Accounting Policies of Sumit Woods Ltd. Company

Mar 31, 2025

The accounting policies set out below have been applied consistently to the years presented in these financial statements.

2.1 Basis of preparation of financial statements

The financial statements have been prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under historical cost
convention on the accrual basis of accounting and comply with accounting standards. as prescribed under Section 133 of the Companies Act,
2013, as applicable and the relevant provisions of the Companies Act, 2013. The accounting policies adopted in preparation of the financial
statements are consistent with those followed in the previous year.

Current and non-current classification

All assets and liabilities are classified into current and non-current.

Current Assets

An asset is classified as current when it satisfies any of the following criteria:

a. it is expected to be realized in or is intended for sale or consumption in, the Company''s normal
operating cycle;

b. it is held primarily for the purpose of being traded;

c. it is expected to be realized within 12 Months after the reporting date; or

d. it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting
date.

Current assets include the current portion of non-current financial assets.

All other assets are classified as non-current.

Current Liabilities

A liability is classified as current when it satisfies any of the following criteria:

a. it is expected to be settled in the company''s normal operating cycle;

b. it is held primarily for the purpose of being traded;

c. it is due to be settled within 12 months after the reporting date; or the Company does not have an unconditional right to defer settlement of
the liability for at least 12 months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its
settlement by the issue of equity instruments do not affect its classification.

Current liabilities include current portion of non-current financial liabilities.

All other liabilities are classified as non-current.

Operating cycle

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents. Based on the
nature of operations and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the
Company has ascertained its operating cycle being a period of 12 months for the purpose of classification of assets and liabilities as current and
non-current.

2.2 Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make judgements, estimates and assumptions that
affect the reported balances of assets and liabilities, the disclosure of contingent liabilities as at the date of the financial ''Statements and
reported-amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Estimates and
underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognized prospectively in current and
future periods.

2.3 Revenue recognition

Sale of goods

Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer,
usually on delivery of the goods. The company collects GST on behalf of the government and, therefore, these are not economic benefits flowing
to the company. Hence, they are excluded from revenue.

2.4 Fixed assets and depreciation
Property, plant and equipment ("PPE")

Property, plant and equipment, capital work in progress are stated at cost, net of accumulated depreciation and accumulated impairment losses,
if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met, directly attributable cost of bringing the asset to its
working condition for the intended use and initial estimate of decommissioning, restoring and similar liabilities. Any trade discounts and rebates
are deducted in arriving at the purchase price. Such cost includes the cost of replacing part of the plant and equipment. When significant parts of
plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives.
Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the
recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.

Gains or losses arising from derecognition of property, plant and equipment are measured as the difference between the net disposal proceeds
and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

Depreciation

For depreciation the Company adopts the useful life as prescribed under the Companies Act 2013 and depreciation is calculated as per the
written down value method by taking into consideration the useful life and residual value of the asset specified in Part ''C'' of Schedule II to the
Act.

2.5 Borrowing costs

Borrowing costs are interest and other costs (including exchange differences arising from foreign currency borrowings to the extent that they are
regarded as an adjustment to interest costs) incurred by the Company in connection with the borrowing of funds. Borrowing costs directly
attributable to acquisition or construction of those PPE which necessarily take a substantial period of time to get ready for their intended use are
capitalized. Other borrowing costs are recognized as an expense in the period in which they are incurred.

2.6 Impairment of assets

The carrying values of assets are reviewed at each reporting date to determine if there is indication of any impairment. If any indication exists,
the asset''s recoverable amount is estimated. The recoverable amount of an asset or smallest group of assets (Cash Generating Units (CGU)) that
generates cash inflows from continuing use is the greater of its value in use and its net selling price. In assessing value in use, the estimated
future cash flows are discounted to their present value using a post-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the assets or Cash Generating Units (CGU). For assets that are not yet available for use, the recoverable
amount is estimated at each reporting date. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating
unit exceeds its recoverable amount. Impairment losses are recognized in the statement of profit and loss. An impairment loss is reversed if
there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the
asset''s carrying amount does not exceed the carrying amount that would have been determined net of depreciation or amortization, if no
impairment loss had been recognized.

