B. Material accounting policies
I. Statement of compliance
The Company’s financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 and the Indian Accounting
Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 and amendments thereto issued by Ministry of Corporate
Affairs under section 133 of the Companies Act, 2013. In addition, the guidance notes/announcements issued by the Institute of Chartered Accountants of
India (ICAI) are also applied except where compliance with other statutory promulgations require a different treatment.
ii. Basis of Preparation
The financial statements have been prepared on accrual basis and under the historical cost convention except for certain financial instruments which are
measured at fair value at the end of each reporting period, as explained in the accounting policies mentioned below.
All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in Schedule
III to the Companies Act, 2013. The Company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of
assets and liabilities.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents.
Functional and presentation currency
These separate financial statements are presented in Indian rupees, which is the Company’s functional currency. All amounts have been rounded to the
nearest Rupees in lacs up to two places of decimal unless otherwise indicated.
iii. Use of Estimates, Judgments and Assumptions
The preparation of financial statements in accordance with Ind AS requires management to make judgments, estimates and assumptions that affect the
application of accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the
estimates are revised and in any future periods affected.
All the assets and liabilities have been classified as current or non-current as per the company’s normal operating cycle of twelve months and other criteria
set out in Schedule III to the Companies Act, 2013.
Significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have significant effect on amount recognized in the
financial statements are:
i. Allowance for bad and doubtful trade receivable.
ii. Recognition and measurement of provision and contingencies.
iii. Depreciation/Amortisation and useful lives of Property, plant and equipment / Intangible Assets.
iv. Recognition of deferred tax.
v. Income Taxes.
vi. Measurement of defined benefit obligation.
vii. Impairment ofNon-financial assets and financial assets.
viii. Fair value of financial instruments
iv. Revenue
Recognition
The company recognised revenue i.e. account for a contract with a customer only when all of the
Following criteria are met:
(a) the parties to the contract have approved the contract (in writing, orally or in accordance with other customary business practices) and are committed
to perform their respective obligations;
(b) the entity can identify each party’s rights regarding the goods or services to be transferred;
© the entity can identify the payment terms for the goods or services to be transferred;
(d) the contract has commercial substance (i.e. the risk, timing or amount of the entity’s future cash flows is expected to change as a result of the contract);
and
(e) it is probable that the entity will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the
customer. In evaluating whether collectability of an amount of consideration is probable, an entity shall consider only the customer’s ability and intention
to pay that amount of consideration when it is due. The amount of consideration to which the entity will be entitled may be less than the price stated in the
contract if the consideration is variable because the entity may offer the customer a price concession.
Measurement
When (or as) a performance obligation is satisfied, company recognise as revenue the amount of the transaction price (which excludes estimates of
variable consideration that are constrained) that is allocated to that performance obligation.
The transaction price is the amount that the entity expects to be entitled to in exchange for transferring promised goods or services to a customer, excluding
amounts collected on behalf of third parties (for example, some taxes on sales). The consideration promised may include fixed amounts, variable amounts,
or both.
a. Sale of goods
Revenue is recognised upon transfer of control of promised goods to customers in an amount that reflects the consideration which the Company expects to
receive in exchange for those goods. Revenue from the sale of goods is recognised at the point in time when control is transferred to the customer which is
usually on dispatch / delivery of goods, based on contracts with the customers. Revenue is measured based on the transaction price, which is the
consideration, adjusted for volume discounts, price concessions, incentives, and returns, if any, as specified in the contracts with the customers. Revenue
excludes taxes collected from customers on behalf of the government. Further, the revenue amount is adjusted for the time value of money if that contract
contains a significant financing component.
Revenue from sale of power is recognized when delivered and measured based on contractual arrangements after giving allowances for wheeling and
transmission loss.
b. Income from Projects
The Company recognises revenue from real estate projects where performance obligation is satisfied over time; revenue recognition is done by measuring
the progress towards complete satisfaction of performance obligation. The progress is measured in terms of a proportion of actual cost incurred to-date, to
the total estimated cost attributable to the performance obligation.
Expected losses, is recognised in the period in which such losses become probable based on the expected total contract cost as at the reporting date.
c. Interest and Dividend
Interest income is recognized on accrual basis using the effective interest method. Dividend income is recognised in profit or loss on the date on which the
company’s right to receive payment is established.
v . Inventories
Inventories are valued at lower of cost and net realizable value. Cost of inventory is arrived at by using Weighted Average Price Method. Cost of inventory
is generally comprises of cost of purchases, cost of conversion and other cost incurred in bringing the inventories to their present location and condition.
The cost of construction material is determined on the basis of Weighted Average price method. Construction work in progress include cost of land,
premium for development rights, construction cost and the allocation of interest and manpower cost and expense incidental to the project , undertaken by
the company.
vi.Property, Plant and Equipment
a. Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses (if any) except for
Freehold land which is not depreciated.
The cost of an item of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, after
deducting trade discounts and rebates, acquisition or construction cost including borrowing costs, any costs directly attributable to bringing the asset to the
location and condition necessary for it to be capable of operating in the manner intended by management, initial estimate of the costs of dismantling and
removing the item and restoring the site on which it is located.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components)
of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment is recognised in statement of profit or loss.
b. Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the company and
the cost of item can be measured reliably.
c. Depreciation
Depreciation on property, plant and equipment is provided using Straight line method(SLM) as per the useful life of the assets in the manner as specified in
Schedule II to the Companies Act, 2013. The estimated useful life of assets and estimated residual value is taken as prescribed under Schedule II to the
Companies Act, 2013.
Depreciation on additions during the year is provided on pro rata basis with reference to date of addition/installation. Depreciation on assets
disposed/discarded is charged up to the date on which such asset is sold.
