2. Summary of significant accounting policies

2.1. Basis of preparation of financial statements

These financial statements are prepared and presented under the historical cost
convention as a going concern on the accrual basis of accounting and comply with the
Indian Accounting Standards' (' Ind AS') specified under section 133 of the Companies
Act, 2013 ('the Act') and the relevant provisions and amendments, as applicable and
other accounting principles generally accepted in India, to the extent applicable. The
financial statements are presented in Indian rupees and rounded off to the nearest
rupee.

2.2. Use of estimates

The preparation of the financial statements in conformity with generally accepted
accounting principles (GAAP) requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent liabilities as of the date of the financial statements and reported amounts
of revenues and expenses during the reporting period. Actual results could differ from
these estimates and such differences are recognised in the period in which such results
are known / materialize. Any revision to accounting estimates is recognised
prospectively in current and future periods.

2.3. Current/ non-current classification

All assets and liabilities are classified into current and non-current as follows:

Assets:

An asset is classified as current when it satisfies any of the following criteria:

a) it is expected to be realised in, or is intended for sale or consumption in, the
Company's normal operating cycle;

b) it is held primarily for the purpose of being traded;

c) it is expected to be realised within 12 months after the reporting date; or

d) it is cash or cash equivalent unless it is restricted from being exchanged or used to
settle a liability for at least 12 months after the reporting date.

Current assets include the current portion of non-current financial assets. All other
assets are classified as non-current.

Liabilities:

A liability is classified as current when it satisfies any of the following criteria:

a) it is expected to be settled in the Company's normal operating cyc le;

b) it is held primarily for the purpose of being traded;

c) it is due to be settled within 12 months after the reporting date; or

d) the Company does not have an unconditional right to defer settlement of the
liability for at least 12 months after the reporting date. Terms of a liability that
could, at the option of the counterparty, result in its settlement by the issue of
equity instruments do not affect its classification.

Current liabilities include current portion of non-current financial liabilities. All other
liabilities are classified as non-current.

2.4. Operating cycle:

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 above which are in
accordance with the Schedule III to the Act. Based on the nature of business the
Company has ascertained its operating cycle as 12 months for the purpose of current -
non-current classification of assets and liabilities.

2.5. Inventories

Inventories are valued as follows:

A. Raw material, components, stores, spares and tools

These are valued at lower of cost or net realisable value. Cost includes all cost of
purchase and all other costs incurred to bring them to its present location and
condition. Cost of purchase consists of purchase price including duties and taxes
(excluding those that are subsequently recoverable), freight inwards and other
expenditure directly attributable to the acquisition. Further, trade discounts, rebates
and other similar items are deducted in determining the costs of purchase. Further,
these are valued on first-in-first out method.

Net realisable value is determined as the estimated selling price of finished goods in
the ordinary course of business less selling expenses.

B. Work-in-progress and finished goods

These are valued at lower of cost or net realisable value. Cost includes direct materials
and labour and a proportion of overheads based on normal operating capacity. Cost is
determined on weighted average basis.

Net realisable value is the estimated contract price in the ordinary course of business,
less estimated costs of completion of the contract.

2.6. Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will
flow to the Company and the revenue can be reliably measured. The following specific
recognition criteria must also be met before revenue is recognised. Claims are
recognised as income to the extent it is measurable and it is not unreasonable to
expect ultimate collection.

A. Construction Contracts

Contract revenue and contract cost associated with the construction of buildings and
civil structures are recognised as revenue and expenses respectively by reference to
the stage of completion of the projects at the balance sheet date i.e. percentage of
completion method. The stage of completion of project is determined by the
proportion that contract cost incurred for work performed up to the balance sheet
date bear to the estimated total contract costs. Where the outcome of the
construction cannot be estimated reliably, revenue is recognised to the extent of the
construction costs incurred if it is probable that they will be recoverable. If total cost is

estimated to exceed total contract revenue, the Company provides for foreseeable
loss. Contract revenue earned in excess of billing has been reflected as unbilled
revenue and billing in excess of contract revenue has been reflected as unearned
revenue.

B. Project supplies

Revenue on sale of goods is recognised when the property in goods has been
transferred to the buyer for a price or when all significant risks and rewards of
ownership have been transferred to the buyer such that the seller retains no effective
control of the goods transferred to a degree usually associated with ownership. This
usually takes place when the goods are delivered to the customer.

