The liability in respect of gratuity 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 employees'' services.
Re-measurement of Defined Benefit Plans in respect of post-employment are charged to the Other Comprehensive Income.
(h) Tax Expenses
The tax expense for the period comprises of Current Tax and Deferred Income Tax. Tax is recognised in the Statement of Profit and loss, except to the extent that it relates to items recognised in the Other Comprehensive Income or in Equity. In which case, the tax is also recognised in Other Comprehensive Income or Equity.
i) Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the Income Tax authorities, based on tax rates and laws that are enacted at the Balance sheet date.
ii) Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Financial Statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of Deferred tax liabilities and assets are reviewed at the end of each reporting period.
(i) Foreign Currencies Transactions and Translation
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of 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 Statement of Profit and Loss except to the extent of exchange differences which are regarded as an adjustment to interest costs on foreign currency borrowings that are directly attributable to the acquisition or construction of qualifying assets which are capitalized as cost of assets
(j) Revenue Recognition
Revenue from rendering of services is recognised when the performance of agreed contractual task has been completed.
Revenue from operations is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.
Interest income
Interest Income from a Financial Asset is recognised using effective interest rate method.
Dividend Income
Dividend Income is recognised when the Company''s right to receive the amount has been established.
(k) Financial instruments
(i) Financial Assets
A. Initial Recognition and Measurement
All Financial Assets are initially recognized at fair value. 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 assets are recognised using trade date accounting.
B. Subsequent measurement
a) Financial Assets measured at Amortised Cost (AC)
A Financial Asset is 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.
b) Financial Assets measured at Fair Value Through Other Comprehensive Income (FVTOCI)
A Financial Asset is measured at FVTOCI 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.
c) Financial Assets measured at Fair Value Through Profit Or Loss (FVTPL)
A financial asset which is not classified in any of the above categories is measured at Fair Valued Through Profit or Loss.
C. Investment in Associates
The Company has accounted for its investments in associates at cost.
D. Other Equity Investments:
All other equity investments 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''.
E. Impairment of Financial Assets
I n accordance with Ind AS 109, the Company uses ''Expected Credit Loss'' (ECL) model, for evaluating impairment of Financial Assets other than those measured at Fair Value Through Profit and Loss (FVTPL).
Expected credit losses are measured through a loss allowance at an amount equal to :
(1) The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or
(2) Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument)
For Trade Receivables, the Company applies ''simplified approach'' which requires expected lifetime losses to be recognised from initial recognition of the receivables. The company uses historical default rates to determine impairment loss on the portfolio of trade receivables. At every reporting date these historical default rates are reviewed and changes in the forward looking estimates are analysed.
For other assets, the Company uses 12 month ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used.
(ii) Financial Liabilities
A. Initial Recognition and Measurement
All Financial Liabilities are recognized at fair value and in case of borrowings, net of directly attributable cost. Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.
B. Subsequent Measurement
Financial Liabilities are carried at Amortized Cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
(iii) Derecognition of Financial Instruments
The Company derecognizes a Financial Asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the company''s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
(iv) Offsetting
Financial Assets and Financial Liabilities are offset and the net amount is presented in the balance sheet when, and only when, the Company has a legally enforceable right to set off the amount and it intends, either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
C. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
The preparation of the Company''s Financial Statements requires management to make judgement, estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures. 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 next financial year.
a) Depreciation / Amortisation and useful lives of Property, Plant and Equipment / Intangible Assets
Property, Plant and Equipment / Intangible Assets are depreciated / amortised over their estimated useful lives, after taking into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives and residual values are based on the Company''s historical experience with similar assets and take into account anticipated technological changes. The depreciation / amortisation for future periods is revised if there are significant changes from previous estimates.
b) Recoverability of Trade Receivables
Judgements are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.
c) Provisions
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability require the application of judgement to existing facts and circumstances, which can be subject to change. The carrying amounts of provisions and liabilities are reviewed regularly and revised to take account of changing facts and circumstances.
d) 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, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or Cash Generating Units (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 a 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 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.
e) Impairment of Financial Assets
The impairment provisions for Financial Assets are based on assumptions about risk of default and expected cash loss rates. The Company uses judgement 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.
D. STANDARDS ISSUED BUT NOT EFFECTIVE
On March 28, 2018, the Ministry of Corporate Affairs (MCA) has notified Ind AS 115 - Revenue from Contract with Customers and certain amendment to existing Ind AS. These amendments shall be applicable to the Company from April 01, 2018.
a) Issue of Ind AS 115 - Revenue from Contracts with Customers
Ind AS 115 will supersede the current revenue recognition guidance including Ind AS 18 Revenue, Ind AS 11 Construction Contracts and the related interpretations. Ind AS 115 provides a single mode of accounting for revenue arising from contracts with customers based on the identification and satisfaction of performance obligations.
b) Amendment to Existing issued Ind AS
The MCA has also carried out amendments of the following accounting standards:
i) Ind AS 21 - The Effects of Changes in Foreign Exchange Rates
ii) Ind AS 40 - Investment Property
iii) Ind AS 12 - Income Taxes
iv) Ind AS 28 - Investments in Associates and Joint Ventures; and
v) Ind AS 112 - Disclosure of Interests in Other Entities
Application of above standards are not expected to have any significant impact on the Company''s Financial Statements.
