Accounting Policies of Markolines Pavement Technologies Ltd. Company

Mar 31, 2025

1. Corporate Information:

The Company was originally incorporated on
November 8, 2002 vide Certificate of Incorporation
bearing Registration Number 156371 issued by the
Registrar of Companies, Mumbai with the name & style
of MARK-O-LINE TRAFFIC CONTROLS PRIVATE LIMITED.
The company changed its name to MARKOLINES
TRAFFIC CONTROLS PRIVATE LIMITED with approval
of Central Government and ROC dated March 12,
2018 and again company converted to public limited
company and changed its name to MARKOLINES
PAVEMENT TECHNOLOGIES LIMITED with approval of
Central Government and ROC dated August 10, 2021.
The company has passed shareholders resolution
to change its name to "Markolines Pavement
Technologies Limited" vide EGM dated 17th August,
2021. The Company is engaged in the business
of providing highway operations & maintenance
services. Since inception the Company has shown
increasing trend in the revenues by endeavoring
to reach consumers at large by providing quality
products.

2. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation:

The financial statements of the Company have been
prepared in accordance with generally accepted
accounting principles in India (Indian GAAP). The
Company has prepared these financial statements to
comply in all material respects with the accounting
standards notified under section 133 of the Companies
Act 2013, read together with paragraph 7 of the
Companies (Accounts) Rules, 2014. The financial
statements have been prepared on an accrual
basis and under the historical cost convention. The
accounting policies have been consistently applied
except where specifically stated in financial statement
and notes to accounts of the non-conformity with the
relevant Accounting Standard.

(b) Significant Accounting Policies:

(a) Use of Estimates: The preparation of financial
statements in conformity with Indian GAAP requires
management to make judgments, estimates and
assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent
liabilities at the end of the reporting period and the
reported amounts of revenue and expenses during
the reported period. Although these estimates
are based on management''s best knowledge of
current events and actions, uncertainty about
these assumptions and estimates could result in
the outcomes requiring a material adjustment
to the Carrying amounts of Assets or Liabilities in
future periods.

(b) Property, Plant & equipment and Intangible
assets: Property, Plant & equipment and
Intangible assets are stated at cost of acquisition
or construction less accumulated depreciation
and impairment loss, if any. The cost of an asset
comprises of its purchase price and any directly
attributable cost of bringing the assets to working
condition for its intended use. Expenditure
on additions, improvements and renewals is
capitalized and expenditure for maintenance and
repairs is charged to profit and loss account.

Depreciation is provided on Written Down value
basis based on life assigned to each asset in
accordance with Schedule II of the Act or as per
life estimated by the Management.

An asset is treated as impaired asset when the
carrying cost of the asset exceeds its recoverable
value. An impairment loss is charged to the profit
& loss account is identified as impaired. The
impairment loss recognized in prior accounting
period is reversed if there has been changed in the
estimate of recoverable amount.

(c) Revenue Recognition: Revenue is recognized
when it is earned and no significant uncertainty
exists as to its realization or collection. Revenue
from sale of goods or services are recognized
on delivery of the products or services, when all
significant contractual obligations have been
satisfied, the property in the goods is transferred
for price, significant risk and rewards of ownership
are transferred to the customers and no effective
ownership is retained.

In the financial statement, revenue from operation
does not include Indirect taxes like sales tax and/
or Goods & service tax.

(d) Investments: 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.

On initial recognition, all investments are measured at cost. The cost comprises price and directly attributable
acquisition charges such as brokerage, fees and duties.

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 carried at cost. However, provision for diminution in
value is made to recognize a decline other than temporary in the value of Investments.

On disposal of investment, the difference between its carrying amount and net disposal proceeds are charged
or credited to the statement of profit and loss.

(e) Inventories: Inventory of W-I-P and Raw materials are valued at lower of cost and net realizable value.
Cost is determined on FIFO 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 make the sale.

There is no stock of finished goods lying with the company.

(f) Employee Benefits: Retirement benefit in the form of provident fund is a defined contribution scheme.
The contribution to the provident fund is charged to the statement of profit and loss for the year when an
employee renders the related services.

During the year gratuity payable to employees is NIL based upon actuarial valuation report.

Leave encashment to the employees are accounted for as & when the same is claimed by eligible employees.
I. Defined contribution plans

The Company has classified the various benefits provided to employees as under:

a. Employee State Insurance Fund

b. Employee Provident Fund

The expense recognised during the period towards defined contribution plan -

II. Defined benefit plans

Gratuity

The Company should provide for gratuity for employees in India as per the Payment of Gratuity Act, 1972.
Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of
gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed
proportionately for 15 days salary multiplied for the number of years of service, subject to a payment ceiling
of INR 20,00,000/-.

