Mar 31, 2015
A) Basis of Accounting
The Company maintains its accounts on historical cost conventions in
accordance with Generally Accepted Accounting Principles on accrual
basis. The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of financial statement and the reported amount
of revenues and expenses during the reporting period. Difference
between actual and estimates are recognized in the period in which the
results are known/ materialized.
b) Inventories
Work in Progress represents cost incurred in respect of unsold area of
the project under development, but there is no work in progress as at
the reporting date.
Inventories include finished properties and cost of unsold land.
Finished properties of completed real estate projects and land are
valued at lower of cost or net realizable value.
c) Fixed Assets
Fixed Assets are stated at Cost including amounts added on revaluation,
less accumulated depreciation and impairment loss, if any. All costs
including financing costs till commencement of actual use, net charges
on foreign exchange contracts and adjustment arising from exchange rate
variations attributable to the fixed assets are capitalized.
d) Depreciation
1) Depreciation on Fixed Assets is provided on "Written Down Value
Method" at the rates and in the manner specified in Schedule - II of
the Companies Act, 2013. Depreciation has been provided on the basis of
useful life of the asset w.e.f. 01st April, 2014 as mentioned in
Schedule II of the Companies Act, 2013. Earlier, Company was providing
depreciation at the rates as mentioned in Schedule XIV to the Companies
Act, 1956 based on Written Down Value Method. Consequent upon the
change from Schedule XIV to Schedule II to the Companies Act, 2013,
additional depreciation of Rs. 4,173 /- is charged to Statement of
Profit and Loss during the year.
2) Depreciation on additions /disposals of fixed assets during the year
is provided on pro-rata basis according to the period during which
assets are put to use.
e) Impairment of Assets
The Company assess at each Balance Sheet date whether there is any
indication that assets may be impaired. If any such indication exists,
the Company estimates the recoverable amount of the cash generating
unit to which the assets belong. If the recoverable amount of the cash
generating unit to which the assets belong is less than its carrying
amount, the carrying amount is reduced to its recoverable amount .The
recoverable amount is higher of the value in use and realizable value.
The reduction is treated as an impairment loss and is recognised in the
Statement of Profit and Loss. If, at the balance Sheet date, there is
an indication that if previously assessed impairment loss no longer
exists, the recoverable amount is reassessed and the asset is reflected
at the recoverable amount.
f) Revenue Recognition
1) Sale of Goods
Revenue from sale of goods is recognized on transfer of all significant
risks and reward of ownership to buyer by way of a legally enforceable
agreement/Contract even though the legal title may not be transferred
or the possession of the real estate property may not be given to the
buyer. Revenue has been considered as per Percentage of Completion
Method.
2) Interest
Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable rate of interest.
Interest income is included under the head " Other Income" on accrual
basis.
g) Cash and Cash Equivalents
Cash and Cash Equivalents for the purpose of Cash Flow Statement
comprise Cash at Bank and in hand and short term investments with an
original maturity of three months or less. Cash Flow Statement is
prepared using the Indirect Method as per Accounting Standard 3 " Cash
Flow Statements".
h) Earnings per Share
Basic Earnings per Share is 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. The
weighted average number of equity shares during the period is adjusted
for events of bonus issue, new issue.
Diluted earnings per share is calculated by adjusting net profit or
loss for the period attributable to equity shareholders and the
weighted number of shares outstanding during the period for the effect
of all dilutive potential equity shares.
i) Segment Reporting
The Company does not have any geographical segments. As such there are
no separate reportable segments as per the Accounting Standard 17 on
"Segment Reporting" notified under Companies (Accounting Standard)
Rules, 2014.
j) Provisions
Provisions involving substantial degree of estimations in measurements
are recognized when there is present obligation as a result of past
event and it is probable that there will be an outflow of resources.
Provisions are not discounted to their present value and are determined
based on best estimates required to settle the obligation at the
balance sheet date. These are reviewed at each balance sheet date and
adjusted to reflect the current best estimates.
k) Contingent liabilities
Contingent liabilities are not recognized but are disclosed in the
notes.
l) Employee Retirement Benefits
Leave Encashment is charged to Statement of Profit and Loss on accrual
basis.
m) Borrowing Costs
Borrowing Costs attributable to the acquisition of fixed assets are
capitalized as part of the cost of such assets till such assets are put
to use.
n) Taxation
1) Provisions for current tax is made and retained in the accounts on
the basis of estimated tax liability as per the applicable provisions
of Income Tax Act 1961.
2) Deferred tax for timing differences between the book profits and tax
profits for the year is accounted for using the tax rates and laws that
apply substantively as on the date of Balance Sheet. Deferred tax
assets arising from timing differences are recognized only if there is
reasonable certainty that these will be realized in future.
Deferred tax asset, in case of unabsorbed loss and depreciation are
recognized only if there is virtual certainty that such deferred tax
assets can be realized against future taxable profits.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article