Ceigall India Ltd. कंपली की लेखा नीति

Mar 31, 2025

1. MATERIAL ACCOUNTING POLICIES

1.1 Basis of Preparation of Standalone Financial Statements

(a) Statement of Compliance

The Standalone Financial Statements have been
prepared in accordance with Indian Accounting
Standards (Ind AS) as prescribed under Section 133
of the Companies Act, 2013 read with Companies
(Indian Accounting Standards) Rules, 2015 as
amended time to time and relevant provisions of the
Companies Act, 2013 and presentation requirements
of Division II of Schedule III to the Companies Act,
2013, (Ind AS compliant Schedule IN). The Financial
Statements comply with IND AS notified by Ministry
of Corporate Affairs ("MCA"). The Company has
consistently applied the accounting policies used in
the preparation for all periods presented.

(b) Basis of Preparation

The Company''s financial statements have
been prepared in accordance with Indian
Accounting Standards (Ind AS) as notified by
Ministry of Corporate Affairs under sections
133 of the Companies Act, 2013 read with
Rule 3 of the Companies (Indian Accounting
Standards) Rules, 2015 and Companies (Indian
Accounting Standards) Amendment Rules, 2016.

The audited financial statements as at year ended
March 31, 2025 were approved by the Board of
Directors at their meeting held on May 8, 2025.

The Company maintains its accounts on accrual
basis following the historical cost convention,
except for certain financial instruments that are
measured at fair values in accordance with Ind AS.
Further, the guidance notes/announcements issued
by the Institute of Chartered Accountants of India
(ICAI) are also considered, wherever applicable to
the extent where compliance with other statutory
promulgations override the same requiring a
different treatment.

1.2 Revenue Recognition

Revenue from contracts with customers

Revenue from contracts with customers is recognised
when control of the goods or services are transferred
to the customer at an amount that reflects the
consideration to which the Company expects to be
entitled in exchange for those goods or services.
The Company has generally concluded that it is
the principal in its revenue arrangements because
it typically controls the goods or services before
transferring them to the customer. The accounting
policies for the specific revenue streams of the
Company as summarized below:

i. Sale of product

Revenue from the sale of products is recognised
at point in time when the control of the goods is
transferred to the customer based on contractual
terms i.e. either on dispatch of goods or on delivery
of the products at the customer''s location.

ii. Construction contracts

Performance obligation in case of construction
contracts is satisfied over a period of time,
since the Company creates an asset that the
customer controls as the asset is created and the
Company has an enforceable right to payment
for performance completed to date if it meets the
agreed specifications.

Revenue from construction contracts, where
the outcome can be estimated reliably and is
recognized under the percentage of completion
method by reference to the stage of completion
of the contract activity. The stage of completion

is measured by input method i.e. the proportion
that costs incurred to date bear to the estimated
total costs of a contract. The percentage of-
completion method (an input method) is the
most faithful depiction of the Company''s
performance because it directly measures the
value of the services transferred to the customer.
The total costs of contracts are estimated based
on technical and other estimates. In the event
that a loss is anticipated on a particular contract,
provision is made for the estimated loss. Contract
revenue earned in excess of billing is reflected
under as "contract asset" and billing in excess
of contract revenue is reflected under "contract
liabilities".

Revenue billings are done based on milestone
completion basis or Go-live of project basis.
Retention money receivable from project customers
does not contain any significant financing element,
these are retained for satisfactory performance
of contract. In case of long - term construction
contracts payment is generally due upon
completion of milestone as per terms of contract. In
certain contracts, short-term advances are received
before the performance obligation is satisfied.

The major component of contract estimate is
"budgeted cost to complete the contract" and on
assumption that contract price will not reduce vis-
avis agreement values. While estimating the various
assumptions are considered by management such as:

• Work will be executed in the manner expected
so that the project is completed timely;

• Consumption norms will remain same;

• Cost escalation comprising of increase in cost
to compete the project are considered as a part
of budgeted cost to complete the project etc.

Due to technical complexities involved in the
budgeting process, contract estimates are highly
sensitive to changes in these assumptions. All
assumptions are reviewed at each reporting date.

iii. Service contract

Service contracts (including operation and
maintenance contracts and job work contracts) in
which the Company has the right to consideration
from the customer in an amount that corresponds
directly with the value to the customer of the
Company''s performance completed to date,
revenue is recognized when services are performed
and contractually billable.

iv. Variable consideration

The nature of the Company''s contracts gives rise

to several types of variable consideration, including
claims, bonus, unpriced change orders, award and
incentive fees, change in law, liquidated damages
and penalties. The Company estimates the
amount of revenue to be recognized on variable
consideration using the expected value (i.e., the
sum of a probability-weighted amount) or the most
likely amount method, whichever is expected to
better predict the amount.

The Company''s claim for extra work, incentives and
escalation in rates relating to execution of contracts
are recognized as revenue in the year in which
said claims are finally accepted by the clients.
Claims under arbitration/ disputes are accounted
as income based on final award. Expenses on
arbitration are accounted as incurred.

1.3 Property, Plant and Equipment (PPE) and Intanglible
Assets and Depreciation

Property, Plant and Equipment are carried at cost
of acquisition net of recoverable taxes, any trade
discounts and rebates and accumulated depreciation.
The cost comprises of purchase price including import
duties, other non-refundable taxes/ levies, borrowing
cost and any other expenses directly attributable to
bringing the asset to its current location and working
condition for its intended use.

Capital Work In Progress

Cost of assets not ready for intended use, as on 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 as other non-current assets.

- Recognition

Subsequent costs of property, plant and equipment
shall be included in asset''s carrying amount only if:

(a) it is probable that future economic benefits
associated with the item will flow to the entity; and

(b) the cost of the item can be measured reliably.

Gains or losses arising from de-recognition 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.

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

- Depreciation on Property, Plant and Equipment

Depreciation on Property, Plant and Equipment is
provided on the WDV method, over the estimated
useful life of each asset as prescribed in Schedule II
to the Companies Act, 2013 and as determined by the
management.

*Solar panels are capitalized with useful life estimate
of 25 years

Depreciation on additions is provided on a pro-rata
basis from the month of acquisition/installation.
Depreciation on sale/deduction from fixed assets is
provided for up to the date of sale/adjustment, as the
case may be.

