2.1 Basis of preparation of financial statements
The financial statements have been prepared in accordance with the Indian Accounting Standards (referred to as "Ind AS") as notified under
the Companies (Indian Accounting Standards) Rules, 2015 read with Section 133 of the Companies Act, 2013 (as amended from time to time)
and presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule III), as applicable to the
financial statement.
These financial statements have been prepared in Indian Rupee which is also the functional currency of the Company and all values are
rounded to the lakhs, except when otherwise indicated. These financial statements have been prepared on historical cost basis, except for
certain financial assets and liabilities which are measured at fair value or amortised cost at the end of each reporting period, as explained in
the accounting policies below.
2.2 Significant accounting judgements, estimates and assumptions
The preparation of the Company's financial statements requires management to make judgements, estimates and assumptions that affect the
reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of
assets or liabilities affected in future periods.
Critical accounting estimates
i. Taxes
Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the same can be utilised.
Significant management judgement 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 together with future tax planning strategies.
ii. Provisions and Contingent Liability
The timing of recognition and quantification of the liability (including litigations) requires the application of judgement to existing facts and
circumstances, which can be subject to change. The carrying amounts of provisions and liabilities are reviewed regularly and revised to take
account of changing facts and circumstances.
2.3 Current versus 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:
i. Expected to be realised or intended to be sold or consumed in normal operating cycle,
ii. Held primarily for the purpose of trading,
iii. Expected to be realised within twelve months after the reporting period, or
iv. Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:
i. It is expected to be settled in the company's normal operating cycle;
ii. It is held primarily for the purpose of being traded;
iii. It is due to be settled within twelve months after the reporting date; or
iv. The company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting
date.Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect
its classification.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non current assets and liabilities._
Operating cycle for current and non-current classification
Operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents. The company has
taken Operating cycle to be twelve months.
2.4 Fair value measurement of financial instruments
The Company measures financial instruments, such as, Investments at fair value at each balance sheet date using valuation techniques. 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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability
takes place either:
a) In the principal market for the asset or liability, or
b) In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using
the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic
best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the
asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair
value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the standalone 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
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 standalone 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.
For assets and liabilities that are recognised in the standalone 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.
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.
2.5 Property, Plant and Equipment
Property, plant and equipment are stated at cost, less accumulated depreciation and accumulated impairment losses, if any. The cost
comprises purchase price, borrowing costs if capitalization criteria are met, directly attributable cost of bringing the asset to its working
condition for the intended use and initial estimate of decommissioning, restoring and similar liabilities. Any trade discounts and rebates are
deducted in arriving at the purchase price. Such cost includes the cost of replacing part of the plant and equipment. When significant parts of
plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives.
Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if
the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.
Gains or losses arising from derecognition of Property, plant and equipment are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.
Depreciation is provided from the current financial year on buildings
2.6 Intangible asset
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business
combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated
amortisation and accumulated impairment losses. The useful lives of intangible assets are assessed as either finite or indefinite. Intangible
assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the
intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are
reviewed at least at the end of each reporting period with the affect of any change in the estimate being accounted for on a prospective basis.
Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered
to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense
on intangible assets with finite lives is recognised in the statement of profit and loss unless such expenditure forms part of carrying value of
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the
carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.
2.7 Depreciation and Amortization
Depreciation on Property, plant and equipment is provided on the straight-line basis over the useful lives of assets specified in Schedule II to
the Companies Act, 2013.
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. The amortization period and the amortization method are reviewed at least at each financial year end.
2.8 Impairment of Financial and Non¬
Financial Assets
The impairment provisions for Financial Assets are based on assumptions about risk of default and expected cash loss rates. The Company uses
judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company's past
history, existing market conditions as well as forward looking estimates at the end of each reporting period.
In case of non-financial assets, assessment of impairment indicators involves consideration of future risks. Further, the company estimates
asset's recoverable amount, which is higher of an asset's or Cash Generating Units (CGU's) fair value less costs of disposal and its value in use.
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.
2.9 Revenue Recognition
Revenue from operation
Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable consideration)
allocated to that performance obligation. The transaction price of goods sold and services rendered is net of variable consideration on account
of various discounts and schemes offered by the Company as part of the contract.