Mar 31, 2017
A. CORPORATE INFORMATION
Reliance Industrial Infrastructure Limited ("the Company") is a listed entity incorporated in India, having its registered office and principal place of business at NKM International House, 5th Floor, 178 Backbay Reclamation, Behind LIC Yogakshema Building, Babubhai Chinai Road, Mumbai - 400 020, India.
B. SIGNIFICANT ACCOUNTING POLICIES B.1 BASIS OF PREPARATION AND PRESENTATION
The financial statements have been prepared on the historical cost basis except for following assets and liabilities which have been measured at fair value amount:
(i) Certain financial assets and liabilities.
(ii) Defined benefit plans - plan assets.
The financial statements of the Company have been prepared to comply with the Indian Accounting standards (''Ind AS''), including the rules notified under the relevant provisions of the Companies Act, 2013.
Up to the year ended March 31, 2016, the Company has prepared its financial statements in accordance with the requirement of Indian General Accepted Accounting Policies, which includes Standards notified under the Companies (Accounting Standards) Rules, 2006 and considered as "Previous GAAP".
These financial statements are the Company''s first Ind AS standalone financial statements.
Company''s financial statements are presented in Indian Rupees (''), which is also its functional currency.
B.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Property, plant and equipment
Property, plant and equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for its intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.
Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably.
Expenses incurred relating to project, net of income earned during the project development stage prior to its intended use, are considered as pre - operative expenses and disclosed under Capital Work-in-Progress.
Depreciation on property, plant and equipment is provided based on useful life of the assets prescribed in Schedule II to the Companies Act, 2013 except that:
(i) the cost of Leasehold Land is amortized over the period of lease.
(ii) cost of Pipeline Corridor Structure is amortized over the residual life of the asset.
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.
(b) Leases
Leases are classified as finance leases whenever the terms of the lease, transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
In respect of fixed assets given on finance lease, assets are shown as receivable at an amount equal to net investment in the lease. Initial direct costs are recognized immediately as expense in the Statement of Profit and Loss. Income from leased assets is accounted by applying the interest rate implicit in the lease to the net investment.
(c) Intangible assets
Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization/depletion and impairment loss, if any. The cost comprises purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use and net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit or Loss when the asset is derecognized.
Intangible assets comprising of Software are amortized over the period of 5 to 10 years.
(d) Inventories
Inventories are measured at lower of cost or net realizable value. Cost is determined on weighted average basis.
(e) Impairment of non-financial assets - property plant and equipment and intangible assets
The Company assesses at each reporting date as to whether there is any indication that any property, plant and equipment and intangible assets or group of assets, called cash generating units (CGU) may be impaired. If any such indication exists the recoverable amount of an asset or CGU is estimated to determine the extent of impairment, if any. When it is not possible to estimate the recoverable amount of an individual assets, the Company estimates the recoverable amount of the (CGU) to which the asset belongs.
An impairment loss is recognized in the Statement of Profit and Loss to the extent, asset''s carrying amount exceeds its recoverable amount. The recoverable amount is higher of an asset''s fair value less cost of disposal and value in use. Value in use is based on the estimated future cash flows, discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specific to the assets.
The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
(f) Provisions
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, 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 recognized as a finance cost.
(g) 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 employees are recognized as an expense during the period when employees render the services.
Post-Employment Benefits
Defined Contribution Plans
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, Superannuation Fund and Pension Scheme. The Company''s contribution is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
Defined Benefit Plans
The Company pays gratuity to the employees whoever has completed five years of service with the company at the time of resignation/superannuation. The gratuity is paid @15 days salary for every completed year of service as per the Payment of Gratuity Act 1972.
The gratuity liability amount is contributed to the approved gratuity fund formed exclusively for gratuity payment to the employees. The gratuity fund has been approved by respective IT authorities.
The liability in respect of gratuity 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 employees'' services.
Re-measurement of defined benefit plans in respect of post-employment are charged to the Other Comprehensive Income.
(h) Tax Expenses
The tax expense for the period comprises current and deferred tax. Tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized in the comprehensive income or in equity. In which case, the tax is also recognized in other comprehensive income or equity.
- Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted at the Balance sheet date.
- Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of Deferred tax liabilities and assets are reviewed at the end of each reporting period.
(i) Foreign currencies transactions and translation
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of 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 recognized in Statement of Profit and Loss except to the extent of exchange differences which are regarded as an adjustment to interest costs on foreign currency borrowings that are directly attributable to the acquisition or construction of qualifying assets, are capitalized as cost of assets.
(j) Revenue recognition
Revenue from rendering of services is recognized when the performance of agreed contractual task has been completed. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.
Revenue from operations includes sale of services, service tax, adjusted for discounts (net).
