1.12 Provisions
Provisions are recognized when the company has a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow of economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.
1.13 Contingent Liabilities / Assets
Contingent Liabilities
Contingent liabilities are not recognized but disclosed in Notes to the Accounts when the
company has possible obligation due to past events and existence of the obligation depends
upon occurrence or non-occurrence of future events not wholly within the control of the
company.
Contingent liabilities are assessed continuously to determine whether outflow of economic resources
have become probable. If the outflow becomes probable then relative provision is recognized in the
financial statements.
Where an entity is jointly and severally liable for an obligation, the part of the obligation that is
expected to be met by other parties is treated as a contingent liability. The entity recognises a
provision for the part of the obligation for which an outflow of resources embodying economic
benefits is probable, except in the extremely rare circumstances where no reliable estimate can be
made
Contingent Liabilities are disclosed in the General Notes forming part of the accounts
Contingent Assets
Contingent Assets are not recognised in the financial statements. Such contingent assets are
assessed continuously and are disclosed in Notes when the inflow of economic benefits becomes
probable. If it's virtually certain that inflow of economic benefits will arise then such assets and the
relative income will be recognised in the financial statements.
1.14 Employee benefits
During the Liquidation all the employees are relieved from their services and no employee working in
the Company according to the order of Liquidation. Hence no provision made for Employee benefits.
1.15 Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit
before tax' as reported in the statement of profit or loss and other comprehensive income/statement
of profit or loss because of items of income or expense that are taxable or deductible in other years
and items that are never taxable or deductible. The Company's current tax is calculated using tax
rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding tax bases used in the computation of
taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences.
Deferred tax assets are generally recognized for all deductible temporary differences to the extent
that it is probable that taxable profits will be available against which those deductible temporary
differences can be utilized. Such deferred tax assets and liabilities are not recognized if the
temporary difference arises from the initial recognition (other than in a business combination) of
assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In
addition, deferred tax liabilities are not recognized if the temporary difference arises from the initial
recognition of goodwill.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments
in subsidiaries and associates, and interests in joint ventures, except where the company is able to
control the reversal of the temporary difference and it is probable that the temporary difference will
not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary
differences associated with such investments and interests are only recognized to the extent that it is
probable that there will be sufficient taxable profits against which to utilize the benefits of the
temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable that sufficient taxable profits will be available to
allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the
period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that
have been enacted or substantively enacted by the end of the reporting period.
Current and deferred tax for the year
Current and deferred tax are recognized in profit or loss, except when they relate to items that are
recognized in other comprehensive income or directly in equity, in which case, the current and
deferred tax are also recognized in other comprehensive income or directly in equity respectively.
Where current tax or deferred tax arises from the initial accounting for a business combination, the
tax effect is included in the accounting for the business combination.
However the Company is in Losses. So, there is no current tax for the current Financial Year
1.16 Investment Property
Investment properties are properties held to earn rentals and/or for capital appreciation (including
property under construction for such purposes). Investment properties are measured initially at cost,
including transaction costs. All of the Company's property interests held under operating leases to
earn rentals or for capital appreciation purposes are accounted for as investment properties.
After initial recognition, the company measures investment property at cost.
An investment property is derecognized upon disposal or when the investment property is
permanently withdrawn from use and no future economic benefits are expected from the disposal.
Any gain or loss arising on de recognition of the property (calculated as the difference between the
net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period
in which the property is derecognized.
Investment properties to be depreciated in accordance to the class of asset that it belongs and the
life of the asset shall be as conceived for the same class of asset at the Company.
1.17 Impairment
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognized immediately in profit or loss, unless the
relevant asset is carried at a revalue amount, in which case the impairment loss is treated as a
revaluation decrease.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset for which the estimates of future cash flows have not been adjusted.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash¬
generating unit) is increased to the revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that would have been determined
had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is
carried at a revalued amount, in which case the reversal of the impairment loss is treated as a
revaluation increase. At the end of each reporting period, the company reviews the carrying amounts
of its tangible, intangible assets to determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is
estimated in order to determine the extent of the impairment loss (if any). When it is not possible to
estimate the recoverable amount of an individual asset, The Company estimates the recoverable
amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent
basis of allocation can be identified, Intangible assets with indefinite useful lives and intangible
assets not yet available for use are tested for impairment at least annually, and whenever there is an
indication that the asset may be impaired.
