A. General Information
ATV PROJECTS INDIA LIMITED is a public company incorporated
under the provisions of the Companies Act, 2013 and listed with
Bombay Stock Exchange. The Company is engaged in the
business of rendering Project Management and Engineering
Services, Project supplies and for executing jobs for various
industries.
B. Basis of preparation of financial statement
I. Compliance with Ind AS
Financial statements have been prepared in accordance with the
Indian Accounting Standards (hereafter referred to as the “Ind AS”)
as notified by the Ministry of Corporate Affairs pursuant to Section
133 of the Companies Act, 2013 (the “Act”) read with the
Companies (Indian Accounting Standards (Ind AS) Rules, 2015 as
amended and other relevant provisions of the Act and rules framed
thereunder.
II. Historical cost convention:
The financial statements have been prepared on a historical cost
basis.
III. Rounding of amounts:
All the amounts disclosed in the financial statements and notes are
presented in Indian Rupees and have been rounded off to the
nearest lakhs as per the requirement of Schedule III, unless
otherwise stated.
IV. Current and Non-current classification:
All assets and liabilities have been classified as current or non¬
current as per the Company's normal operating cycle (twelve
months) and other criteria set out in the schedule III to the act.
C. Property, Plant and Equipment
Freehold land , Property, plant and equipment are stated at cost
less accumulated depreciation and impairment losses, if any. Cost
includes purchase price and expenditures directly attributable to
bringing them into working condition for its intended use. Property,
Plant & Equipment whose fair value can be measured reliably is
carried at a revalued amount being its fair value at the date of the
revaluation less any subsequent accumulated depreciation and
subsequent accumulation impairment losses.
Depreciation on property, plant and equipments is provided under
the written down value method over the useful lives of assets as
prescribed in Schedule II to the Companies Act 2013 (“Act”),and
management believes that useful life of assets are same as those
prescribed in Schedule II to the Act. The TPE Plant of the Company
is not operational hence, the depreciation has not been provided on
the building of the TPE plant. The residual values are not less than
5% of the Original cost of the asset. The assets residual values and
useful lives are reviewed, and adjusted if appropriate, at the end of
each reporting period. Gain or losses arising from derecognisation
of property, plant and equipment are measured as difference
between the net disposal proceeds and the carrying amount of the
assets and are recognized in the statement of profit and loss when
the asset is derecognised.
D. Inventories:
Inventories are valued at lower of cost computed on weighted
average basis or net realisable value after providing cost of
obsolescence, if any. The cost of inventories comprises cost of
purchase and other costs incurred in bringing the inventories to
their present location and condition. Net realisable value is
estimated selling price in ordinary course of business less the
estimated cost necessary to make the sale.
E. Revenue Recognition
Revenue from sale of products is recognised when the property in
the goods, or all significant risks and rewards of ownership of the
products have been transferred to the buyer, and no significant
uncertainty exists regarding the amount of the consideration that
will be derived from the sale of products as well as regarding its
collection. Revenues include excise duty and are shown net of
sales tax, value added tax, and applicable discounts and
allowances if any. Revenue includes only those sales for which the
Company has acted as a principal in the transaction, takes title to
the products, and has the risks and rewards of ownership, including
the risk of loss for collection, delivery and returns. The Company
uses the percentage of completion method using the input (cost
expended) method to measure progress towards completion in
respect of fixed price contracts. Percentage of completion method
accounting relies on estimates of total expected contract revenue
and costs.
F. Employee Benefits
Eligible Employees receive benefit from Provident Fund which is a
defined benefit plan both the employees and the company make
monthly contribution to the Provident Fund equally to specified
percentage of the covered employee salary and contribution to
Government Administered Fund.
As per the past practice, the present value of the obligation of the
staff benefits like gratuity as at the balance sheet date under such
defined benefit plan is determined based on actuarial valuation as
certified by the management.
G. Income tax
Current tax comprises the expected tax payable or receivable on
the taxable income or loss for the year and any adjustment to the tax
payable or receivable in respect of previous years. The amount of
current tax payable or receivable is the best estimate of the tax
amount expected to be paid or received after considering
uncertainty related to income taxes, if any. It is measured using tax
rates enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of temporary differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes.
H. Financial instruments
Recognition and initial measurement:
Financial assets and financial liabilities are recognised when the
Company becomes a party to the contractual provisions of the
financial instrument and are measured initially at fair value adjusted
for transaction costs. Subsequent measurement of financial assets
and financial liabilities is described below.
Non-derivative financial assets
Subsequent measurement
Financial assets carried at amortised cost - A ‘financial asset' is
measured at the amortised cost if both the following conditions are
met:
The asset is held within a business model whose objective is to hold
assets for collecting contractual cash flows, and;
Contractual terms of the asset give rise on specified dates to cash
flows that are solely payments of principal and interest (SPPI) 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 de-recognised when the contractual rights to
receive cash flows from the asset have expired or the Company has
transferred its rights to receive cash flows from the asset.