Interest income
Interest income from a financial asset is recognized using effective interest rate method.
Dividends
Revenue is recognized when the Company''s right to receive the payment has been established.
(k) Financial instruments
(i) Financial Assets
A. Initial recognition and measurement:
All financial assets and liabilities are initially recognized at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value through profit or loss, are adjusted to the fair value on initial recognition. Purchase and sale of financial assets are recognized using trade date accounting.
B. Subsequent measurement
a) Financial assets carried at amortized cost (AC)
A financial asset is measured at amortized 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.
b) Financial assets at fair value through other comprehensive income (FVTOCI)
A financial asset is 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.
c) Financial assets at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories are measured at fair value through profit or loss.
C. Investment in Associates
The Company has accounted for its investments in associates at cost.
D. Equity Investments:
All equity investments are measured at fair value, with value changes recognized 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''.
E. Impairment of Financial Assets.
In accordance with Ind AS 109, the Company uses ''Expected Credit Loss'' (ECL) model, for evaluating impairment of financial assets other than those measured at fair value through profit and loss (FVTPL).
Expected credit losses are measured through a loss allowance at an amount equal to :
(1) The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or
(2) Full lifetime expected credit losses (expected credit losses that result from all possible default events over
the life of the financial instrument)
For trade receivables company applies ''simplified approach'' which requires expected lifetime losses to be recognized from initial recognition of the receivables. Further the company uses historical default rates to determine impairment loss on the portfolio of trade receivables. At every reporting date these historical default rates are reviewed and changes in the forward looking estimates are analyzed.
For other assets, the company uses 12 month ECL to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ECL is used.
(ii) Financial liabilities
A. Initial recognition and measurement:
All financial liabilities are recognized initially at fair value and in case of loans net of directly attributable cost. Fees of recurring nature are directly recognized in the Statement of Profit and Loss as finance cost.
B. Subsequent measurement:
Financial liabilities are carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
(iii) Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the company''s balance sheet when the obligation specified in the contract is discharged or cancelled or expires.
C. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY:
The preparation of the Company''s financial statements requires management to make judgment, estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures. 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.
a) Depreciation / amortization and useful lives of property plant and equipment / intangible assets
Property, plant and equipment / intangible assets are depreciated / amortized over their estimated useful lives, after taking into account estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation / amortization to be recorded during any reporting period. The useful lives and residual values are based on the Company''s historical experience with similar assets and take into account anticipated technological changes. The depreciation / amortization for future periods is revised if there are significant changes from previous estimates.
b) Recoverability of trade receivable
Judgments are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.
c) Provisions
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability require the application of judgment to existing facts and circumstances, which can be subject to change. The carrying amounts of provisions and liabilities are reviewed regularly and revised to take account of changing facts and circumstances.
d) 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, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or Cash Generating Units (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 a 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 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 transaction are taken into account, if no such transactions can be identified, an appropriate valuation model is used.
e) Impairment of financial assets
The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss rates. The Company uses judgment 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.
D. FIRST TIME ADOPTION OF IND AS
The Company has adopted Ind AS with effect from 1st April 2016 with comparatives being restated. Accordingly the impact of transition has been provided in the Opening Reserves as at 1st April 2015. The figures for the previous period have been restated, regrouped and reclassified wherever required to comply with the requirement of Ind AS and Schedule III.
a) Exemptions from retrospective application:
i) Fair value as deemed cost exemption:
The Company has elected to measure items of property, plant and equipment and intangible assets at its carrying value at the transition date.
ii) Investments in Associates
The Company has elected to measure investment in Associate at cost.
# Includes Unclaimed Dividend of Rs, 1 02. 66 lakh (Previous year Rs, 98.77 lakh).
* Fixed Deposits Rs, 2.50 lakh (Previous year Rs, 2.50 lakh) having maturity of more than 12 months.
Mar 31, 2015
A BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
(i) These financial statements have been prepared to comply with
Accounting Principles Generally accepted in India (Indian GAAP),
including the Accounting Standards notified under the relevant
provisions of the Companies Act, 2013.
(ii) The financial statements are prepared on accrual basis under the
historical cost convention, except for certain Fixed Assets which are
carried at revalued amounts. The financial statements are presented in
Indian rupees rounded off to the nearest rupees in lakh.
B USE OF ESTIMATES :
The preparation of financial statements in conformity with Indian GAAP
requires judgements, estimates and assumptions to be made that affect
the reported amount of assets and liabilities, disclosure of contingent
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognised in the period
in which the results are known/materialised.
C OWN FIXED ASSETS:
(i) Fixed Assets are stated at cost net of recoverable taxes and
includes amounts added on revaluation, less accumulated depreciation
and impairment loss, if any. All costs including financing costs, up to
the date of commissioning and attributable to the fixed assets are
capitalised.
(ii) Compensation paid to various land owners / occupiers for
acquisition of Right of User in the lands along the pipeline route
under the Petroleum and Minerals Pipelines (Acquisition of Right of
User in Lands) Act, 1962, up to the date of commissioning, has been
included in Plant and Machinery.