Based on the actuarial valuation obtained in this respect, the following table sets out the details of the
employee benefit obligation as at balance sheet date:

(g) Taxation: Tax expenses comprises of current and deferred tax. Current income tax is measured at the
amount expected to be paid to the Tax Authorities in accordance with the Income Tax Act''1961 enacted or
substantively enacted at the reporting date.

Deferred Tax Assets or Deferred Tax Liability is recognized on timing difference being the difference between
taxable incomes and accounting income. Deferred Tax Assets or Deferred Tax Liability is measured using the
tax rates and tax laws that have been enacted or substantively enacted at the Balance Sheet date. Deferred
Tax Assets arising from timing differences are recognized to the extent there is a reasonable certainty that the
assets can be realized in future.

(h) Borrowing Cost: Borrowing Cost includes interest and amortization of ancillary costs incurred in connection
with the arrangement of borrowings. Borrowing costs directly attributable to the acquisition, construction or
production of an asset that necessarily takes a substantial period of time to get ready for its intended use or
sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the
period they occur.

(i) Segment Reporting: The Company is engaged in business of providing services of infrastructure operations
like road and related infrastructure construction and road maintenance. Considering the nature of Business
and Financial Reporting of the Company, the Company is operating in following two Segments:

i. Highway maintenance services

ii. Specialized construction services

Hence segment reporting is applicable to the company.

---

Mar 31, 2024

2. SIGNIFICANT ACCOUNTING POLICIES

(A) Basis of Preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies have been consistently applied except where specifically stated in financial statement and notes to accounts of the non-conformity with the relevant Accounting Standard.

(B) Significant Accounting Policies

(a) Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the end of the reporting period and the reported

amounts of revenue and expenses during the reported period. Although these estimates are based on management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the Carrying amounts of Assets or Liabilities in future periods.

(b) Property, Plant & equipment and Intangible assets:

Property, Plant & equipment and Intangible assets are stated at cost of acquisition or construction less accumulated depreciation and impairment loss, if any. The cost of an asset comprises of its purchase price and any directly attributable cost of bringing the assets to working condition for its intended use. Expenditure on additions, improvements and renewals is capitalized and expenditure for maintenance and repairs is charged to profit and loss account.

Depreciation is provided on Written Down value basis based on life assigned to each asset in accordance with Schedule II of the Act or as per life estimated by the Management.

An asset is treated as impaired asset when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the profit & loss account is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been changed in the estimate of recoverable amount.

(c) Revenue Recognition

Revenue is recognized when it is earned and no significant uncertainty exists as to its realization or collection. Revenue from sale of goods or services are recognized on delivery of the products or services, when all significant contractual obligations have been satisfied, the property in the goods is transferred for price, significant risk and rewards of ownership are transferred to the customers and no effective ownership is retained.

In the financial statement, revenue from operation does not include Indirect taxes like sales tax and/or Goods & service tax.

(d) Investments

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.

On initial recognition, all investments are measured at cost. The cost comprises price and directly attributable acquisition charges such as brokerage, fees and duties.

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 carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of Investments.

On disposal of investment, the difference between its carrying amount and net disposal proceeds are charged or credited to the statement of profit and loss.

(e) Inventories

Inventory of W-I-P and Raw materials are valued at lower of cost and net realizable value. Cost is determined on FIFO 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 make the sale.

There is no stock of finished goods lying with the company.

(f) Employee Benefits

Retirement benefit in the form of provident fund is a defined contribution scheme. The contribution to the provident fund is charged to the statement of profit and loss for the year when an employee renders the related services.

During the year gratuity payable to employees is NIL based upon actuarial valuation report.

Leave encashment to the employees are accounted for as & when the same is claimed by eligible employees.

I. Defined contribution plans

The Company has classified the various benefits provided to employees as under:

a. Employee State Insurance Fund

b. Employee Provident Fund

II. Defined benefit plans

Gratuity

The Company should provide for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service, subject to a payment ceiling of INR 20,00,000/-.

Based on the actuarial valuation obtained in this respect, the following table sets out the details of the employee benefit obligation as at balance sheet date:

a. The rate used to discount post-employment benefit obligations is determined by reference to market yields at the end of the reporting period on government bonds.

b. The estimates of future salary increases considered in the actuarial valuation take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

(g) Taxation

Tax expenses comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the Tax Authorities in accordance with the Income Tax Act''1961 enacted or substantively enacted at the reporting date.

