Accounting Policies of Shah Construction Company Ltd. Company

Mar 31, 2024

(2) BASIS OF PREPARATION AND PRESENTATION OF FINANCIAL STATEMENT AND SIGNIFICANT ACCOUNTING. POLICIES
(2)fa1 BASIS OF PREPARATION AND PRESENTATION
Compliance with Ind AS

The financial statements of the company comply in all material aspects with Indian Accounting Standards(Ind AS) AS specified under section 133 of
the Companies Act,2013, Companies (Indian Accounting Standards) Rules ,2015 and other relevant provisions of the Act.

Historical cost convention

The financial statements of the company have been prepared on an accrual and going concern basis. The financial statements have been prepared on
historical cost basis, except for certain assets and liabilities that is measured at fair value as states in subsequent policies.

(21fb) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Property , plant and equipment

Property, plant and equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment
losses, if any. Such cost includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its working condition for
its intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.

Depreciation methods, estimated useful lives and residual value:

The depreciation has been provided on the written down value basis in accordance with the requirement of the schedule-II of the companies
Act,2013.

Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted
prospectively, if appropriate.

Gains and losses on disposals are determined by comparing proceeds with carrying amount . These are included in profit and loss within other
expenses or other income , as applicable.

Impairment of non-financial assets - property, plant and equipment and intangible assets

An assets is treated as impaired when carrying cost of assets exceeds its recoverable value. The Company assesses at each reporting date as to
whether there is any indication that any property, plant and equipment and intangible assets or group of assets, called cash generating units (CGU)
may be impaired. If any such indication exists the recoverable amount of an asset or CGU is estimated to determine the extent of impairment, if any.
When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the CGU to
which the asset belongs. An Impairment loss is recognised in statement of Profit and Loss in the year in which an assets are identified as impaired.

ii) Revenue Recognition:

Revenue is measured at the fair value of the consideration received or receivable.

The Company recognizes revenue from sale of goods when:

(a) the Company has transferred to the buyer the significant risk and reward of ownership of goods

(b) the Company retains neither continuing managerial involvement to the degree usually associated with the ownership nor effective control over
the goods sold.

(c) the amount of revenue can be reliably measured

(d) it is probable that future economic benefits associated with the transaction will flow to the Company

Revenue from rendering of services is recognised when the performance of agreed contractual task has been completed.

In respect of Real Estate Development activity, the company is following Project completion method of accounting for revenue recognisation in order
to depict the reasonable picture of the project. Revenue is recognized when Project is completed, Occupancy Certificate (OC) is obtain from the
Municipal authority and possession along with risk and reward in the property is transferred to the prospective buyer.

iii) Employee Benefit Schemes
Short-term benefits:

Employee benefits payable within twelve months of receiving employee services are classified as short-term employee benefits. These benefits
include salaries and wages, bonus and exgratia.

Post -Employment Benefits:

Gratuity:

The company provides defined benefit plan to its employees and the gratuity liability with respect to the same is computed on the basis of an
actuarial valuation by an actuary appointed for the purpose at the end of each financial year.

iii) Inventories:

Stores are valued at lower of cost or net realisable value.

In respect of Real Estate Development activity of the company ,the work in progress consist of the cost of materials, labour charges and other
incidental expenses for the project till the date of the Balance sheet.

In view of the project completion method of accounting followed by the company, work in progress along with the booking amount received (if any)
carried forward to subsequent year.

iv) Trade Receivables:

Trade Receivables are stated at book value after making provisions for doubtful debts. Management considers that the book value approximates fair
value. Judgements are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those
receivables is required. The provision for bad and doubtful debts is based on specific risk assessment and reference to past default experience.

v) Financial Instruments:

Financial Assets

Initial recognition and measurement

All financial assets and liabilities are initially recognized at fair value. Transaction costs that are directly attributable to the acquisition or issue of
financial assets and financial liabilities, which are not at fair value through profit or loss, are adjusted to the fair value on initial recognition. Purchase
and sale of financial assets are recognised using trade date accounting.

Subsequent measurement

Financial assets carried at amortised cost (AC)

A financial asset is measured at amortised cost if it is held within a business model whose objective is to hold the asset 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.

Financial assets at fair value through other comprehensive income (FVTOCI)

A financial asset is measured at FVTOCI 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.

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

A financial asset which is not classified in any of the above categories are measured at FVTPL.

Impairment of financial assets

In accordance with Ind AS 109, the Company uses ''Expected Credit Loss'' (ECL) model, for evaluating impairment of financial assets other than those
measured at fair value through profit and loss (FVTPL).

For trade receivables Company applies ‘simplified approach'' which requires expected lifetime losses to be recognised from initial recognition of the
receivables. The Company uses historical default rates to determine impairment loss on the portfolio of trade receivables. At every reporting date
these historical default rates are reviewed and changes in the forward looking estimates are analysed.

For other assets, the Company uses 12 month ECL to provide for impairment loss where there is no significant increase in credit risk. If there is
significant increase in credit risk full lifetime ECL is used.

Financial liabilities

Initial recognition and measurement

All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost. Fees of recurring nature are directly
recognised in the Statement of Profit and Loss as finance cost.

Subsequent measurement

Financial liabilities are carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the
balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

Derecognition of financial instruments

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial
asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the
Company''s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.