Intangible Assets (Other than Goodwill)

i. Intangible asset represents computer software
acquired by the Company carried at cost of acquisition
net of any trade discounts and rebates less amortization.
The cost comprises of purchase price including import
duties, other non-refundable taxes/ levies, borrowing
cost and any other expenses directly attributable to
bringing the asset to its current location and working
condition for its intended use.

ii. The amortization period is 3 years which is 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. Such changes are treated as changes in
accounting estimates.

iii. On transition to Ind AS, there was no intangible asset
standing in the books of the company.

1.4 Financial Instrument

A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability
or equity instrument of another entity. Financial asset
and liabilities are recognised when the Company

becomes a part to the contractual provisions of the

instrument.

(A) Financial Assets -

Initial recognition and measurement

Financial assets are classified, at initial recognition,
as subsequently measured at amortised cost, fair
value through other comprehensive income (OCI),
and fair value through profit or loss.

The classification of financial assets at initial
recognition depends on the financial asset''s
contractual cash flow characteristics and the
Company''s business model for managing them.
With the exception of trade receivables that do
not contain a significant financing component or
for which the Company has applied the practical
expedient, the Company initially measures a
financial asset at its fair value plus, in the case of
a financial asset not at fair value through profit or
loss, transaction costs. Trade receivables that do
not contain a significant financing component or
for which the Company has applied the practical
expedient are measured at the transaction
price determined under Ind AS 115. Refer to the
accounting policies of revenue from contracts with
customers.

In order for a financial asset to be classified and
measured at amortised cost or fair value through
OCI, it needs to give rise to cash flows that are
’solely payments of principal and interest (SPPI)'' on
the principal amount outstanding. This assessment
is referred to as the SPPI test and is performed at
an instrument level. Financial assets with cash flows
that are not SPPI are classified and measured at
fair value through profit or loss, irrespective of the
business model.

The Company''s business model for managing
financial assets refers to how it manages its
financial assets in order to generate cash flows. The
business model determines whether cash flows
will result from collecting contractual cash flows,
selling the financial assets, or both. Financial assets
classified and measured at amortised cost are held
within a business model with the objective to hold
financial assets in order to collect contractual cash
flows while financial assets classified and measured
at fair value through OCI are held within a business
model with the objective of both holding to collect
contractual cash flows and selling.

Purchases or sales of financial assets that require
delivery of assets within a time frame established
by regulation or convention in the marketplace
(regular way trades) are recognised on the trade

date, i.e., the date that the Company commits to
purchase or sell the asset.

Subsequent measurement

For purposes of subsequent measurement, financial
assets are classified in three categories:

• Financial assets at amortised cost (debt
instruments)

• Financial assets at fair value through profit or
loss

• Equity investments in Subsidiaries, Associates
and Joint Venture at Cost

Financial assets at amortized cost (debt
instruments)

A financial asset is measured at amortised cost if it
meets both of the following conditions are met:

a) the asset is held within a business model whose
objective is to hold assets to collect contractual
cash flows; and

b) the contractual terms of the financial asset give
rise on specified dates to cash flows that are
solely payments of principal and interest on the
principal amount outstanding.

After initial measurement, such financial assets are
subsequently measured at amortised cost using the
effective interest rate (EIR) method. Amortised cost
is calculated by taking into account any discount or
premium on acquisition and fees or costs that are
an integral part of the EIR. The EIR amortisation is
included in finance income in the profit or loss. The
losses arising from impairment are recognised in
the profit or loss. The Company''s financial assets at
amortised cost includes trade receivables, security
and other deposits, other receivable and loan to the
subsidiaries included under other financial assets.

Financial assets at fair value through Other
comprehensive income (FVOCI) (equity
instrument)

Upon initial recognition, the Company can elect
to classify irrevocably its equity investments as
equity instruments designated at fair value through
OCI when they meet the definition of equity under
Ind AS 32 Financial Instruments: Presentation
and are not held for trading. The classification is
determined on an instrument-by- instrument basis.
Equity instruments which are held for trading
and contingent consideration recognized by an
acquirer in a business combination to which Ind
AS103 applies are classified as at FVTPL.

Gains and losses on these financial assets are never

recycled to profit or loss. Dividends are recognized
as other income in the statement of profit and loss
when the right of payment has been established,
except when the Company benefits from such
proceeds as a recovery of part of the cost of the
financial asset, in which case, such gains are
recorded in OCI. Equity instruments designated at
fair value through OCI are not subject to impairment
assessment.

Financial assets at Fair Value through Profit and
Loss (FVTPL)

All financial assets not classified as measured at
amortized cost or FVOCI as described above are
measured at FVTPL. This includes all derivative
financial assets and Mutual Funds. On initial
recognition, the Company may irrevocably
designate a financial asset that otherwise meets
the requirements to be measured at amortised cost
or at FVOCI as at FVTPL if doing so eliminates or
significantly reduces an accounting mismatch that
would otherwise arise.

Financial assets at FVTPL are measured at fair value
at the end of each reporting period, with any gains
or losses arising on remeasurement recognised in
profit or loss. The net gain or loss recognised in
profit or loss incorporates any dividend or interest
earned on the financial asset.

Equity investments in Subsidiaries, Associates and
Joint Venture at Cost

The Company accounts for its investment in
subsidiaries, joint ventures and associates and other
equity investments in subsidiary companies at cost
in accordance with Ind AS 27 - ’Separate Financial
Statements''. Interest free loans by the Company to
its subsidiaries are in the nature of perpetual debt
repayable as per terms of agreement. The borrower
has classified the said loans as equity under Ind AS-
32 financial instruments Presentations". Accordingly
the Company has classified the investment as
Equity instrument and has accounted at cost as per
Ind-AS-27 ’Separate Financial Statements''

Derecognition

A financial asset is derecognized only when:

(i) the Company has transferred the rights to
receive cash flows from the financial asset or
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.

(ii) 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 derecognized. Where the entity has not
transferred substantially all risks and rewards of
ownership of the financial asset, the financial
asset is not derecognized.

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 derecognized 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 recognized to the extent of
continuing involvement in the financial asset.

Impairment of financial Assets

At each reporting date, the Company assesses
whether financial assets carried at amortised
cost are credit-impaired. A financial asset is
''credit-impaired'' when one or more events that
have a detrimental impact on the estimated
future cash flows of the financial asset have
occurred.

