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Notes to the Financial Statements
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3.6.2 Non-Financial assets
The carrying value of non-financial assets other than inventories and deferred tax assets are assessed at each reporting date to determine whether
there is any indication of impairment. If any such indications exist, then the recoverable amount is estimated. An impairment loss is recognised,
as an expense in the profit and loss account, for the amount by which an asset's carrying amount exceeds its recoverable amount. The recoverable
amount is the higher of an asset's fair value less cost to sell and value in use. Value in use is determined through discounting of the estimated
future cash flows using a discount rate that reflects current market assessments of the time value of money and the risk specific to the assets. For
the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash
generating units).
3.7 Taxation
3.7.1 Current
Provision for current taxation is based on taxability of certain income streams of the Company under presumptive tax regime at the applicable tax
rates and remaining income streams chargeable at current rate of taxation under the normal tax regime after taking into account tax credits and
tax rebates available, if any. The charge for current tax includes adjustments to charge for prior years, if any.
3.7.2 Deferred
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is measured at the
tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates and the tax laws that have
been enacted or substantively enacted by the balance sheet date.
A deferred tax asset is recognised only when it is probable that future taxable profits will be available against which the deductible temporary
differences can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
3.8 Long-term receivables
Long-term loans, trade receivables, deposits and other receivables, except those on which mark-up is earned by the Company are discounted to
their present values.
3.9 Inventories
Inventories are valued at the lower of cost and net realisable value. Cost of finished goods, both manufactured and purchased, raw material and
components is determined on weighted average basis. The cost of work-in-process and finished goods includes direct materials, labour and
applicable production overheads.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
3.10 Trade receivables
3.10.1 Trade receivables are initially recognised at fair value and subsequently measured at amortised cost.
3.10.2 Due against construction work in progress represents the gross unbilled amount expected to be collected from customers for contract work
performed to date. It is measured at cost plus profit recognised to date less progress billing and recognised losses. Cost includes all expenditures
related directly to specific projects and an allocation of fixed and variable overheads incurred.
3.11 Cash and cash equivalents
Cash and cash equivalents comprise of cash in hand, deposits held with banks and highly liquid investments with less than three months maturity
from the date of acquisition. Running finance facilities availed by the Company, which are repayable on demand and form an integral part of the
Company's cash management are included as part of cash and cash equivalents for the purpose of the statement of cash flows.
3.12 Segment reporting
A segment is a distinguishable component of the Company that is engaged in providing related products or services (business segment), or in
providing products or services within a particular economic environment (geographical segment), which is subject to risks and returns that are
different from those of other segments. Segment information is presented in respect of the Company's business and geographical segments. The
Company's primary format for segment reporting is based on business segments. The business segments are determined based on the Company's
management and internal reporting structure.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
Unallocated items comprise mainly investments (other than investment property) and related revenue, loans and borrowings and related
expenses, corporate assets and head office expenses, and income tax assets and liabilities.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment, and intangible assets other than
goodwill.