Capacit'e Infraprojects Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2025

3. Summary of material accounting policies
a. Current versus non-current classification

The Company presents assets and liabilities in the Standalone
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 normal operating cycle,

ii. It is held primarily for the purpose of trading,

iii. It is due to be settled within twelve months after the
reporting period, or

iv. There is no unconditional right to defer the
settlement of the liability for at least twelve months
after the reporting period.

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

The operating cycle is the time between the acquisition
of assets for processing and their realisation in cash and
cash equivalents. The Company has identified twelve
months as its operating cycle.

b. Fair Value measurement

Some of the Company''s assets are measured at Fair value
for Financial reporting purposes. 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 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
categorized 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 observable and

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 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.

. Revenue from Construction contract

Performance obligation in case of long - term
construction contracts is satisfied over a period of time,
since the Company creates an asset that the customer

controls and the Company has an enforceable right to
payment for performance completed to date if it meets
the agreed specifications. Revenue from long term
construction contracts, where the outcome can be
estimated reliably is recognised under the percentage
of completion method by reference to the stage of
completion of the contract activity.

The stage of completion is measured by input method

i.e. the proportion that costs incurred to date bear to
the estimated total costs of a contract. The total costs
of contracts are estimated based on technical and
other estimates. In the event that a loss is anticipated
on a particular contract, provision is made for the
estimated loss.

Contract revenue earned in excess of billing is reflected
under "contract asset” and billing in excess of contract
revenue is reflected under "contract liabilities”. Retention
money receivable from project customers does not
contain any significant financing element and are
retained for satisfactory performance of contract.

In case of long - term construction contracts payment is
generally due upon completion of milestone as per terms
of contract. In certain contracts, short-term advances are
received before the performance obligation is satisfied.

Contract balances:

i. Contract assets

A contract asset is the right to consideration in
exchange for goods or services transferred to the
customer. If the Company performs by transferring
goods or services to a customer before the
customer pays consideration or before payment is
due, a contract asset is recognised for the earned
consideration that is conditional.

The amount recognised as contract assets is
reclassified to trade receivables once the amounts
are billed to the customer as per the terms of
the contract. Contract assets are subject to
impairment assessment.

ii. 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. The amount of retention money
held by the customers pending completion of
performance milestone is disclosed as part of trade
receivables. Retention money are specific to project
and generally receivable after defect liability period
upon completion of project. Also, management
performs an assessment of the unbilled receivables
to identify the unbilled work which is pending for
certification in the normal passage of time and
does not have any pending commitment from the
Company and accordingly classifies the same as
part of the trade receivables.

iii. Contract liabilities

A contract liability is the obligation to transfer
goods or services to a customer for which the
Company has received consideration (or an amount
of consideration 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.

Supply contracts-sale of goods:

Revenue, if any from supply contract is recognized
when the control is transferred to the buyer.

Interest income:

Interest income on investments and loans is
accrued on a time basis by reference to the
principal outstanding and the effective interest rate
including interest on investments classified as fair
value through profit or loss or fair value through
other comprehensive income. Interest receivable
is recognised as income in the Statement of Profit
and Loss on accrual basis provided there is no
uncertainty of realisation.

d. Property, plant and equipment (PPE)

PPE is recognised when it is probable that future

economic benefits associated with the item will flow to

the Company and the cost of the item can be measured

reliably. PPE is stated at original cost net of tax/duty
credits availed, if any, less accumulated depreciation and
accumulated impairment, if any.

Such cost includes the cost of replacing part of the
plant and equipment and borrowing costs for long¬
term construction projects if the recognition criteria
are met. 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. The present value
of the expected cost for the decommissioning of an asset
after its use is included in the cost of the respective asset
if the recognition criteria for a provision are met. PPE
acquired on hire purchase basis are recognised at their
cash values. Cost includes professional fees related to the
acquisition of PPE and for qualifying assets, borrowing
costs are capitalised in accordance with the Company''s
accounting policy.

PPE not ready for the intended use on the date of
the Balance Sheet are disclosed as "capital work-in¬
progress”. (Also refer to policy on leases, borrowing costs,
impairment of assets and foreign currencies). Capital
work in progress is stated at cost, net of accumulated
impairment loss, if any.

Buildings are measured at cost less accumulated
depreciation on buildings and impairment losses
recognised at the date of revaluation. Valuations are
performed with sufficient frequency to ensure that the
carrying amount of a revalued asset does not differ
materially from its fair value.

A revaluation surplus is recorded in Other Comprehensive
Income (OCI) and credited to the revaluation surplus
in equity. However, to the extent that it reverses
a revaluation deficit of the same asset previously
recognised in profit or loss, the increase is recognised
in profit or loss. A revaluation deficit is recognised in the
statement of profit and loss, except to the extent that it
offsets an existing surplus on the same asset recognised
in the revaluation surplus.

An annual transfer from the revaluation surplus to
retained earnings is made for the difference between
depreciation based on the revalued carrying amount of
the asset and depreciation based on the asset''s original
cost. Additionally, accumulated depreciation as at the
revaluation date is eliminated against the gross carrying
amount of the asset and the net amount is restated to
the revalued amount of the asset. Upon disposal, any
revaluation surplus relating to the particular asset being
sold is transferred directly to retained earnings.

Depreciation is calculated on a straight-line basis over
the estimated useful lives of the assets as follows:

The Company, based on technical assessment made by
technical expert and management estimate, depreciates
certain items of building, plant and equipment over
estimated useful lives which are different from the useful
life prescribed in Schedule II to the Companies Act, 2013.
The management believes that these estimated useful
lives are realistic and reflect fair approximation of the
period over which the assets are likely to be used.

Expenses incurred for establishment of sites are
capitalised. Site establishments includes temporary
structures build on project site and is used in the process
of construction. Site establishments items and activities
includes excavation, ground levelling, making approach
road, boundary making, barricading, security gate, labour
colony, store rooms, professional fees for designing site
establishments, monsoon protection sheds, all electrical
lines at project site etc. All material and manpower

cost incurred in building these site establishments are
capitalised at that project site. Site Establishments are
amortised systematically over the life of the contract.

The Company identifies and determines cost of
each component/ part of the asset separately, if the
component/ part has a cost which is significant to the
total cost of the asset and has useful life that is materially
different from that of the remaining asset.

An item of property, plant and equipment and any
significant part initially recognised is derecognised
upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or loss
arising on derecognition of the asset (calculated as the
difference between the net disposal proceeds and the
carrying amount of the asset) is included in the statement
of profit and loss when the asset is derecognised.

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.

e. Intangible Assets

Intangible assets acquired separately are measured on
initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less any accumulated
amortisation and accumulated impairment losses, if any.

Amortisation is recognised on a straight-line basis over
their estimated useful lives. The estimated useful life
and amortisation method are reviewed at the end of
each reporting period, with the effect of any changes in
estimate being accounted for on a prospective basis.

An intangible asset is derecognised upon disposal (i.e.,
at the date the recipient obtains control) or when no
future economic benefits are expected from its use or
disposal. 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 recognised in the statement of profit and
loss when the asset is derecognised.

Investment properties comprises of land and building
are measured initially at cost, including transaction costs.
The cost comprises purchase price, borrowing cost if
capitalization criteria are met and directly attributable
cost of bringing the asset to its working condition for
the intended use.

Subsequent to initial recognition, investment properties
are stated at cost less accumulated depreciation and
accumulated impairment loss, if any. AH other repair and
maintenance costs are recognised in Statement of Profit
and Loss as incurred. Though the Company measures
investment property using cost-based measurement.

The cost includes the cost of replacing parts and
borrowing costs for long-term construction projects if
the recognition criteria are met. When significant parts
of the investment properties are required to be replaced
at intervals, the Company depreciates them separately
based on their specific useful lives.

Depreciation

Depreciation on Investment Property is provided using
the straight-line basis method based on the useful lives
specified in Schedule II to the Companies Act, 2013.
The cost comprises purchase price, borrowing cost if
capitalization criteria are met and directly attributable
cost of bringing the asset to its working condition for the
intended use. Subsequent costs are included in the asset''s
carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Company.

