Accounting Policies of Rachana Infrastructure Ltd. Company

Mar 31, 2025

(a) Basis of preparation and presentation:

These financial statements have been prepared in accordance with the Generally Accepted
Accounting Principles in India (Indian GAAP) including the Accounting Standards notified under
Section 133 of the Companies Act, 2013, read with Companies (Accounting Standards) Rules,
2021, as amended, ("AS") and the relevant provisions of the Companies Act, 2013.

The financial statements have been prepared under the historical cost convention on accrual
basis as a going concern.

(b) Use of estimates:

The estimates and judgments used in the preparation of financial statements are continuously
evaluated by the company and are based on historical experience and various other assumptions
and factors that the management believes to be reasonable under existing circumstances.
Difference between actual results and estimates are recognized in the period in which the results
are known/materialized. The said estimates are based on the facts and the events, that existed
as at the reporting date, or that date but provide additional evidence about conditions existing
on the reporting date.

1) Depreciation/amortization and useful lives of property, plant and equipment/intangible assets:
Property, plant and equipment are depreciated over the estimated useful lives of the assets,
after taking into account their estimated residual value. Management reviews the estimated
useful lives and residual values of the assets annually in order to determine the amount of
depreciation to be recorded during any reporting period. The useful lives and residual values are
based on the Company''s historical experience with similar assets and after taking into account
the anticipated technological changes. The depreciation for future periods is adjusted if there are
significant changes from previous estimates.

2) Recoverability of trade receivables:

Judgments are required in assessing the recoverability of overdue trade receivables and
determining whether a provision against those receivables is required. Factors taken into
consideration include the credit rating of the counter party, the amount and timing of anticipated
future payments and any possible actions that can be taken to mitigate the risk of non-payment.

(c) Property, Plant and Equipment:

Property, Plant and Equipment are stated at cost, net of recoverable taxes, trade discount and
rebates less accumulated depreciation and impairment losses, if any. Such cost includes

purchase price, borrowing cost and any cost directly attributable to bringing the assets to its
working condition for its intended use.

Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset,
as appropriate, only when it is probable that future economic benefits associated with the item
will flow to the entity and the cost can be measured reliably.

Depreciation on Property, Plant and Equipment is provided using Written Down Value (WDV)
method on depreciable amount based on useful life of the assets as prescribed in Schedule II to
the Companies Act, 2013. In respect of the Property, Plant and Equipment purchased during the
year, depreciation is provided on pro rata basis from the date on which such asset is ready to be
put to use. The estimated useful lives, residual values and depreciation method are reviewed at
the end of each reporting period, with the effect of any such change in the estimate accounted
for on a prospective basis. The estimated useful lives and residual values are as prescribed in
Schedule II to the Companies Act, 2013.

Till the previous accounting year, accounting practice was adopted of computing and charging
the depreciation on the Investment Property. However, from current year onwards, management
has decided to discontinue the above-mentioned accounting treatment of charging depreciation
on the Investment Property on account of the same being leased out for the purpose of earning
regular rental income and management do not have any intent for using the said Investment
Property for conducting the business operations of the Company.

An item of Property, Plant and Equipment is derecognized upon disposal or when no future
economic benefits are expected to arise from the continued use of the asset. Any gain or loss
arising on the disposal or retirement of an item of Property, Plant and Equipment is determined
as the difference between the sale proceeds and the carrying amount of the asset and are
recognized in the Statement of Profit and Loss.

(d) Intangible Assets:

Intangible assets acquired separately are measured on initial recognition at cost. Following initial
recognition, intangible assets are carried at cost less any accumulated depreciation and
accumulated impairment loss. Intangible Assets mainly consists of Computer Software having
estimated useful life of 5 years. The depreciation expense on intangible assets with finite lives
and impairment loss is recognized in the Statement of Profit and Loss.

The amortization period and the amortization method are reviewed at least at each financial year
end. If the expected useful life of the asset is significantly different from previous estimates, the
amortization period is changed accordingly. If there has been a significant change in the
expected pattern of economic benefits from the asset, the amortization method is changed to
reflect the changed pattern.

An intangible asset is de-recognized on disposal, or when no future economic benefits are
expected from use or disposal. Gains or losses arising from de-recognition of an intangible asset,
measured as the difference between the net disposal proceeds and the carrying amount of the
asset are recognized in statement of profit and loss when the asset is de-recognized.