Evidence that a financial asset is credit-impaired
includes the following observable data:

• significant financial difficulty of the borrower
or issuer;

• a breach of contract such as a default or
being past due for 90 days or more;

• the restructuring of a loan or advance by
the Company on terms that the Company
would not consider otherwise;

• it is probable that the borrower will enter
bankruptcy or other financial reorganization;
or

• the disappearance of an active market for a
security because of financial difficulties.

Ind AS 109 requires expected credit losses to
be measured through a loss allowance. The
Company applies the expected credit loss
(ECL) model for measurement and recognition
of impairment losses. The Company follow
the simplified approach for recognition of
impairment allowance on all trade receivable
and/or contract assets. The application of
the simplified approach does not require
the Company to track changes in credit risk.
Rather, it recognizes impairment allowance
based on lifetime. For all other financial assets,
expected credit losses are measured at an
amount equal to the 12 month expected credit
losses or at an amount equal to the life time

expected credit losses if the credit risk on the
financial asset has increased significantly since
initial recognition.

Loss allowances for financial assets measured
at amortised cost are deducted from the gross
carrying amount of the assets and recognized
in the standalone statement of profit and losses
under the head of "Other Expenses".

(B) Financial liabilities

Initial recognition and measurement

Financial liabilities are initially measured at its fair
value plus or minus, in the case of a financial liability
not at fair value through profit or loss, transaction
costs that are directly attributable to the issue/
origination of the financial liability.

Subsequent measurement

Financial liabilities are classified as measured
at amortized cost. Financial liabilities are
subsequently measured at amortized cost using
the effective interest method. Interest expense and
foreign exchange gains and losses are recognized
in statement of profit and loss. Any gain or loss on
derecognition is also recognized in statement of
profit and loss.

Derecognition

A financial liability is derecognised when the
obligation under the liability is discharged or
cancelled or expires. When an existing financial
liability is replaced by another from the same
lender on substantially different terms, or the terms
of an existing liability are substantially modified,
such an exchange or modification is treated as
the derecognition of the original liability and the
recognition of a new liability. The difference in the
respective carrying amounts is recognised in the
statement of profit and loss.

(C) Financial guarantee contracts

Financial guarantee contracts issued by the
Company are those contracts that require a
payment to be made to reimburse the holder for
a loss it incurs because the specified debtor fails
to make a payment when due in accordance with
the terms of a debt instrument. Financial guarantee
contracts are recognised initially as a liability
at fair value, adjusted for transaction costs that
are directly attributable to the issuance of the
guarantee. Subsequently, the liability is measured
at the higher of the amount of loss allowance
determined as per impairment requirements of

Ind AS 109 and the amount recognised less, when
appropriate, the cumulative amount of income
recognised in accordance with the principles of
Ind AS 115. Investment made by way of Financial
Guarantee contracts in subsidiary, associate and
joint venture companies are initially recognised at
fair value of the Guarantee.

(D) Reclassification of financial Instruments

The Company determines classification of financial
assets and liabilities on initial recognition. After initial
recognition, no reclassification is made for financial
assets, such as equity instruments designated at
FVTPL or FVOCI and financial liabilities. For financial
assets which are debt instruments, a reclassification
is made only if there is a change in the business
model for managing those assets.

(E) Offsetting

Financial assets and financial liabilities are offset
and the net amount presented in the balance sheet
when, and only when, the Company currently has
a legally enforceable right to set off the amounts
and it intends either to settle them on a net basis
or to realise the asset and settle the liability
simultaneously.

(F) Fair value measurement

The Company measures financial instrument,
such as derivative, investment and mutual
fund at fair values at each balance sheet date.
Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly
transaction between market participants at the
measurement date. The fair value measurement is
based on the presumption that the transaction to
sell the asset or transfer the liability takes place
either:

• In the principal market for the asset or liability,
or

• In the absence of a principal market, in the most
advantageous market for the asset or liability

The principal or the most advantageous
market must be accessible by the Company.

The fair value of an asset or a liability is measured
using the assumptions that market participants
would use when pricing the asset or liability,
assuming that market participants act in their
economic best interest.

A fair value measurement of a non-financial asset
takes into account a market participant''s ability to
generate economic benefits by using the asset in

its highest and best use or by selling it to another
market participant that would use the asset in its
highest and best use.

The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximising the use of relevant observable inputs
and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is
measured or disclosed in the financial statements
are categorised within the fair value hierarchy,
described as follows, based on the lowest level input
that is significant to the fair value measurement as a
whole:

Level 1: quoted prices (unadjusted) in active
markets for identical assets or liabilities.

Level 2: Valuation techniques for which the lowest
level input that is significant to the fair value
measurement is directly or indirectly observable.

Level 3: Valuation techniques for which the lowest
level input that is significant to the fair value
measurement is unobservable.

For assets and liabilities that are recognised in
the financial statements on a recurring basis, the
Company determines whether transfers have
occurred between levels in the hierarchy by re¬
assessing categorisation (based on the lowest level
input that is significant to the fair value measurement
as a whole) at the end of each reporting period.

The Company has an established control framework
with respect of fair values. This includes a financial
reporting team that has overall responsibility for
overseeing all significant fair value measurements,
including Level 3 fair values, and reports directly to
the Chief Financial Officer.

The financial reporting team regularly reviews
significant unobservable inputs and valuation
adjustments. If third party information, such as
pricing services, is used to measure fair values,
then the financial reporting team assesses the
evidence obtained from the third parties to support
the conclusion that these valuations meet the
requirements of Ind AS, including the level in the
fair value hierarchy in which the valuations should
be classified.

For the purpose of fair value disclosures, the Company
has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the
asset or liability and the level of the fair value hierarchy
as explained above.

1.5 Income Taxes

Income tax expense for the period is the tax
payable on the current period''s taxable income
based on the applicable income tax rate and
changes in deferred tax assets and liabilities
attributable to temporary differences. The current
income tax charge is calculated in accordance
with the provisions of the Income Tax Act 1961.
Deferred income tax is determined using tax rates
(and laws) that have been enacted or substantially
enacted at the end of the reporting period and
are expected to apply when the related deferred
income tax asset is realised or the deferred income
tax liability is settled. Deferred tax liabilities are
recognised for all taxable temporary differences and
deferred tax assets are recognised for all deductible
temporary differences and brought forward losses
only if it is probable that future taxable profit will
be available to realise the temporary differences.
Current tax assets and tax liabilities are offset where
the entity has a legally enforceable right to offset and
intends either to settle on a net basis, or to realise the
asset and settle the liability simultaneously. Current
and deferred tax is recognised in profit or loss, except
to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this
case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.