In a situation, where transfer of property in goods does not coincide with the transfer
of significant risks and rewards of ownership, revenue in such a situation is recognised
at the time of transfer of significant risks and rewards of ownership to the buyer.

C. Interest income

Revenue is recognised on a time proportion basis taking into account the amount
outstanding and the rate applicable.

During the current year, there is no revenue, recognition of which is postponed due to
lack of certainty of its ultimate collection.

2.7. Property Plant and Equipment

Property, plant and equipment are stated at cost (i.e., cost of acquisition or
construction inclusive of freight, erection and commissioning charges, non-refundable
duties and taxes, expenditure during construction period, borrowing costs (in case of a
qualifying asset) up to the date of acquisition/ installation).

Depreciation is calculated on written down value method (WDV) using the useful lives
as prescribed under Schedule II to the Companies Act, 2013.

2.8. Impairment of assets

In accordance with AS 28 - Impairment of Assets, the carrying amounts of the
Company's assets are reviewed at each balance sheet date to determine whether there
is any indication of impairment. For assets in respect of which any such indication
exists, the asset's recoverable amount is estimated, at higher of the net selling price
and the value in use. Value in use is the present value of estimated future cash flows
expected to arise from the continuing use of an asset and from its disposal at the end
of its useful life. An impairment loss is recognized whenever the carrying amount of an

asset or its cash generating unit exceeds its recoverable amount. If at the Balance
Sheet date, there is an indication that a previously assessed impairment loss no longer
exists, the recoverable amount is reassessed and the asset is reinstated at the
recoverable amount subject to a maximum of depreciable historical cost.

2.9. Investments

Investments are stated at cost, unless there is permanent diminishing in the value of
the investment.

2.10. Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of a
qualifying asset are capitalised as part of the cost of the respective asset. All other
borrowing costs are expensed in the period they occur. Borrowing costs consists of
interest and other costs incurred in connection with the borrowing of funds.

2.11. Retirement and other employee benefits

A. Defined contribution plan

Retirement benefits in the form of Provident Fund, Pension Fund and Employees State
Insurance Fund are a defined contribution scheme and the contributions are charged to the
Statement of Profit and Loss of the period when the employee renders related services.
There are no other obligations other than the contribution payable to the respective
authorities.

B. Defined benefit plan

Gratuity liability for eligible employees is defined benefit obligation and is provided on the
basis of management estimation.

C. Leave encashment

The Company does not have any leave encashment policy and all the unutilised leaves lapse
at the end of the year.

2.12. Income taxes

Income-tax expense comprises current tax (i.e. amount of tax for the period determined in
accordance with the income-tax law) and deferred tax charge or credit (reflecting the tax
effects of timing differences between accounting income and taxable income for the period).
Income-tax expense is recognised in Statement of Profit or Loss except that tax expense
related to items recognised directly in reserves is also recognised in those reserves.

Current tax is measured at the amount expected to be paid to/ recovered from the taxation
authorities, using the applicable tax rates and tax laws.

Deferred tax is recognised in respect of timing differences between taxable income and
accounting income i.e. differences that originate in one period and are capable of reversal in
one or more subsequent periods. The deferred tax charge or credit and the corresponding
deferred tax liabilities or assets are recognised using the tax rates and tax laws that have
been enacted or substantively enacted by the balance sheet date. Deferred tax assets are
recognised only to the extent there is reasonable certainty that the assets can be realised in
future; however, where there is unabsorbed depreciation or carried forward loss under
taxation laws, deferred tax assets are recognised only if there is a virtual certainty supported
by convincing evidence that sufficient future taxable income will be available against which
such deferred tax assets can be realised. Deferred tax assets are reviewed as at each balance
sheet date and written down or written-up to reflect the amount that is reasonably/ virtually
certain (as the case may be) to be realised.

2.13. Earning per share

Basic earnings per share is calculated by dividing the net profit or loss for the period
attributable to equity shareholders by the weighted average number of equity shares
outstanding during the period. Earnings considered in ascertaining the Company's
earnings per share is the net profit or loss for the period. The weighted average
number of equity shares outstanding during the period and for all periods presented is
adjusted for events, such as bonus shares, other than the conversion of potential
equity shares, that have changed the number of equity shares outstanding, without a
corresponding change in resources.

2.14. Cash flow statement

Cash flows are reported using the indirect method, whereby profit before tax is
adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals
of past or future operating cash receipts or payments and item of income or expenses
associated with investing or financing cash flows. The cash flows from operating,
investing and financing activities of the Company are segregated.