2.11 Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it
is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount
of the obligation. Contingent liabilities are disclosed in the standalone financial statements unless possibility of an outflow
of resources embodying economic benefit is remote. Contingent assets are disclosed in the standalone financial
statements when an inflow of economic benefits is probable.
2.12 Earnings Per Share (EPS):
Basic EPS is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted
average number of equity shares outstanding during the year. 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 effect of all dilutive potential equity shares
2.13 Cash and Cash Equivalents:
Cash and cash equivalents in the cash flow statement comprise cash at banks and on hand and short-term deposits with
an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
2.14 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 and financial liabilities are recognised when Company becomes a party to
the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable
to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at
fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities,
as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial
liabilities at fair value through profit or loss are recognised immediately in the standalone statement of profit and loss.
(i) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of
its liabilities. Equity instruments issued by the Company are recognised at the proceeds received. Incremental costs
directly attributable to the issuance of new ordinary equity shares are recognized as a deduction from equity, net of
tax effects.
(ii) Financial assets
(a) Financial assets at amortised cost
Financial assets are subsequently measured at amortised cost using the Effective Interest Rate method (EIR) if these
financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash
flows and 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.
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. This category generally applies to bank deposits, loans and other
financial assets.
(b) Financial assets at fair value through profit or loss (FVTPL)
Financial assets are measured at fair value through profit or loss unless it is measured at amortised cost or at fair
value through other comprehensive income on initial recognition.
(c) Impairment of financial assets
In accordance with Ind-AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and
recognition of impairment loss on the financial assets and credit risk exposure.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the
standalone statement of profit and loss (P&L). This amount is reflected under the head 'other expenses' in the P&L. In
balance sheet, ECL is presented as an allowance, i.e., as an integral part of the measurement of financial assets.
(d) Derecognition
The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or
when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another
party.
(iii) Financial liabilities
(a) Financial liabilities at amortised cost
Financial liabilities are measured at amortised cost using the effective interest rate method (EIR). Gains and losses
are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.
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 as finance costs in the standalone statement of profit and
loss. This category applies to trade and other payables.
(b) Derecognition
The Company derecognises financial liabilities when, and only when, the Company's obligations are discharged,
cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the
consideration paid / payable is recognised in the standalone statement of profit and loss.
(iv) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a
currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to
realise the assets and settle the liabilities simultaneously.
2.15 Fair value
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.
2.16 Significant accounting judgements, estimates and assumptions
The preparation of the standalone financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in
outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
(i) 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 has based its assumptions and estimates on parameters available
when the standalone financial statements are 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) Defined benefit plans (gratuity benefits)
Employee benefit obligations are measured on the basis of actuarial assumptions which include mortality and
withdrawal rates as well as assumptions concerning future developments in discount rates, the rate of salary
increases and the inflation rate. The Company considers that the assumptions used to measure its obligations are
appropriate and documented. However, any changes in these assumptions may have a material impact on the
resulting calculations.
(b) Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured
based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF
model. The inputs to these models are taken from observable markets where possible, but where this is not feasible,
a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as
liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value
of financial instruments. See Note 35 for further disclosures.
(c) Useful life of property, plant and equipment
The estimated useful life of property, plant and equipment is based on a number of factors including the effects of
obsolescence, demand, competition and other economic factors (such as the stability of the industry and known
technological advances) and the level of maintenance expenditures required to obtain the expected future cash flows
from the asset.
Useful life of the assets are determined in accordance with Schedule II of the Companies Act, 2013.
(d) Recoverable amount of property, plant and equipment
The recoverable amount of plant and equipment is based on estimates and assumptions regarding in particular the
expected market outlook and future cash flows associated with the PPE. Any changes in these assumptions may
have a material impact on the measurement of the recoverable amount and could result in impairment.
(e) Provisions and contingencies
The assessments undertaken in recognising provisions and contingencies have been made in accordance with Ind
AS 37, 'Provisions, Contingent Liabilities and Contingent Assets'. The evaluation of the likelihood of the contingent
events has been made on the basis of best judgement by management regarding the probability of exposure to
potential outflow of economic resources. Such estimation can change following unforeseeable developments.
2.17 Recent Accounting Developments
Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards. There is no such
notification which would have been applicable from 1st April, 2024.
(C) Performance obligation
The Company undertakes Engineering, Procurement and Construction business. The ongoing contracts with customers are for balance of work of
power project. The type of work in these contracts involve construction, engineering, designing, supply of materials, project management,
operations and maintenance etc. The Company evaluates whether each contract consists of a single performance obligation or multiple
performance obligations. Contracts where the Company provides a significant integration service to the customer by combining all the goods and
services are concluded to have a single performance obligations. Contracts with no significant integration service and where the customer can
benefit from each unit on its own, are concluded to have multiple performance obligations. In such cases consideration is allocated to each
performance obligation, based on standalone selling prices. Where the Company enters into multiple contracts with the same customer, the
Company evaluates whether the contract is to be combined or not by evaluating factors such as commercial objective of the contract, consideration
negotiated with the customer and whether the individual contracts have single performance obligations or not.