(iii) Intangible assets are stated at cost of acquisition, less
accumulated amortisation.
D LEASED ASSET5 :
In respect of fixed assets given on finance lease, assets are shown as
receivable at an amount equal to net investment in the lease. Initial
direct costs are recognised immediately as expense in the Statement of
Profit and Loss. Income from leased assets is accounted by applying the
interest rate implicit in the lease to the net investment.
E DEPRECIATION AND AMORTISATION:
Depreciation on Fixed Assets is provided based on useful life of the
assets as prescribed in Schedule II to the Companies Act, 2013, except
that :
(i) the cost of Leasehold Land is amortised over the period of lease,
(ii) cost of Pipeline Corridor Structure is amortised over the residual
life of the asset.
(iii) Intangible assets comprising of Software are amortised over the
period of 10 years.
F IMPAIRMENT OF ASSETS:
An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. An impairment loss is charged to the Statement
of Profit and Loss in the year in which an asset is identified as
impaired. The impairment loss recognised in prior accounting period is
reversed if there has been a change in the estimate of recoverable
amount.
G FOREIGN CURRENCY TRANSACTIONS :
(i) Transactions denominated in foreign currencies are recorded at the
exchange rate prevailing on the date of the transaction.
(ii) Monetary items denominated in foreign currencies, if any at the
yearend are restated at year end rates.
(iii) Non monetary foreign currency items are carried at cost.
(iv) Any income or expense on account of exchange difference either on
settlement or on translation is recognised in the Statement of Profit
and Loss.
H INVESTMENTS :
Current Investments are carried at the lower of cost or quoted / fair
value, computed category-wise. Long-term investments are stated at
cost. Provision for diminution in the value of long-term investments is
made only if such decline is other than temporary.
I INVENTORIES:
Inventories are measured at lower of cost or net realisable value. Cost
is determined on weighted average basis.
J REVENUE RECOGNITION:
Revenue is recognised only when it can be reliably measured and it is
reasonable to expect ultimate collection. Revenue from operations
includes sale of services, service tax, adjusted for discounts (net).
Revenue from service contracts are recognised when related services are
performed and are due as per the terms of contract.
Dividend income is recognised when the right to receive payment is
established.
Interest income is recognised on a time proportion basis taking into
account the amount outstanding and the interest rate applicable.
SERVICE TAX:
Service tax is accounted on the basis of both, payments made and
provisions made in respect of services provided.
K EMPLOYEE BENEFITS:
(i) Short term employee benefits:
The undiscounted amount of short-term employee benefits expected to be
paid in exchange for the services rendered by employees are recognised
as an expense during the period when the employees render the services.
These benefits include performance incentive and compensated absences.
(ii) Post-employment benefits: Defined contribution plans
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,
Superannuation Fund and 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 plans
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 employees' services.
Actuarial gains and losses in respect of post-employment and other long
term benefits are charged to the Statement of Profit and Loss.
L BORROWING COST:
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of the cost
of such assets. A qualifying asset is one that takes necessarily
substantial period of time to get ready for intended use. All other
borrowing costs are charged to the Statement of Profit and Loss.
M INCOME TAXES:
Tax expense comprises of current tax and deferred tax. Current tax is
measured at the amount expected to be paid to the tax authorities,
using the applicable tax rates. Deferred income tax reflect the current
period timing differences between taxable income and accounting income
for the period and reversal of timing differences of earlier
years/period. Deferred tax assets are recognised only to the extent
that there is a reasonable certainty that sufficient future income will
be available except that deferred tax assets, in case there are
unabsorbed depreciation or losses, are recognised if there is virtual
certainty that sufficient future taxable income will be available to
realise the same.
Deferred tax assets and liabilities are measured using the tax rates
and tax law that have been enacted or substantively enacted by the
Balance Sheet date.
N PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in notes.
Contingent Assets are neither recognised nor disclosed in the financial
statements.
Mar 31, 2014
A BASIS OF PREPARATION OF FINANCIAL STATEMENTS :
(i) The financial statements are prepared under the historical cost
convention, except for certain fixed assets which are revalued, in
accordance with generally accepted accounting principles in India and
the provisions of the Companies Act, 1956.
(ii) The Company generally follows the mercantile system of accounting
and recognises significant items of income and expenditure on accrual
basis.
B USE OF ESTIMATES :
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognised in the period
in which the results are known / materialised.
C OWN FIXED ASSETS :
(i) Fixed Assets are stated at cost net of recoverable taxes and
includes amounts added on revaluation, less accumulated depreciation
and impairment loss, if any. All costs including financing costs, up to
the date of commissioning and attributable to the fixed assets are
capitalised.
(ii) Compensation paid to various land owners / occupiers for
acquisition of Right of User in the lands along the pipeline route
under the Petroleum and Minerals Pipelines (Acquisition of Right of
User in Lands) Act, 1962 has been included in Plant and Machinery.
