GCCL Construction & Realities Ltd. कंपली की लेखा नीति

Mar 31, 2024

Note 3: Significant accounting policies

3.1 Changes in accounting policies and disclosures

The company has applied Ind AS and several other amendments and interpretations for the
first time during the financial year 2019-20. The company has not earlier adopted any
standards or amendments that have been issued but are not yet effective.

Ind AS 115 - ‘Revenue from Contracts with Customers’:

"Ind AS 115 was issued on March 28, 2018 and supersedes Ind AS 11 Construction
Contracts and Ind AS 18 Revenue and it applies, with limited exceptions, to all revenue
arising from contracts with its customers. Ind AS 115 establishes a five-step model to
account for revenue arising from contracts with customers and requires that revenue be
recognised at an amount that reflects the consideration to which an entity expects to be
entitled in exchange for transferring goods or services to a customer.

Ind AS 115 requires entities to exercise judgement, taking into consideration all of the
relevant facts and circumstances when applying each step of the model to contracts with
their customers. The standard also specifies the accounting for the incremental costs of
obtaining a contract and the costs directly related to fulfilling a contract. In addition, the
standard requires extensive disclosures.

The company adopted Ind AS 115 using the full retrospective method of adoption. The
change did not have material impact on the company''s standalone financial statements."

Amendments to Ind AS 12 - ‘Income Taxes’:

"The amendments clarify that an entity needs to consider whether tax law restricts the
sources of taxable profits against which it may make deductions on the reversal of that
deductible temporary difference. Furthermore, the amendments provide guidance on how an
entity should determine future taxable profits and explain the circumstances in which taxable
profit may include the recovery of some assets for more than their carrying amount.

Entities are required to apply the amendments retrospectively. However, on initial application
of the amendments, the change in the opening equity of the earliest comparative period may
be recognised in opening retained earnings (or in another component of equity, as
appropriate), without allocating the change between opening retained earnings and other
components of equity. Entities applying this relief must disclose that fact.

These amendments do not have any impact on the company as the company has no
deductible temporary differences or assets that are in the scope of the amendments."

There is no requirement for deferred tax as per Ind AS-12 Income Taxes as the company
has no deductible temporary differences or assets that are in the scope of the amendments.

3.2 Current / non-current classification

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

a) expected to be realized or intended to be sold or consumed in normal operating cycle;

b) held primarily for the purpose of trading;

c) expected to be realized within twelve months after the reporting period; or

d) 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.

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

The operating cycle is the time between the acquisition of assets/materials for processing
and their realization in cash and cash equivalents. As the Company''s normal operating cycle
is not clearly identifiable, it is assumed to be twelve months.

3.3 Fair value measurement

"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:

a) In the principal market for the asset or liability, or

b) 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, maximizing the use of relevant
observable inputs and minimizing the use of unobservable inputs.

"All assets and liabilities for which fair value is measured or disclosed in the financial
statements are categorized 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:
a) Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or
liabilities;

"b) Level 2 — Valuation techniques for which the lowest level input that is significant to
the fair value measurement is directly or
indirectly observable;" and

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

External valuers are involved, wherever required, for valuation of significant assets, such as
properties and unquoted financial assets, and significant liabilities. Involvement of external
valuers is decided upon by the Company after discussion with and approval by the
Company’s management. Selection criteria include market knowledge, reputation,
independence and whether professional standards are maintained. The Company, after
discussions with its external valuers, determines which valuation techniques and inputs to
use for each case.

3.4 Revenue recognition

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 entitled in
exchange for those goods or services. The Company is generally the principal as it typically
controls the goods or services before transferring them to the customer.

Generally, control is transferred upon shipment of goods to the customer or when the goods
is made available to the customer, provided transfer of title to the customer occurs and the

Company has not retained any significant risks of ownership or future obligations with
respect to the goods shipped.

Revenue is measured at the amount of consideration which the company expects to be
entitled to in exchange for transferring distinct goods or services to a customer as specified
in the contract, excluding amounts collected on behalf of third parties (for example taxes and
duties collected on behalf of the government). Consideration is generally due upon
satisfaction of performance obligations and a receivable is recognised when the it becomes
unconditional.

3.5 Financial instruments

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 assets

Initial recognition and measurement

All financial assets, except investment in subsidiaries and associate, are recognized initially
at fair value plus, in the case of financial assets not recorded at fair value through profit or
loss, transaction costs that are attributable to the acquisition of the financial asset.
Purchases or sales of financial assets that require delivery of assets within a time frame
established by regulation or convention in the market place (regular way trades) are
recognized on the trade date, i.e., the date that the Company commits to purchase or sell
the asset.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value
through profit or loss or as those measured at amortized cost.