2.7 Investment

Investments that are readily realizable and intended to be held for not more than a year from the date of acquisition are classified as current
investments. All other investments are classified as non-current. investments. However, that part of non-current investments which is expected
to be realized within 12 months after the reporting date is also presented under ''current assets'' as "current portion of non-current investments"
in consonance with the current—non-current classification scheme. Non-current investments (including current portion thereof) are carried at
cost less any other-than-temporary diminution in value, determined separately for each individual investment. Current investments are carried
at the lower of cost and fair value. The comparison of cost and fair value is done separately in respect of each category of investments. Any
reductions in the carrying amount and any reversals of such reductions are charged or credited to the statement of profit and loss.

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Mar 31, 2023

5. Significant Accounting policies

5.1 Financial Instruments
Classification

Financial assets, other than equity instruments, are subsequently measured at amortised cost, fair
value through other comprehensive income (FVOCI) or fair value through profit or loss (FVTPL) on the
basis of both:

(a) The entity’s business model for managing the financial assets, and

(b) The contractual cash flow characteristics of the financial asset.

For assets measured at fair value, gains and losses will either be recorded in profit or loss or other
comprehensive income. For investments in debt instruments, this will depend on the business model in
which the investment is held.

The Company reclassifies debt investments when and only when its business model for managing those
assets changes.

Measurement

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of
a financial asset not carried at fair value through profit or loss, transaction costs that are directly
attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair
value through profit or loss are expensed in profit or loss.

Debt instruments

Subsequent measurement of debt instruments depends on the Company’s business model for managing
the asset and the cash flow characteristics of the asset. There are three measurement categories into
which the Company classifies its debt instruments:

• Amortised cost: Assets that are held for collection of contractual cash flows where those cash

flows represent solely payments of principal and interest are measured at amortised cost. A gain
or loss on a debt investment that is subsequently measured at amortised cost and is not part of
a hedging relationship is recognised in profit or loss when the asset is derecognised or impaired.
Interest income from these financial assets is included in finance income using the effective interest
rate method.

• Fair value through other comprehensive income (FVOCI): Assets that are held for collection of
contractual cash flows and for selling the financial assets, where the assets’ cash flows represent
solely payments of principal and interest, are measured at fair value through other comprehensive
income (FVOCI). Movements in the carrying amount are taken through OCI, except for the
recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses
which are recognised in profit and loss. When the financial asset is derecognised, the cumulative
gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised
in other gains/ (losses). Interest income from these financial assets is included in other income
using the effective interest rate method.

• Fair value through profit or loss: Assets that do not meet the criteria for amortised cost or FVOCI
are measured at fair value through profit or loss. A gain or loss on a debt investment that is
subsequently measured at fair value through profit or loss and is not part of a hedging relationship
is recognised in profit or loss and presented net in the statement of profit and loss within other
gains/(losses) in the period in which it arises. Interest income from these financial assets is
included in other income.

Equity instruments

The Company subsequently measures all equity investments at fair value except investment in subsidiary,
joint venture and associate entities.

Changes in the fair value of financial assets at fair value through profit or loss are recognised in
the statement of profit and loss. Impairment losses (and reversal of impairment losses) on equity
investments measured at FVOCI are not reported separately from other changes in fair value.

Impairment of financial assets

The Company assesses on a forward looking basis the expected credit losses associated with its assets
carried at amortised cost. For trade receivables only, the Company applies the simplified approach
permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognised
from initial recognition of the receivables.

Derecognition of financial assets

A financial asset is derecognised only when

• The Company has transferred the rights to receive cash flows from the financial asset or

• The Company retains the contractual rights to receive the cash flows of the financial asset, but
assumes a contractual obligation to pay the cash flows to one or more recipients.

Where the entity has transferred an asset, the Company evaluates whether it has transferred
substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset

is derecognised.

Where the entity has not transferred substantially all risks and rewards of ownership of the financial
asset, the financial asset is not derecognised. Where the entity has neither transferred a financial asset
nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset
is derecognised if the Company has not retained control of the financial asset. Where the Company
retains control of the financial asset, the asset is continued to be recognised to the extent of continuing
involvement in the financial asset.

Financial Liabilities

All Financial liabilities are measured at amortised cost using effective interest method or fair value
through profit and loss. However, financial liabilities that arise when a transfer of a financial asset does
not qualify for derecognition or when the continuing involvement approach applies, financial guarantee
contracts issued by the Company, and commitments issued by the Company to provide a loan at below-
market interest rate are measured in accordance with the specific accounting policies set out below.

Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the financial liability is either contingent consideration
recognised by the Company as an acquirer in a business combination to which Ind AS 103 applies or is
held for trading or it is designated as at FVTPL.

A financial liability is classified as held for trading if:

• it has been incurred principally for the purpose of repurchasing it in the near term; or

• on initial recognition it is part of a portfolio of identified financial instruments that the Company
manages together and has a recent actual pattern of short-term profit-taking; or

• it is a derivative that is not designated and effective as a hedging instrument

A financial liability other than a financial liability held for trading or contingent consideration recognised
by the Company as an acquirer in a business combination to which Ind AS 103 applies, may be
designated as at FVTPL upon initial recognition if:

• such designation eliminates or significantly reduces a measurement or recognition inconsistency
that would otherwise arise;

• the financial liability is managed and its performance is evaluated on a fair value basis, in accordance
with the Company’s documented risk management or investment strategy, or

• it forms part of a contract containing one or more embedded derivatives, and Ind AS 109 permits
the entire combined contract to be designated as at FVTPL.

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement
recognised in Statement of Profit and Loss. The net gain or loss recognised in Statement of Profit and
Loss incorporates any interest paid on the financial liability and is included in the ‘Other income’ line
item.

Gains or losses on financial guarantee contracts and loan commitments issued by the Company that
are designated by the Company as at fair value through profit or loss are recognised in Statement of
Profit and Loss.

Financial liabilities subsequently measured at amortised cost

Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured
at amortised cost at the end of subsequent accounting periods. The carrying amounts of financial
liabilities that are subsequently measured at amortised cost are determined based on the effective
interest method. Interest expense that is not capitalised as part of costs of an asset is included in
the ‘Finance costs’ line item. The effective interest method is a method of calculating the amortised
cost of a financial liability and of allocating interest expense over the relevant period. The effective
interest rate is the rate that exactly discounts estimated future cash payments (including all fees paid or
received that form an integral part of the effective interest rate, transaction costs and other premiums
or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period,
to the net carrying amount on initial recognition.

Derecognition of financial liabilities

The Company derecognises financial liabilities when, and only when, the Company’s obligations are
discharged, cancelled or have expired. An exchange with a lender of debt instruments with substantially
different terms is accounted for as an extinguishment of the original financial liability and the recognition
of a new financial liability. Similarly, a substantial modification of the terms of an existing financial
liability (whether or not attributable to the financial difficulty of the debtor) is accounted for as an
extinguishment of the original financial liability and the recognition of a new financial liability. The
difference between the carrying amount of the financial liability derecognised and the consideration
paid and payable is recognised in Statement of Profit and Loss.

5.2 Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term
deposits with an original maturity of three months or less, that are readily convertible into known
amounts of cash and which are subject to an insignificant risk of changes in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short term
deposits, as defined above, as they are considered an integral part of the Company’s cash management.

5.3 Property Plant and Equipment
Recognition and initial measurement

Property, plant and equipment are valued at cost of acquisition or construction less accumulated
depreciation and impairment loss. The Company capitalises all costs relating to the acquisition,
installation and construction of property, plant and equipment. Subsequent costs are included in the
asset’s carrying amount or recognised as separate asset, as appropriate, only when it is probable
that future economic benefits associated with the item will flow to the Company. All other repair and
maintenance costs are recognized instatement of profit or loss as incurred.

Subsequent measurement (depreciation and useful lives):

Depreciation is provided on the assets on their original costs up to their net residual value estimated
at 5% of the original cost, prorata to the period of use on the written down value method, over their
estimated useful life. Assets individually costing upto Rs 5,000 are fully depreciated in the year of
purchase.

The residual values, useful lives and method of depreciation are reviewed at the end of each financial
year.

De-recognition:

An item of property, plant and equipment and any significant part initially recognized is derecognized
upon disposal or when no future economic benefits are expected from its use or disposal. Any gain
or loss arising on derecognition of the asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is recognized in the statement of profit and loss, when
the asset is de-recognized.

5.4 Intangible Assets
Recognition and initial measurement

Intangible assets are stated at their cost of acquisition. The cost comprises purchase price, borrowing
cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working
condition for the intended use.

Subsequent measurement (amortisation):

The cost of capitalized software is amortized over a period of 6 years from the date of its acquisition.

