Accounting Policies of Bondada Engineering Ltd. Company

Mar 31, 2025

Note 1: Significant Accounting Policies

I. Basis of preparation of financial statements

The Financial Statements have been prepared in accordance with the generally accepted accounting
principles in India. The company has prepared these financial statements under the historical cost
convention on accrual basis to comply in all material respects with the accounting standards specified
under section 133 of the Companies Act, 2013 read with Rule-7 of the Companies (Accounts) Rules.
2014 as amended. The accounting policies have been consistently applied by the company. All assets
and liabilities have been classified as current or non-current as per the company''s normal operating
cycle. The company has ascertained its operating cycle as 12 months for the purpose of
current/non-current classification of assets and liabilities.

II. Current/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 realized or intended to be sold or consumed in normal operating cycle;

- Held primarily for the purpose of trading;

- Expected to be realized within twelve months after the reporting period, or

- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least
twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when:

- It is expected to be settled in normal operating cycle;

- It is held primarily for the purpose of trading;

- It is due to be settled within twelve months after the reporting period, or - There is no unconditional
right to defer the settlement of the liability for at least twelve months after the reporting period.

Tlie company classifies all other liabilities as non-current.

III. Significant accounting estimates and assumptions

The Financial Statements have been prepared in accordance with the generally accepted accounting
principles in India. The company has prepared these financial statements under the historical cost
convention on accrual basis to comply in all material respects with the accounting standards specified
under section 133 of the Companies Act. 2013 read with Rule-7 of the Companies (Accounts) Rules.
2014 as amended. The accounting policies have been consistently applied by the company. All assets
and liabilities have been classified as current or non-current as per the company''s normal operating
cycle. The company has ascertained its operating cycle as 12 months for the purpose of
current/non-current classification of assets and liabilities.

IV. Property, plant and equipment

Property, plant and equipment are measured at cost less accumulated depreciation and accumulated
impairment losses, if any.

Cost includes all expenses related to acquisition and installation of the concerned assets and any
attributable cost of bringing the asset to the condition of its intended use. The cost of self- constructed
assets includes the cost of materials and direct services, any other costs directly attributable to bringing
the assets to its working condition for their intended use.

All other expenses on existing fixed assets, including day to day repair and maintenance expenditure
and cost of replacing parts, are charged to the statement of profit and loss for the period during which
such expenses are incurred.

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

Gains or losses arising from derecognition of a property, plant and equipment are measured as the
difference between the net disposal proceeds and the carrying amount of the asset and are
recognised in the statement of Profit and Loss when the asset is derecognised.

Depreciation/Amortisation and useful life of property, plant and equipment/intangible Assets

Depreciation on property, plant and equipment have been provided under the straight line method, based
on useful lives of assets as estimated by the management or the useful lives of the assets as prescribed in
schedule-ll to the Companies Act 2013, whichever is lower. Depreciation is charged on a monthly pro-rata
basis for assets purchased/sold during the year.

V. Impairment of assets

The company assesses at each balance sheet date whether there is any indication that an asset any be
impaired. If any such indication exists, the company estimates the recoverable amount of the assets. If
such recoverable amount of the cash generating unit to which the asset belongs is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an
impairment loss and is recognized in the profit and loss account. If at the balance sheet date there is
an indication that a previously assessed impairment loss no longer exists, the recoverable amount is
increased to reflecte at the recoverable amount subject to a maximum of depreciated historical cost.

VI. Inventories

Items of inventories are measured at lower of cost and net realisable value after providing for
obsolescence, if any. Cost of inventories comprises of cost of purchase, and other costs net of
recoverable taxes incurred in bringing them to their respective present location and condition.

VII. Investments

Long term investments are accounted at cost and carried at cost. If there is a decline, other than
temporary, in the value of a long term investment, the carrying amount is reduced to recognize the
decline.

Cost of an investment includes acquisition charges such as brokerage, fees and duties.

current investments may be carried at the lower of cost and net realizable value.

On disposal of an investment, the difference between the carrying amount and the disposal proceeds,
net of expenses, is recognized in the profit and loss statement.

When disposing of a part of the holding of an individual investment, the carrying amount to be
allocated to that part is to be determined on the basis of the average carrying amount of the total
holding of the investment.

VIII. Cash and cash equivalents

Cash and cash equivalents comprise of cash in hand, cash at banks, short term deposits and short
term highly liquid investments that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.

IX. Revenue recognition

Revenue mainly comprises the fair value of the consideration received or receivable for the sale of
goods and services in the ordinary course of the company''s activities. Revenue is shown net of Goods
and Service Tax and returns.

The Company derives revenue primarily from Engineering, Procurement and Construction (EPC). and
Operation and Maintenance (O&M) service contracts of Telecom and Solar segments and also Supply
of Telecom, Transmission & Distribution towers (products) PAN India.

Revenues from customer contracts are considered for recognition and measurement when the
contract has been approved by the parties to the contract, the parties to contract are committed to
perform their respective obligations under the contract, and the contract is legally enforceable.