Non-derivative financial liabilities
Subsequent measurement
Subsequent to initial recognition, all non-derivative financial
liabilities are measured at amortised cost using the effective
interest method.
De-recognition of financial liabilities
A financial liability is de-recognised when the obligation under the
liability is discharged or cancelled or expires.When an existing
financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated
as the derecognition of the original liability and the recognition of a
new liability.The difference in the respective carrying amounts is
recognised in the statement of profit and loss.
I. Government grants
Government grants are recognised where there is reasonable
assurance that the grant will be received, and all attached
conditions will be complied with. When the grant relates to an
expense item, it is recognised as income on a systematic basis over
the periods that the related costs, for which it is intended to
compensate, are expensed. When the grant relates to an asset, it is
recognised as income in equal amounts over the expected useful
life of the related asset.
J. Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected
credit loss ('ECL') model for measurement and recognition of
impairment loss for financial assets.ECL is provided for when there
has been a significant increase in credit risk and then, factors
historical trends and forward looking information. An impairment
loss is recognised either based on the 12 months' probability of
default or lifetime probability of default.
Trade receivables:
In respect of trade receivables, the Company applies the simplified
approach of Ind AS 109, which requires measurement of loss
allowance at an amount equal to lifetime expected credit losses.
Lifetime expected credit losses are the expected credit losses that
result from all possible default events over the expected life of such
receivables.
Other financial assets
In respect of its other financial assets, the Company assesses if the
credit risk on those financial assets has increased significantly
since initial recognition. If the credit risk has not increased
significantly since initial recognition, the Company measures the
loss allowance at an amount equal to 12-months expected credit
losses, else at an amount equal to the lifetime expected credit
losses.
K. Dividend:
The Company recognises a liability to pay dividend to equity
holders of the parent when the distribution is authorized and the
distribution is no longer at the discretion of the Company. As per the
corporate laws in India, a distribution is authorised when it is
approved by the shareholders. A corresponding amount is
recognised directly in equity.
L. Borrowing cost:
General and specific borrowing costs that are directly attributable to
the acquisition, construction or production of a qualifying asset are
capitalised during the period of time that is required to complete and
prepare the asset for its intended use or sale. Qualifying assets are
assets that necessarily take a substantial period of time to get ready
for their intended use or sale. Investment income earned on the
temporary investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the borrowing
costs eligible for capitalisation.
Other borrowing costs are expensed in the period in which they are
incurred. Borrowing cost also includes exchange differences to the
extent regarded as an adjustment to the borrowing costs.
M. Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing:
• the profit attributable to owners of the Company
• by the weighted average number of equity shares outstanding
during the financial year, adjusted for bonus elements in equity
shares issued during the year and excluding treasury shares
(ii) Diluted earnings per share Diluted earnings per share adjusts
the figures used in the determination of basic earnings per share to
take into account:
• the after income tax effect of interest and other financing costs
associated with dilutive potential equity shares, and
• the weighted average number of additional equity shares that
would have been outstanding assuming the conversion of all
dilutive potential equity shares
N. Use of estimates and Judgements
The estimates and judgements used in the preparation of financial
statements are continuously evaluated by the management and are
based on historical experience and various other assumptions and
factors that the management believes to be reasonable under
existing circumstances. Difference between actual results and
estimates are recognized in the period in which the results are
known/materialized. The said estimates are based on the facts and
the events, that existed as at the reporting date, or that date but
provide additional evidence about conditions existing on the
reporting date.
I. I mpairment of non financial asset:
Assessment is done at each Balance Sheet date to evaluate
whether there is any indication that a non financial asset may be
impaired. An asset's recoverable amount is the higher of an asset's
fair value less costs of disposal and its value in use. It is determined
for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or a
groups of assets. Where the carrying amount of an asset exceeds
its recoverable amount, the asset is considered impaired and is
written down to its recoverable amount. In assessing value in use,
the estimated future cash flows are discounted to their present
value using pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the
asset.
In determining fair value less costs of disposal, recent market
transactions are taken into account, if no such transactions can be
identified, an appropriate valuation model is used.
II. Depreciation/amortization and useful lives of property, plant and
equipment/intangible assets:
Property, plant and equipment are depreciated over the estimated
useful lives of the assets, after taking into account their estimated
residual value. Management reviews the estimated useful lives and
residual values of the assets annually in order to determine the
amount of depreciation to be recorded during any reporting period.
The useful lives and residual values are based on the Company's
historical experience with similar assets and take into account
anticipated technological changes. The depreciation for future
periods is adjusted if there are significant changes from previous
estimates.
III. Recoverability of trade receivables:
Judgments are required in assessing the recoverability of overdue
trade receivables and determining whether a provision against
those receivables is required. Factors considered include the credit
rating of the counter party, the amount and timing of anticipated
future payments and any possible actions that can be taken to
mitigate the risk of non-payment.
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