(e) Revenue Recognition:

i) Revenue from operations of Stone Quarry is recognized as per AS 9 ''Revenue Recognition'' while
revenue from operations of Road Construction is recognized on the basis of percentage
completion method as per AS 7 ''Construction Contract'' issued by Institute of Chartered
Accountants of India.

ii) Revenue from sale of goods is recognized when property in goods is transferred to the buyer and
the same is measurable at the time of sale and there is no uncertainty regarding ultimate
collection from the buyer.

iii) Contract revenue and its associated costs are accrued and recognized by reference to the stage
of completion of the contract at the reporting date.

Contract revenue comprises the initial amount of revenue agreed upon in the contract, the
changes in contract work, claims and incentive payments to the extent that it is probable that
they will result in revenue and they are capable of being reliably measured.

Contract cost comprises of cost that relate directly to the specific contract, cost that are
attributable to contract activity in general and can be allocated to the contract and such other
cost as are specifically chargeable to the customer under the terms of the contract.

Stage of completion is determined based on the actual cost incurred till the end of reporting
period as compared to the expected total cost of the project and management validates the
same based on survey of work performed at the end of each year. The effect of a change in the
estimate of contract revenue or contract costs, or the effect of a change in the estimate of the
outcome of a contract, is accounted for as a change in accounting estimate and the effect of
which are recognized in the Statement of Profit and Loss in the period in which the change is
made and in subsequent periods.

An expected loss on construction contract is recognized as an expense immediately when it is
certain that the total contract costs will exceed the total contract revenue.

iv) Interest income from Investment is accounted when the same is accrued.

v) Other Income and government benefit, subsides, refunds etc. are accounted when right to
receive is established.

(f) Valuation of Inventories:

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

Cost of finished goods, work-in-progress, raw materials, chemicals, stores and spares, packing
materials, trading and other products are determined on FIFO basis.

On initial recognition, all investments are measured at cost. The cost comprises purchase price
and directly attributable acquisition charges such as brokerage, fees and duties. If an investment
is acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost is
the fair value of the securities issued. If an investment is acquired in exchange for another asset,
the acquisition is determined by reference to the fair value of the asset given up or by reference
to the fair value of the investment acquired, whichever is more clearly evident.

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 the investments.

On disposal of an investment, the difference between its carrying amount and net disposal
proceeds is charged or credited to the Profit and Loss Account.

Investment property

Property that is held for long-term rental yields or for capital appreciation or both, and that is not
occupied by the Company, is classified as investment property. Till the previous accounting year,
Investment properties were stated at cost, net of accumulated depreciation and accumulated
impairment losses, if any. The cost comprised of the purchase price and directly attributable cost
of bringing the investment property to its working condition for the intended use. However, from
current year onwards, management has decided to discontinue the above-mentioned accounting
treatment of charging depreciation on the Investment Property on account of the same being
leased out for the purpose of earning regular rental income and management do not have any
intent for using the said Investment Property for conducting the business operations of the
Company.

On disposal of an investment, the difference between its carrying amount and net disposal
proceeds is charged or credited to the Profit and Loss Account.

(h) Borrowing Costs:

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the
arrangement of borrowings and exchange differences arising from foreign currency borrowings
to the extent they are regarded as an adjustment to the interest cost.

Borrowing costs that are directly attributable to the acquisition or construction of qualifying
assets till the date it is ready for its intended use 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
its intended use.

All other borrowing costs are charged to the Statement of Profit and Loss for the period for
which they are incurred.

(i) Employee Benefits:

i)Short Term Employee Benefits:

All employee benefits payable wholly within twelve months of rendering the service are classified
as short-term employee benefits. Benefits such as salaries, performance incentives, etc., are
recognized as an expense at the undiscounted amount in the Statement of Profit and Loss of the
year in which the employee renders the related service.

ii) Post-Employment Benefits:
a) Defined Contribution Plans:

A defined contribution plan is a post-employment benefit plan under which the Company pays
specified contributions to a separate entity. The Company makes specified monthly
contributions towards Provident Fund and Pension Scheme. The Company''s contribution is
recognized as an expense in the Profit and Loss Statement during the period in which the
employee renders the related service.

b) Defined Benefit Plans:

Past service cost is recognized immediately to the extent that the benefits are already vested
and otherwise is amortized on a straight-line basis over the average period until the benefits
become vested.

