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Accounting Policies of Tarmat Ltd. Company
Mar 31, 2024
1. Corporate Information :
Tarmat limited was established in year 1986 Mr. Jerry Varghese. The company is specialized in Construction of Airfield and National / state highways all over india. The Company is currently executing various Runway, Parking Bays, Taxi Track related work at Mumbai, Cochin, Trichy and Tuticorn Airport, and it is also executing National Highway work at Mizoram and Jammu.
Tarmat have completed the prestigious works of Resurfacing of Runways at Mumbai International Airport Limited and Delhi International Airport
The Company had its IPO in 2007 and got listed in BSE and NSE. The present paid up capital of the company is Rs 21314248, of which 33.25 is held by the promotors.
The Financial Statement of the company have been prepared in accordance with indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015 (as ameded from time to time) and presentation requirements of Division II of Schedule III of the Companies Act,2013 (IND As complaint Schedule III) as applicable to the Financial Statement. These financial statement have beeen approved for issue by the Board of Directors at their meeting held on May 30, 2024
These Standaline Financial Statement have been prepared on as historical cost basis, except for certain assets and liabilities which have been measured at fair values (refere accounting policy regarding financial instruments). The Standalone Financial Statement are presented in INR and all value are rounded off to the nearest lakhs with 2 decimal places except which otherwise indicated.
The company has prepared the financial statements on the basis that it will contine to operate as as going concern.
The standalone financial statement provide comparative information in respect of the previous period. Accounting polices have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
3. SIGNIFICANT ACCOUNTING POLICIES3.1 Current and Non - Current Classification
The company presents assets and liabilities in the balance sheet based on current/non current classification. An asset is treated as current when it is:
⢠Expected to be realised or intended to be sold or consumed in normal operation cycle.
⢠Held primarily for the purpose of trading
⢠Expected to be realised within twelve months after the reporint period, or
⢠Cash or Cash equivalent unless restricted from being exchanged or used to settle a liability for atleast twelve months after the reporting period.
All othe assets are classified as non - current
A liability is current when :
⢠It is expected to be settled in normal operating Cylce.
⢠It is held primarily for the purpose of trading
⢠It is due to be settled within twelve months after the reporing period, or
⢠There is no unconditional right to defer the settlement of the liability for at least twelve months after the reprorting period.
The company classifies all other liabilities as non current.
Deferred tax assets and liabilities are classified as non current assets and liabilities.
The operating cycle is the time between the acquisiton of assets for processing and their realisation in cash and cash equivalents.
The company has identified twelve month as its operating cycle.
Statement of compliance
The Companyâs financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 and the Indian Accounting Standards (âInd ASâ) notified under the Companies (Indian Accounting Standards) Rules, 2015 and amendments thereof issued by Ministry of Corporate Affairs in exercise of the powers conferred by section 133 of the Companies Act, 2013. In addition, the guidance notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) are also applied except where compliance with other statutory promulgations require a different treatment.
The company measures financial instruments at fair value at each balance sheet date.
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:
⢠In the principal market for the asset or liability, or
⢠In the absence of a principal market, in the most advantageous market for the assets 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 best economic interest.
A fair value measurement of non financial asset takes into account a market participant''s ability to generate economics benefitsby using the asset in its highest and best use or by selling it to another market participant that would use the asset in tis highest and best use.
The company uses valuation techniques that are appropriate in the circumstances and for which sufficient date are available to measure fair value, maximising the use of revevant 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 Statement are categorised within the fair value hierarchy,described as follow, 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 liabilites
⢠Level 2 - Valuation techniques for which the lowest level input that is significatnt to the fair value measurement is directly or indirectily 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 recurring basis, the Company determines whether tranfers have occureed between levles in the hierarchy by re-assessing categorisation (based on the Lowest level input that is significatnt 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 risk of the assets or liability and the level of the fair value hierarchy as explained above.
The Company determines the policies and procedures for both recurring fair value measurement, such as unquoted financial assets measured at fair value, and for non-recurring measurement, such as assets held for sale in discountinued operations. If any.
External valuers are involved for valution of significant assets, such as properties and unquoted financial assets, and significant liabilities such as contingent consideration. Involment of external valuers is decided upon annually by the management after discussion with and approval by the Company''s Audit Committee. Selection criteria include market knowledger, reputation, independence and whether professional standards are maintained.
At each reporting date, the management analyses the movements in the values of assets and liabilities which are required to be remeasured or re assesed as per the Companies accounting policies. For this analysis, the management verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computaion on contracts and other relevant documents.
3.3 Property, Plant and Equipment
Property, plant and equipment (PPE) are carried at cost of acquisiton, on current cost basis less accumulated depreciation and accumulated impairment losses, if any Cost comprises purchase price and directly attributable cost of bringing the asset to its working condition for the intened use. 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 and borrowing costs for long -term construciton projects if the recognition criteria are met. Machinery spares which can be used only in connection with an item of property, plant and equipment and whose use is expected to be irregular are capitalised and depreciated over the useful life of principal item of the relevant assets. When signifiant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them seprately based on their specific useful lives. Likewise, when a major inspection is perfomed, 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 cost are recognised in Statement of Profit & Loss as incurred. The present value of the expected cost for the decommissioning of an asset after its use included in the cost of the respective asset if the recognition criteria for a provision are met.
Depreciation is provided on written down value method over the useful lives of property, plant and equipment as estimated by management. Pursuant to Notification of Schedule II of the Companies Act,2013 depreciation is provided prorata basis on written down value method at the rates determined based on estimated useful lives of property, plant and equipment where applicable. Prescribed under Schedule II to the Companies Act 2013.
No depreciation is provided on freehold land.
An item of property, plant and equipment and any significatnt 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 assets is derecognised.
Capital Work in Progress
Cost of assets not ready for intended use, as the balance sheet date, is shown as capital work in progress. Capital Work in Progress is stated at cost, net of accumulated impairment loss, if any
Intangible Assets are recognized only when future economic benefits arising out of the assets flow to enterpriese and are amortised over their useful life ranging from 3 to 5 year. Intangible assets acquired separately are measured on initial recongnition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses, if any Internaly generated intangibles, excluding capitalised development cost, are not capitalised and the related expenditure is reflected in Statement of Profit and Loss in the period in whcih the expenditure is incured.
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 asse with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or expected pattern of consumption fo 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 recongnised in the statment of profit and loss unless such expenditure froms part of carrying value of another asset
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 losess 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 recognised in the Statement of Profit and Loss when the asset is drecongnised
3.5 Revenue Recognition Revenue from Contracts:
(i) Income from construction contracts is recognized on the basis of work certified in accordance with percentage completion method. All other income and expenditure are recognized and accounted for on an accrual basis. Losses on contracts are fully accounted for as and when incurred.
(ii) Hire Charges is accounted for as per terms of the lease agreement.
Dividend Income
(iii) Dividend Income is accounted for when the right to receive has been established.
Interest Income
(iv) Interest income on deposits is recognized on accrual basis
The stock of stores, spares and embedded goods and fuel is valued at cost (weighted average basis), or net realizable value whichever is lower. Cost includes cost of purchase and costs incurred in bringing the inventories to their present location and conditions. Cost is determined on weighted average basis.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to makt the sale.
Work in Progress is valued at the contract rates and site mobilization expenditure of incomplete contracts is stated at cost. All the inventories of stores, spares and embedded goods and fuel and work in progress have been physically verified by the Management at the year end.
Investments which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as Long Term Investments. Current Investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long Term Investments are measured at Cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investment.
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 (known as Qualifying assets) or sale are capitalised as part of the cost of the asset.Borrowing Costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the borrowing costs. Discount on Commercial papers is amortised over the tenor of the underlying instrument. Borrowing Costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date the asset is ready for its intended use is added to the cost of the assets. Capitalisation of Borrowing Costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted All other borrowing costs are expensed in the period they occur.
Current Income Tax
Current income tax assets and liabilities are measured at the amount expected to be recovered or paid to the taxation authorities in accordance with the Income-tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the Company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively 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. The Company shall reflect the effect of uncertainty for each uncertain tax treatment by using either most likely method or expected value method, depending on which method predicts better resolution fo the treatment.
Deferred tax is provided using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Standalone Financial Statements at the reporting date. Deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax loss).
Deferred tax liabilities are recognised for all taxable temporary differences, except:
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.
In respect of taxable temporary differences associated with investments in subsidiaries 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 and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses
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.
In assessing the recoverability of deferred tax assets, the Company relies on the same forecast assumptions used elsewhere in the financial statements and in other management reports, which, among other things, reflect the potential impact of climate-related development on the business, such as increased cost of production as a result of measures to reduce carbon emission.
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 assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in Statement of Profit and Loss, except to the extent that it relates to items recognised in Other Comprehensive Income (OCI) or directly in equity. In this case, the tax is also recognised in OCI or directly in equity, respectively.
Goods and Service tax paid on acquisition of assets or on incurring expenses
⢠When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable.
⢠When receivables and payables are stated with the amount of tax included, the net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet
i. Provision for current tax is made after taking into consideration benefits admissible under the provision of the Income Tax Act, 1961.
ii. Current Tax is calculated in accordance with the tax laws applicable to the current financial year.
For Financial Year 2021-22 the company has exercised option to pay income tax under the provisions of Section 115BAA of the Income tax Act, 1961 and as such provisions for payment of Minimum Alternate tax (MAT) is not applicable to the company.
The company proposes to pay Tax under the Provisions of Section 115BAA of Income Tax Act 1961.
iii. Advance tax and provision for current income, if any, are presented in the balance sheet after setting off advance tax paid and income tax provision arising in the same tax jurisdiction.