The Company depreciates building component of
investment property over 60 years from the date of
original purchase.

The Company, based on technical assessment made by
technical expert and management estimate, depreciates the
building over estimated useful lives which are different from
the useful life prescribed in Schedule II to the Companies
Act, 2013. The management believes that these estimated
useful lives are realistic and reflect fair approximation of the
period over which the assets are likely to be used.

Though the Company measures investment properties
using cost-based measurement, the fair value of
investment properties are disclosed in the notes. Fair
values are determined based on an annual evaluation
performed by an accredited external independent
valuer applying a valuation model recommended by the
International Valuation Standards Committee.

Investment properties are derecognised either when they
have been disposed of or when they are permanently
withdrawn from use and no future economic benefit is
expected from their disposal. The difference between
the net disposal proceeds and the carrying amount
of the asset is recognised in profit or loss in the period
of derecognition.

All other repair and maintenance costs are recognised in
Statement of Profit and Loss as incurred.

Transfers are made to (or from) investment properties
only when there is a change in use.

g. Financial instruments

A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity.

Financial assets

Initial recognition and measurement

All financial assets are recognised initially at fair value
plus, in the case of financial assets not recorded at fair
value through profit or loss, transaction costs that are
attributable to the acquisition of the financial asset.

The classification of financial assets at initial recognition
depends on the financial asset''s contractual cash flow
characteristics and the Company''s business model for
managing them. With the exception of trade receivables
that do not contain a significant financing component or
for which the Company has applied the practical expedient,
the Company initially measures a financial asset at its fair
value plus, in the case of a financial asset not at fair value
through profit or loss, transaction costs. Trade receivables
that do not contain a significant financing component or
for which the Company has applied the practical expedient
are measured at the transaction price determined under

Ind AS 115. Refer to the accounting policies in section (c)

Revenue from contracts with customers.

Subsequent measurement

Subsequent measurement of financial assets:

All recognised financial assets are subsequently measured

in their entirety at either amortised cost or fair value,

depending on the classification financial assets.

Following are the categories of financial instrument:

a) Financial assets at amortised cost

Financial assets are subsequently measured at
amortised cost using the effective interest rate
method if these financial assets are held within a
business whose objective is to hold these assets
in order to collect contractual cash flows and the
contractual terms of the financial asset give rise
on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.

b) Financial assets at fair value through other
comprehensive income (FVTOCI) with recycling of
cumulative gains and losses (debt instruments)

Debt instruments are subsequently measured at fair
value through other comprehensive income if it is
held within a business model whose objective is
achieved by both collecting contractual cash flows
and selling financial assets and the contractual terms
of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and
interest on the principal amount outstanding.

c) Financial assets designated at fair value through OCI
with no recycling of cumulative gains and losses
upon derecognition (equity instruments):

On initial recognition, the Company makes
an irrevocable election on an instrument-by¬
instrument basis to present the subsequent changes
in fair value in other comprehensive income
pertaining to investments in equity instruments,
other than equity investment which are held for
trading. Subsequently, they are measured at fair

value with gains and losses arising from changes
in fair value recognised in other comprehensive
income and accumulated in the ''Reserve for equity
instruments through other comprehensive income''.
The cumulative gain or loss is not reclassified to
profit or loss on disposal of the investments.

d) Financial assets at fair value through profit
or loss (FVTPL)

Investments in equity instruments are classified as
at FVTPL, unless the Company irrevocably elects on
initial recognition to present subsequent changes
in fair value in other comprehensive income for
investments in equity instruments which are not held
for trading. Other financial assets such as unquoted
Mutual funds are measured at fair value through
profit or loss unless it is measured at amortised
cost or at fair value through other comprehensive
income on initial recognition.

Derecognition

A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is
primarily derecognised (i.e. removed from the Company''s
balance sheet) when:

a) the rights to receive cash flows from the asset
have expired, or

b) the Company has transferred its rights to receive
cash flows from the asset, and

i. the Company has transferred substantially all
the risks and rewards of the asset, or

ii. the Company has neither transferred nor
retained substantially all the risks and
rewards of the asset, but has transferred
control of the asset.

When the Company has transferred its rights to receive
cash flows from an asset or has entered into a pass¬
through arrangement, it evaluates if and to what extent
it has retained the risks and rewards of ownership. When
it has neither transferred nor retained substantially all
of the risks and rewards of the asset, nor transferred
control of the asset, the Company continues to recognise

the transferred asset to the extent of the Company''s
continuing involvement. In that case, the Company also
recognises an associated liability. The transferred asset and
the associated liability are measured on a basis that reflects
the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a
guarantee over the transferred asset is measured at the
lower of the original carrying amount of the asset and the
maximum amount of consideration that the Company
could be required to repay.

Impairment of financial assets

The Company assesses on a forward looking basis
the expected credit losses associated with its assets
carried at amortised cost and FVOCI debt instruments.
The impairment methodology applied depends on the
whether there has been a significant increase in credit
risk. For trade receivables and contract assets, the
Company applies the simplified approach permitted
by Ind AS 109 Financial Instruments, which requires
expected lifetime losses to be recognised from initial
recognition of the receivables.

ECL impairment loss allowance (or reversal) recognized
during the period is recognized as expense/(income) in
the Statement of Profit and Loss. This amount is reflected
under the head ''other expenses'' in the Statement of Profit
and Loss. In the balance sheet, ECL is presented as an
allowance, i.e., as an integral part of the measurement of
those assets in the balance sheet. The allowance reduces
the net carrying amount. Until the asset meets write¬
off criteria, the Company does not reduce impairment
aLLowance from the gross carrying amount.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition,
as financial liabilities at fair value through profit or loss,
loans and borrowings, payables. ALL financial liabilities are
recognised initially at fair value and, in the case of Loans
and borrowings and payables, net of directly attributable
transaction costs.

The Company''s financial Liabilities include trade and
other payables, Loans and borrowings.

The measurement of financial Liabilities depends on their
classification, as described below:

Financial liabilities at fair value through profit or loss

Financial Liabilities at fair value through profit or Loss
include financiaL LiabiLities designated upon initiaL
recognition as at fair vaLue through profit or Loss.

FinanciaL LiabiLities designated upon initiaL recognition at
fair vaLue through profit or Loss are designated as such at
the initiaL date of recognition and onLy if the criteria in Ind
AS 109 are satisfied. For LiabiLities designated as FVTPL, fair
vaLue gains/ Losses attributabLe to changes in own credit
risk are recognized in OCI. These gains/ Losses are not
subsequentLy transferred to P&L. However, the Company
may transfer the cumuLative gain or Loss within equity. ALL
other changes in fair vaLue of such LiabiLity are recognised
in the statement of profit or Loss. The company has not
designated any financiaL LiabiLity as at fair vaLue through
profit or Loss. Gains or Losses on LiabiLities heLd for trading
are recognised in the profit or Loss.

Financial liabilities at amortised cost

After initiaL recognition, interest-bearing Loans and
borrowings are subsequentLy measured at amortised cost
using the EIR method. Gains and Losses are recognised in
profit or Loss when the LiabiLities are derecognised as weLL
as through the EIR amortisation process.

Amortised cost is caLcuLated by taking into account any
discount or premium on acquisition and fees or costs
that are an integraL part of the EIR. The EIR amortisation
is incLuded as finance costs in the statement of
profit and Loss.

De-recognition

A financiaL LiabiLity is derecognised 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 de¬
recognition 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.

Financial guarantee contracts issued by the Company
are those contracts that require a payment to be made
to reimburse the holder for a loss it incurs because the
specified debtor fails to make a payment when due
in accordance with the terms of a debt instrument.
Financial guarantee contracts are recognised initially as
a liability at fair value, adjusted for transaction costs that
are directly attributable to the issuance of the guarantee.
Subsequently, the liability is measured at the higher of the
amount of loss allowance determined as per impairment
requirements of Ind AS 109 and the amount recognised
less cumulative amortisation.

