Mar 31, 2016
NOTES TO THE FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED 31ST MARCH, 2016 Note-
1 :Significant Accounting Policies
1.1 Basis of accounting
The financial statements are prepared under historical cost convention on accrual basis (except interest on delayed payment by customers, administrative charges recovered from customers and expenditure on compensation/ penalty for project delay, which are accounted for at the time of acceptance/ settlement with the customers due to uncertainties with regard to determination of amount receivable/ payable) and are in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 read with Rule 7 of the Companies (Accounts) Rules, 2014 in respect of Section 133 of the Companies Act, 2013. The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and expenses during the reporting period. Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ from these estimates.
1.2 Fixed assets
Fixed assets are stated at cost less accumulated depreciation and impairment losses. Cost comprises purchase price, duties, levies and any other cost relating to the acquisition and installation of the asset. Fixed assets under construction are treated as soon the assets become operational and ready for use. Borrowing cost, if any, directly attributable to the acquisition and / or construction of fixed asset, until the date assets are ready for its intended use, are capitalized as a part of the cost of that asset subject to the provisions of impairment of the assets.
Intangible assets are recognized only if it is probable that the future economic benefits that are attributable to the assets will flow to the enterprise and the cost of the assets can be measured reliably. Expenditure on an intangible item is expensed when incurred unless it forms part of the cost of intangible asset that meets the recognition criteria. Intangible assets are stated at cost of acquisition and are carried at cost less accumulated amortization and impairment loss, if any.
1.3 Depreciation
a) Depreciation is provided on Written Down Value Method as prescribed in Schedule II to the Companies Act, 2013. For Mobile Phones, useful life is considered 2 years.
b) Depreciation on additions / deletion to fixed assets is provided on proportionate basis according to the date of addition / deletion.
1.4 Investments
Long term investments are stated at cost. A provision for diminution is made to recognise a decline, if any, other than temporary in nature, in the value of long term investments.
Short term investments are stated at lower of cost or market value.
1.5 Inventories
Inventories are valued at lower of cost and net realizable value. Construction work in progress comprises of cost of land (including premium for development rights), materials, services and other related overheads.
1.6 Employee Benefits
Retirement benefits to the employees comprise of payments under defined contribution plans like Provident Fund & Family Pension and contribution paid or payable is recognized as an expense in the period in which services are rendered by the employees.
The employees'' gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. Provision for leave encashment is made on accrual basis.
1.7 Borrowing Costs
Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalized for the period until the assets are ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. Other borrowing costs are recognized and capitalized and are included in Capital WIP in the period in which they are incurred.
1.8 Taxation
Tax expense comprises of current Income tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rate and the tax laws enacted or substantially enacted at the balance sheet date.
Deferred tax assets other than on carried forward losses and unabsorbed depreciation are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.
Deferred tax asset on account of carried forward losses and unabsorbed depreciation are recognized only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.
1.9 Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present values and are determined based on management estimate required to settle the obligation at the balance sheet date. Contingent liabilities, if material, are disclosed by way of notes. Contingent assets are not recognized or disclosed in the financial statement.
1.10 Revenue Recognition
a) Revenue from constructed properties is recognized on the ''percentage of completion method''. Sale consideration as per the duly executed agreements to sell/application forms (containing salient terms of agreement to sell), is recognized as revenue based on (i) the percentage of actual project costs incurred thereon to total estimated project cost, subject to such actual cost incurred (excluding land acquisition cost) being 25 per cent or more of the total estimated project cost (excluding land acquisition cost) and (ii) when at least 25 per cent of the saleable project area is secured by contracts or agreements with buyers and at least 10 per cent of the total revenue are realized. Income is recognized when it is not unreasonable to expect ultimate collection and no significant uncertainty exists regarding the amount of consideration. The estimates of the saleable area and costs are reviewed periodically and effect of any changes in such estimates is recognized in the period in which such changes are determined. However, when the total project cost is estimated to exceed total revenues from the project, loss is recognized immediately.
b) Interest on fixed deposits and inter-corporate deposits is accounted on accrual basis.
c) Dividend income is accounted when the right to receive is established and known.
d) Administration charges recovered from customers are accounted as per the terms of contract with the customers.
e) Share of profit from the partnership firm, in which the Company is a partner, is as per the financial statement of the partnership firm.
1.11 Cost of Construction/ Development
Cost of Construction/ Development (including cost of land) incurred is charged to the Statement of Profit and Loss proportionate to project area sold. Adjustments, if required, are made on completion of the respective projects.
1.12 Foreign Currency Transaction
Foreign currency transaction is recorded at the rates of exchange prevailing on the date of the transactions. Exchange differences arising on foreign currency transactions are recognized as income or as expenses and accordingly debited or credited to profit and loss account.