The retirement benefit obligation recognized in the Balance Sheet represents the present value
of the defined benefit obligation as adjusted for unrecognized past service cost, as reduced by
the fair value of scheme assets. Any asset resulting from this calculation is limited to past
service cost, plus the present value of available refunds and reductions in future contributions
to the schemes.

Rachana Infrastructure Limited operates post-employment defined benefit plan i.e. gratuity
plan (the plan). The plan is unfunded and entitles an employee, who has rendered at least five
years of continuous service, to receive half month''s salary for each period of completed service
at the time of retirement/resignation. The Gratuity expense is recognized on accrual basis as
per the report of the Actuary which is required to be obtained every 3 years. Therefore, for any
period for which the report of actuary is not required to be obtained, gratuity expense is
recognized on the basis of arithmetical formula and workings provided by the consultant for the
gratuity. Generally, gratuity is paid to the employees on their retirement / termination of
services / resignation / death of the employees.

For the year ended on 31.03.2025, the company has made provision of Rs. 14.11 for Payment
of Gratuity under the provisions of Payment of Gratuity Act, 1972 making total contribution till
31.03.2025 to Rs. 94.10.

(j) Segment Reporting:

The Group''s operating segments are established on the basis of those components of the
Group that are evaluated on the basis of AS-17 (Segment Reporting), in deciding how to
allocate resources and in assessing performance. These have been identified taking into
account nature of products and services, the differing risks and returns and the internal
business reporting systems.

(k) Taxes on Income:

The tax expenses for the period comprises of current tax and deferred income tax. Tax is
recognized in Statement of Profit and Loss.

i) Current Tax:

Current tax assets and liabilities are measured at the amount expected to be recovered from or
paid to the Income Tax authorities, based on tax rates and laws that are enacted at the
Balance sheet date.

ii) Deferred Tax:

Deferred tax is recognized on temporary differences between the carrying amounts of assets
and liabilities in the Financial Statements and the corresponding tax bases used in the
computation of taxable profit.

Deferred tax assets are recognized to the extent it is probable that taxable profit will be
available against which the deductible temporary differences, and the carry forward of unused
tax losses can be utilized.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in
the period in which the liability is settled or the asset realized, based on tax rates (and tax
laws) that have been enacted or substantively enacted by the end of the reporting period. The
carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting
period.

The company has made provision of Rs. 142.84 (including deferred tax asset of Rs. 7.16) for
taxation in the books of account in view of profit earned during the F.Y. 2024-25 as per the
provisions of The Income Tax Act, 1961.

---

Mar 31, 2024

Note No.: 25 Corporate Information:

Rachana Infrastructure Limited (the Company) is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is engaged in business of Infrastructure Projects, Building construction, Quarry Mining and Trading.

(A) Statement of Significant accounting policies:1. Basis for Preparation and Presentation:

The Financial statement are prepared on accrual basis as a going concern under historical cost convention in accordance with the generally accepted accounting principles in India, the accounting standards issued by the Institute of Chartered Accountants of India and as per the requirements of The Companies Act, 2013

2. Use of estimates:

The estimates and judgments used in the preparation of financial statements are continuously evaluated by the company and are based on historical experience and various other assumptions and factors that the management believes to be reasonable under existing circumstances.

Difference between actual results and estimates are recognized in the period in which the results are known/materialized. The said estimates are based on the facts and the events, that existed as at the reporting date, or that date but provide additional evidence about conditions existing on the reporting date.

i. Depreciation/amortization and useful lives of property, plant and equipment/intangible assets:

Property, plant and equipment are depreciated over the estimated useful lives of the assets, after taking into account their estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation to be recorded during any reporting period. The useful lives and residual values are based on the Company''s historical experience with similar assets and take into account anticipated technological changes. The depreciation for future periods is adjusted if there are significant changes from previous estimates.

ii. Recoverability of trade receivables:

Judgments are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counter party, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.

3. Property, Plant and Equipment:

Property, Plant and Equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its working condition for its intended use.

Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably.

