2 Significant accounting policies
Statement ofpliance
Financial Statements have been prepared in accordance with the accounting principles generally accepted in India
including Indian Accounting Standards (Ind AS) prescribed under the Section 133 of the Companies Act, 2013 read
with rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued
thereafter. A summary of the significant accounting policies applied in the preparation of the financial statements
is as given below. These accounting policies have been applied consistently to all the periods presented in the
financial statements.
3.01 Basis of preparation of financial statements
The separate financial statements of thepany are prepared in accordance with Indian Accounting Standards (Ind
AS), under the historical cost convention on the accrual basis as per the provisions of the Companies Act, 2013 (“the
Act”), except for:-
Financial instruments - measured at fair value;
Assets held for sale - measured at fair value less cost of sale;
Plan assets under defined benefit plans - measured at fair value
In addition, the carrying values of recognised assets and liabilities, designated as hedged items in fair value
hedges that would otherwise be carried at cost, are adjusted to record changes in the fair values attributable to
the risks that are being hedged in effective hedge relationship.”
3.02 Functional and presentation currency
Items included in the financial statements of Company are measured using the currency of the primary economic
environment in which the Company operates (“the functional currency”). Indian rupee is the functional currency of
the Company.
3.03 Historical Cost Convention
The financial statements have been prepared on the historical cost basis, except for certain financial instruments
which are measured at fair value at the end of each reporting period. Historical cost is generally based on the
fair value of the consideration given in exchange for goods and services. Fair value is the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date.
3.04 Current and non-current classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An
asset is treated as current when it is:
Expected to be realised or intended to be sold or consumed in normal operating cycle
Held primarily for the purpose of trading
Expected to be realised within twelve months after the reporting period or
Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period
Current assets include the current portion of non-current assets. All other assets are classified as non-current.
A liability is current when:
It is expected to be settled in normal operating cycle
It is held primarily for the purpose of trading
It is due to be settled within twelve months after the reporting period, or
There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting
period Current liabilities include the current portion of long-term liabilities. The Company classifies all other
liabilities as non- current.
Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and
cash equivalents. The Company has identified twelve months as its operating cycle.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current only
The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting
Standards) Rules, 2015 and relevant amendment rules issued thereafter. Accounting policies have been consistently
applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting
standard requires a change in the accounting policy hitherto in use.
The Financial Statements are presented in Indian Rupees (‘0’) and all values are rounded to the nearest Lakhs,
except otherwise indicated.
3.05 Use of estimates
The preparation of financial statements in conformity of Ind AS requires management to makejudgments, estimates
and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities,
the disclosures of contingent assets and contingent liabilities at the date of financial statements, income and
expenses during the period. Actual results may differ from these estimates. Estimates and underlying assumptions
are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the
estimates are revised and in future periods which are affected.
The areas involving critical estimates or judgments are:
Valuation of financial instruments
Useful life of property, plant and equipment
Defined benefit obligation
Provisions
Recoverability of trade receivables
Recognition of revenue and allocation of transaction price
Current tax expense and current tax payable
Estimates and judgments are regularly revisited. Estimates are based on historical experience and other factors,
including futuristic reasonable information that may have a financial impact on thepany.
3.06 Fair value measurement
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value
measurement as a whole:
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable.
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines
whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the
lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
The Company’s Management determines the policies and procedures for both recurring fair value measurement,
such as derivative instruments and unquoted financial assets measured at fair value, and for non-recurring
measurement, such as assets held for distribution in discontinued operations.
At each reporting date, the Management analyses the movements in the values of assets and liabilities which
are required to be remeasured or re-assessed as per the Company’s accounting policies. For this analysis,
the Management verifies the major inputs applied in the latest valuation by agreeing the information in the
valuationputation to contracts and other relevant documents.
The Management alsopares the change in the fair value of each asset and liability with relevant external sources to
determine whether the change is reasonable.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as
explained above.
This note summarises accounting policy for fair value. Other fair value related disclosures are given in the
relevant notes.
Disclosures for valuation methods, significant estimates and assumptions
Financial instruments (including those carried at amortised cost)
3.07 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, regardless of when the payment is being made. Revenue is measured at the fair
value of the consideration received or receivable, taking into account contractually defined terms of payment and
excluding taxes or duties collected on behalf of the government.
Revenue from Service
Revenue from the installation services is recognized on transfer of the title as per the Contact Terms with the
Customer which start from RFI (Ready for Installation) Date. Revenue from fixed-price, fixed-time frame contracts,
where there is no uncertainty as to the measurement or collectability of consideration that will be derived onpletion
of the contract, is recognized as per the percentage ofpletion method. Interest on deposits, Rent and Maintenance
is accounted for on the time proportion basis.