3.10 Foreign Exchange Transaction -
Items included in the Standalone Financial Statements of the Company are measured using the currency of the primary economic environment in which the Company operates (''the functional currency''). The Standalone Financial Statements are presented in Indian Rupee (INR), which is the Company''s functional and presentation currency.
Transactions in foreign currencies are initially recorded by the Company at the functional currency spot rates (i.e., INR) at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date.
Foreign exchange gains and losses resulting from the settlement of transactions in foreign currencies and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognised in Statement of Profit and Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in OCI or Statement of Profit and Loss are also recognised in OCI or Statement of Profit and Loss, respectively).
In determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which the Company initially recognises the nonmonetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, the Company determines the transaction date for each payment or receipt of advance consideration.
Employee Retirement Benefits -
3.11 Short-term Employee Benefits
Liabilities for short-term employee benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees'' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as ''Employee Benefits Payable'' within ''Other Financial Liabilities'' in the Balance Sheet.
Post-employment Benefits:
a. Superannuation
Contribution made to Superannuation Fund for certain of employees are recognised in the Statement of Profit and Loss as and when services are rendered by employees. The Company has no liability for future Superannuation Fund benefits other than its contribution.
Contributions in respect of Employees who are not covered by Companyâs Employees Provident Fund Trust are made to the Fund administered by the Regional Provident Fund Commissioner as per the provisions of Employeesâ Provident Fund and Miscellaneous Provisions Act, 1952 and are charged to Statement of Profit and Loss as and when services are rendered by employees. The Company has no obligation other than the contribution payable to the Regional Provident fund.
a. Gratuity
Every employee who has completed five years or more of service is entitled to Gratuity as per the provisions of The Payment of Gratuity Act, 1972. Retirement Gratuity for employees, is funded through a scheme of Life Insurance Corporation of India. The costs of providing benefits under this plan are determined on the basis of actuarial valuation using the projected unit credit method at each year-end. Actuarial gains/losses are immediately recognised in retained earnings through Other Comprehensive Income in the period in which they occur. Re-measurements are not re-classified to Statement of Profit and Loss in subsequent periods. The excess/shortfall in the fair value of the plan assets over the present value of the obligation calculated as per actuarial methods as at balance sheet dates is recognised as a gain / loss in the Statement of Profit and Loss. Any asset arising out of this calculation is limited to the past service cost plus the present value of available refunds and reduction in future contributions.
In respect of the employees covered by the Companyâs Employee Provident Fund Trust in Point I b above, contributions to the Companyâs Employees Provident Fund Trust (administered by the Company as per the provisions of Employees'' Provident Fund and Miscellaneous Provisions Act, 1952) are made in accordance with the fund rules. The interest rate payable to the beneficiaries every year is being notified by the Government
In the case of contribution to the Trust, the Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate and recognizes such obligation, if any, determined based on an actuarial valuation as at the balance sheet date, as an expense.
3.12 Impairment of non- financial assets
The Company assesses at each reporting date whether there is an indication that an asset (including goodwill) may be impaired. If any indication exists, the Company estimates the assetâs recoverable amount. An assetâs recoverable amount is the higher of an assetâs or cash-generating unitâs (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.
For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer exist or have decreased. If such indication exists, the Company estimates the assetâs or CGUâs recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the assetâs recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the statement of profit and loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.
Intangible assets with indefinite useful lives are tested for impairment annually at the CGU level, as appropriate, and when circumstances indicate that the carrying value may be impaired.
The Company assesses where climate risks could have a significant impact, such as the introduction of emission-reduction legislation that may increase manufacturing costs. These risks in relation to climate-related matters are included as key assumptions where they materially impact the measure of recoverable amount. These assumptions have been included in the cash-flow forecasts in assessing value-in-use amounts.
The company assesses at each balance sheet date whether there is any indication that an assets may be impaired. If any such indication exists, the company estimates the recoverable amount of the assets. If such recoverable amount of the assets or the recoverable amount of the cash generating unit to which the asset belong is less than its carrying amount, the carrying amount is reduced to its recoverable amount. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.
Basic Earnings Per Share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares that have changed the number of equity shares outstanding, without a corresponding change in resources.
Basic EPS is computed using the weighted average number of equity shares outstanding during the year. Provision, Contingent Liabilities and contingent assets -
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
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 present value of lease payments to be made over the lease term, 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 the assets, as follows:
⢠Leasehold Land and Building 2 years to 99 years
If ownership of the leased asset transfers to the company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
The right-of-use assets are also subject to impairment. Refer to the accounting policies in section 3.12 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 Companyâs lease liabilities are included in Note
iii) Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition exemption to its short-term leases of properties taken on rent (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 has not opted for low-value assets recognition exemption. Lease payments on short-term leases are recognised as expense on a straight-line basis over the lease term.
Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Rental income from operating lease is recognised on a straightline basis over the term of the relevant lease Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.
3.15 Provision and Contingencies
A provision is recognized when the Company has a present obligation (legal or constructive) 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. The expense relating to a provision is presented in the Statement of Profit and Loss.
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.
If the Company has a contract that is onerous, the present obligation under the contract is recognised and measured as a provision However, before a separate provision for an onerous contract is established, the Company recognises any impairment loss that has occurred on assets dedicated to that contract.
An onerous contract is a contract under which the unavoidable costs (i.e., the costs that the Company cannot avoid because it has the contract) of meeting the obligations under the contract exceed the economic benefits expected to be received under it. The unavoidable costs under a contract reflect the least net cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or penalties arising from failure to fulfil it.
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. The Company does not recognize a contingent liability but discloses its existence in the Standalone Financial Statements.
3.16 Cash and Cash Equivalants
Cash and cash equivalent for the purpose of presentation in cash flow statement and in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less that are readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value
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.
A Financial Assets1. Intial 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.
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are âsolely payments of principal and interest (SPPI)â on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model
The Companyâs business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and measured at amortised cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows while financial assets classified and measured at fair value through OCI are held within a business model with the objective of both holding to collect contractual cash flows and selling.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
ii Subsequent Measurement
For purposes of subsequent measurement, financial assets are classified in below categories:
Debt instruments at amortised cost
Equity instruments measured at fair value through other comprehensive income (FVTOCI)
Financial assets at fair value through proift & Loss.
Debt instruments at amortised cost other than derivative contracts
A âdebt instrumentâ is measured at the amortised cost if both the following conditions are met:
The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and 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.
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 Other Income in the Statement of Profit and Loss. The losses arising from impairment are recognised in the Statement of Profit and Loss. This category generally applies to trade and other receivables.
Equity Investments
All equity investments in scope of Ind-AS 109 are measured at fair value other than equity investments measured at deemed cost on first time adoption of Ind AS. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either as at FVTOCI or Fair Value Through Profit or Loss (FVTPL). 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 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 Statement of Profit and Loss, 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 Statement of Profit and Loss
iii Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a Companyâs similar financial assets) is primarily derecognised when:
The rights to receive cash flows from the asset have expired, or
The Company has transferred substantially all the risks and rewards of the asset
iv 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:
Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, trade receivables and bank balance.
The Company follows âsimplified approachâ 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.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. 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, discounted at the original EIR. When estimating the cash flows, an entity is required to consider:
a. 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
b. Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms
As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forwardlooking estimates are analysed.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the Statement of Profit and Loss (SPL). This amount is reflected under the head âother expensesâ in the SPL. The balance sheet presentation for various financial instruments is described below:
Financial assets measured at amortised cost: 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
For assessing increase in credit risk and impairment loss, the Company combines financial instruments on the basis of shared credit risk characteristics with the objective of facilitating an analysis that is designed to enable significant increases in credit risk to be identified on a timely basis.
i) Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowing or payables, as appropriate.
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 Companyâs financial liabilities include trade and other payables, loans and borrowings including bank overdrafts and financial guarantee contracts
ii) 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 derivatives, financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognised in the Statement of Profit and 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 risks are recognized in OCI. These gains/ losses are not subsequently transferred to SPL. 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 and Loss
Trade payables represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period.
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.
Reclassification of Financial Assets and Liabilities:
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 Companyâs senior management determines change in the business model as a result of external or internal changes which are significant to the Companyâs 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.
|
Original Classification |
Revised Classification |
Accounting Treatment |
|
Amortised Cost |
FVTPL |
Fair value is measured at reclassification date. Difference between previous amortized cost and fair value is recognised in profit & loss. |
|
FVTPL |
Amortised Cost |
Fair value at reclassification date become its new gross carrying amount. EIR is calculated based on the new gross carrying amount |
|
Amortised Cost |
FVTOCI |
Fair value is measured at reclassification date. Difference previous amortised cost and fair value is recognised in OCI. No change in EIR due to reclassification |
|
FVTOCI |
Amortised Cost |
Fair Value at reclassification date becomes its new amortised cost carrying amount. However, cumulative gain or loss in OCI is adjuated against fair value. Conseqently, the asset is measured as if it had always been measured at amortised cost |
|
FVTOCI |
FVTOCI |
Fair Value at reclassification date becomes its new amount. No other adjustment is required. |
|
FVTOCI |
FVTPL |
Assets continue to be measured at fair value. Cumulative gain or loss previously recongnized in OCI is reclassified from equity to profit or loss the calssification date. |
Offsetting of financial instruments
Financial assets and financial liabilities are off-set 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. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.
The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standard) Amendment Rules 2022 dated March 23, 2022, to amend the following Ind AS which are effective from April 01,2022.
(a) Amendments to Ind AS 37: Onerous Contracts - Costs of Fulfilling a Contract
An onerous contract is a contract under which the unavoidable cost of meeting the obligations under the contract costs (i.e., the costs that the Company cannot avoid because it has the contract) exceed the economic benefits expected to be received under it.