1.13 Segment Reporting
The Company is mainly engaged in Real Estate and Infrastructure Development activities which constitute Single Primary Business Segment as defined under Accounting Standard 17.
1.14 Leases
a) Operating lease
Leases where the less or effectively retains substantially all the risks and benefits of ownership of the leased assets, are classified as Operating leases. Lease payments are charged to the statement of profit and loss account of the year in which they due.
b) Finance lease
Leases where the less or effectively transfers substantially all the risks and rewards incident to ownership of an asset are classified as Finance leases. The Company has taken a Plot of Land on finance lease from Greater Noida Industrial Development Authority (GNIDA).
1.15 Accounting for Joint Ventures
The Company''s investments in jointly controlled entities is reflected as investment and accounted for in accordance with the company''s accounting policy of investments.
c) Rights, preferences and restrictions attached to Equity shares
The Company has equity shares having a par value of Rs. 10/- per share. On a show of hands, every holder of equity shares is entitled for one vote and upon a poll shall have voting rights in proportion to the shares of the paid up capital of the Company held by them. The dividend, if any, proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. In the event of liquidation, the equity shareholders are entitled to receive the remaining assets of the company after distribution of all preferential amount in the proportion to their shareholding.
d) Rights, preferences and restrictions attached to Preference shares
The Company has only one class of preference shares 8% Non-Cumulative, Non-Convertible, Non-Participating, Compulsory Redeemable Preference Shares of Rs. 10/- each (at a premium of Rs. 40/- on each Preference Share) to be redeemed after 15 years at a premium of Rs. 100/- on each Preference Share but which may be redeemed at the option of the Company at any time after 2 years at a fixed premium of Rs. 40/- on each Preference Share and an additional premium @ Rs. 4/- per year till these Preference Shares are redeemed. These shares carry no voting rights and the said shares are Non-convertible into equity shares. As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.
iii) Claims against the Company not acknowledged as debt Rs. Nil (31.03.2015: Nil).
(b) Commitments
There are no outstanding Capital Commitments.
2.27 Retirement Benefits: Payments under defined contribution plans like Provident Fund and Family Pension have been charged to the Statement of Profit and Loss as and when made or due.
Disclosure for defined benefit plan - Gratuity (funded with LIC under Group Gratuity Scheme)
2.28 Related Party Transactions:
a) Names of other related parties and nature of relationship where there are transactions with related parties:
Associate Companies Capital Infra projects Pvt. Ltd
Golden Palms Facility Management Pvt. Ltd.
Jointly Controlled Entities IITL-Nimbus The Hyde Park - a Partnership Firm
IITL-Nimbus The Express Park View - a Partnership Firm IITL- Nimbus The Palm Village - a Partnership Firm Indogreen International - a Partnership Firm
Entities over which Key Management Personnel Nimbus India Limited
Exercise Significant Influance Nimbus Propmart Pvt. Ltd
Nimbus Multicommodities Brokers Ltd.
IITL Projects Ltd
Key Management Personnels Mr. Bipin Agarwal - Managing Director
Mr. Lalit Agarwal - Whole Time Director (WTD) & Company Secretary (W.e.f. 09.11.2015) Mr. Swatantra Kumar Sethi - Company Secretary (W.e.f. 30.03.2015 to 19.08.2015) Mr. Jitendra Kumar - Chief Financial Officer (W.e.f. 14.05.2015)
2.35 In the opinion of the management, the trade receivables, current assets, loans and advances and trade payables are approximately of the value stated if realized in the ordinary course of business. The provisions for all known liabilities are adequate.
2.36 Status of Various Projects
a) The Company has developed a Group Housing Project "Express Park View" at Plot No GH-10B, Sector CHI-V, Greater Noida, U.P., located in main Noida-Greater Noida Expressway. This Group Housing Project has all important facilities and amenities such as well laid out roads and paths, landscaped areas and beautiful parks, street lights and well designed services to give world class comfort feeling to the residents. Project has 332 flats & 4 shops, consisting of 2 Bed Rooms and 3 Bed Rooms in sizes varying from 831sq.ft. to 1458 sq.ft. Presently, the Project is fully complete in all respects. The Company has booked total 311 Flats of varying sizes, out of which the Company has given possession of 274 Units and has collected the Rs. 82.36 crore for the sale of flats & shops till 31.03.2016. During the quarter ended 31.03.2016 the project undertaken by the company is completed, the cost of unsold units has been considered as stock of units in completed project.