Revenue is recognised when the control of the promised products or services is transferred to the
customer and it is probable that the company will collect the consideration to which it is entitled for
the exchanged goods or services.

Other income

Other income comprises primarily interest income on margin money deposits, intercorporate loans,
dividend income, profit/loss from sale of investments, gain/ (loss) on disposal of property, plant and
equipment. Any gain or loss arising on de-recognition of property, plant and equipment is calculated
as the difference between the net disposal proceeds and the carrying amount of the asset.

Incentives from department of industries recognized based on the reasonable assurance from the
Government of Andhra Pradesh.

Other items of income are accounted as and when the right to receive such income arises and it is
probable that the economic benefits will flow to the company and the amount of income can be
measured reliably.

X. Borrowing cost

Borrowing costs that are directly attributable to the acquisition of an asset that necessarily takes a
substantial period of time to get ready for its intended use are capitalised as part of the cost of that
asset till the date it is put to use.

Borrowing costs are not capitalised where the property, plant and equipment do not take a substantial
period of time to get ready for its intended use.

XI. Earnings per share

Basic earnings per share is calculated by dividing the net profit after tax by the weighted average
number of equity shares outstanding during the year adjusted for bonus element in equity share.
Diluted earnings per share adjusts the figures used in determination of basic earnings per share to take
into account the conversion of all dilutive potential equity shares. Dilutive potential equity shares are
deemed converted as at the beginning of the period unless issued at a later date.

XII. Income taxes

Tax expense for the year comprises current tax and deferred tax.

Current tax:

Current income tax assets and liabilities are measured at the amount expected to be recovered from or
paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that
are enacted at the reporting date.

Deferred tax:

Deferred tax charge or benefit is the tax effects of timing difference between accounting income and
taxable income for the year. The deferred tax charge or benefit and corresponding deferred tax
liabilities or assets are recognized using the tax rates that have been enacted or substantially enacted
by the balance sheet date.

Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can
be realized in future; however, where there is unabsorbed depreciation or carry forward of losses,
deferred tax asset are recognized only if there is a virtual certainty of realization of such assets.

XIII. Leases

Leases that do not transfer substantially all the risks and rewards of ownership are classified as
operating leases and recorded as expense as and when the payments are made over the lease term.

XIV. Employee Benefits

a) Short term employee benefits:

The undiscounted amount of short-term employee benefits expected to be paid in exchange for
the services rendered by employees are recognized as an expense during the period when the
employees render the services.

b) Post-employment benefit:

Defined contribution plans

The company deposits the contributions for provident fund and Employee State Insurance to the
appropriate government authorities and these contributions are recognized in the statement of
Profit & Loss in the financial year to which they relate.

Defined benefit plans

The company pays gratuity to the employees who have completed five years of service at the time
of resignation/superannuation. The gratuity is paid @15 days salary for every completed year of
service as per the Payment of Gratuity Act. 1972.

The liability in respect of gratuity and other post- employment benefits is calculated using the
Projected Unit Credit Method and spread over the period during which the benefit is expected to
be derived from employees’ services.

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Mar 31, 2024

J Note 1: Significant accounting policies

Corporate Information

Bondada Engineering L ;mited (the company) is domiciled and incorporated in India on 29th March''2012, under Companies Act, 1956. Its registered office is located at D. No. 1-1-27/37, Ashok Manoj Nagar, Kapra, Hyderabad. Telangana. The company is engaged in business of providing EPC services and O&M services for telecom and solar sector and manufacturing of telecom towers.

During the year the name of the company has changed from Bondada Engineering Private Limited to Bondada Engineering Limited with effect from 31st May 2023

I. Basis of preparation of Financial Statements

The Financial Statements have been prepared in accordance with the generally accepted accounting principles in India. The company has prepared these financial statements under the historical cost convention on accrual basis to comply in all material respects with the accounting standards specified under section 133 of the Companies Act, 2013 read with Rule-7 of the Companies (Accounts) Rules, 2021 as amended. The accounting policies have been consistently applied by the company. All assets and liabilities have been classified as current or non-current as per the company''s normal operating cycle.

The company has ascertained its operating cycle as 12 months for the purpose of current/non-current classification of assets and liabilities

II. Current/non-current Cassification

The group 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 operating cycle;

Held primarily for the purpose of trading;

Expected to be realised within twelve months after the reporting period, or

Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when;

It is expected to be settled in normal operating cycle;

It is held primarily for the purpose of trading;

It is due to be settled within twelve months after the reporting period, or - There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The company classifies all other liabilities as non-current.

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

II. Significant accounting Estimates and assumptions

The preparation of the company’s financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods

IV. Property, plant and equipment

Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses, if any.

Cost includes all expenses related to acquisition and installation of the concerned assets and any attributable cost of bringing the asset to the condition of its intended use. The cost of self-constructed assets includes the cost of materials and oirect services, any other costs directly attributable to bringing the assets to its working condition for their intended use.

