Summary of significant accounting policies
1.1 Basis of preparation & presentation of financial statements
The financial statements of the company have been prepared under historical cost convention on the accrual
basis of accounting, are in accordance with the applicable requirements of the Companies Act 2013 and
comply in all material aspects with the Indian Accounting Standards (hereinafter referred as to ‘Ind. AS’) as
notified by ministry of corporate affairs in pursuant to section 133 of Companies Act, 2013 read with Rule 3
of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards)
Amendment Rules 2016.
The accounting policies have been consistently applied unless otherwise stated. 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 in the Division II of Schedule III to the Act 2013. The Company considers 12 months to be its normal
operating cycle for the purpose of current or non-current classification of assets and liabilities.
1.2 Summary of significant accounting policies
a. Use of estimates
The preparation of financial statements in conformity with Indian Accounting Standards requires the
management to make judgments, estimates and assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period.
Although these estimates are based on the management’s best knowledge of current events and actions,
uncertainty about these assumptions and estimates could result in the outcomes requiring a material
adjustment to the carrying amounts of assets or liabilities in future periods.
b. Property Plant & Equipment’s
Tangible assets
Property, Plant and Equipment is stated at cost, net of accumulated depreciation and accumulated
impairment losses, if any. Cost comprises of purchase price inclusive of taxes etc. up to the date the asset is
ready for its intended use. Depreciation is provided under the written down value method at the rates and in
the manner prescribed under Schedule II to the Companies Act, 2013.
Intangible assets
Intangible assets are stated at cost, net of accumulated depreciation and impairment of losses, if any.
Depreciation is provided under written down value method at the rate and in the manner prescribed under
Schedule II to the companies Act, 2013. Currently company does not hold any intangible assets.
c. Depreciation/amortization
Tangible assets
Depreciation on fixed assets is calculated on a written down value method at based on the useful lives
estimated by the management, or those prescribed under the Schedule II of the Companies Act, 2013.
Depreciation method, useful life and residual value are reviewed periodically. Leasehold land and
improvements are amortised on the basis of duration and other terms of lease. The carrying amount of PPE is
reviewed periodically for impairment based on internal / external factors. An impairment loss is recognised
wherever the carrying amount of assets exceeds its recoverable amount. The recoverable amount is the
greater of the asset’s net selling price and value in use.
De-recognition
PPE are de-recognized either when they have been disposed of or when they are permanently
withdrawn from use and no future economic benefit is expected from their disposal. The difference
between the net disposal proceeds and the carrying amount of the asset is recognized in the
Statement of Profit and Loss in the period of de-recognition.
Intangible assets
Depreciation on Intangible assets is calculated on a written down value method at based on the
useful lives estimated by the management, or those prescribed under the Schedule II of the
Companies Act, 2013.
d. Borrowing costs
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the
arrangement of borrowings and exchange differences arising from foreign currency borrowings to
the extent they are regarded as an adjustment to the interest cost. 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 capitalized as part of the cost
of the respective asset. All other borrowing costs are expensed in the period they occur.
e. Investments
Investments are classified as current investments and long-term investments as per information and
explanation given by the management.
On initial recognition, all investments are measured at cost. The cost comprises purchase price and
directly attributable acquisition charges such as brokerage, fees and duties.
Current investments are carried in the financial statements at cost or FMV whichever is lower and
Long-term investments are carried at FMV. FMV of Long-term Investment is determined by the
management from the latest audited report of the Investment companies if it is not listed in Stock-
Exchange of India. On disposal of an investment, the difference between it carrying amount and net
disposal proceeds is charged or credited to the statement of profit and loss. Investments transfer to
holding company at cost gain or loss on said investment book by holding company.
f. Revenue recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
company and the revenue can be reliably measured.
Interest
Interest income is recognized on a time proportion basis taking into account the amount outstanding
and the applicable interest rate. Interest income is included under the head “other income” in the
statement of profit and loss.
Dividend Income
Revenue is recognized when the Company’s right to receive the payment is established, which is generally
when shareholders approve the dividend.
Other Income
Other incomes are accounted on accrual basis, except interest on delayed payment by debtors and liquidated
damages which are accounted on acceptance of the Company’s claim.
g. Inventories
Inventories comprise of traded goods, stores and spares are valued at cost or at net realisable value
whichever is lower. Cost of traded goods, stores and spares is determined on weighted average basis. Stores
and spares, which do not meet the definition of property, plant and equipment, are accounted as inventories.
Net realizable value is the estimated selling price in the ordinary course of business and estimated costs
necessary to make the sale.
The Company has valued its construction materials and consumables at lower of cost or net realisable value.
The construction materials and consumables purchased for construction work, issued to construction are
treated as consumed.
h. Accounting for taxes on income
Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected
to be paid to the tax authorities in accordance with the Income Tax Act, 1961. Current and deferred tax shall
be recognized as income and expenses and included in profit and loss for the period, except to the extent that
the tax arises from (a) a transaction or event which is recognized in the same or a different period, outside
profit or loss, either in other comprehensive Income or directly in equity or (b) a business combination.
Deferred taxes recognized in respect of temporary differences between the carrying amount of assets and
liabilities for financial reporting purpose and corresponding amounts used for taxation purpose except to the
extent it relates to business combination or to an item which is recognized directly in equity and in other
comprehensive Income.
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the
balance sheet date. Deferred tax assets are recognized only to the extent that it is probable that future taxable
profit will be available against which the assets can be utilized. A deferred tax asset shall be recognized for
the carry-forward of unused tax losses and unused tax credits to the extent that it is probable that future
taxable profit will be available against which the unused tax losses and unused tax credits can be utilized.
Deferred tax assets are reviewed at each reporting date and Reduced to the extent that it is no longer probable
that the related tax benefit will be Realize. . A deferred tax liability is recognized based on the expected
manner of realization or settlement of carrying amount of assets and liabilities
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 tax assets and deferred taxes relate to the same
taxable entity and the same taxation authority.
Minimum alternate tax (MAT) paid in a period is charged to the statement of profit and loss as current tax.
The Group recognizes MAT credit available as an asset only to the extent that there is convincing evidence
that the Group will pay normal income tax during the specified period, i.e., the period for which MAT credit
is allowed to be carried forward. In the period in which the company recognizes MAT credit as an asset in
accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative
Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and
loss and shown as “MAT Credit Entitlement.” The Group reviews the “MAT credit entitlement” asset at each
reporting date and writes down the asset to the extent the Group does not have convincing evidence that it
will pay normal tax during the specified period.
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