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02-40 CORPORATE OVERVIEW 41-59 STATUTORY REPORTS 60-147 FINANCIAL STATEMENTS Consolidated
Notes
to the Consolidated Financial Statements for the year ended 31 March 2022
2.9 Borrowing Costs
Borrowing costs directly attributable to the acquisition or construction of qualifying assets are capitalized (net of income on temporary deployment of funds) as part of the cost of such assets till the assets are ready for the intended use. Qualifying assets are assets which take a substantial period of time to get ready for their intended use.
All other borrowing costs are recognised in Statement of Profit and Loss in the period in which they are incurred.
Borrowing costs includes interest expenses, other costs in connection with borrowing of fund and exchange differences to the extent regarded as an adjustment to borrowing costs.
2.10 Impairment of non-financial assets
The carrying amounts of the Groups’ non-financial assets are reviewed at least annually to determine whether there is any indication of impairment considering the provisions of Ind AS 36 ‘Impairment of Assets’. If any such indication exists, then the asset’s recoverable amount is estimated.
The recoverable amount of an asset or cash-generating unit is the higher of its fair value less costs to disposal and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”, or “CGU”).
An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognized in the statement of profit and loss. Impairment losses recognized in respect of CGUs are reduced from the carrying amounts of the assets of the CGU.
Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.
2.11 Cash and cash equivalents
Cash and cash equivalents include cash on hand and at bank, and deposits held at call with banks having a maturity of three months or less from the date of acquisition that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value
2.12 Inventories
Inventories are valued at lower of the cost, determined on weighted average basis and net realizable value.
Steel scrap and conductor scrap are valued at estimated realizable value or book value, whichever is less.
Spares which do not meet the recognition criteria as Property, Plant and Equipment including spare parts whose cost is less than ₹500000/- are recorded as inventories.
Surplus materials as determined by the management are held for intended use and are included in the inventory.
The diminution in the value of obsolete, unserviceable and surplus stores and spares is ascertained on review and provided for.
2.13 Leases
Lease is a contract that conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
To assess whether a contract conveys the right to control the use of an identified asset, the group assesses whether: (i) the contract involves use of an identified asset, (ii) the customer has substantially all the economic benefits from the use of the asset through the period of the lease and (iii) the customer has the right to direct the use of the asset.
i) As a Lessee
At the date of commencement of the lease, the group recognises a right-of-use asset (ROU) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for lease with a term of twelve months or less (i.e. short term leases) and leases for which the underlying asset is of low value. For these short-term and leases for which the underlying asset is of low value, the group recognizes the lease payments on straight-line basis over the term of the lease.
Certain lease arrangements includes the options to extend or terminate the lease before the end of the
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