b) The Company had entered into a Partnership ''IITL-NIMBUS THE HYDE PARK NOIDA'' in April 2010 with M/s IITL Projects Ltd. & M/s Supertech Ltd. to develop the Group Housing Project "The Hyde Park" at Plot No. GH-03, Sector 78, Noida. The agreed Capital Ratio between the partners was 45:45:10 with profit to be shared in the said Capital Ratio. During the year ended 31.03.2016, M/s Supertech Ltd. exit from the partnership firm and now the revised Ratio between remaining partners is 50:50. The Hyde Park Project for Residential Development encompasses all important facilities and amenities such as well laid out roads and paths, landscaped areas and beautiful parks, street lights and well designed services to give world class comfort feeling to the residents. Project consists of 2044 flats & 63 commercial units in totality. Apartments are of IBHK/ 2BHK/ 3BHK & 4BHK with sizes varying from 525sq.ft. to 2428 sq.ft. The Partnership Firm has booked total 1377 Flats of varying sizes & 57 commercial units in the said project and has collected the booking amount of Rs. 553.33 crore for the above said booking of flats & commercial units till 31.03.2016.
c) The Company had entered into a Partnership ''IITL-NIMBUS THE EXPRESS PARK VIEW'' with M/s IITL Projects Ltd. & M/ s Assotech Ltd. in April 2011, to develop the Group Housing Project ''Express Park View - II'' at Plot No. GH-03, Sector CHI-V, Greater Noida. The agreed Capital Ratio between the partners is 47.5:47.5:5 and profit will be shared in the said Capital Ratio. The Express Park View - II, Project for Residential Development shall encompass all important facilities and amenities such as well laid out roads and paths, landscaped areas and beautiful parks, street lights and well designed services to give world class comfort feeling to the residents. Project consists of 1668 flats in totality. Apartments shall be of 2BHK/ 3BHK & 4BHK in sizes varying from 984 sq.ft. to 2191 sq.ft. The Partnership Firm has booked total 698 Flats of varying sizes in the said project and has collected the booking amount of Rs. 185.92 Crore for the above said booking of flats till 31.03.2016.
d) The Company had entered into a Partnership ''IITL-NIMBUS THE PALM VILLAGE'' with M/s IITL Projects Ltd. & M/s Assotech Ltd. in June 2011, to develop the Group Housing Project ''The Golden Palm Village'' at Plot No. GH-03, Sector 22A, Greater Noida of Yamuna Expressway Industrial Development Authority. The agreed Capital Ratio between the partners is 47.5:47.5:5 and profit will be shared in the said ratio. ''The Golden Palm Village'', Project for Residential Development shall encompass all important facilities and amenities such as well laid out roads and paths, landscaped areas and beautiful parks, street lights and well designed services to give world class comfort feeling to the residents. The Partnership Firm has booked total 54 Flats of varying sizes in the said project and has collected the booking amount of Rs. 3.49 Crore for the above said booking of flats as on 31.03.2016. Due to Real Estate Market conditions, low demand and consequent delay, the Firm has started refunding booking amount along with interest to the customers as per their request. The Firm is in the process of evaluating alternative options for executing this project within the overall framework of the lease agreement. The management at this stage does not expect any erosion in the capital contribution in the Firm.
e) The Company holds 50% shareholding, i.e., 500,000 Equity Shares (and 11,250,000 Preference Shares) of "M/s Capital Infra projects Pvt. Ltd.". The company M/s ''Capital Infra projects Pvt. Ltd.'' is developing a Group Housing Project at Plot No. GH-01/E, Sector - 168, Noida. The Project ''The Golden Palms'' encompasses all important facilities and amenities such as well laid out roads and paths, landscaped areas and beautiful parks, street lights and well designed services to give world class comfort feeling to the residents. Project consists of 1408 Flats and 49 Commercial Units in totality. Apartments are Studio Appt. / 2BHK/ 3BHK & 4BHK in sizes varying from 506sq.ft. to 2629 sq.ft. The company M/s ''Capital Infra projects Pvt. Ltd.'' has booked total 862 Flats of varying sizes and 21 Commercial Units in the said project and has collected the booking amount of Rs. 293.94 crore for the above said bookings till 31.03.2016.
Mar 31, 2015
Corporate Information
Nimbus Projects Limited is engaged in Real Estate Development of
Commercial / Residential Projects, Trading of Properties & Real Estate
Agent business etc. It is developing Residential Projects in National
Capital Region (NCR). It has developed one Residential Project "Express
Park View" in Greater Noida. Apart from developing its own Project, the
company is undertaking development through Special Purpose Vehicle /
Joint Venture (SPV / JV). The company is developing four Residential
Projects in Joint Venture in Noida & Greater Noida.