(iii) Intangible assets are stated at cost of acquisition, less
accumulated amortisation.
D LEASED ASSETS :
In respect of fxed assets given on finance lease, assets are shown as
receivable at an amount equal to net investment in the lease. Initial
direct costs are recognised immediately as expense in the Statement of
Profit and Loss. Income from leased assets is accounted by applying the
interest rate implicit in the lease to the net investment.
E DEPRECIATION AND AMORTISATION :
Depreciation on Fixed Assets is provided on straight line method at the
rates and in the manner prescribed in Schedule XIV to the Companies
Act, 1956 except that :
(i) on plant and machinery comprising of transport facilities and
monitoring systems (for petrochemical products and for raw water) and
on old construction machinery, depreciation has been provided on
written down value method at the rates and in the manner prescribed in
Schedule XIV to the Companies Act, 1956.
(ii) on revalued assets, depreciation has been provided on written down
value method and charged over the residual life of the assets,
(iii) the cost of leasehold land is amortised over the period of lease,
(iv) cost of pipeline corridor structure is amortised over the residual
life of the asset.
(v) Intangible assets comprising of Software are amortised over the
period of 10 years.
F IMPAIRMENT OF ASSETS :
An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. An impairment loss is charged to the Statement
of Profit and Loss in the year in which an asset is identified as
impaired. The impairment loss recognised in prior accounting period is
reversed if there has been a change in the estimate of recoverable
amount.
G FOREIGN CURRENCY TRANSACTIONS :
(i) Transactions denominated in foreign currencies are recorded at the
exchange rate prevailing on the date of the transaction.
(ii) Monetary items denominated in foreign currencies, if any at the
year end are restated at year end rates.
(iii) Non monetary foreign currency items are carried at cost.
(iv) Any income or expense on account of exchange difference either on
settlement or on translation is recognised in the Statement of Profit
and Loss.
H INVESTMENTS :
Current Investments are carried at the lower of cost or quoted / fair
value, computed category-wise. Long-term investments are stated at
cost. Provision for diminution in the value of long-term investments is
made only if such decline is other than temporary.
I INVENTORIES :
Inventories are measured at lower of cost or net realisable value. Cost
is determined on weighted average basis.
J EMPLOYEE BENEFITS :
(i) Short term employee benefits are recognised as an expense at the
undiscounted amount in the Statement of Profit and Loss of the year in
which the related service is rendered.
(ii) Post employment and other long term employee benefits are
recognised as an expense in the Statement of Profit and Loss for the
year in which the employee has rendered services. The expense is
recognised at the present value of the amounts payable determined using
actuarial valuation techniques. Actuarial gains and losses in respect
of post employment and other long term benefits are charged to the
Statement of Profit and Loss.
K BORROWING COST :
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of the cost
of such assets. A qualifying asset is one that takes necessarily
substantial period of time to get ready for intended use. All other
borrowing costs are charged to the Statement of Profit and Loss.
L PROVISION FOR CURRENT TAX AND DEFERRED TAX :
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961.
Deferred tax resulting from "timing differences" between the taxable and
accounting income is accounted for using the tax rates and laws that
are enacted or substantively enacted as on the balance sheet date. The
deferred tax asset is recognised and carried forward only to the extent
that there is a virtual / reasonable certainty that the assets will be
realised in future.
M PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS :
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in notes.
Contingent Assets are neither recognised nor disclosed in the financial
statements.
Mar 31, 2013
A Basis of preparation of Financial Statements :
(i) The financial statements are prepared under the historical cost
convention, except for certain fixed assets which are revalued, in
accordance with generally accepted accounting principles in India and
the provisions of the Companies Act, 1956.
(ii) The Company generally follows the mercantile system of accounting
and recognises significant items of income and expenditure on accrual
basis.
B Use of Estimates :
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognised in the period
in which the results are known / materialised.
C Own Fixed Assets :
(i) Fixed Assets are stated at cost net of recoverable taxes and
includes amounts added on revaluation, less accumulated depreciation
and impairment loss, if any. All costs including financing costs, up to
the date of commissioning and attributable to the fixed assets are
capitalised.
(ii) Compensation paid to various land owners / occupiers for
acquisition of Right of User in the lands along the pipeline route
under the Petroleum and Minerals Pipelines (Acquisition of Right of
User in Lands) Act, 1962 has been included in Plant and Machinery.
(iii) Intangible assets are stated at cost of acquisition, less
accumulated amortisation.
D Leased Assets :
In respect of fixed assets given on finance lease, assets are shown as
receivable at an amount equal to net investment in the lease. Initial
direct costs are recognised immediately as expense in the Profit and
Loss Account. Income from leased assets is accounted by applying the
interest rate implicit in the lease to the net investment.