The amendments specify that when assessing whether a contract is onerous or loss-making, an entity needs to include costs that relate directly to a contract to provide goods or services including both incremental costs (e.g., the costs of direct labour and materials) and an allocation of costs directly related to contract activities (e.g., depreciation of equipment used to fulfil the contract and costs of contract management and supervision). General and administrative costs do not relate directly to a contract and are excluded unless they are explicitly chargeable to the counterparty under the contract
The Company applied the amendments to the contracts for which it had not fulfilled all of its obligations at the beginning of the reporting period.
Prior to the application of the amendments, the Company had not identified any contracts as being onerous as the unavoidable costs under the contracts, which were the costs of fulfilling them, comprised only incremental costs directly related to the contracts. As a result of the amendments, the Company assessed whether certain other directly related costs are required to be included by the Company in determining the costs of fulfilling the contracts. These amendments had no impact on the Standalone financial statements of the Company as there were no onerous contracts within the scope of these amendments that arose during the period
(b) Reference to the Conceptual Framework - Amendments to Ind AS 103
The amendments replaced the reference to the ICAIâs âFramework for the Preparation and Presentation of Financial Statements under Indian Accounting Standardsâ with the reference to the âConceptual Framework for Financial Reporting under Indian Accounting Standardâ without significantly changing its requirements
The amendments also added an exception to the recognition principle of Ind AS 103 Business Combinations to avoid the issue of potential âday 2â gains or losses arising for liabilities and contingent liabilities that would be within the scope of Ind AS 37 Provisions, Contingent Liabilities and Contingent Assets or Appendix C, Levies, of Ind AS 37, if incurred separately. The exception requires entities to apply the criteria in Ind AS 37 or Appendix C, Levies, of Ind AS 37, respectively, instead of the Conceptual Framework, to determine whether a present obligation exists at the acquisition date.
The amendments also add a new paragraph to IFRS 3 to clarify that contingent assets do not qualify for recognition at the acquisition date.
In accordance with the transitional provisions, the Company applies the amendments prospectively, i.e., to business combinations occurring after the beginning of the annual reporting period in which it first applies the amendments (the date of initial application).
These amendments had no impact on the Standalone financial statements of the Company as there were no contingentassets, liabilities or contingent liabilities within the scope of these amendments that arose during the period
(c) Amendments to Ind AS 16: Property, Plant and Equipment: Proceeds before Intended Use
The amendments modified paragraph 17(e) of Ind AS 16 to clarify that excess of net sale proceeds of items produced over the cost of testing, if any, shall not be recognised in the profit or loss but deducted from the directly attributable costs considered as part of cost of an item of property, plant, and equipment.
The amendments are effective for annual reporting periods beginning on or after 1st April, 2022. These amendments had no impact on the standalone financial statements of the Company as there were no sales of such items produced by property, plant and equipment made available for use on or after the beginning of the earliest period presented.
(d) Ind AS 109 Financial Instruments - Fees in the â10 per centâ test for derecognition of financial liabilities
The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the otherâs behalf.
These amendments had no material im
Mar 31, 2023
3. SIGNIFICANT ACCOUNTING POLICIES
3.1 Current and Non - Current Classification
The company presents assets and liabilities in the balance sheet based on current/non current classification.
An asset is treated as current when it is:
⢠Expected to be realised or intended to be sold or consumed in normal operation cycle.
⢠Held primarily for the purpose of trading
⢠Expected to be realised within twelve months after the reporint period, or
⢠Cash or Cash equivalent unless restricted from being exchanged or used to settle a liability for atleast
twelve months after the reporting period.
All othe assets are classified as non - current
A liability is current when:
⢠It is expected to be settled in normal operating Cylce.
⢠It is held primarily for the purpose of trading
⢠It is due to be settled within twelve months after the reporing period, or
⢠There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reprorting period.
The company classifies all other liabilities as non current.
Deferred tax assets and liabilities are classified as non current assets and liabilities.
The operating cycle is the time between the acquisiton of assets for processing and their realisation in cash
and cash equivalents.
The company has identified twelve month as its operating cycle.
Statement of compliance
The Companyâs financial statements have been prepared in accordance with the provisions of the
Companies Act, 2013 and the Indian Accounting Standards (âInd ASâ) notified under the Companies (Indian
Accounting Standards) Rules, 2015 and amendments thereof issued by Ministry of Corporate Affairs in
exercise of the powers conferred by section 133 of the Companies Act, 2013. In addition, the guidance
notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) are also applied
except where compliance with other statutory promulgations require a different treatment.
3.2 Fair Value Measurement
The company measures financial instruments at fair value at each balance sheet date.
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:
⢠In the principal market for the asset or liability , or
⢠In the absence of a principal market, in the most advantageous market for the assets 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 best economic interest.
A fair value measurement of non financial asset takes into account a market participant''s ability to generate
economics benefitsby using the asset in its highest and best use or by selling it to another market
participant that would use the asset in tis highest and best use.
The company uses valuation techniques that are appropriate in the circumstances and for which sufficient
date are available to measure fair value, maximising the use of revevant 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 Statement
are categorised within the fair value hierarchy,described as follow, 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 liabilites
⢠Level 2 - Valuation techniques for which the lowest level input that is significatnt to the fair value
measurement is directly or indirectily 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 recurring basis,
the Company determines whether tranfers have occureed between levles in the hierarchy by re-assessing
categorisation ( based on the Lowest level input that is significatnt to the fair vfalue 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 risk of the assets or liability and the level of the fair value
hierarchy as explained above.
The Company determines the policies and procedures for both recurring fair value measurement, such as
unquoted financial assets measured at fair value, and for non-recurring measurement, such as assets held
for sale in discountinued operations. If any.
External valuers are involved for valution of significant assets, such as properties and unquoted financial
assets, and significant liabilities such as contingent consideration. Involment of external valuers is decided
upon annually by the management after discussion with and approval by the Company''s Audit Committee.
Selection criteria include market knowledger, reputation, independence and whether professional standards
are maintained.
At each reporting date, the management analyses the movements in the values of assets and liabilities
which are required to be remeasured or re assesed as per the Companies accounting policies. For
this analysis, the management verifies the major inputs applied in the latest valuation by agreeing the
information in the valuation computaion on contracts and other relevant documents.
3.3. Property, Plant and Equipment
Property, plant and equipment ( PPE) are carried at cost of acquisiton, on current cost basis less
accumulated depreciation and accumulated impairment losses, if any Cost comprises purchase price
and directly attributable cost of bringing the asset to its working condition for the intened use. 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 and borrowing costs for long -term construciton projects if
the recognition criteria are met. Machinery spares which can be used only in connection with an item of
property, plant and equipment and whose use is expected to be irregular are capitalised and depreciated
over the useful life of principal item of the relevant assets. When signifiant parts of plant and equipment
are required to be replaced at intervals, the Company depreciates them seprately based on their specific
useful lives. Likewise, when a major inspection is perfomed, 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 cost are recognised in Statement of Profit & Loss as incurred. The present value of the
expected cost for the decommissioning of an asset after its use included in the cost of the respective asset
if the recognition criteria for a provision are met.
Depreciation is provided on written down value method over the useful lives of property, plant and
equipment as estimated by management. Pursuant to Notification of Schedule II of the Companies Act,2013
depreciation is provided prorata basis on written down value method at the rates determined based on
estimated useful lives of property, plant and equipment where applicable. Prescribed under Schedule II to
the Companies Act 2013.
No depreciation is provided on freehold land.
An item of property, plant and equipment and any significatnt 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 assets is
derecognised.
Capital Work in Progress
Cost of assets not ready for intended use, as the balance sheet date, is hown as capital work in progress.
Capital Work in Progress is stated at cost, net of accumulated impairment loss, if any
3.4. Intangible Assets
Intangible Assets are recognized only when future economic benefits arising out of the assets flow to
enterpriese and are amortised over their useful life ranging from 3 to 5 year. Intangible assets acquired
separately are measured on initial recongnition at cost. Following initial recognition, intangible assets are
carried at cost less any accumulated amortisation and accumulated impairment losses, if any Internalyy
generated intangibles, excluding capitalised development cost, are not capitalised and the related
expenditure is reflected in Statement of Profit and Loss in the period in whcih the expenditure is incured.
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 asse with a finite useful life are reviewed at least at the end of each
reporting period. Changes in the expected useful life or expected pattern of consumption fo 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 recongnised in the statment of profit and loss unless such expenditure froms part of carrying
value of another asset
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 losess 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 recognised in the Statement of Profit and Loss when the asset is drecongnised.
3.5 Revenue Recognition -
Revenue from Contracts:
(i) Income from construction contracts is recognized on the basis of work certified in accordance with
percentage completion method. All other income and expenditure are recognized and accounted for on
an accrual basis. Losses on contracts are fully accounted for as and when incurred.
(ii) Hire Charges is accounted for as per terms of the lease agreement.
Dividend Income
(iii) Dividend Income is accounted for when the right to receive has been established.
Interest Income
(iv) Interest income on deposits is recognized on accrual basis
3.6. Inventories -
The stock of stores, spares and embedded goods and fuel is valued at cost (weighted average basis), or
net realizable value whichever is lower. Cost includes cost of purchase and costs incurred in bringing the
inventories to their present location and conditions. Cost is determined on weighted average basis.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and estimated costs necessary to makt the sale.
Work in Progress is valued at the contract rates and site mobilization expenditure of incomplete contracts
is stated at cost. All the inventories of stores, spares and embedded goods and fuel and work in progress
have been physically verified by the Management at the year end.