The Company''s financial liabilities include trade and other payables, loans and borrowings.
Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:
a) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for
trading and financial liabilities designated upon initial recognition as at fair value through
profit or loss. Financial liabilities are classified as held for trading if they are incurred for the
purpose of repurchasing in the near term.

Gains or losses on liabilities held for trading are recognized in the profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are
designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are
satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes
in own credit risk are recognized in OCI. These gains/ loss are not subsequently transferred
to the statement of profit & loss. However, the Company may transfer the cumulative gain or

loss within equity. All other changes in fair value of such liability are recognized in the
statement of profit or loss. The Company has not designated any financial liability as at fair
value through profit and loss.
b) Financial liabilities at amortized cost

Financial liabilities at amortized cost include loans and borrowings and payables.

After initial recognition, interest-bearing loans and borrowings are subsequently measured at
amortized cost using the EIR method. Gains and losses are recognized in profit or loss when
the liabilities are derecognized as well as through the EIR amortization process.

Amortized 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 amortization is included as
finance costs in the statement of profit and loss.

3.6 Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand.

3.7 Taxes
Current taxes

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

Current income tax relating to items recognized outside profit or loss is recognized outside
profit or loss (either in other comprehensive income or in equity). Current tax items are
recognized in correlation to the underlying transaction either in OCI or directly in equity. The
management periodically evaluates positions taken in the tax returns with respect to
situations in which applicable tax regulations are subject to interpretation and establishes
provisions where appropriate.

Deferred taxes

Deferred tax is provided using the balance sheet method on temporary differences between
the tax bases of assets and liabilities and their carrying amounts for financial reporting
purposes at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences, except when the
deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss.

Deferred tax assets are recognized for all deductible temporary differences, the carry
forward of unused tax credits and any unused tax losses. Deferred tax assets are
recognized to the extent that it is probable that taxable profit will be available against which
the deductible temporary differences, and the carry forward of unused tax credits and
unused tax losses can be utilized, except when the deferred tax asset relating to the
deductible temporary difference arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss.

3.8 Earnings Per Share

The basic earnings per share is computed by dividing the net profit / loss attributable to
equity shareholders for the period by the weighted average number of equity shares
outstanding during the period. The number of shares used in computing diluted earnings per
share comprises the weighted average shares considered for deriving basic earnings per
share, and also the weighted average number of equity shares which could be issued on the
conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed
converted as of the beginning of the period, unless they have been issued at a later date. In
computing dilutive earnings per share, only potential equity shares that are dilutive and that
would, if issued, either reduce future earnings per share or increase loss per share, are
included.

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Mar 31, 2013

1 BASIS OF ACCOUNTING :

- The Accounts of the Company have been prepared under the historical cost convention In accordance with the applicable accounting standards and other generally accepted accounting principles in conformity with the statutory requirements.

- The major considerations that are kept In mind while adopting an accounting policy are prudence. Substance over Form, Materially and Consistency.

- A change in an accounting policy is made only if

The adoption of a different accounting policy is required by statute; or For compliance with an accounting standard or;

If It Is considered that the change would result In a more appropriate presentation of the financial statements of the enterprise

2 FIXED ASSETS:

- Tangible Fixed Assets :

The company has no fixed assets as on Balance sheet date.

3 INVESTMENTS:

- Long Term:

Long term Investments shown in the Balance Sheet are valued at cost unless there is a permanent diminution in the value, in which case they are valued at the diminished value and the resulting difference is reflected in the Profit & Loss Account.

- Current Investments:

- Investments classified as current investments are being carried in the financial statements at the lower of cost and fair value Identified on Individual Investment basis.

Disposal of Investments:

On disposal of an investment, the difference between the carrying amount and net disposal proceeds is being charged to Profit & Loss Account determined on the basis of Flrst-ln-Flrst-out Method._

4 REVENUE RECOGNITION :

- Revenue is recognized only when measurability and rabidity is certain. In case of uncertain, revenue recognition is postponed to the year in which it is property measured & reliability assured. In respect of services, the Company accounts for revenue on the basis of the completed contract method.

5 CONTINGENT LIABILITIES:

- Contingent Liabilities are disclosed after careful evaluation of fads and legal aspects of the matter involved.

6 TAXES ON INCOME:

- Tax Expenses for the year Includes current tax & deferred tax. Current tax is the tax payable / recoverable from taxation authorities. Deferred tax is the tax effect of timing difference arising between Accounting income and tax income. Deferred tax is recognized for all timing differences at substantively enacted rates except in respect of those giving rise to deferred tax assets, which are recognized only if their reliability is reasonably certain and virtually certain in case of unabsorbed depreciation and unabsorbed losses.