Reclassification of financial assets

The Company determines classification of financial
assets and liabilities on initial recognition. After initial
recognition, no reclassification is made for financial
assets which are equity instruments and financial
liabilities. For financial assets which are debt instruments,
a reclassification is made only if there is a change in the
business model for managing those assets. Changes to
the business model are expected to be infrequent. The
Company''s senior management determines change in the
business model as a result of external or internal changes
which are significant to the Company''s operations. Such
changes are evident to external parties. A change in
the business model occurs when the Company either
begins or ceases to perform an activity that is significant
to its operations. If the Company reclassifies financial
assets, it applies the reclassification prospectively from
the reclassification date which is the first day of the
immediately next reporting period following the change
in business model. The Company does not restate any
previously recognised gains, losses (including impairment
gains or losses) or interest.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and
the net amount is reported in the balance sheet if
there is a currently enforceable legal right to offset the
recognised amounts and there is an intention to settle on
a net basis, to realise the assets and settle the liabilities
simultaneously.

h. Inventories

Inventories are valued at the lower of cost and net
realisable value. Construction material, raw materials,

components, stores and spares are valued at lower of
cost and net realizable value. However, material and
other items held for use in the production of inventories
are not written down below cost if the finished products
in which they will be incorporated are expected to be
sold at or above cost. Cost are determined on weighted
average method.

i. Foreign currencies

The Company''s financial statements are presented in
INR, 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.

j. Employee benefit expenses
Defined Benefit Plan

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 at the beginning of the period to the net
defined benefit liability or asset. Defined benefit costs are
categorised as follows:

• Service cost (including current service cost,
past service cost, as well as gains and losses on
curtailments and settlements);

• Net interest expense or income; and

• Remeasurement

The Company presents the first two components of
defined benefit costs in the statement of profit and loss in
the line item "Employee Benefits Expenses”. Curtailment
gains and losses are accounted for as past service costs.
The defined benefit obligation recognised in the Balance
Sheet represents the actual deficit or surplus in the
Company''s defined benefit plans

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.

Short term and other long term employee benefit

Benefits accruing to employees in respect of wages,
salaries and compensated absences and which are
expected to be availed within twelve months immediately
following the year end are reported as expenses during
the year in which the employee performs the service that
the benefit covers, and the liabilities are reported at the

undiscounted amount of the benefit expected to be paid
in exchange of related service. Where the availment or
encashment is otherwise not expected to wholly occur
within the next twelve months, the liability on account of
the benefit is actuarially determined using the projected
unit credit method at the present value of the estimated
future cash flow expected to be made by the Company
in respect of services provided by employees up to the
reporting date. The Company presents the leave as a
current liability in the Balance Sheet, to the extent it does
not have an unconditional right to defer its settlement for
12 months after the reporting date.

k. 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 assets and liabilities are measured at
the amount expected to be recovered from or paid to the
taxation authorities in accordance with Income Tax Act,
1961. The tax rates and tax laws used to compute the tax
are those that are enacted at the reporting date.

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 loss

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.

l. Cash and cash equivalent

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 Standalone 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.

m. Borrowing costs

Borrowing costs consist of interest and other costs that
an entity incurs in connection with the borrowing of
funds including interest expense calculated using the
effective interest method, finance charges in respect of
assets acquired on finance lease. Borrowing cost also
includes exchange differences to the extent regarded as
an adjustment to the borrowing costs.

Borrowing costs directly attributable to the acquisition,
construction or production of a qualifying asset that
necessarily takes a substantial period of time to get
ready for its intended use or sale are capitalised as part
of the cost of the asset until such time as the assets
are substantially ready for the intended use or sale. All
other borrowing costs are expensed in the period in
which they occur.

n. Trade payables

These amounts represent liabilities for goods and services
provided to the Company prior to the end of financial
year which are unpaid. The amounts are unsecured and
are usually paid within 30 to 180 days of recognition
other than usance letter of credit. Trade payables are
presented as current financial liabilities.

The Company enters into deferred payment arrangements
(acceptances) for purchase of raw materials under Letter
of Credit (LCs) under non-fund based working capital
facility approved by Banks for the Company. Considering
these arrangements are majorly for raw materials with
a maturity ranging from 90 to 180 days, the economic
substance of the transaction is determined to be operating
in nature and these are recognised as Acceptances under
Trade payables. Interest borne by the company on such
arrangements is accounted as finance cost.

o. 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 assets.

i) Right-of-use assets

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 accumulated 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 Building which is 2 to 5 years.

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 underlying asset.

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.

---

Mar 31, 2024

3. Summary of material accounting policies

a. Current versus non-current classification

The Company presents assets and liabilities in the standalone balance sheet based on current/ noncurrent 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 normal operating cycle,

ii. It is held primarily for the purpose of trading,

iii. It is due to be settled within twelve months after the reporting period, or

iv. There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.

Operating cycle for current and non-current classification

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.

b. Fair Value measurement

Some of the Company''s assets are measured at Fair value for Financial reporting purposes. 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 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 categorized 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 observable and

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 reassessing 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.

c. Revenue from Construction contract

Performance obligation in case of long - term construction contracts is satisfied over a period of time, since the Company creates an asset that the customer controls as the asset is created and the Company has an enforceable right to payment for performance completed to date if it meets the agreed specifications. Revenue from long term construction contracts, where the outcome can be estimated reliably is recognised under the percentage of completion method by reference to the stage of completion of the contract activity.

The stage of completion is measured by input method i.e. the proportion that costs incurred to date bear to the estimated total costs of a contract. The total costs of contracts are estimated based on technical and other estimates. In the event that a loss is anticipated on a particular contract, provision is made for the estimated loss.

Contract revenue earned in excess of billing is reflected under "contract asset” and billing in excess of contract revenue is reflected under "contract liabilities”. Retention money receivable from

project customers does not contain any significant financing element and are retained for satisfactory performance of contract.

In case of long - term construction contracts payment is generally due upon completion of milestone as per terms of contract. In certain contracts, shortterm advances are received before the performance obligation is satisfied.

Contract balances:

i. Contract assets

A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.

The amount recognised as contract assets is reclassified to trade receivables once the amounts are billed to the customer as per the terms of the contract. Contract assets are subject to impairment assessment.

ii. 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. The amount of retention money held by the customers pending completion of performance milestone is disclosed as part of contract asset and is reclassified as trade receivables when it becomes due for payment. Retention money are specific to project and generally receivable after defect liability period upon completion of project. Also, management performs an assessment of the unbilled receivables to identify the unbilled work which is pending for certification in the normal passage of time and does not have any pending commitment from the Company and accordingly classifies the same as part of the trade receivables.

iii. Contract liabilities

A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration 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.

Supply contracts-sale of goods:

Revenue, if any from supply contractis recognized when the control is transferred to the buyer.

Interest income:

Interest income on investments and loans is accrued on a time basis by reference to the principal outstanding and the effective interest rate including interest on investments classified as fair value through profit or loss or fair value through other comprehensive income. Interest receivable is recognised as income in the Statement of Profit and Loss on accrual basis provided there is no uncertainty of realisation.

d. Property, plant and equipment (PPE)

PPE is recognised when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. PPE is stated at original cost net of tax/duty credits availed, if any, less accumulated depreciation and accumulated impairment, if any.

Such cost includes the cost of replacing part of the plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met. 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. The present value of the expected cost for the decommissioning of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met. PPE acquired on hire purchase basis are recognised at their cash values. Cost includes professional fees related to the acquisition of PPE and for qualifying assets, borrowing costs are capitalised in accordance with the Company''s accounting policy.

PPE not ready for the intended use on the date of the Balance Sheet are disclosed as "capital work-in-progress". (Also refer to policy on leases, borrowing costs, impairment of assets and foreign currencies). Capital work in progress is stated at cost, net of accumulated impairment loss, if any.

Buildings are measured at cost less accumulated depreciation on buildings and impairment losses recognised at the date of revaluation. Valuations are performed with sufficient frequency to ensure that the carrying amount of a revalued asset does not differ materially from its fair value.

A revaluation surplus is recorded in OCI and credited to the revaluation surplus in equity. However, to the extent that it reverses a revaluation deficit of the same asset previously recognised in profit or loss, the increase is recognised in profit or loss. A revaluation deficit is recognised in the statement of profit and loss, except to the extent that it offsets an existing surplus on the same asset recognised in the revaluation surplus.