3.7. Investment -
Investments which are readily realizable and intended to be held for not more than one year from the
date on which such investments are made, are classified as current investments. All other investments are
classified as Long Term Investments. Current Investments are carried in the financial statements at lower of
cost and fair value determined on an individual investment basis. Long Term Investments are measured at
Cost. However, provision for diminution in value is made to recognize a decline other than temporary in the
value of the investment.
3.8. 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 (known as Qualifying assets)
or sale are capitalised as part of the cost of the asset.Borrowing Costs include interest, amortisation of
ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent
they are regarded as an adjustment to the borrowing costs. Discount on Commercial papers is amortised
over the tenor of the underlying instrument. Borrowing Costs, allocated to and utilised for qualifying assets,
pertaining to the period from commencement of activities relating to construction / development of the
qualifying asset upto the date the asset is ready for its intended use is added to the cost of the assets.
Capitalisation of Borrowing Costs is suspended and charged to the Statement of Profit and Loss during
extended periods when active development activity on the qualifying assets is interrupted All other borrowing
costs are expensed in the period they occur."
3.9 Taxes
Current Income Tax
Current income tax assets and liabilities are measured at the amount expected to be recovered or paid to
the taxation authorities in accordance with the Income-tax Act, 1961 enacted in India and tax laws prevailing
in the respective tax jurisdictions where the Company operates. The tax rates and tax laws used to compute
the amount are those that are enacted or substantively 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. The Company shall reflect the effect of uncertainty for each
uncertain tax treatment by using either most likely method or expected value method, depending on which
method predicts better resolution of the treatment.
Deferred Tax
Deferred tax is provided using the liability method, on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the Standalone Financial Statements at the reporting
date. Deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a
transaction other than a business combination that at the time of the transaction affects neither accounting
profit nor taxable profit (tax loss).
Deferred tax liabilities are recognised for all taxable temporary differences, except:
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.
In respect of taxable temporary differences associated with investments in subsidiaries 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 and unused tax losses only if it
is probable that future taxable amounts will be available to utilise those temporary differences and losses
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.
In assessing the recoverability of deferred tax assets, the Company relies on the same forecast
assumptions used elsewhere in the financial statements and in other management reports, which, among
other things, reflect the potential impact of climate-related development on the business, such as increased
cost of production as a result of measures to reduce carbon emission.
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 assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax
assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends
either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in Statement of Profit and Loss, except to the extent that it relates
to items recognised in Other Comprehensive Income (OCI) or directly in equity. In this case, the tax is also
recognised in OCI or directly in equity, respectively.
Goods and Service tax paid on acquisition of assets or on incurring expenses
⢠When the tax incurred on a purchase of assets or services is not recoverable from the taxation
authority, in which case, the tax paid is recognised as part of the cost of acquisition of the asset or as
part of the expense item, as applicable.
⢠When receivables and payables are stated with the amount of tax included, the net amount of tax
recoverable from, or payable to, the taxation authority is included as part of receivables or payables in
the balance sheet
i. Provision for current tax is made after taking into consideration benefits admissible under the provision
of the Income Tax Act, 1961.
ii. Current Tax is calculated in accordance with the tax laws applicable to the current financial year.
For Financial Year 2021-22 the company has exercised option to pay income tax under the provisions
of Section 115BAA of the Income tax Act, 1961 and as such provisions for payment of Minimum
Alternate tax (MAT) is not applicable to the company.
The company proposes to pay Tax under the Provisions of Section 115BAA of Income Tax Act 1961.
iii. Advance tax and provision for current income, if any, are presented in the balance sheet after setting off
advance tax paid and income tax provision arising in the same tax jurisdiction.
3.10. Foreign Exchange Transaction -
Items included in the Standalone Financial Statements of the Company are measured using the currency
of the primary economic environment in which the Company operates (''the functional currency''). The
Standalone Financial Statements are presented in Indian Rupee (INR), which is the Company''s functional
and presentation currency.
Transactions in foreign currencies are initially recorded by the Company at the functional currency spot
rates (i.e., INR) at the date the transaction first qualifies for recognition. Monetary assets and liabilities
denominated in foreign currencies are translated at the functional currency spot rates of exchange at the
reporting date.
Foreign exchange gains and losses resulting from the settlement of transactions in foreign currencies
and from the translation of monetary assets and liabilities denominated in foreign currencies at year end
exchange rates are generally recognised in Statement of Profit and Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using
the exchange rates at the dates of the initial transactions. Non-monetary items that are measured at fair
value in a foreign currency are translated using the exchange rates at the date when the fair value is
determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated
in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation
differences on items whose fair value gain or loss is recognised in OCI or Statement of Profit and Loss are
also recognised in OCI or Statement of Profit and Loss, respectively).
In determining the spot exchange rate to use on initial recognition of the related asset, expense or income
(or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance
consideration, the date of the transaction is the date on which the Company initially recognises the non¬
monetary asset or non-monetary liability arising from the advance consideration. If there are multiple
payments or receipts in advance, the Company determines the transaction date for each payment or receipt
of advance consideration.
Employee Retirement Benefits -
3.11. Short-term Employee Benefits:
Liabilities for short-term employee benefits that are expected to be settled wholly within 12 months after the
end of the period in which the employees render the related service are recognised in respect of employees''
services up to the end of the reporting period and are measured at the amounts expected to be paid when
the liabilities are settled. The liabilities are presented as ''Employee Benefits Payable'' within ''Other Financial
Liabilities'' in the Balance Sheet.
Post-employment Benefits:
I. Defined Contribution Plan
a. Superannuation
Contribution made to Superannuation Fund for certain of employees are recognised in the Statement
of Profit and Loss as and when services are rendered by employees. The Company has no liability for
future Superannuation Fund benefits other than its contribution.
b. Provident Fund
Contributions in respect of Employees who are not covered by Companyâs Employees Provident Fund
Trust are made to the Fund administered by the Regional Provident Fund Commissioner as per the
provisions of Employeesâ Provident Fund and Miscellaneous Provisions Act, 1952 and are charged to
Statement of Profit and Loss as and when services are rendered by employees. The Company has no
obligation other than the contribution payable to the Regional Provident fund.
II. Defined Benefit Plan
a. Gratuity
Every employee who has completed five years or more of service is entitled to Gratuity as per the
provisions of The Payment of Gratuity Act, 1972. Retirement Gratuity for employees, is funded through
a scheme of Life Insurance Corporation of India. The costs of providing benefits under this plan are
determined on the basis of actuarial valuation using the projected unit credit method at each year-end.
Actuarial gains/losses are immediately recognised in retained earnings through Other Comprehensive
Income in the period in which they occur. Re-measurements are not re-classified to Statement of
Profit and Loss in subsequent periods. The excess/shortfall in the fair value of the plan assets over
the present value of the obligation calculated as per actuarial methods as at balance sheet dates is
recognised as a gain / loss in the Statement of Profit and Loss. Any asset arising out of this calculation
is limited to the past service cost plus the present value of available refunds and reduction in future
contributions.
b. Provident Fund
In respect of the employees covered by the Companyâs Employee Provident Fund Trust in Point I b
above, contributions to the Companyâs Employees Provident Fund Trust (administered by the Company
as per the provisions of Employees'' Provident Fund and Miscellaneous Provisions Act, 1952) are made
in accordance with the fund rules. The interest rate payable to the beneficiaries every year is being
notified by the Government
In the case of contribution to the Trust, the Company has an obligation to make good the shortfall, if
any, between the return from the investments of the Trust and the notified interest rate and recognizes
such obligation, if any, determined based on an actuarial valuation as at the balance sheet date, as an
expense.
3.12. Impairment of non- financial assets
The Company assesses at each reporting date whether there is an indication that an asset (including
goodwill) may be impaired. If any indication exists, the Company estimates the assetâs recoverable
amount. An assetâs recoverable amount is the higher of an assetâs or cash-generating unitâs (CGU) net
selling price and its value in use. The recoverable amount is determined for an individual asset, unless
the asset does not generate cash inflows that are largely independent of those from other assets or
groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the
asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset. In determining net selling price, recent market transactions are taken into account,
if available. If no such transactions can be identified, an appropriate valuation model is used.
For assets excluding goodwill, an assessment is made at each reporting date to determine whether
there is an indication that previously recognised impairment losses no longer exist or have decreased.
If such indication exists, the Company estimates the assetâs or CGUâs recoverable amount. A previously
recognised impairment loss is reversed only if there has been a change in the assumptions used to
determine the assetâs recoverable amount since the last impairment loss was recognised. The reversal
is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed
the carrying amount that would have been determined, net of depreciation, had no impairment loss
been recognised for the asset in prior years. Such reversal is recognised in the statement of profit
and loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a
revaluation increase.
Intangible assets with indefinite useful lives are tested for impairment annually at the CGU level, as
appropriate, and when circumstances indicate that the carrying value may be impaired.
The Company assesses where climate risks could have a significant impact, such as the introduction
of emission-reduction legislation that may increase manufacturing costs. These risks in relation to
climate-related matters are included as key assumptions where they materially impact the measure of
recoverable amount. These assumptions have been included in the cash-flow forecasts in assessing
value-in-use amounts.
The company assesses at each balance sheet date whether there is any indication that an assets
may be impaired. If any such indication exists, the company estimates the recoverable amount of the
assets. If such recoverable amount of the assets or the recoverable amount of the cash generating
unit to which the asset belong is less than its carrying amount, the carrying amount is reduced to its
recoverable amount. If at the balance sheet date there is an indication that if a previously assessed
impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at
the recoverable amount subject to a maximum of depreciated historical cost.