Contract balances
i. Trade receivables
The amounts billed on customer for work performed and are unconditionally due for payment i.e. only passage of time is required before
payment falls due, are disclosed in the balance sheet as trade receivables.
ii. Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration or is due
from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is
recognised when the payment is made or the payment is due (whichever is earlier).
Contract liabilities are recognised as revenue when the Company performs under the contract.
Interest income
Interest income from a financial assets is recognised using effective interest rate method.
Dividend
Dividend income is recognised when the Company's right to receive the payment is established, which is generally when shareholders approve
the dividend._
2.10 Taxes on income
Current income tax
Tax expense for the year comprises current and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit
differs from net profit as reported in the standalone statement of profit and loss because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is
calculated using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive
income 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
Deferred tax is provided 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:
i. When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
ii. In respect of taxable temporary differences associated with investments in subsidiary and interests in joint ventures, when the timing of the
reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable
future.
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:
i. 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 business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or
ii. In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures,
deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future
and taxable profit will be available against which the temporary differences can be utilised.
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 become 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.
All other acquired tax benefits realised are recognised in profit or loss.
2.11 Earnings Per Share
Basic earnings per equity share is computed by dividing the net profit attributable to the equity share holders of the Company by the weighted
average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period
is adjusted for events such as fresh issue, bonus issue that have changed the number of equity shares outstanding, without a corresponding
change in resources.
Diluted earnings per equity share is computed by dividing the net profit attributable to the equity shares holders of the Company by the
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. Potential equity shares are deemed to be
dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive
equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. Dilutive potential
equity shares are determined independently for each period presented._
2.12 Leases
Where the Company is lessee
The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value
assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying
i) Right-of-use asset
The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use).
Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of
lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease
payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line
basis over the shorter of the lease term and the estimated useful lives of the assets.
The right-of-use assets are also subject to impairment.
ii) Lease Liabilities
At the commencement date of the lease, the company recognises lease liabilities measured at the present value of lease payments to be made
over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable,
variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease
payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties
for terminating the lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not
depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or
condition that triggers the payment occurs.
In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date
because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is
increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is
remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting
from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the
iii) Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term of 12
months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition
exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value
assets are recognised as expense on a straight-line basis over the lease term.
No Lease Expense has been incurred for the company during the current financial year
2.13 Foreign currencies transactions and translation
The Company's financial statements are presented in Indian Rupee, which is also the Company's functional currency.
In preparing the financial statements, transactions in the currencies other than the Company's functional currency are recorded at the rates of
exchange prevailing on the date of transaction. At the end of each reporting period, monetary items denominated in the foreign currencies are
re-translated at the rates prevailing at the end of the reporting period. Non-monetary items carried at fair value that are denominated in
foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items are measured
in terms of historical cost in a foreign currency are not retranslated.
Exchange differences arising on the retranslation or settlement of other monetary items are included in the statement of profit and loss for the
period.
2.14 Cash and Cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks 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 as they are considered an integral
part of the Company's cash management.
2.15 Employee benefits
Defined benefit plans
Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on Projected Unit Credit Method made
at the end of the financial year. Actuarial gains and losses for both defined benefit plans are recognized in full in the period in which they occur
in the statement of OCI.
Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the
net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are
recognised immediately in the standalone balance sheet with a corresponding debit or credit to retained earnings through OCI in the period
in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. Past service costs are recognised in profit or
loss on the earlier of:
• The date of the plan amendment or curtailment, and
• The date that the Company recognises related restructuring costs
Termination benefits
The Company recognizes termination benefit as a liability and an expense when the Company has a present obligation as a result of past event,
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be
made of the amount of the obligation. If the termination benefits fall due more than 12 months after the balance sheet date, they are
measured at present value of future cash flows using the discount rate determined by reference to market yields at the balance sheet date on
government bonds.
Compensated Absences
The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for
measurement purposes. Such long-term compensated advances are provided for based on the actuarial valuation using the projected unit
credit method at the year-end. Remeasurement gains/losses on defined benefit plans are immediately taken to the Statement of Profit & Loss
|