e. Provisions and contingent liabilities
A provision is recognized when the Company has a present obligation as result of a
past event and it is probable that the 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 and adjusted to reflect the current best
estimates. Contingent liabilities are not recognized in the financial statements.
Contingent assets are neither recognized nor disclosed in the financial statements.
vi Inventories
a. Construction materials, stores, spares and fuel
The stock of construction materials, stores, spares and fuel is valued at cost or net
realizable value (‘NRV’), whichever is lower. Cost is determined on weighted average
basis and includes all applicable cost of bringing the goods to their present location
and condition. Net realizable value is estimated selling price in ordinary course of
business less the estimated cost necessary to make the sale.
b. Land and development rights
Undeveloped land (including development costs) and finished units which are held for
sale are valued at the lower of construction costs and net selling price.
c. Work in progress
Construction / development expenses are accumulated under “Work-in-progress”
and the same are valued at lower of cost or net realizable value.
Cost of land purchased / acquired by the Company includes purchase / acquisition
price plus stamp duty and registration charges.
Construction / development expenditure includes cost of development rights, all
direct and indirect expenditure incurred on development of land/ construction,
attributable interest and financial charges and overheads relating to site
management and administration less incidental revenues arising from site
operations.
vii Going concern
As at 31 March 2025, the Company has earned standalone profits
aggregating Rs 5016.033 Lakhs during the year 2024-25. Also, the Company has
been able to attain contracts for future, also there are no delays in payment of bank
loans and the creditors . The above factors indicate that no such events or
conditions exist, which may cast significant doubt on the entity’s ability to continue
as a going concern. Hence the entity is a a going concern .
viii Capital work-in-progress
Capital work-in-progress, representing expenditure incurred in respect of assets under
development and not ready for their intended use, are carried at cost. Cost includes
related acquisition expenses, construction cost, related borrowing cost and other direct
expenditure. No such capital work in progress
ix. Depreciation and amortization
Depreciation is provided for property, plant and equipment so as to expense the cost
less residual value over their estimated useful lives on a straight line basis, except
Building and sheds which is depreciated using WDV method. Intangible assets are
amortized from the date they are available for use, over their estimated useful lives. The
useful lives are as per Schedule II to the Act .
Depreciation on additions is provided on a pro-rata basis, from the date on which asset
is ready to use.
Gains and losses on disposals are determined by comparing proceeds with carrying
amount. These are accounted in the Statement of Profit and Loss under Other income or
Other expenses.
x. Intangible assets
Intangible assets are stated at cost, only when it is probable that future economic benefits
associated with the item
will flow to the Company and the cost of the item can be measured reliably, less
accumulated amortization and acumulated impairment losses, if any.
Intangible assets mainly comprise of toll roads and computer software. Computer
software represents license fees and implementation cost for software and other
application software acquired / developed for in-house use. Intangible assets are stated at
the consideration paid for acquisition less accumulated amortization and impairment loss
if any. Intangible assets are amortized on a straight line basis over the estimated economic
life. Costs relating to software, which are acquired, are capitalized and amortized on a
straight line basis over their useful lives not exceeding Five years.
xi Employee benefits
a. Short term employee benefits:
Short-term employee benefits such as salaries, wages, performance incentives etc.
are recognised as expenses at the undiscounted amounts in the Statement of
Profit and Loss of the period in which the related service is rendered. Expenses on
non-accumulating compensated absences are recognised in the period in which
the absences occur.
b. Defined contribution plan
Provident fund contribution, in respect of certain employees of the Company is made
to a government administered fund, and charged as an expense to the Statement of
Profit and Loss. The above benefits are classified as Defined Contribution Schemes as
the company has no further obligations beyond the monthly contributions.