3.13. Earning per share -
Basic Earnings Per Share is calculated by dividing the net profit or loss for the period attributable to equity
shareholders by the weighted average number of equity shares outstanding during the period. For the
purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity
shareholders and the weighted average number of shares outstanding during the period is adjusted for the
effects of all dilutive potential equity shares.
The weighted average number of equity shares outstanding during the period and for all periods presented
is adjusted for events, such as bonus shares, other than the conversion of potential equity shares that have
changed the number of equity shares outstanding, without a corresponding change in resources.
Basic EPS is computed using the weighted average number of equity shares outstanding during the year.
Provision, Contingent Liabilities and contingent assets -
3.14. Leases -
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
As a 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 present value of lease payments to be made over the lease term, 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 the assets, as follows:
⢠Leasehold Land and Building 2 years to 99 years
If ownership of the leased asset transfers to the company at the end of the lease term or the cost
reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life
of the asset.
The right-of-use assets are also subject to impairment. Refer to the accounting policies in section
3.12 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 Companyâs lease liabilities are included in Note
iii) Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition exemption to its short-term leases of properties
taken on rent (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 has not opted for low-value assets recognition
exemption. Lease payments on short-term leases are recognised as expense on a straight-line basis
over the lease term.
As a lessor
Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an
asset are classified as operating leases. Rental income from operating lease is recognised on a straight¬
line basis over the term of the relevant lease Initial direct costs incurred in negotiating and arranging an
operating lease are added to the carrying amount of the leased asset and recognised over the lease term
on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they
are earned.
Mar 31, 2018
SIGNIFICANT ACCOUNTING POLICIES
a. System of Accounting
The Company follows mercantile system of accounting and recognizes income and expenditure on an accrual basis except in case of significant uncertainties. These financial statements are prepared under the historical cost convention unless otherwise indicated.
b. Key accounting estimates
The preparation of the financial statements, inconformity with the recognition and measurement principles of Ind AS, requires the management to make estimates and assumptions in the application of accounting policies that affect the reported amounts of assets, liabilities, income, expenses and disclosure of contingent liabilities as at the date of financial statements and the results of operation during the reported period. Although these estimates are based upon managementâs best knowledge of current events and actions, actual results could differ from these estimates which are recognized in the period in which they are determined.
The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the financial statements in the period in which changes are made and if material, their effects are disclosed in the notes to the financial statements.
c. Property, Plant and Equipment
(i) Property, plant and equipement are stated at historical cost of acquisition including attributable interest and finance cost, if any, till the date of acquisition/installation of the assets less accumulated depreciation and accumulated impairment losses, if any.
(ii) Subsequent expenditure relating to property, plant and equipment is capitalized only 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. All other repairs and maintenance costs are changed to the statement of profit and loss as incurred.
(iii) The cost and related accumulated depreciation are eliminated from the financial statements, either on disposal or when retired from active use and the resultant gain or loss are recognized in the statement of profit and loss.
(iv) Capital work-in-progress, representing expenditure incurred in respect of assets under development and not ready for their intended use, are carried at cost. Cost includes related acquisition expenses, construction cost, related borrowing cost and other direct expenditure.
(v) On transition to Ind AS, the Company has opted to continue with the carrying values measured under the previous GAAP as at 1st April, 2016 of its property, plant and equipment and use that carrying value as the deemed cost of the property, plant and equipment on the date of transition i.e. 1st April, 2016.
(vi) The Company depreciates properly, plant and equipment on written down value method except for building, plant and machinery, laboratory equipment and excavators where depreciation is provided on straight line method over the estimated useful life prescribed in Schedule II of the Companies Act, 2013 from the date of the assets are ready for intended use after considering the residual value.
(vii) Intangible assets mainly represent implementation cost for software and other application software acquired/ developed for in-house use. These assets are stated at cost. Cost includes related acquisition expenses, related borrowing costs, if any, and other direct expenditure.
(viii) Itmes of stores and spares that meet the definition of property, plant and equipment are capitalized at cost and depreciated over their useful life. Otherwise, such items are classified as inventories.
Use of Estimate -
The preparation of financial statements requires estimates and assumptions to be made that affects the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.
Revenue Recognition -
(i) Income from construction contracts is recognized on the basis of work certified in accordance with percentage completion method. All other income and expenditure are recognized and accounted for on an accrual basis.
Losses on contracts are fully accounted for as and when incurred.
(ii) Hire Charges is accounted for as per terms of the lease agreement.
(iii) Dividend Income is accounted for when the right to receive is established.
(iv) Interest income on deposits is recognized on accrual basis.
Fixed Assets -
Fixed Assets are stated at cost net of tax/duty credits availed, wherever applicable less accumulated depreciation/ impairment losses, if any. The cost of an asset comprises of purchase price and any directly attributable cost of bringing the assets to its present condition for intended use and incremental amount of revaluation.
Depreciation -
Depreciation is charged as per Straight-line method at the rate and in the manner specified in Schedule II to the Companies Act, 2013. Depreciation on fixed assets sold or scrapped during the year is provided upto the date on which such fixed asset is sold or scrapped. Depreciation on addition to fixed assets is calculated on pro rata basis from the day of addition.
Inventories -
The stock of stores, spares and embedded goods and fuel is valued at cost (weighted average basis), or net realizable value whichever is lower.
Work in Progress is valued at the contract rates and site mobilization expenditure of incomplete contracts is stated at cost.
Investment -
Investments which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as Long Term Investments. Current Investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long Term Investments are measured at Cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investment. Upon first-time adoption of Ind AS, the Company has elected to measure these investments of the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS i.e. 1st April, 2017.
Borrowing Costs -
Borrowing cost which are directly attributable to the acquisition/construction of Qualifying Assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing cost is charged to revenue.
Current Tax and Deferred Tax -
i. Provision for current tax is made after taking into consideration benefits admissible under the provision of the Income Tax Act, 1961.
ii. Current Tax is calculated in accordance with the tax laws applicable to the current financial year.
iii. Deferred tax expense of benefit is recognized on timing difference being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.
iv. Advance tax and provision for current income are presented in the balance sheet after setting off advance tax paid and income tax provision arising in the same tax jurisdiction.
Foreign Exchange Transaction -
(i) Transaction denominated in foreign currencies is normally recorded at the exchange rate prevailing at the time of the transaction.
(ii) Monetary items denominated in foreign currency as at the balance sheet date are translated at the year-end exchange rate.
(iii) Premium on forward cover contracts in respect of import of raw material is charged to profit & loss account over the period of contracts except in respect of liability for acquiring fixed assets, in which case the difference are adjusted in carrying cost of the same.
Employee Retirement Benefits -
The company provides for gratuity in accordance with the rules of the company based on an actuarial valuation carried out at the balance sheet date, by an independent actuary. Contribution payable to Employees benefits is charged to Profit & Loss Account as and when incurred. Leave wages is not applicable to this company. The Company has provided for gratuity during the current year as per the actuarial valuation of liability.
Impairment of Assets -
The company assesses at each balance sheet date whether there is any indication that an assets may be impaired.
If any such indication exists, the company estimates the recoverable amount of the assets. If such recoverable amount of the assets or the recoverable amount of the cash generating unit to which the asset belong is less than its carrying amount, the carrying amount is reduced to its recoverable amount. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.
Earning per share -
Basic EPS is computed using the weighted average number of equity shares outstanding during the year.
Provision, Contingent Liabilities and contingent assets -
Provision involving substantial degree of estimation in measurement is recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.
First-time adoption of Ind AS
a. Transition to Ind AS
These are the Companyâs first financial statements prepared in accordance with Ind AS.
The accounting policies as set out in note no. 1.2 above have been applied in preparing the financial statements for the year ended 31st March, 2018, the comparative information presented in these financial statements for the year ended 31st March, 2017 and in the preparation of an opening Ind AS balance sheet as at 1st April, 2016 (the transition date). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in the financial statements prepared in accordance with the Accounting Standards notified under the Companies (accounting standards) Rules, 2006 and other relevant provisions of the Act. An explanation of how transition from previous GAAP to Ind AS has affected the Companyâs financial position, financial performance and cash flows is set out in the following tables and notes.
b. Exemption and exceptions availed
Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS, which are considered to be material and significant.
i] The Company has elected to measure items of property, plant and equipment at its previous GAAP carrying value as on the date of transition to Ind AS.
ii] Ind AS provides a one time option to a first-time adopter either to measure its investment in subsidiaries, joint- ventures and associate companies as per previous GAAP carrying value or at fair value on the date of transition. The Company has elected to measure its investment in subsidiary as per previous GAAP carrying value as on the date of transition to Ind AS.
iii] On assessment of the estimate made under the previous GAAP financial statements, the Company has concluded that there is no necessity to revise the estimates under Ind AS, as there is no objective evidence of an error in those statements. However, estimates that were required under Ind AS but not required under previous GAAP are made by the Company for the relevant reporting dates reflecting conditions existing as at that date.
iv] Under Ind AS, remeasurements of post-employment benefit obligations, i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expenses on the net defined benefit liability are recognized in other comprehensive income instead of profit or loss. Under the Previous GAAP, these remeasurements were forming part of the statement of profit and loss for the year. There is no impact on the total equity.
v] Under Ind AS, all items of income and expenses recognized in a period should be included in the statement of profit and loss for the period, unless a standard requires or permits otherwise. Items of income and expenses that are not recognized in profit or loss but are shown in the statement of profit and loss as âother comprehensive incomeâ includes remeasurements of defined benefit plans and tax effects thereon. The concept of other comprehensive income did not exist under the Previous GAAP
Reconciliations between previous GAAP and Ind AS
The following reconciliations provide the explanations and quantification of the differences arising from the transition from previous GAAP to Ind AS in accordance with Ind AS 101:
i) Reconciliation of equity as reported under previous GAAP to Ind AS;
ii) Reconciliation of profit or loss and total comprehensive income as reported under previous GAAP to Ind AS; and adjustment to statement of cash flow.