Impairment of financial assets
Financial assets, other than those at Fair Value through Profit and Loss (FVTPL), are assessed for
indicators of impairment at the end of each reporting period. Financial assets are considered to be
impaired when there is objective evidence that, as a result of one or more events that occurred after
the initial recognition of the financial asset, the estimated future cash flows of the investment have
been affected. For Available for Sale (AFS) equity investments, a significant or prolonged decline in
the fair value of the security below its cost is considered to be objective evidence of impairment.
For all other financial assets, objective evidence of impairment could include:
• Significant financial difficulty of the issuer or counterparty;
• Breach of contract, such as a default or delinquency in interest or principal payments;
• It becoming probable that the borrower will enter bankruptcy or financial re-organisation; or the
disappearance of an active market for that financial asset because of financial difficulties.
For certain categories of financial assets, such as trade receivables, assets are assessed for
impairment on individual basis. Objective evidence of impairment for a portfolio of receivables could
include companies past experience of collecting payments, an increase in the number of delayed
payments in the portfolio past the average credit period of zero days, as well as observable changes
in national or local economic conditions that correlate with default on receivables.
For financial assets that are carried at cost, the amount of impairment loss is measured as the
difference between the asset's carrying amount and the present value of the estimated future cash
flows discounted at the current market rate of return for a similar financial asset. Such impairment
loss will not be reversed in subsequent periods
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial
assets with the exception of trade receivables; such impairment loss is reduced through the use of
an allowance account for respective financial asset. When a trade receivable is considered
uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts
previously written off are credited against the allowance account. Changes in the carrying amount of
the allowance account are recognized in profit or loss.
For financial assets measured at amortised cost, if, in a subsequent period, the amount of the
impairment loss decreases and the decrease can be related objectively to an event occurring after
the impairment was recognized, the previously recognized impairment loss is reversed through profit
or loss to the extent that the carrying amount of the investment at the date the impairment is
reversed does not exceed what the amortised cost would have been had the impairment not been
recognized.
De-recognition of financial assets:
The Company de-recognises 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. If the Company neither transfers nor retains substantially all
the risks and rewards of ownership and continues to control the transferred asset, The Company
recognises its retained interest in the asset and an associated liability for amounts it may have to
pay. If the Company retains substantially all the risks and rewards of ownership of a transferred
financial asset, the Company continues to recognise the financial asset and also recognises a
collateralised borrowing for the proceeds received.
On de-recognition of a financial asset in its entirety, the difference between the asset's carrying
amount and the sum of the consideration received and receivable and the cumulative gain or loss
that had been recognized in other comprehensive income and accumulated in equity is recognized in
profit or loss.
1.18 Earnings per share
Basic earnings per equity are computed by dividing the net profit attributable to the equity holders of
the company by the weighted average number of equity shares outstanding during the period.
Diluted earnings per equity share is computed by dividing the net profit attributable to the equity
holders of the company by the weighted average number of equity shares considered for deriving
basic earnings per equity share and also the weighted average number of equity shares that could
have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity
shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair
value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity
shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive
potential equity shares are determined independently for each period presented.
The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all
periods presented for any shares splits and bonus shares issues including for changes effected prior
to the approval of the financial statements by the Board of Directors.
1.19 Discontinued operations
A discontinued operation is a component of the Company's business that represents a separate line
of business that has been disposed off or is held for sale, or is a subsidiary acquired exclusively with
a view to resale. Classification as a discontinued operation occurs upon the earlier of disposal or
when the operation meets the criteria to be classified as held for sale.