Depreciation on Property, Plant and Equipment is provided using Written Down Value (WDV) method on depreciable amount based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. In respect of the Property, Plant and Equipment purchased during the year, depreciation is provided on pro rata basis from the date on which such asset is ready to be put to use. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of

any such change in the estimate accounted for on a prospective basis. The estimated useful lives and residual values are as prescribed in Schedule II to the Companies Act, 2013 except for Building held as Investment Properties, which are based on technical evaluation of useful life by the management.

An item of Property, Plant and Equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of Property, Plant and Equipment is determined as the difference between the sale proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss.

The estimated useful lives of items of Property, Plant & Equipment as prescribed in Schedule II of Companies Act, 2013 as follows:

Asset Class	Useful Life (In Years)
Plant & Machinery	3-15
Motor Vehicles	5-10
Computer and Data Processing Units	3
Furniture and Fittings	10
Laboratory Equipments	5-10
Electrical Installations and Equipment	3-5
Office Equipments	3-10
Buildings	30
Investment Property (Building)	60

4. Intangible Assets:

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated depreciation and accumulated impairment loss. Intangible Assets mainly consists of Computer Software having estimated useful life of 5 years. The depreciation expense on intangible assets with finite lives and impairment loss is recognized in the Statement of Profit and Loss.

The amortization period and the amortization method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly. If there has been a significant change in the expected pattern of economic benefits from the asset, the amortization method is changed to reflect the changed pattern.

An intangible asset is de-recognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from de-recognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in statement of profit and loss when the asset is de-recognized.

5. Revenue Recognition:

i. Revenue from operations of Stone Quarry is recognized as per AS 9 ''Revenue Recognition'' while revenue from operations of Road Construction is recognized as per AS 7 ''Construction Contract'' issued by Institute of Chartered Accountants of India.

ii. Revenue from contracts is recognized on the basis of percentage completion method given as per AS 7.

iii. Revenue from sale of goods is recognized when property in goods is transferred to the buyer and the same is measurable at the time of sale and there is no uncertainty regarding ultimate collection from the buyer.

iv. Contract revenue and its associated costs are accrued and recognized by reference to the stage of completion of the contract at the reporting date.

Contract revenue comprises the initial amount of revenue agreed upon in the contract, the changes in contract work, claims and incentive payments to the extent that it is probable that they will result in revenue and they are capable of being reliably measured.

Contract cost comprises of cost that relate directly to the specific contract, cost that are attributable to contract activity in general and can be allocated to the contract and such other cost as are specifically chargeable to the customer under the terms of the contract.

Stage of completion is determined based on the survey of work performed at the end of each year by the management. The effect of a change in the estimate of contract revenue or contract costs, or the effect of a change in the estimate of the outcome of a contract, is accounted for as a change in accounting estimate and the effect of which are recognized in the Statement of Profit and Loss in the period in which the change is made and in subsequent periods.

An expected loss on construction contract is recognized as an expense immediately when it is certain that the total contract costs will exceed the total contract revenue.

v. Interest income from Investment is accounted when the same is accrued.

vi. Other Income and government benefits, subsides, refunds etc. are accounted when right to receive is established.

6. Inventories:

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

Cost of finished goods, work-in-progress, raw materials, chemicals, stores and spares, packing materials, trading and other products are determined on FIFO basis.

7. Investment:

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties. If an investment is acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued. If an investment is acquired in exchange for another asset, the acquisition is determined by reference to the fair value of the asset given up or by reference to the fair value of the investment acquired, whichever is more clearly evident.

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 the investments.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Profit and Loss Account.

Investment property

Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Company, is classified as investment property. Investment properties are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price and directly attributable cost of bringing the investment property to its working condition for the intended use. On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Profit and Loss Account.

During the current financial year, the company has provided depreciation of Rs. 19.87 on Investment Property (including depreciation on Revalued amount of Rs. 6.11 and charged to Revaluation Reserve.).

8. Borrowing Costs:

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets till the date it is ready for its intended use are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.

All other borrowing costs are charged to the Statement of Profit and Loss for the period for which they are incurred.

9. Employee Benefits:

(i) Short Term Employee Benefits:

All employee benefits payable wholly within twelve months of rendering the service are classified as shortterm employee benefits. Benefits such as salaries, performance incentives, etc., are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the employee renders the related service.

