2. Significant accounting policies:
2.1. Statement of Compliance
These financial statements are prepared in accordance with Indian Accounting Standard (Ind AS), and the provisions of the Companies Act,2013 ('the Act') (to the extent notified) The Ind AS are prescribed under Section 133 of the Act read with Rule3 of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter.
2.2. Basis of preparation
These financial statements have been prepared under the historical cost basis and on the accrual basis except for certain financial instruments that are measured at fair value in accordance with Ind AS and certain items of property plant and equipment that were revalued in earlier years in accordance with the previous GAAP principles and the provisions of the Companies Act, 2013 ('Acf) (to the extent notified). The Ind AS are prescribed under Section133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015and Companies (Indian Accounting Standards) Amendment Rules, 2016. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services
2.3. Presentation of financial statements
The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed in the Schedule III to the Companies Act, 2013 (“the Act"). The statement of cash flows has been prepared and presented as per the requirements of Ind AS 7“Statement of Cash flows”. The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of the financial statements along with the other notes required to be disclosed under the notified Indian Accounting Standards.
2.4. Cash flow statement:
Cash flow statement is prepared segregating the cash flows from operating, investing andfinancing activities. Cash flow from operating activities is reported using indirect method under the indirect method, the net profit/(loss) is adjustedforthe effects of:
2.4.1. Changes during the period in inventories and operating receivables and payables andtransactions of a non-Cash nature.
2.4.2. Non-cash items such as depreciation, provisions, unrealized foreign currency gains andlosses, and undistributed profits of associates; and
2.4.3. All other items for which the cash effects are investing or financing cash flows.
2.4.4. The cash flows from operating, investing and financing activities of the Company is segregatedbased on the available information. Cash and cash equivalents (including bank balances) arereflected as such in the Cash Flow Statement.
2.5. Use of Accounting Estimates:
The preparation of the financial statements requires that the management to make estimates andassumptions that affect the reported amounts of assets and liabilities and disclosure ofcontingent liabilities as at the date of financial statements and the results of operation duringthe reported period. Although these estimates are based upon management's best knowledge ofcurrent events and actions,
actual results could differ from these estimates which are recognisedin the period in which they are determined.
2.6. Property, Plant and Equipment:
Property, Plant and Equipment are stated at cost of acquisition including applicable duties andtaxes, any directly attributable expenditure on making the asset ready for its intended use,attributable interest and finance costs, if any, till the date of acquisition/ installation of the assetsless accumulated depreciation and impairment losses, if any. Subsequent expenditure relatingto Property, Plant and Equipment is capitalized only when it is probable that future economicbenefits associated with the item will flow to the Company and the cost of the item can bemeasured reliably. An item of property, plant and equipment is derecognized upon disposal orwhen no future economic benefits are expected to arise from the continued use of the asset.
2.7. IntangibleAssets:
Identifiable intangible assets are recognised when the Comp any controls the asset, it is probablethat future economic benefits attributed to the asset will flow to the Company and the cost ofthe asset can be reliably measured. Intangible assets are stated at cost, lessaccumulatedamortization and accumulated impairment losses, if any. The estimated useful life andamortization method reviewed at the end of each reporting period, with the effect of anychanges in estimate being accounted for on a prospective basis.
2.8. Depreciation/Amortization:
Depreciable amount for assets is the cost of an asset, or other amount substituted for cost lessits estimated residual value. Depreciation on Property, Plant and equipment has been provided on Straight -Line method inaccordance with the Schedule II of the Companies Act, 2013, based on the useful lifeestimated on the technical assessment as in force and proportionate depreciation are chargedfor additions/deletions during the year. In respect of additions / deletions to the fixed assets /leasehold improvements, depreciation is charged from the date the asset is ready to use / up tothe date of deletion. The asset’s useful lives are reviewed and adjusted, if appropriate, attheend of each reporting period.
2.9. Financial instruments:
Financial assets and financial liabilities are recognised when the Company becomes a party tothe contractual provisions of the instrument. Financial assets and financial liabilities areinitially measured at transaction values and where such values are different from the fair value,at fair value. Transaction costs that are directly attributable to the acquisition or issue offinancial assets and financial liabilities (other than financial assets and financial liabilities atfair value through profit or loss) are added to or deducted from the fair value of the financialassets or financial liabilities, as appropriate, on initial recognition. Transaction costs directlyattributable to the acquisition of financial assets or financial liabilities at fair value throughprofit or loss are recognised immediately in profit or loss.
2.9.1. FinancialAssets
Financial assets are recognised when the Company becomes a party to the contractualprovisions of the instruments. Financial assets other than trade receivables are initiallyrecognised at fair value plus transaction costs for all financial assets not carried at fair valuethrough profit or loss. Financial assets carried at fair value through profit or loss is initiallyrecognised at fair value, and transaction costs are expensed in the Statement of Profit and Loss.