1.1 Basis of Accounting
The financial statements are prepared under historical cost convention
on accrual basis (except interest on delayed payment by customers,
administrative charges recovered from customers and expenditure on
compensation/ penalty for project delay, which are accounted for at the
time of acceptance/ settlement with the customers due to uncertainties
with regard to determination of amount receivable/ payable) and are in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
the Companies (Accounting Standards) Rules, 2006 read with Rule 7 of
the Companies (Accounts) Rules, 2014 in respect of Section 133 of the
Companies Act, 2013. The preparation of financial statements requires
the Management to make estimates and assumptions considered in the
reported amounts of assets and liabilities (including contingent
liabilities) as of the date of the financial statements and the
reported income and expenses during the reporting period. Management
believes that the estimates used in preparation of the financial
statements are prudent and reasonable. Future results could differ from
these estimates.
1.2 Fixed assets
Fixed assets are stated at cost less accumulated depreciation and
impairment losses. Cost comprises purchase price, duties, levies and
any other cost relating to the acquisition and installation of the
asset. Fixed assets under construction are treated as soon the assets
become operational and ready for use. Borrowing cost, if any, directly
attributable to the acquisition and / or construction of fixed asset,
until the date assets are ready for its intended use, are capitalized
as a part of the cost of that asset subject to the provisions of
impairment of the assets. Intangible assets are recognized only if it is
probable that the future economic benefits that are attributable to the
assets will flow to the enterprise and the cost of the assets can be
measured reliably. Expenditure on an intangible item is expensed when
incurred unless it forms part of the cost of intangible asset that
meets the recognition criteria. Intangible assets are stated at cost of
acquisition and are carried at cost less accumulated amortization and
impairment loss, if any.
1.3 Depreciation
a) Depreciation on fixed assets for the year ended 31st March, 2014 is
provided on the Written down Value Method at the rates prescribed in
Schedule XIV to The Companies Act, 1956.
b) Effective from 1st April, 2015, depreciation is provided on Written
Down Value Method as prescribed in Schedule II to the Companies Act,
2013.
c) Depreciation on additions / deletion to fixed assets is provided on
proportionate basis according to the date of addition / deletion.
1.4 Investments
Long term investments are stated at cost. A provision for diminution is
made to recognize a decline, if any, other than temporary in nature, in
the value of long term investments.
Short term investments are stated at lower of cost or market value.
1.5 Inventories
Inventories are valued at lower of cost and net realizable value.
Construction work in progress comprises of cost of land (including
premium for development rights), materials, services and other related
overheads.
1.6 Employee Benefits
Retirement benefits to the employees comprise of payments under defined
contribution plans like Provident Fund & Family Pension and
contribution paid or payable is recognized as an expense in the period
in which services are rendered by the employees.
The employees' gratuity fund scheme managed by Life Insurance
Corporation of India is a defined benefit plan. The present value of
obligation is determined based on actuarial valuation using the
Projected Unit Credit Method, which recognizes each period of service
as giving rise to additional unit of employee benefit entitlement and
measures each unit separately to build up the final obligation.
Provision for leave encashment is made on accrual basis.
1.7 Borrowing Costs
Borrowing costs that are directly attributable to the acquisition or
construction of qualifying assets are capitalized for the period until
the assets are ready for its intended use. A qualifying asset is an
asset that necessarily takes substantial period of time to get ready
for its intended use. Other borrowing costs are recognized and
capitalized and are included in Capital WIP in the period in which they
are incurred.
1.8 Taxation
Tax expense comprises of current Income tax. Current income tax is
measured at the amount expected to be paid to the tax authorities in
accordance with the Income-tax Act, 1961. Deferred income taxes reflect
the impact of current year timing differences between taxable income
and accounting income for the year and reversal of timing differences
of earlier years. Deferred tax is measured based on the tax rate and
the tax laws enacted or substantially enacted at the balance sheet
date.
Deferred tax assets other than on carried forward losses and unabsorbed
depreciation are recognized only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realized.
Deferred tax asset on account of carried forward losses and unabsorbed
depreciation are recognized only to the extent that there is virtual
certainty supported by convincing evidence that sufficient future
taxable income will be available against which such deferred tax assets
can be realized.
1.9 Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized when an enterprise has a present obligation
as a result of past event and it is probable that an outflow of
resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions are not discounted
to their present values and are determined based on management estimate
required to settle the obligation at the balance sheet date. Contingent
liabilities, if material, are disclosed by way of notes. Contingent
assets are not recognized or disclosed in the financial statement.