(ii) Post-Employment Benefits:

(a) Defined Contribution Plans:

A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions to a separate entity. The Company makes specified monthly contributions towards Provident Fund and Pension Scheme. The Company''s contribution is recognised as an expense in the Profit and Loss Statement during the period in which the employee renders the related service.

(b) Defined Benefit Plans:

Past service cost is recognised immediately to the extent that the benefits are already vested and otherwise is amortised on a straight-line basis over the average period until the benefits become vested.

The retirement benefit obligation recognised in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for unrecognised past service cost, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes.

Rachana Infrastructure Limited operates post-employment defined benefit plan i.e. gratuity plan (the plan). The plan is unfunded and entitles an employee, who has rendered at least five years of continuous service, to receive half month''s salary for each period of completed service at the time of retirement/resignation. The Gratuity expense is recognized on accrual basis as per the report of the Actuary which is required to be obtained every 3 years. Therefore, for any period for which the report of actuary is not required to be obtained, gratuity expense is recognised on the basis of arithmetical formula and workings provided by the consultant for the gratuity. Generally, gratuity is paid to the employees on their retirement / termination of services / resignation / death of the employees

For the year ended on 31.03.2024, the company has made provision of Rs. 13.76 for Payment of Gratuity under the provisions of Payment of Gratuity Act, 1972 making total contribution till 31.03.2024 to Rs. 79.99.

10. Segment Reporting:

The Group''s operating segments are established on the basis of those components of the Group that are evaluated on the basis of AS-17 (Segment Reporting), in deciding how to allocate resources and in assessing

performance. These have been identified taking into account nature of products and services, the differing risks and returns and the internal business reporting systems.

The Group has principal operating and reporting Business segment; viz. (i) Infrastructure Projects and related activity of Quarry Mining and (ii) Trading.

	2023-24		2022-23
	Infrastructure & Mining	Trading	Infrastructure & Mining	Trading
Segment Revenue	8408.26	739.33	4988.43	1363.25
Segment Profit	453.08	1.05	297.41	6.52
Segment Assets	12645.48	0.00	11300.47	0.00
Segment Liability	3264.82	0.00	2446.79	0.00

11. Taxes on Income:

The tax expenses for the period comprises of current tax and deferred income tax. Tax is recognised in Statement of Profit and Loss.

i. Current Tax:

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the Income Tax authorities, based on tax rates and laws that are enacted at the Balance sheet date.

ii. Deferred Tax:

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Financial Statements and the corresponding tax bases used in the computation of taxable profit.

Deferred tax assets are recognised to the extent it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax losses can be utilised.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.

The company has made provision of Rs. 91.28 (including deferred tax asset of Rs. 18.72) for taxation in the books of account in view of profit earned during the F.Y. 2023-24 as per the provisions of The Income Tax Act, 1961.

12. Provisions, Contingent Liabilities and Contingent Assets:

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 are liable estimate can be made of the amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is

material). Contingent Assets are not recognized, but disclosed in the financial statements, if an inflow of economic benefits is probable.

Contingent liabilities are not provided for, but are disclosed as below:

Contingent Liabilities and Commitments
Particulars	2023-24	2022-23
(i) Guarantees Guarantees to Banks and Financial Institutions against credit facilities extended to third parties and other Guarantees	1335.25	1076.85
(ii) Gujarat VAT assessment order for FY14-15	Nil	609.21
(iii) Goods and Service Tax Act (FY19-20 & 20-21)	175.07	175.07
(iv) M.P. Commercial Tax (FY 17-18)	26.02	0
Total	1536.34	1861.13

• In respect of GST for FY 2019-20 & 2020-21, a search was initiated by Director General of GST Intelligence (DGGI) in the premises of the company. As a result of search, the company made liable to reverse input tax credit of Rs. 383.08 for the F.Y. 2019-20 & 20-21. Out of the same, the company has paid Rs. 50.00 through duty reversal and Rs. 158.00 paid through cash ledger. Management has taken advice of GST consultant and according to their advice an application was filed with GST department stating that the said payment of Rs. 208.00 shall be treated as duty payment under protest. After taking professional consultation, the management is confident of getting back Rs. 208.00 paid to GST department which is considered as Balance with Government Authorities under the head Loans and Advances and remaining Rs. 175.07 is considered as contingent liability.