An annual transfer from the revaluation surplus to retained earnings is made for the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset''s original cost. Additionally, accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Upon disposal, any revaluation surplus relating to the particular asset being sold is transferred directly to retained earnings.

Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as follows:

The Company, based on technical assessment made by technical expert and management estimate, depreciates certain items of building, plant and equipment over estimated useful lives which are different from the useful life prescribed in Schedule II to the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.

Expenses incurred for establishment of sites are capitalised. Site establishments includes temporary structures build on project site and is used in the process of construction. Site establishments items and activities includes excavation, ground levelling, making approach road, boundary making, barricading, security gate, labour colony, store rooms, professional fees for designing site establishments, monsoon protection sheds, all electrical lines at project site etc. All material and manpower cost incurred in building these site establishments are capitalised at that project site. Site Establishments are amortised systematically over the life of the contract.

The Company identifies and determines cost of each component/ part of the asset separately, if the component/ part has a cost which is significant to the total cost of the asset and has useful life that is materially different from that of the remaining asset.

An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss when the asset is derecognised.

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.

e. Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses, if any.

Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. 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 recognised in the statement of profit and loss when the asset is derecognised.

f. Investment property and depreciation Recognition and measurement:

Investment properties comprises of land and building are measured initially at cost, including transaction costs. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use.

Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any. All other repair and maintenance costs are recognised in Statement of Profit and Loss as incurred. Though the Company measures investment property using cost-based measurement.

The cost includes the cost of replacing parts and borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of the investment properties are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives.

Depreciation on Investment Property is provided using the straight-line basis method based on the useful lives specified in Schedule II to the Companies Act, 2013The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company.

The Company depreciates building component of investment property over 60 years from the date of original purchase.

The Company, based on technical assessment made by technical expert and management estimate, depreciates the building over estimated useful lives which are different from the useful life prescribed in Schedule II to the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.

Though the Company measures investment properties using cost-based measurement, the fair value of investment properties are disclosed in the notes. Fair values are determined based on an annual evaluation performed by an accredited external independent valuer applying a valuation model recommended by the International Valuation Standards Committee.

Investment properties are derecognised either when they have been disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period of derecognition.

All other repair and maintenance costs are recognised in Statement of Profit and Loss as incurred.

Transfers are made to (or from) investment properties only when there is a change in use.

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial assets

Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.

The classification of financial assets at initial recognition depends on the financial asset''s contractual cash flow characteristics and the Company''s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient, the Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient are measured at the transaction price determined under Ind AS 115. Refer to the accounting policies in section (c) Revenue from contracts with customers.

Subsequent measurement

Subsequent measurement of financial assets:

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification financial assets.

Following are the categories of financial instrument:

a) Financial assets at amortised cost

Financial assets are subsequently measured at amortised cost using the effective interest rate method if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

b) Financial assets at fair value through other comprehensive income (FVTOCI) with recycling of cumulative gains and losses (debt instruments)

Debt instruments are subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

c) Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments):

On initial recognition, the Company makes an irrevocable election on an instrument-byinstrument basis to present the subsequent changes in fair value in other comprehensive income pertaining to investments in equity instruments, other than equity investment which are held for trading. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and accumulated in the ''Reserve for equity instruments through other comprehensive income''. The cumulative gain or loss is not reclassified to profit or loss on disposal of the investments.

d) Financial assets at fair value through profit or loss (FVTPL)

Investments in equity instruments are classified as at FVTPL, unless the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading. Other financial assets such as unquoted Mutual funds are measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through other comprehensive income on initial recognition.

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the Company''s balance sheet) when:

a) the rights to receive cash flows from the asset have expired, or

b) the Company has transferred its rights to receive cash flows from the asset, and

i. the Company has transferred substantially all the risks and rewards of the asset, or

ii. the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company''s continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

Impairment of financial assets

The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on the whether there has been a significant increase in credit risk. For trade receivables and contract assets, the Company applies the simplified approach

permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

ECL impairment loss allowance (or reversal) recognized during the period is recognized as expense/(income) in the Statement of Profit and Loss. This amount is reflected under the head ''other expenses'' in the Statement of Profit and Loss. In the balance sheet, ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the Company does not reduce impairment allowance from the gross carrying amount.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Company''s financial liabilities include trade and other payables, loans and borrowings.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/ losses are not subsequently transferred to P&L. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit or loss.

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.

De-recognition

A financial liability is derecognised 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 de-recognition 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.

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised less cumulative amortisation.

Reclassification of financial assets

The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Company''s senior management determines change in the business model as a result of external or internal changes which are significant to the Company''s operations. Such changes are evident to external parties. A change in the business model occurs when the Company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognised gains, losses (including impairment gains or losses) or interest.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

h. Inventories

Inventories are valued at the lower of cost and net realisable value.

a. Construction material, raw materials, components, stores and spares are valued at lower of cost and net realizable value. However, material and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost are determined on weighted average method.

b. Ply and Batten (included in cost of material consumed).

Ply and batten are part of material and supplies used in the construction process and are hence part of inventory which are valued at cost less amortisation/charge based on their usages.

i. Foreign currencies

The Company''s financial statements are presented in INR, 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.

j. Employee benefit expenses Defined Benefit Plan

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 at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorised as follows:

• Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);

• Net interest expense or income; and

• Remeasurement

The Company presents the first two components of defined benefit costs in the statement of profit and loss in the line item "Employee Benefits Expenses”. Curtailment gains and losses are accounted for as past service costs. The defined benefit obligation recognised in the Balance Sheet represents the actual deficit or surplus in the Company''s defined benefit plans

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.

Short term and other long term employee benefit

Benefits accruing to employees in respect of wages, salaries and compensated absences and which are expected to be availed within twelve months immediately following the year end are reported as expenses during the year in which the employee performs the service that the benefit covers, and the liabilities are reported at the undiscounted amount

of the benefit expected to be paid in exchange of related service. Where the availment or encashment is otherwise not expected to wholly occur within the next twelve months, the liability on account of the benefit is actuarially determined using the projected unit credit method at the present value of the estimated future cash flow expected to be made by the Company in respect of services provided by employees up to the reporting date. The Company presents the leave as a current liability in the Balance Sheet, to the extent it does not have an unconditional right to defer its settlement for 12 months after the reporting date.

k. 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 assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities in accordance with Income Tax Act, 1961. The tax rates and tax laws used to compute the tax are those that are enacted at the reporting date.

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 loss

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.

l. Cash and cash equivalent

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 standalone 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.

m. Borrowing costs

Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds including interest expense calculated using

the effective interest method, finance charges in respect of assets acquired on finance lease. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset until such time as the assets are substantially ready for the intended use or sale. All other borrowing costs are expensed in the period in which they occur.

n. Trade payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 to 180 days of recognition other than usance letter of credit. Trade payables are presented as current financial liabilities.

The Company enters into deferred payment arrangements (acceptances) for purchase of raw materials under Letter of Credit (LCs) under non-fund based working capital facility approved by Banks for the Company. Considering these arrangements are majorly for raw materials with a maturity ranging from 90 to 180 days, the economic substance of the transaction is determined to be operating in nature and these are recognised as Acceptances under Trade payables. Interest borne by the company on such arrangements is accounted as finance cost.

o. 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 assets.

i) Right-of-use assets

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 accumulated 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 Building which is 2 to 5 years.

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 underlying asset.

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 straightline basis over the lease term.

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Mar 31, 2023

Summary of significant accounting policies

a Current versus non-current classification

The Company presents assets and liabilities in the
standalone 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 normal operating
cycle,

ii. It is held primarily for the purpose of trading,

iii. It is due to be settled within twelve months after
the reporting period, or

iv. There is no unconditional right to defer the

settlement of the liability for at least twelve months
after the reporting period

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

The operating cycle is the time between the acquisition
of assets for processing and their realisation in cash
and cash equivalents. The Company has identified
twelve months as its operating cycle.

b Fair value measurement of financial instruments

The Company measures financial instruments 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 categorized 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 observable
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 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.

c Revenue Recognition

Ind AS 115 establishes a single comprehensive model
for entities to use in accounting for revenue arising
from contracts with customers.