The Company recognises contract revenue over time as the performance creates or enhances an asset controlled by the customer. For such
arrangements revenue is recognised using cost based input methods. Revenue is recognised with respect to the stage of completion, which is
assessed with reference to the proportion of contract costs incurred for the work performed at the balance sheet date relative to the estimated total
contract costs.
Any costs incurred that do not contribute to satisfying performance obligations are excluded from the Company's input methods of revenue
recognition. Significant judgment is required to evaluate assumptions related to the amount of net contract revenues, including the impact of any
performance incentives, liquidated damages, and other forms of variable consideration.
If estimated incremental costs on any contract, are greater than the net contract revenues, the Company recognizes the entire estimated loss in the
period the loss becomes known. Variations in contract work, claims, incentive payments are included in contract revenue to the extent that may
have been agreed with the customer and are capable of being reliably measured.
The Company recognised revenue from operation and maintenance services using the time elapsed measure of progress i.e. input method on a
straight line basis.
(D) Practical expedient
Applying the practical expedient in paragraph 63 of Ind AS 115, the Company does not adjust the promised amount of consideration for the effects
of a significant financing component if at contract inception it is expected that the period between when the entity transfers a promised good or
service to a customer and when the customer pays for that good or service will be one year or less.
The Company applies practical expedient in paragraph 121 of Ind AS 115 and does not disclose information about remaining performance
obligations for EPC contracts that have original expected duration of one year or less.
30 BENEFITS TO EMPLOYEES
The following table sets out the disclosure under Ind AS-19 on ‘Employee Benefits:
30.1 Defined Contribution Plan
There is no contribution plan in the Company.
Note:
(i) Discount rate is based on the prevailing market yields of Indian Government Securities as at the Balance Sheet date for the estimated term of the
obligation.
(ii) The estimates of future salary increases, considered in actuarial valuation, take account of the inflation, seniority, promotion and other relevant
factors.
(iii) The sensitivity analysis shown above have been determined based on reasonably possible changes of the respective assumptions occurring at the
end of the reporting period, while holding all other assumptions constant.
(iv) The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the
change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
(v) There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
31 Disclosure as required by Indian Accounting Standard 116 "Leases" are as below:
(i) The Company has short term/ low value lease contract in respect of office premises & vehicles for office use. These lease contracts are cancellable
operating leases. The aggregate lease rentals payable are charged on straight line basis in 'Rent' in the statement of profit and loss. There are no
exceptional/ restrictive covenants in the lease agreements.
(ii) During the year, the Company has incurred ?7.95 lakh (PY: ?16.87 lakh) towards short-term leases and leases of low-value assets. The total cash
outflow for leases is ?7.95 lakh (PY: ?16.90 lakh) for the year ended 31st March, 2024, including cash outflow of short-term leases and leases of
low-value assets. (Refer note 23).
32 SEGMENT REPORTING
The Company is operating into only one business segment i.e. EPC Contracts and only one geographical segment i.e. India, the disclosure requirements of
the Indian Accounting Standard (Ind-AS) 108 on "Operating Segments" as notified under section 133 of the Companies Act 2013, are not applicable.
However it does not have any impact on the true and fair view of the state of affairs in case of balance sheet and statement of profit and loss.
33 Corporate Social Responsibility
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the
immediately preceding three financial years on corporate social responsibility (CSR) activities. The Company being not meeting the applicability threshold, it
is not required to spend any amount on CSR activities during the current and previous financial year.
35 Financial Instrument
35.1 Capital Risk Management
For the purpose of the Company's capital management, capital includes issued equity capital, share premium and all other
equity reserves attributable to the equity holders of the Company. Primary objective of Company's capital management is
to ensure that it maintains an optimum financing structure and healthy returns in order to support its business and
maximize shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the
requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend
payment to shareholders, return capital to shareholders or issue new shares. The Company does not have any long term
debts hence there is no capital gearing ratio. Surplus fund has been invested into risk free financial instruments.
35.3 Financial risk management objectives and policies
While ensuring liquidity is sufficient to meet Company's operational requirements, the management also monitors and
manages key financial risks relating to the operations of the Company by analysing exposures by degree and magnitude
of risks. These risks include market risk (including Interest risk and price risk), credit risk and liquidity risk.
(a) Market risk
Market risk is the risk or uncertainty arising from possible market price movements and their impact on the future
performance of a business. The major components of market risk are interest rate risk and commodity price risk.