Contributions to defined contribution schemes such as Employees’ state insurance,
labour welfare fund and superannuation scheme are charged as an expense based on
the amount of contribution required to be made as and when services are rendered by
the employees.
c. Defined benefit plan
In respect of certain employees, provident fund contributions are made the Central
Government under the Employees Provident Funds and Miscellaneous Provisions Act,
1952. Gratuity liability is a defined benefit obligation and is provided for on the basis
of an actuarial valuation on projected unit credit (PUC) method at the end of each
year. Actuarial gains/losses are immediately taken to the statement of profit and
loss and are not deferred. Accumulated gratuity, which is expected to be utilized
within the next 12 months, is treated as short-term employee benefit and which is
expected to be carried forward beyond 12 months, as long term employees benefit for
measurement purpose.
d. Leave entitlement and compensated absences
Leave entitlement is recognized in the Statement of Profit and Loss in the period in
which they occur.
xii. Foreign exchange translation of foreign projects and accounting of foreign
exchange transaction
• Initial recognition
Foreign currency transactions are initially recorded in the reporting currency, by
applying to the foreign currency amount the exchange rate between the reporting
currency and the foreign currency at the date of the transaction. However, for
practical reasons, the company uses a monthly average rate if the average rate
approximate is the actual rate at the date of the transactions.
• Conversion
Monetary assets and liabilities denominated in foreign currencies are reported using
the closing rate at the reporting date. Non-monetary items which are carried in terms
of historical cost denominated in a foreign currency are reported using the exchange
rate at the date of the transaction.
• Treatment of exchange difference
Exchange differences arising on settlement/ restatement of short-term foreign
currency monetary assets and liabilities of the Company are recognised as income or
expense in the Statement of Profit and Loss.
xiii. Revenue recognition
a. Revenue from construction contracts
Revenue is recognized upon transfer of control of promised products or services to
customers in an amount that reflects the consideration, the Company expects
to receive in exchange for those products or services.
The Company evaluates whether the performance obligations in engineering and
construction services are satisfied at a point in time or over time. The
performance obligation is transferred over time if one of the following criteria is
met:
i. As the entity performs, the customer simultaneously receives and consumes
the benefits provided by the entity’s performance.
ii. The entity’s performance creates or enhances an asset (e.g., work in progress)
that the customer controls as the asset is created or enhanced.
iii. The entity’s performance does not create an asset with an alternative use to the
entity and the entity has an enforceable right to payment for performance
completed to date.
The percentage-of-completion of a contract is determined by the proportion that
contract costs incurred for work performed upto the reporting date bear to the
estimated total contract costs. When there is uncertainty as to measurement or
ultimate collectability, revenue recognition is postponed until such uncertainty is
resolved.
Advance payments received from contractee for which no services are rendered are
presented as ‘Advance
The Company presents revenues inclusive of GST Collected in its statement of profit
and loss.
b. Other income
i. Interest income
Interest income is accrued on a time proportion basis, by reference to the
principal outstanding and the applicable EIR.
ii. Dividend income
Dividend is recognised when the right to receive the payment is
established, which is generally when shareholders approve the
dividend.
iii. Other income
Other items of income are accounted as and when the right to receive
such income arises and it is probable that the economic benefits will
flow to the Company and the amount of income can be measured
reliably.
c. Expenditure
Expenditure is accounted on accrual basis and provision is made for
all known losses and liabilities
xiv. Cash and cash equivalents
Cash and cash equivalents in the Balance Sheet comprises of cash at banks and on hand
and short-term deposits with an original maturity of three month or less, which are
subject to an insignificant risk of changes in value.
xv. Segment reporting
The company has considered business segment as the primary segment for
disclosure. The Company’s operations predominantly relate to ‘Engineering and
Construction’, ‘Infrastructure’ and ‘Real Estate’. Other business segments
contribute less than 10%of the total revenue and have been grouped as ‘Others’
Accounting Standard 17 on Segment Reporting are considered and there is only
one reportable segment.
xvi. Borrowing costs
Borrowing costs consist of interest and other costs that the company incurs in
connection with the borrowing of funds.