Description of performance obligation:

During the current year the company has changed
the method of measuring progress i.e. from output to
input method as specified in Ind-AS 115 Revenue from
Contract with customers. (Refer note 50)

The Company recognises revenue from contracts with
customers based on a five step model as set out in Ind
AS 115:

Step 1. Identify the contract(s) with a customer: A contract
is defined as an agreement between two or more parties
that creates enforceable rights and obligations and sets
out the criteria for every contract that must be met.
Step 2.Identifytheperformance obligations in the contract:
A performance obligation is a promise in a contract with
a customer to transfer a good or service to the customer.
Step 3. Determine the transaction price: The transaction
price is the amount of consideration to which the
Company expects to be entitled in exchange for
transferring promised goods or services to a customer,
excluding amounts collected on behalf of third parties.
Step 4. Allocate the transaction price to the performance
obligations in the contract: For a contract that has more
than one performance obligation, the Company will
allocate the transaction price to each performance
obligation in an amount that depicts the amount of
consideration to which the Company expects to be
entitled in exchange for satisfying each performance
obligation.

Step 5. Recognise revenue when (or as) the entity
satisfies a performance obligation.

The Company satisfies a performance obligation and
recognises revenue over time, if one of the following
criteria is met:

1. The customer simultaneously receives and
consumes the benefits provided by the Company''s
performance as the Company performs; or

2. The Company''s performance creates or enhances
an asset that the customer controls as the asset is
created or enhanced; or

3. The Company''s performance does not create an
asset with an alternative use to the Company and
the entity has an enforceable right to payment for
performance completed to date.

Revenue from works contracts, where the
outcome can be estimated reliably, is recognised
under the percentage of completion method
by reference to the stage of completion of the
contract activity. The stage of completion is
measured by calculating the proportion that costs
incurred to date bear to the estimated total costs
of a contract. Determination of revenues under
the percentage of completion method necessarily
involves making estimates by the management.
When the outcome of a construction contract
cannot be estimated reliably, contract revenue
is recognised only to the extent of contract
cost incurred that are likely to be recoverable.
Any costs incurred that do not contribute to satisfying
performance obligations are excluded from the
Company''s input methods of revenue recognition
as the amounts are not reflective of our transferring
control of the system to the customer. Significant
judgment is required to evaluate assumptions related
to the amount of net contract revenues, including
the impact of any performance incentives, liquidated
damages, and other forms of variable consideration.
If estimated incremental costs on any contract,
are greater than the net contract revenues, the
Company recognises the entire estimated loss in the
period the loss becomes known.

When the Company satisfies a performance
obligation by delivering the promised goods or
services it creates a contract asset based on the
amount of consideration to be earned by the
performance. Where the amount of consideration
received from a customer exceeds the amount
of revenue recognised this gives rise to a contract
liability. Any variations in contract work, claims,
incentive payments are included in the transaction
price if i.t is highly probable that a significant
reversal of revenue will not occur once associated
uncertainties are resolved.

Variable consideration is included in the
transaction price only to the extent that it is highly
probable that a significant reversal in the amount
of cumulative revenue recognized will not occur

when that uncertainty associated with the variable
consideration is subsequently resolved.

The Company accounts for a contract modification
(change in the scope or price (or both)) when that
is approved by the parties to the contract. Where
the outcome of a performance obligation cannot
be reasonably measured, contract revenue is
recognised to the extent of costs incurred in
satisfying the performance obligation that is
expected to be recovered.

Provision for future losses are recognised as
soon as it becomes evident that the total costs
expected to be incurred in a contract exceeds the
total expected revenue from that contract.

Revenue from rendering of services is recognised
over time as and when the customer receives the
benefit of the company''s performance and the
Company has an enforceable right to payment for
services transferred. Unbilled revenue represents
value of services performed in accordance with
the contract terms but not billed.

Contract balances:

i) Contract assets
Due from customers

For contracts where the aggregate of contract cost
incurred to date plus recognised profits (or minus
recognised losses as the case may be) exceeds the
progress billing, the surplus is shown as contract
asset and termed as "Due from customers.

ii) 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. The amount of
retention money held by the customers pending
completion of performance milestone is disclosed
as part of contract asset and is reclassified as trade
receivables when it becomes due for payment.

Retention money are specific to project and
generally receivable within 12 months of project
completion.

iii) Contract liabilities
Due to customers :

For contracts where progress billing exceeds the
aggregate of contract costs incurred to-date plus
recognised profits (or minus recognised losses, as
the case may be), the surplus is shown as contract
liability and termed as "Due to customers.

Advances from customer:

Amounts received before the related work is
performed are disclosed in the Balance Sheet as
contract liability and termed as "Advances from
customer.

Supply contracts-sale of goods

Revenue, if any from supply contract is recognized
when the control is transferred to the buyer.

Management consultancy and other services

Revenues from management consultancy and other
services are recognized pro-rata over the period of
the contract as and when services are rendered.

Interest income

Interest income is accrued on a time basis, by
reference to the principal outstanding and at
the effective interest rate applicable. For all debt
instruments measured either at amortised cost or
at fair value through other comprehensive income,
interest income is recorded using the effective
interest rate (EIR). EIR is the rate that exactly
discounts the estimated future cash payments
or receipts over the expected life of the financial
instrument or a shorter period, where appropriate,
to the gross carrying amount of the financial
asset. When calculating the effective interest rate,
the Company estimates the expected cash flows
by considering all the contractual terms of the
financial instrument but does not consider the
expected credit losses. Interest income is included
in other income in the statement of profit and loss.

Dividend

Dividend income is recognised when the Company''s
right to receive the payment is established, which is
generally when shareholders approve the dividend.

d Property, plant and equipment (PPE)

PPE is recognised when it is probable that future
economic benefits associated with the item will flow
to the Company and the cost of the item can be
measured reliably. PPE is stated at original cost net
of tax/duty credits availed, if any, less accumulated
depreciation and cumulative impairment, if any. PPE
acquired on hire purchase basis are recognised at their
cash values. Cost includes professional fees related
to the acquisition of PPE and for qualifying assets,
borrowing costs are capitalised in accordance with the
Company''s accounting policy.

PPE not ready for the intended use on the date of
the Balance Sheet are disclosed as "capital work-in¬
progress”. (Also refer to policy on leases, borrowing
costs, impairment of assets and foreign currency
transactions infra).

Company is capitalising Site Establishments at site.
Site establishments includes temporary structures
build on project site and is used in the process of
construction. Site establishments items and activities
includes excavation , Ground levelling, making
approach road, boundary making, barricading, security
gate, labour colony, store rooms, professional fees for
designing site establishments, monsoon protection
sheds, all electrical lines at project site etc. All material
and manpower cost incurred in building these site
establishments are capitalised at that project site.

The Company identifies and determines cost of
each component/ part of the asset separately, if the
component/ part has a cost which is significant to
the total cost of the asset and has useful life that is
materially different from that of the remaining asset.

e Intangible Assets

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 effect 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 another asset.

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 recognised in the statement of profit
and loss when the asset is derecognised.

f Depreciation and amortisation

Depreciation on Property, plant and equipment is
calculated on a straight-line basis using the rates
arrived at based on the useful lives estimated by the
management.

Intangible assets in the form of computer software are
amortised over their respective individual estimated
useful lives on a straight line basis.

The Company has assessed the following useful
life to depreciate and amortize on its property, plant
and equipment and intangible assets respectively.
The useful life of major assets are as under:

believes that these estimated useful lives are realistic and reflect
fair approximation of the period over which the assets are likely to
be used.

Site Establishments are amortised systematically over
the life of the contract.

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.

g Investment property and depreciation

i) Recognition and measurement:

Investment properties comprises of land and
building are measured initially at cost, including
transaction costs. The cost comprises purchase
price, borrowing cost if capitalization criteria are
met and directly attributable cost of bringing the
asset to its working condition for the intended use.

