1. CORPORATE INFORMATION:
NAVKAR URBANSTRUCTURE LIMITED (‘the company”) is engaged in the business of construction and development of infrastructure projects (including provision of Ready mix concrete and Reinforced Cement Concrete Pipes).
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation and presentation
These standalone financial statements are prepared to comply in all material aspects with Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 (the Act) read with Companies (Indian Accounting Standards) Rules, 2015; and other relevant provisions of Companies Act, 2013 and the rules made thereunder. The financial statements are prepared under Ind AS application w.e.f. 01-04-2016.
The standalone financial statements are prepared on accrual basis of accounting under historical cost convention in accordance with generally accepted accounting principles in India and the relevant provisions of the Companies Act, 2013 including Indian Accounting Standards notified thereunder, except for certain financial assets liabilities measured at fair value.
2.2 Use of Estimates
The preparation of financial statements are in conformity with the recognition and measurement principles of Ind AS which requires management to make critical judgments, estimates and assumptions that affect the reporting of assets, liabilities, income and expenditure.
Estimates and underlying assumptions are reviewed on an ongoing basis and any revisions to the estimates are recognised in the period in which the estimates are revised and future periods are affected.
Key source of estimation of uncertainty at the date of financial statements, which may cause material adjustment to the carrying amount of assets and liabilities within the next financial year, is in respect of:
• Useful lives of property, plant and equipment
• Valuation of deferred tax assets
• Valuation of inventories
• Provisions & contingent liabilities
2.3 Property, plant and equipment
2.3.1 Tangible Assets:
Property (including lease assets), plant and equipment are stated at cost of acquisition or construction less accumulated depreciation and any accumulated impairment losses. The cost of fixed assets comprises of its purchase price, nonrefundable taxes & levies, freight and other incidental expenses related to the acquisition and installation of the respective assets. Borrowing cost attributable to financing of acquisition or construction of the qualifying fixed assets is capitalized to respective assets when the time taken to put the assets to use is substantial.
When major items of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment. The cost of replacement of any property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefit associated with the item will flow to the Company and its cost can be measured reliably.
The Estimated Useful Lives of assets are in accordance with the Schedule II of the Companies Act, 2013.
2.3.2 Capital WIP includes advances for Capital work in Progress amounting to Rs. 126.98 lacs. These are old advances prior to 2016 pending for completion.
2.3.3. The Company has revalued leasehold GIDC (Halol) land at fair value in the financial year 2017-2018 and the increased amount of such land amount by Rs.3,650 lakhs which has been credited to Reserve Surplus under the head Other Comprehensive Income as per the Requirement of Ind AS 1 6.
2.4 Financial Instruments
2.4.1 Cash and cash equivalents
Cash and cash equivalents in the cash flow statement comprise cash on hand and balance in banks (including Non-operational Bank accounts) to know amounts of cash and which are subject to an insignificant risk of change in value.
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. Cash
flows from operating, investing and financing activities of the Company are segregated, accordingly.
2.4.2 Investments
The company has enter into Joint Venture with Ankita-Navkar-Sarjit JV by giving bank guarantee to said JV. There is no capital investment. The profit/loss of F.Y. 2023-24 has not been accounted during the year. The business of the JV is construction of infrastructure.
The Company has purchased 78.40 lakh shares of Toyam Sports Ltd. during the F.Y. 2023-24
2.4.3 Trade Receivables
Trade receivables are amounts due from customers for sale of goods or services performed in the ordinary course of business. Trade receivables are initially recognized at its transaction price which is considered t
o be its fair value and are classified as current assets as it is expected to be received within the normal operating cycle of the business.
2.4.4 Borrowings
Borrowings are initially recorded at fair value and subsequently measured at amortized costs using effective interest method. Transaction costs are charged to statement of profit and loss as financial expenses over the term of borrowing.
2.4.5 Trade payables
Trade payables are amounts due to vendors for purchase of goods or services and sub contracts given in the ordinary course of business and are classified as current liabilities to the extent it is expected to be paid within the normal operating cycle of the business.
2.4.6 Other financial assets and liabilities
Other non-derivative financial instruments are initially recognized at fair value and subsequently measured at amortized costs using the effective interest method.
2.5 Leases
Finance lease
Leases where the Company assumes substantially all the risks and rewards of ownership are classified as finance lease. Such leases are capitalized at the inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is recognized for an equivalent amount.
Land acquired on long-term leases
The Company classifies leasehold land of GIDC (Halol) as finance lease where:
• Initial amount paid is substantially all of the fair value of land
• The company has option to purchase the land at a price that is sufficiently lower than fair value at the date option is exercisable
• Lessor has agreed to renew lease on expiry of lease term.