Staff Bonus payable as on 31st March, 2023 due to be paid before filing Income tax return, is pending to be paid as on the signing date of financial, the same will be paid before due date and accordingly has been considered for computation of Income tax for the current financial year.

Deferred Tax Assets or Deferred Tax Liability is recognized on timing difference being the difference between taxable incomes and accounting income. Deferred Tax Assets or Deferred Tax Liability is measured using the tax rates and tax laws that have been enacted or substantively enacted at the Balance Sheet date. Deferred Tax Assets arising from timing differences are recognized to the extent there is a reasonable certainty that the assets can be realized in future.

(h) Borrowing Cost

Borrowing Cost includes interest and amortization of ancillary costs incurred in connection with the arrangement of borrowings. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

(i) Segment Reporting

The Company is engaged in business of providing services of infrastructure operations like road and related infrastructure construction and road maintenance. Considering the nature of Business and Financial Reporting of the Company, the Company is operating in following two Segments:

1.Highway maintenance services 2.Specialized construction services

Hence segment reporting is applicable to the company.

---

Mar 31, 2023

2.1 SIGNIFICANT ACCOUNTING POLICIES

1. Corporate Information:

The Company was originally incorporated on November 8, 2002 vide Certificate of Incorporation bearing Registration Number 156371 issued by the Registrar of Companies, Mumbai with the name & style of MARK-O-LINE TRAFFIC CONTROLS PRIVATE LIMITED. The company changed its name to MARKOLINES TRAFFIC CONTROLS PRIVATE LIMITED with approval of Central Government and ROC dated March 12, 2018 and again company converted to public limited company and changed its name to MARKOLINES PAVEMENT TECHNOLOGIES LIMITED with approval of Central Government and ROC dated August 10, 2021.

The company has passed shareholders resolution to change its name to "Markolines Pavement Technologies Limited" vide EGM dated 17th August, 2021.

The Company is engaged in the business of providing highway operations & maintenance services. Since inception the Company has shown increasing trend in the revenues by endeavoring to reach consumers at large by providing quality products.

2. SIGNIFICANT ACCOUNTING POLICIES

(A) Basis of Preparation:

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies have been consistently applied except where specifically stated in financial statement and notes to accounts of the non-conformity with the relevant Accounting Standard.

(B) Significant Accounting Policies:

(a) Use of Estimates:

The preparation of financial statements in conformity with Indian GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the end of the reporting period and the reported amounts of revenue and expenses during the reported period. Although these estimates are based on management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the Carrying amounts of Assets or Liabilities in future periods.

(b) Property, Plant & equipment and Intangible assets:

Property, Plant & equipment and Intangible assets are stated at cost of acquisition or construction less accumulated depreciation and impairment loss, if any. The cost of an asset comprises of its purchase price and any directly attributable cost of bringing the assets to working condition for its intended use. Expenditure on additions, improvements and renewals is capitalized and expenditure for maintenance and repairs is charged to profit and loss account.

Depreciation is provided on Written Down value basis based on life assigned to each asset in accordance with Schedule II of the Act or as per life estimated by the Management.

An asset is treated as impaired asset when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the profit & loss account is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been changed in the estimate of recoverable amount.

(c) Revenue Recognition:

Revenue is recognized when it is earned and no significant uncertainty exists as to its realization or collection. Revenue from sale of goods or services are recognized on delivery of the products or services, when all significant contractual obligations have been satisfied, the property in the goods is transferred for price, significant risk and rewards of ownership are transferred to the customers and no effective ownership is retained.

In the financial statement, revenue from operation does not include Indirect taxes like sales tax and/or Goods & service tax.

(d) Investments:

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.

On initial recognition, all investments are measured at cost. The cost comprises price and directly attributable acquisition charges such as brokerage, fees and duties.

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 carried at cost. However, provision for diminution in value is made to recognize

a decline other than temporary in the value of Investments.

On disposal of investment, the difference between its carrying amount and net disposal proceeds are charged or credited to the statement of profit and loss.

(e) Inventories:

Inventory of W-I-P and Raw materials are valued at lower of cost and net realizable value. Cost is determined on FIFO 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 make the sale.

There is no stock of finished goods lying with the company.

(f) Employee Benefits:

Retirement benefit in the form of provident fund is a defined contribution scheme. The contribution to the provident fund is charged to the statement of profit and loss for the year when an employee renders the related services.