Subsequent to initial recognition, investment
properties are stated at cost less accumulated
depreciation and accumulated impairment loss,
if any. All other repair and maintenance costs
are recognised in Statement of Profit and Loss
as incurred. Though the Company measures
investment property using cost based measurement

ii) Depreciation

Depreciation on Investment Property is provided
using the straight-line basis method based on the
useful lives specified in Schedule II to the Companies
Act, 2013.The cost comprises purchase price,
borrowing cost if capitalization criteria are met and
directly attributable cost of bringing the asset to its
working condition for the intended use. Subsequent
costs are included in the asset''s carrying amount or
recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits
associated with the item will flow to the Company.
All other repair and maintenance costs are recognised
in Statement of Profit and Loss as incurred.

h Impairment of non-financial assets

As at the end of each accounting year, the Company reviews
the carrying amounts of its non-financial assets to determine
whether there is any indication that those assets have suffered

an impairment loss. If such indication exists, the said assets
are tested for impairment so as to determine the impairment
loss, if any. The intangible assets with indefinite life are tested
for impairment each year. Useful life of the all the assets are
mentioned in note 3(f) -Depreciation and amortisation.

Impairment loss is recognised when the carrying amount
of an asset exceeds its recoverable amount. Recoverable
amount is determined:

(i) in the case of an individual asset, at the higher of the
net selling price and the value in use; and

(ii) in the case of a cash generating unit (a group of assets
that generates identified, independent cash flows),
at the higher of the cash generating unit''s net selling
price and the value in use.

(The amount of value in use is determined as the
present value of estimated future cash flows from the
continuing use of an asset and from its disposal at the
end of its useful life. For this purpose, the discount rate
(pre-tax) is determined based on the weighted average
cost of capital of the Company suitably adjusted for
risks specified to the estimated cash flows of the asset)

For this purpose, a cash generating unit is ascertained
as the smallest identifiable group of assets that
generates cash inflows that are largely independent
of the cash inflows from other assets or groups of
assets. If recoverable amount of an asset (or cash
generating unit) is estimated to be less than its carrying
amount, such deficit is recognised immediately in the
Statement of Profit and Loss as impairment loss and
the carrying amount of the asset (or cash generating
unit) is reduced to its recoverable amount.

When an impairment loss subsequently reverses, the
carrying amount of the asset (or cash generating unit)
is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount
does not exceed the carrying amount that would have
been determined had no impairment loss is recognised
for the asset (or cash generating unit) in prior years.
A reversal of an impairment loss is recognised
immediately in the Statement of Profit and Loss.

i Financial instruments

A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity.

Financial assets

Initial recognition and measurement

All financial assets are recognised initially at fair value
plus, in the case of financial assets not recorded at fair
value through profit or loss, transaction costs that are
attributable to the acquisition of the financial asset.

Subsequent measurement of financial assets:

All recognised financial assets are subsequently
measured in their entirety at either amortised cost or
fair value, depending on the classification financial
assets.

Following are the categories of financial instrument:

a) Financial assets at amortised cost

b) Financial assets at fair value through other
comprehensive income (FVTOCI) with recycling
of cumulative gains and losses (debt instruments)

c) Financial assets designated at fair value through
OCI with no recycling of cumulative gains and
losses upon derecognition (equity instruments)

d) Financial assets at fair value through profit or loss
(FVTPL)

a) Financial assets at amortised cost

Financial assets are subsequently measured at
amortised cost using the effective interest rate
method if these financial assets are held within a
business whose objective is to hold these assets
in order to collect contractual cash flows and the
contractual terms of the financial asset give rise
on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.

b) Financial assets at fair value through other
comprehensive income (FVTOCI) with recycling
of cumulative gains and losses (debt instruments)

Debt financial assets measured at FVTOCI:

Debt instruments are subsequently measured at
fair value through other comprehensive income if
it is held within a business model whose objective

is achieved by both collecting contractual
cash flows and selling financial assets and the
contractual terms of the financial asset give rise
on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.

c) Financial assets designated at fair value through
OCI with no recycling of cumulative gains and
losses upon derecognition (equity instruments) :

On initial recognition, the Company makes
an irrevocable election on an instrument-by¬
instrument basis to present the subsequent
changes in fair value in other comprehensive
income pertaining to investments in equity
instruments, other than equity investment
which are held for trading. Subsequently, they
are measured at fair value with gains and losses
arising from changes in fair value recognised in
other comprehensive income and accumulated in
the ''Reserve for equity instruments through other
comprehensive income''. The cumulative gain or
loss is not reclassified to profit or loss on disposal
of the investments.

d) Financial assets at fair value through profit or loss
(FVTPL)

Investments in equity instruments are classified
as at FVTPL, unless the Company irrevocably
elects on initial recognition to present subsequent
changes in fair value in other comprehensive
income for investments in equity instruments
which are not held for trading. Other financial
assets such as unquoted Mutual funds are
measured at fair value through profit or loss unless
it is measured at amortised cost or at fair value
through other comprehensive income on initial
recognition.

Derecognition

A financial asset (or, where applicable, a part of a
financial asset or part of a group of similar financial
assets) is primarily derecognised (i.e. removed from the
Company''s balance sheet) when:

a) the rights to receive cash flows from the asset
have expired, or

b) the Company has transferred its rights to receive
cash flows from the asset, and

i. the Company has transferred substantially all the risks
and rewards of the asset, or

ii. the Company has neither transferred nor retained
substantially all the risks and rewards of the asset, but
has transferred control of the asset.

When the Company has transferred its rights to
receive cash flows from an asset or has entered into
a pass-through arrangement, it evaluates if and to
what extent it has retained the risks and rewards of
ownership. When it has neither transferred nor retained
substantially all of the risks and rewards of the asset,
nor transferred control of the asset, the Company
continues to recognise the transferred asset to the
extent of the Company''s continuing involvement. In
that case, the Company also recognises an associated
liability. The transferred asset and the associated
liability are measured on a basis that reflects the rights
and obligations that the Company has retained.

Continuing involvement that takes the form of a
guarantee over the transferred asset is measured at
the lower of the original carrying amount of the asset
and the maximum amount of consideration that the
Company could be required to repay.

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 on the following
financial assets and credit risk exposure:

a) Financial assets that are debt instruments, and are
measured at amortised cost e.g., loans, deposits,
trade receivables and bank balance

b) Financial assets that are debt instruments and are
measured at FVTOCI.

c) Financial guarantee contracts which are not
measured as at FVTPL.

The Company follows ''simplified approach'' for
recognition of impairment loss allowance on trade
receivables. The application of simplified approach
does not require the Company to track changes

in credit risk. Rather, it recognises impairment loss
allowance based on lifetime ECLs at each reporting
date, right from its initial recognition.

For recognition of impairment loss on other financial
assets and risk exposure, the Company determines
that whether there has been a significant increase
in the credit risk since initial recognition. If credit risk
has not increased significantly, 12-month ECL is used
to provide for impairment loss. However, if credit risk
has increased significantly, lifetime ECL is used. If, in
a subsequent period, credit quality of the instrument
improves such that there is no longer a significant
increase in credit risk since initial recognition, then the
entity reverts to recognising impairment loss allowance
based on 12-month ECL.