13. Earnings per Share (EPS):

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.

Diluted earnings per share adjust 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.

14. Cash and cash equivalents:

Cash and cash equivalents include cash at bank, cash in hand, demand deposits with banks, other short term highly liquid investments with original maturities of three months or less.

15. Cash flow Statement:

The cash flow statement has been prepared under the indirect method as set out in Accounting Standard (AS 3) statement of cash flows. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the company''s cash management.

---

Mar 31, 2023

(A) Statement of Significant accounting policies:

1. Basis for Preparation and Presentation:

The Financial statement are prepared on accrual basis as a going concern under historical cost convention in accordance with the generally accepted accounting principles in India, the accounting standards issued by the Institute of Chartered Accountants of India and as per the requirements of The Companies Act, 2013

2. Use of estimates:

The estimates and judgments used in the preparation of financial statements are continuously evaluated by the company and are based on historical experience and various other assumptions and factors that the management believes to be reasonable under existing circumstances.

Difference between actual results and estimates are recognized in the period in which the results are known/materialized. The said estimates are based on the facts and the events, that existed as at the reporting date, or that date but provide additional evidence about conditions existing on the reporting date.

i. Depreciation/amortization and useful lives of property, plant and equipment/intangible assets:

Property, plant and equipment are depreciated over the estimated useful lives of the assets, after taking into account their estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation to be recorded during any reporting period. The useful lives and residual values are based on the Company''s historical experience with similar assets and take into account anticipated technological changes. The depreciation for future periods is adjusted if there are significant changes from previous estimates.

ii. Recoverability of trade receivables:

Judgments are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counter party, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.

3. Property, Plant and Equipment:

Property, Plant and Equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its working condition for its intended use.

Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost can be measured reliably.

Depreciation on Property, Plant and Equipment is provided using Written Down Value (WDV) method on depreciable amount based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. In respect of the Property, Plant and Equipment purchased during the year, depreciation is provided on pro rata basis from the date on which such asset is ready to be put to use. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any such change in the estimate accounted for on a prospective basis. The estimated useful lives and residual values are as prescribed in Schedule II to the Companies Act, 2013 except for Building held as Investment Properties, which are based on technical evaluation of useful life by the management.

An item of Property, Plant and Equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of Property, Plant and Equipment is determined as the difference between the sale proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss.

The estimated useful lives of items of Property, Plant & Equipment as prescribed in Schedule II of Companies Act, 2013 as follows:

4. Intangible Assets:

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated depreciation and accumulated impairment loss. Intangible Assets mainly consists of Computer Software having estimated useful life of 5 years. The depreciation expense on intangible assets with finite lives and impairment loss is recognized in the Statement of Profit and Loss.

The amortization period and the amortization method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly. If there has been a significant change in the expected pattern of economic benefits from the asset, the amortization method is changed to reflect the changed pattern.

An intangible asset is de-recognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from de-recognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying

amount of the asset, are recognized in statement of profit and loss when the asset is derecognized.

5. Revenue Recognition:

i. Revenue from operations of Stone Quarry are recognized as per AS 9 ''Revenue Recognition'' while revenue from operations of Road Construction are recognized as per AS 7 ''Construction Contract'' issued by Institute of Chartered Accountants of India.

ii. Revenue from contracts is recognized on the basis of percentage completion method given as per AS 7.

iii. Revenue from sale of goods is recognized when property in goods is transferred to the buyer and the same is measurable at the time of sale and there is no uncertainty regarding ultimate collection from the buyer.

iv. Contract revenue and its associated costs are accrued and recognized by reference to the stage of completion of the contract at the reporting date.

Contract revenue comprises the initial amount of revenue agreed upon in the contract, the changes in contract work, claims and incentive payments to the extent that it is probable that they will result in revenue and they are capable of being reliably measured.