E Depreciation and amortisation :
Depreciation on Fixed Assets is provided on straight line method at the
rates and in the manner prescribed in Schedule XIV to the Companies
Act, 1956 except that :
(i) on plant and machinery comprising of transport facilities and
monitoring systems (for petrochemical products and for raw water) and
on old construction machinery, depreciation has been provided on
written down value method at the rates and in the manner prescribed in
Schedule XIV to the Companies Act, 1956,
(ii) on revalued assets, depreciation has been provided on written down
value method and charged over the residual life of the assets,
(iii) the cost of leasehold land is amortised over the period of lease,
(iv) cost of pipeline corridor structure is amortised over the residual
life of the asset.
(v) Intangible assets comprising of Software are amortised over the
period of 10 years F Impairment of Assets :
An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. An impairment loss is charged to Profit and Loss
Account in the year in which an asset is identified as impaired. The
impairment loss recognised in prior accounting period is reversed if
there has been a change in the estimate of recoverable amount.
G Foreign Currency Transactions :
(i) Transactions denominated in foreign currencies are recorded at the
exchange rate prevailing on the date of the transaction.
(ii) Monetary items denominated in foreign currencies, if any at the
year end are restated at year end rates.
(iii) Non monetary foreign currency items are carried at cost.
(iv) Any income or expense on account of exchange difference either on
settlement or on translation is recognised in the Profit and Loss
Account.
H Investments :
Current Investments are carried at the lower of cost or quoted / fair
value, computed category wise. Long term investments are stated at
cost. Provision for diminution in the value of long term investments is
made only if such decline is other than temporary.
I Inventories :
Inventories are measured at lower of cost or net realisable value. Cost
is determined on weighted average basis.
J Employee Benefits :
(i) Short term employee benefits are recognised as an expense at the
undiscounted amount in the Profit and Loss Account of the year in which
the related service is rendered.
(ii) Post employment and other long term employee benefits are
recognised as an expense in the Profit and Loss Account for the year in
which the employee has rendered services. The expense is recognised at
the present value of the amounts payable determined using actuarial
valuation techniques. Actuarial gains and losses in respect of post
employment and other long term benefits are charged to the Profit and
Loss Account.
K Borrowing Cost :
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of the cost
of such assets. A qualifying asset is one that takes necessarily
substantial period of time to get ready for intended use. All other
borrowing costs are charged to Profit and Loss Account.
L Provision for Current Tax and Deferred Tax :
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961.
Deferred tax resulting from "timing differences" between the
taxable and accounting income is accounted for using the tax rates and
laws that are enacted or substantively enacted as on the balance sheet
date. The deferred tax asset is recognised and carried forward only to
the extent that there is a virtual / reasonable certainty that the
assets will be realised in future.
M Provision, Contingent Liabilities and Contingent Assets :
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in notes.
Contingent Assets are neither recognised nor disclosed in the financial
statements.
Mar 31, 2012
A Basis of preparation of Financial Statements :
(i) The financial statements are prepared under the historical cost
convention, except for certain fixed assets which are revalued, in
accordance with generally accepted accounting principles in India and
the provisions of the Companies Act, 1956.
(ii) The Company generally follows the mercantile system of accounting
and recognises significant items of income and expenditure on accrual
basis.
B Use of Estimates :
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period.
Difference between the actual results and estimates are recognised in
the period in which the results are known / materialised.
C Own Fixed Assets :
(i) Fixed Assets are stated at cost net of recoverable taxes and
includes amounts added on revaluation, less accumulated depreciation
and impairment loss, if any. All costs including financing costs, up to
the date of commissioning and attributable to the fixed assets are
capitalised.
(ii) Compensation paid to various land owners / occupiers for
acquisition of Right of User in the lands along the pipeline route
under the Petroleum and Minerals Pipelines (Acquisition of Right of
User in Lands) Act, 1962 has been included in Plant and Machinery.
(iii) Intangible assets are stated at cost of acquisition, less
accumulated amortisation.
D Leased Assets :
In respect of fixed assets given on finance lease, assets are shown as
receivable at an amount equal to net investment in the lease. Initial
direct costs are recognised immediately as expense in the Profit and
Loss Account. Income from leased assets is accounted by applying the
interest rate implicit in the lease to the net investment.
E Depreciation and amortisation :
Depreciation on Fixed Assets is provided on straight line method at the
rates and in the manner prescribed in Schedule XIV to the Companies
Act, 1956 except that :
(i) on plant and machinery comprising of transport facilities and
monitoring systems (for petrochemical products and for raw water) and
on old construction machinery, depreciation has been provided on
written down value method at the rates and in the manner prescribed in
Schedule XIV to the Companies Act, 1956,
(ii) on revalued assets, depreciation has been provided on written down
value method and charged over the residual life of the assets,
(iii) the cost of leasehold land is amortised over the period of lease,
(iv) cost of pipeline corridor structure is amortised over the residual
life of the asset.
(v) Intangible assets comprising of software are amortised over the
period of 10 years.
F Impairment of Assets :
An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. An impairment loss is charged to Profit and Loss
Account in the year in which an asset is identified as impaired. The
impairment loss recognised in prior accounting period is reversed if
there has been a change in the estimate of recoverable amount.
G Foreign Currency Transactions :
(i) Transactions denominated in foreign currencies are recorded at the
exchange rate prevailing on the date of the transaction.