1.6 Leases
Leases

At inception of a contract, the Company assesses
whether a contract is, or contains, a lease. A contract
is, or contains, a lease if the contract conveys the right
to control the use of an identified asset for a period of
time in exchange for consideration.

Company as a lessee

The Company applies a single recognition and
measurement approach for all leases, except for
shortterm leases and leases of low-value assets. Lease
term which is a non-cancellable period together with
periods covered by an option to extend the lease if
the Company is reasonably certain to exercise that
option; and periods covered by an option to terminate
the lease if the Company is reasonably certain not to
exercise that option. The Company uses judgement
in assessing the lease term (including anticipated
renewals/termination options). The Company
recognises lease liabilities to make lease payments
and right-of-use assets representing the right to use
the underlying assets.

Right of use of Assets

The Company recognises a right-of-use asset and
a lease liability at the lease commencement date
(i.e., the date the underlying asset is available for
use). The right-of-use asset is initially measured at
cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or
before the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle
and remove the underlying asset or to restore the
underlying asset or the site on which it is located, less
any lease incentives received. The right-of-use asset
is subsequently depreciated using the straight-line
method from the commencement date to the end of
the lease term, unless the lease transfers ownership of
the underlying asset to the Company by the end of the
lease term or the cost of the right-of-use asset reflects
that the Company will exercise a purchase option. In
that case the right-of-use asset will be depreciated
over the useful life of the underlying asset. In addition,
the right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain re
measurements of the lease liability.

Lease liabilities

The lease liability is initially measured at the present
value of the lease payments that are not paid at the
commencement date, discounted using the incremental
borrowing rate at the lease commencement date if the
interest rate implicit in the lease or, if that rate cannot
be readily determined. After the commencement date,
lease liability is increased to reflect the accretion of
interest and reduced for the lease payment made.
Lease payments included in the measurement of the
lease liability comprises of fixed payments, including
in-substance fixed payments, amounts expected to
be payable under a residual value guarantee and
the exercise price under a purchase option that the
Company is reasonably certain to exercise, lease
payments in an optional renewal period if the Company
is reasonably certain to exercise an extension option.
The lease liability is measured at amortised cost using
the effective interest method. Modifications to a lease
agreement beyond the original terms and conditions
are generally accounted for as a re-measurement of
the lease liability with a corresponding adjustment
to the ROU asset. Any gain or loss on modification is
recognized in the Statement of Profit & Loss. However,
the modifications that increase the scope of the lease
by adding the right to use one or more underlying
assets at a price commensurate with the stand-alone
selling price are accounted for as a separate new
lease. In case of lease modifications, discounting rates
used for measurement of lease liability and ROU assets
is also suitably adjusted.

Short-term leases and leases of low-value asset

The Company has elected not to recognise right of use
assets and lease liabilities for short term leases of all
the assets that have a lease term of twelve months or
less with no purchase option and leases for which the
underlying asset is of low value. The lease payments
associated with these leases are recognized as an
expense on a straight-line basis over the lease term.

Company as a lessor

Leases in which the Company does not transfer
substantially all the risks and rewards incidental to
ownership of an asset is classified as operating leases.
Rental income arising is accounted for on a straight¬
line basis over the lease terms. Initial direct costs
incurred in negotiating and arranging an operating
lease are added to the carrying amount of the leased
asset and recognised over the lease term on the same
basis as rental income. Leases are classified as finance
leases when substantially all of the risks and rewards of
ownership transfer from the Company to the lessee.

1.7 Inventories

(a) Construction materials, stores, spares and fuel

The stock of construction materials, stores, spares
and fuel is valued at cost or net realisable value
(''NRV''), whichever is lower. Cost is determined on
FIFO basis and includes all applicable cost of bringing
the goods to their present location and condition.
Net realisable value is estimated selling price in
ordinary course of business less the estimated cost
necessary to make the sale.

1.8 Employee benefits

(a) Short-Term Employees Benefits

All employee benefits payable/available within
twelve months of rendering the service are classified
as short-term employee benefits. Benefits such as
salaries, wages and bonus etc., are recognized in the
Statement of Profit and Loss in the period in which
the employee renders the related service.

(b) Post Employment Benefits

(i) Defined Contribution Plan - Provident Fund:

A defined contribution plan is a post-employment
benefit plan under which an entity pays
specified contribution and has no obligation
to pay any further amounts. The Company
makes specified monthly contributions towards
employee provident fund to the Government
administrated provident fund scheme which

is defined contribution plan. The Company''s
contribution is recognized as an expense in the
Statement of Profit and Loss during the period in
which employee renders the related service.

(ii) Defined Benefits Plan - Gratuity:

The liability or asset recognized in the
Standalone 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 is determined by discounting the
estimated future cash outflows by reference to
market yields at the end of the reporting period.
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 Standalone Statement of profit and loss .
Remeasurement gains and losses arising
from experience adjustments and changes in
actuarial assumptions are recognized 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 Standalone Balance Sheet.
Changes in the present value of the defined
benefit obligation resulting from plan
amendments or curtailments are recognized
immediately in Standalone Statement of profit
and loss as past service cost.

1.9 Earnings Per Share

i) Basic earnings per share

Basic earnings per share are calculated by dividing
the net profit or loss for the period attributable
to equity shareholders by the weighted average
number of equity shares outstanding during the
period.

ii) Diluted earnings per share

For the purpose of calculating diluted earnings
per share, the net profit or loss for the period
attributable to equity shareholders and the
weighted average number of shares outstanding
during the period are adjusted for the effects of all
dilutive potential equity shares.

1.10 Cash and Cash Equivalents

Cash and cash equivalents for the purposes of
Financial Statement comprise of cash at bank
and cash in hand including fixed deposits.
Fixed deposits other short term investment with an
original maturity of 12 months or less has been shown
as other Bank balances under current financial assets in
the financial statements.

Fixed deposit with an original maturity of more than 12
months has been shown as non current financial assets.
For the purpose of the statement of cash flows, cash
and cash equivalents consist of cash and deposits, as
defined above, net of outstanding bank overdrafts as
they are considered an integral part of the Company''s
cash management.

