2. Significant Accounting Policies:
(a) Statement of Compliance:
The standalone financial statements have been prepared in accordance with the Indian
Accounting Standards (Ind AS) specified under section 133 of the Companies Act, 2013, read with
Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015. These are Company's first
financial statements prepared in accordance with Ind AS and Ind AS 101 'First time adoption of
Indian Accounting Standards' has been applied. An explanation and effect of transition from
Indian GAAP (Referred to as "Previous GAAP") to Ind AS has been described in note 2(c) to
these standalone Ind AS financial statements.
(b) Basis for preparation of the standalone Ind AS financial statements:
The standalone Ind AS financial statementshave been prepared under the historical cost basis
which is generally based on the fair value of consideration given in exchange for goods and
services.
(c) First-Time Adoption of Ind AS
The Company has prepared its first Indian Accounting Standards (Ind AS) compliant standalone
financial statements for the periods commencing from April 1, 2021 with restated comparative
figures for the year ended March 31, 2024. The Company has prepared these standalone financial
statements in accordance with Ind AS notified under Section 133 of the Companies Act, 2013.
Accordingly, the Balance Sheet in line with Ind AS transitional provisions has been prepared as at
April 1, 2021 i.e. the date of Company's transition to Ind AS.
Ind AS 101 also allows to first time adopter certain exemptions from the retrospective application
of certain requirements under Ind AS. Accordingly, the company has availed the following
exemptions/mandatory exceptions as per Ind AS 101:
(i) Fair Value as Deemed Cost Exemption: -
The company has elected to measure items of property, plant & equipment and
intangible assets at its carrying value at the transition date.
(ii) Investments in subsidiaries, joint ventures and associates: -
The company has elected to measure investment in subsidiaries, joint venture and
associate at cost.
(iii) Classification & Fair value measurement of financial assets or financial liabilities at
initial recognition: -
The financial assets and financial liabilities have been classified on the basis of facts
existing as at the date of transition to Ind AS. In addition, the exemption permits
prospective application of requirements of Ind AS 109 to transactions entered into on or
after date of transition.
(d) Use of Estimates:
The preparation of standalone financial statements requires the management of the company to
make estimates and assumptions that affect the reported amounts of assets and liabilities on the
date of the financial statements, disclosure of contingent liabilities as at the date of the financial
statements, and the reported amounts of income and expenses during the reported period.
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.
(e) Critical accounting estimates
(i) Income Taxes
Significant judgments are involved in determining the provision for income taxes,
including amount expected to be paid/recovered for uncertain tax positions.
(ii) Impairment of Investments:
The carrying value of investments is reviewed at cost annually, or more frequently
whenever, there is indication for impairment. If the recoverable amount is less than the
carrying amount, the impairment loss is accounted for.
(iii) Provisions:
Provisions are recognized when the company has a present obligation as a result of past
event and it is probable that an outflow of resources will be required to settle the
obligation, in respect of which a reliable estimate can be made. These are reviewed at
each balance sheet date adjusted to reflect the current best estimates.
(f) Property, plant and equipment
Properties, Plant & equipment are stated at actual cost less accumulated depreciation and net of
impairment. The actual cost capitalized includes material cost, freight, installation cost, duties
and taxes, eligible borrowing costs and other incidental expenses incurred during the
construction/ installation stage.
The Company has chosen the cost model for recognition and this model is applied to all class of
assets. After recognition as an asset, an item of PPE is carried at its cost less any accumulated
depreciation and any accumulated impairment losses.
Depreciable amount of an asset is the cost of an asset less its estimated residual value.
Depreciation on Property, Plant and Equipment, including assets taken on lease, other than
freehold land is charged based on Straight Line method on an estimated useful life as prescribed
in Schedule II to the Companies Act, 2013. The useful life of asset taken into consideration as per
Schedule II for the purpose of calculating depreciation is as follows: -
An item of Property, Plant and Equipment is derecognized upon disposal or when no future
economic benefits are expected to arise from the continued use of the asset. Any gain or loss
arising on the disposal or retirement of an item of Property, Plant and Equipment are determined
as a difference between the sale proceeds and the carrying amount of the asset and is recognized
in the profit and loss.
