II Significant Accounting Policies
a) Basis of preparation:
The Statement of Assets and Liabilities of the Company as on March 31, 2025, and the Statement of Profit and Loss
and Statement of Cash Flows for the financial year ended on March 31, 2025 and the annexure thereto (collectively,
the "Financial Statements”) have been compiled by the management from the Financial Statements of the Company
for the financial year ended on March 31, 2025.The Financial Statements have been prepared in accordance with
Indian Generally Accepted Accounting Principles (IGAAP) under historical cost convention on the accrual basis. GAAP
comprises mandatory accounting standards prescribed by the Companies (Accounting Standards) Rules, 2021.
b) Revenue recognition:
"A contract is considered completed when the last technical milestone is achieved, which occurs upon contractual
transfer of ownership of the asset. The Company recognises revenue as per Accounting Standard AS-7 (Percentage-
Of-Completion Method), based primarily on contract cost incurred to date compared to total estimated contract costs.
Construction related performance obligations are satisfied over a period of time and contracts revenue is recognised
over a period of time by measuring progress towards complete satisfaction of the performance obligation at the
reporting date. This percentage of completion could be based on technical milestones or as per the contractual terms
specified. The progress is measured based on the proportion of contract costs incurred for work performed to date.
The Company recognises revenue from engineering, procurement and construction contracts (‘EPC') over the period
of time, as performance obligations are satisfied over time due to continuous transfer of control to the customer. EPC
contracts are generally accounted for as a single performance obligation as it involves complex integration of goods and
services. Due to the nature of the work required to be performed on many of the performance obligations, the estimation
of total revenue and cost at completion is complex, subject to many variables and requires significant judgment.
The difference between the timing of revenue recognised and customer billings result in changes to contract assets
and contract liabilities. Contractual retention amounts billed to customers are generally due upon expiration of the
contract period. The contracts generally result in revenue recognised in excess of billings which are presented as
contract assets on the statement of financial position. Amounts billed and due from customers are classified as
receivables on the statement of financial position.
Interest Income: Revenue is recognized on accrual basis as and when it is recognized.
Other Income : Other items of income and expenditure are recognized on accrual basis and as a going concern basis,
and the accounting policies are consistent with the generally accepted accounting policies.
c) Property Plant and Equipment including Intangible assets:
Property Plant and Equipments are stated at cost, less accumulated depreciation. Cost includes cost of acquisition
including material cost, freight, installation cost, duties and taxes, and other incidental expenses, incurred up to the
installation stage, related to such acquisition.
Intangible assets are stated at their cost of acquisition, less accumulated amortization and impairment losses, if any.
An intangible asset is recognized, where it is probable that the future economic benefits attributable to the asset will
flow to the enterprise and the cost of the asset can be measured reliably.
d) Depreciation & Amortisation:
The Company has provided depreciation under the 'written down' method as per the estimated useful lives as
specified in Schedule II of the Companies Act 2013. Depreciation on new assets acquired during the year is provided
from the date of acquisition to the end of the financial year. In respect of the assets sold during the year, depreciation
is provided from the beginning of the year till the date of its disposal. Residual values of assets are measured at not
more than 5% of their original cost. Individual low cost assets (acquired for less than 5000) are depreciated within a
year of acquisition.
Estimated Useful life of Property, Plant and Equipments:
(e) Use of estimates:
The preparation of the financial statements in conformity with Generally Accepted Accounting Principles requires
the Management to make estimates and assumptions that affect the reported balances of assets and liabilities and
disclosures relating to contingent assets and liabilities as at the date of the financial statements and the reported
amounts of income and expenses during the year. Examples of such estimates include provisions for doubtful debts,
income taxes, post - sales customer support and the useful lives of Property Plant and Equipments and intangible
assets.
f) Employee Benefits:
Benefits such as salaries, wages and performance incentives are charged to the statement of profit and loss at the
actual amounts due in the period in which the employee renders the related service. However the Company has
not adopted any policy for payment of Bonus and thus no amount has been charged to profit and loss account or
provisioned in the balance sheet.
Post-Employment benefits:
Defined benefit plan:
Gratuity liability is a defined benefit obligation and is unfunded. The Company accounts for liability for future gratuity
benefits based on the actuarial valuation using Projected Unit Credit Method carried out as at the end of each
financial year.
Defined contribution Plan:
The company makes provident fund and employee state insurance scheme contributions which are defined
contribution plans, for qualifying employees. Under these schemes, both the employee and the Firm make monthly
contributions. The employer contribution is charged off to Profit & Loss Account as an expense.
g) Taxes on Income:
Income Tax expense is accounted for in accordance with AS-22 "Accounting for Taxes on Income" for both Current
Tax and Deferred Tax stated below:
A. Current Tax:
Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961.
B. Deferred Tax:
Deferred tax is recognised, subject to the consideration of prudence, as the tax effect of timing difference between
the taxable income and accounting income computed for the current accounting year using the tax rates and tax
laws that have been enacted or substantially enacted by the balance sheet date.Deferred tax assets are recognised
and carried forward to the extent that there is a reasonable certainty, except arising from unabsorbed depreciation
and carried forward losses, that sufficient future taxable income will be available against which such deferred tax
assets can be realised.
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