Mar 31, 2016
1. Corporate Information:
Tarmat Ltd. was established in the year 1986 by Mr. Jerry Varghese. The company is specialized in the construction of Airfield and National/State Highways all over India. The present works include construction of heavy duty parking bays at Bangalore International Airport, construction of airport runway, taxiway, apron, approach road, peripheral road etc. at Gulbarga & Shimoga, recarpeting of Main Runway at Gwalior and Awantipur Airports, four laning project of Napgur-Hyderabad National highway, construction of internal roads for Sai Sansthan Trust, Shirdi etc.
The company had its IPO in 2007 and got listed in BSE and NSE. The present paid up capital of the company is Rs.10.96 Cr, of which 63% is held by the promoters.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS -
(i) These financial statements have been prepared to comply in all material aspects with applicable accounting principles in India, the applicable Accounting Standards prescribed under Section 133 of the Companies Act, 2013 (âActâ) read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and other accounting principles generally accepted in India, to the extent applicable. All assets and liabilities have been classified as current or noncurrent as per the Companyâs normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013.
(ii) Financial statements are based on historical cost and are prepared on accrual basis, except where impairment is made and revaluation is carried out.
(iii) Accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.
2.2 Use of Estimate -
The preparation of financial statements requires estimates and assumptions to be made that affects the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.
2.3 Revenue Recognition -
(i) Income from construction contracts is recognized on the basis of work certified in accordance with percentage completion method. All other income and expenditure are recognized and accounted for on an accrual basis. Losses on contracts are fully accounted for as and when incurred.
(ii) Hire Charges is accounted for as per terms of the lease agreement.
(iii) Dividend Income is accounted for when the right to receive is established.
(iv) Interest income on deposits is recognized on accrual basis.
2.4 Fixed Assets -
Fixed Assets are stated at cost net of tax/duty credits availed, wherever applicable less accumulated depreciation/ impairment losses, if any. The cost of an asset comprises of purchase price and any directly attributable cost of bringing the assets to its present condition for intended use and incremental amount of revaluation.
2.5 Depreciation -
Depreciation is charged as per Straight-line method at the rate and in the manner specified in Schedule II to the Companies Act, 2013. Depreciation on fixed assets sold or scrapped during the year is provided up to the date on which such fixed asset is sold or scrapped. Depreciation on addition to fixed assets is calculated on pro rata basis from the day of addition.
2.6 Inventories -
The stock of stores, spares and embedded goods and fuel is valued at cost (weighted average basis), or net realizable value whichever is lower.
Work in Progress is valued at the contract rates and site mobilization expenditure of incomplete contracts is stated at cost.
2.7 Investment -
Investments which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as Long Term Investments. Current Investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long Term Investments are measured at Cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investment.
2.8 Borrowing Costs -
Borrowing cost which are directly attributable to the acquisition/construction of Qualifying Assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing cost is charged to revenue.
2.9 Current Tax and Deferred Tax -
i. Provision for current tax is made after taking into consideration benefits admissible under the provision of the Income Tax Act, 1961.
ii. Current Tax is calculated in accordance with the tax laws applicable to the current financial year.
iii. Deferred tax expense of benefit is recognized on timing difference being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.
iv. Advance tax and provision for current income are presented in the balance sheet after setting off advance tax paid and income tax provision arising in the same tax jurisdiction.
2.10 Foreign Exchange Transaction -
(i) Transaction denominated in foreign currencies is normally recorded at the exchange rate prevailing at the time of the transaction.
(ii) Monetary items denominated in foreign currency as at the balance sheet date are translated at the year-end exchange rate.
(iii) Premium on forward cover contracts in respect of import of raw material is charged to profit & loss account over the period of contracts except in respect of liability for acquiring fixed assets, in which case the difference are adjusted in carrying cost of the same.
2.11 Employee Retirement Benefits -
The company provides for gratuity in accordance with the rules of the company based on an actuarial valuation carried out at the balance sheet date, by an independent actuary. Contribution payable to Employees benefits is charged to Profit & Loss Account as and when incurred. leave wages is not applicable to this company. The Company has provided for gratuity during the current year as per the actuarial valuation of liability.
2.12 Impairment of Assets -
The company assesses at each balance sheet date whether there is any indication that an assets may be impaired. If any such indication exists, the company estimates the recoverable amount of the assets. If such recoverable amount of the assets or the recoverable amount of the cash generating unit to which the asset belong is less than its carrying amount, the carrying amount is reduced to its recoverable amount. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.
2.13 Earning per share -
Basic EPS is computed using the weighted average number of equity shares outstanding during the year.
2.14 Provision, Contingent Liabilities and contingent assets -
Provision involving substantial degree of estimation in measurement is recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.
Mar 31, 2015
2.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS -
(i) These financial statements have been prepared to comply in all
material aspects with applicable accounting principles in India, the
applicable Accounting Standards prescribed under Section 133 of the
Companies Act, 2013 ('Act') read with Rule 7 of the Companies
(Accounts) Rules, 2014, the provisions of the Act (to the extent
notified) and other accounting principles generally accepted in India,
to the extent applicable. All assets and liabilities have been
classified as current or noncurrent as per the Company's normal
operating cycle and other criteria set out in the Schedule III to the
Companies Act, 2013.
(ii) Financial statements are based on historical cost and are prepared
on accrual basis, except where impairment is made and revaluation is
carried out.
(iii) Accounting policies have been consistently applied by the Company
and are consistent with those used in the previous year.
2.2 Use of Estimate -
The preparation of financial statements requires estimates and
assumptions to be made that affects the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results are known/ materialized.
2.3 Revenue Recognition -
(i) Income from construction contracts is recognized on the basis of
work certified in accordance with percentage completion method. All
other income and expenditure are recognized and accounted for on an
accrual basis. Losses on contracts are fully accounted for as and when
incurred.
(ii) Hire Charges is accounted for as per terms of the lease agreement.
(iii) Dividend Income is accounted for when the right to receive is
established.
(iv) Interest income on deposits is recognized on accrual basis.
2.4 Fixed Assets -
Fixed Assets are stated at cost net of tax/duty credits availed,
wherever applicable less accumulated depreciation/ impairment losses,
if any. The cost of an asset comprises of purchase price and any
directly attributable cost of bringing the assets to its present
condition for intended use and incremental amount of revaluation.
2.5 Depreciation -
Depreciation is charged as per Straight-line method at the rate and in
the manner specified in Schedule II to the Companies Act, 2013.
Depreciation on fixed assets sold or scrapped during the year is
provided upto the date on which such fixed asset is sold or scrapped.
Depreciation on addition to fixed assets is calculated on pro rata
basis from the day of addition.
2.6 Inventories -
The stock of stores, spares and embedded goods and fuel is valued at
cost (weighted average basis), or net realizable value whichever is
lower.
Work in Progress is valued at the contract rates and site mobilization
expenditure of incomplete contracts is stated at cost.
2.7 Investment -
Investments which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as Long Term Investments. Current Investments are carried in
the financial statements at lower of cost and fair value determined on
an individual investment basis. Long Term Investments are measured at
Cost. However, provision for diminution in value is made to recognize a
decline other than temporary in the value of the investment.
2.8 Borrowing Costs -
Borrowing cost which are directly attributable to the
acquisition/construction of Qualifying Assets are capitalized as part
of the cost of such assets. A qualifying asset is one that necessarily
takes substantial period of time to get ready for intended use. All
other borrowing cost is charged to revenue.
2.9 Current Tax and Deferred Tax -
i. Provision for current tax is made after taking into consideration
benefits admissible under the provision of the Income Tax Act, 1961.
ii. Current Tax is calculated in accordance with the tax laws
applicable to the current financial year.
iii. Deferred tax expense of benefit is recognized on timing
difference being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods. Deferred tax assets and liabilities are
measured using the tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date.
iv. Advance tax and provision for current income are presented in the
balance sheet after setting off advance tax paid and income tax
provision arising in the same tax jurisdiction.
2.10 Foreign Exchange Transaction -
(i) Transaction denominated in foreign currencies is normally recorded
at the exchange rate prevailing at the time of the transaction.
(ii) Monetary items denominated in foreign currency as at the balance
sheet date are translated at the year-end exchange rate.
(iii) Premium on forward cover contracts in respect of import of raw
material is charged to profit & loss account over the period of
contracts except in respect of liability for acquiring fixed assets, in
which case the difference are adjusted in carrying cost of the same.
2.11 Employee Retirement Benefits -
The company provides for gratuity in accordance with the rules of the
company based on an actuarial valuation carried out at the balance
sheet date, by an independent actuary. Contribution payable to
Employees benefits is charged to Profit & Loss Account as and when
incurred. Leave wages is not applicable to this company. The Company
has provided for gratuity during the current year as per the actuarial
valuation of liability.
2.12 Impairment of Assets -
The company assesses at each balance sheet date whether there is any
indication that an assets may be impaired. If any such indication
exists, the company estimates the recoverable amount of the assets. If
such recoverable amount of the assets Or the recoverable amount of the
cash generating unit to which the asset belong is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. If at the balance sheet date there is an indication that if a
previously assessed impairment loss no longer exists, the recoverable
amount is reassessed and the asset is reflected at the recoverable
amount subject to a maximum of depreciated historical cost.
