Page 244 - Hitachi IR 2025

NOTES TO THE FINANCIAL STATEMENTS
2.25 Climate-related matters
The Company considers climate-related matters in estimates and assumptions, where appropriate. This
assessment includes a wide range of possible impacts on the Company due to both physical and transition
risks. Even though the Company believes its business model and products will still be viable after the transition
to a low-carbon economy, climate-related matters increase the uncertainty in estimates and assumptions
underpinning several items in the financial statements. Even though climate-related risks might not currently have
a significant impact on measurement, the Company is closely monitoring relevant changes and developments.
2.26 New and amended standards (Ind AS)
The following amended standards as considered applicable were effective during the year, however, these
amendments had no material impact on the financial statements of the Company
(i) Ind AS 117 Insurance Contracts
The Ministry of corporate Affairs (MCA) notified the Ind AS 117, Insurance Contracts, vide notification
dated August 12, 2024, under the Companies (Indian Accounting Standards) Amendment Rules, 2024,
which is effective from annual reporting periods beginning on or after April 1, 2024.
Ind AS 117 Insurance Contracts is a comprehensive new accounting standard for insurance contracts
covering recognition and measurement, presentation and disclosure. Ind AS 117 replaces Ind AS 104
Insurance Contracts. Ind AS 117 applies to all types of insurance contracts, regardless of the type of
entities that issue them as well as to certain guarantees and financial instruments with discretionary
participation features; a few scope exceptions will apply. Ind AS 117 is based on a general model,
supplemented by:
•
A specific adaptation for contracts with direct participation features (the variable fee approach)
•
A simplified approach (the premium allocation approach) mainly for short-duration contracts
The application of Ind AS 117 had no impact on the Company's financial statements as the Company
has not entered any contracts in the nature of insurance contracts covered under Ind AS 117.
(ii) Amendment to Ind AS 116 Leases
–
Lease Liability in a Sale and Leaseback
The MCA notified the Companies (Indian Accounting Standards) Second Amendment Rules, 2024, which
amend Ind AS 116, Leases, with respect to Lease Liability in a Sale and Leaseback.
The amendment specifies the requirements that a seller-lessee uses in measuring the lease liability arising
in a sale and leaseback transaction, to ensure the seller-lessee does not recognise any amount of the
gain or loss that relates to the right of use it retains.
The amendment is effective for annual reporting periods beginning on or after April 1, 2024 and must be
applied retrospectively to sale and leaseback transactions entered into after the date of initial application
of Ind AS 116.
The amendment does not have a material impact on the Company’s financial statements.
2.27 Recent Indian Accounting Standards (Ind AS)
Lack of exchangeability – Amendments to Ind AS 21
The Ministry of Corporate Affairs notified amendments to Ind AS 21 The effects of changes in foreign exchange
rates to specify how an entity should assess whether a currency is exchangeable and how it should determine
a spot exchange rate when exchangeability is lacking. The amendments also require disclosure of information
that enables users of its financial statements to understand how the currency not being exchangeable into
the other currency affects, or is expected to affect, the entity’s financial performance, financial position and
cash flows.
The amendments are effective for annual reporting periods beginning on or after April 1, 2025. When applying
the amendments, an entity cannot restate comparative information.
The amendments are not expected to have a material impact on the Company’s financial statements.
242 Hitachi Energy India Limited