5.5 Capital work in progress and Capital advances

Cost of assets not ready for intended use, as on the Balance Sheet date, is shown as capital work in
progress. Advances given towards acquisition of property, plant and equipment outstanding at each
Balance Sheet date are disclosed in Other Non-Financial Assets.

5.6 Revenue Recognition

Revenue from real estate development/ sale, maintenance services and project management
services

Revenue is recognised on satisfaction of performance obligation upon transfer of control of promised
products (residential or commercial completed units) or services to customers in an amount that
reflects the consideration the Company expects to receive in exchange for those products or services.

The Company satisfies the performance obligation and recognises revenue over time, if one of the
following criteria is met:

1. The customer simultaneously receives and consumes the benefits provided by the Company’s
performance as the Company performs; or

2. The Company’s performance creates or enhances an asset that the customer controls as the asset
is created or enhanced; or

3. The Company’s performance does not create an asset with an alternative use to the Company and
an entity has an enforceable right to payment for performance completed to date.

For performance obligations where any one of the above conditions are not met, revenue is recognised
at the point in time at which the performance obligation is satisfied.

In case, revenue is recognised over the time, it is being recognised from the financial year in which
the agreement to sell or any other binding documents containing salient terms of agreement to sell is
executed. In respect of ‘over the period of time’, the revenue is recognised based on the percentage-of-
completion method (‘POC method’) of accounting with cost of construction incurred (input method) for
the respective projects determining the degree of completion of the performance obligation.

The revenue recognition requires forecasts to be made of total budgeted costs with the outcomes of
underlying construction contracts, which further require assessments and judgments to be made on
changes in work scopes and other payments to the extent they are probable and they are capable of
being reliably measured. In case, where the contract cost is estimated to exceed total revenues from
the contract, the loss is recognised immediately in the Statement of Profit and Loss. Revenue in excess
of billing (unbilled revenue) are classified as contract asset while invoicing in excess of revenues (bill in
advance) are classified as contract liabilities.

Rent

Rental Income is recognised on a time proportion basis as per the contractual obligations agreed with
the respective tenant.

Interest

Interest income from a financial asset is recognised when it is probable that the economic benefits will
flow to the Company and the amount of income can be measured reliably. Interest income is accrued
on a time basis, by reference to the principal outstanding and at the effective interest rate applicable,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial asset to that asset’s net carrying amount on initial recognition.

Dividend

Dividend income from investments is recognised when the Company’s right to receive payment has
been established (provided that it is probable that the economic benefits will flow to the Company and
the amount of income can be measured reliably).

5.7 Cost of Revenue

Cost of Real estate projects Cost of project, includes cost of land (including cost of development rights/
land under agreements to purchase), liasoning costs, estimated internal development costs, external
development charges, borrowing costs, overheads, construction costs and development/ construction
materials, which is charged to the statement of profit and loss based on the revenue recognised as
explained in policy under revenue recognition, in consonance with the concept of matching costs and
revenue. Final adjustment is made on completion of the specific project.

5.8 Borrowing cost

Borrowing costs directly attributable to the acquisition and/or construction of a qualifying asset are
capitalized during the period of time that is necessary to complete and prepare the asset for its intended
use or sale. 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 as incurred.

5.9 Investments in equity instruments of subsidiaries, limited liability Partnership, joint ventures
and associates

Investments in equity instruments of subsidiaries, limited liability partnership, joint ventures and
associates are stated at cost as per Ind AS 27 ‘Separate Financial Statements’

5.10 Inventories:

Inventories comprise of Land and development rights, Construction materials, Work-in-progress,
completed unsold flats/units. These are valued at lower of the cost and net realisable value.

Net realisable value is the estimated selling price in the ordinary course of business less estimated
costs of completion (wherever applicable) and estimated costs necessary to make the sale.

5.11 Impairment of non - financial assets

The carrying amounts of the Company’s property, plant & equipment and intangible assets are
reviewed at each reporting period to determine whether there is any indication of impairment. If any
such indication exists, the asset’s recoverable amounts are estimated in order to determine the extent
of impairment loss, if any. An impairment loss is recognised whenever the carrying amount of an asset
exceeds its recoverable amount. The impairment loss, if any, is recognised in the statement of profit and
loss in the period in which impairment takes place.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value
in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have not been adjusted.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to
the revised estimate of its recoverable amount, however subject to the increased carrying amount not
exceeding the carrying amount that would have been determined (net of amortisation or depreciation)
had no impairment loss been recognised for the asset in prior accounting periods. A reversal of an
impairment loss is recognised immediately in profit or loss.

