2) Significant Accounting Policies
(i) Basis of preparation
a) Statement of compliance
These standalone financial statements have been prepared in accordance with the Indian
Accounting Standards (referred to as "Ind AS") as prescribed under section 133 of the
Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules as
amended from time to time.
b) Basis of measurement
These standalone financial statements have been prepared on historical cost basis except for
certain financial instruments and defined benefit plans which are measured at fair value or
amortised cost at the end of each reporting period. Historical cost is generally based on the
fair value of the consideration given in exchange for goods and services. 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. All assets and liabilities
have been classified as current and non-current as per the Company's normal operating cycle.
Based on the nature of services rendered to customers and time elapsed between deployment
of resources and the realisation in cash and cash equivalents of the consideration for such
services rendered, the Company has considered an operating cycle of 12 months.
The statement of cash flows has been prepared under indirect method, whereby profit or loss
is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of
past or future operating cash receipts or payments and items of income or expense
associated with investing or financing cash flows. The cash flows from operating, investing
and financing activities of the Company are segregated. The Company considers all highly
liquid investments that are readily convertible to known amounts of cash and are subject to
an insignificant risk of changes in value to be cash equivalents.
(ii) Use of estimates and judgements
The preparation of standalone financial statements in conformity with the recognition and
measurement principles of Ind AS requires management of the Company to make estimates and
judgements that affect the reported balances of assets and liabilities, disclosures of contingent
liabilities as at the date of standalone financial statements and the reported amounts of income and
expenses for the periods presented.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimates are revised and future periods are
affected.
The Company uses the following critical accounting estimates in preparation of its standalone financial
statements:
a) Revenue recognition
Revenue for fixed-price contracts is recognised using percentage-of-completion method. The
Company uses judgement to estimate the future cost-to-completion of the contracts which is
used to determine degree of completion of the performance obligation.
b) Useful lives of property, plant and equipment
The Company reviews the useful life of property, plant and equipment at the end of each
reporting period. This reassessment may result in change in depreciation expense in future
periods.
c) Fair value measurement of financial instruments
When the fair value of financial assets and financial liabilities recorded in the balance sheet
cannot be measured based on quoted prices in active markets, their fair value is measured
using valuation techniques including the Discounted Cash Flow model. The inputs to these
models are taken from observable markets where possible, but where this is not feasible, a
degree of judgement is required in establishing fair values. Judgements include considerations
of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these
factors could affect the reported fair value of financial instruments.
d) Provision for income tax and deferred tax assets
The Company uses estimates and judgements based on the relevant rulings in the areas of
allocation of revenue, costs, allowances and disallowances which is exercised while determining
the provision for income tax. A deferred tax asset is recognised to the extent that it is probable
that future taxable profit will be available against which the deductible temporary differences
and tax losses can be utilised. Accordingly, the Company exercises its judgement to reassess
the carrying amount of deferred tax assets at the end of each reporting period.
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