At the end of each reporting period, the Company reviews the carrying amounts of tangible and
intangible assets to determine whether there is any indication that those assets have suffered an
impairment loss.
(g) Intangible assets and amortisation thereof
Intangible assets, representing software is initially recognised at cost and subsequently carried at
cost less accumulated amortisation and accumulated impairment. The intangible assets are
amortised using the straight line method over a period of five years, which is the Management's
estimate of its useful life. The useful lives of intangible assets are reviewed at each financial year
end and adjusted prospectively, if appropriate.
(a) Revenue recognition:
Revenue is recognised to the extent it is probable that the economic benefits will flow to the
Company & revenue is reliably measured.
(i) Interest Income: The Company recognises interest income using Effective Interest Rate
(EIR) on all financial assets subsequently measured at amortised cost. EIR is calculated by
considering all costs and incomes attributable to acquisition of a financial asset or
assumption of a financial liability and it represents a rate that exactly discounts estimated
future cash payments/receipts through the expected life of the financial asset/financial
liability to the gross carrying amount of a financial asset or to the amortised cost of a
financial liability.
(ii) Dividend: Dividend income from investments is recognised when the shareholders' right
to receive payment has been established which is generally when the shareholders
approve the dividend.
(iii) Other revenue from operations: The Company recognises revenue from contracts with
customers (other than financial assets to which Ind AS 109 'Financial Instruments' is
applicable) based on a comprehensive assessment model as set out in Ind AS 115
'Revenue from contracts with customers'. The Company identifies contract(s) with a
customer and its performance obligations under the contract, determines the transaction
price and its allocation to the performance obligations in the contract and recognises
revenue only on satisfactory completion of performance obligations. Revenue is
measured at fair value of the consideration received or receivable.
(b) Financial Instruments:
(i) Financial Assets: -
Recognition and initial measurement: -
Financial assets and financial liabilities are initially recognised when the Company
becomes a party to the contractual provisions of the instrument and are measured
initially at fair value adjusted for transaction cost.
Subsequent measurement: -
Equity instrument and Mutual Fund: - All equity Instrument and mutual funds within
scope of Ind-AS 109 are measured at fair value. Equity instrument and Mutual fund
which are held for trading are classified as at fair value through profit & loss (FVTPL).
For all other equity instruments, the Company decided to classify them as at fair value
through other comprehensive income (FVTOCI).
Debt instrument: - A 'debt instrument' is measured at the amortised cost if both the
following conditions are met. The assets is held within a business model whose objective
is to hold assets for collecting contractual cash flows, and contractual terms of the assets
give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding. After initial measurement, such financial
assets are subsequently measured at amortised cost using the effective interest rate (EIR)
method.
De- recognition of Financial Assets: -
A financial asset is primarily de-recognised when the rights to receive cash flows from
the asset have expired or Company has transferred its right to receive cash flow from the
asset.
(ii) Financial Liabilities: -
Recognition and initial measurement: -
All financial liabilities are recognised initially at fair value and transaction cost that is
attributable to the acquisition of the financial liabilities is also adjusted. Financial
liabilities are classified at amortised cost.
Subsequent measurement: -
Subsequent to initial recognition, these liabilities are measured at Amortised cost using
the effective interest rate method.
De-recognition of Financial liabilities: -
Financial liabilities are derecognized when the obligation under the liabilities are
discharged or cancelled or expires. Consequently, write back of unsettled credit balances
is done on closure of the concerned project or earlier based on the previous experience of
Management and actual facts of each case and recognized in other Operating Revenues.
Further when an existing Financial liability is replaced by another from the same lender
on substantially different terms , or the terms of existing liability are substantially
modified , such an exchange or modification is treated as the de-recognition of the
original liability and the recognition of a new liability. The difference in the respective
carrying amounts is recognized in the Statement of Profit and Loss.
(iii) Offsetting of Financial Instrument: -
Financial assets and financial liabilities are offset and the net amount is reported in the
Balance Sheet if there is currently enforceable legal right to offset the recognized amounts
and there is an intention to settle on net basis, to realize the assets and settle the liabilities
simultaneously.