Lifetime ECL are the expected credit losses resulting
from all possible default events over the expected life of
a financial instrument. The 12-month ECL is a portion of
the lifetime ECL which results from default events that
are possible within 12 months after the reporting date.
ECL is the difference between all contractual cash
flows that are due to the Company in accordance
with the contract and all the cash flows that the entity
expects to receive (i.e., all cash shortfalls), discounted
at the original EIR. When estimating the cash flows, an
entity is required to consider:

i) All contractual terms of the financial instrument
(including prepayment, extension, call and similar
options) over the expected life of the financial
instrument. However, in rare cases when the
expected life of the financial instrument cannot
be estimated reliably, then the entity is required to
use the remaining contractual term of the financial
instrument

ii) Cash flows from the sale of collateral held or
other credit enhancements that are integral
to the contractual terms. ECL impairment loss
allowance (or reversal) recognized during the
period is recognized as income/ expense in
the Statement of Profit and Loss . This amount
is reflected under the head ''other expenses'' in
the Statement of Profit and Loss. In the balance
sheet, ECL is presented as an allowance, i.e., as
an integral part of the measurement of those
assets in the balance sheet. The allowance
reduces the net carrying amount. Until the asset

meets write-off criteria, the Company does not
reduce impairment allowance from the gross
carrying amount. Offsetting: Financial assets and
financial liabilities are offset and the net amount is
reported in the standalone balance sheet if there
is a currently enforceable legal right to offset the
recognised amounts and there is an intention to
settle on a net basis, to realise the assets and settle
the liabilities simultaneously.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition,
as financial liabilities at fair value through profit or
loss, loans and borrowings, payables. All financial
liabilities are recognised initially at fair value and,
in the case of loans and borrowings and payables,
net of directly attributable transaction costs.
The Company''s financial liabilities include trade and
other payables, loans and borrowings.

Subsequent measurement

The measurement of financial liabilities depends on
their classification, as described below:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss
include financial liabilities designated upon initial
recognition as at fair value through profit or loss.
Financial liabilities designated upon initial recognition at fair
value through profit or loss are designated as such at the
initial date of recognition and only if the criteria in Ind AS 109
are satisfied. For liabilities designated as FVTPL, fair value
gains/ losses attributable to changes in own credit risk are
recognized in OCI. These gains/ loss are not subsequently
transferred to P&L. However, the Company may transfer the
cumulative gain or loss within equity. All other changes in
fair value of such liability are recognised in the statement
of profit or loss. The Company has not designated any
financial liability as at fair value through profit and loss.

Gains or losses on liabilities held for trading are recognised
in the profit or loss Financial liabilities designated upon
initial recognition at fair value through profit or loss are
designated as such at the initial date of recognition, and
only if the criteria in Ind AS 109 are satisfied. For liabilities
designated as FVTPL, fair value gains/ losses attributable

to changes in own credit risk are recognized in OCI.
These gains/ loss are not subsequently transferred to P&L.
However, the Group may transfer the cumulative gain or
loss within equity. All other changes in fair value of such
liability are recognised in the statement of profit or loss.

Loans and borrowings

This is the category most relevant to the Company.
After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortised cost
using the EIR method. Gains and losses are recognised
in profit or loss when the liabilities are derecognised
as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation is
included as finance costs in the statement of profit and loss.
This category generally applies to borrowings.

De-recognition

A financial liability is derecognised 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 de¬
recognition 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.

Financial guarantee contracts issued by the Company
are those contracts that require a payment to be made
to reimburse the holder for a loss it incurs because the
specified debtor fails to make a payment when due in
accordance with the terms of a debt instrument. Financial
guarantee contracts are recognised initially as a liability at
fair value, adjusted for transaction costs that are directly
attributable to the issuance of the guarantee. Subsequently,
the liability is measured at the higher of the amount of loss
allowance determined as per impairment requirements of
Ind AS 109 and the amount recognised less cumulative
amortisation.

Reclassification of financial assets

The Company determines classification of financial assets
and liabilities on initial recognition. After initial recognition,
no reclassification is made for financial assets which are
equity instruments and financial liabilities. For financial

assets which are debt instruments, a reclassification is
made only if there is a change in the business model for
managing those assets. Changes to the business model
are expected to be infrequent. The Company''s senior
management determines change in the business model as
a result of external or internal changes which are significant
to the Company''s operations. Such changes are evident to
external parties. A change in the business model occurs
when the Company either begins or ceases to perform an
activity that is significant to its operations. If the Company
reclassifies financial assets, it applies the reclassification
prospectively from the reclassification date which is the
first day of the immediately next reporting period following
the change in business model. The Company does not
restate any previously recognised gains, losses (including
impairment gains or losses) or interest.

j Inventories

Inventories are valued at the lower of cost and net
realisable value.

a. Construction material, raw materials, components,
stores and spares are valued at lower of cost and net
realizable value. However material and other items held
for use in the production of inventories are not written
down below cost if the finished products in which
they will be incorporated are expected to be sold at or
above cost. Cost are determined on weighted average
method.

b. Ply and Batten (included in cost of material consumed).
Ply and batten are part of material and supplies used
in the construction process and are hence part of
inventory which are valued at cost less amortisation/
charge based on their usages.

k Foreign currencies

The Company''s financial statements are presented in
INR, 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.

l Employee benefit expenses

Defined Benefit Plan 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 and are not
deferred.

m 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 loss

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.

n Cash and cash equivalent

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.

o Borrowing costs

Borrowing costs consist of interest and other costs that
an entity incurs in connection with the borrowing of
funds including interest expense calculated using the
effective interest method, finance charges in respect
of assets acquired on finance lease. Borrowing cost
also includes exchange differences to the extent
regarded as an adjustment to the borrowing costs.
Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily
takes a substantial period of time to get ready for its
intended use or sale are capitalised as part of the cost of
the asset until such time as the assets are substantially
ready for the intended use or sale. All other borrowing
costs are expensed in the period in which they occur.

p Trade payables:

These amounts represents liabilities for goods and
services provided to the Company prior to the end
of financial year which are unpaid. The amounts
are unsecured and are usually paid within 30 to 180
days of recognition other than usance letter of credit.
Trade payables are presented as current financial
liabilities.The Company enters into deferred payment

arrangements (acceptances) for purchase of raw
materials under Letter of Credit (LCs) under non¬
fund based working capital facility approved by Banks
for the Company. Considering these arrangements
are majorly for raw materials with a maturity ranging
from 90 to 180 days, the economic substance of the
transaction is determined to be operating in nature
and these are recognised as Acceptances under Trade
payables. Interest borne by the company on such
arrangements is accounted as finance cost.

q 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 assets.

i) Right-of-use assets

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 Building which is 3 to 5 years.

The right-of-use assets are also subject to impairment.
Refer to the accounting policies in note (h) Impairment
of non-financial assets.

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 underlying asset.
The Company''s lease liabilities are included in Interest¬
bearing loans and borrowings (see note (n) ).

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.

---

Mar 31, 2018

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a Current versus non-current classification

The Company presents assets and liabilities in the standalone 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 normal operating cycle,

ii. It is held primarily for the purpose of trading,

iii. It is due to be settled within twelve months after the reporting period, or

iv. There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period

All other liabilities are classified as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.

b 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 observable

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 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.

c Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.

For Construction Contract

a. For Engineering, Procurement and Construction (‘EPC’) contracts, the work item rates are fixed and subject to price escalation clauses.

b. Revenues are recognised on a percentage of completion method measured on the basis of stage of completion which is as per joint surveys of work done. Work done represents actual work executed during the year, which is billable to the customers.

c. Profit is recognised in proportion to the value of work done (measured by the stage of completion) when the outcome of the contract can be estimated reliably. When the total contract cost is estimated to exceed total revenues from the contract, the loss is recognized immediately.

d. Amounts due in respect of price escalation, cost compensations and/ or variation in contract work are recognised as revenue only if the contract allows for such price escalation, cost compensations and/ or variation and/or there is evidence that the customer has accepted it and are capable of being reliably measured.

Accounting of Supply Contracts-Sale of goods

Revenue from supply contract is recognized when the substantial risk and rewards of ownership is transferred to the buyer.

Management Consultancy & other services

Revenues from Management consultancy & other services are recognized pro-rata over the period of the contract as and when services are rendered.

Interest

For all debt instruments measured either at amortised cost or at fair value through other comprehensive income, interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses. Interest income is included in other income in the statement of profit and loss.

Dividend

Dividend income is recognised when the Company’s right to receive the payment is established, which is generally when shareholders approve the dividend.

d Property, plant and equipment

On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as at March 31, 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment as on April 1, 2016.

Property, plant and equipment, capital work in progress are stated at historical cost, net of 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.

Plant and equipment received from customers:

Contributions by customers of items of property, plant and equipment (such as moulds, formworks) received on or after 1 April 2016, which require an obligation to supply goods to the customer in the future, are recognised at the fair value when the Company has control of the item. A corresponding credit to deferred revenue is made. The Company may agree to deliver one or more services in exchange for the transferred item of property, plant and equipment. The Company identifies the separately identifiable services included in the agreement.