(ii) Monetary items denominated in foreign currencies, if any at the
year end are restated at year end rates.
(iii) Non monetary foreign currency items are carried at cost.
(iv) Any income or expense on account of exchange difference either on
settlement or on translation is recognised in the Profit and Loss
Account.
H Investments :
Current Investments are carried at the lower of cost or quoted / fair
value, computed category wise. Long term investments are stated at
cost. Provision for diminution in the value of long term investments is
made only if such decline is other than temporary.
I Inventories :
Inventories are measured at lower of cost or net realisable value. Cost
is determined on weighted average basis.
J Employee Benefits :
(i) Short term employee benefits are recognised as an expense at the
undiscounted amount in the profit and loss account of the year in which
the related service is rendered.
(ii) Post employment and other long term employee benefits are
recognised as an expense in the profit and loss account for the year in
which the employee has rendered services. The expense is recognised at
the present value of the amounts payable determined using actuarial
valuation techniques. Actuarial gains and losses in respect of post
employment and other long term benefits are charged to the profit and
loss account.
K Borrowing Cost :
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of the cost
of such assets. A qualifying asset is one that takes necessarily
substantial period of time to get ready for intended use. All other
borrowing costs are charged to Profit and Loss account.
L Provision for Current Tax and Deferred Tax :
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961.
Deferred tax resulting from "timing differences" between the taxable
and accounting income is accounted for using the tax rates and laws
that are enacted or substantively enacted as on the balance sheet date.
The deferred tax asset is recognised and carried forward only to the
extent that there is a virtual / reasonable certainty that the assets
will be realised in future.
M Provision, Contingent Liabilities and Contingent Assets :
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in notes.
Contingent Assets are neither recognised nor disclosed in the financial
statements.
Mar 31, 2011
A. Basis of preparation of Financial Statements :
(i) The financial statements are prepared under the historical cost
convention, except for certain fixed assets which are revalued, in
accordance with generally accepted accounting principles in India and
the provisions of the Companies Act, 1956.
(ii) The Company generally follows the mercantile system of accounting
and recognises significant items of income and expenditure on accrual
basis.
B. Use of Estimates :
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognised in the period
in which the results are known / materialised.
C. Own Fixed Assets :
(i) Fixed Assets are stated at cost net of cenvat and includes amounts
added on revaluation, less accumulated depreciation and impairment
loss, if any. All costs including financing costs, upto the date of
commissioning and attributable to the fixed assets are capitalised.
(ii) Compensation paid to various land owners / occupiers for
acquisition of Right of User in the lands along the pipeline route
under the Petroleum and Minerals Pipelines (Acquisition of Right of
User in Lands) Act, 1962 has been included in Plant and Machinery.
D. Leased Assets :
In respect of fixed assets given on finance lease, assets are shown as
receivable at an amount equal to net investment in the lease. Initial
direct costs are recognised immediately as expense in the Profit and
Loss Account. Income from leased assets is accounted by applying the
interest rate implicit in the lease to the net investment.
E. Depreciation :
Depreciation on Fixed Assets is provided on straight line method at the
rates and in the manner prescribed in Schedule XIV to the
Companies Act, 1956 except that :
(i) on plant and machinery comprising of transport facilities and
monitoring systems (for petrochemical products and for raw water) and
on old construction machinery, depreciation has been provided on
written down value method at the rates and in the manner prescribed in
Schedule XIV to the Companies Act, 1956.
(ii) on revalued assets, depreciation has been provided on written down
value method and charged over the residual life of the assets.
(iii) the cost of leasehold land is amortised over the period of lease.
(iv) cost of pipeline corridor structure is amortised over the residual
life of the asset.
F. Impairment of Assets :
An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. An impairment loss is charged to Profit and Loss
Account in the year in which an asset is identified as impaired. The
impairment loss recognised in prior accounting period is reversed if
there has been a change in the estimate of recoverable amount.
G. Foreign Currency Transactions :
(i) Transactions denominated in foreign currencies are recorded at the
exchange rate prevailing on the date of the transaction.
(ii) Monetary items denominated in foreign currencies, if any at the
year end are restated at year end rates.
(iii) Non monetary foreign currency items are carried at cost.
(iv) Any income or expense on account of exchange difference either on
settlement or on translation is recognised in the Profit and Loss
Account.
H. Investments :
Current Investments are carried at the lower of cost or quoted / fair
value, computed category wise. Long term investments are stated at
cost. Provision for diminution in the value of long term investments is
made only if such decline is other than temporary.
I. Inventories :
Inventories are measured at cost. Cost is determined on weighted
average basis.
J. Employee Benefits :
(i) Short term employee benefits are recognised as an expense at the
undiscounted amount in the Profit and Loss Account of the year in which
the related service is rendered.
(ii) Post employment and other long term employee benefits are
recognised as an expense in the Profit and Loss Account for the year in
which the employee has rendered services. The expense is recognised at
the present value of the amounts
SCHEDULE K
SIGNIFICANT ACCOUNTING POLICIES (continued)
payable determined using actuarial valuation techniques. Actuarial
gains and losses in respect of post employment and other long term
benefits are charged to the Profit and Loss Account.