Borrowing costs relating to acquisition, construction or production of a
qualifying asset which takes substantial period of time to get ready for its
intended use are added to the cost of such asset to the extent they relate to the
period till such assets are ready to be put to use. All other borrowing costs are
expensed in the Statement of Profit and Loss in the period in which they occur.
xvii. Income tax
Income tax expense comprises of current tax expense and the net change in the
deferred tax asset or liability during the year. Current and deferred taxes are
recognised in the Statement of Profit and Loss, except when they relate to items
that are recognised in other comprehensive income or directly in equity, in which
case, the current and deferred tax are also recognised in other comprehensive
income or directly in equity, respectively.
a. Current tax
Current tax is recognised based on the estimated tax liability computed
after taking credit for allowances and exemptions in accordance with the
Income Tax Act, 1961. Current income tax assets and liabilities are measured
at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted, at the reporting date.
Current tax assets and tax liabilities are offset where the entity has a legally
enforceable right to offset and intends either to settle on a net basis, or to
realize the asset and settle the liability simultaneously.
b. Deferred tax
Deferred tax is determined by applying the Balance Sheet approach.
Deferred tax assets and liabilities are recognized for all deductible temporary
differences between the financial statements’ carrying amount of existing assets
and liabilities and their respective tax base. Deferred tax assets and liabilities
are measured using the enacted tax rates or tax rates that are substantively
enacted at the Balance Sheet date.
The effect on deferred tax assets and liabilities of a change in tax rates is
recognised in the period that includes the enactment date. Deferred tax assets
are only recognized to the extent that it is probable that future taxable profits
will be available against which the temporary differences can be utilised. Such
assets are reviewed at each Balance Sheet date to reassess realization.
Deferred tax assets and liabilities are offset when there is a legally enforceable
right to offset current tax assets and liabilities. Current tax assets and tax
liabilities are offset where the entity has a legally enforceable right to offset and
intends either to settle on a net basis, or to realize the asset and settle the
liability simultaneously.
Deferred tax assets include Minimum Alternative Tax (MAT) paid in
accordance with the tax laws in India, to the extent it would be available for set
off against future current 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.
xviii. Earnings per share
Basic earnings per share is computed by dividing the net profit or loss for the period
attributable to the equity shareholders of the parent by the weighted average number
of equity shares outstanding during 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.
Diluted earnings per share is computed by dividing the net profit or loss for the
period attributable to the equity shareholders of the parent and weighted average
number of equity shares considered for deriving basic earnings per equity share
and also the weighted average number of equity shares that could have been issued
upon conversion of all dilutive potential 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).
xix. Provisions, contingent liabilities and contingent assets
A provision is recognized when the Company has a present obligation (legal or
constructive) as a result of past events and it is probable that an outflow of
resources embodying economic benefits will be required to settle the obligation, in
respect of which a reliable estimate can be made of the amount of obligation.
Provisions (excluding gratuity and compensated absences) are determined based on
management’s estimate required to settle the obligation at the Balance Sheet date.
In case the time value of money is material, provisions are discounted using a
current pre-tax rate that reflects the risks specific to the liability. When discounting
is used, the increase in the provision due to the passage of time is recognized as a
finance cost. These are reviewed at each Balance Sheet date and adjusted to reflect
the current management estimates.
Contingent liabilities are disclosed in respect of possible obligations that arise
from past events, whose existence would be confirmed by the occurrence or non¬
occurrence of one or more uncertain future events not wholly within the control of
the Company. A contingent liability also arises, in rare cases, where a liability
cannot be recognized because it cannot be measured reliably.
xxi. CASH FLOW STATEMENT
Cash flows are reported using the indirect method as set out in IND AS 7- Cash
Flow Statements, whereby profit/ (loss) before extraordinary items and tax is
adjusted for the effects of transactions of non- cash nature and any deferrals or
accruals of past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are segregated based
on the available information. Cash comprises cash on hand and demand deposits
with banks. Cash equivalents are short term balances ( with an original maturity of
three months or less from the date of acquisition), highly liquid investments that
are readily convertible in to known amounts of cash and which are subject to
insignificant risk of changes in value.
xxii. Exceptional items
When items of income and expense within profit or loss from ordinary activities are
of such size, nature or incidence that their disclosure is relevant to explain the
performance of the enterprise for the period, the nature and amount of such
material items are disclosed separately as exceptional items
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