The estimated useful lives, residual value and depreciation method are reviewed at the end of each balance sheet date, any changes therein are considered
as changes in estimate and accordingly accounted for prospectively
d. Capital Work In progress
Assets under erection/installation are shown as "Capital work in progress", Expenditure during construction period are shown as "pre-operative expenses"
to be capitalized on erection/installations of the assets.
e. Right of Use Assets
Lease hold land are considered as Right of Use assets and amortised over the period of lease.
vii. Employee benefits
a. Short term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the company
has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated
reliably.
b. Defined benefit plans
The company provides for gratuity to the employees as per the Payment of Gratuity Act, 1972. Employees who are in continuous for a period of five years
are eligible for gratuity. The company has opted for scheme with Life Insurance corporation of India (LIC) to cover its liabilities towards employees
gratuity. The company also carries out Actuarial Valuation of gratuity using the projected unit credit method as required by Ind AS - 19 and the difference
between fair value of plan assets and liability as per actuarial valuation as at the year end is recognised in the balance sheet.
Re measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined
benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in
the balance sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur.
Re measurements of the net defined benefit liability (asset) recognised in other comprehensive income shall not be reclassified to profit or loss in a
subsequent period.
c. Other employee benefits
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services
are recognized as a liability at the present value of obligation as at the Balance sheet date determined based on an actuarial valuation.
d. Defined Contribution Plan
The company’s payments to the defined contribution plans are recognized as expenses during the period in which the employees perform the services that
payment covers. Defined contribution plan comprise of contribution to the employees’ provident fund with government, Employees’ State Insurance and
Pension Scheme.
ix) Income Tax
Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to the other comprehensive
income (OCI or a business combination or items recognised directly in equity).
a) Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable
in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising
from dividends.
Current tax assets and liabilities are offset only if, the Company:
a) has a legally enforceable right to set off the recognised amounts; and
b) intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
b. 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 are generally recognised for all taxable temporary differences.
Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available
against which those deductible temporary differences can be utilised.
The carrying amount of deferred tax assets and liabilities are reviewed at the end of each reporting period and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.
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.
Deferred tax assets include Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits
in the form of availability of set off against future income tax liability. Accordingly, MAT is recognised as deferred tax asset in the balance sheet when the
asset can be measured reliably, and it is probable that the future economic benefit associated with the asset will be realised.
Deferred tax assets and liabilities are offset only if:
a) the entity has a legally enforceable right to set off current tax assets against current tax liabilities; and
b) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.
x. Segment Accounting policies
I). The company has disclosed business segment as primary segment. Based on the criteria mentioned in Ind AS-108 “Operating segment “the company
has identified its reportable segments.
The chief operating decision maker (CODM) evaluated the company’s performance and allocates resources based on an analysis of various performance
indicators by operating segments. The CODM reviews revenue and Gross profit as performance indicator for all of the operating segments. The various
segments identified by the company comprised as under:
Name of Segment Comprised of
Real Estate - Construction and Development of Housing project
Wind Power - Wind Turbine Power Unit
Others - Trading of Agri Commodities, Edible Oils etc.
ii) Segment revenue, segment results, segment assets and segment liabilities include respective amounts directly identified with the segment and also an
allocation on reasonable basis of amounts not directly identified. The expenses which are not directly relatable to the business segments are shown as
unallocated corporate cost. Assets and liabilities that cannot be allocated between the segments are shown as unallocable corporate assets and liabilities
respectively.
The company has identified geographical segments as the secondary segment. Secondary segments comprise of domestic and export market.
xi. Foreign currency transactions
Transactions in foreign currencies are translated into the respective functional currencies of the company at the exchange rates prevailing on the date of the
transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date.
Difference arising on settlement 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 based on historical cost in a foreign currency are not translated. Non-monetary assets and liabilities that are
measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Exchange
difference arising out of these transactions are generally recognised in statement of profit and loss.
xii. Borrowing cost
Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying asset are capitalised as part of the cost of that asset
till the date it is ready for its intended use or sale. Qualifying asset are the assets that necessarily takes a substantial period of time to get ready for its
intended use. All other borrowing costs are charged to the statement of profit and loss in the period in which they are incurred.
xiii. Cash and Cash Equivalent
Cash and cash equivalent includes the cash and Cheques in hand, bank balances, demand deposits with bank and other short term, highly liquid
investments with original maturity of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant
risk of changes in value.
Bank overdraft are shown within borrowings in current liabilities in the balance sheet and forms part of financing activities in the cash flow statement.
Book overdraft is shown within other financial liabilities in the balance sheet and forms part of operating activities in the cash flow statement.
xiv. Cash Flow Statement
Cash flows are reported using indirect method, whereby profit/ (loss) before tax is adjusted for the effect of transactions of non-cash nature and any
deferrals or accruals of past or future cash receipts or payments and items of income or expenses associated with investing or financing cash flow. The
cashflow from operating, investing and financing activities of the company is segregated based on the available information.
xv. Earnings Per Share
i. Basic earnings per shares is arrived at based on net profit / (loss) after tax available to equity shareholders divided by Weighted average number of equity
shares , adjusted for bonus elements in equity shares issued during the year (if any) and excluding treasury shares.
ii. Diluted earnings per shares is calculated by dividing Profit attributable to equity holders after tax divided by Weighted average number of shares
considered for basic earning per shares including potential dilutive equity shares. The dilutive potential equity shares are adjusted for the proceeds
receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity
shares are deemed converted as of the beginning of the period, unless issued at a later date. Potential ordinary shares shall be treated as dilutive when, and
only when, their conversion to ordinary shares would decrease earnings per shareor increase loss per share from continuing operations.
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