5.12 Employee benefits

5.12.1 Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled
wholly within 12 months after the end of the period in which the employees render the related service
are recognised in respect of employees’ services up to the end of the reporting period and are measured
at the amounts expected to be paid when the liabilities are settled.

5.12.2 Post-employment obligations

The Company operates the following post-employment schemes:

(a) defined benefit plan such as gratuity; and

(b) defined contribution plan such as provident fund.

Gratuity obligations:

The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plan is the
present value of the defined benefit obligation at the end of the reporting period less the fair value of
plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit
credit method.

The present value of the defined benefit obligation denominated in INR is determined by discounting
the estimated future cash outflows by reference to market yields at the end of the reporting period on
government bonds that have terms approximating to the terms of the related obligation.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit
obligation and the fair value of plan assets. This cost is included in employee benefit expense in the
statement of profit and loss.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial
assumptions are recognised in the period in which they occur, directly in other comprehensive income.

They are included in retained earnings in the statement of changes in equity and in the balance sheet.

Defined contribution plan

The Company pays provident fund contributions to publicly administered provident funds as per local
regulations. The Company has no further payment obligations once the contributions have been paid.
The contributions are accounted for as defined contribution plans and the contributions are recognised
as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to
the extent that a cash refund or a reduction in the future payments is available.

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Mar 31, 2019

Summary of Significant accounting policies

1. Use of Estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions which affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised in the period in which the results are known / materialize.

2. Fixed assets, depreciation and amortization

- Fixed assets are valued at cost of acquisition or construction less accumulated depreciation and impairment loss. The Company capitalises all costs relating to the acquisition, installation and construction of fixed assets.

Tangible Assets

- Depreciation is provided on the assets on their original costs up to their net residual value estimated at 5% of the original cost, prorata to the period of use on the written down value method, over their estimated useful life. Assets individually costing upto Rs 5,000 are fully depreciated in the year of purchase.

Intangible Assets

- Computer software costs are capitalised and recognised as intangible assets in terms of Accounting Standard 26 on intangible assets based on materiality, accounting prudence and significant economic benefits expected to flow therefrom for a period longer than 1 year. Capitalised cost includes direct cost of implementation and expenses directly attributable to the implementation.

- Impairment in the carrying value of assets is recognised and accounted in accordance with Accounting Standard-28, “Impairment of Assets”. At each balance sheet date, the carrying value of fixed assets is reviewed to assess whether there is an indication that an asset may be impaired. Impairment occurs when the carrying value exceeds the present value of future cash flows expected to arise from the continuing use of the assets and its eventual disposal or the net realisable value of the asset at the balance sheet date, whichever is higher. The impairment loss is recognised for such excess carrying value of the asset. The impairment provision made in earlier years is reversed when the review indicates that there is a reversal of such impairment loss.

3. Inventories

Raw Materials, Construction materials and stores and spares are valued at cost. Cost excludes refundable duties and taxes. Inventories of work in progress includes cost of land, premium for development rights, constructions costs and allocated interest and expenses incidental to the project undertaken by the Company and are valued at as per the certificate of Architect and as certified by the Directors. Inventories of finished tenements are valued at the cost or estimated net realizable value (as certified by the management) whichever is the less.

4. Revenue Recognition :

i. Revenue from construction contracts:

The company follow the percentage completion method, on the basis of physical measurement of the work actually completed at the balance sheet date, taking into account the contractual price and revision there to by estimating total revenue total cost till completion of the contract and the profit so determined has been accounted for proportionate to the percentage of the actual work done. Unbilled work-in-progress is valued at cost. Foreseeable losses are accounted for as and when they are determined except to the extent they are expected to be recovered through claims presented.

However during the current year the company has followed Guidance Note on accounting for Real Estate Transactions. Issued by Institute of Chartered Accountants of India.