7 EARNING PER SHARE:

- The Company reports basic and diluted earnings per share in accordance with Accounting Standard (AS) 20 - Earning per Share issued by the institute of Chartered Accountants of India. Basic Earnings per Share are computed by dividing the net profit or loss for the year by the weighted average number of equity share outstanding during the year. Diluted earnings per share is computed by dividing the net profit or loss for the year by the weighted average number of Equity Shares outstanding during the year as adjusted for the effects of all dilutive potential equity share, except where the results are anti- dilutive.

* Income tax demand from the Indian Tax Authority for payment of tax of Rs 154598 upon completion of their tax reviews for the financial year 2003-04. The matter is pending before the income tax officer, ward-4(l)

- The company is contesting the demands and no tax expense has been accrued in the financial statements for the tax demands raised. The management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the company''s financial position and results of the operations.

8 Contingent Liability

31 March 2013 31 March 2012 Rs) (Rs)_

Income tax demand 154598 154598

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Mar 31, 2012

1 BASIS OF ACCOUNTING :

The Accounts of the Company have been prepared under the historical cost convention in accordance with the applicable accounting standards and other generally accepted accounting principles in conformity with the statutory requirements.

The major considerations that are kept in mind while adopting an accounting policy are prudence. Substance over Form, Materially and Consistency.

A change in an accounting policy is made only if The adoption of a different accounting policy is required by statute ; or For compliance with an accounting standard or; If it is considered that the change would result in a more appropriate presentation oMhe financial statements of the enterprise

2 FIXED ASSETS:

Tangible Fixed Assets:

The company has no fixed assets as on Balance sheet date.

3 INVESTMENTS:

Long Term :

Long term Investments shown in the Balance Sheet are valued at cost unless there is a permanent diminution in the value, in which case they are valued at the diminished value and the resulting difference is reflected in the Profit & Loss Account.

Current Investments:

Investments classified as current investments are being carried in the financial statements at the lower of cost and fair value identified on individual investment basis.

Disposal of Investments:

On disposal of an investment, the difference between the carrying amount and net disposal proceeds is being charged to Profit & Loss Account determined on the basis of First-in-First-out Method.

4 REVENUE RECOGNITION:

Revenue is recognized only when measurability and realiability is certain. In case of uncertain, revenue recognition is postponed to the year in which it is properly measured & readability assured, in respect of services, the Company accounts for revenue on the basis of the completed contract method.

5 CONTINGENT LIABILITIES:

Contingent Liabilities are disclosed aftercareful evaluation of facts and legal aspects of the matter involved.

6 TAXES ON INCOME :

Tax Expenses for the year includes current tax & deferred tax. Current tax is the tax payable / recoverable from taxation authorities. Deferred tax is the tax effect of timing difference arising between Accounting income and tax income. Deferred tax is recognized for all timing differences at substantively enacted rates except in respect of those giving rise to deferred tax assets, which are recognized only if their readability is reasonably certain and virtually certain in case of unabsorbed depreciation and unabsorbed losses.

7 EARNING PER SHARE:

The Company reports basic and diluted earnings per share in accordance with Accounting Standard (AS) 20 - Earning per Share issued by the Institute of Chartered Accountants of India. Basic Earning per Share are computed by dividing the net profit or loss for the year by the weighted average number of equity share outstanding during the year. Diluted earning per share is computed by dividing the net profit or loss forthe year by the weighted average number of Equity Shares outstanding during the year as adjusted forthe effects of all dilutive potential equity share, except where the results are anti-dilutive.

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Mar 31, 2010

1. BASIS OF ACCOUNTING :

The Accounts of the Company have been prepared under the historical cost convention in accordance with the

applicable accounting standards and other generally accepted accounting principles in conformity with the statutory

requirements.

The major considerations that are kept in mind while adopting an accounting policy are prudence. Substance over

Form, Materially and Consistency.

A change in an accounting policy is made only if

- The adoption of a different accounting policy is required by statute ; or

- For compliance with an accounting standard or ;

- If it is considered that the change would result in a more appropriate presentation of the financial statements of the enterprise.

2. FIXED ASSETS :

Tangible Fixed Assets :

The Company has no fixed assets as on Balance Sheet date.

3. INVESTMENTS :

Long Term :

Long term Investments shown in the Balance Sheet are valued at cost unless there is a permanent diminution in the value, in which case they are valued at the diminished value and the resulting difference is reflected in the Profit & Loss Account.

Current Investments :

Investments classified as current investments are being carried in the financial statements at the lower of cost and fair value identified on individual investment basis.

Disposal of Investments :

On disposal of an investment, the difference between the carrying amount and net disposal proceeds is being charged to Profit & Loss Account determined on the basis of First-in-First-out Method.

4. REVENUE RECOGNITION :

Revenue is recognized only when measurability and realiability is certain. In case of uncertain, revenue recognition is postponed to the year in which it is properly measured & realisability assured. In respect of services, the Company accounts for revenue on the basis of the completed contract method.