2.13 Earning per share -
Basic EPS is computed using the weighted average number of equity
shares outstanding during the year.
2.14 Provision, Contingent Liabilities and contingent assets -
Provision involving substantial degree of estimation in measurement is
recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
financial statements.
Mar 31, 2014
1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS -
(i) The financial statements have been prepared in accordance with the
generally accepted accounting principles under the historical cost
convention on accrual basis. These financial statements have been
prepared to comply in all material aspects with the accounting
standards notified under Section 211 (3C) (which continues to be
applicable in terms of General circular 15/2013 dated September 13,
2013 of the Ministry of Corporate affairs in respect of Section 133 of
the Companies Act, 2013) and other relevant provisions of the Companies
Arc, 1956.
(ii) Financial statements are based on historical cost and are prepared
on accrual basis, except where impairment is made and revaluation is
carried out.
(iii) Accounting policies have been consistently applied by the Company
and are consistent with those used in the previous year.
1.2 Use of Estimate -
The preparation of financial statements requires estimates and
assumptions to be made that affects the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results are known/ materialized.
1.3 Revenue Recognition -
(i) Income from construction contracts is recognized on the basis of
work certified in accordance with percentage completion method. All
other income and expenditure are recognized and accounted for on an
accrual basis. Losses on contracts are fully accounted for as and when
incurred.
(ii) Hire Charges is accounted for as per terms of the lease agreement.
(iii) Dividend Income is accounted for when the right to receive is
established.
(iv) Interest income on deposits is recognized on accrual basis.
1.4 Fixed Assets -
Fixed Assets are stated at cost net of tax/duty credits availed,
wherever applicable less accumulated depreciation/ impairment losses,
if any. The cost of an asset comprises of purchase price and any
directly attributable cost of bringing the assets to its present
condition for intended use and incremental amount of revaluation.
1.5 Depreciation -
Depreciation is charged as per Straight-line method at the rate and in
the manner specified in Schedule XIV to the Companies Act, 1956.
Depreciation on fixed assets sold or scrapped during the year is
provided upto the date on which such fixed asset is sold or scrapped.
Depreciation on addition to fixed assets is calculated on pro rata
basis from the day of addition.
1.6 Inventories -
The stock of stores, spares and embedded goods and fuel is valued at
cost (weighted average basis), or net realizable value whichever is
lower.
Work in Progress is valued at the contract rates and site mobilization
expenditure of incomplete contracts is stated at cost.
1.7 Investment -
Investments which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as Long Term Investments. Current Investments are carried in
the financial statements at lower of cost and fair value determined on
an individual investment basis. Long Term Investments are measured at
Cost. However, provision for diminution in value is made to recognize a
decline other than temporary in the value of the investment.
1.8 Borrowing Costs -
Borrowing cost which are directly attributable to the
acquisition/construction of Qualifying Assets are capitalized as part
of the cost of such assets. A qualifying asset is one that necessarily
takes substantial period of time to get ready for intended use. All
other borrowing cost is charged to revenue.
1.9 Current Tax and Deferred Tax -
i. Provision for current tax is made after taking into consideration
benefits admissible under the provision of the Income Tax Act, 1961.
ii. Current Tax is calculated in accordance with the tax laws
applicable to the current financial year.
iii. Deferred tax expense of benefit is recognized on timing difference
being the difference between taxable income and accounting income that
originate in one period and are capable of reversal in one or more
subsequent periods. Deferred tax assets and liabilities are measured
using the tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date.
iv. Advance tax and provision for current income are presented in the
balance sheet after setting off advance tax paid and income tax
provision arising in the same tax jurisdiction.
1.10 Foreign Exchange Transaction -
(i) Transaction denominated in foreign currencies is normally recorded
at the exchange rate prevailing at the time of the transaction.
(ii) Monetary items denominated in foreign currency as at the balance
sheet date are translated at the year-end exchange rate.
(iii) Premium on forward cover contracts in respect of import of raw
material is charged to profit & loss account over the period of
contracts except in respect of liability for acquiring fixed assets, in
which case the difference are adjusted in carrying cost of the same.
1.11 Employee Retirement Benefits -
The company provides for gratuity in accordance with the rules of the
company based on an actuarial valuation carried out at the balance
sheet date, by an independent actuary. Contribution payable to
Employees benefits is charged to Profit & Loss Account as and when
incurred. Leave wages is not applicable to this company. The Company
has provided for gratuity during the current year as per the actuarial
valuation of liability.
1.12 Impairment of Assets -
The company assesses at each balance sheet date whether there is any
indication that an assets may be impaired. If any such indication
exists, the company estimates the recoverable amount of the assets. If
such recoverable amount of the assets or the recoverable amount of the
cash generating unit to which the asset belong is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. If at the balance sheet date there is an indication that if a
previously assessed impairment loss no longer exists, the recoverable
amount is reassessed and the asset is reflected at the recoverable
amount subject to a maximum of depreciated historical cost.
1.13 Earning per share -
Basic EPS is computed using the weighted average number of equity
shares outstanding during the year.
1.14 Provision, Contingent Liabilities and contingent assets -
Provision involving substantial degree of estimation in measurement is
recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
financial statements.
Mar 31, 2013
1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS -
(i) The financial statements of the company have been prepared in
accordance with the generally accepted accounting principles in India
(GAAP). The company has prepared these financial statements to comply
in all material respects with the Accounting Standards notified under
the Companies (Accounting Standards) Rules, 2006 and the relevant
provisions of the Companies Act, 1956.
(ii) Financial statements are based on historical cost and are prepared
on accrual basis, except where impairment is made and revaluation is
carried out.
(iii) Accounting policies have been consistently applied by the Company
and are consistent with those used in the previous year.
1.2 Use of Estimate -
The preparation of financial statements requires estimates and
assumptions to be made that affects the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results are known/ materialized.
1.3 Revenue Recognition -
(i) Income from construction contracts is recognized on the basis of
work certified in accordance with percentage completion method. All
other income and expenditure are recognized and accounted for on an
accrual basis. Losses on contracts are fully accounted for as and when
incurred.
(ii) Hire Charges is accounted for as per terms of the lease agreement.
(iii) Dividend Income is accounted for when the right to receive is
established.
(iv) Interest income on deposits is recognized on accrual basis.
1.4 Fixed Assets -
Fixed Assets are stated at cost net of tax/duty credits availed,
wherever applicable less accumulated depreciation/ impairment losses,
if any. The cost of an asset comprises of purchase price and any
directly attributable cost of bringing the assets to its present
condition for intended use and incremental amount of revaluation.
1.5 Depreciation -
Depreciation is charged as per Straight-line method at the rate and in
the manner specified in Schedule XIV to the Companies Act, 1956.
Depreciation on fixed assets sold or scrapped during the year is
provided upto the date on which such fixed asset is sold or scrapped.
Depreciation on addition to fixed assets is calculated on pro rata
basis from the day of addition.
1.6 Inventories -
The stock of stores, spares and embedded goods and fuel is valued at
cost (weighted average basis), or net realizable value whichever is
lower.
Work in Progress is valued at the contract rates and site mobilization
expenditure of incomplete contracts is stated at cost.
1.7 Investment -
Investments which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as Long Term Investments. Current Investments are carried in
the financial statements at lower of cost and fair value determined on
an individual investment basis. Long Term Investments are measured at
Cost. However, provision for diminution in value is made to recognize a
decline other than temporary in the value of the investment.
1.8 Borrowing Costs -
Borrowing cost which are directly attributable to the
acquisition/construction of Qualifying Assets are capitalized as part
of the cost of such assets. A qualifying asset is one that necessarily
takes substantial period of time to get ready for intended use. All
other borrowing cost is charged to revenue.
1.9 Current Tax and Deferred Tax -
i. Provision for current tax is made after taking into consideration
benefits admissible under the provision of the Income Tax Act, 1961.
ii. Current Tax is calculated in accordance with the tax laws
applicable to the current financial year.
iii. Deferred tax expense of benefit is recognized on timing difference
being the difference between taxable income and accounting income that
originate in one period and are capable of reversal in one or more
subsequent periods. Deferred tax assets and liabilities are measured
using the tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date.
iv. Advance tax and provision for current income are presented in the
balance sheet after setting off advance tax paid and income tax
provision arising in the same tax jurisdiction.
1.10 Foreign Exchange Transaction -
(i) Transaction denominated in foreign currencies is normally recorded
at the exchange rate prevailing at the time of the transaction.
(ii) Monetary items denominated in foreign currency as at the balance
sheet date are translated at the year-end exchange rate.
(iii) Premium on forward cover contracts in respect of import of raw
material is charged to profit & loss account over the period of
contracts except in respect of liability for acquiring fixed assets, in
which case the difference are adjusted in carrying cost of the same.
1.11 Employee Retirement Benefits-
The company provides for gratuity in accordance with the rules of the
company based on an actuarial valuation carried out at the balance
sheet date, by an independent actuary. Contribution payable to
Employees benefits is charged to Profit & Loss Account as and when
incurred. Leave wages is not applicable to this company. The Company
has provided for gratuity during the current year as per the actuarial
valuation of liability.
1.12 Impairment of Assets -
The company assesses at each balance sheet date whether there is any
indication that an assets may be impaired. If any such indication
exists, the company estimates the recoverable amount of the assets. If
such recoverable amount of the assets or the recoverable amount of the
cash generating unit to which the asset belong is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. If at the balance sheet date there is an indication that if a
previously assessed impairment loss no longer exists, the recoverable
amount is reassessed and the asset is reflected at the recoverable
amount subject to a maximum of depreciated historical cost.