As per Management in accordance with guidance note Sales is booked as per the satisfaction of following conditions:

- Revenue is recognized on progressive percentage method on the basis of completion of work certified by the architect and on the satisfaction of following criteria as mentioned in ICAI guidance note on Revenue recognition by real estate entity;

- When a reasonable level of development is achieved i.e. more than 25% of the construction & development cost has been incurred and,

- When at least 25% of the saleable area is secured by contracts or agreements with buyers and

- At least 10 % of the total revenue as per the agreements of sale or any other legally enforceable documents are realized at the reporting date in respect of each of the contracts or at least 50% of allotment value are realized at the reporting date in respect of each of the allotment letter and further it is reasonable to expect that the parties to such contracts/allotment will comply with the payment terms as defined in the contracts/allotment letters.

- In Financial Year 2018-19, Revenue has been recognized since the above criteria are met.

ii. Revenue from joint venture contracts:

- Contracts executed in Joint Venture under work sharing arrangement (consortium) are accounted in accordance with the accounting policy followed by the Company for an independent contract to the extent work is executed.

- In respect of contract executed in Integrated Joint Ventures under profit sharing arrangement (assessed as Association of Persons under Income tax laws), the services rendered to the Joint Ventures are accounted as income on accrual basis. The profit / loss is accounted for, as and when it is determined by the Joint Venture and the net investment in the Joint Venture is reflected as investments, loans and advances or current liabilities.

Dividend is recognized when the right to receive the payment is established.

Interest and other income are accounted for on accrual basis except where the receipt of income is uncertain in which case it is accounted for on receipt basis.

5. Employee benefits:

Short-Term Employee Benefits:

- Short-term employee benefits are recognized as an expense on accrual basis.

- Defined Contribution Plan:

Retirement benefits in the form of provident fund are a defined contribution scheme and the contributions are charged to the statement of profit and loss of the year when the employee render related services. There are no other obligations other than the contribution payable to the respective funds.

- Defined benefit Plan

Retirement benefits in the form of provident fund are a defined contribution scheme and the contributions are charged to the statement of profit and loss of the year when the employee render related services. There are no other obligations other than the contribution payable to the respective funds.

Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation at the end of each financial year. The Company has an Employees’ Gratuity Fund. Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the Balance Sheet with a charge or credit recognized in other comprehensive income in the period in which they occur.

Re-measurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Defined benefit costs are categorized as follows:

- Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);

- Net interest expense or income; and

- Re-measurement.

The Company presents the first two components of defined benefit costs in Statement of Profit and Loss in the line item ‘Employee Benefits Expense’.

The present value of the defined benefit plan liability is calculated using a discount rate, which is determined by reference to market yields at the end of the reporting period on government bonds.

The retirement benefit obligation recognized in the Balance Sheet represents the actual deficit or surplus in the Company’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in the future contribution to the plans.’

- Other long term benefits

Short term compensated absences are provided for based on actuarial valuation at year end. Long term compensated absences are provided for based on actuarial valuation at the year end. The actuarial valuation is done as per projected unit credit method. The Company presents the compensated absences as a current liability in the balance sheet, to the extent it does not have an unconditional right to defer its settlement for 12 months after the reporting date.

6. Taxes On Income:

Provision for current tax is made on the basis of estimated taxable income for the current accounting year computed in accordance with Income Tax Act, 1961.

Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the differences between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods, based on tax rates that have been enacted or substantively enacted at the balance sheet date.

Deferred tax assets on unabsorbed tax losses and tax depreciation are recognized only when there is virtual certainty of their realization.

- Minimum alternate tax (MAT):

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax for the year. The deferred tax asset is recognized for MAT credit available only to the extent that it is probable that the concerned company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the company recognizes MAT credit as an asset, it is created by way of credit to the statement of profit and loss and shown as part of deferred tax asset. The company reviews the “MAT credit entitlement” asset at each reporting date and writes down the asset to the extent that it is no longer probable that it will pay normal tax during the specified period.

7. Earnings Per Share :

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average

8. Investments

Long term investments are stated at cost. Any diminution in value, other than diminution which is temporary in nature, is provided for in the books of account.

Current investments are valued at lower of cost and net realizable value.

9. Prior Period Expenses / Income :

Material items of prior period expenses/incomes are disclosed separately.

10. Borrowing Cost:

Interest and other costs in connection with the borrowings of the funds to the extents related/attributed to the acquisition/construction of qualifying fixed assets are capitalized upto the date when such assets are ready for their intended use and other borrowing costs are charged to profit and loss statement.

11. Provisions and contingencies

The Company creates a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

During the year company has issued 4,00,000 Nos of Equity shares at the face value of Rs. 10 each.