1.11 Interest in Joint Arrangements

As per Ind AS 111 - "Joint Arrangements / investments
in joint arrangements" are classified either as joint
operations or joint ventures. The company has joint
operations. The company recognizes its direct right
to the assets, liabilities, revenues & expenses of
joint operations and its share of any jointly held or
incurred assets, liabilities, revenues and expenses.
These have been incorporated in the Standalone
financial statement in appropriate headings. Where
the company participates in a joint operation, where
it does not have joint control and also does not have
the right to the assets and obligation of the liabilities
relating to that joint operation, the interest in the same
joint operations has been accounted for in accordance
with the applicability of IND AS to that interest.

2 Other Accounting Policies

2.1 Operating cycle for Current and Non Current
classification:

The Company presents assets and liabilities in
the balance sheet based on current/ non-current
classification.

An asset is treated as current when it is:

• Expected to be realised or intended to be sold or
consumed in normal operating cycle

• Held primarily for the purpose of trading

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

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

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in normal operating
cycle

• It is held primarily for the purpose of trading

• It is due to be settled within twelve months after
the reporting period, or

• There is no unconditional right to defer the
settlement of the liability for at least twelve months
after the reporting period.

The Company classifies all other liabilities as non¬
current.

The operating cycle is the time between the acquisition
of assets for processing and their realisation in cash
and cash equivalents. The Company has identified
twelve months as its operating cycle.

2.2 Borrowing Costs

Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily
takes a substantial period of time to get ready for its
intended use or sale are capitalized as part of the cost
of the asset. All other borrowing costs are expensed
in the period in which they occur. Borrowing costs
consist of interest and other costs that an entity incurs
in connection with the borrowing of funds. Borrowing
cost also includes exchange differences to the extent
regarded as an adjustment to the borrowing costs.

---

Mar 31, 2024

Material Accounting Policies and explanatory notes to Standalone Financial Statements

Ceigall India Limited is a public limited company incorporated under the provisions of the Companies Act, 1956 on 08.07.2002 and has its registered office at A- 898 Tagore Nagar, Ludhiana, Punjab .The name of the Company at its incorporation was Ceigall Builders Private Limited and subsequently changed to Ceigall India Limited v/ith effect from January 29, 2011. Ceigall India Limited is a construction Company providing Engineering, Procurement and Construction (EPC) service. The Company is also engaged in HAM(projects) across India through its subsidiaries.

Ceigall India Limited is a construction company with more than two decades of experience in roads and highways, including expressways, elevated roads and tunnels. Ceigall India Limited is one of the fastest growing engineering, procurement and construction ("EPC") company

The Standalone Financial Statements have been prepared in accordance with Indian Accounting Standards (IND AS) as prescribed under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015 as amended time to time and relevant provisions of the Companies Act, 2013 and presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule III). The Financial Statements comply with IND AS notified by Ministry of Corporate Affairs ("MCA"). The Company has consistently applied the accounting policies used in the preparation for all periods presented.

The Company''s financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as notified by Ministry of Corporate Affairs under sections 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards)

Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

The audited financial statements as at year ended March 31, 2024 were approved by the Board of Directors at their meeting held on May 10, 2024.

The Company maintains its accounts on accrual basis following the historical cost convention, except for certain financial instruments that are measured at fair values in accordance with Ind AS. Further, the guidance notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) are also considered, wherever applicable to the extent where compliance with other statutory promulgations override the same requiring a different treatment.

Revenue from contracts with customers

Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has generally concluded that it is the principal in its revenue arrangements because it typically controls the goods or services before transferring them to the customer. The accounting policies for the specific revenue streams of the Company as summarized below:

i Sale of product

Revenue from the sale of products is recognised at point in time when the control of the goods is transferred to the customer based on contractual terms i.e. either on dispatch of goods or on delivery of the products at the customer''s location.

ii Construction contracts

Performance obligation in case of construction contracts is satisfied over a period of time, since the Company creates an asset that the customer controls as the asset is created and the Company has an enforceable right to payment for performance completed to date if it meets the agreed specifications.

Revenue from construction contracts, where the outcome can be estimated reliably and is recognized under the percentage of completion method by reference to the stage of completion of the contract activity. The stage of completion is measured by input method i.e. the proportion that costs incurred to date bear to the estimated total costs of a contract. The percentage of-completion method (an input method) is the most faithful depiction of the Company''s performance because it directly measures the value of the services transferred to the customer.

The total costs of contracts are estimated based on technical and other estimates. In the event that a loss is anticipated on a particular contract, provision is made for the estimated loss. Contract revenue earned in excess of billing is reflected under as "contract asset" and billing in excess of contract revenue is reflected under "contract liabilities".

Revenue billings are done based on milestone completion basis or Go-live of project basis.Retention money receivable from project customers does not contain any significant financing element, these are retained for satisfactory performance of contract. In case of long -term construction contracts payment is generally due upon completion of milestone as per terms of contract. In certain contracts, shortterm advances are received before the performance obligation is satisfied.

The major component of contract estimate is "budgeted cost to complete the contract" and on assumption that contract price will not reduce vis-a vis agreement values. While estimating the various assumptions are considered by management such as:

• Work will be executed in the manner expected so that the project is completed timely;

• Consumption norms will remain same;

• Cost escalation comprising of increase in cost to compete the project are considered as a part of budgeted cost to complete the project etc.

i l r^N.

iii Service contract

Service contracts (including operation and maintenance contracts and job work contracts) in which the Company has the right to consideration from the customer in an amount that corresponds directly with the value to the customer of the Company''s performance completed to date, revenue is recognized when services are performed and contractually billable.

iv Variable consideration

The nature of the Company’s contracts gives rise to several types of variable consideration, including claims, bonus, unpriced change orders, award and incentive fees, change in law, liquidated damages and penalties.. The Company estimates the amount of revenue to be recognized on variable consideration using the expected value (i.e., the sum of a probability-weighted amount) or the most likely amount method, whichever is expected to better predict the amount.

The Company''s claim for extra work, incentives and escalation in rates relating to execution of contracts are recognized as revenue in the year in which said claims are finally accepted by the clients. Claims under arbitration/ disputes are accounted as income based on final award. Expenses on arbitration are accounted as incurred.

viii Contract balances Contract assets

A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional. Contract assets represent revenue recognized in excess of amount billed and include unbilled receivables. Unbilled receivables, which represent an uncoditional right to payment subject only to the the passage of time, are reclassified to accounts receivable when they are billed under the terms of the contract.