Contract cost comprises of cost that relate directly to the specific contract, cost that are attributable to contract activity in general and can be allocated to the contract and such other cost as are specifically chargeable to the customer under the terms of the contract. Stage of completion is determined based on the survey of work performed at the end of each year. The effect of a change in the estimate of contract revenue or contract costs, or the effect of a change in the estimate of the outcome of a contract, is accounted for as a change in accounting estimate and the effect of which are recognized in the Statement of Prof it and Loss in the period in which the change is made and in subsequent periods. Any excess revenue recognized in accordance with the stage of completion of the project, in comparison to the amount s billed in accordance with the milestones completed as per the respective project, is accrued as unbilled revenue.

An expected loss on construction contract is recognized as an expense immediately when it is certain that the total contract costs will exceed the total contract revenue.

v. Interest income from Investment is accounted when the same is accrued.

vi. Other Income and government benefits, subsides, refunds etc. are accounted when right to receive is established.

6. 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, cost of conversion and other direct costs including manufacturing overheads net of recoverable taxes incurred in bringing them to their respective present location and condition.

Cost of finished goods, work-in-progress, raw materials, chemicals, stores and spares, packing materials, trading and other products are determined on FIFO basis.

7. Investment:

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties. If an investment is acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued. If an investment is acquired in

Page|93

exchange for another asset, the acquisition is determined by reference to the fair value of the asset given up or by reference to the fair value of the investment acquired, whichever is more clearly evident.

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 the investments.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Profit and Loss Account.

Investment property

Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Company, is classified as investment property. Investment properties are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price and directly attributable cost of bringing the investment property to its working condition for the intended use. On disposal of an investment, the difference between it''s carrying amount and net disposal proceeds is charged or credited to the Profit and Loss Account.

During the current financial year, the company has provided depreciation of Rs. 20.70 on Investment Property (including depreciation on Revalued amount of Rs. 6.38 and charged to Revaluation Reserve.).

8. Borrowing Costs:

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets till the date it is ready for its intended use are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.

All other borrowing costs are charged to the Statement of Profit and Loss for the period for which they are incurred.

9. Employee Benefits:

(i) Short Term Employee Benefits:

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, performance incentives, etc., are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the employee renders the related service.

(ii) Post-Employment Benefits:

(a) Defined Contribution Plans:

A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions to a separate entity. The Company makes

specified monthly contributions towards Provident Fund and Pension Scheme. The Company''s contribution is recognised as an expense in the Profit and Loss Statement during the period in which the employee renders the related service.

(b) Defined Benefit Plans:

Past service cost is recognised immediately to the extent that the benefits are already vested and otherwise is amortised on a straight-line basis over the average period until the benefits become vested.

The retirement benefit obligation recognised in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for unrecognised past service cost, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes.

Rachana Infrastructure Limited operates post-employment defined benefit plan i.e. gratuity plan (the plan). The plan is unfunded and entitles an employee, who has rendered at least five years of continuous service, to receive half month''s salary for each period of completed service at the time of retirement/resignation. The long term service incentive is accrued for all eligible employee of the Company and is payable on completion of 5 year of service

The employees are entitled to accumulate leave for availment as well as encashment subject to the rules. As per the regular past practice followed by the employees, the company does not create provisions for leave encashment. It will be recognized on actual payment basis.

During the period ended on 31.03.2023, the company has made provision of Rs. 420.16 for Payment of Gratuity under the provisions of Payment of Gratuity Act, 1972.

10. Segment Reporting:

The Group''s operating segments are established on the basis of those components of the Group that are evaluated on the basis of AS-17 (Segment Reporting), in deciding how to allocate resources and in assessing performance. These have been identified taking into account nature of products and services, the differing risks and returns and the internal business reporting systems.

The Group has principal operating and reporting Business segment; viz. (i) Infrastructure Projects and related activity of Quarry Mining and (ii) Trading.

11. Taxes on Income:

The tax expenses for the period comprises of current tax and deferred income tax. Tax is recognised in Statement of Profit and Loss.

i. Current Tax:

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the Income Tax authorities, based on tax rates and laws that are enacted at the Balance sheet date.

ii. Deferred Tax:

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Financial Statements and the corresponding tax bases used in the computation of taxable profit.

Deferred tax assets are recognised to the extent it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax losses can be utilised.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period.

The company has made provision of Rs. 77.73 (including deferred tax of Rs. 2.73) for taxation in the books of account in view of profit earned during the F.Y. 2022-23 as per the provisions of The Income Tax Act, 1961.