1.10 Revenue Recognition
a) Revenue from constructed properties is recognized on the 'percentage
of completion method'. Sale consideration as per the duly executed
agreements to sell/application forms (containing salient terms of
agreement to sell), is recognized as revenue based on (i) the
percentage of actual project costs incurred thereon to total estimated
project cost, subject to such actual cost incurred (excluding land
acquisition cost) being 25 per cent or more of the total estimated
project cost (excluding land acquisition cost) and (ii) when at least
25 per cent of the saleable project area is secured by contracts or
agreements with buyers and at least 10 per cent of the total revenue
are realized. Income is recognized when it is not unreasonable to
expect ultimate collection and no significant uncertainty exists
regarding the amount of consideration. The estimates of the saleable
area and costs are reviewed periodically and effect of any changes in
such estimates is recognized in the period in which such changes are
determined. However, when the total project cost is estimated to exceed
total revenues from the project, loss is recognized immediately.
b) Interest on fixed deposits and inter-corporate deposits is accounted
on accrual basis.
c) Dividend income is accounted when the right to receive is
established and known.
d) Administration charges recovered from customers' are accounted as per
the terms of contract with the customers.
e) Share of profit from the partnership firm, in which the Company is a
partner, is as per the financial statement of the partnership firm.
1.11 Cost of Construction/ Development
Cost of Construction/ Development (including cost of land) incurred is
charged to the Statement of Profit and Loss proportionate to project
area sold. Adjustments, if required, are made on completion of the
respective projects.
1.12 Foreign Currency Transaction
Foreign currency transaction is recorded at the rates of exchange
prevailing on the date of the transactions. Exchange
differences arising on foreign currency transactions are recognized as
income or as expenses and accordingly debited or credited to profit and
loss account.
1.13 Borrowing Cost
Borrowing costs that are directly attributable to the acquisition or
construction of qualifying assets are capitalized for the period until
the asset is ready for its intended use. A qualifying asset is an asset
that necessarily takes substantial period of time to get ready for its
intended use. All other borrowing costs are expensed in the period they
occur.
1.14 Segment Reporting
The Company is mainly engaged in Real Estate and Infrastructure
Development activities which constitute Single Primary Business Segment
as defined under Accounting Standard 17.
1.15 Leases
a) Operating lease
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased assets, are classified as
Operating leases. Lease payments are charged to the statement of profit
and loss account of the year in which they due.
b) Finance lease
Leases where the lessor effectively transfers substantially all the
risks and rewards incident to ownership of an asset are classified as
Finance leases. The Company has taken a Plot of Land on finance lease
from Greater Noida Industrial Development Authority (GNIDA).
1.16 Accounting for Joint Ventures
The Company's investments in jointly controlled entities is reflected
as investment and accounted for in accordance with the company's
accounting policy of investments.
c) Rights, preferences and restrictions attached to Equity shares
The Company has equity shares having a par value of Rs. 10/- per share.
On a show of hands, every holder of equity shares is entitled for one
vote and upon a poll shall have voting rights in proportion to the
shares of the paid up capital of the Company held by them. The
dividend, if any, proposed by the Board of Directors is subject to the
approval of the shareholders in the Annual General Meeting. In the vent
of liquidation, the equity shareholders are entitled to receive the
remaining assets of the company after distribution of all preferential
amount in the proportion to their shareholding.
d) Rights, preferences and restrictions attached to Preference shares
The Company has only one class of preference shares 8% NonÂCumulative,
NonÂConvertible, NonÂParticipating, Compulsory Redeemable Preference
Shares of Rs. 10/- each (at a premium of Rs. 40/- on each Preference
Share) to be redeemed after 15 years at a premium of Rs. 100/- on each
Preference Share but which may be redeemed at the option of the Company
at any time after 2 years at a fixed premium of Rs. 40/- on each
Preference Share and an additional premium @ Rs. 4/- per year till
these Preference Shares are redeemed. These shares carry no voting
rights and the said shares are Non-convertible into equity shares. As
per records of the Company, including its register of
shareholders/members and other declarations received from shareholders
regarding beneficial interest, the above shareholding represents both
legal and beneficial ownerships of shares.
Mar 31, 2014
1) Basis of Accounting
The financial statements are prepared under historical cost convention
on an accrual basis (except interest income on late payments on flat
booked and maintenance/administration charges, which are accounted when
realised) and are in accordance with the Generally Accepted Accounting
Principles in India (Indian GAAP) to comply with the Accounting
Standards notified under the Companies(Accounting Standards) Rules,
2006 (as amended and which continue to be applicable in respect of
section133 of the Companies Act, 2013 in terms of General Circular
15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs)
and the relevant provisions of the Companies Act, 1956. The preparation
of financial statements requires the Management to make estimates and
assumptions considered in the reported amounts of assets and
liabilities (including contingent liabilities) as of the date of the
financial statements and the reported income and expenses during the
reporting period. Management believes that the estimates used in
preparation of the financial statements are prudent and reasonable.
Future results could differ from these estimates.
2) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amount of assets and liabilities on the
date of the financial statements and the reported amount of revenues
and expenses during the reporting period. Differences between actual
results and estimates are recognized in the period in which the results
are known / materialize.