Depreciation/ Amortisation and useful life of property, plant and equipment/ intangible Assets

During the financial year, the company has changed the method of depreciation from Written Down Value (WDV) to Straight Line Method (SI M) Accordingly, depreciation on property, plant and equipment have been provided under the straight line method, based on useful lives of assets as estimated by the management or the useful lives of the assets as prescribed in schedule-ll to the Companies Act 2013, whichever is lower. Depreciation is charged on a monthly pro-rata basis for assets purchased/sold during the year.

All other expenses on existing fixed assets, including day to day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss forth''^- period during which such expenses are incurred.

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

Cains or losses arising from derecognition of a property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.

The above change in method of depreciation resulted a positive impact on profit before tax to the extent of Rs. 51.61 lacs during the year FY 23-24

V. Impairment of assets

The company assesses at each balance sheet date whether there is any indication that an asset any be impaired. If any such indication exists, the company estimates the recoverable amount of the assets. If such recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.

VI. Inventories

Items of inventories are measured at lower of cost and net realisable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, and’ other costs net of recoverable taxes incurred in bringing them to their respective present location and condition.

VII. Investments

Long term investments are accounted at cost and carried at cost. If there is a decline, other than temporary, in the value of a long term investment, the carrying amount is reduced to recognise the decline.

Cost of an investment includes acquisition charges such as brokerage, fees and duties.

Current investments may be carried at the lower of cost and net realizable value.

On disposal of an investment, the difference between the carrying amount and the disposal proceeds, net of expenses, is recognised in the profit and loss statement.

When disposing of a part of the holding of an individual investment, the carrying amount to be allocated to that part is to be determined on the basis of the average carrying amount of the total holding of the investment.

VIII. Cash and cash equivalents

Cash and cash equivalents comprise of cash in hand, cash at banks, short term deposits and short term highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

IX. Revenue recognition

Revenue mainly comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Company''s activities. Revenue is shown net of Goods and Service Tax and returns.

The Company derives revenue primarily from Engineering, Procurement and Construction (EPC), and Operation and Maintenance (O&M)

service contracts of Telecom and Solar segments and also Supply of Telecom, Transmission & Distribution towers (products) PAN India.

Revenues from customer contracts are considered for recognition and measurement when the contract has been approved by the parties to the contract, the parties to contract are committed to perform their respective obligations under the contract, and the contract is legally enforceable.

Revenue is recognised when the control of the promised products or services is transferred to the customer and it is probable that the Company will collect the consideration to which it is entitled for the exchanged goods or services.

Other income

Other income comprises primarily interest income on margin money deposits, inter corporate loans, dividend income, gain/ (loss) on disposal of property, plant and equipment. Any gain or loss arising on de-recognition of property, plant and equipment is calculated as the difference between the net disposal proceeds and the carrying amount of the asset.

Incentives from department of industries recognized based on the reasonable assurance from the Government of Andhra Pradesh.

Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably.

X. Borrowing cost

Borrowing costs that are directly attributable to the acquisition of an asset that necessarily takes a substantial period of time to get ready for its

intended use are capitalised as part of the cost of that asset till the date it is put to use.

Borrowing costs are not capitalised where the property, plant and equipment do not take a substantial period of time to get ready for its intended use.

XI. Earnings per share

Basic earnings per share is calculated by dividing the net profit after tax by the weighted average number of equity shares outstanding during the year adjusted for bonus element in equity share. Diluted earnings per share adjusts the figures used in determination of basic earnings per share to take into account the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as at the beginning of the period unless issued at a later date

XII. Income taxes

Tax expense for the year comprises current tax and deferred tax.

Current tax:

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted at the reporting date.

Deferred tax:

Deferred tax charge or benefit is the tax effects of timing difference between accounting income and taxable income for the year. The deferred tax charge or benefit and corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantially enacted by the balance sheet date.

Minimum alternative tax:

After making adjustments for book profits as defined in Income Tax Act. 1961, Minimum alternative tax has to be paid in cases where it is higher than current tax.

XIII. Leases

Leases that do not transfer substantially all the risks and rewards of ownership are classified as operating leases and recorded as expense as and when the payments are made over the lease term.

Leases that do not transfer substantially all the risks and rewards of ownership are classified as operating leases and recorded as expense as and when the payments are made over the lease term.

A] Short term employee benefits:

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services.

B) Post-employment benefit:

Defined contribution plans

The company deposits the contributions for

provident fund and Employee State insurance to the appropriate government authorities and these contributions are recognized in the statement of Profit & Loss in the financial year to which they relate.

Defined benefit plans

The company pays gratuity to the employees who have completed five years of service at the time of resignation/superannuation. The gratuity Is paid @ IS days salary for every completed year of service as per the Payment of Gratuity Act, 1972.

The liability in respect of gratuity and other postemployment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employees’ services.