Accounting policies

1. Inventories: In GMRs and Reliances standalone case the raw material,

stores and spares are valued at lower of cost and net realisable value. Net
realisable value is the estimated selling price in the ordinary course of business,
less estimated costs of completion and estimated costs necessary to make the
sale. These are same for Reliance and GMR.
In Reliance fuel, stores and spares cost is determined on a weighted average
basis, and unserviceable, damaged stores and spares are identified and written
down based on technical evaluation.
For GMR, cost of raw materials, components and stores and spares is
determined on a weighted average basis. Materials and other items used for the
production of the inventories are not included or written down below cost if the
finished product within which they will be incorporated are expected to be sold
at or above cost. Cost related to future activities on the contract are recognised
as Contract Work in Progress. Contract work in progress comprising
construction costs and other directly attributable overheads is valued at lower
of cost and net realisable value.
For IRB standalone they do not have inventories.
2. Borrowing Cost : All three companies mentioned consider borrowing costs
as directly attributable to the acquisition, construction or production of an asset
that necessarily takes a substantial period of time to get ready for its intended
use or sale are capitalised as part of the cost of the respective asset.
For IRB, borrowing costs consists of interest and other cost that an entity incurs
in connection with the borrowing of funds. Reliance considers interest,
amortization of ancillary costs incurred in connection with the arrangement of
borrowings and exchange differences arising from foreign currency borrowings
to the extent they are regarded as an adjustment to the interest cost. GMRs
borrowing cost includes interest, amortisation of ancillary costs incurred in
connection with the arrangement of borrowings.
3. Leases : For GMR, where the company is the lessee, in the case of financial
leases it effectively transfers all the risks and benefits incidental to the
ownership of the leased item are capitalised at the inception of the lease term at
the lower of the fair value of the leased property and present value of the
minimum lease payments. Lease payments are apportioned between the finance
charges and reduction of the lease liability so as to achieve a constant rate of
interest on the remaining balance of the liability. Finance charges are
recognised as finance costs in the statement of profit and loss. Lease
management fees, legal charges and other initial direct costs of lease are
capitalised.
A leased asset is depreciated on a straight-line basis over the useful life of the
asset or the useful life envisaged in Schedule XIV to the Act, whichever is lower.
However, if there is no reasonable certainty that the Company will obtain the
ownership by the end of the lease term, the capitalised asset is depreciated on a
straight-line basis over the shorter of the estimated useful life of the asset, the
lease term or the useful life envisaged in Schedule XIV to the Act.
Leases, where the lessor effectively retains substantially all the risks and
benefits of ownership of the leased item, are classified as operating leases.

Operating lease payments are recognized as an expense in the statement of

profit and loss on a straight-line basis over the lease term.
In the case of IRB, leases in which the company does not transfer substantially
all the risks and benefits of ownership of the asset are classified as operating
leases. Lease payments under operating lease are recognised as an expense in
the Statement of profit and loss on a straight line basis over the lease term.
For Reliance standalone they do not have leases.