During the year gratuity payable to employees of Rs. 58.62 lakhs are provided based upon actuarial valuation report.

Leave encashment to the employees are accounted for as & when the same is claimed by eligible employees.

I. Defined contribution plans

The Company has classified the various benefits provided to employees as under:

a. Employee State Insurance Fund

b. Employee Provident Fund

The expense recognised during the period towards defined contribution plan -

Amount (Rs In lakhs)
Particulars	For the year ended	For the year ended
	31.03.2023	31.03.2022
Employers Contribution to Employee State Insurance	7.21	69.13
Employers Contribution to Employee Provident Fund	311.85	296.94

II. Defined benefit plans

Gratuity

The Company should provide for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service, subject to a payment ceiling of INR 20,00,000/-.

Based on the actuarial valuation obtained in this respect, the following table sets out the details of the employee benefit obligation as at balance sheet date:

Defined benefit plans	For the year ended 31.03.2023	For the year ended 31.03.2022
	Gratuity (Unfunded)	Gratuity (Unfunded)
I Expenses recognised in statement of profit and loss during the year:
Current service cost	35.60	40.54
Past service cost	-	-
Expected return on plan assets	-	-
Net interest cost / (income) on the net defined benefit liability / (asset)	8.60	5.13
Net actuarial (gain)/ loss recognized in the year	14.42	8.18
Loss (gain) on curtailments
Total expenses included in Employee benefit expenses	58.62	53.85
Discount Rate as per para 78 of AS 15 R(2005)	7.30%	7.30%

II	Net asset /(liability) recognised as at balance sheet date:
	Present value of defined obligation	193.32	138.89
	Fair value of plan assets	-	-
	Funded status [surplus/(deficit)]	(193.32)	(138.89)
	Present value of defined benefit obligation at the end of the year	193.32	138.90
Classification
	Current liability	31.22	21.01
	Non-current liability	162.10	117.89

Notes:

a. The rate used to discount post-employment benefit obligations is determined by reference to market yields at the end of the reporting period on government bonds.

b. The estimates of future salary increases considered in the actuarial valuation take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

(g) Taxation:

Tax expenses comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the Tax Authorities in accordance with the Income Tax Act''1961 enacted or substantively enacted at the reporting date.

Staff Bonus payable as on 31st March, 2023 due to be paid before filing Income tax return, is pending to be paid as on the signing date of financial, the same will be paid before due date and accordingly has been considered for computation of Income tax for the current financial year.

Deferred Tax Assets or Deferred Tax Liability is recognized on timing difference being the difference between taxable incomes and accounting income. Deferred Tax Assets or Deferred Tax Liability is measured using the tax rates and tax laws that have been enacted or substantively enacted at the Balance Sheet date. Deferred Tax Assets arising from timing differences are recognized to the extent there is a reasonable certainty that the assets can be realized in future.

(h) Borrowing Cost:

Borrowing Cost includes interest and amortization of ancillary costs incurred in connection with the arrangement of borrowings. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

(i) Segment Reporting:

The Company is engaged in business of providing services of infrastructure operations like road and related infrastructure construction and road maintenance. Considering the nature of Business and Financial Reporting of the Company, the Company is operating in following two Segments:

i. Highway maintenance services

ii. Specialized construction services

Hence segment reporting is applicable to the company.

(j) Provisions and Contingent Liabilities:

A provision is recognized when the company has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

Contingent liability:

Bank Guarantee

-Financial Bank Guarantee- Rs. 2.61 crores -Performance Bank Guarantee- Rs. 17.30 crores Income Tax Demand:

-A.Y. 2020-21 Rs. 0.96 lacs -A.Y. 2021-22 Rs. 0.97 lacs Service Tax Demand:

-F.Y 2015-16 Rs. 389.55 lacs

-F.Y 2016-17 Rs. 430.38 lacs

-F.Y. 2017-18 Rs. 218.50 lacs

(upto J une ''17)

The above demand is in appeal with CESTAT Authority.

(k) Earnings per share:

Basic earnings per share are 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.

(l) Current Assets, Loans & Advances:

In the opinion of the Board and to the best of its knowledge and belief the value on realization of current assets in the ordinary course of business would not be less than the amount at which they are stated in the Balance Sheet and repayable on demand. Trade Receivables as on March 31, 2023 has been taken as certified by the management of the company and is subjected to balance confirmations. As per the view of the management of the company there is no doubtful debt and hence provision for doubtful debts has not been made.