3) Fixed Assets
Fixed assets are stated at cost less accumulated depreciation and
impairment losses. Cost comprises purchase price, duties, levies and
any other cost relating to the acquisition and installation of the
asset. Fixed assets under construction are treated as soon the assets
become operational and ready for use. Borrowing cost, if any, directly
attributable to the acquisition and / or construction of fixed asset,
until the date assets are ready for its intended use, are capitalized
as a part of the cost of that asset subject to the provisions of
impairment of the assets.
Intangible assets are recognized only if it is probable that the future
economic benefits that are attributable to the assets will flow to the
enterprise and the cost of the assets can be measured reliably.
Expenditure on an intangible item is expensed when incurred unless it
forms part of the cost of intangible asset that meets the recognition
criteria. Intangible assets are stated at cost of acquisition and are
carried at cost less accumulated amortization and impairment loss, if
any.
4) Depreciation
a) Depreciation on fixed assets is provided on the Written down Value
Method at the rates prescribed in Schedule XIV to The Companies Act,
1956.
b) Depreciation on additions to fixed assets is provided on the basis
of date of addition. No depreciation is provided on deletion to fixed
assets in the year to sale.
5) Construction Contract Revenue / Cost
Contract revenues and contract cost are recognized as revenue and
expenses respectively by reference to the stage of the completion of
the contract activity at the reporting date when and only when the
outcome of a construction contract is estimated reliably. When the
outcome of a construction contract is not estimated reliably then
revenue is recognized only to the extent of contract costs incurred of
which recovery is probable and contract costs is recognized as an
expense in the period in which they are incurred. An expected loss is
recognized as an expense immediately.
6) Revenue Recognition
a) Revenue from Real estate projects is recognized on the Percentage of
Completion method. Revenue is recognized in relation to area sold, on
the basis of percentage of actual costs incurred as against the total
estimated cost of the project under execution, subject to such actual
costs being 25 percent or more of the total estimated cost.
The estimates of saleable area and costs are revised periodically by
the Management. The effect of such changes in estimates is recognized
in the period in which such changes are determined.
b) Fees are accounted as per the terms of contract with the customers.
c) Interest on fixed deposits and inter-corporate deposits is accounted
on accrual basis.
d) Dividend income is accounted when the right to receive is
established and known.
e) Share of profit from the partnership firm, in which the Company is a
partner, is as per the financial statement of the partnership firm.
7) Inventories
a) Construction Material cost is determined on a First in First out
basis.
b) Land is valued at cost. Cost comprises cost of acquisition and all
other related costs.
c) Construction work in progress is valued at cost. Cost comprises
premium for development rights, cost of material, services and other
related overheads related to project under construction.
8) Investments
Long term investments are stated at cost. A provision for diminution is
made to recognise a decline, if any, other than temporary in nature, in
the value of long term investments.
Current investments are stated at lower of cost and fair market value.
9) Taxation
Tax expense comprises of current and deferred tax. Current income tax
is measured at the amount expected to be paid to the tax authorities in
accordance with the Income-tax Act, 1961. Deferred income taxes reflect
the impact of current year timing differences between taxable income
and accounting income for the year and reversal of timing differences
of earlier years. Deferred tax is measured based on the tax rate and
the tax laws enacted or substantially enacted at the balance sheet
date.
Deferred tax assets other than on carried forward losses and unabsorbed
depreciation are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realised.
Deferred tax asset on account of carried forward losses and unabsorbed
depreciation are recognised only to the extent that there is virtual
certainty supported by convincing evidence that sufficient future
taxable income will be available against which such deferred tax assets
can be realised.
10) Foreign Currency Transaction
Foreign currency transaction is recorded at the rates of exchange
prevailing on the date of the transactions. Exchange differences
arising on foreign currency transactions are recognized as income or as
expenses and accordingly debited or credited to profit and loss
account.
11) Retirement and other Employees'' Benefits
a) Defined Contribution Plan:
Provident fund is considered as defined contribution plan and the
contributions are charged to the profit and loss account of the year in
which the contributions to the fund are due. However contributions
which are directly attributable to project are allocated to cost of
construction.
b) Defined benefit plan:
The company has a defined benefit employees scheme in the form of
Gratuity and for this purpose it has entered into a Group gratuity cum
Life Assurance Scheme to be approved under part ''C'' of the Fourth
Schedule of Income Tax Act, 1961, with the Life Insurance Corporation
of India to provide the Gratuity Benefits to the employees of the
company under an Irrevocable Trust. The Trustees of the Scheme have
entrusted the administration of related fund to L.I.C. The company
shall pay to the trustee such contribution as are required to secure
the benefits which will include the liberalized death cover to the
employees. Expenses for the year is determined on the basis of
actuarial valuation of the company''s year-end obligation in this regard
and the value of year end assets of the scheme. Contribution is
deposited with L.I.C. based on intimation received by the Company.