Trade receivables

A receivable is recognised if an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due). Refer to accounting policies of financial assets in section (t) Financial instruments — initial recognition and subsequent measurement.

Contract liabilities

A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made, or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract. Contract liabilities include unearned revenue which represent amounts billed to clients in excess of revenue recognized to date and advance received from customers. For contract where progress billing exceeds, the aggregate of contract costs incurred to date plus recognised profits (or minus recognised losses, as the case may be), the surplus is shown as contract liability and termed as unearned revenue . Amount received before the related work is performed are disclosed in the balance sheet as contract liability and termed as advances received from customers .

ix Recognition of dividend income, interest income and insurance claim

Dividend income is recognised in profit or loss on the date on which the Company''s right to receive payment is established. Interest income is recognised using the effective interest method. Insurance claims are accounted for on the basis of claims admitted/expected to be admitted and to the extent that there is no uncertainty in receiving the claims. Income from partnership firms is recognized in statement of Profit and Loss as and when the right to receive the profit/loss is estabilshed.

Property, Plant and Equipment are carried at cost of acquisition net of recoverable taxes, any trade discounts and rebates and accumulated depreciation. The cost comprises of purchase price including import duties, other non-refundable taxes/ levies, borrowing cost and any other expenses directly attributable to bringing the asset to its current location and working condition for its intended use. Capital Work In Progress

Cost of assets not ready for intended use, as on 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 as other non-current assets.

- Recognition

Subsequent costs of property, plant and equipment shall be included in asset''s carrying amount only if:

(a) it is probable that future economic benefits associated with the item will flow to the entity; and

(b) the cost of the item can be measured reliably.

Gains or losses arising from de-recognition 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.

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

- Depreciation on Property, Plant and Equipment

Depreciation on Property, Plant and Equipment is provided on the WDV method, over the estimated useful life of each asset as prescribed in Schedule II to the Companies Act, 2013 and as determined by the management.

Material Accounting Policies and explanatory notes to Standalone Financial Statements
	Class of the Assets	Useful Life in Years
	Office Building	60 years
	Furniture & Fixtures	10 years
	Computers & DPU''s	3 years
	Electric Installation & Equipments	10 years
	Vehicles	8 years
	Office Equipments	5 years
	Plant & Machinery*	12-25 years
	Leasehold Improvements	Over the period of lease
	Freehold land is not depreciated.

• Solar panels are capitalized with useful life estimate of 25 years

Depreciation on additions is provided on a pro-rata basis from the month of acquisition/installation. Depreciation on sale/deduction from fixed assets is provided for up to the date of sale/adjustment, as the case may be.

Intangible Assets (Other than Goodwill)

(i) Intangible asset represents computer software acquired by the Company carried at cost of acquisition net of any trade discounts and rebates less amortization. The cost comprises of purchase price including import duties, other non-refundable taxes/ levies, borrowing cost and any other expenses directly attributable to bringing the asset to its current location and working condition for its intended use.

(ii) The amortization period is 3 years which is 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. Such changes are treated as changes in accounting estimates.

(iii) On transition to Ind AS, there was no intangible asset standing in the books of the company.

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial asset and liabilities are recognised when the Company becomes a part to the contractual provisions of the

(A) Financial Assets -Initial recognition and measurement

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive i he classification of financial assets at initial recognition depends on the financial asset''s contractual cash flow characteristics and the Company''s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient, the Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient are measured at the transaction price determined under Ind AS 115. Refer to the accounting policies of revenue from contracts with customers.

In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are ''solely payments of principal and interest (SPPI)'' on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model.

The Company’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and measured at amortised cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows while financial assets classified and measured at fair value through OCI are held within a business model with the objective of both holding to collect contractual cash flows and selling.

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in three categories:

• Financial assets at amortised cost (debt instruments)

• Financial assets at fair value through profit or loss

• Equity investments in Subsidiaries, Associates and Joint Venture at Cost

Financial assets at amortized cost (debt instruments)

A financial asset is measured at amortised cost if it meets both of the following conditions are met:

a) the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and

b) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. The Company”s financial assets at amortised cost includes trade receivables, security and other deposits, other

Financial assets at fair value through Other comprehensive income (FVOCI) (equity instrument)

Upon initial recognition, the Company can elect to classify irrevocably its equity investments as equity instruments designated at fair value through OCI when they meet the definition of equity under Ind AS 32 Financial Instruments: Presentation and are not held for trading. The classification is determined on an instrument-by- instrument basis. Equity instruments which are held for trading and contingent consideration recognized by an acquirer in a business combination to which Ind AS103 applies are classified as at FVTPl.

Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognized as other income in the statement of profit and loss when the right of payment has been established, except when the Company benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair value through

Financial assets at Fair Value through Profit and Loss (FVTPL)

All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets and Mutual Funds. On initial recognition, the Company may irrevocably designate a financiajjsset that

otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPl if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial Equity investments in Subsidiaries, Associates and Joint Venture at Cost

The Company accounts for its investment in subsidiaries, joint ventures and associates and other equity investments in subsidiary companies at cost in accordance with Ind AS 27 - ''Separate Financial Statements''. Interest free loans by the Company to its subsidiaries are in the nature of perpetual debt repayable as per terms of agreement. The borrower has classified the said loans as equity under Ind AS-32 financial instruments Presentations Accordingly the Company has classified the investment as Equity instrument and has accounted at Derecognition

A financial asset is derecognized only when:

(i) the Company has transferred the rights to receive cash flows from the financial asset or retains the contractual rights to receive the

(ii) Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of 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 derecognized 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 recognized to the extent of continuing involvement in the financial asset.

Impairment of financial Assets

At each reporting date, the Company assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is ''credit-impaired'' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have Evidence that a financial asset is credit-impaired includes the following observable data:

• significant financial difficulty of the borrower or issuer;

• a breach of contract such as a default or being past due for 90 days or more;

• the restructuring of a loan or advance by the Company on terms that the Company would not consider otherwise;

• it is probable that the borrower will enter bankruptcy or other financial reorganization; or

• the disappearance of an active market for a security because of financial difficulties.

Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Company applies the expected credit loss (ECL) model for measurement and recognition of impairment losses. The Company follow the simplified approach for recognition of impairment allowance on all trade receivable and/or contract assets. The application of the simplified approach does not require the Company to track changes in credit risk. Rather, it recognizes impairment allowance based on lifetime. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets and recognized in the standalone statement of profit and losses under the head of "Other Expenses".

(B) Financial liabilities

Initial recognition and measurement

Financial liabilities are initially measured at its fair value plus or minus, in the case of a financial liability not at fair value through profit or Subsequent measurement

Financial liabilities are classified as measured at amortized cost. Financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in statement of profit and loss. Any gain or loss on derecognition is also recognized in statement of profit and loss.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability.

The difference in the respective carrying amounts is recognised in the statement of profit and loss.

(C) Financial guarantee contracts

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised less, when appropriate, the cumulative amount of income recognised in accordance with the principles of Ind AS 115. Investment made by way of Financial Guarantee contracts in subsidiary, associate and joint

(D) Reclassification of financial Instruments

The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets, such as equity instruments designated at FVTPL or FVOCI and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets.

(E) Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and

(F) Fair value measurement

The Company measures financial instrument, such as derivative, investment and mutual fund at fair values at each balance sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market

participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most advantageous market for the asset or liability The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value Level X: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

The Company has an established control framework with respect of fair values. This includes a financial reporting team that has overall The financial reporting team regularly reviews significant unobservable inputs and valuation adjustments, if third party information, such as pricing services, is used to measure fair values, then the financial reporting team assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which the For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

Income tax expense for the period is the tax payable on the current period''s taxable income based on the applicable income tax rate and changes in deferred tax assets and liabilities attributable to temporary differences. The current income tax charge is calculated in accordance with the provisions of the Income Tax Act 1961.

Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted at the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences and brought forward losses only if it is probable that future taxable profit will be available to realise the temporary differences.

Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

Leases

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Company as a lessee

The Company applies a single recognition and measurement approach for all leases, except for shortterm leases and leases of low-value assets. Lease term which is a non-cancellable period together with periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. The Company uses judgement in assessing the lease term (including anticipated renewals/ termination options). The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

Right of use of Assets

The Company recognises a right-of-use asset and a lease liability at the lease commencement date (i.e., the date the underlying asset is available for use). The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Company by the end of the lease term or the cost of the right-of-use asset reflects that the Company will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain re measurements of the lease liability.

Lease liabilities

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease or, if that rate cannot be readily determined. After the commencement date, lease liability is increased to reflect the accretion of interest and reduced for the lease payment made. Lease payments included in the measurement of the lease liability comprises of fixed payments, including in-substance fixed payments, amounts expected to be payable under a residual value guarantee and the exercise price under a purchase option that the Company is reasonably certain to exercise, lease payments in an optional renewal period if the Company is reasonably certain to exercise an extension option. The lease liability is measured at amortised cost using the effective interest method. Modifications to a lease agreement beyond the original terms and conditions are generally accounted for as a re-measurement of the lease liability with a corresponding adjustment to the ROU asset. Any gain or loss on modification is recognized in the Statement of Profit & Loss. However, the modifications that increase the scope of the lease by adding the right to use one or more underlying assets at a price commensurate with the stand-alone selling price are accounted for as a separate new lease. In case of lease modifications, discounting rates used for measurement of lease liability and ROU assets is also suitably adjusted.

Material Accounting Policies and explanatory notes to Standalone Financial Statements Short-term leases and leases of low-value assets

The Company has elected not to recognise right of use assets and lease liabilities for short term leases of all the assets that have a lease term of twelve months or less with no purchase option and leases for which the underlying asset is of low value. The lease payments associated with these leases are recognized as an expense on a straight-line basis over the lease term.

Company as a lessor

Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an asset is classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Company to the lessee.

(a) Construction materials, stores, spares and fuel

The stock of construction materials, stores, spares and fuel is valued at cost or net realisable value (''NRV''), whichever is lower. Cost is determined on FIFO basis and includes all applicable cost of bringing the goods to their present location and condition. Net realisable value is estimated selling price in ordinary course of business less the estimated cost necessary to make the sale.

(a) Short-Term Employees Benefits

All employee benefits payable/available within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages and bonus etc., are recognized in the Statement of Profit and Loss in the period in which the employee renders the related service.

(b) Post Employment Benefits

(i) Defined Contribution Plan - Provident Fund:

A defined contribution plan is a post-employment benefit plan under which an entity pays specified contribution and has no obligation to pay any further amounts. The Company makes specified monthly contributions towards employee provident fund to the Government administrated provident fund scheme which is defined contribution plan. The Company''s contribution is recognized as an expense in the Statement of Profit and Loss during the period in which employee renders the related service.

(ii) Defined Benefits Plan - Gratuity:

The liability or asset recognized in the Standalone 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 is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period.

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 emplovee benefit expense in the Standalone Statement of profit and loss .

i) Basic earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

ii) Diluted earnings per share

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

Cash and cash equivalents for the purposes of Financial Statement comprise of cash at bank and cash in hand including fixed deposits.

Fixed deposits other short term investment with an original maturity of 12 months or less has been shown as other Bank balances under current financial assets in the financial statements.

Fixed deposit with an original maturity of more than 12 months has been shown as non current financial assets.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.

As per Ind AS 111 - "Joint Arrangements / investments in joint arrangements” are classified either as joint operations or joint ventures. The company has joint operations. The company recognizes its direct right to the assets, liabilities, revenues & expenses of joint operations and its share of any jointly held or incurred assets, liabilities, revenues and expenses. These have been incorporated in the Standalone financial statement in appropriate headings. Where the company participates in a joint operation, where it does not have joint control and also does not have the right to the assets and obligation of the liabilities relating to that joint operation, the interest in the same joint operations has been accounted for in accordance with the applicability of IND AS to that interest.

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is:

• Expected to be realised or intended to be sold or consumed in normal operating cycle

• Held primarily for the purpose of trading

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

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

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in normal operating cycle

• It is held primarily for the purpose of trading

• It is due to be settled within twelve months after the reporting period, or

• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The Company classifies all other liabilities as non-current.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur.

Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

A provision is recognized when an enterprise has a present obligation as a result of past event; it is probable that an outflow or resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. There are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

The Company recognizes a provision when there is a present obligation as a result of a past event and it is more likely than not that there will be an outflow of resources embodying economic benefits to settle such obligation and the amount of such obligation can be reliably estimated. Provisions are not discounted to its present value, and are determined based on the management''s best estimate of the amount of obligation required at the year end. These are reviewed at each balance sheet date and adjusted to reflect current management estimates.