1.13 Earning per share-
Basic EPS is computed using the weighted average number of equity
shares outstanding during the year.
1.14 Provision, Contingent Liabilities and contingent assets -
Provision involving substantial degree of estimation in measurement is
recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
financial statements.
Mar 31, 2012
1.1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS -
(i) The financial statements of the company have been prepared in
accordance with the generally accepted accounting principles in India
(GAAP). The company has prepared these financial statements to comply
in all material respects with the Accounting Standards notified under
the Companies (Accounting Standards) Rules, 2006 and the relevant
provisions of the Companies Act, 1956.
(ii) Financial statements are based on historical cost and are prepared
on accrual basis, except where impairment is made and revaluation is
carried out.
(iii) Accounting policies have been consistently applied by the Company
and except for the changes in accounting policies referred below, are
consistent with those used in the previous year.
(iv) During the year ended March 31, 2012, the revised Schedule VI
notified under the Companies Act, 1956 has become applicable to the
company for preparation and presentation of its financial statements.
The adoption of revised Schedule VI does not impact recognition and
measurement principles followed for preparation of financial
Statements. However it has significant impact on presentation and
disclosures made in the financial statements. The company has
reclassified the previous year figures in accordance with the
requirements applicable in the current year.
1.2 use of Estimate -
The preparation of financial statements requires estimates and
assumptions to be made that affects the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results are known/materialized.
1.3 revenue recognition -
(i) Income from construction contracts is recognized on the basis of
work certified in accordance with percentage completion method. All
other income and expenditure are recognized and accounted for on an
accrual basis. Losses on contracts are fully accounted for as and when
incurred.
(ii) Hire Charges is accounted for as per terms of the lease agreement.
(iii) Dividend Income is accounted for when the right to receive is
established.
(iv) Interest income on deposits is recognized on accrual basis.
1.4 Fixed assets -
Fixed Assets are stated at cost net of tax/duty credits availed,
wherever applicable less accumulated depreciation/impairment losses, if
any. The cost of an asset comprises of purchase price and any directly
attributable cost of bringing the assets to its present condition for
intended use and incremental amount of revaluation.
1.5 Depreciation -
Depreciation is charged as per straight-line method at the rate and in
the manner specified in Schedule XIV to the Companies Act, 1956.
1.6 Inventories -
The stock of stores, spares and embedded goods and fuel is valued at
cost (weighted average basis), or net realizable value whichever is
lower.
Work in Progress is valued at the contract rates and site mobilization
expenditure of incomplete contracts is stated at cost.
1.7 Investment -
Investments which are readily realizable and intended to be held for
not more than one year from the date on
which such investments are made, are classified as current investments.
All other investments are classified as Long Term Investments. Current
Investment are carried in the financial statements at lower of cost and
fair value determined on an individual investment basis. Long Term
Investments are measured at Cost. However, provision for diminution in
value is made to recognize a decline other than temporary in the value
of the investment.
1.8 Borrowing Costs -
Borrowing cost which are directly attributable to the
acquisition/construction of Qualifying Assets are capitalized as part
of the cost of such assets. A qualifying asset is one that necessarily
takes substantial period of time to get ready for intended use. All
other borrowing cost is charged to revenue.
1.9 Current tax and Deferred tax -
i. Provision for current tax is made after taking into consideration
benefits admissible under the provision of the Income Tax Act, 1961.
ii. Current Tax is calculated in accordance with the tax laws
applicable to the current financial year.
iii. Deferred tax expense of benefit is recognized on timing difference
being the difference between taxable income and accounting income that
originate in one period and are capable of reversal in one or more
subsequent periods. Deferred tax assets and liabilities are measured
using the tax rates and tax laws that have been enacted or
substantively enacted by the Balance Sheet date.
iv. Advance tax and provision for current income are presented in the
Balance Sheet after setting off advance tax paid and income tax
provision arising in the same tax jurisdiction.
1.10 foreign Exchange transaction -
(i) Transaction denominated in foreign currencies is normally recorded
at the exchange rate prevailing at the time of the transaction.
(ii) Monetary items denominated in foreign currency as at the Balance
Sheet date are translated at the year-end exchange rate.
(iii) Premium on forward cover contracts in respect of import of raw
material is charged to Profit & Loss Account over the period of
contracts except in respect of liability for acquiring fixed assets, in
which case the difference are adjusted in carrying cost of the same.
1.11 Employee retirement Benefits -
The company provides for gratuity in accordance with the rules of the
company based on an actuarial valuation carried out at the Balance
Sheet date, by an independent actuary. Contribution payable to
Employees benefits is charged to Profit & Loss Account as and when
incurred. Leave wages is not applicable to this Company. The Company
has provided for gratuity during the current year as per the actuarial
valuation of liability.
1.12 Impairment of assets -
The Company assesses at each Balance Sheet date whether there is any
indication that an assets may be impaired. If any such indication
exists, the company estimates the recoverable amount of the assets. If
such recoverable amount of the assets or the recoverable amount of the
cash generating unit to which the asset belong is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. If at the balance sheet date there is an indication that if a
previously assessed impairment loss no longer exists, the recoverable
amount is reassessed and the asset is refected at the recoverable
amount subject to a maximum of depreciated historical cost.
1.13 Earning per share -
Basic EPS is computed using the weighted average number of equity
shares outstanding during the year.
1.14 provision, Contingent Liabilities and contingent assets -
Provision involving substantial degree of estimation in measurement is
recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
financial statements.
Mar 31, 2010
1] BASIS OF PREPARATION OF FINANCIAL STATEMENTS -
(i) The financial statements have been prepared in compliance with all
material aspects of the Accounting Standards issued by the Institute of
Chartered Accountants of India (ICAI) and the relevant provisions of
the Companies Act, 1956.
(ii) Financial statements are based on historical cost and are prepared
on accrual basis, except where impairment is made and revaluation is
carried out.
(iii) Accounting policies have been consistently applied by the Company
and except for the changes in accounting policies referred below, are
consistent with those used in the previous year.
2] Use of Estimate -
The preparation of financial statements requires estimates and
assumptions to be made that affects the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results are known/ materialized.
3] Revenue Recognition -
(i) Income from construction contracts is recognized on the basis of
work certified in accordance with percentage completion method. All
other income and expenditure are recognized and accounted for on an
accrual basis. Losses on contracts are fully accounted for as and when
incurred.
(ii) Hire Charges is accounted for as per terms of the lease agreement.
(iii) Dividend Income is accounted for when the right to receive is
established.
(iv) Interest income on deposits is recognized on accrual basis.. 4]
fixed Assets -
Fixed Assets are stated at cost net of Modvat/Cenvat wherever
applicable less accumulated depreciation. The cost of an asset
comprises of purchase price and any directly attributable cost of
bringing the assets to its present condition for intended use and
incremental amount of revaluation.
5] Depreciation -
Depreciation is charged as per Straight-line method at the rate and in
the manner specified in Schedule XIV to the Companies Act, 1956.
6] Inventories -
The stock of stores, spares and embedded goods and fuel is valued at
cost(weighted average basis), or net realizable value whichever is
lower.
Work in Progress is valued at the contract rates and site mobilization
expenditure of incomplete contracts is stated at cost.
7] Investment -
Investments are classified as long- term and current investments.
Current Investment is measured at the lower of cost or market value.
Long Term Investment is measured at Cost. The investments of the
company are on long-term basis and therefore the diminution on the same
is not applicable.
8] Borrowing Costs -
Borrowing cost which are directly attributable to the
acquisition/construction of Qualifying Assets are capitalized as part
of the cost of such assets. A qualifying asset is one that necessarily
takes substantial period of time to get ready for intended use. All
other borrowing cost is charged to revenue.
9] Current Tax and Deferred Tax -
i. Provision for current tax is made after taking into consideration
benefits admissible under the provision of the Income Tax Act, 1961.
ii. Current Tax is calculated in accordance with the tax laws
applicable to the current financial year.
iii. Deferred tax expense of benefit is recognized on timing
difference being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods. Deferred tax assets and liabilities are
measured using the tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date.
iv. Advance tax and provision for current income are presented in the
balance sheet after setting off advance tax paid and income tax
provision arising in the same tax jurisdiction.
10] foreign Exchange Transaction -
(i) Transaction denominated in foreign currencies is normally recorded
at the exchange rate prevailing at the time of the transaction.
(ii) Monetary items denominated in foreign currency as at the balance
sheet date are translated at the year-end exchange rate.
(iii) Premium on forward cover contracts in respect of import of raw
material is charged to profit & loss account over the period of
contracts except in respect of liability for acquiring fixed assets, in
which case the difference are adjusted in carrying cost of the same.
11] Employee Retirement Benefts -
The Company provides for gratuity in accordance with the rules of the
Company based on an actuarial valuation carried out at the balance
sheet date, by an independent actuary. Contribution payable to
Employees benefits is charged to Profit & Loss Account as and when
incurred. Leave wages is not applicable to this Company. The Company
has provided for gratuity during the current year as per the actuarial
valuation of liability.
12] Impairment of Assets -
The Company assesses at each balance sheet date whether there is any
indication that an assets may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the assets. If
such recoverable amount of the assets or the recoverable amount of the
cash generating unit to which the asset belong is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. If at the balance sheet date there is an indication that if a
previously assessed impairment loss no longer exists, the recoverable
amount is reassessed and the asset is reflected at the recoverable
amount subject to a maximum of depreciated historical cost.
13] Earning per share -
Basic EPS is computed using the weighted average number of equity
shares outstanding during the year.
14] provision, Contingent Liabilities and contingent assets -
Provision involving substantial degree of estimation in measurement is
recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
financial statements.
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