If only one service is identified, the Company recognises revenue when the service is performed.

If an ongoing service is identified as part of the agreement, the period over which revenue is recognised for that service is generally determined by the terms of the agreement with the customer. If the agreement does not specify a period, the revenue is recognised over a period no longer than the useful life of the transferred asset used to provide the ongoing service.

If more than one separately identifiable service is identified, the fair value of the total consideration received or receivable for the agreement will be allocated to each service and the recognition criteria of Ind AS 18 are then applied to each service.

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.

The Company identifies and determines cost of each component/ part of the asset separately, if the component/ part has a cost which is significant to the total cost of the asset and has useful life that is materially different from that of the remaining asset.

e Intangible Assets

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 another asset.

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 recognised in the statement of profit and loss when the asset is derecognised.

f Depreciation & Amortisation

Depreciation on Property, plant and equipment is calculated on astraight-line basis using the rates arrived at based on the useful lives estimated by the management.

Intangible assets in the form of computer software are amortised over their respective individual estimated useful lives on a straight line basis.

The Company has assessed the following useful life to depreciate and amortize on its property, plant and equipment and intangible assets respectively.

* Company has used useful life other than as indicated in Schedule II which is as per management estimate, supported by independent assessment by professionals. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.

Site Establishment are amortised over the life of the projects.

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.

g Impairment of Non-financial assets

As at the end of each accounting year, the Company reviews the carrying amounts of its PPE, intangible assets and investments in subsidiary companies to determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, the said assets are tested for impairment so as to determine the impairment loss, if any. The intangible assets with indefinite life are tested for impairment each year.

Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined:

(i) in the case of an individual asset, at the higher of the net selling price and the value in use; and

(ii) in the case of a cash generating unit (a group of assets that generates identified, independent cash flows), at the higher of the cash generating unit’s net selling price and the value in use.

(The amount of value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its disposal at the end of its useful life. For this purpose, the discount rate (pre-tax) is determined based on the weighted average cost of capital of the company suitably adjusted for risks specified to the estimated cash flows of the asset).

For this purpose, a cash generating unit is ascertained as the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. If recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, such deficit is recognised immediately in the Statement of Profit and Loss as impairment loss and the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount.

When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss is recognised for the asset (or cash generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the Statement of Profit and Loss.

h Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial assets Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classfied in four categories:

a) Debt instruments at amortised cost.

b) Debt instruments at fair value through other comprehensive income (FVTOCI)

c) Debt instruments, derivatives and equity instruments at fair value through profit and loss (FVTPL)

d) Equity instruments measured at fair value through other comprehensive income (FVOCI) Debt instruments at amortised cost

Debt instruments at FVTOCI

A ‘debt instrument’ is measured at the amortised cost if both the following conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

b) 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.

This category is the most relevant to the Company. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. This category generally applies to trade receivables, other receivables and loans.

Debt instrument at FVTOCI

A ‘debt instrument’ is classified as at the FVTOCI if both of the following criteria are met:

a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and

b) The asset’s contractual cash flows represent SPPI.

Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However, the company recognizes interest income and foreign exchange gain or loss in the P&L. On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to P&L. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.

Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)

FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.

In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch’). The company has not designated any debt instrument as at FVTPL.

Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit and loss.

Equity investments

All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognised by an acquirer in a business combination to which Ind AS103 applies are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable. If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the Company’s balance sheet) when:

a) the rights to receive cash flows from the asset have expired, or

b) the Company has transferred its rights to receive cash flows from the asset, and

i. the Company has transferred substantially all the risks and rewards of the asset, or

ii. the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

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 on the following financial assets and credit risk exposure:

a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, deposits, trade receivables and bank balance

b) Financial assets that are debt instruments and are measured at FVTOCI.

c) Financial guarantee contracts which are not measured as at FVTPL.

The Company follows ‘simplified approach’ for recognition of impairment loss allowance on trade receivables. The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition. For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.

Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.

ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required to consider:

i) All contractual terms of the financial instrument (including prepayment, extension, call and similar options) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument

ii) Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the statement of profit and loss (P&L). This amount is reflected under the head ‘other expenses’ in the P&L. In the balance sheet, ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the Company does not reduce impairment allowance from the gross carrying amount.

Offsetting: Financial assets and financial liabilities are offset and the net amount is reported in the standalone balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

Financial liabilities Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Company’s financial liabilities include trade and other payables, loans and borrowings.”

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Loans and borrowings

This is the category most relevant to the Company. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.

This category generally applies to borrowings.

Financial guarantee contracts

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised less cumulative amortisation.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/ loss are not subsequently transferred to P&L. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit or loss.

The Company has not designated any financial liability as at fair value through profit and loss.”

De-recongnition

A financial liability is derecognised 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.

Reclassification of financial assets

The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Company’s senior management determines change in the business model as a result of external or internal changes which are significant to the Company’s operations. Such changes are evident to external parties. A change in the business model occurs when the Company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model.

The Company does not restate any previously recognised gains, losses (including impairment gains or losses) or interest.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

i Inventories

Inventories are valued at the lower of cost and net realisable value.

a. Construction material, raw materials, components, stores and spares are valued at lower of cost and net realizable value. However material and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost are determined on weighted average method.

b. Ply and Batten (included in construction work in progress): Cost less amortisation/charge based on their usages.

c. Construction Work-in-progress (others) consists of direct construction cost and indirect construction cost to the extent to which the expenditure is related to the construction or incidental thereto. Construction Work-in-progress is valued on the basis of technical assessment.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

j Foreign currencies

The Company’s financial statements are presented in INR, which is also the parent company’s functional currency. For each entity the Company determines the functional currency and items included in the financial statements of each entity are measured using that functional currency. The Company uses the direct method of consolidation and on disposal of a foreign operation the gain or loss that is reclassified to profit or loss reflects the amount that arises from using this method.

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 translation of long term foreign currency monetary items recognised in the financial statements before the beginning of the first Ind AS financial reporting period in respect of which the Company has elected to recognise such exchange differences in equity or as part of cost of assets as allowed under Ind AS 101-”First time adoption of Indian

Accounting Standard” are recognised directly in equity or added/ deducted to/ from the cost of assets as the case may be. Such exchange differences recognised in equity or as part of cost of assets is recognised in the statement of profit and loss on a systematic basis. Exchange differences arising on the retranslation or settlement of other monetary items are included in the statement of profit and loss for the period.

k Retirement and other employee benefits

Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme as expenditure, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre payment will lead to, for example, a reduction in future payment or a cash refund.

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 profit and loss.

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.

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.

I 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 Income 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 loss

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 reassessed 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.”

m Cash and Cash Equivalent

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.”

n Borrowing costs

Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds including interest expense calculated using the effective interest method, finance charges in respect of assets acquired on finance lease. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset until such time as the assets are substantially ready for the intended use or sale. All other borrowing costs are expensed in the period in which they occur.”

o Leases

The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.

For arrangements entered into prior to 1 April 2016, the Company has determined whether the arrangement contain lease on the basis of facts and circumstances existing on the date of transition.”

Where the Company is lessee

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term.

Where the Company is the lessor

Leases in which the Company does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Assets subject to operating leases are included in property, plant and equipment. Lease income on an operating lease is recognized in the statement of profit and loss on a straight-line basis over the lease term. Costs, including depreciation, are recognized as an expense in the statement of profit and loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognized immediately in the Statement of Profit and Loss.

p Provisions and Contingencies

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a 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. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain.

The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

A provision for onerous contracts is recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the standalone financial statements.

Provisions and contingent liability are reviewed at each balance sheet.

q Accounting for Proposed Dividend

The Company recognises a liability to make cash distributions to equity holders of the Company when the distribution is authorised and the distribution is no longer at the discretion of the Company. Final dividends on shares are recorded as a liability on the date of approval by the shareholders and interim dividends are recorded as a liability on the date of declaration by the Company’s Board of Directors.