• The Company has revalued leasehold GIDC (Halol) land at fair value in the financial year 2017-2018 and the increased amount of such land amount by Rs.36,50,00,000/- which has been credited to Reserve Surplus under the head Other Comprehensive Income as per the Requirement of Ind AS 1 6
From the above details analysis, company concludes that a land lease is finance lease and will be presented as an item of PPE covered under Ind AS-16. The company expects to obtain ownership of the land by the end of the lease term. Hence, the company has not charged any depreciation/ amortisation on such asset since the land has unlimited useful life.
Operating lease
Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognized as operating lease. Operating lease payments are recognized as an expense on a straight line basis over the lease term unless the payments are structured to increase in line with the expected general inflation so as to compensate for the lessor’s expected inflationary cost increases. There is no such operating lease.
2.6 Inventories
Items of inventories are measured at lower of cost or net realisable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including overheads incurred in bringing them to their respective present location and condition.
2.7 Impairment of Property Plant & Equipment:
There is no impairment of Property Plant & Equipment during the year.
Employee Benefit
Short term employee benefits
Short term benefits payable before twelve months after the end of the reporting period in which the employees have rendered service are accounted as expense in s t at e m en t o f p ro fi t a n d l o s s .
Long term employee benefits
Defined benefit plans
There is no provision for gratuity liability as at 31-03-2024. The Company has not obtained actuarial valuation at the end of the financial year and has not made provision for gratuity liability during the year under audit.
Defined Contribution Plan
Defined contribution to provident fund and ESIC are by charged to the profit and loss account on accrual basis.
2.8 Provisions, contingent liabilities and contingent assets Contingent liability:
A possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company are disclosed as contingent liability and not provided for. Such liability is not disclosed if the possibility of outflow of resources is remote.
Contingent liabilities are disclosed by way of Notes to Accounts if any. Contingent assets:
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. Contingent assets are not recognised and disclosed only when an inflow of economic benefits is probable.
Provisions:
A provision is recognized when as a result of a past event, the Company has a present obligation whether legal or constructive that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. If the obligation is expected to be settled more than 12 months after the end of reporting date or has no definite settlement date, the provision is recorded as non-current liabilities after giving effect for time value of money, if material. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
2.9 Revenue Recognition
a) Revenue from the contract is recognised when significant risks and rewards in respect of work of the contract are transferred to the contractee, as per the terms of the order. The company has shown separately the revenues from the operations which are stated at gross amount as per the Requirement of Ind AS 115 “Revenue from contract with customers”. Further, the amounts collected on behalf of third parties such as Government authorities for VAT, Service Tax and GST are excluded from the revenue since the same do not result in increase in Equity.
b) Interest Income is recognised on time proportion basis.
2.10 Income taxes
Income tax expense comprises current and deferred tax expense. Income tax expenses are recognized in statement of profit and loss and when they relate to items recognized in comprehensive income
Current tax is the tax payable on the taxable profit for the year, using tax rates enacted or substantively enacted by the end of reporting period by the governing taxation laws, and any adjustment to tax payable in respect of previous periods. Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. 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 taxes arising from deductible and taxable temporary differences between the tax base of assets and liabilities and their carrying amount in the financial statements are recognized using substantively enacted tax rates and laws expected to apply to taxable income in the years in which the temporary differences are expected to be received or settled.
Deferred tax asset are recognized only to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences can be utilized. 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 income tax assets to be utilized.
2.11 Earnings Per Share
a) Basic earnings per share are calculated by dividing the net profit by number of equity shares outstanding at the end of the year.
2.12 Borrowing cost
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of these assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in statement of profit and loss in the period in which they are incurred.
2.13 Segment Reporting
The company has only one preliminary reportable segment i.e. construction and development of infrastructure projects (including provision of Reinforced Cement Concrete Pipes) hence there is no separate reportable segments as required in Ind AS 108 issued by ICAI.
2.14 Depreciation
Depreciation on tangible fixed assets is provided using the Written down Method based on the useful life of the assets as estimated by the management and is charged to the Statement of Profit and Loss as per the requirement of Schedule II of the Companies Act, 2013. In case of additions or deletions during the year, depreciation is computed from the month in which such assets are put to use and up to previous month of sale or disposal, as the case may be.
2.15 Foreign currency Transactions
There is Nil foreign currency transaction during period under reporting.
2.18. Disclosure of Interest in other Entities:
As per Ind AS 112 - ‘Disclosure of Interest in other Entities’, as notified by the Rules, the disclosures of transactions with the related parties as defined in the accounting standard are given below:
a) Key management personnel
Harsh J. Shah Ami Kankaria,
Pinky Nirmal Sagar.
b) Entities have significant influence -
Navkar Fiscal Services Pvt. Ltd.
C) Joint Venture-
Ankita-Navkar-Sarjit JV
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