Subsequent Measurement
For purposes of subsequent measurement, financial assets are classified in followingcategories.
2.9.1.1. Financial Assets at Amortized Cost
Afinancial asset is subsequently measured at amortized cost if it is held within a business modelwhose objective is to hold the asset in order to collect contractual cash flows and the contractualterms ofthe financial asset give rise on specified dates to cash flows that are solely paymentsof principal and interest on the principal amount outstanding.
2.9.1.2. Financial Assets Measured at Fair Value
Afinancial asset is subsequently measured at fair value through other comprehensive incomeif it is held within a business model whose objective is achieved by both collecting contractualcash flows and selling financial assets and the contractual terms of the financial asset give riseon specified dates to cash flows that are solely payments of principal and interest on theprincipal amount outstanding. Further, in case where the company has made an irrevocableselection based on its business model, for its investments which are classified as equityinstruments, the subsequent changes in fair value are recognized in other comprehensiveincome. In any other case, financial asset is fair valued through profit and loss.
2.9.1.3. Impairmentof Financial Assets
The Company recognizes loss allowances using the expected credit loss (ECL) model for thefinancial assets which are not fair valued through profit or loss. Loss allowance for tradereceivables with no significant financing component is measured at an amount equal to lifetimeECL. For all other financial assets, expected credit losses are measured at an amount equal tothe 12-month ECL, unless there has been a significant increase in credit risk from initialrecognition in which case those are measured at lifetime ECL. The amount of expected creditlosses (or reversal) that is required to adjust the loss allowance at the reporting date to theamount that is required to be recognised is recognized as an impairment gain or loss instatement of profit or loss.
2.9.1.4. De-recognition of Financial Assets
The Company de-recognizes a financial asset only when the contractual rights to the cash flowsfrom the asset expire, or it transfers the financial asset and substantially all risks and rewardsof ownership of the asset to another entity. If the Company neither transfers nor retainssubstantially all the risks and rewards of ownership and continues to control the transferredasset, the Company recognizes its retained interest in the assets and an associated liability foramounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferredfinancial asset, the Company continues to recognise the financial asset and also recognizes acollateralized borrowing for the proceeds received.
2.9.2. Equity Instruments and Financial Liabilities
Financial liabilities and equity instruments issued by the Company are classified according tothe substance of the contractual arrangements entered into and the definitions of a financialliability and an equity instrument.
2.9.2.1. Equityinstruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments which are issued for cash are recorded at the proceeds received, net of direct issue costs. Equity instruments which are issued for consideration other than cash are recorded at fair value of the equity instrument.
2.9.2.2. Financial Liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at FVPL, loansand borrowings and payables as appropriate. All financial liabilities are recognised initially atfair value and, in the case of loans and borrowings and payables, net of directly attributabletransaction costs.
2.9.2.3. Subsequent Measurement
Financial liabilities are subsequently carried at amortized cost using the effective interestmethod. For trade and other payables maturing within one year from the balance sheet date,the carrying amounts approximate the fair value dueto the short maturity of theseinstruments.
2.9.2.4. De-recognition of Financial Liabilities
Financial liabilities are de -recognised when the obligation specified in the contract isdischarged, cancelled or expired. When an existing financial liability is replaced by anotherfrom the same lender on substantially different terms, or the terms of an existing liability aresubstantially modified, such an exchange or modification is treated as de-recognition of theoriginal liability and recognition of a new liability. The difference in the respective carrying amounts is recognized in the Statement of Profit and Loss.
2.10. Investment property
Investment properties are properties held to earn rentals and/or forcapital appreciation (including property under construction for such purposes). Investmentproperties are measured initially at cost, including transaction costs. Subsequent to initialrecognition, investment properties are measured in accordance with the Ind AS16’srequirement for cost model.
An investment property is derecognized upon disposal or when the investment property ispermanently withdrawn from use and no further economic benefits expected from disposal.Any gain or loss arising on de-recognition of the property is included in profit or loss in theperiod in which the property is derecognized.
The company does not have any Investment properties.
2.11. Inventories:
2.11.1. RawMaterials:
Raw Materials, construction materials and stores & spares are valued at weighted average costor under. Cost includes all charges in bringing the materials to the place of usage, excluding refundable duties and taxes.
2.11.2. Work in Progress:
Work-in-Progress is valued at the contracted rates less profit margin/estimates.
2.12. Cash and cash equivalent:
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and demand deposits with an original maturity of three months or less and highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value net of outstanding bank overdrafts as they are considered an integral part of the company’s cash management.
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