1.20 Financial instruments
Non-derivative financial instruments
Non-derivative financial instruments consist of:
• financial assets, which include cash and cash equivalents, trade receivables, unbilled revenues,
finance lease receivables, employee and other advances, investments in equity and debt securities
and eligible current and non-current assets;
• Financial liabilities, which include long and short-term loans and borrowings, bank overdrafts,
trade payables, eligible current and non-current liabilities.
Non derivative financial instruments are recognized initially at fair value including any directly
attributable transaction costs. Financial assets are derecognized when substantial risks and rewards
of ownership of the financial asset have been transferred. In cases where substantial risks and
rewards of ownership of the financial assets are neither transferred nor retained, financial assets are
derecognized only when the Company has not retained control over the financial asset.
Subsequent to initial recognition, non-derivative financial instruments are measured as described
below:
a) Cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents include cash in hand, at
banks and demand deposits with banks, net of outstanding bank overdrafts that are repayable on
demand and are considered part of the Company's cash management system. In the statement of
financial position, bank overdrafts are presented under borrowings within current liabilities.
b) Investments in liquid mutual funds, equity securities (other than Subsidiaries, Joint Venture and
Associates) are valued at their fair value. These investments are measured at fair value and changes
therein, other than impairment losses, are recognized in other comprehensive income and presented
within equity, net of taxes. The impairment losses, if any, are reclassified from equity into statement
of income. When an available for sale financial asset is derecognized, the related cumulative gain or
loss recognised in equity is transferred to the statement of income.
c) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market. They are presented as current assets, except for those maturing
later than 12 months after the reporting date which are presented as non-current assets. Loans and
receivables are initially recognized at fair value plus directly attributable transaction costs and
subsequently measured at amortized cost using the effective interest method, less any impairment
losses. Loans and receivables comprise trade receivables, unbilled revenues and other assets.
The company estimates the un-collectability of accounts receivable by analysing historical payment
patterns, customer concentrations, customer credit-worthiness and current economic trends. If the
financial condition of a customer deteriorates, additional allowances may be required.
d) Trade and other payables
Trade and other payables are initially recognized at fair value, and subsequently carried at amortized
cost using the effective interest method. For these financial instruments, the carrying amounts
approximate fair value due to the short term maturity of these instruments.
e) Investments in Subsidiary, Associates and Joint Venture
The company accounts investment in subsidiary, joint ventures and associates at cost
An entity controlled by the company is considered as a subsidiary of the company.
Investments in subsidiary company outside India are translated at the rate of exchange prevailing on
the date of acquisition.
Investments where the company has significant influence are classified as associates. Significant
influence is the power to participate in the financial and operating policy decisions of the investee but
is not control or joint control over those policies.
A joint arrangement whereby the parties that have joint control of the arrangement have rights to the
net assets of the joint arrangement is classified as a joint venture. Joint control is the contractually
agreed sharing of control of an arrangement, which exists only when decisions about the relevant
activities require unanimous consent of the parties sharing control.
1.21 Segment Information
The company is principally engaged in single business segment viz., “Power and Telecom Tower”,
and operates in one geographical segment as per on ‘Segment Reporting'. Accordingly, no segment
reporting has been made by the company.
1.22 Going Concern
The company has incurred loss during the year and has negative net worth as at 31st March 2025
that may create uncertainties. However various initiatives taken by the company in relation to cost
saving, optimising revenue management opportunities and enhance ancillary revenues is expected
to result in improved operating performance, there are positive signs where most of the lenders have
accepted for a restructuring proposal. Accordingly the financial statements continue to be prepared
on a going concern basis, which contemplates realisation of assets and settlement of liabilities in the
normal course of business.
1.23 Approval of financial statements
The financial statements were approved by the board of directors and authorised for issue on
17.05.2025
For and on behalf of the Board Directors
for RPSV AND CO., Sudheer Rayachoti PVS Santharam
Chartered Accountants Managing Director Wholetime Director
FRN No. 0013151S DIN:01914434 DIN:07536846
M Murali Krishna V Naveen Babu Subrat Sahoo
M. No. 238030 Chief Financial Officer Company Secretary
Place: Hyderabad
Date:17.05.2025
|