(i) Interest rate risk
The Company has borrowed funds at a fixed rate of interest. Therefore exposure to interest rate risk is very insignificant.
(ii) Foreign currency risk
The Company has no outstanding exposure in foreign currency at the end of the reporting period. Therefore exposure to
foreign currency risk is very insignificant.
(iii) Commodity price risk
The Company is engaged in Engineering, Procurement and Construction related activities on contractual basis and the
price of the contract was decided at the time of entering into contract with the contractee. Therefore exposure to
commodity price risk is very insignificant.
(b) Credit risk
Credit risk arises from trade receivables, loans, cash and cash equivalents and deposits with banks. Credit risk
management considers available reasonable and supportive forward-looking information including indicators like external
credit rating (as far as available), macro-economic information (such as regulatory changes, government directives,
market interest rate). The Company has adopted a policy of only dealing with creditworthy customers.
Investment of surplus funds is reviewed by the Management. Investments are generally made into growth prospect
securities of companies having good rating. For banks, only high rated banks are considered for placement of deposits.
Bank balances are held with reputed and creditworthy banking institutions.
(c) Liquidity risk
The Company manages liquidity risk by maintaining adequate reserves and banking facilities, by continuously monitoring
forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities for the Company.
The Company has established an appropriate liquidity risk management framework for it's short-term, medium term and
long-term funding requirement. The Company monitors rolling forecasts of its liquidity requirements to ensure it has
sufficient cash to meet operational needs.
35.4 Fair value measurement
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in
a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and
assumptions were used to estimate the fair values unless the carrying value of the financial asset or liability is immaterial:
i) The management assessed fair value of cash and short-term deposits, short-term receivables, trade payables and
other current liabilities carried at amortised cost is not materially different from its carrying amount largely due to
short-term maturities of these financial assets and liabilities.
ii) The fair value of loans receivables are estimated by discounted cash flow method to capture the present value of
the expected future economic benefits that will flow to the company.
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by
valuation technique:
Level 1: quoted prices in active markets for identical assets or liabilities that can be accessed at the measurement date.
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly
or indirectly.
Level 3: Inputs for the asset or liability that are not based on observable market data.
36 Undisclosed Income
There are no transaction that has not been recorded in the books of accounts that has been surrendered or disclosed as
income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other
relevant provisions of the Income Tax Act, 1961) and also there were no income and related assets that has been
previously unrecorded and required to be recorded in the books of account during the year.
37 Details of Benami Properties
There are no proceedings have been initiated or are pending against the Company for holding any benami property under
the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
38 Utilisation of Borrowed funds and share premium:
The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other
sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the
understanding (whether recorded in writing or otherwise) that the Intermediary shall (i) directly or indirectly lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or
(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with
the understanding (whether recorded in writing or otherwise) that the company shall (i) directly or indirectly lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries)
or (ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
39 Registration of charges or satisfaction with Registrar of Companies (ROC):
No charges or satisfaction pending to be registered with ROC beyond the statutory period.
40 Audit trail:
The ministry of corporate affairs (MCA) has issued a notification (Companies (Accounts) Amendment Rules, 2021) which
is effective from 1st April 2023, states that every company which uses accounting software for maintaining its books of
accounts shall use only the accounting software where there is a feature of recording audit trail of each and every
transaction and further creating an edit log of each change made to books of account along with the date when such
changes were made and ensuring that the audit trail cannot be disabled.
The Company uses a Oracle based ERP a primary accounting software for maintaining books of account, which presently
does not have a feature of recording audit trail (edit log) facility and the company is in the process of
implementing the same.
41 Loans or advances granted to related parties
No Loans or advances in the nature of loans are granted to any Promoters, Directors, KMPs or the related parties (as
defined under Companies Act, 2013), either severally or jointly with any other person, that are repayable on demand or
without specifying any terms or period of repayment.
42 Transaction with struck off companies
The Company has no transactions with any companies struck off under section 248 of the Companies Act, 2013 or
Section 560 of the Companies Act, 1956.
43 The previous year figures have been regrouped / re-classified to confirm to the current year's classification.
44 Approval of standalone financial statements
The standalone financial statements were approved for issue by the board of directors on 30th May 2024.
As per our Report of even date attached
For Chopra Vimal & Co. For and on behalf of the Board of Directors of
Chartered Accountants Anand Projects Limited
Firm Reg. No - 006456C
(Rajesh Kumar Sharma)
Lokesh Sharma Whole Time Director & CFO
Partner DIN - 09388677
Membership No : 420735
(Manish Sharma) (Neeraj Khari)
Place: Lalitpur Director Company Secretary
Date: 30th May 2024 DIN - 09375119 Membership No - A 63204
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