The Company provides for the encashment of leave or leave without pay
subject to certain rules. The Employees are entitled to accumulate
leave subject to certain limits for future encashment/availment. The
Company makes provision for compensated absences based on management
valuation as at the date of balance sheet.
12) Borrowing Cost
Borrowing costs that are directly attributable to the acquisition or
construction of qualifying assets are capitalized for the period until
the asset is ready for its intended use. A qualifying asset is an asset
that necessarily takes substantial period of time to get ready for its
intended use. All other borrowing costs are expensed in the period they
occur.
13) Segment Reporting
The Company is mainly engaged in Real Estate and Infrastructure
Development activities which constitute Single Primary Business Segment
as defined under Accounting Standard 17.
14) Leases Operating lease
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased assets, are classified as
operating leases. Lease payments are charged to the profit and loss
account of the year in which they due.
Finance lease
Leases where the lessor effectively transfers substantially all the
risks and rewards incident to ownership of an asset. Land has been
taken on finance lease of 90 years and is included in Inventory.
15) Accounting for Joint Ventures
The Company''s investments in jointly controlled entities is reflected
as investment and accounted for in accordance with the company''s
accounting policy of investments (see Note C (23) below).
16) Impairment of Assets
The carrying amount of assets are reviewed at each Balance Sheet date
if there is any indication of impairment based on internal / external
factors. Impairment loss is provided to the extent the carrying amount
of assets exceeds their recoverable amount. Recoverable amount is the
higher of an asset''s net selling price and its value in use. Value in
use is the present value of estimated future cash flows expected to
arise from the continuing use of an asset and from its disposal at the
end of its useful life. Net selling price is the amount obtainable from
the sale of an asset in an arm''s length transaction between
knowledgeable, willing parties, less the cost of disposal.
17) Provision, contingent liabilities and contingent assets
Provision is recognized when an enterprise has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation and in respect of which a
reliable estimate can be made. Provisions are determined based on
management 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 management estimate.
The contingent liabilities are disclosed, unless the possibility of
outflow of resources is remote. Contingent Assets are generally neither
recognized nor disclosed in the financial statements.
Mar 31, 2010
1.) Nature Of Operation
The company has been engaged in the various activities relating to real
estate sector including entering into collaboration agreement,
development of commercial complex, construction of flats and offices,
advisory / consultancy services.
2.) Basis of preparation of financial statements
The financial statements have been prepared to comply, in all material
respects, with:
- the Accounting Standards as notified by the Companies (Accounting
Standards) Rules, 2006;
- ther elevant provisions of the Companies Act, 1956;and
- the generally accepted accounting principles in India.
The financial statements have been prepared under historical cost
convention on accrual basis and on the assumption of going concern
basis. The accounting policies have been consistently applied by the
Company and are consistently followed by the Company and are consistent
with those applied in the previous year.
3.) Use of Estimates
The preparation of Financial Statements require to management to make
estimates and assumptions that affect the reported amount of assets and
liabilities, the disclosure of the contingent liabilities on the date
of the financial statements and the reported amount of revenues and
expenses during the reporting period. Actual results could differ from
estimates. Any revision to accounting estimates is recognized in
accordance with the requirements of the respective accounting standard
in the period in which the results are known / materialized.
4.) Inventories
The value of various categories of inventories is arrived following
FIFO, formula wherever applicable, at as follows:
- Raw material, consumables and stores and spares are valued at the
lower of cost or net realizable value.
- Work in progress is valued by taking cost of material used and labour
charges incurred upto the stage of constructions and other related cost
wherever applicable subject to their estimated net realizable value.
- Finished goods is valued at the lower of cost or net realizable
value.
5.) Contingencies and Provisions
A provision is recognized when there is a present obligation as a
result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance date. These are reviewed at each
balance sheet date and adjusted to reflect the current management
estimates.
6.) Prior Period Items
Prior period items arisen in the current year as a result of errors or
omission in the preparation of the financial statements of prior
period(s) are separately disclosed in the profit & loss account.
7.) Construction Contract Revenue/ Cost
- Contract Revenues and Contract Cost are recognized as revenue and
expenses respectively by reference to the stage of the completion of
the contract activity at the reporting date when and only when the
outcome of a construction contract is estimated reliably. When the
outcome of a construction contract is not estimated reliably then
revenue is recognized only to the extent of contract costs incurred of
which recovery is probable and contract costs is recognized as an
expense in the period in which they are incurred. An expected loss is
recognized as an expense immediately.
8.) Revenue Recognition
- Revenues / Sales / Incomes and Cost / Expenditures are generally
accounted on accrual basis, as they are earned or incurred.
- Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured.
- Revenues from sales are recognized on transfer of significant risk
and rewards.
- Duties and Taxes, wherever applicable, included in the amount of
turnover (gross) are deducted from turnover (gross) for disclosure of
net turnover in the P&LA/c.