(iv) Impairment of Financial Assets
Equity instruments, Debt Instruments and Mutual Fund: -In accordance with Ind-AS
109, the Company applies Expected Credit Loss model for measurement and recognition
of impairment loss for financial assets. Expected Credit Loss is the difference between all
contractual cash flows that are due to the Company in accordance with the contract and
all the cash flows that the Company expects to receive.
Other Financial Assets: - The Company determines whether there has been a significant
increase in the credit risk since initial recognition and if credit risk has increased
significantly, impairment loss is provided.
(c) Cash & Cash equivalents
Cash and cash equivalents in the balance sheet comprise of cash at bank and on hand and short
term deposits with an original maturity of three months or less, which are subject to an
insignificant risk of changes in value. For the purpose of the statement of cash flows, cash and
cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding
bank overdrafts if they are considered an integral part of the Company's cash management.
(d) Taxation
Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount
expected to be paid/recovered from the tax authorities, based on estimated tax liability
computed after taking credit for allowances and exemption in accordance with Income Tax Act,
1961.
Current and deferred tax are recognised in profit and loss, except when they relates to items that
are recognised in other comprehensive income or directly in equity, in which case, the income
taxes are recognised in other comprehensive income or directly in equity, respectively.
Advance taxes and provisions for current income taxes are presented in the statement of financial
position after off-setting advance tax paid and income tax provision.
Deferred income tax is recognised using the balance sheet approach. Deferred income tax assets
and liabilities are recognised for deductible and taxable temporary differences arising between
the tax base of assets and liabilities and their carrying amounts.
Deferred income tax are recognised to the extent it is probable that taxable profit will be available
against which the deductible temporary differences and the carry forward of unused tax credits
and unused tax losses can be utilized. The carrying amount of deferred income tax assets is
reviewed at each reporting date. Deferred tax asset/liability is measured at the tax rates that are
expected to be applied to the period when the asset is realized or the liability is settled.
Deferred tax assets include Minimum Alternative Tax (MAT) paid which is considered as an
asset if there is probable evidence that the Company will pay normal income tax after the tax
holiday period.
(e) Employee Benefits
(i) Short-term Employee Benefits:-
Liabilities for short-term employee benefits that are expected to be settled wholly within
12 months after the end of the period in which the employees render the related service
are recognized in respect of employee's services up to the end of the reporting period
and are measured at the amounts expected to be paid when the liabilities are settled.
(ii) Post-Employment Benefits:-
Defined Benefit Plans:-
The liability or asset recognized in the Balance Sheet in respect of defined benefit plans is
the present value of the defined benefit obligation at the end of the reporting period less
the fair value of plan assets.
The defined benefit obligation is calculated annually by actuaries using the projected unit
credit method. The present value of the defined benefit obligation is determined by
discounting the estimated future cash outflows by reference to market yields at the end
of the reporting period on government bonds that have terms approximating to the terms
of the related obligation. The net interest cost is calculated by applying the discount rate
to the net balance of the defined benefit obligation and the fair value of plan assets. This
cost is included in 'Employee Benefits Expense' in the Statement of Profit and Loss.
Re-measurement gains and losses arising from experience adjustments and changes in
actuarial assumptions are recognized in the period in which they occur, directly in Other
Comprehensive Income. These are included in 'Retained Earnings' in the Statement of
Changes in Equity.
(f) Earnings Per Share
Basic earnings/ (loss) per share are calculated by dividing the net profit/ (loss) for the period
attributable to equity shareholders by the weighted average number of equity shares outstanding
during the period. The weighted average number of equity shares outstanding during the period
are adjusted for any bonus shares issued during the period and also after the Balance Sheet date
but before the date the standalone Ind AS financial statements are approved by the Board of
Directors.
For the purpose of calculating diluted earnings/ (loss) per share, the net profit/ (loss) for the
period attributable to equity shareholders and the weighted average number of shares
outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
The number of equity shares and potentially dilutive equity shares are adjusted for bonus shares
as appropriate. The dilutive potential equity shares are adjusted for the proceeds receivable, had
the shares been issued at fair value. Dilutive potential equity shares are deemed converted as of
the beginning of the period, unless issued at a later date.
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