K. Borrowing Cost :
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of the cost
of such assets. A qualifying asset is one that takes necessarily
substantial period of time to get ready for intended use. All other
borrowing costs are charged to Profit and Loss Account.
L. Provision for Current Tax and Deferred Tax :
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961.
Deferred tax resulting from "timing differences" between the taxable
and accounting income is accounted for using the tax rates and laws
that are enacted or substantively enacted as on the balance sheet date.
The deferred tax asset is recognised and carried forward only to the
extent that there is a virtual / reasonable certainty that the assets
will be realised in future.
M. Provision, Contingent Liabilities and Contingent Assets :
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in notes.
Contingent Assets are neither recognised nor disclosed in the financial
statements.
Mar 31, 2010
A. Basis of preparation of Financial Statements :
(i) The financial statements are prepared under the historical cost
convention, except for certain fixed assets which are revalued, in
accordance with generally accepted accounting principles in India and
the provisions of the Companies Act, 1956.
(ii) The Company generally follows the mercantile system of accounting
and recognises significant items of income and expenditure on accrual
basis.
B. Use of Estimates :
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognised in the period
in which the results are known / materialised.
C. Own Fixed Assets :
(i) Fixed Assets are stated at cost net of cenvat and includes amounts
added on revaluation, less accumulated depreciation and impairment
loss, if any. All costs including financing costs, upto the date of
commissioning and attributable to the fixed assets are capitalised.
(ii) Compensation paid to various land owners / occupiers for
acquisition of Right of User in the lands along the pipeline route
under the Petroleum and Minerals Pipelines (Acquisition of Right of
User in Lands) Act, 1962 has been included in Plant and Machinery.
D. Leased Assets :
In respect of fixed assets given on finance lease, assets are shown as
receivable at an amount equal to net investment in the lease. Initial
direct costs are recognised immediately as expense in the Profit and
Loss Account. Income from leased assets is accounted by applying the
interest rate implicit in the lease to the net investment.
E. Depreciation :
Depreciation on Fixed Assets is provided on straight line method at the
rates and in the manner prescribed in Schedule XIV to the Companies
Act, 1956 except that :
(i) on plant and machinery comprising of transport facilities and
monitoring systems (for petrochemical products and for raw water) and
on construction machinery, depreciation has been provided on written
down value method at the rates and in the manner prescribed in Schedule
XIV to the Companies Act, 1956.
(ii) on revalued assets, depreciation has been provided on written down
value method and charged over the residual life of the assets.
(iii) The cost of leasehold land is amortised over the period of lease.
(iv) cost of pipeline corridor structure is amortised over the residual
life of the asset.
F. Impairment of Assets :
An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. An impairment loss is charged to Profit and Loss
Account in the year in which an asset is identified as impaired. The
impairment loss recognised in prior accounting period is reversed if
there has been a change in the estimate of recoverable amount.
G. Foreign Currency Transactions :
(i) Transactions denominated in foreign currencies are recorded at the
exchange rate prevailing on the date of the transaction. (ii) Monetary
items denominated in foreign currencies, if any at the year end are
restated at year end rates. (iii) Non monetary foreign currency items
are carried at cost.
(iv) Any income or expense on account of exchange difference either on
settlement or on translation is recognised in the Profit and Loss
Account.
H. Investments :
Current Investments are carried at the lower of cost or quoted / fair
value, computed category wise. Long term investments are stated at
cost. Provision for diminution in the value of long term investments is
made only if such decline is other than temporary.
I. Inventories :
Inventories are measured at cost. Cost is determined on weighted
average basis.
J. Employee Benefits :
(i) Short term employee benefits are recognised as an expense at the
undiscounted amount in the profit and loss account of the year in which
the related service is rendered.
(ii) Post employment and other long term employee benefits are
recognised as an expense in the profit and loss account for the year in
which the employee has rendered services. The expense is recognised at
the present value of the amounts
SCHEDULE 14 : SIGNIFICANT ACCOUNTING POLICIES (continued)
payable determined using actuarial valuation techniques. Actuarial
gains and losses in respect of post employment and other long term
benefits are charged to the Profit and Loss account.
K. Borrowing Cost :
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of the cost
of such assets. A qualifying asset is one that takes necessarily
substantial period of time to get ready for intended use. All other
borrowing costs are charged to Profit and Loss account.
L. Provision for Current Tax and Deferred Tax :
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961.
Deferred tax resulting from "timing difference" between the taxable and
accounting income is accounted for using the tax rates and laws that
are enacted or substantively enacted as on the balance sheet date.
Deferred tax asset is recognised and carried forward only to the extent
that there is a virtual certainty that the asset will be realised in
future.
M. Provision, Contingent Liabilities and Contingent Assets :
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in notes.
Contingent Assets are neither recognised nor disclosed in the financial
statements.