- Interest is recognized on a time proportion basis taking into account
the amount outstanding and the rate applicable.
9.) Fixed Assets
Fixed assets are stated at cost less accumulated depreciation and
impairment losses. Cost comprises purchase price, duties, levies and
any other cost relating to the acquisition and installation of the
asset. Fixed assets under construction are
Seated as soon the assets become operational and ready for use.
Borrowing cost, if any, directly attributable to the acquisition and /
or construction of fixed asset, until the date assets are ready for its
intended use, are capitalized as a part of the cost of that asset
subject to the provisions of impairment of the assets.
10.) Depreciation
Depreciation on fixed assets is charged, on pro-rata, on the Written
Down Value Method in accordance with those specified in Schedule XIV of
The Companies Act, 1956.
11.) Foreign Currency Transaction
Foreign currency transaction is recorded at the rates of exchange
prevailing on the date of the transactions. Exchange differences
arising on foreign currency transactions are recognized as income or as
expenses and accordingly debited or credited to profit and loss
account.
12.) Investments
Investments which are readily realizable and intended to be held for
not more than a year are classified as Current Investment and valued at
lower of cost or fair market value determined on an individual
investment basis. All other investments are classified as Long Term
Investments and are stated at cost less diminution if any which is not
in temporary nature.
13.) Retirement and other Employees Benefits
Liability for employees benefits, both short term and long term, for
present and past services which are due as per the terms of employment
are accounted for as per the provisions of AS 15 (Revised). Gratuity is
accounted as per the rules of the company. Contribution to the P.F. /
E.S.I., if applicable, are made at a pre determined rate and charged to
profit and loss account on accrual basis.
14.) Borrowing Cost
Borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalized as a
part of the cost of that asset subject to the provisions of impairment
of the assets and other borrowing cost are recognized as expenses in
the period in which they are incurred.
15.) Segment Reporting
The Company has been mainly engaged in Real Estate and Infrastructure
Development activities which constitute Single Primary Business Segment
as defined under Accounting Standard 17.
16.) Related Party Transaction
In related party transactions all the material information as required
by the Accounting Standard 18 are given to disclose the effect on the
financial position and operating results of the Company.
17.) Lease
The company has adopted the provisions of Accounting Standard 19 for
accounting of lease, whether finance lease or operating lease, where it
is an original lessor or lessee. Assets acquired under lease where
substantial risks and rewards are transferred are treated as finance
lease and lease other than finance lease is treated as operating lease.
18.) Earning Per Share
Basic Earning Per Share is calculated by dividing the net profit or
loss after tax for the period attributable to equity shareholders by
the weighted average number of equity shares during the period.
19.) Taxation
Tax expense comprises of Current Tax and Deferred Tax. Provision for
current tax is made on the assessable income at the tax rate applicable
to the relevant assessment year.
Deferred Taxes are recognized for the future tax consequences
attributable to timing differences and their recognition for tax
purpose The effect of a change in tax rates on Deferred Tax Assets /
Liabilities is recognized in income using the tax rates and tax laws
that have been enacted or substantively enacted by balance sheet date.
Deferred Tax Assets are recognized and carried forward only to the
extent that there is a reasonable certainty that sufficient future
taxable income will be available against which such Deferred Tax can be
realized. However, Deferred Tax Assets arising from brought forward and
depreciation are recognized only when there is virtual certainty
supported by convincing evidence that such assets will be realized in
foreseeable future.
20.) Research and Development
All expenses pertaining to research are charged to the profit and loss
account in the year in which they are incurred. All expenses pertaining
to development are recognized if, and only if, future economic benefits
from the asset are probable otherwise these expenses are charged to the
profit and loss account in the year in which they are incurred. 21.)
Joint Ventures
I) Interest In Jointly Controlled Operations
Assets that it controls and the liabilities that it incurs, expenses
that it incurs and its share of income that it earns from the joint
ventures is recognized in its Separate Financial Statements; and
II) Interest In Jointly Controlled Entitles
Interest in such entity is accounted for as an investment in accordance
with Accounting Standard (AS) 13, Accounting for Investment.
22.) Impairment of Assets
The carrying amount of assets is reviewed at each balance sheet date if
there is any indication of impairment of the carrying amount of the
companys assets. If any indication exists, then recoverable amount /
fair market value of such asset is estimated. An impairment loss is
recognized wherever the carrying amount of the assets exceeds its
recoverable amount / fair market value. After impairment, depreciation
is provided on the revised carrying amount of the assets over its
remaining useful life. A previously recognized impairment loss is
increased or reversed depending on changes in circumstances. However
the carrying amount after reversal is not increased beyond the carrying
value that would have prevailed by charging usual depreciation as if
there was no impairment.