Interest and dividend income
The interest and dividends are recognised only when no uncertainty as to measurability or collectability exists.
Interest on fixed deposits is recognised on time proportion basis taking into account the amount outstanding and
the rate applicable.
3.08 Inventories:
i) Inventories are measured at lower of the cost and net realizable value. Cost of inventoriesprises all costs of purchase
(net of input credit) and other costs incurred in bringing the inventories to their present location and condition. Costs
of consumable and materials are determined by using the First-In First-Out Method (FIFO).
3.09 Foreign currency transactions and translation
i) Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction.
Monetary assets and liabilities denominated in foreign currencies are translated in functional currency at closing
rates of exchange at the reporting date.
ii) Exchange differences arising on settlement or translation of monetary items recognised in statement of profit
and loss.
3.10 Taxes
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to
the taxation authorities. The Company determines the tax as per the provisions of Ie Tax Act 1961 and other rules
specified thereunder.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either
in otherprehensive ie or in equity). Current tax items are recognised in correlation to the underlying transaction
either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with
respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions
where appropriate
Deferred tax
Significant management judgment is required to determine the amount of deferred tax assets that can be
recognised, based upon the likely timing and the level of future taxable profits.
The amount of total deferred tax assets could change if management estimates of projected future taxable income
or if tax regulations undergo a change.
Deferred tax is provided in full using the liability method on temporary differences between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction
that is not a businessbination and, at the time of the transaction, affects neither the accounting profit nor taxable
profit or loss.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits
and any unused tax losses. Deferred tax assets are recognised to the extent that 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 utilised, except when the deferred tax asset relating to the deductible temporary
difference arises from the initial recognition of an asset or liability in a transaction that is not a businessbination
and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
The carrying amount of deferred tax assets is reviewed at each reporting date 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 deferred tax asset to be
utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent
that it has be probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the
asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other
comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction
either in OCI or directly in equity .
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same
taxation authority.
3.11 a) Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and where applicable
accumulated impairment losses. Property, plant and equipment and capital work in progress cost include
expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets
includes the cost of materials, direct labour and any other costs directly attributable to bringing the asset to a
working condition for its intended use, and the costs of dismantling and removing the items and restoring the
site on which they are located. Purchased software that is integral to the functionality of the related equipment
is capitalized as part of that equipment.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items (majorponents) of property, plant and equipment.
Subsequent Cost
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of
the item if it is probable that the future economic benefits embodied within the part will flow to the Company
and its cost can be measured reliably. The carrying amount of the replaced part is de-recognised and charged
to the statement of Profit and Loss. The costs of the day-to-day servicing of property, plant and equipment
are recognised in the Statement of Profit and Loss.
b) Intangible assets
I ntangible assets are stated at cost less accumulated amortisation and impairment loss if any. The system
software which is expected to provide future enduring benefits is capitalised. The capitalised cost includes
license fees and cost of implementation/system integration.
Useful lives of property, plant and equipment (‘PPE’) and intangible assets
Management reviews the estimated useful lives and residual value of PPE and Intangibles at the end of each
reporting period. Factors such as changes in the expected level of usage, technological developments and
product life-cycle, could significantly impact the economic useful lives and the residual values of these assets.
Consequently, the future depreciation charge could be revised and may have an impact on the profit of the
future years.
Depreciation and amortisation
The depreciation on tangible assets is calculated on WDV method over the estimated useful life of assets
prescribed by the Schedule II to the Companies Act 2013 as follows:
recognised because it cannot be measured reliably. The contingent liability is not recognised in books of account but
its existence is disclosed in financial statements.Contingent liabilities are disclosed in the notes forming part of the
financial statements. Contingent assets are not disclosed in the financial statements unless an inflow of economic
benefits is probable.
3.14 Impairment of non-financial assets
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If
any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s
recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) fair
value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset. unless the
asset does not generate cash inflows that are largely independent of those from other assets or Company’s assets.
When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired
and is written down to its recoverable amount.
The depreciation on Tel Towers is calculated on straight line method over its useful life of 18 years as prescribed
by schedule II of the Companies Act 2013. Computer software is amortised over a period of 5 years.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at
each financial year end and adjusted prospectively, if appropriate.
Derecognition of assets
An item of property plant & equipment and any significant part initially recognised is derecognised upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on
derecognition of the asset is included in the income statement when the asset is derecognised.
3.12 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes
a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset.
All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and
other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange
differences to the extent regarded as an adjustment to the borrowing costs.
3.13 Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the
occurrence or non-occurrence of one or more uncertain future events beyond the control of thepany or a present
obligation that is not recognised because it is not probable that an outflow of resources will be required to settle
the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be
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