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Mar 31, 2013

A) BASIS OF PREPARATION:

The Company follows the Mercantile System of Accounting and recognizes Income and Expenditure on accrual basis except (i) Gratuity and bonus are accounted on payment basis and (ii) Rates of Foreign Exchange are adopted as on 30.06.84 in respect of current assets and current liabilities. Revenue recognition is on the basis of periodical bills made as per contract terms. In respect of other items, accrual basis is followed based on reasonable certainty of the receipt of income. The accounts are prepared on Historical cost basis and as going concern. Accounting policies not referred to otherwise are consistent with generally accepted accounting principles and comply in all material aspects with the accounting standards notifies under section 211(3C) and other relevant provisions of the companies act, 1956

b) USE OF ESTIMATES:

The preparation of Financial Statements requires estimates and assumptions to be made that affect the reported amount of Assets and Liabilities on the date of the Financial Statements and the reported amount of revenue and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known / materialised.

c) FIXED ASSETS & DEPRECIATION:

Fixed Assets are stated at their original costs adjusted by revaluation of certain Land and Buildings less accumulated depreciation. In respect of Fixed Assets purchased in Foreign currency, these have been stated at the values prevailing at the time of purchase.

Depreciation is provided at the rates and in the manner prescribed in Schedule XIV to the Companies Act,1956.

d) The Company makes full provision for all known expenses and liabilities. Profit on Sale of long term assets is credited to Capital Reserve Account.

e) Earnings/losses on bills under Arbitration are adjusted as and when the awards in respect thereof are given and approved.

f) INVESTMENTS:

Long term investments are stated at Cost. Current investments are carried at lower of Cost & Market value.

g) FOREIGN CURRENCY TRANSACTIONS:

i) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction.

ii) Monetary items denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction, such difference having been recognised over the life of the contract.

iii) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the profit and loss account. Adjustments arising from exchange rate variations attributable to the fixed assets are capitalised.

iv) The Company has valued its Current Assets, Current Liabilities and loans in foreign Currency at the rate prevailing as on 30.06.1984. The rates as on 31.03.2013 are not available due to United Nations Embargo.

h) INVENTORIES :

Stores are valued at lower of cost or market value. Work-in-Progress is valued at direct cost incurred at every construction site. No Head office overheads are added thereon.

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Mar 31, 2012

A) BASIS OF PREPARATION:

The Company follows the Mercantile System of Accounting and recognizes Income and Expenditure on accrual basis except (i) Gratuity and bonus are accounted on payment basis and (ii) Rates of Foreign Exchange are adopted as on 30.06.84 in respect of current assets and current liabilities. Revenue recognition is on the basis of periodical bills made as per contract terms. In respect of other items' accrual basis is followed based on reasonable certainty of the receipt of income. The accounts are prepared on Historical cost basis and as going concern. Accounting policies not referred to otherwise are consistent with generally accepted accounting principles and comply in all material aspects with the accounting standards notifies under section 211(3 C) and other relevant provisions of the companies act' 1956

b) USE OF ESTIMATES:

The preparation of Financial Statements requires estimates and assumptions to be made that affect the reported amount of Assets and Liabilities on the date of the Financial Statements and the reported amount of revenue and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known / materialised.

c) FIXED ASSETS & DEPRECIATION:

Fixed Assets are stated at their original costs adjusted by revaluation of certain Land and Buildings less accumulated depreciation. In respect of Fixed Assets purchased in Foreign currency' these have been stated at the values prevailing at the time of purchase.

Depreciation is provided at the rates and in the manner prescribed in Schedule XrV to the Companies Act' 1956.

d) The Company makes full provision for all known expenses and liabilities. Profit on Sale of long term assets is credited to Capital Reserve Account.

e) Earnings/losses on bills under Arbitration are adjusted as and when the awards in respect thereof are given and approved.

f) INVESTMENTS:

Long term investments are stated at Cost. Current investments are carried at lower of Cost & Market value.

g) FOREIGN CURRENCY TRANSACTIONS:

i) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction.

ii) Monetary items denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end rates and those covered by forward exchange contracts are translated at the rate ruling at the date of transaction as increased or decreased by the proportionate difference between the forward rate and exchange rate on the date of transaction' such difference having been recognised over the life of the contract.

iii) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the profit and loss account. Adjustments arising from exchange rate variations attributable to the fixed assets are capitalised.

iv) The Company has valued its Current Assets' Current Liabilities and loans in foreign Currency at the rate prevailing as on 30.06.1984. The rates as on 31.03.2012 are not available due to United Nations Embargo.

h) INVENTORIES;

Stores are valued at lower of cost or market value. Work-in-Progress is valued at direct cost incurred at every construction site. No Head office overheads are added thereon.

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Mar 31, 2010

1. The Company follows the Mercantile System of Accounting and recognises Income and Expenditure on accrual basis except (i) Gratuity and bonus are accounted on payment basis (ii) Provisions of depreciation made for the year as per provisions of Schedule xiv of the Companies Act, 1956 (iii) Rates of Foreign Exchange are adopted as on 30.06.84 in respect of current assets and current liabilities Revenue recognition is on the basis of periodical bills made as per contract terms. In respect of other items, accrual basis is followed based on reasonable certainty of the receipt of income. The accounts are prepared on Historical cost basis and as going concern. Accounting policies not referred to otherwise are consistent with generally accepted accounting principles.

2. Fixed Assets are stated at their original costs adjusted by revaluation of certain Land and Buildings. In respect of Fixed Assets purchased in Foreign currency, these have been stated at the values prevailing at the time of purchase.

3. The Company makes full provision for all known expenses and liabilities but does not take into account expected future profits/losses in respect of on going jobs. However, Accounting Standards requires that the provision for anticipated profit/losses if any on contracts etc. must be provided for Profit on Sale of long term assets is credited to Capital Reserve Account.

4. Earnings/losses on bills under Arbitration are adjusted as and when the awards in respect there of are given and approved.

5. INVESTMENTS:

Investments are stated at cost.

6. INVENTORIES:

Stores are valued at lower of cost or market value. Work-in-Progress is valued at direct cost incurred at every construction site. No Head office overheads are added thereon.