Contingent liabilities are disclosed in respect of possible obligations that have arisen from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of future events not wholly within the control of the Company.

When there is a possible obligation or a present obligation where the likelihood of an outflow of resources is remote, no disclosure or provision is made.

The preparation of Financial statements in conformity with Ind AS requires the management to make judgments, estimates and assumptions that affect the reported amounts of income, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods. Therefore, actual results could differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Judgements

In the process of applying the material accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements :

a) Revenue from contracts with customers

The management applied judgements that significantly affect the determination of the amount and timing of revenue from contracts with customers, such as identifying performance obligations, uncertainty of variable consideration and estimates on the contract costs.

b) Valuation of accounts receivable and contract assets in view of credit losses

Accounts receivable and contract assets are material items in the Company''s financial statements. The Company has concentration of credit exposure on a particular customers, being a government organisation, where there could be delays in collection to various reasons. The management periodically assess the adequacy of provisions recognised , as applicable, on receivables and contract assets, based on factors such as credit risk of customer, status of project, discussions with the customer and underlying contractual terms and conditions. This involves significant judgement.

c) Financial Instruments _

Classification and measurement - Refer note 1.4 ^

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the Financial Statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

a) Estimation of contract cost and revenue recognition

Revenue from construction contracts is recognised over a period of time in accordance with IND AS 115, "Revenue from contracts with Customers". The contract revenue usually extends over a period 1 to 2 years and the contact prices are fixed and in few cases subject to clauses with price variances and variable consideration. In accordance with the Input method prescribed under IND AS 115, the contract revenue is measured based on the proportion of contract costs incurred for work performed to date relative to the estimated total costs. This method required the Company to perform an initial assessment of total estimated costs and reassess the total construction cost at the end of each reporting period to determine the appropriate percentage of completion. The estimation of total cost to complete the contract involves significant judgement and estimation throughout the period of contract, as it is subject to revision as the contract progresses- based on latest available information including physical work done on ground, changes in cost estimates and need to accrue provision for onerous contracts if any. Besides recognition of revenues based on actual cost and estimated cost to complete the work at the period end, the measurement recognition of contract assets (unbilled revenue) and contract liabilities (unearned revenue) related to each of the contract is also depended on the cost estimates.

b) Investments and Loans to Subsidiaries

The Company is extended loans to subsidiaries. Due to the nature of business in the infrastructure projects the Company is exposed to heightened risk in respect of the impairment of loans granted to the aforementioned related parties. There is significant judgment and estimation uncertainty involved in assessing the impairment of above loans made to related parties because it is dependent on number of infrastructure projects being completed as per the schedule timeline and generation of future cash flows.

The carrying amount of investment in subsidiaries held at cost less impairment. These investments are associated with significant risks in respect of valuation. Changes in business environment could have a significant impact of the valuation. The investments are carried at cost less any impairment in value of such investments. These investments are unquoted and hence it is difficult to measure the recoverable amount. The Company perform annual assessment of impairment to identify any indicators of impairment which are derived from forecasted cash flows which require management to make significant estimated assumptions related to future revenue growth, concession period, operation cost, discount rate and the assessment of the status of the project and cost to complete balance work.

c) Defined benefit plans (gratuity benefit)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its longterm nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation .

The mortality rate are current best estimates of the expected mortality rates of plan members, both during and after employment. Future salary increases and gratuity increases are based on expected future inflation rates, seniority, promotion and other relevant factors, such as supply and demand in the employment market. Refer Note 41 and 1.8 for further details.

d) Useful life of assets of Property, Plant and Equipment

The charge in respect of periodic depreciation is derived after determining an estimate of an asset''s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of the assets are determined by management at the time the asset is acquired and reviewed at each financial year end. Refer Note 3 and 1.3 for further details.

e) Calculation of loss allowance

When measuring ECL the Company uses reasonable and supportable forward-looking information, which is based on assumptions for the future movement of different economic drivers and how these drivers will affect each other. Loss given default is an estimate of the loss arising on default. It is based on the difference between the contractual cash flows due and those that the lender would expect to receive.

Probability of default constitutes a key input in measuring ECL. Probability of default is an estimate of the likelihood of default over a given time horizon, the calculation of which includes historical data, assumptions and expectations of future conditions.

Also refer to note 50D.

g) Adoption of new accounting principles

Onerous contracts - cost of fulfilling a contract (amendment to Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets)

The amendment clarified that the ''costs of fulfilling a contract'' comprise both the incremental costs and allocation of other direct costs. The Company has adopted this amendment effective 1 April 2022 and the adoption did not have any material impact on its financial statements.

h) Recently issued accounting pronouncements

On 31 March 2023, the Ministry of Corporate Affairs (MCA), notified Companies (Indian Accounting Standards) Amendment Rules, 2023 effective from 1 April 2023. Following are the key amended provisions which may have an impact on the financial statements of the Company:

Disclosure of accounting policies (amendments to Ind AS 1 - Presentation of Financial Statements)

The amendments intend to assist in deciding which accounting policies to disclose in the financial statements. The amendments to Ind AS 1 require entities to disclose their material accounting policies rather than their Material accounting policies. The amendments provide guidance on how to apply the concept of materiality to accounting policy disclosures. The company does not expect this amendment to have any significant impact in its financial statements.

Definition of accounting estimate (amendments to Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors)

The amendments distinguish between accounting policies and accounting estimates. The definition of a change in accounting estimates has been replaced with a definition of accounting estimates. Under the new definition, accounting estimates are "monetary amounts in financial statements that are subject to measurement uncertainty". Entities develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty. The Company does not expect this amendment to have any significant impact in its financial statements.

Deferred tax related to assets and liabilities arising from a single transaction (amendments to Ind AS 12 - Income taxes)

I!:*;— ^SPf^ ^h°^{W t0 aCC0Unt for deferred tax on} transactions such as leases. The amendments clarify that lease transactions gn/e rise equal and offsetting temporary differences and financial statements should reflect the future tax impacts of these transactions through recognizing deferred tax. The Company is evaluating the impact of this amendment, if any, in its financial statements.

Other amendments included in the notification do not have any significant impact on the financial statements